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HomeMy WebLinkAboutO-1995-2010 . e 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. - e ORDINANCE NO. 95-2010 PAGE2 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 e . ORDINANCE NO. 95-2010 PAGE 3 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 e e 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 . e 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. 2 / . . 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 ----- 3