Emmet Water Bond

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ORDINANCE NO 3 of 1960

AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF EMMET, ARKANSAS, WATERWORKS REVENUE BONDS, SERIES 1960; SETTING UP CERTAIN FUNDS; AND DECLARING AN EMERGENCY.

WHEREAS, the City of Emmet, Arkansas, a city of the second class, does not own a municipal waterworks system but proposes to construct and operate such a system in order to supply the domestic and commercial needs of its inhabitants and to protect their health and safety; and 

WHEREAS, the City has had John E. Hawkins, a consulting engineer, of Hope, Arkansas, prepare plans, specifications, and estimates of cost for the improvement contemplated, which were filed with the City Recorder on or about 9th day Jun, 1960, and show an estimated cost of the proposed improvements of $82,000, which the City proposes to finance by the issuance of $27,000 in bonds under the authority of Amendment No 13 to the Constitution of the State of Arkansas, and the issuance of $55,000 in waterworks revenue bonds; and the City has heretofore complied with all statutory and constitutional requirements for the issuance of the Amendment No 13 bonds and is now ready to issue the revenue bonds; and 

WHEREAS, the Housing and Home Finance Agency of the United States, at a public sale after due advertisement, submitted the best and highest bid for said revenue bonds, namely: par and accrued interest for bonds dated March 1, 1960, with interest payable semi-annually at the rate of 4 7/8% per annum, and maturing on March 1 of each year as hereinafter set out, and the sale of the bonds was duly awarded to said Housing and Home Finance Agency; and 

WHEREAS, the buyer of said bonds has agreed to name The Commercial National Bank of Little Rock, Arkansas, as Trustee and paying agent, and the buyer is ready to accept the bonds as soon as the City can legally make delivery; now, therefore, 

BE IT ORDAINED by the City Council of the City of Emmet, Arkansas:

SECTION 1) That the Council hereby finds and declares that there is immediate need for the construction of a municipal waterworks system to serve the inhabitants of the City, and a brief description of the proposed improvements is: the construction of a complete municipal waterworks system, to include a well, storage, and distribution system with appurtenances—at an estimated cost of $82,000. (The waterworks system which is to be constructed is sometimes hereinafter referred to as the “System.”)

SECTION 2) The Council hereby further finds and declares that the offer of the Housing and Home Finance Agency for the purchase of the revenue bonds is at a fair price and one that is allowed by law, and therefore the bonds are hereby sold to said buyer.

SECTION 3) That under the authority of the general statutes of the State of Arkansas, and particularly Act No 131 of the General Assembly of the State of Arkansas for the year 1933, as amended, revenue bonds be issued in the total amount of $55,000, the proceeds of the sale of which shall be used to pay a part of the cost of the construction of the System, including engineering and legal fees, interest on the bonds during the period of construction and for the six-month development period after the completion thereof, and other necessary expenses; that said bonds be designated “City of Emmet, Arkansas, Waterworks Revenue Bond, Series 1960,” be dated as of march 1, 1960, numbered from 1 to 55, both inclusive, be sometimes hereinafter referred to as “bonds,” be in the denomination of $1000 each, be callable as hereinafter set out, and mature in numerical order on March 1 of each year as follows:

YEAR   BOND NOS AMOUNT

1963  1 $ 1000

1964    2 1000

1965 3  1000

1966 4 1000

1967  5 1000 

1968 6  1000

1969 7 1000

1970  8 1000

1971 9 1000

1972  10 1000

1973 11  1000

1974 12 1000

1975  13 1000

1976 14 1000

1977 15 1000

1978 16 and  17  2000

1979 18 and 19 2000

1980  20 and 21 2000

1981 22 and 23  2000

1982 24 and 25 2000

1983 26 and 27  2000

1984 28 and 29 2000

1985  30 and 31 2000

1986 32 and 33 2000

1987 34 and 35 2000

1988 36 and 37  2000

1989 38, 39 and 40 3000

1990  41, 42 and 43 3000

1991 44, 45 and 46 3000

1992  47, 48 and 49 3000

1993 50, 51 and 52  3000

1994 53, 54 and 55 3000

The bonds shall be negotiable and shall bear interest payable semi-annually on March 1 and September 1 in each year, beginning September 1, 1960, at the rate of 4 7/8% per annum until the principal and interest shall have been fully paid. The bonds shall be signed by the Mayor and City Recorder and sealed with the corporate seal of the City; the interest upon the bonds shall be evidenced by coupons attached thereto, the coupons to be signed by said Mayor by his facsimile signature, and the Mayor shall by the execution of the bonds adopt as and for his own proper signature his facsimile signature appearing on said coupons. Both the principal and interest of said bonds shall be payable in any coin or currency which on the respective dates of payment of such principal and interest is legal tender for the payment of debts due the United States of America, at the office of The Commercial National Bank of Little Rock, Arkansas.

The bonds, together with interest thereon, shall be payable solely out of the Waterworks Revenue Bond and Interest Sinking Fund (sometimes hereinafter termed “Bond Fund”), as hereinafter defined, and shall be a valid claim of the holder thereof only against such fund, and the amount of revenues pledged to said fund, which amount of said revenues is hereby pledged and mortgaged for the equal and ratable payment of the bonds and shall be used for no other purpose, except as hereinafter set out. 

SECTION 4) Said bonds and coupons shall be in substantially the following form:

UNITED STATES OF AMERICA

STATE OF ARKANSAS

COUNTY OF NEVADA

CITY OF EMMET 

4 7/8% Waterworks Revenue Bond, Series 1960

No _____ $1000

KNOW ALL MEN BY THESE PRESENTS:

 That the City of Emmet, in the County of Nevada, State of Arkansas, for value received hereby promises to pay, solely from the special fund provided therefor as hereinafter set forth, to bearer, the sum of 

ONE THOUSAND DOLLARS

on the first day of March, 19 ___, with interest thereon at the rate of four and seven-eighths per centum (4 7/8%) per annum payable on September 1, 1960, and semi-annually thereafter on the first day of March and September in each year until the principal hereof is paid, only upon presentation and surrender of the annexed coupons as they severally become due. Both the principal and interest of this bond shall be payable in any coin or currency which on the respective dates of payment of such principal and interest is legal tender for the payment of debts due the United States of America, at the office of The Commercial National Bank of Little Rock, Arkansas.

This bond is one of a series of bonds aggregating Fifty-five Thousand Dollars ($55,000), all of like tenor and effect except as to number and maturity, numbered from 1 to 55, both inclusive, and issued for the purpose of paying part of the cost of constructing a waterworks system for said City. (The waterworks system will be hereinafter called the “System.”)

This bond and the series of which it forms a part are issued pursuant to and in accordance with the provisions of the laws and Constitution of the State of Arkansas, and particularly Act No 131 of the Acts of the General Assembly of the State of Arkansas for the year 1933, as amended, and do not constitute an indebtedness of the City of Emmet within any constitutional or statutory limitation. Said bonds are payable solely from a fixed amount of the revenues from the System, which amount shall be sufficient to pay the principal of and interest on the bonds as the same become due and payable. Said amount has been duly set aside and pledged as a special fund for that purpose and identified as the “Waterworks Revenue Bond and Interest Sinking Fund,” created by the ordinance by which this bond is authorized to be issued, and the said City of Emmet has fixed and has covenanted and agreed to maintain rates for water services which shall be sufficient at all times to provide for the payment of the reasonable expenses of operation, repair and maintenance of said System, to provide for adequate depreciation, and to provide for the payment of the principal of and interest on the bonds of this issue as the same become due and payable. 

  This bond is expressly made negotiable by the statutes under which it is issued, and is issued with the intent that the laws of the State of Arkansas shall govern the construction thereof.

The bonds of this issue are callable at the option of the City on any interest paying date on and after March 1, 1970, for payment prior to the stated maturities thereof, in whole or in part, in inverse numerical order at par plus accrued interest to the date of redemption, plus a premium of ¼ of 1% of the principal amount for each year or fraction thereof from the redemption date to the stated maturity thereof, but not to exceed a total of 4%. In the event the City elects to exercise the option to call any bonds for prepayment, it must give notice of such intention by publication once a week for two weeks, the first publication to be at least thirty days prior to the date fixed for redemption, in some newspaper published in the English language in the City of Little Rock, Arkansas, with state-wide circulation, in which it will set out the numbers, denomination, and maturities of the bonds being called, and all bonds so called shall cease to bear interest on and after the date fixed for their redemption, provided funds for their payment are on deposit with the paying agent at the time fixed for redemption. 

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all conditions, acts and things required to exist, to be performed, and to happen precedent to and in the issuance of this bond do exist, have been performed, and have happened in due time, form and manner as required by law, and that sufficient of the income and revenue deemed to be derived from the operation of said System has been pledged to and will be set aside into said special fund for the payment of the principal of and interest on said bonds; and these bonds do not exceed any constitutional or statutory limitation. 

This bond shall not be valid until it shall have been authenticated by the certificate hereon, duly signed by The Commercial National Bank of Little Rock, Arkansas.

   IN WITNESS WHEREOF, THE City of Emmet, Arkansas, by its City Council, has caused this bond to be signed by the mayor and City Recorder thereof and sealed with the corporate seal of said City, and has caused the coupons hereto attached to be executed by the facsimile signature of said Mayor, all as of the first day of March, 1960.

CITY OF EMMET, ARKANSAS

(Seal)  By_______________________________________________

Mayor

Attest:

____________________________

City Recorder

(Form of Coupon)

No ___  $_______

On the first day of March, September , 19____, upon surrender hereof, unless the bond to which this coupon is attached is sooner called for payment, the City of Emmet, Arkansas, promises to pay to bearer the sum of _______________________DOLLARS in any coin or currency which on the date of payment is legal tender for the payment of debts due the United States of America, solely out of the fund specified in the bond to which this coupon appertains, at the office of The Commercial National Bank of Little Rock, Arkansas, being interest then due on its Waterworks Revenue Bond, Series 1960, dated March 1, 1960, and numbered ____.

CITY OF EMMET, ARKANSAS

By_________________________

MAYOR

(All coupons shall be for six months’ interest. The Mayor’s signature on the coupons may be lithographed or engraved.)

On the back of said bonds is to appear the following: 

CERTIFICATE

This bond is one of the 55 Waterworks Revenue Bonds, Series 1960, aggregating $55,000 described within.

THE COMMERCIAL NATIONAL BANK

OF LITTLE ROCK, ARKANSAS, Trustee

By___________________________

Authorized Officer

Little Rock, Arkansas

_________________.

SECTION 5) In order to pay the bonds and the interest thereon as they mature, the City Council by Ordinance No 1 of 1960, passed and approved January 14, 1960, fixed the rates to be charged for water service, and the Council hereby finds the rates so fixed to be reasonable and the necessary minimum rates to be charged, and said rates are hereby approved and confirmed. The Council further finds and declares that the said rates will produce a total revenue sufficient to pay the costs of the operation, repair, and maintenance of the System and to provide an annual net revenue, as hereinafter defined in this ordinance, equivalent to 150% of the average annual principal and interest maturities of the bonds. The rates so fixed shall never be reduced until all the bonds authorized by this ordinance and all interest thereon have been paid in full, and shall when necessary be increased in an amount sufficient to provide for the maintenance of the funds hereinafter described.

SECTION 6) Waterworks Revenue Fund From and after the completion of any revenue-producing part, the System shall be continuously operated as a revenue-producing undertaking. The income and revenues from such operation shall be set aside in a special and separate fund hereby created and designated “Waterworks Revenue Fund” (hereinafter termed “Water Fund”) and deposited in a bank that is a member of the Federal Deposit Insurance Corporation. Such income and revenues are hereby pledged, and shall be applied, to the payment of all bonds, and the interest thereon, issued under this ordinance and secured hereby, the payment of the cost of operation, repair, and maintenance of the System, and to provide an adequate depreciation fund, in the manner hereinafter set out.

SECTION 7) Waterworks Revenue Bond and Interest Sinking Fund (a) There is hereby created, and so long as any of the bonds hereby authorized are outstanding there shall be maintained, a special fund to be known as the “Waterworks Revenue Bond and Interest Sinking Fund” (hereinafter termed “Bond Fund”), into which there shall be deposited all accrued interest received from the sale of said bonds and into which there shall be set aside and deposited from said Water Fund such portion thereof as will be sufficient to pay the interest on said bonds as the same becomes due, to pay the necessary fiscal agency charges for paying bonds and interest, and to pay the principal of said bonds at or before maturity, as herein provided, and to create a margin of safety. It is hereby determined and agreed that the minimum amounts to be so set aside and paid into the Bond Fund each month for account of the bonds herein authorized shall be, in addition to the paying agent’s fees, not less than 1/5 of the amount of interest becoming due on the next succeeding interest payment date plus 1/10 of the amount of principal becoming due on the next succeeding principal payment date, until a reserve of $3500 has been accumulated.

Provided, however, that no further payments need be made into said Bond Fund after and so long as such amount of the bonds shall have been retired that the amount then held in such Bond Fund, including the reserve, is equal to the entire amount of the interest and principal that will have accrued and become due at the time of the retirement or maturity of all the bonds then remaining outstanding.

The undertaking to transfer and pay the prescribed amounts from said Water Fund into said Bond Fund shall be cumulative so that in the event the revenues during any month are inadequate to make the required transfer and payment, or if for any other reason there be a failure to make such transfer and payment, the amount of the deficiency shall be made up from the first available revenues thereafter received, and the same shall be in addition to the amounts otherwise required to be transferred and paid into said Bond Fund.  

THE REST OF ORDINANCE NO. 3 OF 1960 IS NOT TRANSCRIBED AT THIS TIME BUT IS ON THE BOOKS.