HomeMy WebLinkAboutOrdinance 4484 ORDINANCE NO.4484
AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY OF
A MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT HAVING A
NOMINAL PRINCIPAL AMOUNT OF NOT TO EXCEED $5,000,000 FOR
THE PURPOSE OF FINANCING THE COST OF ACQUIRING CERTAIN
SOLID WASTE VEHICLES, CARTS AND OTHER EQUIPMENT; AND
PRESCRIBING OTHER MATTERS RELATING THERETO
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has
determined that there is a great need for a mechanism to finance the costs of acquisition of
certain solid waste vehicles, carts and related equipment to benefit the residents of the City (the
"Improvements"); and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the
Constitution of the State of Arkansas ("Amendment 65") and the Local Government Capital
Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated ( 1998 Repl .)
Sections 14- 164-401 et seq. (as from time to time amended, the "Act"), to enter into certain
short-term lease/purchase arrangements to finance the costs of various capital improvements
such as those comprising the Improvements, which lease obligations shall constitute special
obligations of the City under Amendment 65 and the Act; and
WHEREAS, the City has made arrangements for the entry into a Master Equipment
Lease/Purchase Agreement (the "Lease/Purchase Agreement') with Banc of America Leasing &
Capital, LLC, a Delaware limited liability company (the "Lessor"), in substantially the form
presented to and before this meeting;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS THAT:
Section 1 . Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 65 and the Act, and in order to finance the acquisition of the
Improvements, the Mayor is hereby authorized and directed to execute the Lease/Purchase
Agreement, and the City Clerk is hereby authorized and directed to execute the Lease/Purchase
Agreement and to affix the seal of the City thereto, and the Mayor and the City Clerk are hereby
authorized and directed to cause the Lease/Purchase Agreement to be executed by the Lessor.
The Lease/Purchase Agreement is hereby approved in substantially the form submitted to this
meeting. The Mayor is hereby authorized to confer with the Lessor and Kutak Rock LLP, Bond
Counsel, in order to complete the Lease/Purchase Agreement in substantially the form submitted
to this meeting, with such changes as shall be approved by such persons executing the
Lease/Purchase Agreement, their execution to constitute conclusive evidence of such approval.
(Advice is given that a copy of the Lease/Purchase Agreement in substantially the form
authorized to be executed is on file with the City Clerk and is available for inspection by any
interested person.)
Section 2. The nominal principal amount of the Lease/Purchase Agreement may not
exceed $5,000,000 in the aggregate and the effective interest rate relating to the City's
obligations under the Lease/Purchase Agreement shall not exceed the maximum rate prescribed
by Arkansas law, including Amendment 65.
Section 3. It is affirmed that, pursuant to Amendment 65 and the Act, the payment
obligations of the City under the Lease/Purchase Agreement shall not constitute general
obligations of the City, but shall be special obligations, secured by and payable from the receipts
of the City' s solid waste fees and charges. The payment obligations shall additionally be secured
by a security interest in the Improvements as provided in the Lease/Purchase Agreement.
Section 4. The Mayor and City Clerk, for and on behalf of the City, are hereby
authorized and directed to do any and all things necessary to effect the execution and delivery of
the Lease/Purchase Agreement, and to perform all of the obligations of the City under and
pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on
behalf of the City, to execute all papers, documents, certificates and other instruments that may
be required for the carrying out of such authority or to evidence the exercise thereof.
Section 5. The provisions of this Ordinance are hereby declared to be severable, and
if any section, phrase or provision shall for any reason be declared to be illegal or invalid, such
declaration shall not affect the validity of the remainder of the sections, phrases or provisions of
this Ordinance.
Section 6. All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
PASSED and APPROVED this the 61h day of May, 2003.
APPROV D:
DAN COODY, Mayor
ATTEST__:
Kd& AA��
SONDRA SMITH, City Clerk
b • 2
NAME OF FILE: Ord. No. 4484
CROSS REFERENCE:
Item # Date Document
t 05/06/03 10rd. No. 4484
2 03/22/03 Staff Review Form w/attachments:
draft ordinance
memo to mayor/city council
Summary of Terms and Conditions
Appendix A
Appendix B
Amortization Schedule: Fire Trucks
3 05/24/03 Affidavit of Publication
NOTES:
NORTI*VEST ARKANSA4 EDITION
A* SaS Dem®c (0azew
AFFIDAVIT OF PUBLICATION
I , Z do solemnly swear that I am
Leg I Clerk of the Arkansas Democrat-Gazette newspaper, printed and
published in Lowell , Arkansas, and that from my own personal knowledge
and reference to the files of said publication , the advertisement of:
P
was inserted in the regular editions on
s5 c
** Publication Charge : $
Subscribed and sworn to before me this
day of 2003.
No ary Publi
��al puEN
My Commission Expi es:
mmHNo ta' ,
ItAG
� t 11A520
`* Please do not pay from
An invoice will be sent.
RECEIVED
MAY 2 8 2003
CITY OF FAYMEVILLE
CITY CLERK'S OFFICE
212 NORTH EAST AVENUE • P.O. BOX 1607 FAYETTENAI I E, ARKANSAS 72702 • (501 ) 442-1700
r
ORDINANCE NO. 4484 _
AN ORDINANCE AUTHORIZING THE EXECUTION AND
DELIVERY OF A MASTER EQUIPMENT LEASE/PURCHASE
AGREEMENT HAVING A NOMINAL PRINCIPAL AMOUNT OF
NOT TO EXCEED $5,000,000 FOR THE PURPOSE Of
FINANCING THE COST OF ACQUIRING CERTAIN SOLID �J/
WASTE VEHICLES, CARTS AND OTHER EQUIPMENT; AND � .V, FayBH 119
PRESCRIBING OTHER MATTERS RELATING THERETO.
WIIERFAS, the City Council of aro City of FWattevll9, Arkansas ghe 'Gty) has dotermNad that there
Is a great need fa a mechanism to finance me wets of abc dsltbn of certain slid waste vehidas, came
and related equipment to benefit the residents of the City (the -ImprovemantS�: and
WHEREAS, Ina Gty is authorized and empayssed under Ina Provisions of the Ca fiession and laws
of the state of Arkansas, Indudkig perticularN ArtondmeM 65 to the CanstaW03 of the State of
Arkorvsav ( Nrendment 65, and the Local GvrernmaM Capast Impro+amait Revenue Bond Act of
1985. coddled as Arkansas Code Annotated (1998 Repl.) Sectkim 14-1134-401 at seq. (as from Into to
Ifire costs oamended,various capital ItR1P�tnW&n011b tch as thosB pd5hg Lha nnplU'emBnl3`o &UVKm the
whC11 IBBs9
obligations shall corssfitute special obligations of the City under Amendmem 65 and fine Act: and
WHEREAS, the City has made armagemants,for the entry Into a Master Equipment LeaserPumhase
m It
Agreeinene 'L.eawAudnase Af rsementj with Banc of America Leasing 8 Capital, LLC, a Delaware
frame lbbpaty comparry (tis -Lesson, In substanualy the forth presented to and before INS meeting:
NOW, THEREFORE, BE IT ORDAINED BY THE CIN COUNCIL OF THE Cf OF FAYETTEMLLE,
ARKANSAS THAT:
' Section 1. Under Ne authority of the Constitution and laws of the State Of Adrersses, including
partlwlarty Amendment 65 and the Act, and in order to finance Ina acquisition of the Improvamerts, the
Mayor is hereby avoartzed and directed to execute the Losse/Purchase Agreement, and the City Clerk
is hereby aulhonzed 6rd directed to execute the Lease/R+chase Agreement and to alfa Ne seal of the
City lterete, and the Mayor and the City Gerk are hereby authorized and directed to cause the
LeasrlPlndfilse Agraern int to be axeated M the Lessen. The Lease/Purchase Agreement is hereby
'approved in substantially the Icon subrrstted to this ineeang. The Mayor Is hereby authorized to confer
,with are Lessor and Kutak Rock LLP, Bond Counsel, n ardor to complete the Leese/Purahaso
Agreement in subslantaly the loam submlhed to this meeting, vviN such changes as sw be approved
by such persons "pouting the LeamoPurchase Agreement, tto'v execution to consllule wnduslve
evidence of such approval.
(Advica is given that a dopy of the Leesa/Purchese Agreement in substantially one form authorized to be
geculed Is w file wN the Gly Clerk and Is avatlable for fiv peeliw by any Interested person.)
SechaN2.The nonvnal pnndPal mount of the Lease/Purcnase Agreement may not exceed
$5.000.000 la tho ing to ft Cry's obligaecins under the
LeasaPurdtaxe Agr�nantt sneu not xexeaed the maxi nun e and the offec" Interest rate re e prescribed by Arkansas law, MCkid'vg
Aarendment 135.
Section 3.It Is affirmed Nat, Pursuant to Amendment 85 and the Act, the payment obligations; of No
Cay under one Leasa/Pumhase Agreement shall not consfitute general obligations of the City, but shall
be special cbllgations, secured by and payable horn Ina moopts of the Cly§ solid vasty lees and
.doges. The payment cbllgatlws shell addloonsly be secured by a security Interest In the
-Improvements as provided N the LeasaPurd,_ ^ Agreement.
SecbOn 4.The Mayor and Gy Clerk. for" w behalf of the Gy. are hereby authorized end dareciel
to de any sad aA "ngs necessary to eaeot tha exec tion and delivery of the LeaswPuwasa Agmamenl
cod to perfoam as of tte obfgatWo of the Cay under and pursuant aorato. The Maya and Na Cay
Clerk are furaor auNwzed and directed, b and on banal of the Cay, to smoule al papers, dowments,
certificates and other instruments that may be required fa the carrying cul of saw authority or to
evidence lila exemise thereof,
Section 5.The provisions of this Ordinance are hereby declared to be severable, and if any section,
please or provision shop for any reason be declared to be illegal a invalid, such declaration shall not
affect the vaudaly of the renwXm. of the sedlorsl phases a providons of NIs Ordinance.
Section 6.ArI atlinsnces, resolutions and pans thereof h eoaW herewith are hereby repealed to the
indent of such wnflcl.
PASSED just APPROVED this Ns 6th day of May, 2003.
APPROVED:
By:
DAN COODY, Maya
ATFc.ST:
SORA SMITH, City aerk
STAFF REVIEW FORM
XX AGENDA REQUEST • Residential Solid Waste V
CONTRACT REVIEW - Lease Agreement
GRANT REVIEW Amendment 65
f hGoa3 �\
For the Fayetteville City Council Meeting of :
FROM :
Stephen Davis Finance & Internal Services Div. Finance & Internal Services
Name Division Department
ACTION REQUIRED : Approval of a master lease agreement with Banc of America Leasing & Capital, LLC. The
leasing agreement provide the opportunity for the City, to utilize Amendment 65 to fund the acquisition of
enc" 'authorizing the Cit to execute the necessary
residential solid waste collecti s. An Or-dinAnGe�"� g Y
agreements with Banc of America Leasing & Capital, LLC for the City to participate in a Lease-To-Own lease
agreement for the residential solid_waste collection vehicles.
COST TO CITY :
No Cost At .This Time $
Cost of this request Program Category. / Project Name
$
Account Number Funds Used to Date Program / Project Category Name
Project Number Remaining Balance Fund Name
BuDG� REVIEW : �V/,q Budgeted Item Budget Adjustment Attached
Budget Manager Date
CO
N
TRACT/GRANT/LEASE REVIEW :
Accounting Ma ger Date Internal ditor Date
wwos
Date Purchasing Manager City Attorne 9 Date
STAFF RECOMMENDATION: Staff recommends approval Of the lease agreements.
)�,Y� Cross Reference .
Division Head Date
New Item : Yes No
/J14-
Department Director Date Previous Ord/Res# :
Z,/—,/'13
A 46 `,/—/03 Orig . Contract Date
Fina cn e & internal Services Dir . Date
Orig . Contract Number
7 �
Chiefinistrative Officer Date
71
Mayor LT- 7� D�te
• Staff Review Form - Page 2 •
Description Meeting Date,
Comments : Reference Comments :
Budget Manager
Accounting Manager
('on ( 11Zlr,wOo ugakA Le 09 a_
Purchasing Manager
ADA . Coordinator
Internal Auditor
Grants Coordinator
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY OF
A MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT HAVING A
NOMINAL PRINCIPAL AMOUNT OF NOT TO EXCEED $5,000,000 FOR
THE PURPOSE OF FINANCING THE COST OF ACQUIRING CERTAIN
SOLID WASTE VEHICLES, CARTS AND OTHER EQUIPMENT; AND
PRESCRIBING OTHER MATTERS RELATING THERETO
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has
determined that there is a great need for a mechanism to finance the costs of acquisition of
certain solid waste vehicles, carts and related equipment to benefit the residents of the City (the
"Improvements"); and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the
Constitution of the State of Arkansas ("Amendment 65") and the Local Government Capital
Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated ( 1998 Repl.)
Sections 14- 164-401 et seg. (as from time to time amended, the "Act'), to enter into certain
short-term lease/purchase arrangements to finance the costs of various capital improvements
such as those comprising the Improvements, which lease obligations shall constitute special
obligations of the City under Amendment 65 and the Act; and
WHEREAS, the City has made arrangements for the entry into a Master Equipment
Lease/Purchase Agreement (the "Lease/Purchase Agreement') with Banc of America Leasing &
Capital, LLC, a Delaware limited liability company (the "Lessor"), in substantially the form
presented to and before this meeting;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS THAT:
Section 1 . Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 65 and the Act, and in order to finance the acquisition of the
Improvements, the Mayor is hereby authorized and directed to execute the Lease/Purchase
Agreement, and the City Clerk is hereby authorized and directed to execute the Lease/Purchase
Agreement and to affix the seal of the City thereto, and the Mayor and the City Clerk are hereby
authorized and directed to cause the Lease/Purchase Agreement to be executed by the Lessor.
The Lease/Purchase Agreement is hereby approved in substantially the form submitted to this
meeting. The Mayor is hereby authorized to confer with the Lessor and Kutak Rock LLP, Bond
Counsel, in order to complete the Lease/Purchase Agreement in substantially the form submitted
to this meeting, with such changes as shall be approved by such persons executing the
Lease/Purchase Agreement, their execution to constitute conclusive evidence of such approval.
(Advice is given that a copy of the Lease/Purchase Agreement in substantially the form
authorized to be executed is on file with the City Clerk and is available for inspection by any
interested person.)
0 0
Section 2. The nominal principal amount of the Lease/Purchase Agreement may not
exceed $5,000,000 in the aggregate and the effective interest rate relating to the City' s
obligations under the Lease/Purchase Agreement shall not exceed the maximum rate prescribed
by Arkansas law, including Amendment 65.
Section 3. It is affirmed that, pursuant to Amendment 65 and the Act, the payment
obligations of the City under the Lease/Purchase Agreement 'shall not constitute general
obligations of the City, but shall be special obligations, secured by and payable from the receipts
of the City's solid waste fees and charges. The payment obligations shall additionally be secured
by a security interest in the Improvements as provided in the Lease/Purchase Agreement.
Section 4. The Mayor and City Clerk, for and on behalf of the City, are hereby
authorized and directed to do any and all things necessary to effect the execution and delivery of
the Lease/Purchase Agreement, and to perform all of the obligations of the City under and
pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on
behalf of the City, to execute all papers, documents, certificates and other instruments that may
be required for the carrying out of such authority or to evidence the exercise thereof.
Section 5. The provisions of this Ordinance are hereby declared to be severable, and
if any section, phrase or provision shall for any reason be declared to be illegal or invalid, such
declaration shall not affect the validity of the remainder of the sections, phrases or provisions of
this Ordinance.
Section 6. All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
PASSED and APPROVED this the 6`h day of May, 2003.
APPROVED:
AFS
DAN C ODY, Mayor
ATTEST:
SONDRA SMITH, City Clerk
2
FAYETTETILLE
THE CITY OF FAYETTEYILLE, ARKANSAS
DEPARTMENTAL CORRESPONDENCE
TO: Fayetteville City Council
THROUGH: Dan Coody, Mayor
Hugh Earnest, Chief Administrative Officer /
FROM: Stephen Davis, Finance & Internal Services Directory 1
DATE: March 27, 2003 vv
SUBJECT: Debt Management Program: Leasing Services
Background
City Council approved a Debt Management Policy (Policy) on November 5, 2002. The Debt
Management Committee met after approval of the Policy and determined the City needed to seek
statement of qualifications for bond counsel services and to seek requests for proposals for bond
underwriter services and for leasing services. A professional selection committee was formed to: 1)
provide oversight of the drafting of the request for qualifications for bond counsel services and the
request for proposals for the bond underwriter services and leasing services; 2) review the responses
to the request for qualification/proposals; conduct interviews of the selected respondents; and, 3)
recommend service providers for leasing services and bond underwriter services.
Current Status
In mid-January 2003, the Professional Selection Committee (Committee) met, reviewed and
approved the request for qualifications for bond counsel services and request for proposals for bond
underwriter and leasing services. The Committee reviewed the responses, developed a short list to
interview for each service to be provided and selected the firm or firms to provide the service. The
firms selected to provide services under this set of request for qualifications and request for
proposals are as follows: Bond Counsel Services - Gordon Wilboum of Kutak Rock LLP; Leasing
Services - Banc of America Leasing & Capital, LLC, and, Bond Underwriter Services — (two firms
were selected to provide bond underwriter services): Stephens, Inc and Crews & Associates.
City Council, on March 18 and April 1 , approved a Resolution of Intent to Reimburse and approved
a bond counsel agreement with Kutak Rock. Staff has negotiated two master lease agreements with
Banc of America Leasing & Capital, LLC. These master lease agreements provide a funding
mechanism to leverage current and future City funds in acquiring solid waste residential collection
vehicles and fire apparatus vehicles.
KASteve Davis\Debt Financing\Leasing Services BOA_ 2003 Council Memo.doc
•
There are two lease agreements submitted for approval because of the differences in revenues
pledged to fund the lease payments. The revenue stream pledged for the solid waste vehicles is the
solid waste fees collected and the debt is authorized under Amendment 65 of the Arkansas
Constitution. The revenue stream pledged for the fire apparatus vehicles is the general revenues of
the City and is authorized under Amendment 78 of the Arkansas Constitution.
The payment terms under each of the lease agreements would be for a period of no more than sixty
(60) months at a fixed interest cost of 2.89%.
/bj- 6� -erccceJ
Recommendation
Staff recommends City Council approval of the two master lease agreements with Banc of America
Leasing & Capital, LLC.
KASteve Davis\Debt Financing\Leasing Services BOA_ 2003 Council Memo.doc
SUMMARY OF TERMS AND CONDITIONS
Date: December 3, 2002
Lessee: City of Fayetteville, Arkansas
Lessor: Banc of America Leasing & Capital, LLC or its designee ("Lessor")
Equipment: Various essential use equipment including, but not limited to, sanitation
vehicles and receptacles, fire emergency response vehicles, specialized
constructionequipment such as paving machines, track hoes, and
excavators (individually "Unit" and collectively "Equipment").
Maximum Purchase Price: The lower of $5,000,000 and the fair market
value of the Equipment, which may with Lessor's prior consent include soft
costs such as freight, installation and taxes paid up-front by Lessor not
exceeding 20% of the Maximum Purchase Price. The Purchase Price for used
Equipment may be subject to verification by an independent third party
appraiser.
Lease Structure: A lease intended as security transaction; under which all tax benefits will
retrain with Lessee. The lease will be a net financial lease, and all expenses,
including (but not limited to) insurance, maintenance, and taxes, will be for the
account of Lessee.
Term: Lease Commencement Date: No later than February 14, 2003
Lease Term: 36, 48, or 60 months from funding.
Interim Rental Term: The Interim Rental Tetra will be equal to the number
of days from acceptance of the Equipment to the Lease Commencement Date.
Rent will be charged at the daily equivalent of the Tax Exempt Interest Rate.
Tax Exempt
Interest Rate: Fixed Rate Options
Option A: 3-Year Fixed Rate: 2.53%
Option B: 4-Year Fixed Rate: 2.76%
Option C: 5-Year Fixed Rate: 2.89%
The above rates will be held for 30 days from the date of this proposal.
Subsequent to that date and subject to the economic yield maintenance
requirements below, the Tax Exempt Interest Rate will be fixed at funding at
an interest rate equal to the following equation:
3-Year, Term: 3-Year H. 15 Constant Maturity x .65 + 85.3 basis points (bps)
- 4-Year Tem: 5-Year H. 15 Constant Maturity x .65 + 58.9 bps
5-Year Tem: 5-Year H. 15 Constant Maturity x .65 + 71 .9 bps
City of Fayetteville
Page 12 of 15
Fixed Rate/Floatine Rate Options:
Option D: (Four -Year Term) - Fixed rate for the first three (3) years;
floating rate for the subsequent one (1) year
Fixed Rate for Years One (1), Two (2) and Three (3) = 2.53%
Floating Rate for Year Four (4) =
3 -Month LIBOR x .65 + 126.62 basis points
(on December 3, 2002 the floating rate is 2.19% based on a 3 -Month LIBOR
of 1.42125%)
Option E: (Five -Year Term) - Fixed rate for the first three (3) years;
floating rate for the subsequent two (2) years
Fixed Rate for Years One (1), Two (2) and Three (3) = 2.53%
Floating Rate for Years Four (4) and Five (5) =
3 -Month LIBOR x .65 + 137.62 bps
(on December 3, 2002 the floating rate is 2.3% based on a 3 -Month LIBOR of
1.42125%).
Rent: Lessee shall make monthly, quarterly or semi-annual payments, payable in
arrears.
Index: Fixed Rate
The index on which the Tax Exempt Fixed Interest Rate is based is the three
and five-year H.15 Constant Maturity. As of November 27, 2002 the Index
was 2.58% for the three-year index and 3.34% for the five-year index.Index
data may be found at www.federalreserve.gov/releases/H15/Current/
Floating Rate
The index on which the Tax Exempt Floating Rate is based is the three-month
LIBOR. As of December 3, 2002 the Index was 1.42125%.
Governmental
Entity Lease: The Base Rent installments are calculated on the assumptions, and Lessee will
represent, that Lessee is a state or political subdivision of a state within the
meaning of Section 103(c) of the Internal Revenue Code (the "Code"), and
that this transaction will constitute an obligation of Lessee within the meaning
of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code.
Lessee shall provide Lessor with such evidence as Lessor may request to
substantiate and maintain such tax status. Lessee shall comply with the filing
%requirements of Section 149(e) of the Code. Lessee will pay Lessor amounts
'calculated at a taxable rate sufficient to maintain Lessor's yield in the Lease, in
City of Fayetteville
Page 13 of 15
C1
the event Lessor suffers a loss of Federal income tax exemption of the interest
portion of the rentals.
Early Termination: Lessee may not prepay the Lease for the first onehalf of the Lease Term.
Thereafter, Lessee may on any rental payment date, upon 30days notice, prepay
in full all amounts then outstanding under the Lease, including accrued interest,
principal balance, other unpaid charges, and an amount equal to 1% of the then
outstanding principal balance.
End of Term: At the expiration of the Lease Term, Lessee will purchase all (but not less than
all) the Equipment for S1.00 ("Purchase Price").
Expenses: Lessee and Lessor will each be responsible for its own expenses incurred in
connection with the preparation, negotiation and closing of the lease
documentation.
Lease Documents: Lease documents in form and substance satisfactory to Lessor and its local
counsel must be executed and delivered. Nonappropriation provisions, if any,
must be satisfactory to Lessor. If Lessor requests, Lessee will also furnish
duly executed landlord and mortgagee waivers and supporting information.
Lessee will also provide board resolutions, incumbency certificates and other
documentation required by Lessor.
Opinion of Counsel: Lessee's counsel shall deliver an opinion to Lessor at closing in form and
substance satisfactory to Lessor. The opinion of counsel will cover the
following tax matters, in addition to other customary opinions:
(a) the portion of Base Rent designated as and constituting interest paid by
Lessee and received by Lessor is excluded from gross income for
federal income tax purposes under Section 103 of the Internal Revenue
Code of 1986 and is exempt from state personal income taxes;
(b) such interest is not a specific preference item for purposes of the federal
individual or corporate alternative minimum taxes; and
(c) counsel has examined, approved and attached the text of the enabling
resolution of Lessee's governing body authorizing Lessee to enter into
the Lease.
Assignment by Lessor: The Lessor shall be entitled to assign its right, title and interest in the Lease
and leased equipment on a private placement basis to qualified purchasers. In
addition, Lessor shall be entitled to assign its right, title and interest in the
Lease to a trustee for the purpose of issuing certificates of participation or
other forms of certificates evidencing an undivided interest in such Lease,
provided such certificates are sold only on a private placement basis (and not
• pursuant to any "public offering") to a purchaser(s) who represent that (I) such
purchaser has sufficient knowledge and experience in financial and business
matters to be able to evaluate the risks and merits of the investment (ii) such
purchaser understands neither the Lease or certificates will be registered under
the Securities Act of 1933, (iii) such purchaser is either an "accredited
investor" within the meaning of Regulation D under the Securities Act of
1933, or a qualified institutional buyer within the meaning of Rule 144A, and
:_(iv) that it is the intention of such purchaser to acquire such certificates (A) for
investment for its own account or (B) for resale in a transaction exempt from
registration under the Securities Act of 1933.
City of Fayetteville
Page 14 of 15
C
Escrow Account: Subject to compliance by Lessee with applicable regulations under the Code,
including but not limited to arbitrage reporting, the proceeds of the Lease may
be deposited into an escrow acceptable to Lessor, and disbursements made
therefrom to pay for equipment upon execution and delivery of an acceptance
certificate (and related documents by Lessee and approved by Lessor.
Utilization Period
Expiration Date: The latest date for any funding will be one year from contract dated date.
Multiple Year
Utilization Period: Multiple year lease financing lines will be subject to annual credit approval by
Lessor..
Credit Due Diligence: In order to complete its credit due diligence, Lessor will require Lessee to
submit:
Three years of most recent financial statements;
Most recent fiscal year budget;
Insurance Certificate.
City of Fayetteville
Page 15 of 15
•
APPENDIX A
PROPOSER GUARANTEES
The proposer certifies it can and will provide and make available, at a minimum, all services set
forth in this request for Short Term Leasing Services.
Signature of Official: (/\
Name (typed): j 0B9 rC C L LE(Z I
Title:. V 1 C -C ? 511> EJ T
Firm:
Date: i 2.r30t_
Z
�P Sc Ivor i �-1PT- i-1-1ts p1ePOSL.. tS Es
2 O 'o LE7}s c 1�j ry at_
PrPP�vr�t_ tS 5Lt3T-E�r c2c�t� Zevte��, .
C
S
APPENDIX B •
Was) L'Th
A. Proposer warrants that it is willing and able to comply with State of Arkansas laws with
respect to foreign (non -state of Arkansas) corporations.
B. Proposer warrants that it is willing and able to obtain an errors and omissions insurance
policy providing a prudent amount of coverage for the willful or negligent acts, or omissions of
any officers, employees or agents thereof.
C. Proposer warrants that it will not delegate or subcontract its responsibilities under an
agreement without the express prior written permission of the City of Fayetteville.
D. Proposer warrants that all information provided by it in connection with this proposal is true
and accurate.
Signature
Name (typed): 20 y r3
Firm:.- G
Date:
Levi -s i a
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:zl xrr- e1Z V t $ C. v c9 -t
7
P-.z3m� 'i3 tc
Sample Amortization Schedule
City of Fayetteville
Fire Trucks: $1,769,865.49
debt
service
interest
debt
Date
number
2.64000%
principal
service
balance
Apr -16-03
0
1,769,865.49
May -16-03
1
3,893.70
27,626.11
31,519.82
1,742,239.38
Jun -16-03
2
3,832.93
27,686.89
31,519.82
1,714,552.49
Jul -16-03
3
3,772.02
27,747.80
31,519.82
1,686,804.68
Aug -16-03
4
3,710.97
27,808.85
31,519.82
1,658,995.84
Sep -16-03
5
3,649.79
27,870.03
31,519.82
1,631,125.81
Oct -16-03
6
3,588.48
27,931.34
31,519.82
1,603,194.47
Nov -16-03
7
3,527.03
27,992.79
31,519.82
1,575,201.68
Dec -16-03
8
3,465.44
28,054.37
31,519.82
1,.547,147.31
Jan -16-04
9
3,403.72
28,116.09
31,519.82
1,519,031.22
Feb -16-04
10
3,341.87
28,177.95
31,519.82
1,490,853.27
Mar -16-04
11
3,279.88
28,239.94
31,519.82
1,462,613.33
Apr -16-04
12
3,217.75
28,302.07
31,519.82
1,434,311.26
May -16-04
13
3,155.48
28,364.33
31,519.82
1,405,946.93
Jun -16-04
14
3,093.08
28,426.73
31,519.82
1,377,520.19
Jul -16-04
15
3,030.54
28,489.27
31,519.82
1,349,030.92
Aug -16-04
16
2,967.87
28,551.95
31,519.82
1,320,478.97
Sep -16-04
17
2,905.05
28,614.76
31,519.82
1,291,864.21
Oct -16-04
18
2,842.10
28,677.72
31,519.82
1,263,186.49
Nov -16-04
19
2,779.01
28,740.81
31,519.82
1,234,445.68
Dec -16-04
20
2,715.78
28,804.04
31,519.82
1,205,641.65
Jan -16-05
21
2,652.41
28,867.41
31,519.82
1,176,774.24
Feb -16-05
22
2,588.90
28,930.91
31,519.82
1,147,843.33
Mar -16-05
23
2,525.26
28,994.56
31,519.82
1,118,848.77
Apr -16-05
24
2,461.47
29,058.35
31,519.82
1,089,790.42
May -16-05
25
2,397.54
29,122.28
31,519.82
1,060,668.14
Jun -16-05
26
2,333.47
29,186.35
31,519.82
1,031,481.79
Jul -16-05
27
2,269.26
29,250.56
31,519.82
1,002,231.23
Aug -16-05
28
2,204.91
29,314.91
31,519.82
972,916.33
Sep -16-05
29
2,140.42
29,379.40
31,519.82
943,536.92
Oct -16-05
30
2,075.78
29,444.04
31,519.82
914,092.89
Nov -16-05
31
2,011.00
29,508.81
31,519.82
884,584.08
Dec -16-05
32
1,946.08
29,573.73
31,519.82
855,010.34
Jan -16-06
33
1,881.02
29,638.79
31,519.82
825,371.55
Feb -16-06
34
1,815.82
29,704.00
31,519.82
795,667.55
Mar -16-06
35
1,750.47
29,769.35
31,519.82
765,898.20
Apr -16-06
36
1,684.98
29,834.84
31,519.82
736,063.36
May -16-06
37
1,619.34
29,900.48
31,519.82
706,162.88
Jun -16-06
38
1,553.56
29,966.26
31,519.82
676,196.62
Jul -16-06
39
1,487.63
30,032.18
31,519.82
646,164.44
Aug -16-06
40
1,421.56
30,098.26
31,519.82
616,066.18
Sep -16-06
41
1,355.35
30,164.47
31,519.82
585,901.71
Oct -16-06
42
1,288.98
30,230.83
31,519.82
555,670.88
Nov -16-06
43
1,222.48
30,297.34
31,519.82
525,373.54
Dec -16-06
44
1,155.82
30,364.00
31,519.82
495,009.54
Jan -16-07
45
1,089.02
30,430.80
31,519.82
464,578.75
Feb -16-07
46
1,022.07
30,497.74
31,519.82
434,081.00
Mar -16-07
47
954.98
30,564.84
31,519.82
403,516.16
Apr -16-07
48
887.74
30,632.08
31,519.82
372,884.08
May -16-07
49
820.34
30,699.47
31,519.82
342,184.61
CI
•
Jun -16-07
50
752.81
30,767.01
31,519.82
311,417.60
Jul -16-07
51
685.12
30,834.70
31,519.82
280,582.90
Aug -16-07
52
617.28
30,902.53
31,519.82
249,680.36
Sep -16-07
53
549.30
30,970.52
31,519.82
218,709.84
Oct -16-07
54
481.16
31,038.66
31,519.82
187,671.19
Nov -16-07
55
412.88
31,106.94
31,519.82
156,564.25
Dec -16-07
56
344.44
31,175.38
31,519.82
125,388.87
Jan -16-08
57
275.86
31,243.96
31,519.82
94,144.91
Feb -16-08
58
207.12
31,312.70
31,519.82
62,832.21
Mar -16-08
59
138.23
31,381.59
31,519.82
31,450.63
Apr -16-08
60
69.19
31,450.63
31,519.82
0.00
T 0 T A L 121,323.54 1,769,865.49 1,891,189.03
___=====c====c======cc c=====_____
S • s� V
Sample Amortization Schedule
$1,178,928 Principal
debt
service interest debt
Date number 2.64000% principal service balance
Apr -16-03 0 1,178,928.00
• May -16-03 1 2,593.64 18,402.08 20,995.72 1,160,525.92
Jun -16-03 2 2,553.16 18,442.56 20,995.72 1,142,083.36
Jul -16-03 3 2,512.58 18,483.13 20,995.72 1,123,600.23
Aug -16-03 4 2,471.92 18,523.80 20,995.72 1,105,076.43
Sep -16-03 5 2,431.17 18,564.55 20,995.72 1,086,511.89
Oct -16-03 6 2,390.33 18,605.39 20,995.72 1,067,906.49
Nov -16-03 7 2,349.39 18,646.32 20,995.72 1,049,260.17
Dec -16-03 8 2,308.37 18,687.34 20,995.72 1,030,572.83
Jan -16-04 9 2,267.26 18,728.46 20,995.72 1,011,844.37
Feb -16-04 10 2,226.06 18,769.66 20,995.72 993,074.71
Mar -16-04 11 2,184.76 18,810.95 20,995.72 974,263.76
Apr -16-04 12 2,143.38 18,852.34 20,995.72 955,411.42
• May -16-04 13 2,101.91. 18,893.81 20,995.72 936,517.61
Jun -16-04 14 2,060.34 18,935.38 20,995.72 917,582.23
Jul -16-04 15 2,018.68 18,977.04 20,995.72 898,605.20
Aug -16-04 16 1,976.93 19,018.79 20,995.72 879,586.41
Sep -16-04 17 1,935.09 19,060.63 20,995.72 860,525.78
Oct -16-04 18 1,893.16 19,102.56 20,995.72 841,423.22
Nov -16-04 19 1,851.13 19,144.59 20,995.72 822,278.64
Dec -16-04 20 1,809.01 19,186.70 20,995.72 803,091.93
Jan -16-05 21 1,766.80 19,228.91 20,995.72 783,863.02.
Feb -16-05 22 1,724.50 19,271.22 20,995.72 764,591.80
Mar -16-05 23 1,682.10 19,313.62 20,995.72 745,278.18
Apr -16-05 24 1,639.61 19,356.11- 20,995.72 725,922.08
May -16-05 25 1,597.03 19,398.69 20,995.72 706,523.39
Jun -16-05 26 1,554.35 19,441.37 20,995.72 687,082.03
Jul -16-05 27 1,511.58 .19,484.14 20,995.72 667,597.89
Aug -16-05 28 1,468.72 19,527.00 20,995.72 648,070.89
Sep -16-05 29 1,425.76 19,569.96 20,995.72 628,500.93
Oct -16-05 30 1,382.70 19,613.01 20,995.72 608,887.91
Nov -16-05 31 1,339.55 19,656.16 20,995.72 589,231.75
Dec -16-05 32 1,296.31 19,699.41 20,995.72 569,532.34
Jan -16-06 33 1,252.97 19,742.75 20,995.72 549,789.59
Feb -16-06 34 1,209.54 19,786.18 20,995.72 .530,003.41
Mar -16-06 35 1,166.01 19,829.71 20,995.72 510,173.70
Apr -16-06 36 1,122.38 19,873.33 20,995.72 490,300.37
May -16-06 37 1,078.66 19,917.06 20,995.72 470,383.31
Jun -16-06 38 1,034.84 19,960.87 20,995.72 450,422.44
Jul -16-06 39 990.93 20,004.79 20,995.72 430,417.65
• Aug -16-06 .40 946.92 20,048.80 20,995.72 410,368.85
Sep -16-06 41 902.81 20,092.91 20,995.72 390,275.95
Oct -16-06 42 858.61 20,137.11 20,995.72 370,138.84
Nov -16-06 43 814.31 20,181.41 20,995.72 349,957.43
• Dec -16-06 44 769.91 20,225.81 20,995.72 329,731.62
Jan -16-07 45 725.41 20,270.31 20,995.72 309,461.31
Feb -16-07 46 680.81 20,314.90 20,995.72 289,146.41
Mar -16-07 47 636.12 20,359.59 20,995.72 268,786.81
Apr -16-07 48 591.33 20,404.39 20,995:72 248,382.43
May -16-07 - 49 546.44 20,449.28 20,995.72 227,933.15
'Jun -16-07 50 501.45 20,494.26 20,995.72 207,438.89
Jul -16-07 51 456.37 20,539.35 20,995.72 186,899.53
Aug -16-07
52
411.18
20,584.54
20,995.72
166,315.00
Sep -16-07
53
365.89
20,629.82
20,995.72
145,685.17
Oct -16-07
54
320.51
20,675.21
20,995.72
.125,009.96
Nov -16-07
55
275.02
20,720.70
20,995.72
104,289.27
Dec -16-07
56
229.44
20,766.28
20,995.72
83,522.99
Jan -16-08
57
183.75
20,811.97
20,995.72
62,711.02
Feb -16-08
58
137.96
20,857.75
20,995.72
41,853.27
Mar -16-08
59
92.08
20,903.64
20,995.72
20,949.63
Apr -16-08
60
46.09
20,949.63
20,995.72
0.00
T O T A L 80,815.02 1,178,928.00 1,259,743.02
aavvavvvvav vvaavaaavav vvvvavvaavv
CITY OF FAYETTEVILLE, ARKANSAS
MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
(AMENDMENT 65)
TRANSCRIPT OF PROCEEDINGS
Dated as of July 9, 2003
Prepared By:
KUTAK ROCK LLP
425 West Capitol, Suite 1100
Little Rock, Arkansas 72201
10-50531.1
• City of Fayetteville, Arkansas
Master Equipment Lease/Purchase Agreement
(Amendment 65)
INDEX
Item No.
Closing Certificate of the City (Amendment 65 Lease/Purchase Agreement)
Exhibit A - Ordinance No. 4484 adopted May 6, 2003,
authorizing execution and delivery of the Lease/Purchase
Agreement
Exhibit B — Minutes of City Council meeting held May 6, 2003
adopting Ordinance No. 4484
Exhibit C — Proof of Publication of Ordinance No. 4484 in the
• Northwest Arkansas edition of the Arkansas Democrat -Gazette
on May 24, 2003
Exhibit D — Proof of Publication of Notice of Public Hearing on
Ordinance No. 4484 in the Northwest Arkansas edition of the
Arkansas Democrat -Gazette on April 23, 2003
Master Equipment Lease/Purchase Agreement
Opinion of Bond Counsel
Form 8038-G and Proof of Mailing to Internal Revenue Service
Transcripts Delivered to:
City of Fayetteville, Attn: Mr. Steve Davis (1 Bound; 1 CD Rom)
Banc of America Leasing & Capital, LLC, Attn: Ms. Tessie G. Panganiban (1 Bound)
Fayetteville City Attorney, Attn: Kit Williams, Esq. (1 Bound)
Kutak Rock LLP (1 Bound; 1 CD Rom)
•
10-50531.1
EXECUTION COPY
CLOSING CERTIFICATE OF THE CITY
• (Amendment 65 Lease/Purchase Agreement)
The undersigned Mayor and City Clerk of the City of Fayetteville, Arkansas, a duly
organized municipality and political subdivision of the State of Arkansas (the "City"), do hereby
certify, represent, covenant and request as follows:
1. The undersigned are the duly elected, qualified, and acting Mayor and City Clerk
of the City, and as such officials have in their possession or have access to the official books and
corporate records of the City. This Certificate is executed and delivered in connection with the
execution and delivery of the Master Equipment Lease/Purchase Agreement (Amendment 65
Lease), together with the Schedule of Property No. 1, each dated as of June 25, 2003 (the
"Lease/Purchase Agreement"), by and between the City and Banc of America Leasing & Capital,
LLC, a Delaware limited liability company ("Banc of America").
2. Attached hereto as Exhibit A is a true, complete and correct copy of Ordinance
No. 4484 (the "Authorizing Ordinance"), duly adopted by a majority of the City Council of the
City at a duly called regular meeting of the City Council, open to the public, held May 6, 2003.
The Authorizing Ordinance authorizes the execution and delivery of the Lease/Purchase
Agreement, and the Authorizing Ordinance is in full force and effect and has not been altered,
amended or repealed as of the date hereof. No petition or petitions to refer the Authorizing
Ordinance to the people under Amendment No. 7 to the Constitution of the State of Arkansas
have been filed as of the date hereof, and the City Council has not referred the Authorizing
Ordinance to the people for adoption or rejection.
• Attached hereto as Exhibit B is a true, complete and correct copy of the minutes of a
meeting of the City Council held May 6, 2003, setting forth the details of a public hearing held
on the adoption of the Authorizing Ordinance and showing adoption of the Authorizing
Ordinance, as said minutes appear in the official records of the City. At said meeting a quorum
was present and acted throughout.
Attached hereto as Exhibit C is a true, complete, and correct copy of a publisher's
affidavit showing publication of the Authorizing Ordinance in the Northwest Arkansas edition of
the Arkansas Democrat -Gazette on May 24, 2003.
Attached hereto as Exhibit D is a true, complete, and correct copy of a publisher's
affidavit showing publication of a notice of public hearing on the adoption of the Authorizing
Ordinance in the Northwest Arkansas edition of the Arkansas Democrat -Gazette on April 23,
2003.
No authority or proceeding in connection with the execution and delivery of the
Lease/Purchase Agreement has been repealed, revoked or rescinded.
3. The persons named below were on the date of execution of the Lease/Purchase
Agreement, and are on the date hereof, the duly qualified and acting incumbents of the offices of
the City set opposite their respective names. The undersigned, or their successors in office, are
• the authorized representatives of the City for all purposes of the Lease/ Purchase Agreement and
the Authorizing Ordinance.
10-50525.1
Title Name
• Mayor Dan Coody
City Clerk Sondra Smith
4. The undersigned Mayor of the City did manually execute the Lease/Purchase
Agreement and the undersigned City Clerk of the City did manually attest the Lease/Purchase
Agreement.
5. The City has duly adopted the Authorizing Ordinance (and has duly pledged the
receipts of solid waste fees and charges described therein) and has duly authorized, executed and
delivered the Lease/Purchase Agreement by all necessary action under the Constitution and laws
of the State of Arkansas, including particularly Amendment 65 to the Constitution and Arkansas
Code Annotated Sections 14-164-401 et seq. (the "Authorizing Legislation"). As of the date
hereof, the Authorizing Ordinance and the Lease/Purchase Agreement are in full force and effect
and each constitutes the valid, binding and enforceable obligation of the City, except to the
extent their enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally, or by the availability of equitable remedies, and the City is
entitled to the benefits of the same. The City has complied in all respects with the provisions of
the Authorizing Legislation and has full legal right, power and authority to enter into the
Lease/Purchase Agreement for the purpose stated in the Authorizing Legislation, to adopt the
Authorizing Ordinance, and to carry out and consummate all other transactions contemplated by
the Lease/Purchase Agreement and the Authorizing Ordinance.
• 6. Any certificate signed by any official of the City (including this certificate)
delivered in connection with the Lease/Purchase Agreement shall be deemed a representation
and warranty by the City as to the statements made therein (and herein).
7. The seal affixed to this certificate is the legally adopted, proper and only official
seal of the City, and has been duly affixed to the Lease/Purchase Agreement.
8. The meeting of the City Council of the City referred to in paragraph 2 hereof was
open to the public in compliance with the provisions of Section 25-19-106 of the Arkansas Code
Annotated (2002 Repl.), as amended and supplemented.
9. The present officials of the City and their respective terms are as follows:
Date of Expiration
Name
Office
of Term
Dan Coody
Mayor
12-31-04
Sondra Smith
City Clerk
12-31-04
Kit Williams
City Attorney
12-31-06
Kyle Cook
Alderman
12-31-06
Bob Davis
Alderman
12-31-04
Lioneld Jordan
Alderman
12-31-04
Shirley Lucas
Alderman
12-31-06
Don Man
Alderman
12-31-04
Robert Reynolds
•
Alderman
12-31-06
Robert Rhoades
Alderman
12-31-06
Brenda Thiel
Alderman
12-31-04
10-50525.1
10. The authorized representative of the City for all purposes of the Lease/Purchase
• Agreement is Dan Coody, Mayor, whose signature appears on page _ Until further written
notice to you, any instrument authorized by the Lease/Purchase Agreement to be signed by an
authorized representative of the City is to be honored if it contains the manual signature of this
individual.
11. The City has not and will not engage in any activity which might result in the
portion of the rentals constituting interest under the Lease/Purchase Agreement becoming
taxable to it or any of said interest on the Bonds becoming taxable to the recipients thereof under
the Federal income tax laws.
12. The City is a city of the first class pursuant to Title 14, Subtitle 3, Chapter 43 of
the Arkansas Code Annotated. The City is operating under the major -council form of
government pursuant to Title 14.
13. The City has not adopted any by-laws or rules of procedure relating to the conduct
of its City Council meetings.
14. There is no action, suit, proceeding, inquiry or investigation involving the City
before or by any court or public board or body pending or, to the knowledge of the undersigned,
threatened wherein an unfavorable decision, ruling or finding would: (i) affect the creation,
organization, existence or powers of the City or the titles of its officials to their respective
offices, (ii) enjoin or restrain the execution or delivery of the Lease/Purchase Agreement or the
. pledge of the receipts of solid waste fees and charges thereunder, (iii) in any way question or
affect any of the rights, powers, duties or obligations of the City with respect to the solid waste
fees and charges, or (iv) in any way question or affect any authority for the authorization,
execution or delivery of the Lease/Purchase Agreement or the validity or enforceability of the
Lease/Purchase Agreement or the Authorizing Ordinance, or the assignment by the City of any
of the moneys, instruments or other rights pledged under the Lease/Purchase Agreement.
15.
In
the City,
the time for filing a referendum petition is fixed at 31 days after the
publication
of the
measure
upon which the referendum is sought.
16. The adoption of the Authorizing Ordinance and the execution and delivery of the
Lease/Purchase Agreement, and compliance with the provisions thereof under the circumstances
contemplated thereby does not and will not in any material respect conflict with, or constitute on
the part of the City a breach or default under, any agreement or other instrument to which the
City is a party, or any existing law, administrative regulation, court order or consent decree to
which the City is subject.
17. The Equipment (as defined in the Lease/Purchase Agreement) is essential to the
functions of the City or to services the City provides to its citizens. Further, the City has an
immediate need for, and expects to make immediate use of, substantially all of such Equipment,
which need is not temporary or expected to diminish in the foreseeable future.
18. The City's employer tax identification number is 71-6018462.
•
10-50525.1
9
19. Dan Coody, Mayor, hereby certifies that the signature of Sondra Smith, City
• Clerk, affixed hereto is her true and correct signature, and Sondra Smith, City Clerk, hereby
certifies that the signature of Dan Coody, Mayor, affixed hereto is his true and correct signature.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of July 9,
2003.
CITY OF FAYETTEVILLE, ARKANSAS
By: AGL1dw Aft
Sondra Smith, City Clerk
•
•
10-50525.1
I
2
•• ORDINANCE NO.4484
MICROJFILME D
AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY OF
A MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT HAVING A
NOMINAL PRINCIPAL AMOUNT OF NOT TO EXCEED $5,000,000 FOR
THE PURPOSE OF FINANCING THE COST OF ACQUIRING CERTAIN
SOLID WASTE VEHICLES, CARTS AND OTHER EQUIPMENT; AND
PRESCRIBING OTHER MATTERS RELATING THERETO
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has
determined that there is a great need for a mechanism to finance the costs of acquisition of
certain solid waste vehicles, carts and related equipment to benefit the residents of the City (the
"Improvements"); and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the
Constitution of the State of Arkansas ("Amendment 65") and the Local Government Capital
Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated (1998 Repl.)
Sections 14-164-401 et seq. (as from time to time amended, the "Act"), to enter into certain
short-term lease/purchase arrangements to finance the costs of various capital improvements
such as those comprising the Improvements, which lease obligations shall constitute special
• obligations of the City under Amendment 65 and the Act; and
WHEREAS, the City has made arrangements for the entry into a Master Equipment
Lease/Purchase Agreement (the "Lease/Purchase Agreement") with Banc of America Leasing &
Capital, LLC, a Delaware limited liability company (the "Lessor"), in substantially the -form
presented to and before this meeting;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS THAT:
Section 1. Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 65 and the Act, and in order to finance the acquisition of the
Improvements, the Mayor is hereby authorized and directed to execute the Lease/Purchase
Agreement, and the City Clerk is hereby authorized and directed to execute the Lease/Purchase
Agreement and to affix the seal of the City thereto, and the Mayor and the City Clerk are hereby
authorized and directed to cause the Lease/Purchase Agreement to be executed by the Lessor.
The Lease/Purchase Agreement is hereby approved in substantially the form submitted to this
meeting. The Mayor is hereby authorized to confer with the Lessor and Kutak Rock LLP, Bond
Counsel, in order to complete the Lease/Purchase Agreement in substantially the form submitted
to this meeting, with such changes as shall be approved by such persons executing the
Lease/Purchase Agreement, their execution to constitute conclusive evidence of such approval.
•(Advice is given that a copy of the Lease/Purchase Agreement in substantially the form
authorized to be executed is on file with the City Clerk and is available for inspection by any
interested person.)
• Section 2. The nominal principal amount of the Lease/Purchase Agreement may not
exceed $5,000,000 in the aggregate and the effective interest rate relating to the City's
obligations under the Lease/Purchase Agreement shall not exceed the maximum rate prescribed
by Arkansas law, including Amendment 65.
Section 3. It is affirmed that, pursuant to Amendment 65 and the Act, the payment
obligations of the City under the Lease/Purchase Agreement shall not constitute general
obligations of the City, but shall be special obligations, secured by and payable from the receipts
of the City's solid waste fees and charges. The payment obligations shall additionally be secured
by a security interest in the Improvements as provided in the Lease/Purchase Agreement.
Section 4. The Mayor and City Clerk, for and on behalf of the City, are hereby
authorized and directed to do any and all things necessary to effect the execution and delivery of
the Lease/Purchase Agreement, and to perform all of the obligations of the City under and
pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on
behalf of the City, to execute all papers, documents, certificates and other instruments that may
be required for the carrying out of such authority or to evidence the exercise thereof.
Section 5. The provisions of this Ordinance are hereby declared to be severable, and
if any section, phrase or provision shall for any reason be declared to be illegal or invalid, such
declaration shall not affect the validity of the remainder of the sections, phrases or provisions of
this Ordinance.
• Section 6. All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
PASSED and APPROVED this the 6th day of May, 2003.
ATTEST:
1
2
CERTIFICATE OF RECORD
State of Arkansas 'I
City of Fayetteville I ss'
I, Sondra Smith, City Clerk/Treasurer for the City
of Fayetteville, do hereby certify that the
foregoing instrument is a true and correct copy
of the on anal +e
g
filed in my office on the day of
40 • Witness mys
hand adnseal this F.day of ` ", . 7cc3.
(4 ee j Tua.xc.�.O
3
•
City Council Meeting
May 6.2003
Page I of 23
• MINUTES OF A MEETING
OF THE
CITY COUNCIL
May 6, 2003
A meeting of the Fayetteville City Council was on May 6, 2003 at 6:00 p.m. in Room 219 of the
City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas.
PRESENT: Alderman Reynolds, Thiel, Cook, Marr, Rhoads, Davis, Lucas, Jordan, Mayor
Coody, City Attorney Kit Williams, City Clerk Sondra Smith, Staff, Press, and Audience.
Downtown Dickson Enhancement Program (DDEP) - A Streetscape and Sidewalks Study
presentation.
Sharon Hoover, Chair of the Downtown Dickson Enhancement Group gave a presentation on the
contractual agreement of the sidewalk master plan for the downtown area.
Mayor Coody thanked Ms. Hoover for the presentation. He said once Dickson Street is done and
we start expanding to the rest of the downtown area this is going to be an enhancement to the
entire downtown.
Alderman Marr said when we were going through the budget process one of the things that we
• talked about was having tangible measurable activities when we gave money to an organization
and one of the action items under the contract for DDEP was a study of our master sidewalks
within the boundary and I definitely think they have met that requirement.
CONSENT:
Approval Of The Minutes: Approval of the April 1, 2003 meeting minutes. Approval of the
April 15, 2003 meeting minutes.
Fire Department Uniforms: A resolution awarding Bid #03-09 to NAFECO, Inc. in the
amount of $32,060.14 to provide new uniforms to the existing personnel of the Fayetteville Fire
Department.
Resolution 60-03 As Recorded In The Office Of The City Clerk
Score, Inc. /Soccer Uniforms: A resolution approving the purchase of youth soccer uniforms
from Score Uniforms in the amount of $26,600.00.
Resolution 61-03 As Recorded In The Office Of The City Clerk
City Council Mating
May 6.2003
Page 2 of 23
• Mobley Contractors, Inc. Old Missouri Road Contract: A resolution awarding a
construction contract to Mobley Contractors, Inc. in the amount of $1,644,402.38 for
improvements to Old Missouri Road from Rolling Hills Drive to Mud Creek; approving a project
contingency in the amount of $164,440.00 and approving a budget adjustment in the amount of
$79,000.00 for same.
Resolution 62-03 As Recorded In The Office Of The City Clerk.
University of Arkansas 20 Year Hangar Lease: A resolution approving a lease agreement
with the University of Arkansas for space at the Fayetteville Municipal Airport to construct an
80' x 120' hangar.
Resolution 63-03 As Recorded In The Office Of The City Clerk
McClelland Consulting Engineers Hangar Contract: A resolution approving, contingent
upon the execution of a lease agreement with the University of Arkansas, Task Order #1 with
McClelland Consulting Engineers, Inc. for engineering services and construction observation
associated with the construction of an 80' x 120' hangar at the Fayetteville Municipal Airport.
Resolution 64-03 As Recorded In The Office Of The City Clerk
Bes-Pac Waste Equipment: A resolution awarding Bid #03-05 to Bes-Pac Waste Equipment in
• the amount of $200,000.00 for the purchase of new commercial compactors and drop boxes on
an as needed basis.
Resolution 65-03 As Recorded In The Office Of The City Clerk
Hiring Maintenance Worker H's: A resolution authorizing the Transportation Division to
hire five (5) additional full-time temporary employees (Maintenance Worker I1).
Resolution 66-03 As Recorded In The Office Of The City Clerk
Ozark Regional Transit: A resolution approving the transfer of funds in the amount of $61,000
to the Ozark Regional Transit Authority for the purpose of enhancement and repair of the Public
Transit Fleet; and approving a budget adjustment in that amount for same.
Resolution 67-03 As Recorded In The Office Of The City Clerk
Alderman Jordan moved to approve the consent as read. Alderman Davis seconded. The
motion carried unanimously.
•
City Council Meeting
May 6, 2003
Page 3 of 23
• OLD BUSINESS:
R-PZD 03-1.00 (Jackson Place): Planned Zoning District Jackson Place: An ordinance
establishing a Residential Planned Zoning District titled Jackson Place (R-PZD 03-1.00) located
south of Skillem Road and east of Crossover Road; amending the official zoning map of the City
of Fayetteville. The ordinance was left on the first reading at the April 15, 2003 City Council
Meeting.
Alderman Davis moved to suspend the rules and go to the second reading. Alderman
Jordan seconded. Upon roll call the motion carried unanimously.
Mr. Williams read the ordinance
Tim Conklin, City Planning, said this is a residential planned zoning district it is 14 lots of single
family homes. Staff and the Planning Commission recommended approval.
Alderman Marr
said
at agenda session when this first came up there was some discussion about
the intersection
and
whether or not
that could be studied. I am concerned about the concern on
this intersection
and
how this might
impact 265 traffic.
Mr. Conklin said staff did forward to transportation consultants that are working on the master
plan a copy of this intersection for them to look at. A plan at this time is to place a stop sign
• where Old Wire turns back to the north and a stop sign at the new road that will line up across
from Old Wire going to the north.
Alderman
Davis
moved to
suspend the
rules and
go to the third and final reading.
Alderman
Jordan
seconded.
Upon roll call
the motion
carried unanimously.
Mr. Williams read the ordinance
Mayor Coody asked shall the ordinance pass. Upon roll call the ordinance passed
unanimously.
Ordinance 4480 As Recorded In The Office Of The City Clerk
NEW BUSINESS:
Wilson Springs Business Park Land Sale: A resolution to approve the real estate purchase and
sale contract wherein Legacy Project LLC purchases the 289 acre I-540 Business Park site from
the City of Fayetteville for 5.2 million dollars and other consideration.
Collins Haynes a developer said he has made an offer on the I-540 Business Park and that he is
here to answer any questions. He said he thinks a minimum of 100 acres will be preserved.
• Alderman Thiel said that in the contact it says an agreement to convey and deed 100 acres more
or less of the property identified by Legacy Project to an Environmental Conversation Non -Profit
Organization acceptable to and determined by Legacy Project. There are at least 85 acres of
delineated wet lands and 14-15 acres of floodway. She asked if that was part of this.
City Council Mating
May 6.2003
Page 4 of 23
• Mr. Haynes said yes it is part of it. He said we consider the described wetlands on the site to be
pristine acreage and we believe that that acreage should be held in perpetuity by a group or a
series of groups that can preserve it. I think more study needs to be done on the site to determine
where the wet lands are.
Alderman Jordan asked how we came up with the figure of $5.2 million.
Mayor Coody said he came up with that because he wanted to bring a number forward that he
thought was high enough for the City Council and the tax payers to reap the benefit of, yet low
enough to where a developer, if we could find one would fmd it attractive enough to purchase. It
was kind of the middle ground of getting a good return on our investment yet attractive enough
to the developer to want to make an offer, which he has.
Alderman Jordan said this comes to roughly $34,000.00 per acre.
Mr.
Haynes
said
some of that site is easement and he is paying for land that is already owned by
the
City and
will
continue to be owned in perpetuity by
the City.
Alderman Jordan said he is trying to determine what an acre of land is worth out there. He has
heard from $10,000.00 up to $50,000.00. He said he wanted clarification as to what it is worth
per acre.
• Mr. Haynes said the worth would have to be analyzed in several different ways. This site has a
signification ground water situation on it. The ground water varies from 2 feet to 5 feet in areas
on this property. He said this causes additional expense in the development process. We take
those numbers and work backwards to try to find what our real costs are. If we are buying land
at $10,000.00 per acre but our actual development cost were $40,000.00 per acre then that is
something that we would have to consider before we start the project. We have looked at the soil
studies that were done; we know this is going to be an expensive site to do any development
work on.
Alderman Marr asked Mr. Haynes if this is a time sensitive transaction meaning does it need to
happen within a certain time frame. If this Council does not make a decision tonight will it kill
the project from your perspective.
Mr. Haynes said if we are successful with obtaining approval from the City Council to a least
present a plan for your review so that we could purchase this land we would be back within 30
days at the latest. With any project that has been as controversial as this one is, in order to
develop it successfully there is going to have to be compromise from our side and from the ones
that want to hold this land insitu forever. Without compromise it is never going to happen.
Mayor Coody gave a brief history of the land. In 1988 the City purchased this land for $1.3
million and over the course of the next few years we spent money putting in water and sewer
• lines and a lift station. Southwestern Bell has put in fiber optic cable.
City Council Meeting
May 6, 2003
Page 5 of 23
• Steve Davis, Finance and Internal Services Director, said the City has $1,658,000.00 in land cost
and an additional $552,000.00 in other cost of which includes the sewer and water lines. Total
cost to the City is $2.2 million rounded.
Mayor Coody said he thought it was originally bought because Texas Instruments was interested
in coming to Arkansas, but they did not come.
Jonathan Jones, a member of the Task Force, said the per acre value is about $18,000.00 per acre
for 289 acres at $5.2 million and that is not counting the $700.000 rebate, with that it would be
more along the line of $15,000. The appraisals came in from $11,000 to $67,000 on comparable
sales along the I-540 corridor this is on the lower end of those. The reason it is lower is because
a lot of the property has drainage and soil issues. Those same issues are what make this property
ecologically valuable. Mr. Haynes seems like a very trustworthy fellow. I would prefer to see a
more concrete proposal with more specific details where there was an agreement in hand
between the developer and Audubon before the City Council approves the sale of the property.
Mayor Coody said that before the transaction would consummate, the PZD zoning would have to
be approved.
Alderman Jordan asked what the 70 acres that the Task Force recommended for development
would be worth per acre.
• Mr. Jones said the economic value of any property is at best a guess until the transaction has
been consummated. The 70 acres on the south if you look at the report the estimated
development cost is across the board $50,000 per acre. Development cost on the 70 acres to the
south would be less. I would put the value of the 70 acres at least the medium of the appraised
value that came back which would be somewhere in the mid 30's. The pay back to the City from
this investment would be 6 '/2 to 7 percent.
Lou
Weiss she was
told that we could not have the Audubon or anyone
like that because this is
not a park property,
but there are other places in Fayetteville that we do
that so why can't we do
it in
this
place.
Kit Williams, City Attorney, said constitutionally the City is not allowed to give away resources
to non-profit groups that would be doing government service things. We can enter into
agreements with non -profits organizations, it doesn't always require money if they can provide
enough services to the citizens of Fayetteville to justify the value of the property that we are
leasing to them. The key issue is value. In order for a non-profit to be provided this land I can't
see how they would be able to provide enough services to Fayetteville citizens to pay the fair
market lease on land that is worth so much money.
Ms. Weiss said so would it be up to you and the Mayor and the Council people to make the
decision on how valuable the organization that wants to lease the land would be to the citizens to
Fayetteville.
• Mr. Williams said certainly the Council and the Mayor would need to make some decisions like
that but it would also have to be reasonable decisions. The Attorney General in his opinion has
stated the crucial issue is whether the agreement is supported by adequate consideration. You
City Council Meeting
May 6, 2003
Page 6 of 23
• can lease land to non -profits, but the tax payers are entitled to adequate consideration for their
property.
Terry Eastin, Sharon Davison, and Al Vick spoke against the sale of the property.
Jeff Collins, the Chairman of the Task Force said the idea that there would be development on
the north side of the property was considered and it was deemed that what was required was
further research on the value of that property before it would be developed. When you are
talking about developing the south and the north, some amount of acreage to be determined, that
is within the ream of possibility.
Tom McKinney, a member of the Task Force said the sale of this property was discussed once.
Nothing in the sale proposal coincides at all with any of the recommendations that the Task
Force came up with. The 100 acres is not a donation, that 100 acres is protected wet lands and
flood plains, the developer can not touch that anyway unless he is going to replace it somewhere
else. This is a new project, if the property is sold then as far as I am concerned the delineation of
the wet lands needs to be redone. Our recommendation was that we develop 70 acres of the
southern portion, that approximately 80 acres of the middle portion needs to be set aside for
putridity and that the northern portion of the property should be studied. The other resolution
that was voted on by the City was to negotiate with Audubon to lease the 219 acres that was not
included in the 73 developed.
• Alderman Jordan asked what is impacted wet lands.
Mr. McKinney said as he understands there is certain criteria that must be met to have something
designated as wet land. The wet lands out there meet that criteria.
Alderman Jordan said so those wet lands have always been there but they have sort of been
covered over, but if they are let to go back to their natural state they will return.
Mr. McKinney said yes.
Laura Kelly spoke against the sale of the property.
Rob Leflar, Political Chair of the Ozark Headwater Group of the Sierra Club said this does not
need to be an issue that divides the citizens of Fayetteville. Mayor Coody's plan is a plan that
has some merits, we just disagreed that it is the best plan. The most developable commercially
saleable area that is the piece that recoups the City's investment and then some, protects the tax
payers interest, it should be put on the market, and it should be sold. That is not all the
developable area. The Task Force reported that after study some of the rest of that tract could
prove of less ecological value. The reminder is critical wet land habitat. The Audubon could
protect that. We would request that you table this proposal that is before you. He presented a
petition that was signed by 200 voters in opposition to the sale.
Mayor Coody said the
sale is not a $4.2
million
dollar net
it is a $5.2 million, the $700,00 that we
would reimburse for the development is in the
•
bank but
it can only be used for this site we can
not use it for anything
else. If we don't
use it we have to
send it back to Little Rock.
City Council Mating
May 6.2003
Page 7 of 23
• Andrea Radwell, Stephen Boss, Steven Nichols, Fran Alexander, Jennifer Holt, Jim Bemis, and
Melissa Terry spoke against the sale of the property.
Jeff Erf asked about the $700,000 grant money and how those funds can be used.
Mr. Williams said he has looked at this, there were two grant applications one from Mayor
Hanna's administration and from Mayor Coody's administration. They are almost identical
except for the name of the I-540 site. Both Mayors' in their transmittal letters asked for money
to aid in construction of the water and sewer lines and streets at the park. Mr. Williams read the
resolutions; they state the grants are to aid in the construction of the water and sewer lines and
streets at the park. We would only be able to reimburse Mr. Haynes for the money that he would
spend for street, sewer and water lines. Mr. Williams said these grants are not tied to the
University, it is not tied to technology, and it must be for the infrastructure in the development of
this site. Mr. Williams said he believes that this would be completely legal to use these grants in
that way.
Mr. Erf asked do you think it would be legal to use those grants and give them to the University
of Arkansas Genesis.
Mr. Williams said no.
Steve Frankenberger, a resident, asked Mr. Williams if we were to lease this to the Audubon
• Society and we are trying to delineate the economic benefits to the tax payer of the City to make
it legal to lease this out at something less than market value, you have to be able to defend that
line of reasoning in court, am I correct?
Mr. Williams said yes, I would not say that we are leasing it for less than fair market value, I
would say that we are getting services from the Audubon Society besides money.
Mr. Frankenberger said but it is not an arbitrary figure that you just pick out of the air and the
City Council decides it, you have to be able to defend it in court.. Mr. Frankenberger said no
matter what you decide tonight, the wet lands are preserved. The ad in the paper implies that the
wet lands are to be developed, that is simply not true. The issue is where do we draw the line
between what will be preserved and what will be developed. In a perfect world there would be a
lot more sites like this being preserved, but this is not a perfect world and because it is not a
perfect world, this issue should not be examined in a vacuum. With any issue that involves
money, it has to be decided in the context of the budget and that means it has to be examined as
to where it lies on a list of priories. The value of preservation has to be compared to the value of
what the City would do with that money. This is no different than taking $5.2 million from our
current budget and buying that land. The question is this, what is the best use of this resource for
the people of Fayetteville, is this land more important to us than the fire protection that it would
buy, is this land more important to us than the trails and sidewalks it would buy, is this land more
important to us that the green space that it would buy, is this land more important to us than the
traffic improvement that it would buy, is this land more important to us in the piece of mind we
• would have by setting the money aside and doing nothing with it. Where is this on your list of
priorities, unless it is at the very top, you should vote to sell this land and fund the items that are
on the top. Fully developed this property will be worth hundreds of millions of dollars that will
generate millions of dollars of property taxes for our schools and the library. They will have to
City Council Meeting
May 6, 2003
Page 8 of 23
• pay impact fees to help us with our infrastructure. You will generate a flow of millions of
dollars of commerce that much of it is likely to be subject to sales tax. This is a win, win
situation; I urge you to accept this offer, sell this land and use the money wisely.
Jim Huffman spoke in favor of the sale.
Robert Farrell a resident said he has never seen nor can he recall a time when the
recommendation of a citizens committee became public policy. A resolution does not tie the
hands of elected officials who set public policy and enact laws and ordinances. Selling the
property makes since for the City's economy. Recently 70 acres was acquired at Mount
Sequoyah for green space, we must allocate resources to other things like widening street,
building sidewalks and maintaining our needed repairs in the city and trying to keep up with our
escalating public transit insurance. Several of us went to Little Rock several times to ask for
infrastructure grants for the I-540 property. I take exception that the money was intended for
Genesis, certainly we wanted it to be for the entire community. Please vote for the sale of the
property.
Rebecca Gamer, Bob Hill, Bill Clodfelter and Bill Moeller spoke in favor of the sale of this
property.
Tommy Deweese, a resident, said he represented the City of Fayetteville back in 1998 when they
took 5 of the Mayors from Northwest Arkansas and traveled to Little Rock to try to get the funds
• from the Arkansas Economic Development Division. The specific purpose that I was asked
whenever I made the presentations by the committee was number one what will you use the
money for, by response to that in the way that we came up with dollars is just as Kit Williams
has said, my response was that we would use that for development of the specific property for
streets and sewers out there. We were able to get in those two grants about $700,000. We
received a lot of support from the cities of Bentonville, Springdale, Rogers and all those
communities, because they realized the benefit that all of Northwest Arkansas could have from
the development of that property, on the interstate there so many people travel by each day. Kit,
it's exactly as you say, it was presented and came back to us as a representative of the City of
Fayetteville to be used for that specific property for improvements on street and sewer.
Len Schaper, a resident that worked on the project, said this land was proposed as a Research
and Technology Park at that time because it would bring good jobs. In 1995 I received a memo
from a member of the Research and Technology Park Committee about the ecologically sensitive
nature of some of the land out there, but at that time we thought there was about 7 acres of wet
lands on that property. How did it get to be 85 acres of wet lands, a lot of wet lands is depending
on vegetation. The wet lands may have been there at the time and never appeared because the
land was being leased to folks for them to graze cattle, apparently that kept the water from
running down the hill and forming wet lands. Regardless of how they got there they need to be
preserved. In the mean time things have changed, ideas have changes, concepts have changed,
why should we be building a Research and Technology Park out by the bypass when we have
Genesis and Engineering South down here. I must disagree with Kit, the money was to go for
• Research and Technology Park and the building of infrastructure in a Research and Technology
Park, if you say and the folks from the State say it's tied to the site, so be it, it's tied to the site, it
will still bring in jobs, it will still bring in high quality jobs. If I had my druthers it would go
with the use and have it down at Genesis to help the University put in the infrastructure that we
City Council Meeting
May 6.2003
Page 9 of23
• need down there. Does it make since to have a $5.2 million deal on this land, I think it does in
some form. I am not sure if this is the perfect form, but I think it is a really good offer and I
think you folks need to consider it very, very seriously. Obviously Mr. Haynes is an
environmentally conscious developer, perhaps the title to the land should not all go to him,
perhaps you work it out so first you figure out how much is wet lands, and that wet lands goes
directly to whatever group everybody agrees on, I don't know, it is up to you to structure the best
deal possible. Do you need to vote on it tonight, maybe not, but in principle I can certainly
support this because it is a good use of that land. Is a nature center the best use I don't know,
when I go out in nature I like to be able to hear the frogs, I am not sure I could hear the frogs
above the roar of the 18 wheelers going up and down the bypass. Let's recognize that there is a
lot more history to this than just the Wilson Springs Task Force, it goes way back. The final
study came in 1998, so we worked on this between 1995 and 1998. The City Council accepted it
at that time. A better idea comes along you go along with it. It's been 13 years that the City has
owned this, it is time to recoup the investment, it is time to get the City out of that land
development business and get it into the hands that can do it very well, that has demonstrated his
ability to do it very well, I urge you at some point, maybe not tonight but in the near future, get
this deal worked to the satisfaction of many folks and move on.
John Kelly spoke against the sale of the property.
Bob Nickle, Wayne Mays, and Paul Justus, Charlie Sloan and Dave Fulton spoke for the sale of
the property.
• Jeff Collins said as you look at the Task Force process you have to understand that we started
with a certain state of the world and we tried to do the best with that state of the world. We at
the time had no one making an offer for the property, in fact much of the discussion revolved
around the uncertainty about whether anyone would make an offer for the property. We were
also very concerned about the ability of the City to be a developer. The Audubon had talked
about doing some things, there were a number of ideas floating around, but no resolution had
been passed about the Audubon, we didn't integrate it into our deliberations and we certainly
didn't integrate the idea that someone would be in front of us today offering $5.2 million for this
site into our deliberation, that would have erased a great deal of uncertainly on my part. I was
sort of the leader of the group that looked at the economics of the site and if you look at our
report we made some estimations about job creation, and value of the site. What I would ask you
to do is go back to those estimations and put them into the context, those estimations were made
under a great deal of uncertainty much of which has been removed by my way of thinking by
actually having an offer on the table. There still is uncertainty on the site with regard to
environmental values; I can't speak to those because that is not my area of expertise. What I can
speak to is the idea of value. I don't know how many would go there, I have my doubts about
how many people would actually use the Wilson Springs site. We as individuals assign value to
these environmental amenities. The idea that we are trading one environmental amenity for
another as if all environmental amenities had the exact same dollar value is ludicrous we make
these trade offs all the time. With regard to the Task Force recommendations I think you have to
understand that as time has elapsed and a great deal of time has elapsed since we began the
• process the world has changed. What recommendations we would come to now in this new
world I can not tell you, those are merely guidelines. We did the best we could with the
information that we had. We gave it to you to use to guide your decision making process.
City Council Meeting
May 6, 2003
Page 10 of 23
• He read two letters from two other Task Force members, Kathy Foraker and George Faucette
expressing their support of the sale.
A member of the Task Force said there are many things about the Task Force process that he
regrets, of all of the proposals that were entertained at many meetings in deliberating over what
to do with this property I regret that one of those proposals was not Mr. Haynes proposal. It
would have put everything in better context for us and would have been a better framework for
the decision making. I would say that in accepting this proposal you are in many ways
embodying most of the objectives of the Task Force, one we were trying to develop some
plausible scheme for development in the context of the existing wet lands, the wet lands are
going to be preserved, but also you are going to have a quality development out there. Everyone
can attest to the fact that I have some serious concerns about the City functioning as a private
developer. Turning this over to a private developer takes care of a lot of those concerns for me.
Pete Reagan spoke in favor of the sale of the property.
Bill Ramsey, CEO of the Chamber of Commerce spoke in favor of the sale of the property. In
March the Chamber Board of Directors unanimously passed a resolution in support of the sale of
this property.
Don Nelms, a
resident representing the National
Audubon Society
and Audubon Arkansas, said
he talked with
Dan Taylor, Vice President of the
National Audubon
Society, today and has come
• in full circle in our organization, there has been some question if we are really representing the
National Audubon Society, and I can assure you that I am and that Dan Taylor is. They support
what I am saying. Our objective in the National Audubon Society is to connect people with
nature and almost every person in this entire room grew up in an age that is very different than
what our children are growing up today. I spent 90% of my time when I was at home until dark
or after dark outside and I think many of you did the same thing. You went out into the fields
and you discovered the way the earth works. Today children know more about nature strictly by
TV than any other method and they spend an extremely small amount of time outside and we
feel like that is something important that needs to change because we feel there is something
really being lost in this country. It's not just a matter of a piece of land it's part of our soul, a
part of the structure that helps us come back and be reasonable people and get along and I think
that is what we are trying to do in this city tonight, we are trying to get along. I want to try to get
along, I am not here to read the right act to anybody, but to say I would like to be part of the
solution here tonight and not part of the problem. I think the first thing that I need to explain and
we have explained it before. Let me restate what an Audubon Center is and draw you a picture
of what one would be like in this community. We would be talking about, if we are talking
about Wilson Springs, about a 10,000 square foot building primarily devoted to education and
helping people interact with nature. Where school children could come there, college students
could come there and do research, where we could have all day long with students and get them
out into the field and let them feel nature and find out what it's really like and get that wow
factor back into what they see, that's what TV doesn't have. Kids can sit home and watch a bird
do something or watch a fish do something but there is no wow to it, but when you are in nature
• and you are out there and you see something and you've got that where you just say wow, wow
how beautiful is that, that's what we are not getting and that's something that I think is very very
important and I would like to be a part of bringing that back to the children of the future. We
would like to be in a position to have people come into this city and observe wildlife, have nature
City Council Meeting
May 6, 2003
Page II of 23
• professional, and professional naturalist that could take people out into this area and show them
things, to be able to bring displays in from all over the nation and have it to where people could
go through this center. The argument that we are having tonight and the very arguments against
this I am sure were the very same arguments that were made about Central Park in New York,
they were the very same arguments that were made when Portland Oregon decided to sit aside
probably 30% of that entire town and today anybody that has ever been to those places can look
back and say man is that not incredible that somebody had the concept and the foresight to see
what that would mean to this community. I believe that some kind of resolution to this away
from the 100 acre resolution has the potential of doing that for this city and I hope it does. The
Springfield, Missouri center attracts about approximately 250,000 people a year and I asked Dan
today how many it was. I said Dan how many do you think will be attracted to this one, he said
Don it would probably be in excess of 100,000, I really couldn't tell you that, that's anybody's
guess. Nobody really knows the answer to that, I think it depends on who runs it and how it's run
and how our city embraces it. Obviously if the city does not embrace this it's a no deal, it's just
that simple, and it just isn't going to go anywhere. What do we need out there and what would it
look like, I guess I would start with what would an Audubon Center out there look like, I would
visualize the wet lands being wet lands and being restored back to their natural state. Remember
somebody just dug a trench right through the center of this thing to drain it and that's what we
have today. I would like to see that back to the meandering stream that it once was and all the
tremendous things that it would bring back to that wet land and yes the wet lands will grow
because the truth of the matter is the wet lands at one time were significantly larger than they are
today so that would help it grow. I would like to see the tall grass prairies out there restored, I
• tell you, you would not believe how many people would go out there to see the flowers on those
and would be involved in the bird processes and things like that. It would be necessary to restore
that and it would be a central focal point for this community and something that would be a
learning experience for everybody in this community. That's another thing I would like to see, I
would like to see a trail system all down the creek that runs on down to the adjoining schools,
there's two schools. We need controlled access to the wet lands, it doesn't need to be something
that people can just go out there and tromp around in all the time, you have nesting birds, you
have all kinds of wildlife out there and you just can't have just free access to it because if you do
you will destroy the very thing that we are talking about saving here. If you are talking about
just letting people walk around on it, just X it because it's gone. There are times that you can,
and there are observation things and there are things that can be done, but I mean just free access
to it cannot, so we have to have controlled access. A generous remnant of the tall grass prairie
needs to be present out there. I spent this spring traveling back and forth to prairies all over
Arkansas and I am going to Hope next week to look at the tall grass prairies down there which is
a black land prairie and the flowers on those and the things that you can see and the wild life and
things that you take for granted you wouldn't believe, there is just holes all over those things
where there are animals living down there, there are hawks over above that are going down and
getting them and it's a cycle of life that's none of us really observe unless you are there and it's a
chance for us to come back and have our community be able to observe what was a very broad
amount of land in this area. We have hillsides all over this town and I would certainly be in
favor in saving every one of them that we could, but they are not nearly as unique as this piece of
property out there is and if we restore it, it would be so unique that it would just blow your mind,
• I guarantee you. We need a suitable building site and that would be about three acres and so
really we are talking about what we need can be put on three acres. We can build a center on
three acres, we can put the parking lots, hopefully Collins if he develops this, which I certainly
hope that he will, then if he could share with us some parking lots we could even cut that
City Council Meeting
May 6, 2003
Page 12 of 23
• amount. We need a center and we need it strategically located so we could have observation out
of it and these things would just have to be worked out. We need access to high traffic areas and
this is the reason this site so appeals to us, no different than the reason Collins wants to come
here is the same reason we want to come here, because we are in the business of attracting a
large number of people, if we don't attract a large number of people, we have no purpose. The
nature conservancy goes out and sets aside land and just keeps people off of it and that's a
wonderful thing to do, but that's not what we are really into, we're really into bringing people
into nature and letting them interact with it. There is one other part that is extremely important
and it hasn't really been brought out, but we need to preserve Wilson Springs. Wilson Springs is
an extraordinarily unique thing that's out there that has the Arkansas Darter in it, a small
beautiful fish that is pretty special and it's got to be protected and access to it has to be protected
and I am not sure exactly how to do it but I think that's another worthy ambition. The next point
I would do is to say, will 100 acres work, well let's not joke each other, there is 100 acres
probably of wet lands out there right now, it's not buildable, it's not usable for anything, so the
answer on that is obviously not, something more than that has to work and we would have to
have that. My personal opinion of this is the Task Force recommendation. Many of the people
that stood up here tonight and said it's time to bail out we've changed our mind, we are going to
go on, I think it was thought through better than people give it credit for because over a very long
period of time I have observed this, I've went out there, I've visualized building on it and I am
not an architect but I tell you it is very problematic and I think that I would have a little bit of a
heart tug with some of the things that are going to have to be done out there. We talk of this like
this $5.2 million is a done deal, guys read the contract it's not a done deal, this contract simply
• says I'm going to go out there and I'm going to work up a deal, if I can get it through and I'm
happy with it I'm going to buy it if I'm not I'm gone, so you don't have a deal you've got the
beginning of a deal. You have a whole lot of people that you have heard here tonight that don't
want that deal, so it's not over, and the shouting is going to go on for a long time and it really is
time to put this to bed, so maybe some other solution is really a better solution, a better solution
for Collins, a better solution for the National Audubon Society, a better solution for the people of
this city and that is what I would like you to consider. I just tell you what I think would make
some sense, sit down with this developer, look at the price that he is paying, now no one is
talking about whether that's the right price, but I want to talk about it being the right price. I
spent my life selling things at the right price, you can either say it's a good deal or bad deal but I
have probably sold 100,000 cars in my life and if I sold the majority of those at the wrong price I
wouldn't have sold them. We have a situation here where we may have the price wrong; it may
need to be a little less to give this developer the flexibility necessary to take all the things into
consideration that needs to be taken into consideration. I think that Collins, and I am not putting
words in your mouth, because I'm frankly kind of tired of people putting words in my mouth, so
I don't want to put words in your mouth, but I would be surprised if he wouldn't tell you that this
thing would be a heck of a lot easier if there wasn't such a price issue on this. If this thing could
be resolved at a lesser amount and just sell him the whole property and let us sit down and work
with him or some other organization and it doesn't have to be us we are not the only one in the
world, but let us work toward a resolution to this at a dollar amount where he could actually get
us the land or work a deal with us to get the land, but he could receive the tax benefits from it
and he could receive a lot of things from it, but the whole thing is at $5.2 million, guys the
• economic model here is that you have just about got to do the whole thing there is just not much
left and that may just be too much, so I will leave you with that, I have made Collins a
commitment, I said I would come back and look at it when he gets it done. The National
Audubon Society would like to have a center in Fayetteville, Arkansas no matter what anybody
City Council Meeting
May 6, 2003
Page 13 of 23
• else says we want a center here and we are willing to commit our time and our resources to get
this done, but let's get it off to a good start. I suggest to go back to the drawing boards see if you
can't come up with something that's a little more compatible to everybody concerned and then
see if we can't make a deal here that will live, if you make a deal tonight and he has such a
problem developing this thing and so many people making it difficult for him he may say man I
don't have to have this life, this isn't worth it, so let's make it worth it to him, let's make it a
good deal for him.
George Weiss, a resident said every intelligent person wants to gather all the information that
they can if we are making a decision, one of the things I have not heard yet discussed tonight,
since the Audubon does have nature centers throughout the country, has anybody looked into
what impact they have in those communities, good or bad and I think until you have that
information I don't know how you can make a reasonable decision, so I would suggest until you
get that information you table this.
Mayor Coody said we want Audubon here too, that has always been our position. Of course
everybody in Fayetteville wants Audubon here too.
Mr. Nelms said I don't think everyone is a fair statement, I've heard you say this time and time
again. It's got to be compatible to us establishing and being able achieve our mission and we are
talking about a very, very long term commitment to this city that will live way past any of us in
this room and it has to be a deal that works and so we looked at this seriously, thought about it
• and we brought experts in, these guys do this every day and I am looking to them. They feel like
this is a wonderful site for us, we will find a site in Northwest Arkansas, but I am telling you we
• are going to stick to the dying death on this one just simply because we think the habit is so
unique here and it is something that this city would be so proud of and we would be proud of,
because this land is not pristine, everybody that has been out there knows that, this thing has had
more alterations, it doesn't even come close to being calling pristine, but the potential for
restoration is just unbelievable and the result would be unbelievable. I didn't mean to take up
your time any more but I appreciate you all hearing us and whatever you do is fine with me, I am
going to be happy with it and all of you really are my friends and that includes you Dan, I know
we fuss and all this but I'll tell you I have been diligent about this because I think it's worth it
and it's my time and I'm not even on the job here just remember that, I mean I think this is
important, if we don't have this happen we'll do something else some other time, but I have met
with Collins, I like him he has a great reputation, everybody here tonight has said that, so let's
not let this chance pass up to make a lot of people happy with this thing.
Mayor Coody said that what he was going to say is I think there may be some room where
Audubon and Mr. Haynes can work together we have been visiting with each other and I know
you have mentioned the possible purchase of a small tract of some land. I want to see Audubon
work out a deal here in town and I do think that there is room for that, no one knows exactly
what the magic number of acres is for the potential site out there of Wilson Springs Business
Park, love to have Audubon out there, love to have Collins Haynes out there, I feel certain that
you two can work out some kind of a deal to where you both can come out ahead. Matter of fact
• after talking with Mr. Haynes about this I feel certain that he will be able to work with you to
accomplish your goal and I feel certain that you will be able to be flexible enough to work with
Mr. Haynes to make something work out for Audubon, so I am putting faith in the two of you to
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• May 6, 2003
Page 14 of 23
• be able to work out some kind of a compatible arrangement, I just feel certain that this will work
just the.
Mr. Haynes said there has been a lot of discussion about Audubon. There are other groups out
there that are just as deserving as Audubon, I don't have anything against the Audubon Society
nor Mr. Nelms, I consider him a friend, I consider him a great environmentalist, but my point is
this is not trying to accommodate Audubon, all I am trying to do is put an offer to the City
Council of the City of Fayetteville that says I will pay you $5.2 million for this piece of property,
I will deed out, this really is giving this land away, I mean I can own this 100 acres in putridity
myself. I don't have to give this land up, this is a gift, and the notion that it is not a gift is a gross
misconception. I see a very limited potential for failure, because I have gotten support of every
person that I have talked to within the city government, I have gotten support of Mr. Nelms
about trying to work out a solution on this property, if we don't come to a solution with the
Audubon Society, there are other groups that I can work with on it and if I don't find a suitable
group that 100 acres will sit insitu, I will protect it, I will let no one own this property. I mean it
needs to stay pristine, whether Audubon uses it or the Sierra Club or the Nature Conservancy,
whoever, it is a pristine wonderful piece of property, that being said I hope you vote for it so that
I'll get a chance to show you what I think I can do with the property, should you vote against it,
it's still a great piece of property and the Audubon Society and all the other environmental
groups deserve to have a shoot at it. Thank you.
Mayor Coody read a letter from the Mayor in Rogers commending Mr. Haynes and his work.
• Alderman Davis said you are willing to work with other non -profits including Audubon if they
need more acreage you are possibility willing to give or sell or try to work out some deal is that
correct.
Mr. Haynes said absolutely.
Alderman Davis said with that and Mr. Haynes track record and his willingness to work with
Audubon or another non-profit organization, I don't believe the City needs to be in the
development business, it is something we needed to be out of 12 or 13 years ago. We bought the
land because of TI, Texas Instruments was coming into Fayetteville supposedly and it never
happened, as long as the land is owned by the City I firmly believe that nothing is ever going to
take place out there, because of what has happened at this point in time, because of that I am
going to move that I would like for the City Council to accept Mr. Collins Haynes offer.
Alderman Davis moved to approve the resolution. Alderman Lucas seconded.
Alderman Thiel said she has supported the Audubon Nature Center. I really was not going to get
into that, but I think there really is a desire of the people that I have heard from, because as it has
been pointed out the Nature Conservative provides basically a passive preservation of land and
the offer that we have from the National Audubon Society is to build a nature center, which is
the reason I have always thought of this as a win, win is because that would provide tourism
• dollars, educational opportunities that I don't think the Nature Conservative preservation of land
would offer the same thing, with that being said I want to go on and say what I had planned to
say. I support the sale of this property to Collins Haynes, who I believe is a fairly
environmentally sensitive developer, but I don't believe this particular contract is in the best
City Council Meeting
May 6.2003
Page 15 of 23
• interest of the citizens of Fayetteville. If the Mayor had followed the recommendations of the
Council and had gone to Collins Haynes with a proposal for involving the Audubon idea which
he has a resolution on, we could be looking at a high class business commercial area and a
National Audubon Center contract tonight and I truly think both would bring immeasurable
economic benefits to the City of Fayetteville. I agree with what Don Nelms said that the best
solution would be for Mr. Haynes and an Audubon representative to work out an arrangement
that is suitable to both parties and to the public and this would probably consist of a reduced
price coming back to this Council for this land. It would allow Collins to economically develop
the land 70 to 90 acres and donate the rest to the Audubon Society which then of course you
would derive the tax credits for that. I think this Council and the public needs to remember this
land was bought for economic incentive, it was never bought to sell for profit, that was not the
intention of the purchase of this land, if we can sell this land, recoup our loss and make some, I
think that is the win, win. I fully understand that people, all the public is very tired of this
debate, I think they want something now, but I think we still have the opportunity to do the right
thing, I think the citizens desire that, particularly the citizens of Ward 4 where this property is
located. So I would like to see this tabled for another two weeks to give these people an
opportunity to discuss this a little further.
Alderman Thiel moved to table the resolution until the next Council meeting. Alderman
Jordan seconded.
Alderman Jordan said every once in a while when I make my decisions we come to a point to
• where we as politicians the plastic facade that we put around us from time comes off and the true
character of the politician is revealed, what I mean by that is this. When you come to a vote like
this who you are really comes out, what you believe, what you rely on, who you are. As I made
decisions on this thing I flipped through my notes and I asked myself two questions, what have
we said and what have we done, what do we have and what do we lose. As I made decisions on
this thing, we passed a resolution last October, I in good faith and we passed it unanimously and
we said this is what we are going to do, if I remember this correctly, we are going to preserve
180 acres we are going to develop 70, we are going to put a 600 foot buffer around that creek in
the northern area and we are going to study the rest and that was never done. That concerns me:
As far as the Audubon goes this is a chance to have a nationally known park in this area that can
be passed down for our children and our children's children from one generation to the next and
that is important to me. I do not want to sacrifice the inheritance of my children and my
grandchildren for some monetary gain right now, now I fully believe that we can table this and
come back with a better solution to this. We do know we can sale the seventy acres right now
and if it is anywhere close to $35,000, that is $2.4 million and we can still have the Audubon and
we can still study the land in the northern area to see what we can have, but in my opinion, I
have made a decision and I am going to go with the first recommendation of that Task Force. I
don't care what kind of straw vote we've got in here tonight.
Alderman Marr said he loved Mr. Molders comment that it is time to pony up to the table and
make some decisions and I know that before I even ran for office in a special election this piece
of land was being talked about, I remember on the Planning Commission, I remember people
• talking about it at our Rotary and one of my first meetings was a presentation on what the City
did and this particular piece of land came up and what should be done with it. I struggle with
whether it should be tabled or not because I think that most everyone who has talked to me, who
has called me, I have been very clear that I absolutely 100% do not believe that the City should
City Council Meeting
May 6, 2003
Page 16 of 23
. be a developer, there is a lot of appeal to me to get out of the business that is not our core
competency, I don't think we have compensation programs around creating positions that
encourage people to attract business to the city. I don't think you have proven even with the
Task Force recommendation that we had people lined up to come develop or we would already
have had things in front of us, I think there are a lot of weaknesses and I think we need to get out
of that. I too have some questions on the contract itself, because I don't like that every out is on
the side of the developer. I think Ms. Alexander's comments tonight that it's identified by
Legacy Group, the time period is designated by the Legacy Group some of those things concern
me. I don't want to kill a deal over that, but I'll tell you that it concerns me because I think it's a
decisive issue that probably could be worked out. I also do not want to run off a developer, my
very first question was is it time sensitive because I can tell you if I could pick a person that I
would want to do this it would be the one that is standing here with the offer without question.
What limited conservation I have had with him personally and with what my own due diligence
and referencing of him as a developer in the region. So I really struggle with this motion to table
because what I don't want is to be here on May 20th from 6:00 to 10:00 pm hearing the same
comments again, I don't know that it will change that much and I don't know how willing we
truly are to say are we willing to take a little bit less to get a little more preserve so that we get
win, win. If it came down to the fact that nothing was going to change, then I don't support
tabling it and if we think that we have some kind of negotiation that can take place, then I think
we should wait. So I guess I am trying to get some feel for, do we think that there is any
possibility of further discussion on the contract or do you see it that way, do you see that there is
a resolution on an amount and the terms.
• Mr. Haynes, said we do not design by committee nor do we work deals out by committee, so I
am not use to this, let me just tell you where I am coming from, I have an offer on the table to
you right now for $5.2 million. My suggestion to you is that you take that as a basis in fact per
acre for that property, if during our discussions and my submittal to the City through the PZD
process that Audubon can work with me on taking part of that land more that just the designated
wet land area and come up with a suitable site that they can use for their development and I am
going to give back another amount of acreage then you reduce my basis back down that I pay
you for that land by that amount, because this could go on. I have done a lot of work on this
project in trying to find suitable environmental non -profit's to utilize the property, I have called
the Audubon, I have emailed the Audubon, the Audubon comes back and I quote in this email"
Audubon at this present time has more projects possible than we can ever possibility take on
even in a strong economy" that comes from the National Audubon Society, you have nothing in
writing that indicates that Audubon is going to build there, I. filly believe they will build there, I
want them there, I like Ken Smith, I like Don Nelms, I think it can happen, but it's not going to
happen in 6 months, it's not going to happen in a year, it's going to take a long time. I'm not
going to wait, neither is any reasonable businessman, so what I am trying to point out to you is I
think the solution here is to put a basis per acre cost into this contract, if I buy all 289 acres for
the property I am going to give you $5.2 million, if I work something out that your Planning
Commission and your PZD group agrees is the best solution to try to get a nature center in there
and I have to give up 30 more acres of my property then my price and my basis are reduced
portionally that would be a suggestion.
• Alderman Marr said how is that reflected in this contract.
City Council Meeting
May 6, 2003
Page 17 of 23
• Mr. Williams said he was negotiating this contract with Mr. Haynes attorney and we looked at
this and this contract has gone through a lot of back and forth's to try to make it as fair as
possible and as you are aware being on the Planning Commission often times the person that is
asking for a rezoning doesn't own the property yet, they just have a right to buy it if the property
is rezoned, so that is not so unusual. In this particular context Mr. Haynes doesn't actually have
to fully go through with this contract and pay the $5.2 million unless his development is
approved, and when it is approved by the Planning Commission or possibly the City Council
which is our out, because if he proposes a development that is not satisfactory, that does not
honor the wishes and desires of the Planning Commission or the City Council, well then he is not
going to be approved. You have the power just like the Planning Commission has the power on
that, especially if it is a Planned Zoning District, so he has a right and I think it is very reasonable
for him to have a right to say unless my project gets approved this land is not worth anything to
me, that's why he has the right to back out of it. I think at that point in time, let's assume as Mr.
Haynes just said that after he has done his study on the wet land, after he has talked to whatever
non-profit conservation group he wants, maybe it's looked at that there is more than 100 acres
that's needed to be preserved, it doesn't mean that we can't go back as part of this contract and
make an amendment to the contract just as he has suggested, if as long as you all would agree
and he would agree at that point in time. I don't think you will ever get to that point though,
unless you agree to this contract, because he is not going to begin all the development process to
get there.
Mr. Haynes said if you want to sell me the property for $5.2 million and I give you a minimum
• of 100 acres back to a non-profit that is the deal on the table, I think it's evidence by what I'm
telling you and being heard and being listened to and probably quoted in the press as probably
saying right now, my reputation is on the line, I do what I say I am going to do. I have just told
you I want to work with Audubon or a non-profit to try to develop the piece of property so we
can both co -habitat and have a great development.
Upon roll call the motion to table failed 2-6. Alderman Thiel and Jordan voting yes.
Alderman Cook, Marr, Rhoads, Davis, Lucas and Reynolds voting no.
Alderman Thiel said there are some changes she would like to see in the contract, but since we
didn't table this there is really no way, I don't see how we handle making amendments to a
contract, I don't see how this Council can do that tonight, that's why my suggestion to table it so
this could be worked out, we make suggestions for changes. they come back to us with the
changes. I have a real concern about one of the sections in this, that's the one Fran eluded to.
Can we make amendments to this.
Mr. Williams said I don't think you can make amendments to this particular contract, this is an
offer and acceptance contract which has been signed both by the Mayor and Mr. Haynes, and so
the contract is before you for acceptance or rejection at this point in time.
Mr. Haynes said that that's all it is, it's an O & A.
• Alderman Thiel said she would just as soon see the consideration of this 100 acres of wet land
and creek be removed from this contract.
City Council Meeting
May 6, 2003
Page 18 of 23
• Mr. Williams said if this contract is not acceptable to you, you will need to vote against the
resolution.
Alderman Marr said how do we make sure that the proceeds go towards the things that we are
talking about tonight as opposed to being in the general fund without any direction as to how it is
going to be spent.
Mayor Coody said the decision is ultimately the Council's how this money is spent, but I am
going to make a pitch to the Council that we spend $3 million of this money preserving creeks,
streams, multi use trails, etc. It is going to be up to the Council on how we spend the money, but
I feel certain that they will fall within the parameters that we came up with at the retreat.
Alderman Rhoads said the last thing you said is the most important piece and that is what we
decided our priorities were a month and half ago, we all have them, I bring them to every
meeting, I look at them, I refresh my memory. I think we should maintain the flexibility to use
the proceeds as our priorities dictate otherwise we are going to have the same kind of
conservation that we had tonight about you promised to do this and you promised to do that. I
think we need the flexibility to spend the money on the priorities.
Upon roll call the motion to approve the resolution passed. 6-2. Alderman Cook, Man,
Rhoads, Davis, Lucas and Reynolds voting yes. Alderman Thiel and Jordan voting no.
Resolution 68-03 As Recorded In The Office Of The City Clerk.
• Wilson Springs Business Park Survey: A resolution approving Contract Amendment #2 with
McClelland Engineers, Inc. in the amount of $71,000.00 for engineering services relating to the
sale of the Arkansas Business Technology Park (Wilson Springs Business Park).
Alderman Davis moved to approve the resolution. Alderman Reynolds seconded. Upon
roll call the motion carried 7-0-1. Alderman Rhoads was absent during roll call.
Resolution 69-03 As Recorded In The Office Of The City Clerk
WHM Land Investments, Inc. Condemnation: A resolution authorizing the City Attorney to
seek condemnation and possession of certain lands owned by WFIM Land Investment, Inc. to
secure the necessary land on which to construct the West Fayetteville Fire Station. The
resolution was tabled at the May 6, 2003 City Council meeting.
Alderman Davis moved to table the resolution until the next meeting. Alderman Thiel
seconded. Upon roll call the motion to table passed 7-0-1. Alderman Rhoads was absent
during roll call.
VAC 03-6.00 (Allen): An ordinance approving VAC03-6.00 to vacate and abandon a 43.7 sq.
ft. portion of the utility easement located along the south property line of 2541 Litchfield Lane as
depicted on the attached map and legal description.
• Mr. Williams read the ordinance.
Alderman Davis asked what was the reason for the vacation.
City Council Meeting
May 6.2003
Page 19 of 23
• Mr. Conklin stated that there is a small encroachment with ease of an existing structure, so in
order to get clear title and clean that up they have to vacate just that 43.7 sq. ft.
Alderman Davis stated that this was passed by The Planning Commission 7-0.
Alderman Jordan moved to suspend the rules and go to the second reading. Alderman
Davis seconded. Upon roll call the motion passed unanimously.
Mr. Williams read the ordinance.
Alderman Jordan moved to suspend the rules and go to the third and final reading.
Alderman Davis seconded. Upon roll call motion passed unanimously.
Mr. Williams read the ordinance.
Mayor Coody asked shall the ordinance pass. Upon roll call the ordinance passed
unanimously.
Ordinance 4481 As Recorded In The Office Of The City Clerk
ANX 03-2.00 (Williams): An ordinance annexing into the City of Fayetteville Arkansas, an
• island containing approximately 0.57 acres located at the Northeast Comer of Mt. Comfort Road
and Shiloh Drive.
Mr. Williams read the ordinance.
Alderman Jordan moved to suspend the rules and go to the second reading. Alderman
Reynolds seconded. Upon roll call the motion passed.
Mr. Williams read the ordinance.
Alderman Jordan moved to suspend the rules and go to the third and final reading.
Alderman Reynolds seconded. Upon roll call the motion passed.
Mr. Williams read the ordinance.
Alderman Davis gave an explanation of the location.
Mr. Conklin stated that the location is on Mt. Comfort where Porter Road goes under
I-540 to Mt. Comfort onto Shiloh.
Mayor Coody asked shall the ordinance pass. Upon roll call the ordinance passed
unanimously.
• Ordinance 4482 As Recorded In The Office Of The City Clerk
City Council Mating
May 6, 2003
Page 20 of 23
• RZN 03-14.00 (Williams): An ordinance rezoning that property described in rezoning petition
RZN 03-14.00 as submitted by James Williams for property located at the northeast comer of
Mt. Comfort Road and Shiloh Drive, Fayetteville, Arkansas from R-2, Medium Density
Residential and A -1, Agricultural to C -1, Neighborhood Commercial.
Mr. Williams read the ordinance.
The Ordinance Was Left On The First Reading.
RZN 03-15.00 (McCord): An ordinance rezoning that property described in the rezoning
petition RZN 03-15.00 as submitted by James McCord on behalf of Meadows Enterprises, Inc.
for property located south of Goff Farm Road and west of Dead Horse Mountain Road,
Fayetteville, Arkansas containing approximately 67.47 acres from A-1, Agricultural to R-1, Low
Density Residential.
Mr. Williams read the ordinance.
Mayor Coody asked Mr. Conklin if they would be using full cut off lights for the street lights.
Mr. Conklin stated that currently the type of street lights that they put in are not fill cut off and
arc fairly low foot candle lights. You have seen them in some subdivisions and at St. Josephs
Catholic School. They don't really shine up they do have a top on them but the sides are visible
• with light coming out. That is what we currently install with Ozark and Swepc^_..
Mayor Coody stated that the reason he was curious was because the mountain tops are being
lighted 11-11 the valleys below and he finds that to be very wasteful of electricity.
Tim Conklin stated that looking at what some of the newer subdivisions have installed, their
• • 1'.,1.•.. L...;.. , ,.._ lli:L•:. ._ I 1/ 1• .,..1T...- ._. ,L 1.L. .....1:-i :�•at:
S1rec1 k1611 ualc a �ciy' I'LL IL 1yc_ niu� t /_ Caittut_≥ t•i;:: :.�,._: .__.
Mr. McCord on behalf of Meadows Enterprises, Inc stated that this was approved by the
P,t1 .1..•• ci'••.. n1......:..._ _• CV TT 1..- •..•..a •t
tanIiing Commission upon the. iecomrncrnlati ,t Gt \.i1, t tatuiulr, tau. t Sc a1Ju �tau:u i wt ute3
would cGTipiy With the Subdivision regut.it.GriS.
Alderman Davis moved to suspend the rules and go to the second reading. Alderman
Jordan seconded. Upon roll call the motion passed unanimously,
Mr. Williams read the ordinance.
Alderman Reynolds moved to suspend the rules and go to the third and final reading.
Miter
r t �r n n•
A.,ir, man Jordan seconded. Upon roll call the motion passed unanimously.
Mr. Williams read ordinance.
• Mayor Coody asked shall the ordinance pass. Upon roll call the ordinance passed
unanimously.
Ordinance 4433 As Recorded In The Office Of The City Clerk
City Council Mating
May 6, 2003
Page 21 of 23
• Unified Development Code: An ordinance repealing Title XV, Unified Development
Ordinance (originally adopted by Ordinance 4100 on June 16, 1998) of the Code of Fayetteville
and adopting and enacting an amended Title XV Unified Development Code.
Mr. Williams read the ordinance.
Mayor Coody requested that Mr. Conklin explain this matter.
Mr. Conklin stated that the Ordinance Review Committee was unable to meet Monday so we do
need to reschedule or pick another day, but basically the City of Fayetteville has taken over the
codification of our codes and the Planning Division needed to be able to get this out so we took
over this project from the City Clerks Office. We spent two months to put it together and get it
forward to this point. We took all our amendments to a tree ordinance, grading, and landscaping
standards and codifying it in house to allow us to get code books out to our elected o'rcia's, our
Planning Commissioners, developers, and staff. Right now we are dealing with code books that
L..r .. ....J n.rr,tp Y 1......, ;.
n ..... n ^ .,...7
:nn .. :11 r lnb10 to tTl9 n}an it n
--.. _. "'---- - - ----- ._a.�v .Sa -- '-iv,,:a ..:::: . i.. non, 1A .. . ............ . "I
L.-....,.-. . ±Lull :J - hat •Q•,_. are tr iilb tO dO.
Mr. Williams discussed the news publication with Mr. Conklin and asked if it has been published
in t c paper that there arc copies in the City Clerk's office.
• Mr. Conklin said he would have to check on that.
The Ordinance Was Left On The First Reading.
Banc of America Leasing Agreement Amendment 65: An ordinance authorizing the
1• of t l r w_ t h : al
execution and dc,ivcry a rnastcr equipment lease/purchase C::,uC agreement having a nominal
principal amount of not to exceed $5,000,000 for the purpose of financing the cost of acquiring
certain solid waste vehicles, carts and other equipment; and prescribing other matters relating
therein.
Mr. Williams read the ordinance.
Mr. Davis stated that because of the particular amendment that we're under, a public hearing
needs to be opened to take any comment. It's a formality and I suppose you all do that now.
Mayor Coody asked if any of the public would like to speak on this matter.
Mayor Coody closed the public hearing,
Alderman Jordan moved to suspend the rules and go to the second reading. Alderman
Davis seconded. Upon roll call the motion passed.
• Mr. Williams read the ordinance.
Alderman Jordan moved to suspend the rules and go to the third and final reading.
�!'= ?ernnded. Upon roll call the motion passed unanimously.
City Council Mating
May 6, 2003
Page 22 of 23
• Mr. Williams read the ordinance.
Mr. Williams asked Mayor Coody if he would like an explanation about this $5,000,000 project.
Mayor Coody asked Mr. Davis to briefly explain.
Mr. Davis stated that this lease agreement will provide the City the opportunity to do is to lease
some of our residential Solid Waste Collection Vehicles at an interest rate less than three. We
can then take that cash, invest it and earn about four. So it gives us the opportunity to earn a
little bit of extra money in our Solid Waste Fund. Before we actually affect any debt with Bank
of America, a separate resolution with the specific pieces of equipment will come back before
City Council for specific approval.
Mayor Coody asked shall the ordinance pass. Upon roll call the ordinance passed
unanimously.
Ordinance 4484 As Recorded h? The Office of The Cut;' Clerk
Dixie Development: An ordinance waiving the requirements of formal competitive bidding and
- - in f h.:r-. orccment with Dixie Development, Inc. in an amount not to exceed
$54,600.00 for the widening of approximately 1,950 linear feet of the proposed Bob Younkin
IV!:. Williams read the urditiauce.
Alderman Jordan moved to suspend the rules and go to the second reading. Alderman
Davisp apel Upon r ll .n11 1Ln .w nl:nw wnnnnri Ar A 1 A 1nlnww.nw qL nd nL In' ..r1
�i4:s se.Jay. u. LpYY - Vt. ..... ,... Y. V.... ..JJ,.. ,V-.. .1.1... .Y..Y -VuUj ..-;t,alli ,:
iii'. 33 u/iati&S read tii. ui9iiiSuiWt.
Alderman Davis stated that a few weeks ago we had a public hearing in the Street Committee
1Tenf:nn gnrl r" 1,n/! nn fly',' nn"" n Hln .\ry!1(`n:.1 (. nF'} n nt.r.n1 w, n:1n } M hn..n •. n
.........e,.w... .......... ..♦..o .,,,,.s....., ........... ;....h% �...... E- \,.. .It,., I ...,.. meet,._ c14
this have all been encouraging and they wanted to see the street also widened there has been no
o nn.,h.,t T n.., . n
Alderman Davis moved to suspend the rules and go to the third and final reading.
Aldo. an rnw.l.tw ennn..Ana Finn.. ..nil null t1n ...n1:n.l wnnry,a 7 n_1 4J 1.... f14 nn.1..
♦ v.. u. J YV.u.Y J.. vYY. v. .yV.. •Y.1 .N.1 Y\ Wvi♦Vu 1i.i3J\N V L. 1.4.1,8 tI 1.1 fl'j
auataiuvu.
•
iir. fF. lu�iai as rt.-' die urlI.
uaue.
A representative from Dixie Development thanked the City Council Members and the Mayor.
• Mayor Coody asked shall the ordinance pass. Upon roll call the ordinance passed 7-0-1.
Alderman Rhoads abstained.
Ordinance 4485 As Recorded In The Office Of The City Clerk.
City Council Meeting
May 6, 2003
Page 23 of 23
• Meeting Adjourned at l 1:10 PM
(L&Az /NMa.tL
Sondra Smith, City Clerk
• Alderman Thiel requested to schedule an Ordinance Review Committee meeting after the next Agenda
meeting.
• Alderman Jordan announced that there is a Telecom Sub -Committee Meeting May 7, 2003.
• Alderman Davis announced that they will be having a Ward 3 cleanup May 31, 2003.
• Alderman Reynolds stated that they had a Ward I cleanup and it was a great success. He also thanked Bob
Rhoads for inviting them to the Special Olympics.
•
•
CERTIFICATE OF RECORD
SW. of Arkansas
City of Fayetteville } u•
1, Sondra Smith, City Clerk/Treasurer for the City
S Fayetteville, do hereby certify that the
bregoing instrument �is _a true and corgrct copy
d the originaly�t�� i s .lrn e lla <liiveii I
tiled in my office on the I/e
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AFFIDAVIT OF PUBLICATION
1, ,do solemnly swear that I am
Leg01O"erkoAhie Arkansas Democrat -Gazette newspaper, printed and
published in Lowell, Arkansas, and that from my own personal knowledge
and reference to the files of said publication, the advertisement of:
was inserted in the regular editions on
** Publication Charge:$ /D.3"7
• Subscribed and sworn to before me this
day of , 2003.
No ary Publi
�aI Seal
T�µY A���nsas
My Commission Expi es: ___
140167GT
oommiss'on
" Please do not pay from
An invoice will be sent
RECEIVED
S. MAY 2 8 2003
CITY OF FAYETTEVILLE
CITY CLERKS OFFICE
212 NORTH EAST AVENUE • P.O. BOX 1607 • FAYETTEVILLE, ARKANSAS 72702 • (501) 442-1700
•
El
•
FFIDjW/IT OF PUBLICATION
I. / , do solemnly swear that I am
Legal Clerk of the Arkansas Democrat -Gazette newspaper, printed and
published in Lowell, Arkansas, and that from my own personal knowledge
and reference to the files f said publication, the advertisement of:
l was inserted
'" Publication Charge: $ 'Q 5
• Subscribed and sworn to before me this
day of , 2003.
My Commission Expir
•" oL.,.,...a. to M ,iuA
MY
RECEIVED
• APP 3 n 2003
PURCHASING
in the regular editions on
212 NORTH EAST AVENUE • P.O. BOX 1607 • FAYETTEVILLE, ARKANSAS 72702 • (501)442-1700
APR -24-2003 08119
AR 70 GAZ CLASS
501 442 1760 P.01/01
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• MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
(AMENDMENT 65 LEASE)
This Master Equipment Lease/Purchase Agreement (the "Agreement") dated as of June
25, 2003, and entered into between Banc of America Leasing & Capital, LLC, a Delaware
limited liability company ("Banc of America"), and City of Fayetteville, Arkansas, a body
corporate and politic existing under the laws of the State of Arkansas ("City").
WITNESSETH:
WHEREAS, City desires to lease and acquire from Banc of America certain Equipment
described in each Schedule (as each such term is defined herein), subject to the terns and
conditions of and for the purposes set forth in each Lease; and in the event of a conflict the terms
of a Schedule prevail; and
WHEREAS, the relationship between the parties shall be a continuing one and items of
equipment may be added to the Equipment from time to time by execution of additional
Schedules by the parties hereto and as otherwise provided herein; and
WHEREAS, City is authorized under the Constitution and laws of the State including
particularly, Amendment 65 to the State Constitution and the Local Government Capital
Improvement Revenue Bond Act of 1985, as amended, codified as Arkansas Code Annotated
• Sections 14-164-401 et seq. (Repl. 1998) (the "Act"), to enter into certain revenue -secured
obligations, such as this Agreement and the Schedules hereto, for the purposes set forth herein;
and
WHEREAS, the City Council of City has authorized the execution and delivery of this
Agreement and the Schedules hereto pursuant to Ordinance No. 4484, adopted and approved on
May 6.2003;
Now, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the premises hereinafter contained, the parties hereby
agree as follows:
ARTICLE I
Section 1.01. Definitions. The following terms will have the meanings indicated below
unless the context clearly requires otherwise:
"Acquisition Amount" means the amount specified in each Lease and represented by City
to be sufficient to acquire the Equipment listed in such Lease, which amount shall be not less
than $100,000 for each Lease.
"Acquisition Period" means, with respect to each Lease, that period stated in the
• Schedule to such Lease during which the Acquisition Amount attributable to such Lease may be
expended on Equipment Costs.
(Amendment 65 Lease) #591172v3 1 [Appropriation]
Lessee's Copy
• "Act" means, the Local Government Capital Improvement & Revenue Bond Act of 1985,
as amended, codified as Arkansas Code Annotated Sections 14-164-401 et seq. (Repl. 1998).
"Agreement" means this Master Equipment Lease/Purchase Agreement, including the
exhibits hereto, together with any amendments and modifications to the Agreement pursuant to
Section 13.05.
"Banc of America" means (a) the entity referred to as Banc of America in the first
paragraph of this Agreement or (b) any assignee or transferee of any right, title or interest of
Banc of America in and to the Equipment under a Lease or any Lease (including Rental
Payments thereunder) pursuant to Section 11.01, but does not include any entity solely by reason
of that entity retaining or assuming any obligation of Banc of America to perform under a Lease.
"City" means the entity referred to as City in the first paragraph of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended. Each reference to a
Section of the Code herein shall be deemed to include the United States Treasury Regulations
proposed or in effect thereunder.
"Commencement Date" means, for each Lease, the date when City's obligation to pay
rent commences under such Lease, which date shall be the date on which the Equipment listed in
such Lease is accepted by City in the manner described in Section 5.01.
• "Equipment" means the property listed in each of the Leases and all replacements,
repairs, restorations, modifications and improvements thereof or thereto made pursuant to
Section 8.01 or Article V. Whenever reference is made in this Agreement to Equipment listed in
a Lease, such reference shall be deemed to include all such replacements, repairs, restorations,
modifications and improvements of or to such Equipment.
"Equipment Costs" means the total cost of the Equipment listed in each Lease, including
all delivery charges, installation charges, capitalizable consulting and training fees approved by
Banc of America, legal fees, financing costs, and other costs necessary to vest fill, clear legal
title to the Equipment in City, subject to the security interest granted to and retained by Banc of
America as set forth in each Lease, and otherwise incurred in connection with the financing
provided by the lease -purchase of the Equipment as provided in each Lease; provided that in no
event shall approved consulting and training fees or other non-capitalizable "soft" costs relating
to the Equipment listed in any Lease which are to be financed by Banc of America hereunder
exceed 2% of the total cost of such Equipment as determined by Banc of America; and provided
further, that in no event shall capitalizable delivery charges, installation charges, taxes and
similar capitalizable "soft costs" relating to such Equipment be included without Banc of
America's prior consent.
"Event of Default" means an Event of Default described in Section 12.01.
"Lease" means a Schedule and the terms of this Agreement which are incorporated by
reference into such Schedule. Each Schedule shall constitute a separate and independent Lease.
•
(Amendment 65 Lease) 2
• "Lease Term" for each Lease means the Original Term and all Renewal Terms therein
provided and for this Agreement means the period from the date hereof until this Agreement is
terminated.
"Maximum Equipment Cost" means an amount not to exceed $2,200,000.
"Original Term"
means
the period
from
the Commencement Date for each Lease until
the end of the
fiscal year
of City
in effect at
such
Commencement Date.
"Pledged Revenues" means all solid waste fees and charges collected by City or such
other special purpose revenues as are mutually agreed by Banc of America and City.
"Purchase
Price"
means, with respect to
the Equipment listed on a Lease, the amount
that City may pay
to Banc
of America to purchase
such Equipment as provided in such Lease.
"Renewal Terms" means the renewal terms of each Lease, each having a duration of one
year and a term coextensive with City's fiscal year, as specified in the Schedule applicable
thereto.
"Rental Payments" means the basic rental payments payable by City under each Lease
pursuant to Section 4.01, in each case consisting of a principal component and an interest
component.
"Schedule" means each separately numbered Schedule of Property substantially in the
• form of Exhibit A hereto together with a Rental Payment Schedule attached thereto substantially
in the form of Exhibit A-1 hereto.
"State" means the State of Arkansas.
"Utilization Period"
means the date,
by which
City must
deliver an Acceptance
Certificate for the Equipment
under such Lease
as indicated
in Section 3.05(b).
"Vendor" means the manufacturer or supplier of the Equipment or any other person as
well as the agents or dealers of the manufacturer or supplier from whom Banc of America
arranged City's acquisition and financing of the Equipment pursuant to the applicable Lease.
ARTICLE II
Section 2.01. Representations and Covenants of City. City represents, covenants and
warrants for the benefit of Banc of America on the date hereof and as of the Commencement
Date of each Lease as follows:
(a) _ City is a political subdivision of the State within the meaning of Section 103(c) of
the Code, duly organized and existing under the Constitution and laws of the State, including
Amendment 65 to the State Constitution and the Act, with full power and authority to enter into
this Agreement and each Lease and the transactions contemplated hereby and to perform all of
• its obligations hereunder and under each Lease.
(Amendment 65 Lease)
• (b) City has duly authorized the execution and delivery of this Agreement and each
Lease by proper action of its governing body at a meeting duly called, regularly convened and
attended throughout by the requisite quorum of the members thereof, or by other appropriate
official approval, and all requirements have been met and procedures have occurred in order to
ensure the validity and enforceability of this Agreement and each Lease.
(c)
No event or condition that constitutes, or
with the giving of notice
or the lapse of
time or both
would constitute, an Event of Default exists
at the date hereof.
(d) City will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence as a body corporate and politic.
(e) City has complied with such public bidding requirements as may be applicable to
this Agreement and each Lease and the acquisition by City of the Equipment as provided in each
Lease.
(f) During the Lease Term, the Equipment will be used by City only for the purpose
of performing essential governmental or proprietary functions of City consistent with the
permissible scope of City's authority. City does not intend to sell or otherwise dispose of the
Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms)
scheduled to be paid under each Lease.
(g) City shall keep its books and records in accordance with generally accepted
• accounting principles and practices consistently applied and shall deliver to Banc of America
(i) annual audited financial statements (including (1) a balance sheet, (2) statement of revenues,
expenses and changes in fund balances for budget and actual, (3) statement of cash flows and
notes, and (4) schedules and attachments to the financial statements), on August 1 of each year
during the Lease Term, (ii) such other financial statements and information as Banc of America
may reasonably request, and (iii) its annual budget for the following fiscal year on or before
February 1 of each year during the Lease Tenn. The financial statements described in subsection
(i) shall be accompanied by an unqualified opinion of City's auditor. Credit information relating
to City may be disseminated among Banc of America and any of its affiliates and any of their
respective successors and assigns.
(h) City has an immediate need for the Equipment listed on each Schedule and
expects to make immediate use of the Equipment listed on each Schedule. City's need for the
Equipment is not temporary and City does not expect the need for any item of the Equipment to
diminish during the Lease Term to such item.
(i) The payment of the Rental Payments or any portion thereof is not (under the terms
of any Lease or any underlying arrangement) directly or indirectly (x) secured by any interest in
property used or to be used in any activity carried on by any person other than a state or local
governmental unit or payments in respect of such property; or (y) on a present value basis,
derived from payments (whether or not to City) in respect of property, or borrowed money, used
or to be used in any activity carried on by any person other than a state or local governmental
unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any
• person other than a state or local governmental unit. No portion of the Equipment Costs for the
Equipment will be used, directly or indirectly, to make or finance loans to any person other than
(Amendment 65 Lease) 4
• City. City has not entered into any management or other service contract with respect to the use
and operation of the Equipment.
(j) There is no pending litigation, tax claim, proceeding or dispute that may adversely
affect City's financial condition or impair its ability to perform its obligations hereunder. City
will, at its expense, maintain its legal existence in good standing and do any further act and
execute, acknowledge, deliver, file, register and record any further documents Banc of America
may reasonably request in order to protect Banc of America's security interest in the Equipment
and Banc of America's rights and benefits under this Lease.
ARTICLE III
Section 3.01. Lease of Equipment. Subject to the terms of this Master Lease, Banc of
America agrees to provide the funds specified in each Lease to be provided by it to acquire the
Equipment, up to an amount equal to the Maximum Equipment Cost. Upon the execution of
each Lease, Banc of America demises, leases, transfers and lets to City, and City acquires, rents
and leases from Banc of America, the Equipment as set forth in such Lease and in accordance
with the terms thereof. The Lease Term for each Lease may be continued, solely at the option of
City, at the end of the Original Term or any Renewal Term for the next succeeding Renewal
Term up to the maximum Lease Term set forth in such Lease. At the end of the Original Term
and at the end of each Renewal Term until the maximum Lease Term has been completed, City
shall be deemed to have exercised its option to continue each Lease for the next Renewal Term
• unless City shall have terminated such Lease pursuant to Section 10.01. The terms and
conditions during any Renewal Term shall be the same as the terms and conditions during the
Original Term, except that the Rental Payments shall be as provided in the applicable Lease.
Section 3.02. Continuation of Lease Term. City intends, subject to Section 10.01, to
continue the Lease Term of each Lease through the Original Term and all Renewal Terms and to
pay the Rental Payments thereunder. City affirms that sufficient Pledged Revenues are available
for the current fiscal year, and City reasonably believes that an amount sufficient to make all
Rental Payments during the entire Lease Term of each Lease can be obtained from Pledged
Revenues of City. City further intends to do all things lawfully within its power to obtain and
maintain Pledged Revenues sufficient and available to discharge its obligation to make Rental
Payments due hereunder, including making provision for such payments to the extent necessary
in each budget adopted in accordance with applicable provisions of law.
Section 3.03. [Intentionally omitted.]
Section 3.04. [Intentionally omitted.]
Section 3.05. Conditions to Banc of America's Performance.
(a) As a prerequisite to the performance by Banc of America of any of its obligations
pursuant to any Lease, City shall deliver to Banc of America the following:
• (i) A fully completed Schedule, executed by City;
(Amendment 65 Lease) 5
• (ii) A Certificate executed by the Clerk or Secretary or other comparable
officer of City, in substantially the form attached hereto as Exhibit C, completed to the
satisfaction of Banc of America;
(iii) A certified copy of an ordinance or other official action of City's
governing body authorizing the execution and delivery of this Lease and performance by
City of its obligations hereunder;
(iv) An opinion of counsel to City in substantially the form attached hereto as
Exhibit D respecting such Lease and otherwise satisfactory to Banc of America;
(v) Evidence of insurance as required by Section 7.02 hereof;
(vi) All documents, including financing statements, affidavits, notices and
similar instruments, in form satisfactory to Banc of America, which Banc of America
deems necessary or appropriate at that time pursuant to Section 6.02;
(vii) Assignment of each performance bond, if any, as collateral security to
Banc of America pursuant to Section 7.02A hereof;
(viii) A copy of a fully completed and executed Form 8038-G; and
(ix) Such other items, if any, as are set forth in such Lease or are reasonably
• required by Banc of America.
(b) In addition, the performance by Banc of America of any of its obligations
pursuant to any Lease shall be subject to: (i) no material adverse change in the financial condition
of City since the date of this Lease, (ii) no Event of Default having occurred, and (iii) the
Equipment must be accepted by City no later than the date specified in the relevant Schedule (the
"Utilization Period").
(c) Subject to satisfaction of the foregoing, Banc of America will pay the Acquisition
Amount for Equipment described in a Schedule to the Vendor (or will reimburse City for the
prior payment of any such Acquisition Amounts by City to the Vendor) upon receipt of the
documents described in Sections 5.01(a) and (b).
(d) This Agreement is not a commitment by Banc of America to enter into any Lease
not currently in existence, and nothing in this Agreement shall be construed to impose any
obligation upon Banc of America to enter into any proposed Lease, it being understood that
whether Banc of America enters into any proposed Lease shall be a decision solely within Banc
of America's discretion.
(e) City will cooperate with Banc of America in Banc of America's review of any
proposed Lease. Without limiting the foregoing, City will provide Banc of America with any
documentation or information Banc of America may reasonably request in connection with Banc
of America's review of any proposed Lease. Such documentation may include, without
• limitation, documentation concerning the Equipment and its contemplated use and location and
(Amendment 65 Lease)
• documentation or information concerning the financial status of City and other matters related to
City.
ARTICLE IV
Section 4.01. Rental Payments. Subject to Section 10.01, City shall promptly pay Rental
Payments, in lawful money of the United States of America, to Banc of America on the dates and
in such amounts as provided in each Lease. CITY SHALL PAY BANC OF AMERICA A
CHARGE ON ANY RENTAL PAYMENT NOT PAID WITHIN 10 DAYS OF THE DATE
SUCH PAYMENT IS DUE AT THE MAXIMUM RATE PERMITTED BY ARKANSAS
LAW, FROM SUCH DATE. City shall not permit the federal government to guarantee any
Rental Payments under any Lease. Rental Payments consist of principal and interest payments as
more fully detailed on each Schedule, the interest on which begins to accrue as of the
Commencement Date for each such Schedule.
Section 4.02. Interest and Principal Components. A portion of each Rental Payment is
paid as, and represents payment of, interest, and the balance of each Rental Payment is paid as,
and represents payment of, principal. Each Lease shall set forth the principal and interest
components of each Rental Payment payable thereunder during the Lease Term.
Section 4.03. Rental Payments to Constitute a Special Obligation of City. Banc of
America and City understand and intend that the obligation of City to pay Rental Payments under
• each Lease shall constitute a special obligation of City secured solely by Pledged Revenues (and
the applicable Equipment pursuant to Section 6.02). Said obligations shall not in any way be
construed to be a debt of City in contravention of any applicable constitutional or statutory
limitation or requirement concerning the creation of indebtedness by City, nor shall anything
contained herein or in a Lease constitute a pledge of the general tax revenues, funds or moneys of
City.
Section 4.04. Rental Payments to be Unconditional. Except as provided in
Section 10.01, the obligations of City to make Rental Payments and to perform and observe the
other covenants and agreements contained in each Lease shall be absolute and unconditional in
all events without abatement, diminution, deduction, set-off or defense, for any reason, including
without limitation any failure of the Equipment, after it has been accepted by City, any defects,
malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation or
unforeseen circumstances.
Section 4.05. Tax Covenant. City agrees that it will not take any action that would cause
the interest component of Rental Payments to be or to become ineligible for the exclusion from
gross income of the owner or owners thereof for federal income tax purposes, nor will it omit to
take or cause to be taken, in timely manner, any action, which omission would cause the interest
component of Rental Payments to be or to become ineligible for the exclusion from gross income
of the owner or owners thereof for federal income tax purposes.
Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability, the
• interest component shall be at a Taxable Rate retroactive to the date as of which the interest
component is determined by the Internal Revenue Service to be includible in the gross income of
(Amendment 65 Lease) 7
• the owner or owners thereof for federal income tax purposes, and City will pay such additional
amount as will result in the owner receiving the interest component at the Taxable Rate identified
in the related Lease.
For purposes of this Section, "Event of Taxability" means a determination that the
interest component is includible for federal income tax purposes in the gross income of the
owner thereof due to City's action or failure to take any action.
Section 4.07. [Intentionally omitted.]
ARTICLE V
Section 5.01. Delivery, Installation and Acceptance of Equipment.
(a) City shall order the Equipment, cause the Equipment to be delivered and installed
at the location specified in the Leases and pay any and all delivery and installation costs and
other Equipment Costs in connection therewith. When the Equipment listed in any Lease has
been delivered and installed, City shall promptly accept, reject, or demand deficiencies be
corrected in such Equipment in a reasonably prompt manner and evidence said acceptance by
executing and delivering to Banc of America an acceptance certificate in the form attached hereto
as Exhibit B.
• (b) City shall deliver to Banc of America original invoices and bills of sale (if title to
such Equipment has passed to City) relating to each item of Equipment accepted by City. Banc
of America shall, upon receipt of an Acceptance Certificate from City, prepare a Schedule of
Property and Rental Payment Schedule in the forms attached hereto as Schedule A and A-1. City
shall execute and deliver such Schedules to Banc of America within 5 business days of receipt.
Section 5.02. Enjoyment of Equipment. Banc of America shall provide City with quiet
use and enjoyment of the Equipment during the Lease Term, and City shall peaceably and quietly
have, hold and enjoy the Equipment during the Lease Term, without suit, trouble or hindrance
from Banc of America, except as otherwise expressly set forth in the related Lease. Banc of
America shall not interfere with such quiet use and enjoyment during the Lease Term so long as
City is not in default under the related Lease.
Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be
moved from the base location specified for it in the Lease on which such item is listed without
Banc of America's consent, which consent shall not be unreasonably withheld. Banc of America
shall have the right at all reasonable times during regular business hours to enter into and upon
the property of City for the purpose of inspecting the Equipment.
Section 5.04. Use and Maintenance of the Equipment. City will not install, use, operate,
or maintain the Equipment improperly, carelessly, in violation of any applicable law or in a
manner contrary to that contemplated by the related Lease. City shall provide all permits and
licenses, if any, necessary for the installation and operation of the Equipment. In addition, City
agrees to
comply in
all respects with all applicable laws,
regulations and rulings of any
legislative,
•
executive,
administrative, or judicial body relating
to the installation, use, operation
(Amendment 65 Lease) 8
• and maintenance of the Equipment; provided that City may contest in good faith the validity or
application of any such law, regulation or ruling in any reasonable manner that does not, in the
opinion of Banc of America, adversely affect the interest (including the reversionary interest) of
Banc of America in and to the Equipment or its interest or rights under the Lease.
City agrees that it will maintain, preserve, and keep the Equipment in good repair and
working order, in accordance with manufacturer's recommendations. Banc of America shall
have no responsibility to maintain, repair or make improvements or additions to the Equipment.
In all cases, City agrees to pay any costs necessary for the manufacturer to re -certify the
Equipment as eligible for manufacturer's maintenance upon the return of the Equipment to Banc
of America as provided for herein.
City shall not alter any item of Equipment or install any accessory, equipment or device
on an item of Equipment if that would impair any applicable warranty, the originally intended
function or the value of that Equipment. All repairs, parts, accessories, equipment and devices
furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall
thereupon become subject to the security interest of Banc of America.
ARTICLE VI
Section
6.01. Title to
the Equipment. During each Lease Term, and so long as no Event
of Default has
occurred and
is continuing under Article XII hereof, all right,
title and interest in
• and to each item of the Equipment shall be vested in City immediately upon its acceptance of
each item of Equipment, subject to the terms and conditions of the applicable Lease. City shall at
all times protect and defend, at its own cost and expense, its title in and to the Equipment from
and against all claims, liens and legal processes of its creditors, and keep all Equipment free and
clear of all such claims, liens and processes. Upon the occurrence of an Event of Default, full
and unencumbered legal title to the Equipment shall pass to Banc of America, and City shall
have no further interest therein. In addition, upon the occurrence of such an Event of Default or
such termination, City shall execute and deliver to Banc of America such documents as Banc of
America may request to evidence the passage of such legal title to Banc of America and the
termination of City's interest therein, and upon request by Banc of America shall deliver
possession of the Equipment to Banc of America in accordance with Section 12.02. Upon
purchase of the Equipment under a Lease by City pursuant to Section 10.01, Banc of America's
security interest or other interest in the Equipment shall terminate, and Banc of America shall
execute and deliver to City such documents as City may request to evidence the termination of
Banc of America's security interest in the Equipment subject to the related Lease.
Section 6.02. Security Interest. To secure the payment of all of City's obligations under
each Lease, upon the execution of such Lease, City grants to Banc of America a security interest
constituting a first lien on (a) the Pledged Revenues, (b) the Equipment applicable to such Lease,
and (c) any and all proceeds of any of the foregoing. City agrees to execute and authorizes Banc
of America to file such notices of assignment, chattel mortgages, financing statements and other
documents, in form satisfactory to Banc of America, which Banc of America deems necessary or
• appropriate to establish and maintain Banc of America's security interest in the Pledged
Revenues, Equipment and the proceeds thereof.
(Amendment 65 Lease) 9
• Section 6.03. Personal Property. The Equipment is and will remain personal property
and will not be deemed to be affixed to or a part of the real estate on which it may be situated,
notwithstanding that the Equipment or any part thereof may be or hereafter become in any
manner physically affixed or attached to real estate or any building thereon. Upon the request of
Banc of America, City will, at City's expense, furnish a waiver of any interest in the Equipment
from any party having an interest in any such real estate or building.
ARTICLE VII
Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. City shall
keep the Equipment free of all levies, liens, and encumbrances except those created by each
Lease. The parties to this Agreement contemplate that the Equipment will be used for a govern-
mental or proprietary purpose of City and that the Equipment will therefore be exempt from all
property taxes. If the use, possession or acquisition of any Equipment is nevertheless determined
to be subject to taxation, City shall pay when due all taxes and governmental charges lawfully
assessed or levied against or with respect to such Equipment. City shall pay all utility and other
charges incurred in the use and maintenance of the Equipment. City shall pay such taxes or
charges as the same may become due; provided that, with respect to any such taxes or charges
that may lawfully be paid in installments over a period of years, City shall be obligated to pay
only such installments as accrue during each Lease Term.
Section 7.02. Insurance. City shall during each Lease Term maintain or cause to be
• maintained (a) casualty insurance naming Banc of America and its assigns as additional insured
and loss payee and insuring the Equipment against loss or damage by fire and all other risks
covered by the standard extended coverage endorsement then in use in the State, and any other
risks reasonably required by Banc of America, in an amount at least equal to the then applicable
Purchase Price of the Equipment; (b) liability insurance as to which City agrees to add Banc of
America as an additional insured on the City's liability policies for the Equipment financed
hereunder and subject to any Lease; and (c) worker's compensation coverage as required by the
laws of the State; provided that, with Banc of America's prior written consent, City may self -
insure against the risks described in clause (a). City shall furnish to Banc of America evidence of
such insurance or self-insurance coverage throughout each Lease Term. City shall not cancel or
modify such insurance or self-insurance coverage in any way that would affect the interests of
Banc of America without first giving written notice thereof to Banc of America at least 30 days
in advance of such cancellation or modification.
Section 7.02A. Surety Bonds; City to Pursue Remedies Against Contractors and
Subcontractors and Their Sureties. City has secured from each contactor directly employed by
City, in connection with the acquisition, construction, installation, improvement or equipping of
the Equipment, payment and performance bonds executed by a surety company reasonably
acceptable to Banc of America and authorized to do business in the State in a sum equal to the
entire amount to become payable under the contract with such contractor. Each bond was
conditioned on the completion of the work in accordance with the plans and specifications for the
Equipment and upon payment of all claims of subcontractors and suppliers. City shall upon
• receipt of each bond from each contractor assign such bond as collateral security to Banc of
America.
(Amendment 65 Lease) 10
• In the event of a material default of any contractor under any contract in connection with
the acquisition, construction, improvement or equipping of the Equipment or in the event of a
material breach of warranty with respect to any material, workmanship or performance guaranty,
City will promptly proceed to exhaust its remedies against the contractor, or supplier in default
and against any surety for the performance of such contract with respect to the contractor. City
shall advise Banc of America of the steps it intends to take in connection with any such default.
Any amounts received by way of damages, refunds, adjustments or otherwise in connection with
the foregoing shall be paid to Banc of America and applied against City's obligations hereunder,
net of legal fees.
Section 7.03. Advances. In the event City shall fail to keep the Equipment in good repair
and working order, Banc of America may, but shall be under no obligation to, maintain and
repair the Equipment and pay the cost thereof. All amounts so advanced by Banc of America
shall constitute additional rent for the then current Original Term or Renewal Term and City
covenants and agrees to pay such amounts so advanced by Banc of America with interest thereon
from the due date until paid at the maximum rate permitted by Arkansas law.
ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. Unless City shall have exercised
its option .to purchase the Equipment pursuant to Section 10.01 by making payment of the
Purchase Price as provided in the related Lease, if, prior to the termination of the applicable
. Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is
damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any
part thereof shall be taken under the exercise or threat of the power of eminent domain by any
governmental body or by any person, firm or corporation acting pursuant to governmental
authority, City and Banc of America will cause the Net Proceeds of any insurance claim or
condemnation award or sale under threat of condemnation to be applied to the prompt
replacement, repair, restoration, modification or improvement of the Equipment. Any balance of
the Net Proceeds remaining after such work has been completed shall be paid to City.
If City elects to replace any item of the Equipment (the "Replaced Equipment") pursuant
to this Section, the replacement equipment (the "Replacement Equipment") shall be of similar
type, utility and condition to the Replaced Equipment and shall be of equal or greater value than
the Replaced Equipment. Banc of America shall receive a first lien security interest in any such
Replacement Equipment. City shall represent, warrant and covenant to Banc of America that
each item of Replacement Equipment is free and clear of all claims, liens, security interests and
encumbrances, excepting only those liens created by or through Banc of America, and shall
provide to Banc of America any and all documents as Banc of America may reasonably request
in connection with the replacement, including, but not limited to, documentation in form and
substance satisfactory to Banc of America evidencing Banc of America's security interest in the
Replacement Equipment. Banc of America and City hereby acknowledge and agree that any
Replacement Equipment acquired pursuant to this paragraph shall constitute "Equipment" for
purposes of this Master Equipment Lease and the related Lease. City shall complete the
• documentation of Replacement Equipment on or before the next Rental Payment date after the
(Amendment 65 Lease) 11
occurrence of a casualty event, or be required to exercise the Purchase Option with respect to the
damaged equipment.
For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining
from the gross proceeds of any insurance claim or condemnation award or sale under threat of
condemnation after deducting all expenses, including attorneys' fees, incurred in the collection
thereof.
Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in
full the cost of any repair, restoration, modification or improvement referred to in Section 8.01,
City shall either (a) complete such replacement, repair, restoration, modification or improvement
and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay or cause to be
paid to Banc of America the amount of the then applicable Purchase Price for the Equipment,
and, upon such payment, the applicable Lease Term shall terminate and Banc of America's
security interest in the Equipment shall terminate as provided in Section 6.01 hereof. The
amount of the Net Proceeds, if any, remaining after completing such repair, restoration,
modification or improvement or after purchasing such Equipment and such other Equipment
shall be retained by City. If City shall make any payments pursuant to this Section, City shall not
be entitled to any reimbursement therefor from Banc of America nor shall City be entitled to any
diminution of the amounts payable under Article IV.
ARTICLE IX
• Section 9.01. Disclaimer of Warranties. Banc of America makes no warranty or
representation, either express or implied, as to the value, design, condition, merchantability or
fitness for particular purpose or fitness for use of the Equipment, or any other warranty or
representation, express or implied, with respect thereto and, as to Banc of America, City; s
acquisition of the Equipment shall be on an "as is" basis. In no event shall Banc of America be
liable for any incidental, indirect, special or consequential damage in connection with or arising
out of this Agreement, any Lease, the Equipment or the existence, furnishing, functioning or
City's use of any item, product or service provided for in this Agreement or any Lease.
Section 9.02. Vendor's Warranties. Banc of America hereby irrevocably appoints City
its agent and attorney -in -fact during each Lease Term, so long as no Event of Default shall have
occurred and be continuing under the related Lease, to assert from time to time whatever claims
and rights (including without limitation warranties) relating to the Equipment that Banc of
America may have against Vendor. City's sole remedy for the breach of such warranty,
indemnification or representation shall be against Vendor of the Equipment, and not against Banc
of America. Any such matter shall not have any effect whatsoever on the rights and obligations
of Banc of America with respect to any Lease, including the right to receive full and timely
Rental Payments under a Lease. City expressly acknowledges that Banc of America makes, and
has made, no representations or warranties whatsoever as to the existence or the availability of
such warranties relating to the Equipment.
•
(Amendment 65 Lease) 12
• ARTICLE X
Section 10.01. Purchase Option. City shall have the option to purchase all of the
Equipment listed in a Lease, at the following times and upon the following terms:
(a) From and after the date specified in the related Schedule (the "Purchase Option
Commencement Date"), on the Rental Payment dates specified in each Lease, upon not less than
30 days' prior written notice, and upon payment in full of the Rental Payments then due under
such Lease plus the then applicable Purchase Price, which may include a prepayment premium
on the unpaid balance as set forth in the applicable Schedule; or
(b) In the event of substantial damage to or destruction or condemnation of
substantially all of the Equipment listed in a Lease, on the day specified in City's notice to Banc
of America of its exercise of the purchase option (which shall be the earlier of the next Rental
Payment date or 60 days after the casualty event) upon payment in full to Banc of America of the
Rental Payments then due under such Lease plus the then applicable Purchase Price; or
(c) Upon the expiration of the Lease Term, upon payment in full of all Rental
Payments then due and all other amounts then owing under the Lease, and the payment of $1.00
to Banc of America.
After payment of the applicable Purchase Price, City will own the related Equipment, and
Banc of America's security interests in and to such Equipment will be terminated.
•
ARTICLE XI
Section 11.01. Assignment by Banc of America. Banc of America's right, title and
interest in and to Rental Payments and any other amounts payable by City under any and all of
the Leases, its security interest in the Equipment subject to each such Lease, and all proceeds
therefrom may be assigned and reassigned in whole or in part to one or more assignees or
subassignees by Banc of America, without the necessity of obtaining the consent of City;
provided, however, that any such assignment, transfer or conveyance to a trustee for the benefit
of owners of certificates of participation shall be made in a manner that conforms to any
applicable State law and said certificates of participation shall be offered and sold in a private
placement or limited offering only to investors whom Banc of America reasonably believes are
qualified institutional buyers or accredited investors within the meaning of the applicable federal
securities laws. Nothing in this Section 11.01 shall be construed, however, to prevent Banc of
America from executing any such assignment, transfer or conveyance that does not involve
funding through the use of certificates of participation within the meaning of applicable State
law, including any such assignment, transfer or conveyance as part of a multiple asset pool to a
partnership or trust, interests in which are offered and sold in a private placement or limited
offering only to investors whom Banc of America reasonably believes are qualified institutional
buyers or accredited investors within the meaning of the applicable federal securities law;
provided further, however, that in any event, City shall not be required to make Rental Payments,
to send notices or to otherwise deal with respect to matters arising under a Lease with or to more
than one individual
or entity.
No assignment,
transfer or
conveyance
permitted by
this
• Section 11.01 shall be
effective
until City shall have
received a
written notice
of assignment
that
(Amendment 65 Lease) 13
• discloses the name and address of each such assignee; provided, however, that if such assignment
is made to a bank or trust company as trustee or paying agent for owners of certificates of
participation, trust certificates or partnership interests with respect to the Rental Payments
payable under a Lease, it shall thereafter be sufficient that City receives notice of the name and
address of the bank or trust company as trustee or paying agent. During each Lease Term, City
shall keep, or cause to be kept, a complete and accurate record of all such assignments in form
necessary to comply with Section 149 of the Code. City shall retain all such notices as a register
of all assignees and shall make all payments to the assignee or assignees designated in such
register. City shall not have the right to and shall not assert against any assignee any claim,
counterclaim or other right City may have against Banc of America or the Vendor. Assignments
in part may include without limitation assignment of all of Banc of America's security interest in
and to the Equipment listed in a particular Lease and all rights in, to and under the Lease related
to such Equipment. The option granted in this Section may be separately exercised from time to
time with respect to the Equipment listed in each Lease, but such option does not permit the
assignment of less than all of Banc of America's interests in the Equipment listed in a single
Lease.
Section 11.02. Assignment and Subleasing by City. None of City's right, title, and
interest in, to and under any Lease or any portion of the Equipment may be assigned or encum-
bered by City for any reason.
ARTICLE XII
• Section 12.01. Events of Default Defined. Any of the following events shall constitute an
"Event of Default" under a Lease:
. (a) Failure by City to pay any Rental Payment or other payment required to be paid
under any Lease within 10 days of the date specified herein;
(b) Failure by City to observe and perform any covenant, condition or agreement on
its part to be observed or performed, other than as referred to in subparagraph (a) above, for a
period of 30 days after written notice specifying such failure and requesting that it be remedied is
given to City by Banc of America, unless Banc of America shall agree in writing to an extension
of such time prior to its expiration; provided that, if the failure stated in the notice cannot be
corrected within the applicable period, Banc of America will not unreasonably withhold its
consent to an extension of such time if corrective action is instituted by City within the
applicable period and diligently pursued until the default is corrected;
(c)
Any material misstatement or
misrepresentation made
by City in any
representation
or warranty in this Agreement or
any Lease or to obtain this
Agreement or any
Lease or any
Equipment obtained through this
Agreement or any Lease, if
such statement or
representation
is intentionally false or incorrect at
the time it is made;
(d) Any default occurs under any other agreement for borrowing money or receiving
credit under which City may be obligated as borrower, if such default consists of (i) the failure to
• pay any indebtedness when due or (ii) the failure to perform any other obligation thereunder and
gives the holder of the indebtedness the right to accelerate the indebtedness;
(Amendment 65 Lease) 14
• (e) City shall (i) apply for or consent to the appointment of a receiver, trustee,
custodian or liquidator of City, or of all or a substantial part of the assets of City, (ii) be unable,
fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a
general assignment for the benefit of creditors, (iv) have an order for relief entered against it
under applicable federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a
petition or an answer seeking reorganization or an arrangement with creditors or taking
advantage of any insolvency law or any answer admitting the material allegations of a petition
filed against City in any bankruptcy, reorganization or insolvency proceeding; or
(f) An order, judgment or decree shall be entered by any court of competent
jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator or City
or of all or a substantial part of the assets of City, in each case without its application, approval or
consent, and such order, judgment or decree shall continue unstayed and in effect for any period
of 30 consecutive days.
Section 12.02. Remedies on Default. Whenever any Event of Default exists, Banc of
America shall have the right, at its sole option without any further demand or notice, to take one
or any combination of the following remedial steps:
(a) By written notice to City, Banc of America may declare all Rental Payments
payable by City pursuant to such Lease and other amounts payable by City under such Lease to
the end of the then current Original Term or Renewal Term to be due subject, however, to any
limitations imposed by applicable Arkansas law.
• (b) With or without terminating the Lease Term under such Lease, Banc of America
may enter the premises where the Equipment listed in such Lease is located and retake
possession of such Equipment or require City at City's expense to promptly return any or all of
such Equipment to the possession of Banc of America at such place within the United States as
Banc of America shall specify, and sell or lease such Equipment or, for the account of City,
sublease such Equipment, continuing to hold City liable, but solely from legally available funds,
for the difference between (i) the Rental Payments payable by City pursuant to such Lease and
other amounts related to such Lease or the Equipment listed therein that are payable by City to
the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net
proceeds of any such sale, leasing or subleasing (after deducting all expenses of Banc of America
in exercising its remedies under such Lease, including without limitation all expenses of taking
possession, storing, reconditioning and selling or leasing such Equipment and all brokerage,
auctioneer's and attorney's fees and any limitations imposed by applicable Arkansas law). The
exercise of any such remedies respecting any such Event of Default shall not relieve City of any
other liabilities under any other Lease or the Equipment listed therein; and
(c) Banc of America may take whatever action at law or in equity may appear
necessary ordesirable to enforce its rights under such Lease or as a secured party in any or all of
the Pledged Revenues or the Equipment subject to such Lease.
Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to
• Banc of America is intended to be exclusive and every such remedy shall be cumulative and shall
be in addition to every other remedy given under a Lease now or hereafter existing at law or in
equity. No delay or omission to exercise any right or power accruing upon any Event of Default
(Amendment 65 Lease) 15
• shall impair any such right or power or shall be construed to be a waiver thereof, but any such
right or power may be exercised from time to time and as often as may be deemed expedient. In
order to entitle Banc of America to exercise any remedy reserved to it in this Article it shall not
be necessary to give any notice other than such notice as may be required in this Article.
Section 12.04. Application of Moneys. Any net proceeds from the exercise of any
remedy under this Agreement, including the application specified in Section 12.02(b)(ii) (after
deducting all expenses of Banc of America in exercising such remedies including without
limitation all expenses of taking possession, storing, reconditioning and selling or leasing
Equipment and all brokerage, auctioneer's or attorney's fees), shall be applied as follows:
(a) If such remedy is exercised solely with respect to a single Lease, Equipment listed
in such Lease or rights thereunder, then to amounts due pursuant to such Lease and other
amounts related to such Lease or such Equipment.
(b) If such remedy is exercised with respect to more than one Lease, Equipment listed
in more than one Lease or rights under more than one Lease, then to amounts due pursuant to
such Leases pro rata.
ARTICLE XIII
Section 13.01. Notices. All notices, certificates or other communications under any
• Lease shall be sufficiently given and shall be deemed given when delivered or mailed by
registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile
transmission (with electronic confirmation) to the parties hereto at the addresses immediately
after the signatures to this Agreement (or at such other address as either party hereto shall
designate in writing to the other for notices to such party) and to any assignee at its address as it
appears on the registration books maintained by City.
Section 13.02. Release and Indemnification. To the extent permitted by law, City shall
indemnify and defend Banc of America against any and all claims, actions, suits and other
demands for damages related to any alleged lien holder liability arising out of City's selection,
possession or use of any Equipment obtained by City under this Agreement and any Lease. This
indemnification does not waive or reduce City's statutory immunity as to any third party
claimants nor provide any third party beneficiary rights to any claimant or other person or entity.
Section 13.03. Binding Effect. Each Lease shall inure to the benefit of and shall be
binding upon Banc of America and City and their respective successors and assigns.
Section 13.04. Severability. In the event any provision of any Lease shall be held invalid
or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision hereof.
Section 13.05. Amendments, Changes and Modifications. Each Lease may only be
amended by Banc of America and City in writing.
•
(Amendment 65 Lease) 16
• Section 13.06. Execution in Counterparts. Each Lease may be simultaneously executed
in several counterparts, each of which shall be an original and all of which shall constitute but
one and the same instrument.
Section 13.07. Applicable Law. Each Lease shall be governed by and construed in
accordance with the laws of the State of Arkansas.
Section 13.08. Captions. The captions or headings in this Agreement and in each Lease
are for convenience only and in no way define, limit or describe the scope or intent of any
provisions or sections of this Agreement or any Lease.
Section 13.09. Jurisdiction. The jurisdiction for this agreement is stipulated as
Washington County, Arkansas.
(Remainder of page intentionally left blank.)
•
•
(Amendment 65 Lease) 17
•
•
•
IN WITNESS WHEREOF, Banc of America and City have caused this Agreement to be
executed in their names by their duly authorized representatives as of the date first above written.
BANG OF AMERICA:
Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
CA5-705-04-01
San Francisco, Califp 'a 94104
By
Title ssistant V ce Pfesident
CITY:
City of Fayetteville, Arkansas
113 West Mountain Street
Favetteville„Arkansas 72701
By —
Title
(Seal)
Attest:
By Q4 aL. w +--
Title: City Clerk
(Amendment 65 Lease)
LESSEE'S COPY
A'
ED
EXHIBIT A
SCHEDULE OF PROPERTY NO. I
Re: Master Equipment Lease/Purchase Agreement, dated as of June 25, 2003,
between Banc of America Leasing & Capital, LLC, as Banc of America,
and City of Fayetteville Arkansas, as City
1. Defined Terms. All terms used herein have the meanings ascribed to them in the
above -referenced Master Equipment Lease/Purchase Agreement (the "Master Equipment
Lease ").
2. Equipment. The following items of Equipment are hereby included under this
Schedule of the Master Equipment Lease.
Quantity
Description
Serial No.
Model No.
Location
2003
Mack
Truck
1M2ACO8C73M008244
I 613-S
clyaifewille
1
2003
Mack
Truck
1M2ACO8C53M008243
LE -613-S
Fayetteville
1
2003
Mack
Truck
1M2ACO8C03M008246
LE -613-S
Fayetteville
1
2003
Mack
Truck
1M2ACO8C93M008245
LE -613-S
Fayetteville
1
2003
Mack
Truck
1M2ACO8C43M008248
LE -613-S
Fayetteville
1
2003
Mack
Truck
1M2ACO8C63M008249
LE -613-S
Fayetteville
1
2003
Mack
Truck
1M2ACO8C23M008247
LE -613-S
Fayetteville
3. Payment Schedule.
(a) Rental Payments. The Rental Payments shall be in such amounts and
payable on such dates as set forth in the Rental Payment Schedule attached to this Schedule as
Exhibit A-1. Rental Payments shall commence on the date on which the Equipment listed in this
Schedule is accepted by City, as indicated in an Acceptance Certificate substantially in the form of
Exhibit B to the Master Equipment Lease. The Equipment must be accepted by City no later than
June 30, 2003.
(b) Purchase Price Schedule. The Purchase Price on each Rental Payment
date for the Lease of the Equipment listed in this Schedule shall be the amount set forth for such
Rental Payment date in the "Purchase Price" column of the Rental Payment Schedule attached to
this Schedule. The Purchase Price is in addition to all Rental Payments then due under this
Schedule (including the Rental Payment shown on the same line in the Rental Payment Schedule).
4. Representations, Warranties and Covenants. City hereby represents, warrants and
covenants that its representations, warranties and covenants set forth in the Master Equipment
Lease are true and correct as though made on the date of commencement of Rental Payments on
this Schedule. City further represents and warrants that no material adverse change in City's
• financial condition has occurred since the date of the Master Equipment Lease.
(Amendment 65 Lease) A-1
5. The Lease. The terms and provisions of the Master Equipment Lease (other than
• to the extent that they relate solely to other Schedules or Equipment listed on other Schedules)
are hereby incorporated into this Schedule by reference and made a part hereof.
6. Acquisition Amount. The Acquisition Amount for the Equipment described in this
Schedule to be paid to the Vendor is $ 1,178,928.00.
7. Lease Term. The Lease Term shall consist of the Original Term and bi3 (4)
consecutive Renewal Terms, with the final Renewal Term ending on July 9, 2008
8.
Purchase Option Commencement
Date.
For
purposes of Section 10.01 of the
Lease, the
Purchase Option Commencement Date
is Feb.
9,
2006 .
Dated: June 25, 2003
BANC OF AMERICA:
Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
CA5-705-04-01
San Francisco, California 94104
CITY:
City of Fayetteville, Arkansas
113 West Mountain Street
Fayetteville, Arkansas 72701
By (A1 By
• Titl sistant Vie resident : Tit]
•
(Se
Counterpart No. of 0 manually executed and serially numbered counterparts.
To the extent that this Lease constitutes chattel paper (as defined in the Uniform Commercial
Code), no security interest herein may be created through the transfer or possession of any
Counterpart other than Counterpart No. 1.
(Amendment 65 Lease) A-2
•
•
•
EXHIBIT A-1
RENTAL PAYMENT SCHEDULE
• Rental
Payment
Date
Rental
Payment
Amount
Interest
Portion
Principal
Portion
Purchase
Price
Prepayment Premium for purposes of Section 10.01(a) is 1.00%.
For purposes of this Lease, "Taxable Rate," with respect to the interest component of
Rental Payments, means an annual rate of interest equal to %a.
CITY:
City of Fayetteville, Arkansas
By
Title Mayor
(Amendment 65 Lease) A-1-1
JUL-07-2003 17:28 P.02
ETCTmTT A-1
• ►Z£N•1'aL PAYMENT SCHXDUT,F.
debt O ervbeP Aebt
iidercec belJnCe
panumber 2.15300t pr7nclyal ee N1C6
1,178,326.00
0 +. 1.2e 20,794.'11 1,160,346.72
Jul -09-03 1 2.213.44 18.5 •.0,794.77 1.191,730.56
Ocr-U9-03 2 2.143.60 19.651.11 20,794.71 1,12!,079.45
Cr-u9-03 3 16.686.13 20,794.11 1.104.393.33
4 2.,100.50 18,721.21 20,791.71 ,,OB5. 672.10
Nov-u4.OJ 5 2,073.50
Dec -.14-03
038.35 1D,756..4b 20,774.71 1,466,915.74
Jan-nY-OS 6 /,110].13 3a,791.'+8 20,794.71 1,uaq,124. SG
Feb -09-114 7 1' 18,826.9b 10,794.71 1. e'1+,297.30
Nar-09-04 a 1,4b7.05
9 ),932.51 18,942.11 20.794.71 1.010,437.
03
71pi.09-04 1 tiv7.09 19,097.62 20,774.71 941.537.47
May_04-U4 10 1.wK1..61 18,933.].11 20,794.71 97'2,601.37
Jun -09-u4 1i 1.a2b.06 10,769.65 20.794.71 934,h35.72
Jul -09`44 12 1 79U.45 19,004.]6 20.794.71 915.y91.52
46
149-09-(1• 13 S95.B3
6bp-09-"4 14 1,754.77 1D,019.94 20.794.
15 1,719.02 17,076.60 20,791.71 076.204791.71 4114.32
Oct -09-114 6 1.E„i.11 19,111.50 20.794.71 958, 2.fi6.9a
Nw -09-u• 1 1.647.33 19,147.39
DCC-09-04 17
Jon-09_nh lB 1.617...8 19 19,. 19,t1.35 81'3G 20.794.71 939,974.25
09 -OS 1,575..6 9
Feb 20 1 539.28 19,255.44 211,794.71
Mer 09-05 21 1S03.12 19,291.55 411 781.307.12
,94.71 761,979.42 Kay 23
Apr 09-05 22 1,166.94 19,327.81 11.154.71 742, G15.3'A
09.05 1,430.61 19.364.10 2 723,116.9'/
Jun -07.06 1,394.25 19.400.15 10.'144.71
Jul -07-05 24 1,357.94 19.456.08 20.'194.71 707.777.9?
ADG-09-05 2- 144.71 684.304.52
• OcL 09-05 27 1,321.34 19.579.33 20.794.11 664.794.19
OCL-09-05 27 1,181.79 19.546.76 20,794.71 647,268.13
Nuv-09 05 28 1,219.15 17.546.26 30,74•.71 62.664.81
Dee07 OS 23 1,211.46 ±9.563.26
30 1,114.99 19,620.03 10,794.11 606.014.64
7411-0706 i1 1,137.85 19.656.06 10,794.11 Se6.381.99
Peb-09-06 _2 1,100.94 1.9.693.77 10.794.11 566,674.21
M41 -09-OG i, 063 .77 19,730.11 10.794.'11 546,763.4'0
Ay1.09-06 7l 20,794.77 527,19.67
09-06 1• 1.020.72 19.767.79
2t4)•• 19, 804.90 30,754.77 507,190.77
Jail 09-06 3 909.81 14, N4L.09 20,794.71 487,540.68
36 915.63
341-09-06 37 915.37 19,8'19.34 20,794.71 467.669.14
s.p.09-04 678.0+ 19.916.66 20,794.71 147.752.60
gnp-09-06 20 840.60 1D. 99•.06 10.794.11 e0 ,807.10
798.62
Nnv-09-06 40
Der -09-06 41
Drc-09.06 s9 803.17 19,?91.92 20.774.71 ip 7.770.05
765.66 20,039.U6 20.754.11
10,066 611 20,794.71 lh1,711.39
.van -09-07 61 120.05 341,607.05
13 690.38 10,104.33 20,194.71
FP.b-09.07 Oa 602.63 30,14 .0 20794.71 )47,285.07
May-09
ar-09-07 s5 20,179.79 , 771.71 381,067.29
3Q794.1t 3r'.464.97
619.82
p Y-09-07 46 576.93 ]0,21'1.79 20,
9-09-07 97 20.256.74 20,794.71 366,811.54
.nln-0907 47 536.4 20,293.7'1 20,794.71 346,517.77
N1-09.07 16 500.9 20,331.98 20,794.71
sep-0'01 276,185.89
-119IugO7 19 464.64 70.0} 20,194.71 205,X15.84
e1t
50 414.66 20,7
(.aA-1.1
mmdmmt 651444)
JUL 07 2003 15:38 PAGE.02
•
JUL-07-2003 17:28
P.03
•
Oct •09-07
Nov -09-07
pee -09-U7
jar- 09 -OS
Pcb fl -0U
Mar 09 -OA
Apt.09'OA
Moy-O9-O8
Jun -09-0B
jut -O9 -0g
T O T A L
380.4]
70.406.29
S.
349.10
2U,446.61
Si
309.71
211,485.00
53
271.25
2n,S23.46
51
234.12
10, �A 1.99
Sg
194.12
20,100.60
SC
116.49
70.639.27
�7
116.69
10.6'16.07
76
'17.86
20.71K.85
59
YB.97
70,755'74
60
10.794.71 1tl 7.107,15
20,794.71 174,465,94
20,'194. 1
20.'144.71
123,9c2.40
10,144.71
103,140.49
10,744.71
97, 789.09
70,
7Ys
.71
62,150.62
30,794.11
11,677.59
30.144.71
10,795./4
20.
194
.11
O.On
g g, 744.76 1,11e,97a.n0 1,247_i92c7N
__ .__ .caste a-_•_•-.eec
Prcpnyment Prctnitun for purpnscs of Section 10.01(a) is 1.00%.
"taxable Rate." with respect to the interest compon�t of
For pu7posas of Ihis T.easc, to
Mental Payments, means au annual rate Of inLereSt equal
( acndm8At651saac)
JUL 07 2003 15:38
CITY: knnA �i
(,qty of P�tY�ttcvilt �
Title Mayor
A-1-2
TOTAL P.03
PAGE.03
•
debt
service
Date number
Jul -09-03 0
Aug -09-03 1
Sep -09-03 2
Oct -09-03 3
Nov -09-03 4
Dec -09-03 5
Jan -09-04 6
Feb -09-04 7
Mar -09-04 8
Apr -09-04 9
May -09-04 10
Jun -09-04 11
Jul -09-04 12
Aug -09-04 13
Sep -09-04 14
Oct -09-04 15
Nov -09-04 16
Dec -09-04 17
• Jan -09-05 19
Feb -09-05 19
Mar -09-05 20
Apr -09-05 21
May -09-05 22
Jun -09-05 23
Jul -09-05 24
Aug -09-05 25
Sep -09-05 26
Oct -09-05 27
Nov -09-05 28
Dec -09-05 29
Jan -09-06 30
Feb -09-06 31
• Mar -09-06 32
Apr -09-06 33
May -09-06 34
Jun -09-06 35
Jul -09-06 36
Aug -09-06 37
Sep -09-06 38
Oct -09-06 39
Nov -09-06 40
Dec -09-06 41
Jan -09-07 42
Feb -09-07 43
Mar -09-07 44
Apr -09-07 45
May -09-07 46
• Jun -09-07 47
Jul -09-07 48
• Aug -09-07 49
Sep -09-07 50
(Amendment 65 Lease)
EXHIBIT A-1
RENTAL PAYMENT Sc
interest
2.25300% principal
2,213.44 18,581.28
2,178.55 18,616.16
2,143.60 18,651.11
2,108.58 18,686.13
2,073.50 18,721.21
2,038.35 18,756.36
2,003.13 18,791.58
1,967.85 18,826.86
1,932.51 18,862.21
1,897.09 18,897.62
1,861.61 18,933.10
1,826.06 18,968.65
1,790.45 19,004.26
1,754.77 19,039.94
1,719.02 19,075.69
1,683.21 19,111.50
1,647.33 19,147.39
1,611.38 19,183.34
1,575.36 19,219.35
1,539.28 19,255.44
1,503.12 19,291.59
1,466.90 19,327.81
1,430.62 19,364.10
1,394.26 19,400.45
1,357.84 19,436.88
1,321.34 19,473.37
1,284.78 19,509.93
1,248.15 19,546.56
1,211.45 19,583.26
1,174.69 19,620.03
1,137.85 19,656.86
1,100.94 19,693.77
1,063.97 19,730.74
1,026.92 19,767.79
989.81 19,804.90
952.63 19,842.09
915.37 19,879.34
878.05 19,916.66
840.66 19,954.06
803.19 19,991.52
765.66 20,029.06
728.05 20,066.66
690.38 20,104.33
652.63 20,142.08
614.82 20,179.90
576.93 20,217.79
538.97 20,255.74
500.94 20,293.77
462.84 20,331.88
424.66 20,370.05
A-1-1
HEDULE
debt
service balance
1,178,928.00
20,794.71 1,160,346.72
20,794.71 1,141,730.56
20,794.71 1,123,.079.45
20,794.71 1,104,393.32
20,794.71 1,085,672.10
20,794.71 1,066,915.74
20,794.71 1,048,124.16
20,794.71 1,029,297.30
20,794.71 1,010,435.09
20,794.71 991,537.47
20,794.71 972,604.37
20,794.71 953,635.72
20,794.71 934,631.46
20,794.71 915,591.52
20,794.71 896,515.83
20,794.71 877,404.32
20,794.71 858,256.94
20,794.71 839,073.60
20,794.71 819,854.25
20,794.71 800,598.81
20,794.71 781,307.22
20,794.71 761,979.42
20,794.71 742,615.32
20,794.71 723,214.87
20,794.71 703,777.99
20,794.71 684,304.62
20,794.71 664,794.69
20,794.71 645,248.13
20,794.71 625,664.87
20,794.71 606,044.84
20,794.71 586,387.98
20,794.71 566,694.21
20,794.71 546,963.46
20,794.71 527,195.67
20,794.71 507,390.77
20,794.71 487,548.68
20,794.71 467,669.34
20,794.71 447,752.68
20,794.71 427,798.62
20,794.71 407,807.10
20,794.71 387,778.05
20,794.71 367,711.39
20,794.71 347,607.05
20,794.71 327,464.97
20,794.71 307,285.07
20,794.71 287,067.29
20,794.71 266,811.54
20,794.71 246,517.77
20,794.71 226,185.89
20,794.71 205,815.84
S
Oct -09-07 51 386.42 20,408.29 20,794.71 185,407.55
Nov -09-07 52 348.10 20,446.61 20,794.71 164,960.94
Dec -09-07 53 309.71 20,485.00 20,794.71 144,475.94
Jan -09-08 54 271.25 20,523.46 20,794.71 123,952.48
Feb -09-08 55 232.72 20,561.99 20,794.71 103,390.49
Mar -09-08 56 194.12 20,600.60 20,794.71 82,789.89
Apr -09-08 57 155.44 20,639.27 20,794.71 62,150.62
May -09-08 58 116.69 20,678.03 20,794.71 41,472.59
Jun -09-08 59 77.86 20,716.85 20,794.71 20,755.74
Jul -09-08 60 38.97 20,755.74 20,794.71 0.00
T O T A L 68,754.78 1,178,928.00 1,247,682.78
Prepayment Premium for purposes of Section 10.01(a) is 1.00%.
For purposes of this Lease, "Taxable Rate, " with respect to the interest component of
Rental Payments, means an annual rate of interest equal to 3.530%.
CITY:
City of Fayetteville, Arkansas
By
• Title Mayor
•
(Amendment 65 Lease) A-1-2
EXHIBIT B
ACCEPTANCE CERTIFICATE
Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
CA5-705-04-01
San Francisco, California 94104
Re: Schedule of Property No. 1 dated June 25, 2003, to Master Equipment
Lease/Purchase Agreement, dated as of June 25, 2003, between Banc of
America Leasing & Capital, LLC, as Banc of America, and City of
Fayetteville, Arkansas, as City
Ladies and Gentlemen:
In accordance with the Master Equipment Lease/Purchase Agreement (the "Agreement"),
the undersigned City hereby certifies and represents to, and agrees with Banc of America as
follows:
1. All
of the Equipment (as
such
term is defined in the
Agreement)
listed in
the
above -referenced
Schedule of Property
(the
"Schedule ") has been
delivered,
installed
and
• accepted on the date hereof.
2. City has conducted such inspection and/or testing of the Equipment listed in the
Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the
Equipment for all purposes.
3. City is currently maintaining the insurance coverage required by Section 7.02 of
the Agreement.
4. No event or condition
that constitutes,
or with notice or
lapse of time, or both,
would constitute, an Event of Default
(as defined in the
Agreement) exists
at the date
hereof.
Date: June 25.2003
•
(Amendment 65 Lease) B -I
CITY
Cit
By
Tit]
(Se
C
•
CERTIFICATE
The undersigned, the duly elected and acting City Clerk of the City of Fayetteville
("City") certifies as follows:
A. The following listed persons are duly elected and acting officials of City (the
"Officials") in the capacity set forth opposite their respective names below and that the facsimile
signatures are true and correct as of the date hereof;
B. The Officials are duly authorized, on behalf of City, to negotiate, execute and
deliver the Master Equipment Lease/Purchase Agreement dated as of June 25. 2003 and the
Schedule(s) thereunder and all future Schedule(s) (the "Agreements") by and between City and
Banc of America Leasing & Capital, LLC and these Agreements are binding and authorized
Agreements of City, enforceable in all respects in accordance with their terms.
Name of Official Title
Dan Coody Mayor
Title: City Clerk
(The signer of this Certificate cannot be listed above as authorized to execute the
Agreements.)
(Amendment 65 Lease)
G1
• ESSENTIAL USE/SOURCE OF FUNDS CERTIFICATE
Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
CA5-705-04-01
San Francisco, California 94104
Re: Master Equipment Lease/Purchase Agreement dated June 25 2003,
between Banc of America Leasing & Capital, LLC and City of
Fayetteville, Arkansas ("City") and Schedule of Property No. 1 dated June
25, 2003.
This certificate confirms and affirms that the Equipment described in the Agreement
referenced above is essential to the functions of City or to the services City provides its citizens.
Further, City has an immediate need for, and expects to make immediate use of, substantially all
such Equipment, which need is not temporary or expected to diminish in the foreseeable future.
Such Equipment will be used by City only for the purpose of performing one or more of City's
governmental or proprietary functions consistent with the permissible scope of its authority.
City
expects
and anticipates
adequate Pledged
Revenues to l available for all future
payments or
rent due
after the current
budgetary period.
• Signature
Name Dai
Title Mayor \J
•
(Amendment 65 Lease)
•
fl
•
NORTHWEST ARKANSAS OFFICE
KUTAK ROCK LLP
SUITE 1100
425 WEST CAPITOL AVENUE
LITTLE ROCK, ARKANSAS 72201-3409
THE THREE SISTERS BUILDING 501-975-3000
214 WEST DICKSON STREET FACSIMILE 501 -975-3001
FAYETTEVILLE. ARKANSAS 72701-5221
479-072.4200 www.kutakrock.Com
July 9, 2003
Banc of America Leasing & Capital, LLC
555 California Street, 4th Floor
CA5-705-04-01
San Francisco, California 94104
Re: Schedule of Property No. 1, dated June 25, 2003, to Master Equipment
Lease/Purchase Agreement dated as of June 25, 2003, by and between
Banc of America Leasing & Capital, LLC, as lessor, and City of
Fayetteville, Arkansas, as lessee
Ladies and Gentlemen:
ATLANTA
CHICAGO
DENVER
DEB MOINES
FAYETTEVILLE
IRVINE
KANSAS CITY
LINCOLN
OKLAHOMA CITY
OMAHA
PASADENA
RICHMOND
SCOTTSDALE
WASHINGTON
As legal counsel to the City of Fayetteville, Arkansas (the "City"), I have examined
• (a) an executed counterpart of that certain Master Equipment Lease/Purchase Agreement dated
as of June 25, 2003, and the Exhibits thereto (the "Agreement"), by and between Banc of
America Leasing & Capital, LLC ("Banc of America") and the City, and an executed counterpart
of Schedule of Property No. 1, dated June 25, 2003 (the "Schedule"), by and between Banc of
America and the City, which, among other things, provides for the lease of certain property listed
in the Schedule (the "Equipment"), (b) an executed counterpart of Ordinance No. 4484 of City
adopted on May 6, 2003 (the "Authorizing Ordinance"), which, among other things, authorizes
the City to execute the Agreement and the Schedule, and (c) such other opinions, documents,
certified proceedings and matters of law as we have deemed necessary in connection with the
following opinions. The Schedule and the terms and provisions of the Agreement incorporated
therein by reference, together with the Rental Payment Schedule attached to the Schedule, are
herein referred to collectively as the "Lease".
As to questions of fact material to our opinion, we have relied upon the representations of
the City contained in the Authorizing Ordinance and the Lease and in the certified proceedings
and other certifications of public officials furnished to us, without undertaking to verify the same
by independent investigation.
Based upon the foregoing, we are of the opinion, under existing law, that:
1. The City is a public body corporate and politic, duly organized and existing under
the laws of the State of Arkansas, and is a political subdivision of the State of Arkansas within
• the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the "Code"),
10-19977.1
KUTAK ROCK LLP
Approving Opinion
• July 9, 2003
Page 2
and the obligations of the City under the Agreement will constitute an obligation of the City
within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code.
2. Pursuant to the Constitution and laws of the State of Arkansas, including,
particularly, Amendment 65 and Arkansas Code Annotated Sections 14-164-401 et seq.
(Repl.1998) (the "Act"), the City has the requisite power and authority to lease and acquire the
Equipment and to execute and deliver the Lease and to perform its obligations under the Lease.
3. The Lease has been duly authorized, approved, executed and delivered by and on
behalf of City, and the Lease is a valid and binding obligation of City enforceable in accordance
with its terms.
4. The Lease does not constitute a general obligation of City, but is a valid and
binding special obligation of City payable solely from the Pledged Revenues (as defined in the
Lease).
5.
The authorization, approval, execution and delivery of
the Lease
and all other
proceedings
of City relating to the transactions contemplated thereby
have been
performed in
• accordance with all open meeting laws, public bidding laws and all other applicable state or
federal laws.
6. To the best of our knowledge, there is no proceeding pending or threatened in any
court or before any governmental authority or arbitration board or tribunal that, if adversely
determined, would adversely affect the transactions contemplated by the Lease or the security
interest of Banc of America or its assigns, as the case may be, in the Equipment thereunder or in
the Pledged Revenues.
7. The portion of rentals designated as and constituting interest paid by City and
received by Banc of America is excluded from Banc of America's gross income for federal
income tax purposes under Section 103 of the Code and is exempt from State of Arkansas
personal income taxes; and such interest is not a specific item of tax preference for purposes of
computing the alternative minimum tax imposed on individual and corporations; it should be
noted, however, that such interest is taken into account in determining adjusted current earnings
for purposes of such alternative minimum tax.
It is to be understood that the rights of Banc of America and the enforceability of the
Lease may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally
applicable and that its enforcement may also be subject to the exercise of judicial discretion in
appropriate cases.
All capitalized terms
herein shall have the same
meanings
as set forth in
the
Lease unless
• otherwise provided herein.
Banc of America and its
successors
and assigns,
and
any counsel
10-19977.1
KUTAK ROCK LLP
Approving Opinion
• July 9, 2003
Page 3
rendering an opinion on the tax-exempt status of the interest components of the Rental Payments,
are entitled to rely on this opinion. Except to the extent specifically set forth above, this opinion
is being rendered to you solely for your use and benefit and may not be relied upon in any
manner, nor used, by any other person.
Very truly yours,
C
IDMI21 i
I
0
0
Form 8038-G Information Return for Tax -Exempt Governmental Obligations
► Under Internal Revenue Code section 149(e) OMB No. 1545-0720
(Rev. November 2000) ► See separate Instructions.
can of the Trwuy Caution: If the issue price is under $100,000, use Form 8038 -GC.
I Reranus Servio
art I Reporting Authority If Amended Return, check here ►
1 Issuer's name 2 Issuers employer Identification number
City of Fayetteville, Arkansas 71-6018462
3 Number and street (or P.O. box if mail is not delivered to street address) Room/suite 4 Report number
113 West Mountain 3 01
S City, town, or post office, state, and ZIP code 8 Date of issue
Fayetteville, AR 72701 7-9-03
7 Name of issue 8 CUSIP number
Master Equipment Lease/Purchase Agreement (Amendment 65 Lease) None
9 Name and title of officer or legal representative wham the IRS may call for more information 10 Telepnre nu,Eer of officer or legal repn.ametihw
Gordon M. Wilbourn, Kutak Rock LLP, Bond Counsel 501-975-3000
Part Ill Type of Issue (check applicable box(es) and enter tt1e issue price) See instructions and attach schedule
11 ❑ Education ........................................... .... b .... 11
12 ❑ Health and hospital......................................[......................12.. .
13 ❑ Transportation ....................................... .. ...1. .^ .. .vs 13
14 ® Public safety ....................................... .11�. Jl :r. LOOS. 14 1,178,928
15 ❑ Environment (including sewage bonds) ............................ ... 15
16 ❑ Housing ........................................... `...Q.GD€N:.UT... 16
17 ❑ Utilities........................................................... 17
18 ❑ Other. Describe ► 18
19 If obligations are TANS or RANs, check box ► ❑ If obligations are BANS, check box ...... ► ❑
20 If obligations are in the form of a lease or installment sale, check box ................. ► ❑x
Part III I Description of Obligations. (Complete for the entire issue for which this form is being filed.)
(a) Final maturity date (b) Issue price lei Salted redemption (d) yyeighled (e) yield
price at maturity average maturity
7-9-08 $ 1,178,928 $ 1,178,928 2.5880 years 2.2530%
art lvi Uses of Proceeds of Bond Issue (including underwriters' discount)
22 Proceeds used for accrued interest ............................................... ... 22 0
23 Issue price of entire issue (enter amount from line 21, column (b)) .......................... 23 1 178 928
24 Proceeds used for bond issuance costs (including underwriters' discount) 24 0
25 Proceeds used for credit enhancement ........................... 25 0
26 Proceeds allocated to reasonably required reserve or replacement fund .. 26 0
27 Proceeds used to currently refund prior issues ..................... 27 0
28 Proceeds used to advance refund prior issues ..................... 28 0
29 Total (add lines 24 through 28) ..................................................... 29 0
30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) ........ 30 11178f928
Part VI Description of Refunded Bonds (Complete this part only for refunding bonds.)
31 Enter the remaining weighted average maturity of the bonds to be currently refunded ........... ► years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded ...... , .... ► years
33 Enter the last date on which the refunded bonds will be called ............................. ►
34 Enter the date(s) the refunded bonds were issued ►
Part VII Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) ......... 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) .... 36a
b Enter the final maturity date of the guaranteed investment contract ►
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units ........... 37a
b If this issue is a loan made from the proceeds of another tax-exempt issue, check box ► ❑ and enter the name of the
issuer ► and the date of the issue ►
38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ............ ► ❑
9 If the issuer has elected to pay a penaltyin lieu of arbitrage rebate, check box .................................. ► ❑
If the issuer has identified a hedge,check box ........................................ .................. ►
Under penalties perjury, I decl at I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief,
they are true, r ct. and comp
Sign
Here , A 7-9-03 Dan Coody, Mayor
Signature of issues autnonzed represents Date Type or print name and one
For Paperwork Reduction Act Notice, see p g 2 of the Instructions. sA Fom, 8038-G (Rev 11-2000)
STF FED6403F
•
NORTHWEST ARKANSAS OFFICE
THE THREE SISTERS BUILDING
214 WENT DICKSON STREET
FAVETTEVILLE. ARKANSAS 7270t.6221
472.072.420E
GORDON M. WILBOURN
gadon.wilboum®kuakmck.wm
(501)975.3101
KUTAK ROCK LLP
SUITE 1100
425 WEST CAPITOL AVENUE
LITTLE ROCK, ARKANSAS 72201-3409
501-975-3000
FACSIMILE 501 -075-3001
www.kutakroak.00m
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Receipt#70993400001583545681
Internal Revenue Service Center
Ogden, Utah 84201
July 11, 2003
City of Fayetteville, Arkansas
Master Equipment Lease/Purchase Agreement
(Amendment 65 Lease)
ATLANTA
CHICAGO
DENVER
DES MOINES
FAYETTEVILLE
IRVINE
KANSAS CITY
LINCOLN
OKLAHOMA CITY
OMAHA
PASADENA
RICHMOND
SCOTTEDALE
WASHINGTON
• Ladies and Gentlemen:
I have enclosed for filing an original and one copy of Form 8038-G, with respect to the
above -captioned matter. Please return the copy, showing your file mark, in the enclosed prepaid,
self-addressed envelope;
•
Enclosures
Very truly yours,
on
on M. Wilboum
10-50620.1