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HomeMy WebLinkAboutO-1009ORDINANCE NO. 1009 AN ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY'S $7,735,000 PRINCIPAL AMOUNT OF UTILITIES REVENUE WARRANTS, SERIES 1997, DATED MARCH 1, 1997 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) the City is engaged in making extensive improvements to its water works and sanitary sewer system and its electric distribution system (which systems, together with the City's natural gas distribution system, are herein together called the "Systems") at a total estimated cost of not less than $7,500,000; and (b) to provide funds for the said improvements, to pay issuance expenses and to provide a surety bond for the debt service reserve fund, it will be necessary that the Series 1997 Warrants be issued as authorized in this ordinance and pursuant to the applicable provisions contained in the First Supplemental 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 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 $7,735,000 aggregate principal amount of its Utilities Revenue Warrants, Series 1997 (herein called the "Warrants"), under the terms, conditions and provisions set out in the First Supplemental Indenture (herein called the "First Supplemental 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 Systems 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. Series 1997 Warrants to Constitute Additional Warrants Issued Under the 1996 Indenture Covering the Systems. The Warrants shall be issued as additional securities under the reserved power contained in Section 8.2 of that certain Trust Indenture between the City and Regions Bank, dated November 1, 1996 (herein called the "1996 Indenture"), and shall be entitled to and shall have the pledges and other rights and privileges accorded to the securities issued under that document and each supplement thereto, including specifically (but without limiting the generality thereof) the pledge made in the 1996 Indenture for payment of the principal of and interest on all securities issued thereunder on a parity with all other securities that may at any time be issued pursuant to its provisions. Section 5. Resolution Conllying With the Requirements of Section 8.2(b) of the 1996 Indenture. In order to comply with the requirements of Section 8.2(b) of the 1996 Indenture preliminary to the issuance of the Warrants as additional securities thereunder, the Council has adopted, at the same meeting at which this ordinance is adopted, a resolution containing the recitations required in Section 8.2(b) of the 1996 Indenture to be made by the City. Section 6. Authorization of First Supplemental Indenture. The Mayor is hereby authorized to execute and deliver, in the name and behalf of the City, the First Supplemental 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 the City Clerk is hereby authorized and directed to affix thereto and attest thereon the corporate seal of the City. Upon full execution of the First Supplemental Indenture, the Mayor is authorized and directed to deliver it to the trustee thereunder. All provisions of the First Supplemental Indenture are hereby adopted as a part of this resolution to the same extent as if they were set out in full herein. Section 7. 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 $7,523,263.30 (which represents an underwriting discount of $37,901.50 and an original issue discount of $173,835.20, 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 2.5 of the First Supplemental Indenture. Section 8. 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 March 19, 1997, to be final as of its date except for the omission of pricing information. Section 9. Authorization of GuarantyAgreement. The Mayor is hereby authorized and directed to execute and deliver for and in the name and behalf of the City a Guaranty Agreement between the City and AMBAC Indemnity Corporation 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 is hereby authorized and directed to affix the seal of the City to said agreement and to attest the same. Section 10. 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 11. 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 12. 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 13. 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 14. 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 14th day of April, 1997. Mayor Authenticated: City Clerk i 11