Loading...
HomeMy WebLinkAboutO-847ORDINANCE NO. 847 AN ORDINANCE AUTHORIZING THE CITY'S UTILITIES REVENUE WARRANTS, SERIES 1989, AND THE CITY'S TRUST INDENTURE SECURING SAID WARRANTS AND OTHER WARRANTS THAT MAY BE ISSUED THEREUNDER BE IT ORDAINED by the Mayor and the City Council (herein together called the "Council") of the City of Fairhope (herein called the "City") in the State of Alabama as follows: Section 1. Findings. The Council has investigated the records of the City pertaining to the City's water works and sanitary sewer system, its natural gas distribution system, and its electric distribution system (herein, together, called the "Systems") and as a result of such investigation has ascertained and found and does hereby declare that it is necessary and desirable that the City construct certain improvements to the Systems and that it provide funds for constructing the said improvements by the issuance of the warrants hereinafter authorized. Section 2. Authorization. Pursuant to the applicable provisions of the Constitution and laws of the State of Alabama, including particularly Section 11-47-2 and Section 11-81-16 of the Code of Alabama of 1975, as amended, and for the purpose of providing funds for said improvements, there are hereby authorized to be issued $2,750,000 principal amount of Utilities Revenue Warrants, Series 1989 (herein called the "Warrants"), of the City under the terms, conditions and provisions set out in the trust indenture provided for in Section 7 of this ordinance. All of the provisions thereof respecting the Warrants applicable thereto are hereby adopted as a part of this ordinance. Section 3. Source of Payment. The principal of and interest on the Warrants shall be payable solely from the revenues derived from operation of the Systems, as they may be at any time constituted. Neither the Warrants nor any of the agreements herein contained shall ever constitute an indebtedness of the City within the meaning of any constitutional or statutory provisions or limitation. The general faith and credit of the City are not pledged to the payment of the Warrants, and the Warrants shall not be general obligations of the City. None of the agreements, representations or warranties made or implied in this ordinance, or in the issuance of the Warrants, shall ever impose any personal or pecuniary liability or charge upon the City, whether before or after any breach by the City of any such agreement, representation or warranty, except with the moneys herein provided. Nothing contained in this section, however, shall relieve the City from the performance of the several covenants and representations on its part herein contained. Section 4. Payment at Par. All remittances of principal of and interest on the Warrants to the holders thereof shall be made at par without any deduction for exchange or other costs, fees or expenses. The bank or banks at which the Warrants shall at any time be payable shall be considered by acceptance of their duties hereunder to have agreed that they will make or cause to be made remittances of principal of and interest on the Warrants out of the moneys provided for that purpose, in bankable funds at par without any deduction for exchange or other costs, fees or expenses. The City will pay to such bank or banks all reasonable charges made and expenses incurred by them in making such remittances in bankable funds at par. Section 5. Constitutes Contract. The provisions of this ordinance shall constitute a contract between the City and each holder of the Warrants issued hereunder. Whenever all the Warrants and the interest thereon shall have been paid in full or provision made for the payment thereof as provided in the trust indenture referred to in Section 7 hereof, and all the agreements on the part of the City herein and therein contained with respect thereto shall have been performed, then upon the happening of such events the obligations of the City hereunder shall thereupon cease. Section 6. Severability. The various provisions of this ordinance are hereby declared to be severable. In the event any provision hereof shall be held invalid by a court of competent jurisdiction, such invalidity shall not affect any other portion of this ordinance. Section 7. Indenture. As security for the payment of the principal of and interest on the Warrants and any additional warrants that may be issued under the trust indenture herein authorized, pro rata and without preference of one over another, the City does hereby authorize and direct the Mayor to execute and deliver, in the name of and in behalf of the City, to First Alabama Bank, Mobile, Alabama, an indenture in substantially the form presented to the meeting of the Council at which this ordinance is adopted (which form shall be attached to the minutes of said meeting as Exhibit I thereto and which is made a part of this ordinance as if set out in full herein), and does hereby authorize and direct the City Clerk of the City to affix to such trust indenture the corporate seal of the City and to attest the same. Section 8. Sale. The Warrants are hereby sold to The Frazer Lanier Company Incorporated at a purchase price equal to $2,705,950 (which includes an original issue discount of $2,800 on those of the Warrants having a stated maturity in 2009) plus accrued interest thereon from their date to the date of payment therefor. The Mayor is hereby authorized and directed to execute, in the name and in behalf of the City, the Warrants and the trust indenture referred to in Section 7 hereof, and the City Clerk is hereby directed to affix to the Warrants and to said trust indenture the corporate seal of the City and to attest the same; and the said Mayor is hereby directed thereupon to deliver the Warrants and the said trust indenture to First Alabama Bank, the trustee under the said trust indenture, and to direct the said trustee to certify and deliver the Warrants to the said purchaser thereof upon payment to the City of the aforesaid purchase price thereof. Section 9. Official Statement. The Council does hereby adopt as the Official Statement of the City with respect to the Warrants the form thereof presented to the meeting of the Council at which this ordinance is adopted (which form shall be attached to the minutes of said meeting as Exhibit II thereto and which is made a part of this ordinance as if set out in full herein). Section 10. Designation of Deposi!M. Central Bank, Fairhope, Alabama, is hereby designated as the depository for the Gross Revenue Account created in Section 10.1 of the trust indenture referred to in Section 7 hereof, and First Alabama Bank, Mobile, Alabama, is hereby designated as depository for the Replacement Fund created in Section Section 10.4 of said trust indenture. The Mayor and City Treasurer of the City are hereby authorized and directed to take such actions as may be necessary to effect the transfers to said account and said fund provided for in said trust indenture. Section 11. Compliance With Certain Requirements of the Internal Revenue of 1986. The City will comply with all conditions to, and requirements for, the exemption from gross income for Federal income taxation of the interest income on the Warrants granted by Section 103 of the Internal Revenue Code of 1986, as amended (herein called "the Code"). Without limiting the generality of the foregoing, (a) the City will not cause the proceeds from the Warrants to be applied in any manner that would cause the Warrants to be "private activity bonds" within the meaning of Section 141(a) of the Code, and (b) the City will comply with the requirements of Section 148 of the Code in order that the Warrants will not be "arbitrage bonds" within the meaning of said Section 148. Further, the City designates the Warrants as "qualified tax-exempt obligations" for the purpose of paragraph (b)(3)(A) of Section 265 of the Code and, in connection therewith and after due investigation and consideration, finds, determines and declares that the amount of tax- exempt obligations (other than private activity bonds) that have heretofore during the current calendar year been issued by the City and by any subordinate entities of the City and the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds) that will be issued by the City and its said subordinate entities during the current calendar year will not exceed the sum of $10,000,000. For purposes of the so-called "exception for small governmental units" from the rebate requirement imposed by said Section 148, the City hereby finds, determines and declares that (i) the City has general taxing powers, (ii) the Warrants are not private activity bonds within the meaning of said Section 141(a) of the Code, (iii) the entire proceeds of the Warrants will be used for local governmental activities of the City, and (iv) the aggregate amount of all tax-exempt obligations (other than private activity bonds) that have heretofore during the current calendar year been issued by the City and by its subordinate entities and the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds) that will be issued by the City and by its subordinate entities during the current calendar year will not exceed $5,000,000. ADOPTED and APPROVED this 18th day of December, 1989. Mayor AUTHENTICATED: City Clerk