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Ordinance 2004-20

ORDINANCE NO. 2004-20
AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF NOT
TO EXCEED $1,750,000 OF TAX INCREMENT BONDS (CLEAR CREEK
REDEVELOPMENT DISTRICT #1 PROJECT), SERIES 2005, BY THE
CITY OF JOHNSON, ARKANSAS FOR THE PURPOSE OF FINANCING
THE COSTS OF ACQUISITION, CONSTRUCTION AND EQUIPPING
OF CERTAIN INFRASTRUCTURE IMPROVEMENTS WITHIN THE
DISTRICT; AUTHORIZING THE EXECUTION AND DELIVERY OF A
TRUST INDENTURE PURSUANT TO WHICH THE BONDS WILL BE
ISSUED AND SECURED; AUTHORIZING THE EXECUTION AND
DELIVERY OF A FORM OF BOND PURCHASE AGREEMENT
PROVIDING FOR THE SALE OF THE BONDS; PRESCRIBING OTHER
MATTERS RELATING THERETO; AND DECLARING AN
EMERGENCY,
WHEREAS, the City Council of the City of Johnson, Arkansas (the "City") has
determined that there is a great need for a source of revenue to finance the costs of acquisition,
construction and equipping of certain street, sidewalk, traffic signal, drainage, lighting and water
and wastewater utility improvements (the '''Project") within the boundaries of City of Johnson,
Arkansas Clear Creek Redevelopment District #1 (the "District") created by the City Council
pursuant to Ordinance No. 2004-12 adopted October 12, 2004; and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 78 to the
Constitution of the State of Arkansas ("Amendment 78") and Arkansas Code Annotated (2003
Supp.) Sections 14-168-301 at seq. (as from time to time amended, the "Act"), to issue and sell
its bonds to finance the costs of various capital improvements within the District such as those
comprising the Project, which bonds are to be secured by and payable from the ad valorem tax
increment described in and authorized by the Act; and
WHEREAS, as authorized under the provisions of Amendment 78 and the Act, the City
has now determined to issue and sell its Tax Increment Bonds (Clear Creek Redevelopment
District #1 Project), Series 2005, in principal amount not to exceed $1,750,000 (the "Bonds"), in
order to provide financing for the acquisition, construction and equipping of the Project, to fund
capitalized interest and a debt service reserve, and to pay related costs of issuance; and
WHEREAS, the City has made arrangements for the sale of the Bonds to one or more
individuals or entities qualifying as "accredited investors" within the meaning of Rule 501 of
Regulation D of the United States Securities and Exchange Commission (the "Purchasers"), each
such sale to be made pursuant to the terms of a Bond Purchase Agreement between the City and
the Purchaser (the "Bond Purchase Agreement") in substantially the form presented to and
before this meeting;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Johnson,

Section 1. Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 78 and the Act, there is hereby authorized the issuance of
bonds of the City to be designated as "City of Johnson, Arkansas Tax Increment Bonds (Clear
Creek Redevelopment District #1 Project), Series 2005" (the "Bonds"). The Bonds shall be
issued at one time or from time to time in the original aggregate principal amount of not to
exceed One Million Seven Hundred Fifty Thousand Dollars ($1,750,000), shall mature on
February 1, 2016; and shall bear interest at the rate of eight percent (8.00%) per annum. The
proceeds of the Bonds will be utilized to finance the costs of acquisition, construction and
equipping of the Project, to fund twelve months of capitalized interest, to establish a debt service
reserve, and to pay publication, legal and other expenses incidental to the issuance of the Bonds.
The City Council hereby finds that the real property within the District will be benefitted upon
completion of the Project.
The Bonds shall be issued in minimum denominations of $50,000 and in increments of
$1,000 in excess thereof, shall be dated as of the date of their issuance and delivery, and shall be
in the form, shall be numbered, shall be subject to.redemption prior to maturity, and shall contain
such other terms, covenants and conditions, all as set forth in that certain Trust Indenture to be
dated as of January 15, 2005 (the "Indenture"), by and between the City and the Bank of
Fayetteville, as trustee (the "Trustee"), to be entered into by the City and the Trustee in
substantially the form submitted to this meeting.
The Mayor is hereby authorized and directed to execute and deliver the Bonds in one or
more series, each series to be in substantially the form thereof contained in the Indenture
submitted to this meeting, and the City Recorder/Treasurer is hereby authorized and directed to
execute and deliver the Bonds and to affix the seal of the City thereto, and the Mayor and City
Recorder/Treasurer are hereby authorized and directed to cause the Bonds to be accepted and
authenticated by the Trustee. The Mayor is hereby authorized to confer with the Trustee and
Kutak Rock LLP, Little Rock, Arkansas ("Bond Counsel"), in order to complete the Bonds in
substantially the form contained in the Indenture submitted to this meeting, with such changes as
shall be approved by such persons executing the Bonds, their execution to constitute conclusive
evidence of such approval.
Section 2. In order to pay the principal of and interest on the Bonds as they mature or
are called for redemption prior to maturity, the Act provides that the District's tax increment, as
defined in the Act (the "Tax Increment"), shall be calculated annually and any positive amount
distributed to the City for deposit into the City of Johnson, Arkansas Clear Creek Redevelopment
District #1 Tax Increment Fund created in Ordinance No. 2004-12. Pursuant to the Indenture,
such fund will be assigned to and held by the Trustee for the benefit of the holders of the Bonds.
The City covenants and agrees that all receipts relating to the Tax Increment will be accounted
for separately as special funds on the books of the City, and receipts of said Tax Increment will
be deposited and will be used solely as provided in the Indenture.
Section3. To prescribe the terms and conditions upon which the Bonds are to be
executed, authenticated, issued, accepted, held and secured, the Mayor is hereby authorized and
directed to execute and acknowledge the Indenture, and the City Recorder/Treasurer is hereby
authorized and directed to execute and acknowledge the Indenture and to affix the seal of the
City thereto, and the Mayor and the City Recorder/Treasurer are hereby authorized and directed
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to cause the Indenture to be accepted, executed and acknowledged by the Trustee. The Indenture
is hereby approved in substantially the form submitted to this meeting, including, without
limitation, the provisions thereof pertaining to the Tax Increment and the terms of the Bonds.
The Mayor is hereby authorized to confer with the Trustee and Bond Counsel in order to
complete the Indenture in substantially the form submitted to this meeting, with such changes as
shall be approved by such persons executing the Indenture, their execution to constitute
conclusive evidence of such approval.
(Advice is given that a copy of the Indenture in substantially the form authorized to be
executed is on file with the City Recorder/Treasurer and is available for inspection by any
interested person.)
Section 4. In order to prescribe the terms and conditions upon which the Bonds are to
be sold to the Purchasers, the Mayor is hereby authorized and directed to execute Bond Purchase
Agreements on behalf of the City, each to be dated as of the date of its execution (the "Bond
Purchase Agreements"), by and between the City and each Purchaser, and said Bond Purchase
Agreements are hereby approved in substantially the form submitted to this meeting, and the
Mayor is hereby authorized to confer with Bond Counsel in order to complete the Bond Purchase
Agreements in substantially the form submitted to this meeting, with such changes as shall be
approved by such persons executing the Bond Purchase Agreements, their execution to constitute
conclusive evidence of such approval.
(Advice is given that a copy of the Bond Purchase Agreement in substantially the form
authorized to be executed is on file with the City Recorder/Treasurer and is available for
inspection by any interested person.)
Section 5. The Mayor and City Recorder/Treasurer, for and on behalf of the City, are
hereby authorized and directed to do any and all things necessary to effect the issuance, sale,
execution and delivery of the Bonds and to effect the execution and delivery of the Indenture, the
Bond Purchase Agreements and a Tax Regulatory Agreement relating to the tax exemption of
interest on the Bonds, and to perform all of the obligations of the City under and pursuant
thereto. The Mayor and the City Recorder/Treasurer are 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.
In order to provide for the acquisition of the necessary right-of-way for location of certain
Project improvements and the reimbursement of certain engineering and surveying expenses in
connection therewith, it is anticipated that the Mayor will enter into a Development Agreement
on behalf of the City with Clear Creek Ventures, LLC (the "Developer"). It is further anticipated
that in order to provide for the payment of engineering expenses associated with traffic signal
design and preparation of bidding requirements for the remainder of the Project, the Mayor will
enter into an Engineering Consulting Agreement with CEI Engineering Associates, Inc.
Section 6. The City intends to utilize a portion of the proceeds of the Bonds to
reimburse the Developer for certain expenditures relating to the Project made by the Developer
prior to the issuance of the Bonds. Accordingly, the City intends this resolution to be its
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declaration of "official intent" under the Code and U.S. Treasury Regulation Section 1.150-2 to
reimburse certain original expenditures with respect to the Project.
Section 7. Kutak Rock LLP, Little Rock, Arkansas, is hereby appointed to act as
Bond Counsel on behalf of the City in connection with the issuance and sale of the Bonds.
Section 8. The provisions of this Ordinance are hereby declared to be severable, and
if any section, phrase or provision shall for any reason be declared to be illegal or invalid, such
declaration shall not affect the validity of the remainder of the sections, phrases or provisions of
this Ordinance.
Section 9. All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
Section 10. There is hereby found and declared to be an immediate need for
infrastructure improvements within the District," which improvements will benefit the public
health and welfare of the City and its inhabitants, and the issuance and sale of the Bonds
approved hereby for the purpose of financing the Project and the taking of the other actions
authorized herein are immediately necessary in connection with such improvements. It is.
therefore, declared that an emergency exists and this Ordinance being necessary for the
immediate preservation of the public health and welfare shall be in force and take effect
immediately upon and after its passage.
ADOPTED AND APPROVED THIS 20th DAY OF DECEMBER, 2004.