HomeMy WebLinkAboutO-1004ORDINANCE NO. 1004
AN ORDINANCE AUTHORIZING THE ISSUANCE
OF THE CITY'S $4,195,000 PRINCIPAL
AMOUNT OF UTILITIES REVENUE WARRANTS,
SERIES 1996, DATED NOVEMBER 1, 1996
BE IT ORDAINED by the Mayor and 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. After investigation duly made by it and based upon the
information obtained from such investigation, the Council hereby makes the following findings
and declares the following statements to be true:
(a) it is necessary and desirable to restructure the City's utilities
revenue indebtedness by refunding the City's Utilities Revenue Warrants, Series
1989 (herein called the "1989 Warrants"), and the City's General Obligation
Water Warrants, dated May 1, 1988 (herein called the "1988 Warrants"); and
(b) for the purpose of providing funds to refund the said indebtedness,
to provide funds for miscellaneous improvements to the water works and sewer
system hereinafter referred to, to pay issuance expenses and to fund partially a
debt service reserve, it will be necessary that the Series 1996 Warrants be issued
as authorized in this ordinance and pursuant to the applicable provisions contained
in the Trust Indenture authorized in Section 4 of this ordinance.
Section 2. 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, as
amended, and Section 11-81-4 of the Code of Alabama of 1975, and for the purpose of
providing funds for the purposes referred to in Section 1 of this ordinance, there are hereby
authorized to be issued by the City $4,195,000 aggregate principal amount of its Utilities
Revenue Warrants, Series 1996 (herein called the "Warrants"), under the terms, conditions and
provisions set out in the Trust Indenture (herein called the "Trust Indenture") authorized in
Section 4 of this ordinance. All of the provisions thereof respecting the Warrants are hereby
adopted as a part of this ordinance.
Section 3. Source of Payment of the Warrants and Pledge Therefor. The
obligation evidenced and ordered paid by the Warrants shall be a limited obligation of the City
payable solely out of the revenues from the operation of the City's water works and sewer
system, its natural gas system and its electric distribution system as specified in the Trust
Indenture, and shall not constitute a general obligation of the City or be subject to any charge
on or against its general funds, its taxing powers, or its constitutional debt limit. 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. Authorization of the Trust 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, 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 Regions 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 included
in the records of the City 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 the Trust Indenture
the corporate seal of the City and to attest the same.
Section 5. Sale of the Warrants; Delivery Thereof and Use of Proceeds
Therefrom. The Warrants are hereby sold to The Frazer Lanier Company Incorporated (herein
called the "Underwriter"), at a purchase price equal to $4,141,161.80 (which represents an
underwriting discount of $41,111 and an original issue discount of $12,727.20, allocated among
the various maturities as reflected by the prices or yields shown on the cover page of the Official
Statement hereinafter referred to), plus accrued interest thereon from their date to the date of
payment therefor. The Mayor and the City Clerk are hereby directed to consummate the
execution, sealing and attestation of the Warrants and to deliver them to the said purchaser upon
payment to the City of the purchase price therefor. Simultaneously with such delivery, the City
Treasurer is authorized and directed to pay the proceeds from the said sale to the Trustee who
shall apply them in the manner and for the purposes set out in Section 9.1 of the Trust
Indenture.
Section 6. Designation of Depository. Compass Bank, Fairhope, Alabama, is
hereby designated as the depository for the Gross Revenue Account created in Section 10.1 of
the Trust Indenture, and Regions Bank, Mobile, Alabama, is hereby designated as depository
for the Replacement Fund created in Section 10.4 of the 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 the Trust
Indenture.
Section 7. Authorization of Official Statement. The Mayor is hereby authorized
to execute for and in behalf of the City an Official Statement with respect to the Warrants in
substantially the form presented to the meeting at which this ordinance is adopted (which form
shall be included in the records of the City and which is made a part of this ordinance as if set
out in full herein). The Council hereby finds and declares that the City deemed the Preliminary
Official Statement with respect to the Warrants dated November 14, 1996, to be final as of its
date except for the omission of pricing information.
Section 8. Authorization of Escrow Trust Agreement. In order to provide for
retirement of the 1988 Warrants and the 1989 Warrants, the Mayor is hereby authorized and
directed to execute and deliver for and in behalf of the City, an Escrow Trust Agreement
between the City and Regions Bank, Mobile, Alabama, in substantially the form presented to
the meeting at which this ordinance is adopted (which form shall be included in the records of
the City and which is made a part of this ordinance as if set out in full herein) and the City
Clerk of the City is hereby authorized and directed to affix the seal of the City to said Escrow
Trust Agreement and to attest the same.
Section 9. Authorization of Continuing Disclosure Agreement. In order to assist
the Underwriter in complying with Rule 15c2-12 of the Securities and Exchange Commission,
the Council hereby authorizes and directs the Mayor to execute and deliver, for and in behalf
of the City, a Continuing Disclosure Agreement in substantially the form presented to the
meeting at which this ordinance is adopted (which form shall be included in the records of the
City and which is made a part of this ordinance as if set out in full herein), and hereby
authorizes and directs the City Clerk of the City to affix to the Continuing Disclosure Agreement
the seal of the City and to attest the same.
Section 10. Compliance with Certain Requirements of the Code. 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 imposed 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 apply the proceeds from the Warrants in a manner
that would cause any of the Warrants to be a "private activity bond" 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 purposes 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 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
$10, 000, 000.
Section 11. 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 12. 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, 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 13. 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.
ADOPTED this 25th day of November, 1996.
Authenticated:
Mayor