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HomeMy WebLinkAboutO-627i f. ORDINANCE NO. 627 AN ORDINANCE AUTHORIZING THE ISSUANCE AND MAKING SALE OF $535,000 PRINCIPAL AMOUNT OF GENERAL OBLIGATION VARIOUS PURPOSE WARRANTS OF THE CITY TO BE DATED DECEMBER 1, 1978 BE IT ORDAINED by the Mayor and City Council of the City of Fairhope, Alabama, as follows: Section 1. Definitions and Use of Phrases (a) Definitions. The following words shall have the following respective meanings in this ordinance; "Callable Warrants" means those of the War- rants having stated maturities in 1984 and thereafter. "Called Warrants" means those of the Warrants which shall have been called for redemption prior to their maturities pursuant to the applicable provisions of Section 4. "Cif" means the City of Fairhope, a municipal corporation under the laws of Alabama, and includes any municipal corporation into or with which it may be merged or consolidated. "Counci.l" means the governing body of the City its it may at any time be constituted. "Coupons" means those coupons issued in pursu- ance hereof and evidencing the interest on the applicable warrants. "Financial Journal" means a journal printed in the English Language, devoted primarily to news of finan- cial matters, and customarily published in the locality specified not less often than five days during each cal- endar week. "Holder", when used in conjunction with any of 'the Warrants, means the person in whose name the Warrant is issued or, in the event it shall have been transferred thereon to a named payee then the said word means the person to whom it has been so transferred, or in the event it. has been transferred in blank then the said word ineans the person who is in possession and the apparent owner of the said Warrant, and when used in conjunction with any of the Coupons the said word means the person who is in possession and the apparent owner of such Coupon. "Interest Payment Date" means any June 1 and December 1. "Newspaper" means a newspaper printed in the English language and customarily published in the locali- ty specified not less often than five days during each calendar week. "Outstanding Temporary Note" means that cer- tain 5-3/4'% General Obligation Note dated August 16, 1978 due, in the principal amount of $142,641.24, payable to the order of First National Bank of Baldwin County. "RE�demption Date" means the date fixed for re- demption of Callable Warrants in a published notice of redemption made pursuant to the provisions of Section 4. "Redemption Price" means the price at which Callable Warrants called for redemption may be redeemed on the Redemption Date. "United States Securities" means securities that are direct oblgations of the United States of P,merica, or the principal of and the interest on which are fully guaranteed by the United States of America. "Warrant Fund" means the special fund created in Section 7. "Warrants" means those warrants issued under this ordinance and authorized in Section 3. (b) Use of Phrases. The following words and phrases, where used in this ordinance, shall be given the following respective interpretations: The definitions set forth in subsection (a) of this section shall be deemed applicable whether the words defined are herein used in the singular or plural. Wherever used in this ordinance, any noun or pronoun shall where applicable be deemed to include both zingular and plural and to cover all genders. Reference in this ordinance to a section by number shall be to the section having that number in this ordinance. In order to identify readily the words and phrases herein used that are defined in this section, the first letter of each such word and of each word in such phrase is capitalized where herein used (other than when used in the Warrant, Coupon and assignment forms in Sec- tion 8). Section 2. Findings. The Council has ascer- tained and does hereby find and declare that the follow- ing facts are true and correct: (a) The Council has heretofore found and declared that it is necessary and desirable that the City construct certain street im- provements (said improvements being those re- ferred to in the minutes of a meeting of the Council held on February 27, 1978); the total estimated costs of the said street improve- ments is not less than $225,000; (b) Pursuant to authorization in a reso- lution adopted by the Council on July 24, 1978, and for the purpose of paying a portion of the said estimated costs of constructing the street :improvements referred to in paragraph (a) above, the City has heretofore borrowed from First National Bank of Baldwin County, the sum of $142,641.24 and in evidence of the said loan, the City issued its 5-3/4% General Obli- gation Note., dated August 16, 1978. (c) The Council hereby finds and declares that it is necessary and desirable and in the interest of the City and its citizens that the City (i) construct sewer improvements to serve persons south of the City, at a cost estimated to be not less than $132,000, (ii) purchase certain equipment for the City, at a cost esti- mated to be not less than $40,000, (iii) pur- chase a garbage transfer station to serve the City, at a cost estimated to be not less than $35,000, (iv) repair storm damage to streets, at a cost estimated to be not less than $40,000, and (v) construct improvements to the City's electric distribution system, at a cost estimated to be not less than $54,000; and (d) The City does not have at the present time, and will not have, prior to the maturity of the Outstanding Temporary Note, funds available for payment of the principal there- of, and the City does not have at the present time, and will not have in the near future, funds available to pay the balance of the costs of the projects referred to in the foregoing paragraphs (a) and (c), and it will be advan- tageous to and in the best interest of the City to issue the Warrants hereinafter authorized for the purpose of refunding the principal of and the Outstanding Temporary Note and paying the balance of said costs. Section 3. Authorization of the Warrants. Pursuant to the applicable provisions of the constitution and laws of the State of Alabama, including particularly Section 11--47-2 of the Code of Alabama of 1975, there are hereby authorized to be sold and issued by the City $535,000 aggregate principal amount of General Obliga- tion Various Purpose Warrants. Those of the Warrants numbered 1 to 26, inclusive and $2,000 of that one of the Warrants numbered 27 shall be issued for the purpose of paying the costs of the sewer improvements referred to in subsection (c) of Section 2 hereof; and the balance of the Warrants shall be issued for the purpose of refunding the principal of the Outstanding Temporary Note and pay- ing the balance of the costs of the projects referred to in subsections (a) and (c) of Section 2 hereof and the costs of issuing the Warrants. The Warrants shall be dated December 1, 1978, shall consist of 107 coupon war- rants in the denomination of $5,000 each, shall be num- bered consecutively from 1 to 107, inclusive, and shall mature on December 1 as follows: Aggregate Principal Warrant Number Year of Maturity Amount Maturing 1 to 10 1980 $ 50,000 11 to20 1981 50,000 21 to 30 1982 509000 31 to 4:. 1983 55,000 42 to 52 1984 55,000 53 to 63 1985 55,000 64 to 711 1986 55,000 75 to 85 1987 55,000 86 to 96 1988 55,000 97 to 107 1989 55,000 The Warrants shall bear interest from their date until their date until their respective maturities at the fol- lowing per annum rates: 5.50% on those maturing in 1980; 5.70% on those maturing in 1981; 5.80% on those maturing in 1982; 5.90% on those maturing in 1983; 6.00% on those maturing in 1984; 6.25% on those maturing in 1985 through 1.987; 6.30% on those maturing in 1988; and 6.35% on those maturing in 1.989. The said interest shall be payable semiannually on June 1 and December 1 in each year until and at the respective maturities of the Warrants and shall be evidenced by Cou- pons attached. to the Warrants. The Warrants and the Cou- pons shdll bear interest at the rate of 8% per annum after their respective maturities and shall be payable in lawful money of the United States of America at the prin- cipal office of The Merchants National Bank of Mobile in the City of Mobile, Alabama. Section 4. Optional Redemption of Callable Warrants. Those of the Warrants having stated maturities in 79 and thereafter shall be subject to redemption and payment by the City at its option on December 1, 1983, and on any Interest Payment Date thereafter, at a Redemp- tion Price with respect to each Warrant redeemed, equal. to its face value plus the following redemption premiums (expressed in percentages of each Warrant redeemed): If the redemption date is in 1983, 103% If the redemption date is in 1984, 102% If the redemption date is in 1985, 101% If the redemption date is in 1986 or thereafter, 100% .Any such redemption may be made as a whole or in part of the Warrants that are at the time outstanding (and if in part it shall be accomplished in the inverse numer:.cal order of those of the Warrants at the time outstanding). Any such redemption shall be effected in the following n:ianner : (a) The City shall by resolution adopted by the Council call for redemption on a stated Interest Payment Date when they are by their terms subject to redemption Callable Warrants bearing stated numbers. (b) The City shall cause to be published one time in a Newspaper published in the City of Birmingham, Alabama, and in a Financial Journal published in New York, New York) a not- ice :Mating the numbers of the Callable War- rants so called for redemption, and stating that the Callable Warrants bearing such num- bers will become due and payable on a specified date (which shall be the Redemption Date fixed by the Resolution referred to in paragraph (a) of this section) at the Redemption Price (which shall be specified in the said notice), and that !i11 interest on the Called Warrants will cease after the Redemption Date. Such notice shall be published not less than thirty days prior to the Redemption Date. (c) On or prior to the Redemption Date, the City shall notify the bank at which the Warrants are payable of the City's compliance with thE; requirements of paragraphs (a) and (b) of this section and shall make available at the said bank the total Redemption Price of the Called Warrants. Capon compliance with the foregoing requirements on its part contained in this section, the Called Warrants shall become due and payable on the Redemption Date and at the Redemption Price, and interest thereon shall thereafter cease. Neitner the City nor the Bank at which the War- rants are payable shall be required to pay any Coupon ma- turing on the Redemption Date which is applicable to any Called War -rant unless the Called Warrant to which such Coupon is applicable is also presented for payment; pro- vided, that in the event any such bank should pay and such Coupon without payment of the applicable Called War- rant it shall not be liable to the Holder of such appli- cable Called Warrant or to the City or to anyone whomso- ever; and provided, further, that the said bank shall. pay such Coupon out of the moneys supplied to it by the City for that purpose if the Holder thereof shall present evi- dence satisfactory to the said bank that such Holder is the owner of the Coupon so presented and is not the owner of the Called Warrant to which such Coupon is applicable. Section 5. Execution of the Warrants. The ^'ayor shall execute the Warrants in the name and behalf of the City by manually subscribing his signature there- on; the official. seal of the City shall be printed or, otherwise reproduced thereon in facsimile; and the City Clerk shall cause the said execution and the said seal to to attested by a facsimile of her signature printed or, otherwise reproduced thereon. The Coupons shall be ere- ruted by a facsimile of the signature of the Mayor and shall be attested with a facsimile of the signature of the City Clerk provided in this section to be printed or otherwise reproduced in facsimile on the Coupons. The facsimiles of the signatures of the Mayor and the City clerk provided in this section to be printed or otherwise reproduced shall be valid in all respects as if the City Clerk had manually signed each of the Warrants and as if the Mayor and the City Clerk had manually signed each of the Coupons. The facsimile of the official seal of the City provided in this section to be printed or otherwise reproduced shall be valid in all respects as if the offi- cial seal of the City were manually impressed on each of -the Warrants. The Warrants and the Coupons shall be reg- istered by the City Treasurer in the records maintained by him as a claim against the City, which registration shall be made simultaneously with respect to all of the 'Aarrants and the Coupons. The said officers are hereby directed so to execute, seal, attest and register the 'Narrants and the Coupons. a-ec:tion 6. General Obligation. The Warrants shall be general obligations of the City and for the pay- ment of the principal thereof and interest thereon the full faith and credit of the City are hereby irrevocably ;pledged. Section 7. The Warrant Fund. There is hereby created a special fund of the City the full name of which shall be the "Fairhope 1978 General Obligation Various Purpose Warrant Fund" which is so created for the purpose of providing for payment of the Warrants and the Coupons and shall be maintained so long as any thereof remain un- paid. The City agrees that it will make or cause to be made the following payments into the Warrant Fund at the respective times hereunder stated: (1; There shall be paid into the Warrant Fund, contemporaneously with the issuance of the Warrants and out of the proceeds derived from the sale thereof, that portion'of the said proceeds that may be referable to the accrued interest: received by the City from such sale. (2; On or before the 20th day of May, 1979, and on or before the 20th day of each successive May and November thereafter so long as any of the Warrants or the Coupons remain unpaid, the'City will pay or cause to be paid into the Warrant Fund such amount as, when added to the amount then in the Warrant Fund that is not needed to pay any Warrants and Cou- pons theretofore matured but not then paid, will equal the principal (if any) and the in- terest maturing on the Warrants on the then next ensuing Interest Payment Date; provided, that following the payment into the Warrant Fund of any sum out of the proceeds from the sale of the Warrants pursuant to the provisions of paragraph (1) of this subsection, there shall be credited one time to the amount re- quired n this paragraph (2) to be paid into the Warr -ant Fund the sum so paid into the War- rant Fund pursuant to the provisions of the said paragraph (1). The City will make the payments provided for in this paragraph (2) out of all general revenues of the City available t .erefor . The moneys required in this section to be paid into the Warrant Fund shall be used only for payment of the prin- cipal of and interest on the Warrants at the respective maturities of such principal and interest, provided that if at the final maturity of the Warrants, however the same may mature, there shall be in the Warrant Fund moneys in excess of the amount required to retire the Warrants and the Coupons then remaining unpaid, then all such excess shall thereupon be returned to the City and may be used by it for any lawful purpose. When the amount of money on deposit in the Warrant Fund equals or exceeds the aggregate of the principal and interest to their respective maturities on the Warrants at the time outstanding, no further payments need be made into the Warrant Hand except to make good the moneys paid therein which may become lost or which may not be immediately available for withdrawal under the provisions of this section. The Merchants National Bank of Mobile, in Mobile, Alabama, is hereby designated as the depository for the Warrant Fund. In the event that the said bank (or arty successor depository for the Warrant Fund that may he.rea-fter be designated as herein provided) should at any time decline to act as such depository, or should re-- sign as such depository, or should cease to be a member of the Federal Deposit Insurance Corporation (or any agency which. may succeed to its duties), or should cease to be duly qualified and doing business within the State of Alabama, then the Council shall by resolution desig- nate a successor to such depository, provided that any such successor depository shall be and remain a member of the Federal Deposit Insurance Corporation (or of any agency which may succeed to its duties) and shall be and remain. duly qualified and doing business in the State of Alabama. The depository for the Warrant Fund shall at all times keep the moneys on deposit with it in the War- rant Fund continuously secured, for the benefit of the City and the holders of the Warrants, either (1) by hold- ing on deposit, as collateral security, United States Se- curities or other marketable securities eligible as se- curity for the deposit of trust funds, having a market value (exclusive of accrued interest) not less than the amount of moneys on deposit in the Warrant Fund, or (2) if the furnishing of security in the manner provided in this paragraph is not permitted by the applicable law and regulations, then in such manner as may be required or permitted by the applicable state and federal laws and regulations respecting the security for, or granting a preference in the case of, the deposit of trust funds; provided ghat. it shall not be necessary for the deposi- tory to secure any portion of the moneys on deposit in the Warrant Fund that is insured by the Federal Deposit_ Insurance Corporation or other agency of the United States of America that may succeed to its functions. l Section 8. Forms of the Warrants and the Cou- pons.. The [warrants, tHie�oupons , and the provisions for the assignment thereof shall be in substantially the fol- lowing forms, with appropriate insertions and variations therein to conform to the provisions hereof: No. $5,000 UNITED STATES OF AMERICA STATE OF ALABAMA CITY OF FAIRHOPE GENERAL OBLIGATION VARIOUS PURPOSE WARRANT The City Treasurer of the City of Fairhope ("the City"), a municipal corporation in the State of klabama, is hereby ordered and directed to pay to Fralan & Co., or assigns, the principal sum of F I V E T H O U S A N D D 0 L L A R S on the lst day of December, 19_, with interest thereon from the date hereof until the maturity hereof at the rate of % per annum, payable semiannually on June 1 and December 1 in each year upon surrender of the appro- priate interest coupons hereto attached as the same re- spectively become due. This warrant and the interest coupons applicable hereto shall bear interest at the rate of 8% per annum after their respective maturities and :.,hall be payable in lawful money of the United States of America at the principal office of The Merchants National Bank of Mobile in the City of Mobile, Alabama. This warrant is one of an issue of warrants ("the Warrants") aggregating $535,000 in principal amount, numbered from 1 to 107, inclusive, issued pursu- ant to the applicable provisions of the constitution and laws of Alabama, including particularly Section 11-47-2 of the Code of Alabama of 1975, and an ordinance duly adopted by the governing body of the City. Those of the Warrants having stated maturities in 1984 and thereafter are subject to redemption and pay- ment prior, to maturity, at the option of the City, as a whole or in part and if in part then in inverse numerical order of those of the Warrants at the time outstanding, on any interest payment date on or after December 1, 1983, at the following respective redemption prices for each Warrant redeemed (expressed in percentages of the principal amount thereof) plus accrued interest thereon to the date fixed for redemption: 103% if the date fixed for redemption is in 1983; 102% if the date fixed for re- demption is in 1984; 101% if the date fixed for redemp- tion is in 1985; and 100% if the date fixed for redemp- tion is in 1986 or thereafter. Prior notice of each such redemption must be given one time, at least thirty days before the date fixed for redemption, by publication in a financial journal published in New York, New York and in a newspaper published in Birmingham, Alabama. By the execution of this Warrant the City ac- knowledges that it is indebted to the payee hereof in the principal amount hereof and that it will become indebted to the holders of the interest coupons attached hereto at - the respective maturities thereof and in accordance with the terms thereof. The indebtedness evidenced and ordered paid by this Warrant is a general obligation of the City for the payment of the principal of and interest on which the .full faith and credit of the City have been irrevocably pledged.. It is hereby certified and recited that the in- debtedness evidenced and ordered paid by this Warrant is lawfully due without condition, abatement or offset of any description; that this Warrant has been registered in the manner provided by law; that all conditions, actions and things provided by the constitution and laws of the State of Alabama to exist, be performed or happen prece- dent to or in the issuance of this Warrant exist, have teen performed and have happened; and that the indebted- ness evidenced and ordered paid by this Warrant, together with all other indebtedness of the City was at the time the same was created and is now within every debt and other limit prescribed by the constitution and laws of -_the State of Alabama. This Warrant is nonnegotiable but is transfer- able by assignment. Each taker, owner, purchaser or holder hereof', by receiving or accepting this Warrant or any interest coupons applicable hereto, shall consent and agree and shall be estopped to deny: (1) that title to the coupons hereunto appertaining may be transferred by delivery without the necessity of a written assignment, and any person making such delivery shall be deemed to have transferred to the person to whom such delivery is made all of his equities or rights in the coupons so de- livered; (2) that any person in possession of any such coupon, regardless of the manner in which he shall have acquired possession, is authorized to represent himself' as the absolute owner thereof and has the power and au- thority, to transfer absolute title thereto by delivery 'thereof' to a bona fide purchaser for value (present or antecedent) without notice of prior defenses or equities or claims of ownership enforceable against his transferor or any person in the chain of title and before the matur- ity thereof; and (3) that whenever and so long as this 'narrant may to assigned in blank by written assignment by 'the original payee hereof or by any subsequent assignee hereof in the chain of title to whom written assignment is made, the City may treat any person in possession of this Warrant, regardless of how such possession may have been acquired and regardless of the genuineness or effec- tiveness of any assignment, as the absolute owner hereof' for all purposes, and payment to any such person shall discharge all obligations hereunder. IN WITNESS WHEREOF, the City has caused its corporate seal -o be impressed hereon by printing or otherwise reproducing the same hereon in facsimile, has caused this Warrant to be executed by its Mayor by manu- ally subscribing his signature hereon, has caused the said seal and the said execution to be attested by its City Clerk by causing tier signature to be printed or otherwise reproduced hereon in facsimile, has caused the annexed interest coupons to be executed and attested with the signatures of the said officers printed or otherwise reproduced thereon in facsimile, and has caused this war- rant to be dated December 1, 1978. CITY OF FAIRHOPE BY Attest. City Clerk Its Mayor (Form of Coupon) Coupon No. On the 1st day of , 19_, the City Treasurer of the City of Fairhope,. in the State of klabama, is ordered and directed to pay the bearer here- of, the sum of Dollars in lawful :Honey of the United States of America upon pre•- :.entation and surrender of this coupon at the principal office of The Merchants National Bank of Mobile in the City of Mobile, Alabama, being interest then due on the General Obligation Various Purpose Warrant of the City of F'airhope, Alabama, dated December 1, 1978, and numbered CITY OF FAIRHOPE BY Attest: City Clerk Its Mayor (Form of Assignment) For value received, this Warrant and the inter- est coupons applicable thereto and the indebtedness evi- denced and ordered paid thereby are hereby transferred and assigned, without recourse or warranties, to jo Following the raturity of each of the Callable Warrants there shall be inserted the following: "(unless this warrant shall have been duly.called for prior payment)," Following the maturity date of each Coupon due on and after June 1, 1984, there shall be inserted the following: "(unless the warrant to which this coupon is applicable shall have been duly called for prior payment)," Section 9. Provision for Payment at Par. The hank at which the Warrants and the Coupons shall at any time be payable, by acceptance of its duties as paying agent therefor, shall be construed to have agreed thereby with the Holders of the Warrants and the Coupons that it will make, out of the funds supplied to it for that pur- pose, all remittances of principal of and interest on the Wa-rrants and the Coupons in bankable funds at par and without deduction for exchange, fees or expenses. The City agrees with the Holders of the Warrants and the Cou- pons that it will pay all charges for exchange, fees or expenses which may be made by the said bank in the making of remittances in bankable funds of the principal of and :.nterest on any of the Warrants and the Coupons. Section 10. Provisions of Ordinance Sever- able. The various provisions of this ordinance are here- by declared to be severable. In the event any provisions hereof shall be held invalid by a court of competent jurisdiction such invalidity shall not affect any other portion of this ordinance. Section 11. Sale of the Warrants. The War- rants are hereby sold to The Frazer Lanier Company, for a purchase price equal to their face value (viz., ,)535,000), plus accrued interest on the Warrants from their date to the date of delivery. The Warrants shall be made payable to Fralan & Co., the nominee of the said purchaser for that purpose, in accordance with directions given by the said purchaser. The City Clerk is hereby authorized and directed to deliver the Warrants, with all Coupons applicable thereto, to the said purchaser upon payment to the City of the said purchase price. Section 12. Use of Proceeds From Sale of. the Warrants. The proceeds from the sale of the Warrants shall be applied as follows: (a) That part of the said proceeds which represents accrued interest on the Warrants from December 1, 1978 to the date of payment therefor shall be deposited in the Warrant Fund and applied toward payment of the interest that will become payable on the Warrants on June 1, 1979; (b) The sum of $142,641.24 shall be paid to Firs National Bank of Baldwin County to re- fund the principal of the Outstanding Tempo- rary Ncte provided that, at the time of the said payment, the City shall pay, out of other moneys available for such purpose, the inter- est accrued on the Outstanding Temporary Note to the date of such payment, and the Outstand- ing Temporary Note shall be cancelled and re- tired; (c) The balance of the proceeds from the sale of the Warrants shall be applied for pay- ment of the balance of the costs of the proj- eats referred to in paragraphs (a) and (c) of Section 2 hereof and the costs of issuing the Warrants and to that end shall be paid into the special account created in Section 13 hereof. Section 13. Establishment of 1978 Warrant Pro- ceeds Account. Investment Provisions. There is hereby created a special construction account to be designated she 111978 Warrant Proceeds Account." There shall be de- posited in the said account all moneys remaining at the time of'the issuance of the Warrants from the issuance of the Outstanding Temporary Note. First National Bank of Baldwin County, in the City of Fairhope, Alabama, is de- signated as a depository for the said account. The moneys on deposit in the account shall be used solely for payment of the costs of the projects referred to in para- graphs (a) and*(c) of Section 2 hereof and the costs of issuing the Warrants. Pending the use of the moneys in the said ac- count for the purpose for which the moneys in the said account- are herein provided to be used, moneys on deposit _ in the said account may be invested in United States Se- curities or in interest -bearing bank certificates of 7 deposit. In the event of any such investment, the secur- ities or certificates in which the investment is made and �5 the income therefrom shall become a part of the said ac- count and shall be held by the depository to the same ex - II .� tent as if they were moneys on deposit in the said ac- U count; and the City may likewise at any time and from time to time cause any securities or' certificates in z which any such investment shall be made to be sold or otherwise converted into cash, whereupon the net proceeds derived from any such sale or conversion, after payment of all necessary expenses incident to such sale or con- , c version, shall become a part of the said special account. `'e. C�s The depository for the said account shall be fully pro- tected in making investments, sales and conversions of b any such securities or certificates upon direction given to it in a resolution adopted by the Council. o ADOPTED this 26th day of December, 1978. z � Mayor "•' Attest: ��� City Clerk