HomeMy WebLinkAboutO-1995-2010
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ORDINANCE NO. 95-2010
AN ORDINANCE FINDING THE NECESSITY FOR THE ACQUISITION OF CERTAIN
REAL PROPERTY FOR PUBLIC PURPOSES; AUTHORIZING THE EXERCISE OF
OPTION AGREEMENT DATED JULY 11, 1994, AND THE PURCHASE OF SAID REAL
PROPERTY; AUTHORIZING THE ISSUANCE OF THE CITY OF LA PORTE' S
$575,000.00 PROMISSORY NOTE; FINDING COMPLIANCE WITH THE OPEN
MEETINGS LAW; PROVIDING AN EFFECTIVE DATE HEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE:
section 1. The City Council of the City of La Porte (the
"City") has heretofore, by its Ordinance No. 94-1994, passed and
approved August 8, 1994, authorized the City Manager of the City
of La Porte to enter into an option agreement with Harold P.
Pfeiffer, for the purchase of the real property in the City of La
Porte, Texas, more particularly described in said option agreement,
to be utilized by the City of La Porte for public purposes (the
"Property").
section 2. The City Council hereby authorizes the exercise
of the purchase option contained in the said option agreement dated
July 11, 1994, and the purchase of the Property on the terms and
conditions therein stated.
section 3. The City Council, as a portion of the
consideration to be paid for the purchase of the Property, and in
accordance with Article 717w, Vernon's Texas civil Statutes, hereby
authorizes the execution and delivery of the City's promissory note
(the "Note") in form attached hereto as Exhibit "A", incorporated
by reference herein, and made a part hereof for all purposes. The
Mayor of the City is authorized to execute the Note on behalf of
the City, and the City Secretary of the City is authorized to
attest the execution thereof on behalf of the City, and to affix
the City's seal thereto.
section 4. The city Council, during each year while any of
the principal of or interest on the Note is outstanding and unpaid,
shall compute and ascertain a rate and amount of ad valorem tax
which will be sufficient to raise and produce the money required
to pay the interest on the Note as such interest comes due, and to
provide and maintain a sinking fund adequate to pay the principal
on the Note as such principal matures (but never less than 2% of
the original principal amount of the Note as a sinking fund each
year); and the tax shall be based on the latest approved tax rolls
of the City, with full allowance being made for tax delinquencies
and the cost of tax collection. The rate and amount of ad valorem
tax is hereby levied, and is hereby ordered to be levied, against
all taxable property in the City, for each year while the Note is
outstanding and unpaid; and such tax shall be assessed and
collected each year and deposited, as collected, to the credit of
an interest and sinking fund. The ad valorem taxes sufficient to
provide for the payment of the interest on and principal of the
Note, as such interest comes due and such principal matures, are
hereby pledged irrevocably for such payment within the limit
prescribed by law.
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ORDINANCE NO. 95-2010
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section 5. The City Council covenants to take any action or
refrain from any action which would adversely affect the treatment
of the Note as an obligation described in section 103 of the
Internal Revenue Code of 1986, as amended (the "Code"), the
interest on which is not includable in the "gross income" of the
holder for purposes of federal income taxation. In furtherance
thereto, the City Council covenants as follows:
(a) to take any action to assure that in the event that
the "private business use" of the Property (within the meaning
of section 141(b) of the Code) exceeds 5% of the original
principal amount of the Note, then the amount in excess of 5%
is used for a "private business use" which is "related" and
not "disproportionate," within the meaning of section
141(b) (3) of the Code, to the governmental use;
(b) to refrain from taking any action which would
otherwise result in the Note being treated as a "private
activity bond" within the meaning of section 141(b) of the
Code; and
(c) to refrain from taking any action that would result
in the Note being "federally guaranteed" within the meaning
of section 149(b) of the Code.
It is the understanding of the City that the covenants contained
herein are intended to assure compliance with the Code and any
regulations or rulings promulgated by the U.S. Department of the
Treasury pursuant thereto. In furtherance of such intention, the
City hereby authorizes and directs the Mayor of the City to execute
any documents, certificates, or reports required by the Code and
to make such elections, on behalf of the ci ty , which may be
permitted by the Code as are consistent with the propose for the
issuance of the Note. In the event that regulations or rulings
are hereafter promulgated which modify or expand provisions of the
Code, as applicable to the Note, the City will not be required to
comply with any covenant contained herein to the extent that such
modification or expansion, in the opinion of nationally recognized
bond counsel, will not adversely affect the exemption from federal
income taxation of interest on the Note under section 103 of the
Code. In the event that regulations or rulings are hereafter
promulgated which impose additional requirements which are
applicable to the Note, the city agrees to comply with the
additional requirements to the extent necessary, in the opinion of
nationally recognized bond counsel, to preserve the exemption from
federal income taxation of interest on the Note under section 103
of the Code.
section 6. The City Council officially finds, determines,
recites, and declares that a sufficient written notice of the date,
hour, place and subject of this meeting of the City Council was
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ORDINANCE NO. 95-2010
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posted at a place convenient to the pUblic at the City Hall of the
ci ty for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 55, Texas Government
Code; and that this meeting has been open to the public as required
by law at all times during which this ordinance and the subject
matter thereof has been discussed, considered and formally acted
upon. The city Council further ratifies, approves and confirms
such written notice and the contents and posting thereof.
section 7. This Ordinance shall be effective from and after
its passage and approval, and it is so ordered.
PASSED AND APPROVED, this 22nd day of May, 1995.
By:
ATTL ~
Sue Lene~
City secretary
~d
Knox W. ASkins,
City Attorney
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PROMISSORY NOTE
La Porte, Harris County, Texas
$575,000.00
January 10, 1995
For value received, the CITY OF LA PORTE, TEXAS, a municipal
corporation and home rule city under the Constitution and laws of
the State of Texas (hereinafter "Maker"), promises to pay to the
order of HAROLD P. PFEIFFER (hereinafter "Payee"), Harris County,
Texas, the sum of FIVE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS
($575,000.00), in legal and lawful money of the United States of
America, with interest thereon from date hereof until maturity in
the amounts and at the times as set out below; matured unpaid
principal and interest shall bear interest at the maximum rate
permitted by law from date of maturity until paid. This note is
due and payable as follows, to-wit:
Payment
Date
Reduction
in
Principal
Payment
Amount
Interest
Amount
08/10/95 $111,480.07 $25,875.00 $85,605.07
08/10/96 111,480.07 22,022.77 89,457.30
08/10/97 111,480.07 17,977.19 93,482.88
08/10/98 111,480.07 13,790.46 97,689.61
08/10/99 111,480.07 9,394.43 102,085.64
08/10/00 111,480.07 4,800.58 106,679.50
Outstanding
Balance
$575,000.00
489,394.93
399,937.63
306,454.75
208,765.14
106,679.50
0.00
Maker agrees that during the full term hereof the maximum lawful
rate of interest for this note determined under Texas law shall be
the lesser of the rate calculated as described in Article 717k-2,
Vernon's Texas civil statutes, as amended, or the Indicated Rate
(weekly) ceiling as Specified in Article 5069-1.04, Vernon's Texas
civil statues, as amended. Further,. to the extent that any other
lawful rate exceeds the rate so determined then the higher ceiling
rate shall apply.
It is the intention of Maker and Payee to conform strictly to the
usury laws now in force in the State of Texas, except as superseded
by applicable Federal law. Accordingly, notwithstanding anything
to the contrary in this note or any other agreement entered into
in connection herewith, it is agreed as follows: (i) in the event
that the maturity of this note is accelerated by an election of
EXHIBIT A
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Payee resulting from an event of default under this note or any
agreement entered into in connection herewith, then earned interest
may never include more than the maximum amount permitted by law,
and any unearned interest included in the face of this note or
otherwise shall be cancelled automatically and, if theretofore
paid, shall be either refunded to Maker or credited on the
principal amount of this note; and (ii) the aggregate of all
interest and any other charges constituting interest under the laws
of the state of Texas and contracted for, chargeable or receivable
under this note or otherwise in connection with this loan
transaction shall under no circumstances exceed the maximum amount
of interest permitted by law, and any excess shall be deemed a
mistake and cancelled automatically and, if theretofore paid, shall
be either refunded to Maker or credited on the principal amount of
this note.
It is expressly provided that upon default in the punctual payment
of this note or any part thereof, principal or interest, as the
same shall become due and payable, the entire indebtedness secured
by the hereinafter mentioned lien shall be matured, at the option
of the holder; and in the event default is made in the prompt
payment of this note when due or declared due, and the same is
placed in the hands of an attorney for collection, or suit is
brought on same, or the same is collected through Probate,
Bankruptcy or other judicial proceedings, then the makers agree and
promise to pay ten percent (10%) addi tional on the amount of
principal and interest then owing, as attorney's fees.
Each maker, surety and endorser of this note expressly waives all
notices, demands for payment, presentations for payment, notice of
intention to accelerate to maturity, protest and notice of protest,
as to this note and as to each, every and all installments thereof.
This note is issued pursuant to Ordinance No. 95-2010 whereunder
the Maker authorized the levy of a continuing, direct, annual ad
valorem tax on taxable property within the City of La Porte, within
the limits prescribed by law, for each year while any part of the
note is considered outstanding, in sufficient amount to pay
interest on the note as it becomes due, to provide a sinking fund
for the payment of the principal of the note when due, and to pay
the expenses of assessing and collecting such tax. The ad valorem
taxes sufficient to provide for the payment of the interest on and
principal of the note, as such interest comes due and such
principal matures, are hereby pledged irrevocably for such payment,
within the limit prescribed by law.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this
note is duly authorized by law and that all acts, conditions, and
things required to be done precedent to and in connection with the
issuance of this note have been properly done and performed and
have happened in regular and due time, form, and manner as required
by the laws of the state of Texas.
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IN WITNESS WHEREOF, the City Council has caused this note to
be executed in its name by the manual signature of the Mayor of
the City, and the City Secretary of the City of La Porte has
attested to the execution thereof on behalf of the City of La
Porte, and has affixed the City's seal thereto.
By:
CITY OF LA PORTE
~<frt~
Mayor
ATTEST:
~L~
Sue Lenes
City Secretary
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