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AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CERTIFICATES OF INDEBTEDNESS OF THE CITY OF JONESBORO FOR MUNICIPAL AIRPORT PURPOSES; DESCRIBING THE DUTIES OF CITY OFFICERS IN CONNECTION THEREWITH; PROVIDING FOR THE PLEDGE OF REVNEUES DERIVED FROM THE MUNICIPAL AIRPORT OF THE CITY; DECLARING AN EMERGENCY; AND FOR OTHER PURPOSES
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WHEREAS, the City of Jonesboro (the "City") owns an airport which is free of bonded indebtedness and which is operated by an Airport Commission created by Ordinance No. 1573, adopted April 18th, 1977, pursuant to Ark. Stats. Ann. Section 74-501-518, as amended; and
WHEREAS, it has been determined by the Airport Commission and by the City Council of the City, that funds are needed to provide temporary financing for improvements and additions to the airport; and
WHEREAS, the City Council and the Airport Commission have approved a proposal submitted by Citizens Bank of Jonesboro, to provide the needed funds upon the issuance of interim certificates of indebtedness pending the future issuance of definitive airport revenue bonds; and
WHEREAS, it is desirable that such interim certificates of indebtedness now be authorized and issued:
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Jonesboro, Arkansas:
Section 1: There is an immediate need for the issuance of interim certificates of indebtedness to provide temporary financing for improvements to the airport of the City.
Section 2: That the sale of interim certificates of indebtedness, not to exceed in principal amount the sum of $265,000 to Citizens Bank of Jonesboro, under the terms and conditions hereinafter set forth, be, and the same is, approved and confirmed.
Section 3: That under the authority of Act 53 of the Acts of the General Assembly of the State of Arkansas of 1949 (sometimes hereinafter referred to as "Act 53 of 1949") interim certificates of indebtedness of the City (hereinafter called the "Certificates") be issued in the principal amount not to exceed Two Hundred Sixty-Five Thousand Dollars ($265,000), the proceeds of which are necessary to provide sufficient funds to pay costs incurred in the construction of improvements made, and to be made, to the airport of the City, including engineering, legal and other expense necessary thereto. The said Certificates shall be designated "City of Jonesboro, Arkansas Airport Revenue Interim Certificates of Indebtedness," shall be issued at such times, and from time to time, and is such denominations as shall be necessary to provide the funds as required, and shall be numbered consecutively in the order of issuance. Each Certificate shall be dated as of the date of issuance, and the interest thereon shall be payable monthly commencing on the first day of the month following the date of issuance, and thereafter, until fully paid. The Certificates shall each be finally due and payable five years from date. The Certificates shall be payable prior to maturity, as hereinafter provided.
Section 4: The Certificates shall be executed, when delivered, on behalf of the City by the Mayor and City Clerk and shall have impressed thereon the seal of the City. The Certificates shall be without interest coupons, and interest shall be remitted monthly by the Treasurer of the Airport Commission, as herein provided. The Certificates shall be payable solely out of the Airport Revenue Certificate Fund, as hereinafter provided for, and shall be a valid claim of the holders thereof only against such Fund and the amount of revenues pledged to such Fund, which amount of revenues is hereby pledged and mortgaged for the equal and ratable payment of the Certificates issued hereunder and shall be used for no other purpose than to pay the principal of and interest on said Certificates, except as hereinafter set out. The Certificates, and the interest thereon, shall not constitute an indebtedness of the City within any constitutional or statutory limitation.
Section 5: The Certificates shall be in substantially the following form, and the Mayor and City Clerk are hereby expressed authorized and directed to make all recitals contained therein, and to conform the form of instruments, as the circumstances of issuance might require, with regard to the principal amount thereof and rate of interest to be paid thereon:
UNITED STATES OF AMERICA
STATE OF ARKANSAS
COUNTY OF CRAIGHEAD
CITY OF JONESBORO
AIRPORT REVENUE INTERIM CERTIFICATE OF INDEBTEDNESS
No. $
FOR VALUE RECEIVED, the City of Jonesboro, Craighead County, Arkansas, hereby acknowledges itself indebted and promises to pay to Citizens Bank of Jonesboro, at its office in the City of Jonesboro, and County of Craighead, Arkansas, the principal sum of
______________ Dollars ($_____________) five (5) years from the date hereof, plus interest thereon from the date hereof at the rate of ____percent
(_____%) per annum, payable monthly on the first day of each month next following the date hereof, until the principal hereof shall be fully paid.
This Certificate is one of a series of Certificates in an aggregate principal amount not to exceed $265,000, issued for the purpose of providing funds for the use of the Airport Commission of the City of Jonesboro in anticipation of the issuance of permanent and definitive bonds for the construction of additions and improvements to the airport owned by the City, and in accordance with the Ordinance of the City adopted on the _____day of November, 1977. This is a special obligation payable solely from the revenues of the said Airport, or the proceeds of such definitive Airport revenue bonds as may hereafter be issued, and does not constitute an indebtedness of the City of Jonesboro within any constitutional or statutory limitation. The City covenants and agrees that on or, at its option, before the maturity date hereof this, and other such Certificates, to the extent then outstanding, with all interest accrued thereon, to date of payment, without penalty, shall be paid from the proceeds of such permanent and definitive bonds, unless sooner paid from other sources.
IN WITNESS WHEREOF, the City of Jonesboro, Arkansas, has caused this Certificate to be signed by the Mayor and City Clerk and sealed with the corporate seal of said City on the _____day of ____________, 19___.
CITY OF JONESBORO, ARKANSAS
By:
NEIL J. STALLINGS, MAYOR
ATTEST:
City Clerk
(S E A L)
Section 6: The Certificates of Indebtedness initially issued, in the principal amount of not to exceed $198,000, shall bear interest at 6 & ¾ per annum. Such additional Certificates as may thereafter be issued shall bear interest at 7% per annum.
Section 7: The City has covenanted and agreed, and does hereby covenant and agree, to impose and collect, or cause to be imposed and collected, such charges for the use of airport facilities and lease and rental of its airport properties as will always produce sufficient revenue to provide for the payment of the principal of and interest on the said Certificates as they become due and payable, to provide for the costs of reasonable expense of operation, maintenance and repair of the airport and related facilities, and to create and maintain the funds hereinafter described. The words "Airport and "airport facilities" as used in this Ordinance, shall include all property owned by the City comprising its municipal airport, without regard to whether the same may currently be used or leased for purposes solely connected aviation.
Section 8: That from and after the delivery of any Certificates issued hereunder the airport shall be continuously operated as a revenue producing undertaking. All airport revenues shall be received by the Treasurer and shall be kept separate and apart from other funds of the City, and shall be deposited in Citizens Bank of Jonesboro. All deposits made by the Treasure shall be in the name of the Airport Commission of the City and shall be designated to indicate the particular funds to which the revenues belong.
Section 9: AIRPORT FUND: That from and after the delivery of any Certificates issued hereunder, all revenues derived from the operation of the airport, belonging to the Airport Commission including the herein authorized additions and improvements, shall be set aside as when collected into a separate fund which is hereby created and designated the "Airport Fund". Such revenues are hereby pledged, and shall be applied first to the payment of the principal of and interest on the Certificates of the issue herein authorized, then to the payment of the operation and maintenance of the airport, and then to the providing of an adequate depreciation fund, if such shall be determined to be desirable by the Airport Commission.
Section 10: AIRPORT REVENUE CERTIFICATE FUND: There shall be set aside monthly by the Treasurer from the Airport Fund into a fund which is hereby created and established in the Citizens Bank of Jonesboro and designated "Airport Revenue Certificate Fund" sufficient amounts at all times to provide for the payment of interest on the Certificates authorized and issued hereunder as the same matures according to the terms of the Certificates.
At least ten (10) days before the maturity of each Certificate issued hereunder, it shall be the duty of the Treasurer to set aside from the Airport Fund the amount required to pay the principal of such maturing Certificate, and on or before the maturity of such maturing Certificate to remit the same to Citizens Bank of Jonesboro, together with accrued interest to the date payment.
Section 11: AIRPORT OPERATION AND MAINTENANCE FUND: After the payment required to be made into the Airport Revenue Certificate Fund, as set forth in Section 10 herein, there shall be paid by the Treasurer from the Airport Fund into a fund which is hereby created and designated "Airport Operation and Maintenance Fund" on the first day of each month will any of the Certificates authorized hereunder are outstanding sufficient money to pay all operation expenses and to make reasonable provision for the maintenance of the airport except as hereinafter in this section provided, moneys in the Airport Operation and Maintenance Fund shall be used solely for the purpose of paying the cost of operation and maintenance of the airport.
If any surplus shall be accumulated in the Airport Operation and Maintenance Fund over and above the amount which shall be necessary to defray the cost of maintaining and operating the airport during the remainder of the current fiscal year, such surplus or excess be transferred to the Airport Revenue Certificate Fund, as the Airport Commission may direct, and use for the purpose of the prepayment of principal on any of said Certificates.
Section 12: AIRPORT DEPRECIATION FUND: After the payments required to be made into the Airport Revenue Certificate Fund and the Airport Operation and Maintenance Fund, there shall be paid by the Treasurer from the Airport Fund into a fund which is hereby created and designated "Airport Depreciation Fund" on the first business day of each month while any of the Certificates herein authorized are outstanding, such amount as shall be determined by the Airport Commission as appropriate to establish and maintain a fund for the purpose of paying for the costs of replacements made necessary by the depreciation of the airport. The moneys in the Airport Depreciation Fund shall be used solely for the purpose of paying the costs of replacement made necessary by the depreciation of the airport, except, that upon appropriate resolution of the Airport Commission, such funds may be used for the purpose of paying the principal of or interest on the Certificates herein authorized.
Section 13: The Certificates authorized hereby and issued hereunder shall be subject to payment prior to maturity, at the option of the City, in lawful funds of the United States of America, at any time, from any funds lawfully available for such purpose, and shall be paid in full, with all accrued interest, out of the proceeds from the sale of the definitive airport revenue bonds hereinafter proposed to be authorized and issued.
Section 14: The City's airport shall be operated on a fiscal year basis beginning January 1 and ending December 31.
Section 15: It is covenanted and agreed by the City with the holder or holders of the Certificates, or any of them, that it will faithfully and punctually perform all duties with reference to the airport required by the Constitution and the statutes of the State of Arkansas, including making and collecting of reasonable and sufficient rates and charges for the use of the airport, its facilities and properties, segregating the revenues of the airport, and applying such revenues to the respective funds herein created.
Section 16: The City will maintain the airport in good condition and operate the same in an efficient manner and at a reasonable cost. So long as any of the Certificates issued hereunder are outstanding, the City agrees to maintain fire, lightning and tornado insurance on the airport improvements in an amount which normally would be carried by a private company engaged in a similar type of business. In the event of loss, while the Certificates herein authorized to be issued are outstanding the proceeds of such insurance shall be applied solely toward the reconstruction, replacement or repair of the airport. In the event of such loss, the City will, with reasonable promptness, cause to be commenced and completed the reconstruction, replacement and repair. Nothing herein shall be construed an requiring the City to expend any funds for premiums on its insurance on the City's airport which are derived from sources other than the operation of the airport, but nothing herein shall be construed as preventing the City from doing so.
Section 17: So long as any of the Certificates authorized hereunder are outstanding, the City will not mortgage, pledge or otherwise the City's airport or any other part thereof or any revenues there from, except as herein provided, and will not sell, lease or otherwise dispose of any substantial part of the same, except as herein provided.
Section 18: The City will keep proper books and records of accounts (separate from all other records and accounts) in which complete and correct entries shall be made of any transactions relating to the airport. The books and records of accounts shall be available for inspection by the holder of any of the Certificates herein authorized at reasonable times and under reasonable circumstances. The City shall have the airport books and records audited by an independent certified public accountant, or a department of the State of Arkansas, at least once each year, and a copy of the audit will be delivered to Citizens Bank of Jonesboro, and to any other holder of a Certificate upon request. In the event the City fails or refuses to make the audit, any holder of a Certificate, may have the audit made, and the cost thereof shall be charged against the Airport Operation and Maintenance Fund.
Section 19: The airport properties of the City include real property of substantial value not now used specifically for aviation purposes, but which may be desirable for the establishment of industry which will be of benefit to the City in general, and provide additional utilization of the airport facilities. Nothing in this Ordinance contained shall be deemed to prohibit the City from entering into a sale or lease (with option to purchase) of such properties for the purpose of furthering industrial development within the City. Provided, however, that no such industrial use shall be undertaken if the same shall materially reduce the availability of the airport for aviation purposes, or otherwise operate to reduce or diminish the revenues of the airport. Nothing contained in this Section shall prevent the use of airport properties for any airport purpose, or rental for other purposes, which will provide income to the Airport Commission.
Section 20: So long as any of the Certificates authorized and issued hereunder shall be and remaining outstanding and unpaid, the City hereby covenants and agrees that it will not issue any bonds with a lien on the revenue derived from the operation of the City's airport which is prior to, or on a parity with, the lien of the Certificates herein authorized and issued hereunder.
Section 21: If there be any default in the payment of either the principal of or interest on any of the Certificates may, by proper suit, compel the performance of the officials of the City. If there be any default in the payment of the principal of or the interest on the Certificates, or if the City shall fail to keep any other obligation which it herein assumes, and such default shall continue for thirty (30) days thereafter, any court having jurisdiction in any proper action, which may be instituted by any holder of a Certificate in default, may appoint a receiver to administer the airport on behalf of the City, with the power to charge and collect rates sufficient to provide for the expenses of the receivership, the payment of the Certificates thereon, and for the payment of the operating expenses, and to apply the income and revenues in conformity with this Ordinance providing for the issuance of said Certificates, but when all defaults are cured, the receivership shall be ended and the management and control of the airport restored to the Airport Commission of the City.
Section 22: The City covenants that in the issuance of the Certificates, all acts, conditions and things required to be done precedent to and in the issuance thereof have been properly done and performed and have happened in regular and due time, form and manner as required by law; and that the Certificates are within every debt limit, tax limit or other limits prescribed by law.
Section 23: As funds are required, upon the request of the Chairman of the Airport Commission, the Certificates herein authorized to be issued shall be completed in such amounts and at such rate of interest as shall be appropriate, and shall be executed by the Mayor and the City Clerk, and the seal of the City impressed, as herein provided, and shall be delivered to Citizens Bank of Jonesboro in exchange for payment at par of the principal amount specified in such Certificate or Certificates. The proceeds received from the delivery of such Certificates shall be paid to the Treasurer of the Airport Commission of the City for deposit and use as follows: The treasurer shall cause to be paid from such proceeds such outstanding indebtedness of the Airport Commission or the City as shall have been previously incurred in connection with the costs of the construction of any additions and improvements to the airport, including engineering, legal and other expenses incident thereto, and shall deposit the balance thereof, if any, to the credit of the Airport Fund with Citizens Bank of Jonesboro, Such remaining proceeds shall be expended, upon appropriate resolution of the Airport Commission, for such additional costs of additions and improvements as shall in the judgment of the Airport Commission be appropriate.
Section 24: This Ordinance shall not create any right of any kind to no right of any kind shall arise hereunder pursuant to it until one of more Certificates authorized by this Ordinance shall be issued and delivered.
Section 25: If any provision of this Ordinance shall for any reason be held illegal or invalid, it shall not affect the validity of the remainder of the Ordinance.
Section 26: It is hereby ascertained and declared that the lack of adequate airport facilities endangers the safety, health and welfare of the inhabitants of the City of Jonesboro, Arkansas, and that adequate facilities can be made available by the issuance of the Certificates authorized hereby. It is, therefore, declared that an emergency exists and that this Ordinance is necessary for the immediate preservation of the public peace, health and safety and shall take effect and become in force from and after its passage.
PASSED and ADOPTED this 21stday of November, 1977.