CITY OF TEXARKANA, AR

REQUEST FOR BOARD ACTION

 

AGENDA TITLE: Consider the following regarding Revenue Bonds, Series2018.

  1. Conduct a Public Hearing to hear comments and concerns regarding the bonds.
  2. Adopt an Ordinance to confirm the aggregate principal amount, maturity and interest rate schedules, and redemption features of the City of Texarkana, Arkansas Franchise Fee Secured Capital Improvement Revenue Bonds, Series 2018. (FIN)
  3. This ordinance requires an emergency clause: An emergency clause requires a separate and distinct vote of the board and is valid only if there is a two-thirds vote of approval by the board. (Hdbk. Const. Amend 7

 

AGENDA DATE: 01/16/2018

ITEM#: 10

DEPARTMENT: Finance

DATE SUBMITTED: 01/08/2018

PREPARED BY: TyRhonda Henderson

SUBJECT: Franchise Fee Secured Capital Improvement Revenue Bonds, Series 2018

EXHIBITS: Ordinance, Resolution No. 2017-52 and Bond Agreement.

APPROVAL:

 

 

 

EXPENSE REQUIRED: $0.00

AMOUNT BUDGETED: $0.00

APPROPRIATION REQUIRED: $0.00

SUMMARY: This item is to confirm certain aspects related to the issuance of the Bonds, including the aggregate principal amount, maturity and interest rates schedules, and redemption features. The adoption of Resolution 2017-52 authorized the issuance of these bonds.

BOARD ACTION: The City Manager and staff recommend that the City Board of Directors approve this resolution.

 

 

 

 

ORDINANCE NO. ______

AN ORDINANCE AUTHORIZING THE ISSUANCE OF $2,260,000 FRANCHISE FEE SECURED CAPITAL IMPROVEMENT REVENUE BONDS, SERIES 2018; AUTHORIZING A TRUST INDENTURE SECURING THE BONDS; AUTHORIZING THE SALE OF THE BONDS AND THE EXECUTION OF A BOND PURCHASE AGREEMENT; PRESCRIBING OTHER MATTERS PERTAINING THERETO; AND DECLARING AN EMERGENCY

 

WHEREAS, pursuant to the Constitution and laws of the State of Arkansas, including particularly the Local Government Capital Improvement Revenue Bond Act of 1985 (the “Act”), the City of Texarkana, Arkansas, (the “City”) is authorized to issue its bonds to finance capital improvements and to pledge to the repayment of the bonds the franchise fees charged to public utilities for the privilege of using the City’s streets and rights-of-way; and

WHEREAS, the City has determined to accomplish public safety betterments and improvements consisting generally of acquisition of fire trucks and police communication equipment (the “Project”); and

WHEREAS, in order to provide moneys for the Project, to fund a debt service reserve, and to pay the costs of issuing bonds, the City has determined to issue its Franchise Fee Secured Capital Improvement Revenue Bonds, Series 2018, dated March 13, 2018, (the “Bonds”), in the principal amount of $2,260,000; and

WHEREAS, preliminary arrangements have been made with Stephens Inc., Little Rock, Arkansas, (the “Underwriter”), for the purchase of the Bonds; and

WHEREAS, the Preliminary Official Statement, dated January 9, 2018, offering the Bonds for sale, (he “Preliminary Official Statement”), has been presented to and is before this meeting; and

WHEREAS, the City intends to issue the Bonds on a parity of security with the City’s $10,300,000 original principal amount of Franchise Fee Secured Refunding Revenue Bonds, Series 2012 (the “Series 2012 Bonds”) and its $3,770,000 original principal amount of amount of Franchise Fee Secured Refunding Revenue Bonds, Series 2015 (the “Series 2015 Bonds”); and

WHEREAS, following notice duly published pursuant to Act 852 of the Acts of Arkansas of 1987, as amended, the City conducted a public hearing and any person interested was invited to speak concerning the issuance of the Bonds; and

WHEREAS, the City desires to adopt an Ordinance authorizing the issuance of the Bonds, the acceptance of the Underwriter’s offer to purchase the Bonds, and the execution and delivery of various documents pertaining to the issuance of the Bonds;

NOW, THEREFORE, BE IT ORDAINED by the Board of Directors of the City of Texarkana, Arkansas, as follows:

Section 1. The issuance of the Bonds in the aggregate principal amount of $2,260,000 is hereby authorized, and the Mayor and City Clerk are hereby authorized to execute, by manual or facsimile signature, and deliver the Bonds to or upon the direction of the Underwriter. The Bonds shall be issued in the form and denominations, shall be dated, shall be numbered, shall mature, shall bear interest at the rates, and shall be subject to redemption prior to maturity all upon the terms and conditions set forth in the Bond Purchase Agreement and Trust Indenture (each hereinafter identified and authorized). The Bonds shall be not general obligations of the City, but shall be special obligations, payable from and secured by the franchise fees charged to public utilities for the privilege of using the City’s streets and rights-of-way. The Bonds shall mature or be subject to mandatory sinking fund redemption and shall bear interest at the rates as follows:

Year April 1

Principal

Interest Rate

2019*

135,000.00

2.000%

2020

140,000.00

2.000%

2021*

140,000.00

2.250%

2022

145,000.00

2.250%

2023*

150,000.00

2.625%

2024

155,000.00

2.625%

2025*

155,000.00

3.000%

2026

160,000.00

3.000%

2027*

165,000.00

3.250%

2028

170,000.00

3.250%

2029*

175,000.00

3.500%

2030

185,000.00

3.500%

2031*

190,000.00

3.625%

2032

195,000.00

3.625%

* Mandatory Sinking Fund Redemptions

Section 2. The Bonds shall be sold pursuant to the terms and conditions set forth in a Bond Purchase Agreement, dated February 5, 2018 (the “Bond Purchase Agreement”), between the City and the Underwriter, for the purchase price of $2,241,480.60. The Mayor is hereby authorized and directed to execute the Bond Purchase Agreement on behalf of the City in the form submitted at this meeting.

Section 3. To prescribe the terms and conditions upon which the Bonds are to be executed, authenticated, delivered, issued, accepted, held, and secured, the Mayor is hereby authorized and directed to execute and acknowledge a Trust Indenture, dated as of March 13, 2018 (the “Trust Indenture”), by and between the City and Bank of the Ozarks, as Trustee (the “Trustee”), and the City Clerk is hereby authorized and directed to execute and acknowledge the Trust Indenture and to affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the Trust Indenture to be accepted, executed, and acknowledged by the Trustee. The Trust Indenture is hereby approved in substantially the form submitted at this meeting, and the Mayor and City Clerk are hereby authorized, upon the advice of bond counsel, to confer with the Trustee and the Underwriter in order to complete the Trust Indenture with such modifications as shall be approved by the Mayor and City Clerk, their execution to constitute conclusive evidence of such approval.

Section 4. The preparation and distribution to various prospective and actual purchasers of the Bonds of the Official Statement describing the City, the Bonds, the Trust Indenture, and other information is hereby authorized. The Mayor, for and on behalf of the City, is hereby authorized and directed to cause the Official Statement to be delivered for and in the name of the City, with such provisions therein as shall be approved by the Mayor. The Mayor is hereby authorized and directed to execute such Official Statement, a copy of which shall be filed in the permanent records of the City and kept by the City Clerk.

Section 5. The Preliminary Official Statement is hereby approved and the previous use of the Preliminary Official Statement by the Purchaser in connection with the sale of the Bonds is hereby in all respects ratified, approved and confirmed, and the Mayor is hereby authorized and directed, for and on behalf of the City, to execute the Preliminary Official Statement and to deem it final for purposes of Rule 15c2-12 of the Securities and Exchange Commission.  The Mayor, City Clerk, and City Manager, for and on behalf of the City, are hereby authorized and directed to do any and all things necessary to effect the execution and delivery of the Trust Indenture; the execution and delivery of the Bond Purchase Agreement; the execution, delivery, and distribution of the Official Statement; the execution and delivery of such other papers and documents necessary to effect the issuance of the Bonds; and the performance of all acts of whatever nature necessary to effect and carry out the authority conferred by this Ordinance. The Mayor, City Clerk, and City Manager are hereby 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 6. The City Clerk shall maintain, as a part of the minutes of the meeting at which this Ordinance is adopted, and in the permanent records of the City, for inspection by any interested person, a copy of the Trust Indenture and the Bond Purchase Agreement.

Section 7. The Bonds are hereby designated as “qualified tax-exempt obligations” for purposes of paragraph (3) of Section 265(b) of the Internal Revenue Code of 1986, as amended (the “Code”), and covenants that not more than $10,000,000 in aggregate principal amount of obligations, the interest on which is excludable from gross income for federal income tax purposes (excluding, however, private activity bonds, as defined in Section 141 of the Code, other than qualified 501(c)(3) bonds, as defined in Section 145 of the Code), including the Bonds, have been or shall be issued by the City and its subordinate entities during the calendar year 2018.

Section 8. It is hereby ascertained and declared that the Project must be accomplished as soon as possible in order to alleviate immediate hazards to the health, safety, and welfare of the City, its inhabitants, and their property, and that the Project can be accomplished only by the issuance of the Bonds. It is, therefore, declared that an emergency exists and this Ordinance, being necessary for the immediate preservation of the public peace, health, and safety, shall take effect and be enforced from and after its passage.

PASSED AND APPROVED this 5th day of February, 2018.

_____________________________

Ruth Penney Bell, Mayor

ATTEST:

                                                                       

Heather Soyars, City Clerk

 

APPROVED:

                                                                       

George Matteson City Attorney

 

PREPARED BY:

                                                                       

James M. Fowler, Jr., Rose Law Firm, a Professional Association, Bond Counsel