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Ordinance 2015-09

ORDINANCE NO. 2015-09
AN ORDINANCE AUTHORIZING BORROWING FUNDS FOR THE
ACQUISITION OF A PARCEL OF REAL PROPERTY FOR USE BY THE CITY
BY ISSUANCE OF A PROMISSORY NOTE; AUTHORIZING THE PURCHASE
OF A PARCEL OF REAL PROPERTY FOR USE BY THE CITY; PROVIDING
FOR THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE
NOTE; AUTHORIZING THE EXECUTION AND DELIVERY OF A
MORTGAGE PROVIDING SECURITY FOR THE NOTE; DECLARING AN
EMERGENCY; AND PRESCRIBING OTHER MATTERS RELATING
THERETO.


WHEREAS, the City Council of the City of Johnson, Arkansas (the "City") has determined that the City is in need of purchasing the parcel of real property described in Exhibit A attached hereto for use by the City (the "Land"); and
WHEREAS, the cost of the Land is $125,000.00; and
WHEREAS, the City can obtain the necessary funds for the acquisition of the Land by issuing its Promissory Note in favor of First Security Bank ("Lender") in the principal amount of $120,000.00 (the "Note").

Now THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF JOHNSON, ARKANSAS, TO-WIT:

Section 1. The City Council hereby finds that the Land to be acquired will have a useful life of more than one (1) year and that the principal amount of the Note, plus all other obligations heretofore incurred by the City under Amendment No. 78 to the Arkansas Constitution ("Amendment No. 78") does not exceed 5% of the assessed value of taxable property located within the City as determined by the last tax assessment.
Section 2. Under the authority of the Constitution and laws of the State of Arkansas (the "State"), including, Amendment No. 78, the Mayor and Recorder are hereby authorized purchase the Land and to execute and deliver, by and on behalf of the City, a Promissory Note in favor of Lender in the maximum principal amount of$120,000.00 for the purpose of financing the cost of purchasing the Land. The Note shall be dated within sixty (60) days of the date of enactment of this Ordinance and shall be issuable only as a fully registered Note without coupons. The Note shall bear interest at an interest rate of 2.48%, and shall be paid in sixty (60) equal monthly installments of principal and interest, to mature on that date which is sixty months from the date of the Note. As security for the performance of the obligations of the City pursuant to the Note, coincident with the execution and delivery of the Note, there is authorized the execution by the Mayor and Recorder, and delivery of a mortgage granting unto and in favor of the Lender (as secured party), a prior lien upon the Land (the "Mortgage").
Section 3. The Note shall be in such form as shall be approved by the Lender and the Mayor and Recorder.
Section 4. As provided in Amendment No. 78, the debt service payments on the Note in each fiscal year shall be charged against and paid first from the general revenues of the City for such fiscal year. For the purpose of making the debt service payments, there is hereby, and shall be appropriated to pay the Note, an amount of general revenues of the City sufficient for such purposes in each fiscal year of the City for each year the Note is outstanding. The City covenants that for each fiscal year in which the Note is outstanding, the general revenues of the City shall exceed the amount of debt service payments due on the Note in that fiscal year.
Section 5. The City agrees to provide a copy of its internally prepared financial statements to the Lender on an annual basis.
Section 6. The City agrees to prepare and adopt a budget for each fiscal year in accordance with Arkansas law and to furnish the Lender with a copy of the same by January 31 of each year while the Note is outstanding. Each budget shall make provision for the payment of debt service due on the Note in that fiscal year.
Section 7. If there be any default in the payment of the principal of or interest on the Note, or in the performance of any of the other covenants contained in this Ordinance, Lender may, in addition to any other remedies available to Lender, by proper suit, compel the performance of the duties of the officials of the City under the laws of Arkansas. No remedy conferred upon or reserved to Lender is intended to be exclusive of any other remedy or remedies, and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Ordinance or by law. Lender may waive any default which shall have been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted under the provisions of this Ordinance or before the completion of the enforcement of any other remedy, but no such waiver shall extend to or affect any other existing or any subsequent default or defaults or impair any rights or remedies of Lender with respect thereto. No delay or omission of Lender to exercise any right or power accrued upon any default shall impair any such right of power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Ordinance to Lender may be exercised from time to time and as often as may be deemed expedient. In any proceeding to enforce the provisions ofthis Ordinance Lender shall be entitled to recover from the City all costs of such proceeding, including reasonable attorney's fees.
Section 8. The terms of this Ordinance, the Note and the Mortgage shall constitute a contract between the City and the Lender and no variation or change in the undertaking herein set forth shall be made while the Note is outstanding, except as may be agreed in writing as between the City and Lender.
Section 9. The City covenants that it shall not take any action or suffer or permit any action to be taken or conditions to exist which causes or may cause the interest payable on the Note to be included in gross income for federal income tax purposes, including, without limitation, any action in violation of the applicable provisions of the Internal Revenue Code of 1986, and the Regulations thereunder (the "Code"). The City represents that it has not used or permitted the use of, and covenants that it will not use or permit the use of the Land or the proceeds of the Note, in such manner as to cause the Note to be "private activity bonds" within the meaning of Section 141 of the Code. The Note is hereby designated as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3)(B) of the Code. The City covenants that it will submit to the Secretary of the Treasury of the United States, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Note is issued, a statement as required by Section 149( e) of the Code.
Section 10. The provisions of this Ordinance are hereby declared to be separable and if any provision shall for any reason be held illegal or invalid, such holding shall not affect the validity of the remainder of this Ordinance.
Section 11. All ordinances and resolutions or parts thereof, in conflict herewith are hereby repealed to the extent of such conflict. Emergency Clause. The immediate need to acquire the Land in order to continue to provide essential services to the citizens and residents of the City being necessary for the preservation of the public peace, health, safety and welfare, an emergency is hereby found to exist and this Ordinance shall be in full force and effect from and after its passage.

PASSED AND ADOPTED This 13th day of October, 2015.

ATTEST:

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