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HomeMy WebLinkAboutOrdinance 4718 ORDINANCE NO. 4718 AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $65,000,000 OF A SALES AND USE TAX CAPITAL IMPROVEMENT BOND, SERIES 2005, BY THE CITY OF FAYETTEVILLE, ARKANSAS FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF ACQUIRING, CONSTRUCTING AND EQUIPPING A NEW WASTEWATER TREATMENT FACILITY AND RELATED SEWERAGE IMPROVEMENTS; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE SERIES 2005 BOND; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF THE SERIES 2005 BOND; AUTHORIZING THE EXECUTION AND DELIVERY OF A CONTINUING DISCLOSURE AGREEMENT; 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 source of revenue to finance the costs of acquisition, construction and equipping of a new wastewater treatment facility and related sewerage improvements to serve the western portion of the City (the "Project'); and WHEREAS, based on the engineering report (the "Engineering Report") of McGoodwin, Williams and Yates, Fayetteville, Arkansas, which Engineering Report has been reviewed by the City Council, it has been determined that the remaining costs of the Project are in excess of $65,000,000; and WHEREAS, the City is authorized and empowered under the provisions of the Constitution and laws of the State of Arkansas, including particularly Amendment 62 to the Constitution of the State of Arkansas ("Amendment 62") and Arkansas Code Annotated (1998 Repl. & 2003 Supp.) Sections 14- 164-301 et seq. (as from time to time amended, the "Local Government Bond Act'), to issue and sell its capital improvement bonds to finance the costs of various capital improvements such as those comprising the Project, which capital improvement bonds may be secured by and payable from the receipts of the special city-wide sales and use tax authorized by the Local Government Bond Act; and WHEREAS, pursuant to the provisions of Ordinance No. 4327 of the City, adopted and approved on August 7, 2001 (the "Election Ordinance"), there was submitted to the qualified electors of the City the question of the issuance of not to exceed $ 125,000,000 in aggregate principal amount of capital improvement bonds pursuant to Amendment 62 and the Local Government Bond Act to finance a portion of the wastewater system improvements described in the Election Ordinance, said bonds to be secured by a pledge of and lien upon all of the receipts of a special city-wide sales and use tax levied at the rate of three-quarters of one percent (0.75%) pursuant to the Local Government Bond Act (the "Sales and Use Tax"); and WHEREAS, at a special election held November 6, 2001 , a majority of the qualified electors of the City voting on the question approved the issuance of said capital improvement bonds (and the corresponding levy of the Sales and Use Tax and the pledge of Sales and Use Tax receipts to the payment of the capital improvement bonds); and WHEREAS, pursuant to such authority, the City has previously issued its $25,000,000 Sales and Use Tax Capital Improvement Bonds, Series 2002 (the "Series 2002 Bonds"), and its $35,000,000 Sales and Use Tax Capital Improvement Bonds, Series 2004 (the "Series 2004 Bonds"), in order to provide for the funding of various wastewater system improvements, including initial portions of the Project; and WHEREAS, the Series 2002 Bonds have been redeemed in full from receipts of the Sales and Use Tax; and WHEREAS, as authorized under the provisions of Amendment 62 and the Local Government Bond Act and as approved by the qualified electors of the City, and in order to secure funds necessary to pay a portion of the costs of engineering, planning, designing, acquiring, constructing and equipping of the Project, and the legal costs incident to the issuance of a revenue bond to finance the costs of said Project, upon the most favorable terms to the City and the users of the City's wastewater system, the City has made arrangements for the sale of its Sales and Use Tax Capital Improvement Bond, Series 2005 (the "Series 2005 Bond"), in the principal amount of not to exceed $65,000,000 to the Arkansas Development Finance Authority, as purchaser (the "Bondholder"), at a price of par, which Series 2005 Bond shall bear interest at the rate of two percent (2.00%) per annum, pursuant to a Bond Purchase Agreement (the "Bond Purchase Agreement") among the City, the Bondholder and the Arkansas Soil and Water Conservation Commission (the "Commission"); and WHEREAS, the City will also be required to pay to the Arkansas Development Finance Authority, as servicer with respect to the Series 2005 Bond (the "Authority"), a semiannual servicing fee equal to one percent (1 .00%) per annum of the outstanding principal amount of the Series 2005 Bond (the "Servicing Fee"); and WHEREAS, the Series 2005 Bond will be issued and secured by the Sales and Use Tax receipts on a panty basis with the Series 2004 Bonds, except that the Series 2005 Bond will not be secured by the debt service reserve securing the Series 2004 Bonds ; and WHEREAS, a copy of the Bond Purchase Agreement has been presented to and is before this meeting; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1 : The Project shall be accomplished and shall be a part of the City's wastewater system (the "System"). The accomplishment of the Project shall be under the control and supervision of, and all details in connection therewith shall be handled by, the City, and the City shall make all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers. The City shall let all contracts pursuant to and in accordance with existing laws and shall require such performance bonds and insurance from the contractors as will fully insure completion of the Project in accordance with the Engineering Report so as to fully promote and protect the best interests of the City and the Bondholder. 2 ' Section 2: The sale to the Bondholder of the City's Series 2005 Bond in the maximum principal amount of $65,000,000 at a price of par, such Series 2005 Bond to bear interest at the rate of 2.00% per annum and to be subject to a Servicing Fee of 1 .00% per annum and otherwise to be subject to the terms and provisions hereafter in this Ordinance set forth in detail be, and is hereby approved and the Series 2005 Bond is hereby sold to the Bondholder. The Mayor is hereby authorized and directed to execute and deliver the Bond Purchase Agreement on behalf of the City and to take all action required on the part of the City to fulfill its obligations under the Bond Purchase Agreement. The Bond Purchase Agreement is hereby approved in substantially the form submitted to this meeting with such changes as may be approved by the Mayor, his execution to constitute complete evidence of such approval. Section 3 : The City Council hereby finds and declares that the period of usefulness of the System after completion of the Project will be more than twenty-five (25) years, which is longer than the term of the Series 2005 Bond. Section 4: Under the authority of the Constitution and laws of the State of Arkansas, including particularly Amendment 62 to the Constitution of the State of Arkansas and the Local Government Bond Act, the City of Fayetteville, Arkansas Sales and Use Tax Capital Improvement Bond, Series 2005 (the "Series 2005 Bond"), is hereby authorized to be issued in the total principal amount of not to exceed Sixty-Five Million Dollars ($65,000,000), the proceeds of the sale of which are necessary to provide sufficient funds to pay a portion of the costs of accomplishing the Project, including, without limitation, engineering fees, legal fees and other necessary expenses incidental to accomplishment of the Project, and to the issuance of the Series 2005 Bond. The Series 2005 Bond shall bear interest at the rate of two percent (2.00%) per annum and shall be subject to a Servicing Fee of one percent (1 .00%) per annum based upon a 360-day year of twelve consecutive 30-day months compounded semiannually. The Series 2005 Bond shall be dated the date of its delivery to the Bondholder. Accrued interest and the Servicing Fee only shall be payable on each April 15 and October 15, commencing October 15, 2005, to and including October 15, 2008. Principal, interest and the Servicing Fee shall be payable on April 15, 2009, and on each April 15 and October 15 thereafter until the unpaid principal is paid in full as follows: Date Payment Amount Interest Servicing Fee Principal April 15, 2009 $3,785,973 .00 $6505000.00 $3255000.00 $25810,973 .00 October 15, 2009 35785,973 .00 621 ,890.00 310,945.00 2,8539138.00 April 15, 2010 35785,973 .00 593,359.00 296,679.00 2,895,935.00 October 15, 2010 39785,973 .00 5645400.00 2829200.00 2,939,373.00 April 15, 2011 3,7853973 .00 535,006.00 2675503.00 2,983,464.00 Date Payment Amount Interest Servicing Fee Principal 3 • i October 15, 2011 3,7855973 .00 505, 171 .00 252,586.00 3,0289216.00 April 15, 2012 397855973 .00 474,889.00 237,445.00 39073,639.00 October 15, 2012 33785,973 .00 444, 153.00 2225076.00 39119,744.00 April 15, 2013 35785,973.00 412,955.00 206,478.00 3, 166,540.00 October 15, 2013 397855973 .00 3819290.00 190,645 .00 3,2145038.00 April 15, 2014 35785,973 .00 3495149.00 174,575.00 3,2625249.00 October 15, 2014 3,785,973.00 3169527.00 158,263 .00 313115183.00 April 15, 2015 3 ,7855973 .00 283,415.00 1419708.00 333605850.00 October 15, 2015 39785,973.00 2495807.00 124,903 .00 3,4111263.00 April 15, 2016 3 ,7853973 .00 215,694.00 1079847.00 33462,432.00 October 15, 2016 3,785,973.00 181 ,070.00 90,535.00 3,514,368.00 April 15, 2017 3,785,973 .00 145,926.00 72,963 .00 35567,084.00 October 15, 2017 3,785,973.00 110,255.00 555128.00 35620,590.00 April 15, 2018 3,785,973 .00 74,049.00 37,025.00 3,6749899.00 October 15, 2018 3 ,785,972.00 37,300.00 185650.00 397305022.00 The Series 2005 Bond shall be issued in the form of a single typewritten bond, registered as to both principal and interest, payable to the Bondholder, or registered assigns, as set forth hereinafter in the bond form, and shall be numbered R05- 1 . Payment of principal and interest shall be by check or draft mailed by Simmons First Trust Company, N.A., as trustee in connection with the Series 2004 Bonds (the "Trustee"), to the Bondholder at its address shown on the registration books of the City which shall be maintained by the City Clerk as Bond Registrar, without presentation or surrender of the Series 2005 Bond (except upon final payment), and such payments shall discharge the obligation of the City to the extent thereof The City Clerk or her designee shall keep a payment record and make proper notations thereon of all payments of principal and interest. Payment of principal and interest shall be in any coin or currency of the United States of America which, as at the time of payment, shall be legal tender for the payment of debts due the United States of America. When the principal of and interest on the Series 2005 Bond has been fully paid, it shall be delivered to the City Clerk and shall be canceled. Section 5 : The Series 2005 Bond shall be executed on behalf of the City by its Mayor and City Clerk, and shall have impressed thereon the seal of the City. In order to pay the principal of and interest on the Series 2005 Bond and the Servicing Fee in connection therewith, there is hereby pledged all of the receipts of the Sales and Use Tax levied by the Election Ordinance. As permitted under the Trust Indenture dated as of June 1 , 2002, as amended (the "Indenture"), securing the Series 2004 Bonds, such pledge is made on a parity basis with the 4 r i existing pledge of receipts of the Sales and Use Tax securing the payment of the Series 2004 Bonds. The levy and collection of the Sales and Use Tax shall continue until such time as the Series 2004 Bonds and the Series 2005 Bond are no longer outstanding or sufficient funds are on deposit with the Trustee under the Indenture to redeem the Series 2004 Bonds and the Series 2005 Bond in full. The City covenants and agrees that all receipts from the Sales and Use Tax will be accounted for separately as special funds on the books of the City, and receipts of said Sales and Use Tax will be deposited and will be used solely as provided herein and in the Indenture. The Series 2005 Bond is not a general obligation of the City but is a special obligation, the principal of and the interest on which, and the Servicing Fee in connection therewith, are secured by a pledge of the receipts from the Sales and Use Tax. The principal of and interest on the Series 2005 Bond shall not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction. Section 6: The Series 2005 Bond shall be in substantially the following form, and the Mayor and City Clerk are hereby authorized and directed to make all the recitals contained therein: Registered United States of America Registered No. R05-1 $653000,000 State of Arkansas County of Washington City of Fayetteville, Arkansas Sales and Use Tax Capital Improvement Bond Series 2005 Registered Owner: ARKANSAS DEVELOPMENT FINANCE AUTHORITY Principal Amount: SIXTY-FIVE MILLION DOLLARS Know All Men By These Presents: That the City of Fayetteville, Arkansas (the "City") hereby acknowledges itself to owe, and for value received promises to pay to the order of the Arkansas Development Finance Authority, or registered assigns, but solely from the special fund provided therefor as hereinafter set forth, in lawful money of the United States of America, the Principal Amount shown above (or so much of the Principal Amount as should have been advanced as shown on the Record of Payment of Advances attached hereto), and to pay in like coin or currency interest thereon at the rate of 2.00% per annum from the date of each advance. A servicing fee of 1 .00% per annum (the "Servicing Fee") shall also be payable by the City to the Arkansas Development Finance Authority or its successor in the same manner and upon the same dates as interest hereon. Interest on the unpaid balance of the total principal amount outstanding and the Servicing Fee shall be payable on October 15, 2005, April 15, 2006, October 15, 2006, April 15, 2007, October 15, 2007, April 15, 2008 and October 15, 2008. Principal, interest and the Servicing Fee shall be payable on April 15, 2009, and on each April 15 and October 15 thereafter until the unpaid principal is paid in full as follows: 5 [Here will be inserted the amortization schedule set forth in Section 4 of this Ordinance.] Payments of principal and interest due hereon shall be made, except for final payment, without presentation and surrender of this bond, directly to the Registered Owner at its address shown on the registration book of the City maintained by the City Clerk as Bond Registrar, and such payments shall fully discharge the obligation of the City to the extent of the payments so made. This bond is issued for the purpose of (i) providing, financing for a portion of the costs of planning, designing, acquiring, constructing and equipping of a new wastewater treatment facility and related sewerage improvements to serve the western portion of the City (the "Project"), and (ii) paying costs of authorizing and issuing this bond, and is issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas, including particularly Amendment No. 62 to the Constitution of the State of Arkansas ("Amendment 62") and the Local Government Bond Act, codified as Arkansas Code Annotated Sections 14- 164-301 et seq. ( 1998 Repl. & 2003 Supp.) (the "Act"), and pursuant to Ordinance No.,, y '718 of the City, duly adopted and approved on the _% day of. , dy , 2005 (the "Authorizing Ordinance"). Reference is hereby made to the Authorizing Ordinance f r the details of the nature and extent of the security and of the rights and obligations of the City and the Registered Owner of this bond. This bond may be assigned only upon the written approval of the Arkansas Soil and Water Conservation Commission (the "Commission"), and in order to effect such assignment, the assignor shall promptly notify the City Clerk by registered mail, and the assignee shall surrender this bond along with a written assignment and written approval of the Commission to the City Clerk for transfer on the registration records. Every assignee shall take this bond subject to all payments and prepayments of principal and interest (as reflected on the Payment Record maintained by the City Clerk or her designee) prior to such surrender for transfer. Following payment in full of the City's Sales and Use Tax Capital Improvement Bonds, Series 2004 (the "Series 2004 Bonds"), the outstanding principal of this bond shall be prepaid by the City from time to time with receipts of the Sales and Use Tax (defined below) in excess of amounts needed to make scheduled payments of the principal, interest and Servicing Fee hereon. Further, on and after October 15, 2014, this bond may be prepaid at the option of the City from funds from any source, in whole but not in part, at a prepayment price equal to the principal amount outstanding, plus accrued interest to the prepayment date. Notice of any prepayment, whether mandatory or optional, shall be given to the registered owner of this bond at least 90 days prior to the prepayment date. Such notice shall be in writing mailed to the address of the registered owner of this bond at the address appearing on the bond registration records maintained by the City Clerk. This bond does not constitute an indebtedness of the City or the State of Arkansas within the meaning of any constitutional or statutory limitation or provision, and, except with respect to receipts generated from the Sales and Use Tax, the taxing power of the City is not pledged to the payment of the principal of and interest on this bond. 6 This bond is not a general obligation of the City, but is a special limited obligation payable solely from the receipts of a special City-wide sales and use tax levied at the rate of three-quarters of one percent (0.75%) pursuant to the Local Government Bond Act (the "Sales and Use Tax"). In this regard, the pledge of Sales and Use Tax receipts is made on a parity basis with the prior pledge of such receipts securing the City's Sales and Use Tax Capital Improvement Bonds, Series 2004 (the "Series 2004 Bonds"). Pursuant to the Trust Indenture dated as of June 1 , 2002, as amended (the "Indenture), under which the Series 2004 Bonds are issued and secured, an amount of Sales and Use Tax receipts sufficient to pay principal and interest on this bond as due shall be set aside monthly in a special fund created for that purpose identified as the Bond Fund. Reference is made to the Indenture for a detailed statement of the nature and extent of the security, and the rights and obligations of the City and registered owner of this bond. This bond is issued with the intent that the laws of the State of Arkansas will govern its construction. No recourse shall be had for the payment of the principal of or premium, if any, or interest on this bond or for any claim based thereon or upon any obligation, covenant, or agreement contained in this bond or in the Authorizing Ordinance against any past, present or future alderman, officer or employee of the City, or any alderman, officer or employee of any successor of the City, as such, either directly or through the City or any successor of the City, under any rule of law or equity, statute, or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such alderman, officer or employee as such is hereby expressly waived and released as a condition of and consideration for the issuance of this bond. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution and statutes of the State of Arkansas to exist, happen and be performed precedent to and in the issuance of this bond do exist, have happened and have been performed in due time, form and manner as required by law; that the indebtedness represented by this bond does not exceed or violate any constitutional or statutory limitation of indebtedness; and that provision has been made for the payment of the principal of and interest on this bond, as provided in the Authorizing Ordinance. IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this bond to be executed in its name by the manual signatures of its Mayor and City Clerk, thereunto duly authorize, and its corporate seal to be affixed hereto, all as of the 5k day of 2005 . CITY OF FAYETTEVILLE, ARKANSAS By: DA COODY, Mayor 7 ATTEST: = ; FAYETTEVILLE ; SON RA SMITH, City lerk REGISTRATION CERTIFICATE Date of Registration Name of Registered Owner Signature of City Clerk Arkansas Development Finance Authority RECORD OF PAYMENT OF ADVANCES Signature of Vice President of Arkansas * Total Principal Development Finance Date of Advance Amount of Outstanding Authority Advance 8 *The date of each advance shall be the interest commencement date from which the principal amount of such advance bears interest and from which the Servicing Fee is calculated. Section 7. All of the terms and provisions of the Indenture, as now in effect, except for those provisions clearly inapplicable hereto or in direct conflict herewith, including, without limitation, those terms and provisions pertaining to the receipt, investment and handling of Sales and Use Tax receipts, are hereby made applicable hereto and incorporated by reference as though fully set forth herein. The effect of the foregoing sentence shall be to continue the applicable provisions in full force and effect until the Series 2005 Bond is paid, or provision made therefor, even after payment of the Series 2004 Bonds. Section 8. The City shall assure that (i) not in excess of 10% of the proceeds of the Series 2005 Bond is used for Private Business Use (as defined below) if, in addition, the payment of more than 10% of the principal or 10% of the interest due on the Series 2005 Bond during the term thereof are, under the terms of the Series 2005 Bond or any underlying arrangement, directly or indirectly secured by any interest in property used or to be used for a Private Business Use or in payments in respect of property used or to be used for a Private Business Use or are to be derived from payments, whether or not to the City, in respect of property or borrowed moneys used or to be used for a Private Business Use; and (ii) that, in the event that both (A) in excess of 5% of the proceeds of the Series 2005 Bond are used for a Private Business Use, and (B) an amount in excess of 5% of the principal or 5% of the interest due on the Series 2005 Bond during the term thereof are, under the terms of the Series 2005 Bond or any underlying arrangement, directly or indirectly, secured by any interest in property used or to be used for said Private Business Use or in payments in respect of property used or to be used for said Private Business Use or are to be derived from payments, whether or not to the City, in respect of property or borrowed money used or to be used for said Private Business Use, then said excess over said 5% of proceeds of the Series 2005 Bond used for a Private Business Use shall be used for a Private Business Use related to the governmental use of the Project. The City shall assure that not in excess of 5% of the proceeds of the Series 2005 Bond are used, directly or indirectly, to make or finance a loan to persons other than state or local governmental units. As used in this Section, "Private Business Use" means use directly or indirectly in a trade or business carried on by a natural person or in any activity carried on by a person other than a natural person, excluding, however, use by a state or local governmental unit and use as a member of the general public. Section 9: Installments of principal and interest on the Series 2005 Bond shall be prepayable prior to maturity as provided in the form of the Series 2005 Bond set forth in Section 5 of this Ordinance. Section 10: So long as the Series 2005 Bond is outstanding, the City shall not issue or attempt to issue any bonds or other indebtedness having or claimed to be entitled to a pledge of the Sales and Use Tax receipts on a priority or panty basis with the lien thereon securing the Series 2004 Bonds and the Series 2005 Bond. 9 Section 11 : It is covenanted and agreed by the City with the Bondholder and the Commission that it will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Arkansas and by this Ordinance, including, without limitation, the making and collecting of reasonable and sufficient rates lawfully established for services rendered by the System and the segregating of System revenues. The City covenants and agrees that the Bondholder shall have the protection of all the . provisions of the Local Government Bond Act, the Indenture and this Ordinance, and that the City will diligently proceed to enforce those provisions to the end of the Bondholder realizing fully upon its security. If the City shall fail to proceed within thirty (30) days after written request shall have been filed by the Bondholder or the Commission, the Bondholder or the Commission may proceed to enforce all such provisions. If there be any default in the payment of the principal of or interest on the Series 2005 Bond, or if the City defaults in any Bond Fund requirement described in the Indenture or in the performance of any of the other covenants contained in this Ordinance or in the Bond Purchase Agreement, the Bondholder and the Commission (with respect to covenants contained in the Bond Purchase Agreement) may, by proper suit, compel the performance of the duties of the officials of the City under the laws of the State of Arkansas. No remedy herein conferred upon or reserved to the Bondholder is intended to be exclusive of any other remedy or remedies herein provided or provided by law, and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or given by law. No delay or omission of the Bondholder to exercise any right or power accrued upon any default shall impair any such right or power or shall be construed to be a waiver of any default or an acquiescence therein; and every power and remedy given by this Ordinance to the Bondholder may be exercised from time to time and as often as may be deemed expedient. No waiver of any default shall extend to or affect . any other existing or any subsequent default or defaults or impair any rights or remedies consequent thereon. Any costs of enforcement of the Series 2005 Bond or of any provision of this Ordinance, including reasonable attorney' s fees, shall be paid by the City. The Bondholder may enforce all rights and exercise all remedies available to the Bondholder in the event the Servicing Fee is not paid when due. Section 12: When the Series 2005 Bond has been executed by the Mayor and City Clerk and the seal of the City impressed thereon as herein provided, it shall be delivered to the Bondholder upon the payment of all or a portion of the purchase price in accordance with the Bond Purchase Agreement. The purchase price shall be deposited, as and when received, in a special account of the City hereby created in a bank that is a member of the Federal Deposit Insurance Corporation and designated the "2005 Wastewater Construction Fund" (the "Construction Fund"). The moneys in the Construction Fund shall be used for accomplishing the Project, paying expenses incidental thereto and paying the expenses of issuing the Series 2005 Bond approved in accordance with the Bond Purchase Agreement. Payments from the Construction Fund shall be by check or voucher signed by the City Clerk or her designee, and drawn on the depository. Each such check or voucher shall briefly specify the purpose of the expenditure. 10 When the Project has been completed and all required expenses paid and expenditures made from the Construction Fund for and in connection with the accomplishment of the Project and the financing thereof, this fact shall be evidenced by a certificate signed by the City Clerk or her designee, and by the consulting engineer, which certificate shall state, among other things, the date of the completion and that all obligations payable from the Construction Fund have been discharged. A copy of the certificate shall be filed with the depository bank, the Bondholder and the Commission. Disbursements shall be made by the Bondholder for costs of the Project pursuant to written Disbursement Requests as provided in the Bond Purchase Agreement. Section 13 : The terms and provisions of this Ordinance shall constitute a binding contract among the City, the Bondholder and the Commission, and no variation or change in the undertaking herein set forth shall be made while the Series 2005 Bond is outstanding unless consented to in writing by the Bondholder and the Commission. Section 14: The City covenants and agrees that it will maintain the System in good condition and operate it in an efficient manner and at reasonable cost. The City agrees to keep proper records, books and accounts relating to the operation of the System, which shall be kept separate from all other records and accounts of the City, in which complete and correct entries shall be made of all transactions relating to the operation of the System in accordance with generally accepted government accounting standards. Such books shall be available for inspection by the Bondholder and the Commission, or the agent or the representative of either, at reasonable times and under reasonable circumstances. The City agrees to have these records audited annually. If requested, the City agrees to furnish the audit report with respect to the System to the Bondholder and the Commission. The City also agrees that it will furnish to the Bondholder and the Commission on or before 30 days after the end of each fiscal year, if requested, a statement showing (i) total receipts of the Sales and Use Tax during such fiscal year, (ii) the application of such receipts to pay the principal of and interest on the Series 2004 Bonds, and (iii) the application of such receipts to pay the principal of and the interest on the Series 2005 Bond and the Servicing Fee with respect thereto. Section 15 : The City agrees that the Bondholder may pledge the Series 2005 Bond as security for the payment of its wastewater system revolving loan fund revenue bonds (the "ADFA Bonds"), and the trustee or municipal bond insurer for the ADFA Bonds may exercise any rights or remedies available to the Bondholder under this Ordinance or the Bond Purchase Agreement while the Series 2005 Bond is pledged and/or the ADFA Bonds are insured. In addition, the City agrees that while the Series 2005 Bond is pledged and/or the ADFA Bonds are insured, copies of all financial information relating to the City, the System and the Sales and Use Tax receipts shall be furnished to the trustee and/or the municipal insurer for the ADFA Bonds. Section 16: 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 issuance, sale, execution and delivery of the Series 2005 Bond and to effect the execution and delivery of the Bond Purchase Agreement, and to perform all of the obligations of the City under and pursuant thereto. 11 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 17: Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as Bond Counsel on behalf of the City in connection with the issuance and sale of the Series 2005 Bond. Section 18 : 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 19: All ordinances, resolutions and parts thereof in conflict herewith are hereby repealed to the extent of such conflict. PASSED and APPROVED this 5 h day of July, 2005 . APPROVED: ' U@ FAYETTEVILLE : By: �: •� DA GOODY, Mayor %ys .9QkANSpC.�Jia: ATTEST: GT ONv%�%�0 .�` ji By: ebAJA0 V SONDRA SMITH, City Clerk 12