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HomeMy WebLinkAboutOrd 1570 - finance contract for the aquisition of equipment ~--'-~-"-~r_ ORDINANCE NO. 1570 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WEST UNIVERSITY PLACE, TEXAS, AUTHORIZING THE EXECUTION AND DELIVERY OF A FINANCE CONTRACT FOR THE ACQUISITION OF EQUIPMENT, LEVYING A TAX IN PAYMENT THEREOF, AND ENACTING OTHER PROVISIONS RELATED THERETO WHEREAS, the City is authorized, pursuant to the Public Property Finance Act, Chapter 271, Subchapter A, Local Government Code, as amended (the "Act"), to execute, perform and make payments under a contract for the acquisition of personal property for authorized municipal purposes, or the financing thereof; WHEREAS, this City Council has found and determined that it is necessary and in the best interests of the City to acquire certain equipment (the "Equipment") for the City as described on Schedule I attached hereto; WHEREAS, American Bank, Houston, Texas (the"Bank"), has offered to proYide financing for the acquisition of the Equipment; and WHEREAS, this City Council has found and determined that it is in the best interests of the City to finance the acquisition of the Equipment through the execution and deliyery of a finance contract with the Bank; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WEST UNIVERSITY PLACE, TEXAS: ARTICLE I DEFINITIONS AND OTHER PRELIMINARY MATTERS Section 1.01. Definitions (a) Unless otherwise expressly provided or unless the context clearly requires otherwise, in this Ordinance the following terms shall have the meanings specified below: "Acquisition Fund" meansthefund established in Section 4.0 1 (a)(11). "Code, means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions relating thereto, "Contract Payments" means the payments to be made by the City in payment of the principal and interest due under the Finance Contract. '-:C:=-:-:-:~~j.__::::J. I''''-.-'' -::n_-] . .:..._ ::-1:~jI]IT'---------- '""'--IHlYIlIr.'Il~jllrmr. , "Finance Contract" means the finance contract between the City and the Bank pursuant to which the Bank will proYide funds to the City for the acquisition of the Equipment. . "Interest and Sinking Fund" means the interest and sinking fund established by Section 4.01(a)(i). "Principal Amount" means the principal amount set forth in the Finance Contract. (b) The terms defmed in the preamble to this Ordinance shall have the meanings assigned to such terms in the preamble. Section 1.02. Findinl!S: Interoretation. (a) The declarations, determinations and findings declared,' made and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof. (b) The table of contents, titles and headings of the Articles and Sections of this Ordinance haye been inserted for conyenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or giyen any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. (c) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice Yersa, and words of the singular number shall be construed to include correlative words of the plural number and yice versa. (d) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein to sustain the yalidity of this Ordinance. (e) Article and section references shall mean references to articles and sections of this Ordinance unless designated otherwise. ARTICLED AUTHORIZATION AND GENERAL TERMS AND PROVISION OF THE FINANCE CONTRACT Section 2.01. Authorization. (a) The terms and provisions of the Finance Contract, substantially in the form presented at this meeting, are hereby approyed and said Finance Contract is hereby authorized to be executed and delivered in accordance with the Constitution and laws of the State of '--'--~""'~-~T'C"""~",c.~=~~c.:r,"'-'-'-f'"""'",,,,...... -"if' ;--~-.-'nIT _.__n_ c--mmlll"'wmrmr: Texas, including particularly the Act. The Mayor and City Secretary are hereby authorized and ~irected to execute and attest, respectiyely, the Finance Contract. (b) All officers of the City are authorized to take such actions and to execute such documents, certificates and receipts as they may deem necessary and appropriate in order to consummate the deliyery of the Finance Contract. ARTICLE ill SECURITY FOR THE CONTRACT PAYMENTS Section 3.01. Tax Levv for Payment of the Contract Payments. (a) The City Council hereby declares and covenants that it will provide and levy a tax legally and fully sufficient for payment of the Contract Payments, it having been determined that the existing and ayailable taxing authority of the City for such purpose is adequate to permit a legally sufficient tax in consideration of all other outstanding obligations of the City. (b) In order to provide for the payment of the Contract Payments, being (i) the interest on the outstanding Principal Amount and (ii) a sinking fund for payment of the installment amounts of the Principal Amount as they become due or a sinking fund of two percent per annum (whichever amount is the greater), there is hereby levied for the current year and each succeeding year thereafter, while the Principal Amount or interest thereon remains outstanding and unpaid, a tax within legal limitations on each $100 valuation of taxable property in the City that is sufficient to pay such Contract Payments, full allowance being made for delinquencies and costs of collection. (c) The tax leyied by this Section shall be assessed and collected each Year and applied to the payment of the Contract Payments, and the tax shall not be diverted to any other purpose. (d) Said ad yalorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the Contract Payments when and as due and payable in accordance with the Finance Contract and this Ordinance. (e). To the extent the City has available funds which may be lawfully used to pay the Contract Payments andsuch funds are on deposit in the Interest and Sinking Fund in adyance of the time when ad valorem taxes are scheduled to be leyied for the payment of the contract Payments, then the amount of ad yalorem taxes which otherwise would be required to be levied pursuant to. subsection (b) of this Section may be reduced to the extent and by the amount of such funds then on deposit in the Interest and Sinking Fund. r--'--~~~~-~~r""~CC.T"~'-T~r----'---------'.'~"..'."~.'-_.~"C.~ niT - --- -. - U U Tllnm nr"'TIiTIllflllT r. (f) If the liens and provisions of this Ordinance shall be released in a manner permitted by Article VI of the Finance Contract, then the collection of such ad yalorem tax may be suspended or appropriately reduced, as the facts may permit, and further deposits to the Interest and Sinking Fund may be-suspended or appropriately reduced, as_the facts may permit. In determining the outstanding Principal Amount, there shall be. subtracted the amount thereof that has been prepaid in accordance with the Finance Contract. ARTICLE IV CREATION OF FUNDS AND ACCOUNTS; DEPOSIT OF PROCEEDS; INVESTMENTS Section 4.01. Creation of Funds. (a) The City hereby establishes the following special funds or accounts: (i) . the City of West University Place, Texas, 1997 Finance Contract Interest and Sinking Fund (the "Interest and Sinking Fund"); and (ii) the City of West University Place, Texas, 1997 Finance Contract Acquisition Fund (the Acquisition Fund"). (b) The Interest and Sinking Fund and the Acquisition Fund shall be maintained at an official depository of the City Section 4.02. Interest and Sinkine: Fund. (a) The taxes levied under Section 3.01 of this Ordinance shall be deposited to the credit of the Interest and Sinking fund at such times and in such amounts as necessary for the timely payment of the Contract Payments. (b) Money on deposit in the Interest and Sinking Fund shall be used to pay the Contract Payments as such become due and payable. Section 4.03. Acouisition Fund. (a) Money on deposit in the Acquisition Fund, including inyestment earnings thereof, shall be used for the acquisition of the Equipment. (b) All amounts remaining in the Acquisition Fund after the acquisition of the Equipment, including inyestment earnings of the Acquisition Fund, shall be deposited into the . Interest and Sinking Fund, unless applicable law permits or authorizes all or any part of such funds to be used for other purposes. ___~_____ 1.:::-::::::"''':_-______:, ....J::-:.:::::~___r::-::::l r._'" ~"'_-c_.o'="'"~=_~~.. :rr:, 1.a..C'--------- --- "-ll'r.I:rmr;:'Il~!fIlrn:r; - -- I Section 4.04. Setudtv of FuDdi All moneys on deposit in the fends referred to in this Ordinance shall be secured in the manner and to the fullest extent required by the laws of the State of Texas for the security of public funds, and moneys on deposit in such funds shall be Used only for the purposes permitted by this Ordinance. Section 4.05. Deuoiit of Pr-Oteeu. All amounts received on the Closing Date by the City under the Finance Contract shall be deposite~ to the Acquisition Fund, such moneys to be dedicated and used for the acquisition of the Equipment and costs related thereto, Section 4.06. Jqv('stro('nts (a) Money in the Interest and Sinking Fund"and the Acquisition Fund, at the option of the City, may be invested in such securities or obligations as permitted under applicable law. (b) Any securities or obligations in which money is so inyested shall be kept and held in trust for the benefit of the persons entitled to receive Contract Payments and shall be sold and the proceeds of sale shall be timely applied to the making of all payments required to be made from the fund from which the investment was made. (c) Interest and income deriyed from investment of any fund created by this Ordinance shall be credited to such fund. ARTICLE V REPRESENTATIONS AND COVENANTS Section 5.01. R.eur-eilelltatiOlli aDd C~Vellalltil. (a) The City will faithfully perform at all times any and all coyenants, undertakings, stipulations, and provisions contained in this Ordinance and in the Finance Contract; the City will promptly payor cause to be paid the Contract Payments on. the dates and at the places and manner prescribed in the Finance Contract; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance. (b) The City is duly authorized under the laws of the State of Texas to execute and deliyer the Finance Contract; all action on its part for execution and delivery of the Finance Contract has been duly and effectiyely taken; and the Finance Contract is and will be a valid and enforceable obligation of the City in accordance with its terms. L. -_L.______J'-.-=:J. r-- ,ill .- ."!T[lmlinmlrml',-- ------ , ILl (c) The City Council may make any changes in the description of the property listed on Schedule I to this Ordinance or of any component thereof wheneyer the City Council deems such changes to be necessary and appropriate and proyided that the nature of the property after such changes will constitute qualified property eligible for financing under the Act and such changes shall not adyersely affect the tax exempt status of the Contract Payments. Section 5.02. Provisions Concerninl! Federal Income Tax Exclusion. (a) The City hereby represents that the proceeds of the Finance Contract are needed at this time for the acquisition of the Equipment (the "Project'); that it is not reasonably expected. that the proceeds of the Finance Contract or money deposited in. the Interest and Sinking Fund or Acquisition Fund will be used or inyested in. a manner that would cause the Finance Contract to be or become an "arbitrage bond," within the meaning of Section 148 of the Code; and that, except for the Interest and Sinking Fund, no other funds or accounts haye been established or pledged to the payment of the Finance Contract. (b) The City will not take any action or fail to take any action with respect to the investment of the proceeds of the Finance Contract or any other funds of the City, including amounts receiyed from the investment of any of the foregoing, if such action or inaction would result in constituting the Finance Contract an "arbitrage bond," within the meaning of Section 148 of the Code, and the City will not take any deliberate action motivated by arbitrage that would have such result. (c) The City will not take any action or fail to take any action which act or omission would (i) result in the interest payable under the Finance Contract being includable in gross income for federal tax purposes; (H)result in the Finance Contract being treated as a "private actiyity bond'" within the meaning or Section 141(a) of the Code; or (Hi) result in the Finance Contract being treated as "federally guaranteed" within the meaning of Section 149(b) of the Code. (d) It is the understanding of the City that the coyenants contained herein are intended to assure compliance with the regulations and rulings issued by. the Internal Revenue Service. In the eyent thatregulations or rulings are hereafter issued which modify or expand proyisions of the Code, as applicable to the Finance Contract the City will not be required to comply with any coyenant contained herein to the extent that such failure to comply, in the opinion of nationally-recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest payable under the Finance Contract under Section 103 of the Code. In the eyent that regulations or rulings are hereafter issued which impose additional requirements which are applicable to the Finance Contract, the City agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally-recognized bond counsel, to preserve the exclusion of interest payable under the Finance Contract for federal tax purposes under Section 103 of the Code. (e) The City will comply with the Proyisions of Section 148(f) of the Code (relating to paying in certain excess earnings of inyestment proceeds of the Finance Contract to the ,---- - '1 '~-~-C'!f''1 !IiT- - -- --------'rlTl;rlnmTIf~- United States) and the regulations promulgated thereunder. This covenant includes the maintenance of records regarding investments acquired with the proceeds by or on behalf of the City adequate to calculate the City's rebate liability, if any. \ (f) Proper officers of the City charged with the responsibility of deliyering the Finance Contract. are hereby directed to make, execute and deliver certifications as to facts, estimates and circumstances in existence as of the Closing Date and stating whether there arc any facts, estimate~ or circumstances that would materially change the City's current expectations. (g) The covenants and representations made or required by this Section are for the benefit of the Owners and may be relied upon by the Owners and Bond Counsel for the City. Section 5.03. Covenants Rel!ardinl! Sale. Lease or DisDosition of Fin9nf'..d ProDertv. The City covenants that the City will regulate the use of the Equipment and will not sell, lease or otherwise dispose of such Equipment unless (i) the City takes the remedial measures as may be requited by the Code and the regulations and rulings thereunder in order to preserve the exclusion from gross income of interest payable under the Finance Contract under section 103 of the Code or (ii) the City seeks the adyice of nationally recognized bond counsel with respect to such sale, lease or other disposition. Section 5.04. Oualified Tax-Exemot Oblhmtions The City hereby designates the Finance Contract as a "qualified tax-exempt obligation" for purposes of Section 265(b) of the Code. In connection therewith, the City represents (a) that the aggregate amount of tax-exempt obligations issued by the Issuer during calendar year 1997, including the Finance Contract, which have been designated as "qualified tax-exempt obligations" under Section 265(b)(3) of the Code does not exceed $10,000,000, and (b) thatthe reasonably anticipated amount of tax- exempt obligations which will be issued by the City during calendar year 1997, including the Finance Contract, will not exceed $10,000,000. For purposes of this Section 5.04, the term "tax exempt obligations" does not include "private activity bonds" within the meaning of Section 141 of the Code; other than "qualified 501(c)(3) bonds" within the meaning of Section 145 of the Code. In addition, for purposes of this section 5.04, the City includes all goyemmental units which are aggregate with the City under Section 265(b) of the Code. Section 6. All ordinances and parts of ordinances in conflict herewith are hereby repealed to the extent of the conflict only. Section 7. If any word, phrase, clause, sentence, paragraph, section or other part of this ordinance or the application thereof to any person or circumstance, shall eyer be held to be inyalid or unconstitutional by any court of competent jurisdiction, neither the remainder of this ordinance, nor the application of such word, phrase, clause, sentence, paragraph, section or other part of this ordinance to any other persons or circumstances, shall be affected thereby. Section 8. The City Council officially finds, determines and declares that a sufficient written notice of the date, hour, place and subject of each meeting at which this ordinance was discussed, considered or acted upon was given in the manner required by the Texas Open Meetings Act, as amended, and that each such meeting has been open to the public as required by law at all times during such discussion, consideration and action. The City Council ratifies, approves and confirms such notices and the contents and posting thereof. ...,fASSEp AND APPROVED ON FIRST READING, this ~1997. , ~ 8:.. day of Voting Aye: Voting Nay: Absent: /J PASSED AND APPROVED ON SECOND READING, this ~day of ~1997. Voting Aye: Voting Nay: Absent: SIGNED: (seal) ATTEST: REVIEWED: J~ ---" James Dougherty, City Attorney c--.-.---.-.--.---.T"'~".o.~~~~~=.=--____r"",...,~,.,~~~.,'~~"""1I":1 , . i....:i'T:"':!T1IlD"."-- -- --,-, ",":'.'lUl!I: 1II~:'n11lIlrmr; ATTAC.RMF.NT A DESCRIPTION OF mE EQUIPMENT IBM AS/400E Computer 9406-600 Processor IBM 6400-08Z Matrix Line Printer H.T.E Application software for General ledger Payroll Utility Billing Tax Billing Fixed Assets Purchasing/Inventory Public Safety Computer system and software ~---------'-----'---'-~r~~~=~L.._.J:_=:1'":l~---r'~-"o_-~~~ '1L1 , , LJ~ilin- -- - . -'mlffillnill![IDri