$13,355,000 CITY OF PINE BLUFF, ARKANSAS LIBRARY ... · PDF fileThelma Walker Glen Brown, Jr. Win Trafford Bill Brumett Donald Hatchett ... is a body public and corporate organized

(NEW ISSUE) RATINGS (BAM Insured):Standard and Poor’s “AA“

(BOOK-ENTRY ONLY) Underlying Rating: Standard and Poor’s “A+”

(See “BOND RATING” herein)

In the opinion of Bond Counsel, under existing law and assuming compliance with certain covenants described herein, (i) interest

on the Series 2017 Bonds is excluded from gross income for federal income tax purposes, (ii) interest on the Series 2017 Bonds is

not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, (iii)

with respect to certain corporations, interest on the Series 2017 Bonds will be taken into account in determining adjusted current

earnings for the purpose of computing the alternative minimum tax imposed on such corporations, (iv) interest on the Series 2017

Bonds is exempt from State of Arkansas income tax, and (v) the Series 2017 Bonds are not subject to property taxes in the State

of Arkansas. See, LEGAL MATTERS, herein.

$13,355,000

CITY OF PINE BLUFF, ARKANSAS

LIBRARY CONSTRUCTION BONDS, SERIES 2017

Dated: Date of delivery Due: February 1, as shown on the inside cover page

[Maturity Schedule included on inside cover page]

The City of Pine Bluff, Arkansas Library Construction Bonds, Series 2017 (the “Bonds”) are limited obligations of the City of

Pine Bluff, Arkansas (the “City”) payable solely from the collections of the Library Tax (as herein defined) and amounts on

deposit in certain funds and accounts established under a Trust Indenture, dated as of May 9, 2017, between the City and

Simmons Bank, as Trustee (the “Indenture”).

The Bonds are issuable as fully registered bonds and, when issued, will be registered in the name of Cede & Co., as nominee of

The Depository Trust Company (“DTC”), New York, New York, to which principal and interest payments on the Bonds will be

made so long as Cede & Co. is the registered owner of the Bonds. Individual purchases of the Bonds will be made only in book-

entry form, in the denominations of $5,000 or any integral multiple thereof. Individual purchasers of the Bonds (“Beneficial

Owners”) will not receive physical delivery of bond certificates.

Interest is payable February 1, 2018 and semiannually thereafter on each February 1 and August 1. The Bonds are issuable only

as fully registered bonds in the denomination of $5,000 or an integral multiple thereof. Principal is payable at the corporate trust

office of Simmons Bank, Pine Bluff, Arkansas, the trustee, bond registrar, and paying agent (the “Trustee”).

Interest is payable by check or draft drawn on the paying agent and mailed to the registered owners as of the Record Date (herein

defined) on each interest payment date, or solely at the option of the Trustee, by wire fund transfer upon the terms and conditions

of the Trustee.

The Bonds are subject to mandatory, optional, extraordinary, mandatory, and mandatory redemption from sinking fund

installments prior to maturity as described herein.

The scheduled payment of principal of and interest on the Bonds will be guaranteed under a municipal bond insurance policy to

be issued concurrently with the delivery of the Bonds by Build America Mutual Assurance Company.

The Bonds are offered when, as, and if issued and received by the Underwriter, subject to the approval of legality by Wright,

Lindsey & Jennings LLP, Little Rock, Arkansas, Bond Counsel for the City, and to certain other conditions. Althea Hadden-

Scott, City Attorney, will approve certain proceedings of the City in connection with the issuance of the Bonds. It is expected that

the Bonds will be available for delivery in New York, New York, on or about May 9, 2017.

Dated: April 6, 2017

MATURITY SCHEDULE

$13,355,000


LIBRARY CONSTRUCTION BONDS

Series 2017

$3,055,000 Serial Bonds

Maturity

(February 1)

Principal

Amount

Interest

Rate

Yield

CUSIP*

2018 $185,000.00 2.000% 1.200% 722409 DM8

2019 285,000.00 3.000% 1.500% 722409 DN6

2020 295,000.00 3.000% 1.750% 722409 DP1

2021 300,000.00 3.000% 1.900% 722409 DQ9

2022 310,000.00 3.000% 2.100% 722409 DR7

2023 320,000.00 2.125% 2.350% 722409 DS5

2024 325,000.00 2.375% 2.550% 722409 DT3

2025 335,000.00 2.500% 2.700% 722409 DU0

2026 345,000.00 3.000% 2.850% 722409 DV8

2027 355,000.00 2.750% 2.950% 722409 DW6

$10,300,000 Term Bonds

$3,825,000 3.625% Term bonds due February 1, 2036; yield 3.625%; CUSIP 722409 DX4

$6,475,000 3.000% Term bonds due February 1, 2047; yield 3.051%; CUSIP 722409 DY2

*Copyright 2006, American Bankers Association. CUSIP data herein is provided by the CUSIP Service Bureau, operated by

Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not

serve in any way as a substitute for the CUSIP Service Bureau. CUSIP numbers are provided for convenience of reference only.

The City and the Underwriters are not responsible for the selection or uses of these CUSIP numbers, and no representation is

made as to their correctness on the Bonds.

No dealer, broker, salesman, or other person has been authorized by the City or the Underwriter to give

any information or to make any representations other than contained in this Official Statement, and, if

given or made, such other information or representations must not be relied upon as having been

authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or a

solicitation of an offer to buy nor shall there be any offer, solicitation, or sale of the Bonds by or to any

person in any jurisdiction in which it is unlawful to make such offer, solicitation, or sale.

The information set forth herein under the captions “DESCRIPTION OF THE CITY OF PINE BLUFF,

General,” “DEBT STRUCTURE,” “BOND INSURANCE,” “RATING,” and “FINANCIAL

INFORMATION” has been furnished by the City, except where otherwise noted. All other information

set forth herein has been obtained from the City or from sources other than the City that are believed to be

reliable, but the adequacy, accuracy, or completeness of such information is not guaranteed by, and it is

not to be construed as a representation by, the City or Bond Counsel. The information and expressions of

opinion herein are subject to change without notice. Neither the delivery of this Official Statement nor the

sale of any of the Bonds implies that there has been no change in the matters described herein since the

date hereof or that the information herein is correct as of any time subsequent to its date.

Build America Mutual Assurance Company (“BAM”) makes no representation regarding the Bonds or

the advisability of investing in the Bonds. In addition, BAM has not independently verified, makes no

representation regarding, and does not accept any responsibility for the accuracy or completeness of this

Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with

respect to the accuracy of the information regarding BAM, supplied by BAM and presented under the

heading “BOND INSURANCE” and “Appendix D - Specimen Municipal Bond Insurance Policy”.

The Bonds have not been registered under the Securities Act of 1933, as amended, nor have the

Authorizing Ordinance or Trust Indenture described herein been qualified under the Trust Indenture Act

of 1939, as amended, in reliance upon certain exemptions in such laws from such registration and

qualification.

IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET

PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN

THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT

ANY TIME.

[Remainder of page intentionally left blank.]


Mayor and City Council

Shirley Washington, Mayor

City Council

Lloyd Holcomb

Thelma Walker

Glen Brown, Jr.

Win Trafford

Bill Brumett

Donald Hatchett

Steven Mays

Bruce Lockett

City Clerk

Loretta Whitfield

City Attorney

Althea Hadden - Scott

Certified Public Accountants

Legislative Audit Committee

State of Arkansas

CONSULTANTS AND ADVISORS TO THIS FINANCING

Bond Counsel

Wright, Lindsey & Jennings LLP

Little Rock, Arkansas

Underwriter

Stephens Inc.

Little Rock, Arkansas

i

TABLE OF CONTENTS

Page

SUMMARY OF THE OFFICIAL STATEMENT ....................................................................................... 1 Purpose of Official Statement .......................................................................................................... 1 The City ........................................................................................................................................... 1 Pine Bluff – Jefferson County Library Board .................................................................................. 1 Purpose ............................................................................................................................................. 1 Security and Source of Payment ...................................................................................................... 1 Bond Insurance ................................................................................................................................ 1

BONDS BEING OFFERED ......................................................................................................................... 2 Generally .......................................................................................................................................... 2 Authority .......................................................................................................................................... 2 Purposes ........................................................................................................................................... 3 Sources and Uses of Funds .............................................................................................................. 3 Security and Source of Payment ...................................................................................................... 3 Redemption ...................................................................................................................................... 4 Optional Redemption of Bonds ....................................................................................................... 4 Extraordinary Redemption of Bonds ............................................................................................... 5 Mandatory Redemption of Bonds .................................................................................................... 5 Redemption Within a Maturity ........................................................................................................ 6 Notice of Redemption ...................................................................................................................... 6 Trustee, Bond Registrar and Paying Agent ...................................................................................... 6 Modification of Terms of Bonds ...................................................................................................... 6 Defeasance ....................................................................................................................................... 7 Defaults and Remedies .................................................................................................................... 7 Additional Bonds ............................................................................................................................. 7

BOND INSURANCE ................................................................................................................................... 8 Bond Insurance Policy ..................................................................................................................... 8 Build America Mutual Assurance Company ................................................................................... 8 Credit Insights Videos...................................................................................................................... 9 Credit Profiles .................................................................................................................................. 9 Disclaimers ...................................................................................................................................... 9

BOOK-ENTRY ONLY SYSTEM ................................................................................................................ 9 Book-Entry Only System ................................................................................................................. 9

DESCRIPTION OF THE IMRPOVEMENTS ........................................................................................... 11

DESCRIPTION OF PINE BLUFF – JEFFERSON COUNTY LIBRARY SYSTEM ............................... 12 General ........................................................................................................................................... 12 Organization ................................................................................................................................... 12 Operation - Administration ............................................................................................................ 12 Funding .......................................................................................................................................... 13 Operations Budget ......................................................................................................................... 14

DESCRIPTION OF THE CITY OF PINE BLUFF .................................................................................... 15 General ........................................................................................................................................... 15 Governmental Organization ........................................................................................................... 15 Litigation ........................................................................................................................................ 16

Population ...................................................................................................................................... 16 Economic Data ............................................................................................................................... 16 Income ........................................................................................................................................... 16 Employment ................................................................................................................................... 17

ii

Commercial and Residential Construction .................................................................................... 18 Financial Institution Deposits ........................................................................................................ 18 Major Employers ........................................................................................................................... 19 School Enrollment ......................................................................................................................... 19 Higher Education ........................................................................................................................... 19 Medical Facilities ........................................................................................................................... 19 City Employees .............................................................................................................................. 20 Port of Pine Bluff ........................................................................................................................... 21

DEBT STRUCTURE .................................................................................................................................. 22 Legal Debt Margin Calculation for 2015 ........................................................................................ 22 General Obligation Debt Service ................................................................................................... 23 Defaults .......................................................................................................................................... 24 Revenue Bonds .............................................................................................................................. 24

FINANCIAL INFORMATION .................................................................................................................. 24 The City Budget ............................................................................................................................. 24 Statement of Revenues ................................................................................................................... 25 Assets ............................................................................................................................................. 27 Computation of Dollar Amount of Library Tax Levied ................................................................ 27 Assessed Valuation ........................................................................................................................ 27 Collection of Taxes ........................................................................................................................ 28 Debt Service Schedule ................................................................................................................... 29 Coverage ........................................................................................................................................ 30 Projected Mandatory Redemption ................................................................................................. 30 Overlapping Ad Valorem Taxes .................................................................................................... 31

SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES .................................................... 31 Taxable Property ............................................................................................................................ 31 Assessment ..................................................................................................................................... 32 Reassessment ................................................................................................................................. 33 Valuation ........................................................................................................................................ 34 Millage Rollback ............................................................................................................................ 34 Real Property ................................................................................................................................. 34 Personal Property ........................................................................................................................... 34 Property of Public Utility and Regulated Carriers ......................................................................... 35 Bond Protection ............................................................................................................................. 35 Amendment 78 ............................................................................................................................... 35 Amendment 79 ............................................................................................................................... 35 General Adjustments ...................................................................................................................... 35 Property of Public Utilities and Regulated Carriers ....................................................................... 36 Special Provisions for Those 65 or Over and Disabled Persons .................................................... 36 Homestead Exemption ................................................................................................................... 36 Property Tax Relief Trust Fund ..................................................................................................... 36 Bond Protection ............................................................................................................................. 37 Other .............................................................................................................................................. 37 Collection ....................................................................................................................................... 37 Delinquent Taxes ........................................................................................................................... 37 Remittance of Tax Collections ....................................................................................................... 37 Miscellaneous ................................................................................................................................ 37

TAX EXEMPTION .................................................................................................................................... 38 Tax Treatment of Original Issue Discount ..................................................................................... 38 State Tax Exemption ...................................................................................................................... 39

LEGAL MATTERS .................................................................................................................................... 39

iii

ENFORCEABILITY OF REMEDIES ....................................................................................................... 40

UNDERWRITING ..................................................................................................................................... 40

BOND RATING ......................................................................................................................................... 40

CONTINUING DISCLOSURE AGREEMENT ........................................................................................ 40

MISCELLANEOUS ................................................................................................................................... 46

APPENDIX A - Legal Opinion

APPENDIX B - Summary of the Trust Indenture

APPENDIX C - Financial Statements and Accompanying Information and Independent Auditors’ Report

for Pine Bluff and Jefferson County Library System, December 31, 2015

APPENDIX D – Specimen Municipal Bond Insurance Policy

1

SUMMARY OF THE OFFICIAL STATEMENT

This summary is subject in all respects to the more complete information contained in this Official

Statement. The offering of the Bonds to potential investors is made only by means of the entire Official

Statement, including the Cover Page.

Purpose of Official Statement. This Official Statement is provided to furnish certain information in

connection with the issuance by the City of Pine Bluff, Arkansas (the “City”) of its $13,355,000 Library

Construction Bonds, Series 2017 dated as of May 9, 2017 (the “Bonds”).

The City. The City is a city of the first class duly established and existing under the Constitution and

laws of the State of Arkansas. See “DESCRIPTION OF THE CITY OF PINE BLUFF”, herein.

Pine Bluff – Jefferson County Library Board. Pine Bluff – Jefferson County Library Board (the

“Board”) is a body public and corporate organized pursuant to the Arkansas Interlocal Cooperation Act

(Ark. Code Ann. §§ 25-20-101 through 25-20-108) and is charged with the operation and management of

public libraries in the cities of Pine Bluff, White Hall, Altheimer and Redfield. See “DESCRIPTION OF

PINE BLUFF – JEFFERSON COUNTY LIBRARY SYSTEM”, herein.

Purpose. The Bonds are being issued to finance the cost of acquiring, constructing, and equipping the

land and additional capital improvements to the public libraries (the “Improvements”) owned and

operated by the City of Pine Bluff, and pay the costs of issuing the Bonds. See “DESCRIPTION OF THE

IMPROVEMENTS”, herein.

Security and Source of Payment. The Bonds will be limited tax obligations of the City, payable solely

from a three mill (.003) annual ad valorem tax levied upon all taxable real and personal property located

within the City, including penalties and interest payable with respect thereto (the “Library Tax”) and all

payments received by the City from the State of Arkansas in lieu thereof under Amendment 79 to the

Arkansas Constitution (the “Special Tax Collections”). The City will levy the Library Tax at the rate of

three mills (.003) for collection in 2017 and continuously in each year thereafter, the collection of which

will be available to pay debt service on the Bonds. The City has covenanted that the Library Tax will be

levied and collected annually and that it and the Special Tax Collections will be pledged as security for

the Bonds until all of the outstanding Bonds together with interest thereon and related costs and fees have

been paid in full. The Library Tax, the Bonds, and the authority to pledge the Library Tax to secure

repayment of the Bonds comprise a portion of the aggregate principal amount of $14,060,000 in bonds

approved by voters of the City at the November 8, 2016, general election (the “Authorized Amount”).

The City reserves the right to issue the remaining unissued portion of the Authorized Amount.

Bond Insurance. The scheduled payment of principal of and interest on the Bonds will be guaranteed

under a municipal bond insurance policy to be issued concurrently with the delivery of the Bonds by

Build America Mutual Assurance Company. See “BOND INSURANCE”, herein.

2

BONDS BEING OFFERED

Generally. The Bonds are issuable in the form and denominations and are in the total principal amount

shown on the cover page, and will be dated, mature, and bear interest as set out on the cover page.

Simmons Bank1, Pine Bluff, Arkansas, the trustee, bond registrar, and paying agent (“Trustee”), will

maintain books for the registration and transfer of ownership of the Bonds. Interest due on a bond on each

interest payment date will be paid to the person in whose name the bond was registered at the end of the

fifteenth day of the month (whether or not a business day) next preceding the interest payment date (the

“Record Date”), irrespective of any transfer of the bond subsequent to the Record Date and prior to the

interest payment date. Payment of interest shall be made by check or draft drawn on the Trustee and

mailed to such registered owner at the address shown on the registration books, or solely at the option of

the Trustee, by wire fund transfer upon the terms and conditions of the Trustee. The City has also

arranged to make the Bonds eligible for book-entry deposit with The Depository Trust Company

(“DTC”), New York, New York. Deposit of the Bonds, or any portion thereof, with DTC shall be at the

option of the registered owner and at the expense of the registered owner or the participating securities

dealer, as the case may be.

A bond may be transferred, in whole or in part (in integral multiples of $5,000), but only upon delivery of

the bond, together with a written instrument of transfer, to the Trustee. The transfer instrument must be

signed by the registered owner or the registered owner’s attorney-in-fact or legal representative, and the

signature must be guaranteed by a member firm of the National Association of Securities Dealers, a

commercial bank, or a trust company. The transfer instrument shall state the name, mailing address, and

social security number or federal employer identification number of the transferee. Upon such transfer,

the Trustee shall enter the transfer of ownership in the registration books and authenticate and deliver in

the name or names of the new registered owner or owners a new fully registered bond or bonds of

authorized denominations of the same maturity and interest rate for the aggregate principal amount of the

bond transferred.

Authority. The Bonds are issued under the authority of the Constitution and laws of the State of

Arkansas, including particularly Amendment No. 30 to the Constitution of the State of Arkansas, as

amended by Amendment 72 to the Arkansas Constitution (“Amendment 30” and “Amendment 72” are

collectively referred to herein as the “Constitution”); Arkansas Code Annotated §§ 14-142-201 through

222 (Act 920 of the Acts of Arkansas of 1993), as amended (the “Act”); and Ordinance No. 6566 duly

adopted and approved by the City on April 3, 2017 (the “Authorizing Ordinance”).

The Constitution allows electors of the City to approve an annual tax on real and personal property to be

levied for capital improvements to or construction of a public city library not to exceed three mills (.003)

for each dollar of assessed value. The Constitution further states that electors may authorize the governing

body of the City to issue bonds as prescribed by law for capital improvements to or construction of a

library and to authorize the pledge of all, or any part of, the tax for the purpose of retiring the bonds.

The City currently levies one and six tenths of one mills (.0016) for the operation and maintenance of the

public libraries in the City. The Library Tax pledged to secure the Bonds will be levied in 2016 for

collection beginning in 2017 and the City will covenant to levy and collect the Library Tax continuously

for so long as the Bonds remain outstanding.

The Act provides the procedures for the issuance of library bonds by municipalities and counties in

implementation of the Constitutional provisions. The Act authorizes Arkansas municipalities to issue

bonds for library capital improvements and to refund outstanding bonds in amounts and for purposes

approved by a majority of the qualified electors of the city voting on the question at an election called for

1 Mark C. Doramus is a member of the Board of Directors of Simmons First National Corporation, the ultimate parent company

of the Trustee. Mr. Doramus is also the Chief Financial Officer of the Underwriter.

3

that purpose. Such bonds shall be made payable from a special ad valorem tax on real and personal

property in the city at the maximum rate specified on the election ballot. The Bonds were approved by the

voters of the City at the general election on November 8, 2016.

Purposes. The proceeds of the Bonds, together with investment earnings thereon, will be used to (i)

finance the cost of constructing a new main library branch in Pine Bluff and renovating the existing

library branch in the Watson Chapel neighborhood Pine Bluff; and (ii) pay the costs of issuance of the

Bonds. The City and the Board expect that the construction periods will be approximately 27 months,

consisting of 12 months for programming and design, and 15 months for construction and renovation.

A portion of the proposed Improvements to be made with the proceeds of the Bonds are as follows:

Improvements Estimated Cost

*

Construct a 35,000 sq. ft. new main branch for the City $12,400,000.00

Renovate existing library by adding addition of 2,000 sq. ft. 600,000.00

Contingency Fund -0-

Total $13,000,000.00

*The balance of the costs of the Improvements, if any, will be paid from Project Fund earnings and other funds of the City or the

Board.

These improvements shall hereinafter be referred to either as the “Projects” or the “Improvements.”

Sources and Uses of Funds. The estimated sources and uses of funds for the above purposes are as

follows:

Series 2017 Bonds

Sources

Par Amount of Bonds $13,355,000.00

Less Original Issue Discount (36,363,45)

Total Sources $13,318,636.55

Uses

Deposit to Project Construction Fund $13,000,000.00

Costs of Issuance (including Underwriter’s discount

and bond insurance premium) 318,538.04

Rounding Amount 98.51

Total Uses $13,318,636.55

Security and Source of Payment. The Bonds are limited tax obligations of the City, payable from and

secured by a pledge of the Library Tax and the Special Tax Collections. The City has pledged the Library

Tax and the Special Tax Collections for the payment of the Bonds. The Library Tax will be a continuing

annual levy until sufficient moneys have been paid to retire all of the Bonds, plus Trustee’s fees and

expenses. The rate of the Library Tax cannot exceed the rate specified on the ballot for the November 8,

2016 general election at which the Bonds were approved. The maximum rate specified for the Bonds was

three mills (.003) per dollar of assessed value of taxable property in the City. For a discussion of the

estimated amount of Library Tax and the Special Tax Collections to be collected in each year, see

“FINANCIAL INFORMATION, Computation of Dollar Amount of Library Tax Levied”.

The electors adopted Constitutional Amendment No. 79 at the November 2000 General Election. This

Amendment, which was effective January 1, 2001, provides for an annual state credit against ad valorem

property tax on a homestead. As directed by the Amendment, the General Assembly has instituted a

4

statewide sales and use tax in the amount of one half of one percent (0.5) (previously defined as the

“Special Tax Collections”). The purpose of the statewide sales and use tax is to assure that the tax or

millage levied for bonded indebtedness will provide a level of income sufficient to meet current debt

service and other expense requirements. See “SUMMARY OF ARKANSAS AD VALOREM TAX

PROCEDURES, Property Tax Relief Trust Fund”.

The Bonds are not secured by any lien on or security interest in any physical properties. The Bonds are

limited tax obligations of the City payable solely from revenues collected from the Library Tax and the

Special Tax Collections.

Arkansas property taxes are collected by the county collector and remitted to the respective taxing

authorities. See “FINANCIAL INFORMATION, Assessed Valuation”, and “Collection of Taxes”. All

collections of the Library Tax voted for the Bonds together with the Special Tax Collections will be

deposited as received into a special fund of the City held by the Trustee designated the “Series 2017

Library Bond Revenue Fund” (the “Revenue Fund”). All moneys held for the credit of the Revenue Fund

shall either be insured by the Federal Deposit Insurance Corporation or secured by direct or fully

guaranteed obligations of the United States of America, or otherwise invested in a manner consistent with

and authorized by the Indenture. The Trustee will transfer from the Revenue Fund, prior to any payment

date, to the credit of the Series 2017 Bond Fund, the amount required for the principal and interest due on

such payment date. Until retirement of the Bonds, the proceeds of the Library Tax and the Special Tax

Collections cannot be used for any purpose other than payment of debt service on the Bonds. Upon

retirement of the Bonds, any surplus Library Tax collections which may have accumulated shall be

transferred to the general fund of the City and shall be used for maintenance and operation of the public

library. The Special Tax Collections cannot be used for any purpose other than the payment of debt

service on the Bonds, calculation and payment of arbitrage rebate, and payment of Trustee and Paying

Agent fees.

The proceeds of the Bonds will be used first to pay the costs of issuance at closing of the Bond issue, and

then the balance of the proceeds of the bond sale will be deposited in the Project Fund with the Trustee.

The moneys in the Project Fund shall be disbursed for the payment of the costs of accomplishing the

Improvements, paying necessary expenses, and making necessary expenditures incidental thereto, paying

engineering fees, paying legal fees, and paying the expenses of the authorization and issuance of the

Bonds. For each disbursement related to construction costs, there shall be prepared a requisition signed by

an authorized representative of the Board, or other designated officer, and the Project Engineer or

Architect. For disbursements related to acquiring, constructing and equipping of land and additional

capital improvements for the public city libraries owned and operated by the City of Pine Bluff and the

Board, the Board shall submit a requisition signed by an authorized representative of the Board. The

Board will maintain copies of all invoices related to acquiring, constructing and equipping of land and

additional capital improvements for the public city libraries owned and operated by the City of Pine Bluff

and the Board in the Board’s records. Interest earned by the investments of the Project Fund shall be

retained in such Fund and used for the same purposes as other moneys in such Fund are authorized to be

used.

Redemption. The Series 2017 Bonds are subject to optional, extraordinary mandatory, and mandatory

redemption from sinking fund installments.

Optional Redemption of Bonds. The Series 2017 Bonds are subject to optional redemption in whole or

in part, in inverse order of maturity (Bonds within a maturity to be selected by lot in such manner as the

Trustee shall determine to be fair and equitable), on any date, from any moneys available therefor on or

after August 1, 2027, at a redemption price equal to the principal amount being redeemed, together with

accrued and unpaid interest to the date of redemption and payment.

5

Extraordinary Redemption of Bonds. The Series 2017 Bonds are subject to redemption on the first

interest payment date following completion of the Projects, but not later than August 1, 2020, in whole or

in part from excess proceeds of the Bonds not needed to complete the Projects, at a redemption price

equal to the principal amount being redeemed together with accrued and unpaid interest to the date of

redemption and payment. Such moneys shall be applied to redeem Series 2017 Bonds in inverse order of

maturity (Bonds within a maturity to be selected by lot in such manner as the Trustee shall determine to

be fair and equitable).

Mandatory Redemption of Bonds. The Series 2017 Bonds shall be subject to mandatory redemption,

prior to maturity on February 1, 2018, and on any February 1 thereafter, from surplus collections of the

Library Tax and Special Tax Collections, being collections over and above (i) the amount necessary to

pay the current requirements of interest and principal on the Bonds and Trustee’s fees, and (ii) the interest

due on the next interest payment date for the Bonds. Moneys available for redemption shall be applied to

the redemption of the Bonds, in inverse order of maturity in whole or in part, at a redemption price equal

to the principal amount being redeemed plus accrued interest to the redemption date (Bonds within a

maturity to be selected by lot in such manner as the Trustee shall determine to be fair and equitable).

Bonds of denominations greater than $5,000 may be redeemed partially in the amount of $5,000, or any

integral multiple thereof.

Mandatory Redemption from Sinking Fund Installments. To the extent not previously redeemed,

the Series 2017 Bonds maturing on February 1, 2036, are subject to mandatory sinking fund redemption in

such a manner as the Trustee may determine, on the date and in the amounts as set forth below, at a price

equal to the principal amount thereof plus interest to the date of redemption:

Year (February 1) Principal Amount

2028 $365,000.00

2029 380,000.00

2030 395,000.00

2031 405,000.00

2032 425,000.00

2033 440,000.00

2034 455,000.00

2035 470,000.00

2036 (Final Maturity) 490,000.00

To the extent not previously redeemed, the Series 2017 Bonds maturing on February 1, 2047, are subject to

mandatory sinking fund redemption in such a manner as the Trustee may determine, on the date and in the

amounts as set forth below, at a price equal to the principal amount thereof plus interest to the date of

redemption:

Year (February 1) Principal Amount

2037 $505,000.00

2038 520,000.00

2039 535,000.00

2040 550,000.00

2041 570,000.00

2042 585,000.00

2043 605,000.00

2044 625,000.00

2045 640,000.00

2046 660,000.00

2047 (Final Maturity) 680,000.00

6

Redemption Within a Maturity. So long as the Bonds are issued in book-entry only form (see “BOOK-

ENTRY ONLY SYSTEM” herein), if fewer than all of a particular maturity of the Bonds are to be called

for redemption, the particular Bonds to be redeemed will be selected pursuant to the procedures

established by DTC. If the Bonds are no longer held pursuant to the Book-Entry Only System, and if

fewer than all of a particular maturity of the Bonds then outstanding shall be called for redemption, the

Bonds or portions of Bonds to be redeemed within such maturity shall be selected by the Trustee by lot in

such manner as the Trustee shall determine appropriate.

Notice of Redemption. Notice of redemption shall be given as follows:

(i) The Trustee shall mail a copy of such notice by first-class mail, postage prepaid, not less

than thirty (30) days and not more than sixty (60) days before such redemption date, to the owner of any

Bond, all or a portion of which is to be redeemed, at the last address appearing upon the registration

books maintained by the Trustee. Failure to give such notice by mail to any owner, or any defect therein,

shall not affect the validity of any proceedings for the redemption of other Bonds.

(ii) The Trustee also shall mail a copy of such notice by registered or certified mail or

overnight delivery service or transmit via telecopier, for receipt not less than two (2) business days prior

to sending such notice to the owners, to the following: The Depository Trust Company, 711 Stewart

Avenue, Garden City, New York 11530, Attention: Call Notification Department (telecopier number:

516-227-4190 or 516-227-4039), or such other notice address as is subsequently provided by DTC;

provided, however, that such mailing shall not be a condition precedent to such redemption and failure to

so mail any such notice shall not affect the validity of any proceedings for the redemption of the Bonds.

After the date specified in such call, the Bonds so called will cease to bear interest, provided that funds

for their payment have been deposited with the Trustee, and, except for the purpose of payment, shall no

longer be protected by the Indenture and shall not be deemed to be outstanding under the provisions of the

Indenture.

While the Bonds are being held by DTC under the book-entry system, notice of redemption will be sent

only to DTC. See “BOOK-ENTRY ONLY SYSTEM” herein.

Trustee, Bond Registrar, and Paying Agent. The Trustee, Simmons Bank, Pine Bluff, Arkansas, was

designated by the Board.

The Trustee will maintain books for the registration and transfer of ownership of the Bonds. The principal

of all Bonds, payable either at maturity or upon redemption prior to maturity, shall be paid upon surrender

of the bond at the corporate trust office of the Trustee or in accordance with book-entry provisions

acceptable to the Trustee. Interest shall be paid by check or draft drawn on the Trustee and mailed to each

registered owner at the address shown on the registration books, or solely at the option of Trustee, by wire

fund transfer upon the terms and conditions of the Trustee.

The Trustee may resign by giving not less than sixty (60) days’ notice in writing to the City specifying the

date when such resignation shall take effect and mailing notice thereof to the owners of any and all Bond

or Bonds (the “Holders”) outstanding. Such resignation shall be effective upon the appointment of a

successor Trustee by the City and acceptance of appointment by the successor.

The City may at any time, with or without cause, remove the Trustee and appoint a successor.

Any successor Trustee shall have capital and surplus of at least $50,000,000.

Modification of Terms of Bonds. The terms of the Bonds, the Authorizing Ordinance, and the Indenture

will constitute a contract between the City and the registered owners of the Bonds. The owners of not less

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than sixty percent (60%) in aggregate principal amount of the Bonds then outstanding have the right, from

time to time, to consent to the adoption by the City of ordinances modifying any of the terms or

provisions contained in the Bonds, the Authorizing Ordinance, or the Indenture; provided, however, there

shall not be permitted (a) extension of the fixed maturity of any Bond, or reduction of the Principal

amount or Redemption Price thereof, or reduction of the rate or extension of the time of payment of

interest thereon; (b) reduction of the percentage of Bonds required for the affirmative vote or written

consent to an amendment or modification of the Indenture; or (c) modification of any of the rights or

obligations of the Trustee.

Defeasance. When all of the Bonds shall have been paid or deemed paid, the pledge in favor of the

Bonds (See “THE BONDS BEING OFFERED, Security and Source of Payment”, herein) shall be

discharged and satisfied. A Bond shall be deemed paid when there shall have been deposited in trust with

the Trustee, as escrow agent under an escrow deposit agreement requiring the escrow agent to apply the

proceeds of the deposit to pay the principal of and interest on the Bonds as due at maturity or upon

redemption prior to maturity, moneys or Government Obligations sufficient to pay when due the principal

of, interest on, and trustee’s fees associated with the Bond. If the principal of the Bond is to become due

by redemption prior to maturity, notice of such redemption must have been duly given or provided for.

“Government Obligations” shall mean direct or fully guaranteed obligations of the United States of

America, noncallable, maturing on or prior to the maturity or redemption date of the Bond. In determining

the sufficiency of a deposit there shall be considered the principal amount of such Government

Obligations and interest to be earned thereon until their maturity.

Defaults and Remedies. The Trustee shall immediately notify the City of each default in the payment of

principal of or interest on any Bond and of any other default under the Authorizing Ordinance or the

Indenture of which the Trustee has knowledge. Any default in the payment of the principal of or interest

on any Bond, and any default in the performance of any other covenant in the Authorizing Ordinance or

the Indenture which continues for sixty (60) days after written notice thereof is given to the City by the

Trustee, shall constitute an event of default.

None of the owners of the Bonds shall have any right in any manner by their action to affect, disturb, or

prejudice the security of the Authorizing Ordinance or the Indenture, or to enforce any right thereunder

except in the manner provided in the Authorizing Ordinance or the Indenture. All proceedings at law or in

equity shall be instituted, had, and maintained in the manner provided in the Authorizing Ordinance or the

Indenture and for the benefit of all owners of outstanding Bonds. Any individual rights of action are

restricted by the Authorizing Ordinance or the Indenture to the rights and remedies therein provided.

Nothing shall, however, affect or impair the right of a Holder to enforce the payment of the principal of

and interest on any Bond at and after maturity thereof.

No delay or omission of any Holder of a Bond to exercise any right or power accrued upon any default

shall impair any such right or power or be construed to be a waiver of any such default or acquiescence

therein, and every power and remedy given to the Holders of the Bonds may be exercised from time to

time as often as may be deemed expedient.

The Holders of not less than fifty percent (50%) in principal amount of the Bonds then outstanding shall

have the right, during the continuance of an event of default, to direct the time, method, and place of

conducting any proceedings for any remedy of the Holders, and may waive any default which shall have

been remedied before the entry of final judgment or decree in any suit, action, or proceeding or before the

completion of the enforcement of any other remedy. No such waiver shall extend to or affect any other

existing or subsequent default or defaults or impair any rights or remedies consequent thereon.

Additional Bonds. No additional bonds, other than the remaining unissued portion of the Authorized

Amount and bonds to refund the outstanding Bonds, may be issued under the Indenture.

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BOND INSURANCE

Bond Insurance Policy.

Concurrently with the issuance of the Bonds, Build America Mutual Assurance Company (“BAM”) will

issue its Municipal Bond Insurance Policy for the Bonds (the “Policy”). The Policy guarantees the

scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the

Policy included as APPENDIX D to this Official Statement.

The Policy is not covered by any insurance security or guaranty fund established under New York,

California, Connecticut or Florida insurance law.

Build America Mutual Assurance Company.

BAM is a New York domiciled mutual insurance corporation. BAM provides credit enhancement

products solely to issuers in the U.S. public finance markets. BAM will only insure obligations of states,

political subdivisions, integral parts of states or political subdivisions or entities otherwise eligible for the

exclusion of income under section 115 of the U.S. Internal Revenue Code of 1986, as amended. No

member of BAM is liable for the obligations of BAM.

The address of the principal executive offices of BAM is: 200 Liberty Street, 27th Floor, New York, New

York 10281, its telephone number is: 212-235-2500, and its website is located at:

www.buildamerica.com.

BAM is licensed and subject to regulation as a financial guaranty insurance corporation under the laws of

the State of New York and in particular Articles 41 and 69 of the New York Insurance Law.

BAM’s financial strength is rated “AA/Stable” by S&P Global Ratings, a business unit of Standard &

Poor's Financial Services LLC (“S&P”). An explanation of the significance of the rating and current

reports may be obtained from S&P at www.standardandpoors.com. The rating of BAM should be

evaluated independently. The rating reflects the S&P’s current assessment of the creditworthiness of

BAM and its ability to pay claims on its policies of insurance. The above rating is not a recommendation

to buy, sell or hold the Bonds, and such rating is subject to revision or withdrawal at any time by S&P,

including withdrawal initiated at the request of BAM in its sole discretion. Any downward revision or

withdrawal of the above rating may have an adverse effect on the market price of the Bonds. BAM only

guarantees scheduled principal and scheduled interest payments payable by the issuer of the Bonds on the

date(s) when such amounts were initially scheduled to become due and payable (subject to and in

accordance with the terms of the Policy), and BAM does not guarantee the market price or liquidity of the

Bonds, nor does it guarantee that the rating on the Bonds will not be revised or withdrawn.

Capitalization of BAM

BAM’s total admitted assets, total liabilities, and total capital and surplus, as of December 31, 2016 and

as prepared in accordance with statutory accounting practices prescribed or permitted by the New York

State Department of Financial Services were $496.7 million, $65.2 million and $431.5 million,

respectively.

BAM is party to a first loss reinsurance treaty that provides first loss protection up to a maximum of 15%

of the par amount outstanding for each policy issued by BAM, subject to certain limitations and

restrictions.

http://www.standardandpoors.com/

9

BAM’s most recent Statutory Annual Statement, which has been filed with the New York State Insurance

Department and posted on BAM’s website at www.buildamerica.com, is incorporated herein by reference

and may be obtained, without charge, upon request to BAM at its address provided above (Attention:

Finance Department). Future financial statements will similarly be made available when published.

BAM makes no representation regarding the Bonds or the advisability of investing in the Bonds. In

addition, BAM has not independently verified, makes no representation regarding, and does not accept

any responsibility for the accuracy or completeness of this Official Statement or any information or

disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the

information regarding BAM, supplied by BAM and presented under the heading “BOND INSURANCE”.

Additional Information Available from BAM

Credit Insights Videos. For certain BAM-insured issues, BAM produces and posts a brief Credit Insights

video that provides a discussion of the obligor and some of the key factors BAM’s analysts and credit

committee considered when approving the credit for insurance. The Credit Insights videos are easily

accessible on BAM's website at buildamerica.com/creditinsights/. (The preceding website address is

provided for convenience of reference only. Information available at such address is not incorporated

herein by reference.)

Credit Profiles. Prior to the pricing of bonds that BAM has been selected to insure, BAM may prepare a

pre-sale Credit Profile for those bonds. These pre-sale Credit Profiles provide information about the

sector designation (e.g. general obligation, sales tax); a preliminary summary of financial information and

key ratios; and demographic and economic data relevant to the obligor, if available. Subsequent to

closing, for any offering that includes bonds insured by BAM, any pre-sale Credit Profile will be updated

and superseded by a final Credit Profile to include information about the gross par insured by CUSIP,

maturity and coupon. BAM pre-sale and final Credit Profiles are easily accessible on BAM's website at

buildamerica.com/obligor/. BAM will produce a Credit Profile for all bonds insured by BAM, whether or

not a pre-sale Credit Profile has been prepared for such bonds. (The preceding website address is

provided for convenience of reference only. Information available at such address is not incorporated

herein by reference.)

Disclaimers. The Credit Profiles and the Credit Insights videos and the information contained therein are

not recommendations to purchase, hold or sell securities or to make any investment decisions. Credit-

related and other analyses and statements in the Credit Profiles and the Credit Insights videos are

statements of opinion as of the date expressed, and BAM assumes no responsibility to update the content

of such material. The Credit Profiles and Credit Insight videos are prepared by BAM; they have not been

reviewed or approved by the issuer of or the underwriter for the Bonds, and the issuer and underwriter

assume no responsibility for their content.

BAM receives compensation (an insurance premium) for the insurance that it is providing with respect to

the Bonds. Neither BAM nor any affiliate of BAM has purchased, or committed to purchase, any of the

Bonds, whether at the initial offering or otherwise.

BOOK-ENTRY ONLY SYSTEM

Book-Entry Only System. The Depository Trust Company (“DTC”), New York, New York, will act as

securities depository for the Bonds. The Bonds will each be issued as fully-registered securities registered

in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an

authorized representative of DTC. One fully-registered Bond certificate will be issued for each maturity,

each in the aggregate principal amount of the maturity, and will be deposited with DTC.

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DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the

New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a

member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York

Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A

of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million

issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market

instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC.

DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities

transactions in deposited securities, through electronic computerized book-entry transfers and pledges

between Direct Participants’ accounts. This eliminates the need for physical movement of securities

certificates. Direct Participants include both U.S. and non-non-U.S. securities brokers and dealers, banks,

trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned

subsidiary of The Depository Trust & Closing Corporation (“DTCC”). DTCC is the holding company for

DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are

registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the

DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers,

banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship

with a Direct Participant, either directly or indirectly (“Indirect Participants”, together with Direct

Participants, the “Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable

to its Participants are on file with the Securities and Exchange Commission. More information about DTC

can be found at www.dtcc.com.

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will

receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each

Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners

are, however, expected to receive written confirmations providing details of the transaction, as well as

periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial

Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished

by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.

Beneficial Owners will not receive certificates representing their ownership interest in Bonds, except in

the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in

the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an

authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of

Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no

knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the

Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial

Owners. Direct and Indirect Participants will remain responsible for keeping account of their holdings on

behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to

Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be

governed by arrangements among them, subject to any statutory or regulatory requirements as may be in

effect from time to time.

Redemption notices will be sent to DTC. If less than all of the Bonds within a maturity are being

redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in

such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the

Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its

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usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The

Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose

accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, principal, interest, and premium, if any, payments on the Bonds will be made to

Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's

practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail

information from the City or Trustee, on the payable date in accordance with their respective holdings

shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing

instructions and customary practices, as is the case with securities held for the accounts of customers in

bearer form or registered in “street name,” and will be the responsibility of such Participant and not of

DTC, the Trustee, or the City, subject to any statutory or regulatory requirements as may be in effect from

time to time. Payment of redemption proceeds, principal, interest, and premium, if any, payments to Cede

& Co. (or such other nominee as may be requested by an authorized representative of DTC) is the

responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the

responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the

responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Bonds at any time

by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a

successor depository is not obtained, Bond certificates are required to be printed and delivered. The City

may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor

securities depository). In that event, Bond certificates will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from

sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof.

So long as the Bonds are in book-entry only form, Cede & Co., as nominee for DTC, will be treated

as the sole owner of the Bonds for all purposes under the Authorizing Ordinance, including receipt

of all principal of and interest on the Bonds, receipt of notices, voting, and requesting or directing

the Trustee to take or not to take, or consenting to, certain actions under the Authorizing

Ordinance. The City and the Trustee have no responsibility or obligation to the Participants or the

Beneficial Owners with respect to (a) the accuracy of any records maintained by DTC or any

Participant, (b) the payment by any Participant of any amount due to any Beneficial Owner in

respect of the principal of and interest on the Bonds, (c) the delivery or timeliness of delivery by any

Participant of any notice to any Beneficial Owner which is required or permitted under the terms

of the Authorizing Ordinance to be given to owners of Bonds, or (d) other action taken by DTC or

Cede & Co. as owner of the Bonds.

The information above concerning DTC and DTC ‘s book-entry only system has been obtained from

sources that the City believes to be reliable, but is not guaranteed as to accuracy or completeness by and

is not to be construed as a representation by the City, the Trustee, or the Underwriter. The City, the

Trustee, and the Underwriter make no assurances that DTC, Direct Participants, Indirect Participants, or

other nominees of the Beneficial Owners will act in accordance with the procedures described above or

in a timely manner.

DESCRIPTION OF THE IMPROVEMENTS

Proceeds from the Bonds will be used to construct a new 35,000 square foot library branch in downtown

Pine Bluff. The new branch will serve as the main branch of the Pine Bluff – Jefferson County Library

System. In addition, the proceeds from the Bonds will be used to construct an addition of approximately

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2,000 square feet to the existing Pine Bluff branch located in the Watson Chapel neighborhood of the

City.

DESCRIPTION OF PINE BLUFF – JEFFERSON COUNTY LIBRARY SYSTEM

General. In 1979, the Pine Bluff Public Library's Board of Trustees and the Trustees of the Jefferson

County library agreed to a merger of the libraries in Pine Bluff, White Hall, Redfield, Altheimer, and

Watson Chapel into one library system. The new system adopted the name, Pine Bluff – Jefferson County

Library System (the “System”).

The System, headquartered in Pine Bluff, serves a local population of over 70,000 citizens. Its five

libraries are located in the Cities of Altheimer, Pine Bluff (two branches), Redfield, and White Hall. The

System contains over 100,000 titles. In 2016, approximately 143,195 people visited the System’s

branches. The System serves an additional state-wide population of nearly one million users through the

Gateway Project. The Gateway Project is an agreement to provide public library service to residents in

Central Arkansas without charging a non-resident fee. Gateway cardholders have borrowing at

approximately 50 libraries in 27 counties.

Organization. The System was created by an Interlocal Agreement of the City of Pine Bluff and

Jefferson County. The participating governmental bodies have ceded their library authority to the Board.

The Board of Trustees is composed of six (6) residents of the City of Pine Bluff (appointed by the Pine

Bluff City Council) and five (5) Jefferson County residents (appointed by the Jefferson County Quorum

Court). The present members of the Board of Trustees are as follows:

Pine Bluff Appointees Term Occupation

Stephen Bronskill ends 12/16/2018 City of Pine Bluff

Edward J. Fontenette ends 01/31/2018 University of Arkansas Pine Bluff

LaNelle Roberts, Chair ends 10/31/2017 Retired (Pine Bluff School District)

Ann Talbot ends 12/05/2020 Retired

Rev. Robert Thompson ends 05/31/2017 Instructor (SEARK College), Pastor

Alisa Smith ends 10/31/2017 Pine Bluff School District

Jefferson County Appointees Term Occupation

Linda Johnson Banks ends 11/18/2018 Retired (White Hall School District)

Dr. Josephine Bell ends 11/18/2020 Retired (University of Ark. Pine Bluff)

Tommy Brown, Vice Chair ends 11/18/2018 Attorney

Dr. Michael Gunter ends 11/18/2019 Retired (SEARK College)

Anna Marie Jacks ends 11/18/2017 Retired (Pine Bluff School District)

Operation – Administration. The Board of Trustees makes policies for the System and appoints the

Library Director, who serves at the pleasure of the Board and is responsible for administration of policies

and operational control of the Library. The office of the Library Director is located at the Main Library.

The Library Director is assisted by the bookkeeper and the operations manager. The other four branches

are managed by a branch manager, who oversees all aspects of the operations of each individual branch.

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The executive officers of the System are:

Library Director

Bookkeeper

Operations Manager

Branch Manager for each individual branch in the System

The System currently employs approximately twenty-six (26) individuals at its five branches, including

the main branch in Pine Bluff, Arkansas.

Funding. Libraries in Arkansas are funded by the ad valorem (property) tax. Approximately eighty-eight

percent (88%) of funding for the System comes from taxes derived from the City and Jefferson County.

The amount of tax funds which may be dedicated to libraries, and the maximum millage limit which may

be assessed, is mandated by the Constitution of the State of Arkansas. The State Constitution also

mandates that these funds may not be utilized for any purpose other than the support of public libraries.

Currently, the maximum millage for public library funding is five mills (.005) for operational expenses,

and three mills (.003) for capital expenditure projects. Individual communities vote the amount of

property tax for support of their local libraries. Within constitutional limits, the tax millage amount may

vary from one community to another.

The System’s libraries are funded by popular mandate, with tax funds disbursed directly to the library

system by the counties in which they exist. For this reason, and due to its public body status, the System

is an independent public agency. It is not a department or agency of the cities or counties in which it

operates libraries, however, for purposes of the City of Pine Bluff’s Comprehensive Annual Financial

Report, the System is included as a component unit of the City. The participating entities do not allocate

funds for library operations, nor do they have authority over the operation of the library. However,

because taxes are voted and paid by citizens of the local communities, and board members are appointed

by participating county and city governmental bodies, the System maintains close working relationships

with the governing bodies of the communities and counties in which the libraries operate.

[Remainder of page intentionally left blank]

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The System audited statement of revenue, expenses, and changes in fund equity for 2015 are as follows:

Statement of Revenue, Expenses and Changes in Fund Equity

Revenues:

City Millage $601,243

County Millage 633,881

State Aid 121,056

Grants 6,110

Fines 10,972

Interests Income 10,871

Gifts & Memorials 550

Miscellaneous Income 20,393

Total Revenues $1,405,076

Expenses $1,545,745

Net Loss ($140,669)

Fund Equity Beginning of Year $3,700,071

Fund Equity End of Year $3,559,402

Source: Financial Statements and Accompanying Information and Independent Auditors’ Report for Pine Bluff and Jefferson

County Library System, December 31, 2015

Operations Budget. Following is a summary of Financial Information for the System’s operations for

the years ending in 2012-2016.

2012 2013 2014 2015 2016

Income

Tax Collections $1,125,000 $1,125,000 $1,145,000 $1,165,000 $1,175,000

State Aid 149,00 143,000 143,000 143,000 107,323

Bond Funds -- -- -- -- --

Other Income 148,000 58,000 42,250 29,000 29,000

Interest/Dividends 20,750 15,750 21,500 15,750 15,750

Miscellaneous 8,000 8,000 8,000 8,000 8,000

Total Income $1,450,750 $1,349,750 $1,359,750 $1,360,750 $1,335,073

Expenses

Salaries/Benefits $908,000 $863,500 $852,500 $854,500 $854,500

Library Materials 224,000 191,500 213,500 212,500 223,500

Operations 1,435,000 285,000 288,000 288,000 257,073

Capital 50,000 41,500 40,500 41,500 41,500

-- -- 40,000 --

-- -- -- 5,000

-- -- -- 15,000

-- 225,000 -- --

Total Expenses $908,000 $863,500 $852,500 $854,500 $854,500

Source: Pine Bluff Jefferson County Library System, Jeannie West, Bookkeeper

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DESCRIPTION OF THE CITY OF PINE BLUFF

General. The City is organized under the laws of the State of Arkansas as a city of the first class. It is

one of the ten largest cities in Arkansas, and was chartered in 1839. The City is located in the southeast

part of the State.

The City is the industrial, entertainment, and recreational leader for Southeast Arkansas. It is

approximately 50 miles southeast of Little Rock, the State Capital, and is the county seat of Jefferson

County, Arkansas. Within a radius of 500 miles from the center of the City are located 24 metropolitan

areas and substantial portions of 17 states containing over a third of the nation’s population. Major cities

within this radius include: St. Louis, 389 miles northeast; Kansas City, 465 miles northwest; New

Orleans, 397 miles south; Oklahoma City, 381 miles northwest; Dallas, 329 miles southwest; and

Memphis, 152 miles northeast.

The City is served by U.S. Interstates 530; U.S. Highways 65, 425 and 79. Pine Bluff Regional Airport

Grider Field is a general Aviation Airport is owned by the City of Pine Bluff and operated by the Pine

Bluff Aviation Commission.

Governmental Organization. The City operates under the Council form of municipal government. It

has an eight (8) member City Council, with all city council members elected by wards. The Mayor’s

position is a citywide elected position. All city council members and the Mayor serve four-year terms.

The current members of the City of Pine Bluff City Council are as follows:

Name Term Expires Principal Occupation

Shirley Washington, Mayor December 31, 2020 Mayor, City of Pine Bluff

Lloyd Holcomb December 31, 2020 Owner, Funeral Home

Thelma Walker December 31, 2018 Owner, Nursing Home

Glen Brown, Jr. December 31, 2019 Chiropractor

Win Trafford December 31, 2020 Owner, Real Estate Agency

Bill Brumett December 31, 2018 Owner, Business and Tax Service

Donald Hatchett December 31, 2020 Retired, Entergy Arkansas

Steven Mays December 31, 2019 Alderman

Bruce Lockett December 31, 2020

Grant Writer for Boys, Girls, Adults

Community Development Center in

Marvell, AR

Source: www.cityofpinebluff.com

The principal executive officers of the City include:

City Clerk Loretta Whitfield

Director of Finance Steve Miller

City Attorney Althea Hadden - Scott

The City Clerk and City Attorney are elected positions. The Director of Finance is appointed by the City

Council.

The City provides a broad range of municipal services including: Police, Fire, Parks and Recreation,

Finance, Human Resources, City Clerk, Inspection and Zoning, Street Department, Animal Control, Pine

Bluff Transit, Quality of Life Division, and Information Technology. Boards and commissions have

primary responsibility for the operation of the Wastewater Utility and Port of Pine Bluff.

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Litigation. There is no material litigation pending or threatened against the City.

Following are selected indices and financial information for the City of Pine Bluff:

Population. The estimated population for the City and County are listed below:

Year Jefferson County Pine Bluff

2006 -- 55,0341

2007 -- 55,0341

2008 -- 55,0341

2009 -- 55,0341

2010 77,435 49,0832

2011 75,974 48,0683

2012 74,723 47,0353

2013 73,084 46,0943

2014 72,297 46,0943

2015 71,565 45,3323

1 Source: 2000 Census

2 Source: 2000 Census 3 Source: City’s Estimate

Economic Data. For comparative purposes the economic data of the Pine Bluff – Jefferson County

Metropolitan Statistical Area (the "MSA") of which the City is a part, is shown along with economic data

for Jefferson County, the State of Arkansas, and, in certain instances, the United States.

Income. Per capita income figures for the Pine Bluff MSA and Jefferson County are as follows:

Per Capita Income

Year Jefferson County Pine Bluff MSA

2006 $25,519 $24,688

2007 $26,417 $25,783

2008 $27,249 $26,471

2009 $28,352 $27,260

2010 $28,718 $27,638

2011 $30,067 $28,689

2012 $31,059 $29,876

2013 $31,285 $30,561

2014 $31,609 $30,975

2015 $32,189 $31,377

Source: University of Arkansas at Little Rock, Institute for Economic Advancement citing the Bureau of Economic Analysis for

Per Capita Personal Income.

17

Employment. The civilian labor force in the Pine Bluff MSA, the State of Arkansas, and the United

States and its employment has been as follows:

Civilian Labor Force

(in thousands)

Number Employed

(in thousands)

Year

Pine Bluff

MSA*

Arkansas

United

States

Pine Bluff

MSA

Arkansas

United States

2006 45,898 1,365 151,428 42,370 1,294 144,427

2007 44,802 1,369 153,124 41,506 1,296 146,047

2008 44,484 1,375 154,287 41,129 1,300 145,362

2009 44,660 1,358 154,142 40,337 1,252 139,877

2010 42,562 1,353 153,889 38,259 1,242 139,064

2011 42,393 1,362 153,617 37,867 1,249 139,869

2012 40,793 1,342 154,975 36,868 1,240 142,469

2013 38,564 1,307 155,389 34,725 1,212 143,929

2014 36,834 1,304 155,922 33,709 1,224 146,305

2015 36,709 1,330 157,130 34,137 1,260 146,834

Source: University of Arkansas at Little Rock, Institute for Economic Advancement citing the Bureau of Labor Statistics

*Pine Bluff MSA is not stated in thousands; this represents the true number of the civilian labor force and number employed.

The annual average unemployment rates for the Pine Bluff MSA, the State, and the United States for

2006 – 2015 are as follows:

Unemployment Rate %

Year

Pine Bluff MSA

Arkansas

United

States

2006 7.7 5.2 4.6

2007 7.4 5.3 4.6

2008 7.5 5.5 5.8

2009 9.7 7.8 9.3

2010 10.1 8.2 9.6

2011 10.7 8.3 8.9

2012 9.6 7.6 8.1

2013 10.0 7.3 7.4

2014 8.5 6.1 6.2

2015 7.0 5.2 5.3

Source: University of Arkansas at Little Rock, Institute for Economic Advancement citing the Bureau of Labor Statistics


18

Commercial and Residential Construction. The following table shows new construction in the City, as

reflected by building permits issued, at year end:

Commercial Construction

Residential Construction

Year

Number of

Permits

Value

Number of

Permits

Value

Total Permits

Issued

2011 8 $7,786,450.01 7 $650,300.00 15

2012 5 3,626,000.00 17 3,942,000.00 22

2013 5 12,227,209.89 73 6,538,618.78 78

2014 9 9,001,290.00 14 2,520,000.00 23

2015 9 9,953,217.00 6 831,100.00 15

2016 21 6,082,517.00 11 1,185,835.00 32

Source: City of Pine Bluff, Inspection and Zoning Department

Financial Institution Deposits. The total deposits of banks with principal offices within Jefferson

County as of the end of each year have been as follows:

Year Total Bank Deposits1

2006 $902,187

2007 873,989

2008 974,889

2009 969,817

2010 1,094,758

2011 1,142,063

2012 1,162,387

2013 1,125,794

2014 1,075,904

2015 1,230,486

Source: University of Arkansas at Little Rock, Institute for Economic Advancement 1 Number is expressed in the thousands (,000).


19

Major Employers. The City’s economy is comprised of a diverse mix of financial, commercial,

industrial, government, health, and educational sectors. This diversity helps maintain a relatively stable

employment environment in the City. The principal industries, commercial entities, and other major

employers within the boundaries of the City and Jefferson County as of December 31, 2015 were as

follows:

Employer

Product/Service

Number of

Employees

1. Jefferson Regional Medical Center Medical Services 1,575

2. Tyson Foods, Inc. Poultry Processing 1,500

3. Arkansas Department of Corrections State Prison System 1,452

4. Evergreen Packaging Newsprint 1,040

5. Pine Bluff School District Public School 860

6. Pine Bluff Arsenal Ammunition/Manufacturing 710

7. University of Arkansas-Pine Bluff State University 654

8. Union Pacific Railroad Transportation (Railroad) 612

9. Central Moloney, Inc. Electric Products 550

10. Wal-Mart Supercenter Consumer Retail Sales 525 Source: www.JeffersonCountyAlliance.com

School Enrollment. The City is served by three school districts: Pine Bluff School District, Dollarway

School District, and Watson Chapel School District. Total public school enrollment has been as follows:

School Year Enrollment

2012 9,069

2013 8,743

2014 8,514

2015 8,316

2016 7,813 Source: Arkansas Department of Education

Higher Education. The City offers educational institutions with instruction in undergraduate, graduate

and professional fields. The following is a list of colleges and universities located within the Pine Bluff

MSA (or with relatively short commutes) with approximate on-campus enrollments for the 2016 fall

academic semester:

University of Arkansas at Pine Bluff 2,821

Southeast Arkansas College 1,391

Source: University of Arkansas Pine Bluff and Southeast Arkansas College

Medical Facilities. Pine Bluff is served by Jefferson Regional Medical Center with a 471 bed capacity.

Source: Arkansas Department of Health

http://www.jeffersoncountyalliance.com/

20

City Employees. In 2016, the City had 419 employees with a total employee fund in the amount of

$15,633,481. This includes 185 employees in the police department, 102 employees in police

administration, and 92 employees in fire prevention. The City also employees 13 elected officials,

including the Mayor, City Council, District Court Judge, City Clerk, and City Attorney.

As of December 31, 2016, the City employment (unaudited) was as follows:

City Government Total

General Fund Employees

Executive 16

District Court Div. II 10

Building Maintenance 3

District Court Div. I 0

Cemetery 3

Fire Administration 5

Fire Operations 92

Fire Prevention 3

Fire Training 2

Fire 102

Police Administration 13

Police Auto 2

Police Detective 31

Police Vice 15

Police Patrol 80

Police Service 31

Police Quality of Life 7

Animal Control 6

Police 185

Inspection 5

Human Resource 3

Animal Control 0

City Clerk 3

Finance 4

City Collector 4

City Attorney 7

Information Technology 3

Weed & Seed __0

Total General Fund Employees 348

Total Street Fund Employees 46

Total Transit Fund Employees 25

Total Employees 419

Source: City of Pine Bluff 2017 City Budget

In addition, the City bargains with three organized units: the American Federal, State, County and

Municipal Employees (AFSME); International Association of Firefighters (IAFF) and the Fraternal Order

of Police (FOP). These organizations represent fifty-nine percent (59%) of the full-time City government

employees. None of the employees of the city’s boards and commissions are organized.

21

City Government Total Full Time

Seasonal and

Part Time

IAFF - Sworn Uniform 102 102 0

FOP - Sworn Uniform 146 136 11

Subtotal 248 238 11

Commissions Total Full Time

Seasonal and

Part Time

PB Grider Field Airport 4 3 1

Advertising and Promotion 18 17 1

Arkansas Arts Center 7 5 2

PB - Jefferson County Library System 24 17 7

Subtotal 53 42 11

Total 301 280 22

Source: City of Pine Bluff

Port of Pine Bluff. The development of the Arkansas River through the McClellan-Kerr Arkansas River

Navigation System has resulted in a 448-mile navigation channel with 17 locks and dams from the

Mississippi River northwest to a point 15 miles east of Tulsa, Oklahoma. The ability to provide low-cost,

bulk transportation has created opportunities for industrial development in the area.


22

DEBT STRUCTURE

The information set forth under the heading “DEBT STRUCTURE” was obtained from the City of

Pine Bluff and is believed to be accurate.

Legal Debt Margin Calculation for 2015

Assessed Value $363,841,0001

Legal debt limit for general obligation2:

Less: Current bond indebtedness3

Legal debt limit margin for general obligation:

$72,768,200

$13,355,000

$59,413,200

Legal debt limit for short-term financing4:

Less: Short-term financing obligations

Legal debt margin for short-term financing:

$19,834,844

$(596,730)

$19,238,114

Source: City of Pine Bluff, Arkansas Regulatory Basis Financial Statements and Other Reports, December 31, 2015

1 The assessed value is determined by the calculation that the legal debt limit for property tax secured bonded debt in the amount

of $72,768,200 is 20% of the legal debt limit. 2 The City is subject to a constitutional limitation, found in Amendment 62 of the Arkansas Constitution, for bonded indebtedness

equal to 20% of the total assessed value for tax purposes of real and personal property as determined by the last tax assessment. 3 Current bond indebtedness only includes proposed indebtedness for Series 2017; it does not include Capital Improvement

Refunding and Improvement Revenue Series 2014A and 2014B, Sales and Use Tax Improvement Bonds, Series 2011 and

Series 2012, or Capital Improvement Bonds Series 2016 4 The City is subject to a constitutional limitation, found in Amendment 62 of the Arkansas Constitution, for short-term financing

obligations equal to 5% of the assessed value of taxable property within the City as determined by the last tax assessment


23

General Obligation Debt Service. The scheduled consolidated annual debt service requirements for the

general obligation debt (long term and short term combined) of the City is as follows as of December 31,

2016:

Debt Service Requirements to Maturity1

Fiscal Year Ending

December 31

Bonds Notes Total

2016 $1,585,475 $218,434 $1,803,909

2017 $1,591,955 $165,684 $1,757,639

2018 $1,586,000 $170,337 $1,756,337

2019 $1,508,362 $170,337 $1,577,804

2020 $1,500,330 $69,442 $1,500,300

2021 - 2025 $6,847,229 -- $6,847,229

2026 - 2030 $5,707,174 -- $5,707,174

2031 - 2035 $3,910,524 -- $3,910,524

2036 - 2039 $986,812 -- $986,812

Total Obligations $25,223,861 $623,897 $25,847,758

Less Interest $7,093,861 $27,167 $7,121,028

Total Principal $18,130,00 $596,730 $18,726,730


1 Prior to the issuance of the Series 2017 Bonds

Ratio of Annual Debt Service Payments for General Obligation Bonded Debt to Total General

Governmental Expenditures:

Year

Principal

Interest and

Fiscal Charges

Total Debt

Service*1

Total General

Expenditures

Ratio of Debt

Service

to Total General

Expenditures

2006 -- -- -- $23,932,1142

--

2007 $99,479 $ 22,965 $ 122,444 24,813,0012

.4%

2008 124,450 22,184 146,934

26,145,060 .5%

2009 184,589 28,944 213,533 27,743,825 .7%

2010 266,926 34,105 301,031 26,871,078 1.1%

2011 278,527 17,644 296,171 28,605,810 1.0%

2012

186,180 11,631 197,811 29,270,290 .6%

2013 208,309 8,305 216,614 29,092,205 .7%

2014 82,124 4,269 86,393 28,511,861 .3%

2015 157,551 2,983 160,534 28,926,631 .5%

Source: City of Pine Bluff, Arkansas Regulatory Basis Financial Statements and Other Reports for 2015, 2014, 2013, 2012, 2011,

2010, 2009, 2008, 2007, 2006 1 Total Debt Service does not include debt for lease principal and interest 2 “General Expenditures” are referred to as “General Disbursements” in City of Pine Bluff, Arkansas Regulatory Basis Financial

Statements and Other Reports, December 31, 2006, and City of Pine Bluff, Arkansas Regulatory Basis Financial Statements and

Other Reports, December 31, 2006

*Includes debt service from both long term and short term general obligation bonds and notes

24

Population Trend and Ratio of General Net Obligation Bonded Debt to Assessed Value and Net Bonded

Debt Per Capita:

Year

Population

Assessed Value4

Net Bonded

Debt5

Ratio of

Bonded Debt

to Assessed

Value

Net Bonded

Debt per

Capita

2006 55,0341

$375,452,300 -- -- --

2007 55,0341 371,846,299 $122,444 3.3% $2.22

2008 55,0341 386,549,537 146,934

3.8% 2.66

2009 55,0341 384,146,747 213,533 5.5% 3.88

2010 49,0832

387,189,796 301,031 7.7% 6.13

2011 48,0683 392,566,998 296,171 7.5% 6.16

2012 47,0353 398,126,023 197,811 4.9% 4.20

2013 46,0943 388,749,032 216,614 5.5% 4.69

2014 46,0943 396,696,878 86,393 2.2% 1.87

2015 45,3323 396,272,747 160,534 4.0% 3.54

20166

-- 404,388,615 -- -- --

1 Source: 2000 Census 2 Source: 2010 Census 3 City’s Estimate 4 Source: Jefferson County Assessor 5 General obligation bonds only exclusive of bonds and notes secured by general fund of the City and franchise fees 6 The statistics for population and bonded debt in 2016 are not yet available per the City’s Regulatory Basis Financial Statements

and Other Reports, December 31, 2015; therefore, the calculations for net bonded to assessed value and net bonded debt per

capita could not be determined.

Defaults. No general obligation or revenue securities of the City have been in default as to principal or

interest payments or in any other material respect in the past thirty (30) years.

Revenue Bonds. The City and its Commissions have issued revenue bonds, which are not general

obligations of the City but which are repayable solely from the specific revenues of the City pledged to

pay debt service on these bonds. The amount of these bonds outstanding as of December 31, 2016, was as

follows:

Capital Improvement Refunding and Improvement Revenue Series 2014A $4,930,000.00

Capital Improvement Refunding and Improvement Revenue Series 2014B $1,085,000.00

Capital Improvement Bonds Series 2016 $3,080,000.00

Total $9,095,000.00


FINANCIAL INFORMATION

Upon request, the City will provide annual audited financial statements and other pertinent credit

information relevant to the City’s Bonds, including the City’s Comprehensive Annual Financial Report,

and will provide copies to one or more major information providers in the state and local government

securities market. The City’s audited Comprehensive Annual Financial Report as of December 31, 2015

is attached hereto as Appendix “C.” Appropriate credit information necessary for maintaining the rating

on the Bonds will be provided by the City to the rating agency rating the Bonds.

The City Budget. The three principal sources of revenue for the City’s operating budget are sales and

use taxes, utility franchise taxes, and property taxes. The County sales and use tax is levied by Jefferson

County and distributed to the governmental entities on a per capita basis. Tax proceeds have increased

steadily since the tax was approved by the voters in 2011.

25

The following tables summarize the City’s revenues, expenditures, and assets for governmental operating

funds for the years indicated:

Statement of Revenues. The table below is the statement of revenues, expenditures, and changes in fund

balances, budget and actual, for both the General Fund and Street Fund for year ending December 31,

2015.

The General Fund is used to account for and report all financial resources not accounted for and reported

in another fund. The General Fund heading as it appears in the financial statements includes the following

accounts: General, Sewer Improvement District Loan, Capital Projects, Public Safety Facility Building,

Parks and Recreation Commission, Police Department Special Projects, Police Athletic League, and

Summer Academic and Culture Enrichment Program.

The Street Fund (Special Revenue Fund) is used to account for and report the proceeds of specific

revenue sources that are restricted or committed to expenditure for specified purposes other than debt

service or capital projects. The Street Fund accounts for and reports the proceeds of state highway

turnback and property taxes that are restricted or committed for maintaining and constructing highways

and streets.

REVENUES

General

Street

Budget Actual

Variance

Favorable

(Unfavorable) Budget Actual

Variance

Favorable

(Unfavorable)

REVENUES

State aid $1,887,184 $1,856,875 $(30,309) $2,328,161 $3,240,854 $ 912,693

Federal aid 1,500 (1,500)

Property taxes 2,272,814 2,866,833 594,019 588,000 563,378 (24,622)

Franchise fees 3,166,858 2,788,090 (378,768)

Sales taxes 17,358,530 16,166,747 (1,191,783) 897,919 (897,919)

Fines, forfeitures, and costs

681,671 590,389 (91,282)

Interest 48,740 46,578 (2,162) 621 2,516 1,895

Local permits and fees 1,232,676 1,307,533 74,857

Sanitation fees 2,758,390 2,772,885 14,495

Parks and recreation fees 188,230 188,230

Other 480,097 329,825 (150,272) 123,863 70,901 (52,962)

TOTAL REVENUES $29,888,460 $28,913,985 $(974,475) $3,938,564 $3,877,649 $(60,915)

EXPENDITURES

Current:

General government 4,709,192 4,744,548 (35,356)

Law enforcement 12,186,156 11,176,517 1,009,639

Highways and streets 171,542 126,823 44,719 5,017,159 3,702,758 1,314,401

Public safety 7,882,672 7,651,302 231,370

Sanitation 2,676,298 2,660,472 15,826

Health 54,292 54,292

Recreation and culture 1,949,317 1,860,200 89,117

Social services 220,922 341,176 (120,254)

Airport 150,767 150,767

Total Current $30,001,158 $28,766,097 $1,235,061 $5,017,159 $3,702,758 $1,314,401

Debt Service:

Note principal 157,551 (157,551)

Note interest 2,983 (2,983)

TOTAL EXPENDITURES $30,001,158 $28,926,631 $1,074,527 $5,017,159 $3,702,758 $1,314,401

26

Income Statement for General Fund

General 2015 2014 2013 2012 2011

Total Assets $8,348,520 $8,183,923 $8,713,056 $7,534,522 $6,831,167

Total Liabilities 667,859 696,231 508,472 301,655 246,755

Total Fund Balances 7,680,661 7,487,692 8,204,584 7,232,867 6,584,412

Total Revenues 28,913,985 28,053,602 30,084,182 29,653,407 29,074,106

Total Expenditures 28,926,631 28,511,861 29,092,205 29,270,290 28,605,810

Total Other Financing Sources/Uses 205,615 (38,005) 306,427 265,338 354,004

Income Statement for Street Fund

Street 2015 2014 2013 2012 2011

Total Assets $1,023,460 $ 851,718 $ 354,642 $748,675 $1,038,188

Total Liabilities 58,171 61,320 264,909 40,736 14,707

Total Fund Balances 965,289 790,398 89,733 707,939 1,023,481

Total Revenues 3,877,649 4,227,291 3,426,927 3,441,064 3,384,678


Total Other Financing Sources/Uses

Income Statement in the Aggregate



Other Funds 2015 2014 2013 2012 2011

Total Assets $44,730,799 $48,866,715 $50,538,938 $63,169,796 $61,052,939

Total Liabilities 1,078,925 1,019,214 1,346,724 721,220 490,012

Total Fund Balances 43,651,874 47,847,501 49,192,214 62,448,576 60,562,927

Total Revenues 9,684,055 9,478,315 6,748,247 7,862,158 7,561,521


Total Other Financing Sources/Uses 344,386 1,281,322 (6,015,669) 5,599,099 9,655,159

27

Assets. The following table is the schedule of the City’s Capital Assets and income statement for General

Fund and Street Fund for last five years ending in December 31, 2015. These numbers are unaudited.

Schedule of Capital Assets

Land $613,981

Buildings 20,400,540

Infrastructure 18,696,329

Improvements 3,656,006

Heavy Equipment 9,871,423

Vehicles 6,510,319

Equipment 3,669,839

Total $63,418,437


Computation of Dollar Amount of Library Tax Levied. The most recent county-wide reassessment of

taxable property required by the Arkansas Supreme Court was completed in Jefferson County in 2013.

For purposes of Amendment 59, the year in which the reassessment is completed is known as the “Base

Year.” For a general discussion of the reassessment requirement and its effect on assessed value and the

tax rate. See “SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES”, herein.

The Library Tax pledged to the Bonds is levied at the rate of three mills (.003). For purposes of this

computation it has been assumed that revenues from the collection of the Library Tax will remain

constant for so long as any of the Bonds remain outstanding. In connection with this assumption, it is

assumed that Special Tax Collections will equal the decrease in collections resulting from the Homestead

Exemption. See “SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES, Homestead

Exemption”, herein. However, if the assessed valuation of the property in the City increases or decreases

for any reason, the dollar amount of the Library Tax actually levied will increase or decrease

proportionately as will the Special Tax Collections.

Assessed Valuation. The following table contains the assessed valuation of real, personal, and utility

property within the City:

Year

Real Property

Personal

Property

Utility

Property

Total

2006 $231,626,117 $118,074,633 $25,751,550 $375,452,300

2007 232,593,329 114,006,600 25,246,370 371,846,299

2008 242,846,797 119,870,210 23,832,530 386,549,537

2009 250,224,367 108,683,120 25,239,260 384,146,747

2010 254,468,426 108,043,920 24,677,450 387,189,796

2011 256,995,028 109,825,200 25,746,770 392,566,998

2012 257,595,393 114,043,930 26,486,700 398,126,023

2013 240,127,962 119,880,330 28,740,740 388,749,032

2014 243,960,428 119,880,570 32,855,880 396,696,878

2015 244,344,777 118,140,810 33,787,160 396,272,747

2016 245,528,055 123,634,330 35,226,230 404,388,615

Source: Jefferson County Assessor

28

Collection of Taxes. Tax collections of ad valorem taxes levied by the City are shown in the following

table:

Year

Ended

Total Tax

Levy

Collection of

Current Year’s

Taxes During

Current Period

Percentage

of Levy

Collected

Prior Years’

Collections

Total

Collections1

Percentage

of Total

Collections

to Tax Levy

2011 $ 3,219,049 $ 2,434,147 75.61% $ 228,234 $ 3,281,005 96.13%

2012 3,423,883 2,599,275 75.91% 257,447 2,903,407 96.42%

2013 3,343,241 2,561,373 77.61% 263,773 2,871,376 96.83%

2014 3,411,593 2,643,849 77.49% 249,141 2,936,518 96.66%

2015 3,407,945 2,622,877 76.96% 263,773 2,928,442 96.28%

Source: Jefferson County Tax Collector

Note: Property assessments are made, tax rates (millages) are established, and taxes are levied in one year for payment by the

taxpayer and collection by local governments the following year. Data is not available to show the current level by year of

outstanding delinquent taxes.

1 The total collections include Prior Year’s Collections which includes delinquent payments and payment of the Special Tax.


29

Debt Service Schedule. The projected annual principal and interest requirements for the Bonds is

estimated as follows:

DEBT SERVICE SCHEDULE

Date

Principal

Interest

Total Debt

Service

02/01/2018 $185,000.00 $302,255.21 $487,255.21

02/01/2019 285,000.00 411,612.50 696,612.50

02/01/2020 295,000.00 403,062.50 698,062.50

02/01/2021 300,000.00 394,212.50 694,212.50

02/01/2022 310,000.00 385,212.50 695,212.50

02/01/2023 320,000.00 375,912.50 695,912.50

02/01/2024 325,000.00 369,112.50 694,112.50

02/01/2025 335,000.00 361,393.76 696,393.76

02/01/2026 345,000.00 353,018.76 698,018.76

02/01/2027 355,000.00 342,668.76 697,668.76

02/01/2028* 365,000.00 332,906.26 697,906.26

02/01/2029* 380,000.00 319,675.00 699,675.00

02/01/2030* 395,000.00 305,900.00 700,900.00

02/01/2031* 405,000.00 291,581.26 696,581.26

02/01/2032* 425,000.00 276,900.00 701,900.00

02/01/2033* 440,000.00 261,493.76 701,493.76

02/01/2034* 455,000.00 245,543.76 700,543.76

02/01/2035* 470,000.00 229,050.00 699,050.00

02/01/2036** 490,000.00 212,012.50 702,012.50

02/01/2037* 505,000.00 194,250.00 699,250.00

02/01/2038* 520,000.00 179,100.00 699,100.00

02/01/2039* 535,000.00 163,500.00 698,500.00

02/01/2040* 550,000.00 147,450.00 697,450.00

02/01/2041* 570,000.00 130,950.00 700,950.00

02/01/2042* 585,000.00 113,850.00 698,850.00

02/01/2043* 605,000.00 96,300.00 701,300.00

02/01/2044* 625,000.00 78,150.00 703,150.00

02/01/2045* 640,000.00 59,400.00 699,400.00

02/01/2046* 660,000.00 40,200.00 700,200.00

02/01/2047** 680,000.00 20,400.00 700,400.00

Total $13,355,000.00 $7,397,074.03 $20,752,074.03

*Term Bond, subject to mandatory sinking fund redemption.

**Term Bond, final maturity.


30

Coverage. Based on an estimated collection rate of 96%, collection of the Library Tax levied on the

taxable property within the City as supplemented by the Special Tax Collections will provide coverage in

excess of annual principal and interest requirements for the Bonds as shown below. (For information

concerning the historical rate of tax collection see “FINANCIAL INFORMATION, Collection of Taxes”,

herein. See also “SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES, Property Tax

Relief Trust Fund”, herein). The figures set forth below are estimates only, and there can be no assurance

that the collection and the collection rate will equal the estimated amounts set forth hereinbelow.

Estimated Tax Revenue At 100% collection

1 $1,213,165.85

County Treasurer’s Commission at 2% ($24,263.32)

Estimated Available Tax Revenue2

$1,188,902.53

Most recent five years Average Total Collection Rate 96%

Total Revenue for Debt Service3

$1,141,346.43

Maximum Annual Debt Service (Year Ending 2044) $703,150.00

Coverage Ratio 1.62x

1 Includes collections for homestead and delinquent taxes 2 This is calculated subtracting the county treasurer’s commission from estimated tax revenue 3 This is calculated by multiplying the average total collection rate by estimated available tax revenue

Projected Mandatory Redemption. The table under the caption “FINANCIAL INFORMATION, Debt

Service Schedule” does not reflect possible redemptions from Surplus Collections. Surplus Collections

are collections of Library Tax and Special Tax Collections in excess of the amounts needed to pay current

requirements of interest and principal of the Bonds and Trustee’s fees and the interest due on the next

interest payment date for the Bonds. Surplus Collections will be used to redeem the Series 2017 Bonds

commencing on February 1, 2018 and on February 1 annually thereafter. Based on a collection rate of

96%, the Estimated Available Tax Revenue will be approximately $1,188,902.53 per year. If such an

estimate is correct and there is no increase or decrease in such collections or collection rate and scheduled

debt service on the Bonds is as shown at the caption “FINANCIAL INFORMATION, Debt Service

Schedule”, herein, the Bonds would be redeemed prior to maturity as shown below. There can be no

assurance that these estimates will be sufficient to provide for the projected redemptions set forth.

[Reminder of this page intentionally left blank.]

31

Year

Principal Due

Bonds Redeemed

Prior to Maturity

Total

Redemption

2018 $185,000.00 $455,000.00 $640,000.00

2019 285,000.00 465,000.00 750,000.00

2020 295,000.00 485,000.00 780,000.00

2021 300,000.00 500,000.00 800,000.00

2022 310,000.00 515,000.00 825,000.00

2023 320,000.00 530,000.00 850,000.00

2024 325,000.00 550,000.00 875,000.00

2025 335,000.00 560,000.00

895,000.00

2026 345,000.00 580,000.00 925,000.00

2027 355,000.00 595,000.00 950,000.00

2028 365,000.00 620,000.00 985,000.00

2029 380,000.00 630,000.00 1,010,000.00

2030 395,000.00 655,000.00 1,050,000.00

2031 405,000.00 685,000.00

1,090,000.00

2032 425,000.00 505,000.00 930,000.00

Total $5,025,000.00 $8,330,000.00 $13,355,000.00

Overlapping Ad Valorem Taxes. The ad valorem taxing entities in the State of Arkansas are

municipalities, counties, school districts, and community college districts. All taxable property located

within the boundaries of a taxing entity is subject to taxation by that entity. Thus, property within a

municipality is also subject to county ad valorem taxes. Property located within a school district and/or

within a community college district is also subject to taxation by that entity or entities. The ad valorem

tax entities whose boundaries overlap the City and their ad valorem taxing rates are:

Names of Overlapping Entity Mills

Jefferson County General, Hospital, and Roads 9.4

Pine Bluff School District 41.7

Dollarway School District

Watson Chapel School District

40.8

34.1

City of Pine Bluff 8.6

SUMMARY OF ARKANSAS AD VALOREM TAX PROCEDURES

The following is a summary of the principal provisions of the Arkansas Constitution and statutes relating

to the assessment and collection of real and personal property taxes in Arkansas.

Taxable Property. In general, the Arkansas Constitution subjects all real estate property situated in the

State to ad valorem taxation except the following: (1) public property used exclusively for public

purposes; (2) churches used as such; (3) cemeteries used exclusively as such; (4) school buildings and

apparatus; (5) libraries and grounds used exclusively for school purposes; (6) buildings, grounds, and

materials used exclusively for public charity; and (7) items of household furniture and furnishings,

clothing, appliances, and other personal property used within the home, if not held for sale, rental, or

other commercial or professional use.

The General Assembly may exempt one or more classes of intangible personal property from taxation, tax

intangible property at a lower rate, or provide for taxation of intangible personal property on a basis other

than ad valorem. Under statutes presently in force, intangible personal property is not subject to ad

valorem taxation. Amendment 89 also authorizes the General Assembly to exempt from taxation the first

$20,000 of value of a homestead of a taxpayer 65 years of age or older.

32

The Arkansas Constitution provides exemptions from ad valorem taxation, with limitations, for textile

mills and new manufacturing establishments.

Tangible personal property in transit through the State is not subject to ad valorem taxation. This

exemption has been interpreted to include raw materials shipped to Arkansas for inclusion in tangible

personal property manufactured, processed, or refined here for shipment outside the State.

Assessment. Each Arkansas county has a county assessor, elected for a two-year term of office. Every

year between the first Monday in January and July 1 the assessor is required to assess the value of all real

personal property located in the county and has the authority to list, value, and assess all tangible personal

property subject to ad valorem taxation located in the county. Under certain circumstances, a professional

appraiser or appraisers may be employed for the purpose of assessing all or any portion of the property

located in the county.

It is the duty of the assessor to determine and to keep current a correct and pertinent description of each

tract of real property in the county and to place a value on each such tract, including any improvements.

The assessor must then file with the county clerk, by July 31, an assessment report of all tangible personal

property within the county and, by the third Monday of August, of all real property within the county.

The assessor must also, by the third Monday of August of each year, report to the Public Service

Commission (“PSC”) the total assessment of real and tangible personal property in the county and the

kind, character, number, and value of property assessed for taxation in the county.

The owner of every vehicle subject to registration in the state must assess the vehicle with the county tax

assessor. County tax assessors and collectors are required to forward information identifying vehicles

which have been assessed within the time frame required by law and vehicles for which the owners have

paid personal property taxes within the time frame required by law to the Arkansas Department of

Finance and Administration.

Any property owner may appeal an assessment made by the assessor to the county equalization board,

which has the authority to increase or decrease such assessment. From a decision by the board, a property

owner or the assessor may appeal to the county court.

Upon complaint made to the Assessment Coordination Division (the “ACD”), a division of the PSC, by

the county judge, county assessor, or county equalization board, or upon the ACD’s own investigation

and motion, and a summary hearing, the ACD may, in its discretion, order a reassessment of all or any

part of the taxable property in any county, to be made by the county assessor or by a person or persons to

be recommended by the county judge and appointed by the ACD.

Property owned by public utilities and common carriers and "used and/or held for use in the operation of

the company . . ." is assessed for tax purposes by the Tax Division of the Arkansas Public Service

Commission. A. C. A. § 26-26-1605 (1997 Repl.) provides that the Tax Division "shall assess the

property at its true and full market or actual value" and that all utility property of a company, whether

located within or without the State of Arkansas, is to be valued as a unit. Annually, the company files a

report with the Tax Division. The Tax Division reviews these reports, along with other reports (such as

reports to shareholders, the Federal Communications Commission, the Federal Energy Regulatory

Commission, and the Interstate Commerce Commission), to determine the value of the property.

Valuation is currently made on the basis of a formula, as set forth in A.C.A. § 26-26-1607 (1997 Repl.),

with consideration given to (i) original cost less depreciation, replacement cost less depreciation, or

reconstruction cost less depreciation; (ii) market value of capital stock and funded debt; and (iii)

capitalization of income. As provided in A.C.A. § 26-26-1611 (1997 Repl.), once the value of a

company's property as a unit is determined, the Tax Division removes the value allocable to out-of-state

property and assigns the remainder among Arkansas taxing units on the basis of value within each

33

jurisdiction. The Tax Division certifies the assessment to the county assessor who enters the assessment

as certified on the county assessment roll. County officials have no authority to change such assessment.

Reassessment. All other property is assessed by the elected assessor of each Arkansas county (or other

official or officials designated by law). This includes both real and tangible personal property.

Amendment No. 79 to the Arkansas Constitution requires each county to appraise all market value real

estate normally assessed by the county assessor at its full and fair value at a minimum of once every five

(5) years.

Amendment No. 79 requires the county assessor (or other official or officials designated by law), after

each county-wide reappraisal, to compare the assessed value of each parcel of real property reappraised

or reassessed to the prior year's assessed value. If the assessed value of the parcel increased, then the

assessed value of that parcel must be adjusted as provided below.

(a) Subject to subsection (c) below, if the parcel is not the homestead and principal place

of residence ("homestead") of a taxpayer, then any increase in the assessed value in the first year after

reappraisal cannot be greater than 10% (or 5% if the parcel is the taxpayer's homestead) of the assessed

value for the previous year. For each year thereafter, the assessed value shall increase by an additional

10% (or 5% if the parcel is the taxpayer's homestead) of the assessed value for the year preceding the first

assessment resulting from reappraisal; however, the increase cannot exceed the assessed value determined

by the reappraisal prior to adjustment under Amendment No. 79.

For property owned by public utilities and common carriers, any annual increase in the assessed

value cannot exceed more than 10% of the assessed value for the previous year. The provisions of this

subsection (a) do not apply to newly discovered real property, new construction, or substantial

improvements to real property.

(b) If a homestead is purchased or constructed on or after January 1, 2001, by a disabled

person or by a person over age 65, then that parcel will be assessed based on the lower of the assessed

value as of the date of purchase (or construction) or a later assessed value. If a person is disabled or is at

least 65 years of age and owns a homestead on January 1, 2001, then the homestead will be assessed

based on the lower of the assessed value on January 1, 2001, or a later assessed value. When a person

becomes disabled or reaches age 65 on or after January 1, 2001, that person's homestead should thereafter

be assessed based on the lower of the assessed value on the person's 65th birthday, on the date the person

becomes disabled, or a later assessed value. This subsection (b) does not apply to substantial

improvements to real property. For real property subject to subsection (c) below, the applicable date in

this subsection (b), in lieu of January 1, 2001, is January 1 of the year following the completion of the

adjustments to assessed value required in subsection (c).

(c) If, however, there has been no county-wide reappraisal and resulting assessed value of

property between January 1, 1986, and December 1, 2000, then real property in that county is adjusted

differently. In that case, the assessor (or other official or officials designated by law) compares the

assessed value of each parcel to the assessed value of the parcel for the previous year. If the assessed

value of the parcel increases, then the assessed value of the parcel for the year in which the parcel is

reappraised or reassessed is adjusted by adding one-third (1/3) of the increase to the assessed value for the

year prior to appraisal or reassessment. An additional one-third (1/3) of the increase is added in each of

the next two (2) years.

The adjustment contemplated by subsection (c) does not apply to the property of public utilities or

common carriers. No adjustment will be made for newly discovered real property, new construction, or

substantial improvements to real property.

34

Jefferson County completed its most recent reassessment in 2013; the next reassessment is scheduled for

2018. Based on current growth rates, Pulaski County is required to conduct a county-wide reappraisal at

least once every five years.

Valuation. Residential property used solely as the principal place of residence by the owner is assessed

according to its value as a residence; agricultural land, pasture land, and timber land is assessed according

to the productivity of its soil; and residential and commercial land that is vacant is assessed according to

the value of its typical use. All other taxable property is assessed according to its current market value,

and the General Assembly may establish the methods and procedures for valuation of such property, as

long as they are equal and uniform throughout the State.

Assessed value is an amount equal to 20 percent (20%) of market value, and the levied millage is applied

against the assessed value to determine the tax owed.

Millage Rollback. Amendment 59 to the Arkansas Constitution, as implemented by Act 848 of 1981, as

amended (the “Amendment 59 Implementation Act”), directed the General Assembly to limit the effects

of any comprehensive county-wide reassessment by providing for adjustment or rollback of millage rates

in certain circumstances.

The Amendment 59 Implementation Act provides that the computation of millage rollbacks is to be made

separately for each tax source or millage levy (in the case of school districts this requires separate

computations for operation and maintenance millage and debt service millage), with the new tax rate for

each millage levy to be rounded up to the nearest 1/10 mil. In the case of debt service millage, the tax rate

as so adjusted will continue as the continuing annual tax rate until retirement of the bonds to which the

tax is pledged. The adjusted rate for operation and maintenance millage is subject to change at each

annual school election in accordance with law.

The term “base year” means the year in which a county-wide reassessment is completed and adjusted

millage rates first extended for collection in the following year. When a county-wide reappraisal of

property for ad valorem tax purposes is conducted over a period of two or more years, the taxes are not

assessed on the basis of the reappraised value of the property until all tax property in the county has been

reappraised, and the adjustment or rollback of millage is applicable in the year of completion.

Rollback procedures differ for (a) real property, (b) personal property, and (c) all property of public

utilities and regulated carriers.

Real Property. If county-wide reassessment results in an increase in value of taxable property in any

taxing unit (county, municipality, school district, or community college district) in the base year of ten

percent (10%) or more over the previous year, then a millage rollback occurs. The millage rollback is

designed to assure that taxpayers, as a group, in each taxing unit will pay taxes no greater than ten percent

(10%) above the taxes paid during the previous year to such taxing unit.

Millage rates applicable to real property are rolled back only one time following any comprehensive,

county-wide reassessment.

Personal Property. A separate millage rate is applied to reassessed personal property in order to produce

revenues equal to the revenues received from personal property taxes in the base year. As the assessed

value of taxable personal property increases, the separate personal property millage rate is reduced

annually in order to maintain revenues equal to those for the base year. The tax rate for personal property

will increase (at least to the level in effect before the rollback), however, in the event the personal

property assessment declines so that a tax rate increase would be necessary to produce revenues

equivalent to the base year revenues from personal property. When the revenues from personal property

taxes computed on the basis of the current (real property) millage rates equal or exceed revenues from

35

personal property taxes for the base year, the current millage rates applicable to real property will also

apply to taxable personal property.

The Arkansas Supreme Court has held that a voted increase in the tax rate is not applicable to personal

property prior to equalization.

Property of Public Utility and Regulated Carriers. During the first five years in which taxes are levied

on taxable real and personal property or public utilities and regulated carriers as reassessed, the taxes paid

equal the greater of (a) the amount of taxes paid on such property in the base year (less adjustments for

property disposed of or reductions in the assessed valuation of such property) and (b) the amount of taxes

due on such property at millage rates levied in the current year. If in any of the sixth through tenth years

after the base year taxes of a public utility or regulated carrier exceed the current year taxes, then the

amount of the taxes are decreased in each year by twenty percent (20%) of the difference until, in the

tenth year and thereafter, the taxpayer pays taxes calculated with current millage rates only. If in any of

the first ten (10) years after the base year the current year taxes equal or exceed the base year taxes, the

public utility or regulated carrier thereafter pays the current year taxes.

In implementation of Amendment 59, the Amendment 59 Implementation Act provides that if the

provisions in the Amendment and the Act relating to the taxing of public utilities and regulated carriers,

or any class thereof, are held to be contrary to the Constitution or statutes of the United States or of the

State of Arkansas, all utilities and all classes of carriers shall receive the same treatment provided or

required under the court order for a particular type of carrier or utility “if deemed necessary to promote

equity between similar utilities or class of carriers.” Certain regulated carriers (railroads) have

successfully challenged Amendment 59, as applied to them, as contrary to federal statutes. The effect of

this challenge by the railroads on utilities and on other classes of carriers cannot be predicted at this time.

Bond Protection. As directed by Amendment 59, the Amendment 59 Implementation Act provides that

any millage rates rolled back or adjusted pursuant to the Amendment 59 Implementation Act shall be

rolled back or adjusted only to a level which will produce at least a level of income sufficient to meet the

current requirements of all principal, interest, paying agent fees, reserves, and other requirements of the

bond indenture.

Amendment 78. Amendment 78 to the Arkansas Constitution, approved at the 2000 General Election

and effective January 1, 2001, authorized cities and counties to form redevelopment districts for the

purpose of financing redevelopment projects. The ad valorem taxes levied by any taxing unit (including

municipalities) on property in a redevelopment district may be divided so that all or part of the ad valorem

taxes levied against any increase in the assessed value of property in the area after approval of the

redevelopment plan for the district shall be used to pay any indebtedness incurred for the redevelopment

project. Debt service millage approved by voters prior to January 1, 2001, is excluded from this provision.

The creation of redevelopment districts which encompass property in the City may have an adverse effect

on the amount of future increases in property taxes collected by the City.

Amendment 79. Amendment 79 to the Arkansas Constitution, approved at the 2000 General Election

and effective January 1, 2001, generally limits increases in the assessed value of taxable real property and

requires that such increases be effected over time. The extent of the limitation depends upon whether the

property is a taxpayer’s homestead used as the taxpayer’s principal place of residence.

General Adjustments. With respect to the first assessment following a county-wide reappraisal,

Amendment 79 limits any increase in the assessed value of the non-homestead real property to ten percent

(10%) of the previous year’s assessed value. For each year thereafter, the assessed value of such property

will be increased by an additional ten percent (10%) of the assessed value for the year preceding the first

assessment following reappraisal, but shall not exceed the assessed value determined by reappraisal. If the

property is taxpayer’s homestead, any increase in the assessed value following reappraisal is limited to

36

five percent (5%) of the previous year’s assessed value. For each year thereafter, the assessed value of

such property will increase by an additional five percent (5%) of the assessed value for the year prior to

the first assessment following reappraisal (not to exceed the value determined by reappraisal).

The adjustment described above will not apply to newly discovered real property, new construction, or

substantial improvements to real property.

Property of Public Utilities and Regulated Carriers. Under Amendment 79, any annual increase in the

value of utility and carrier real property is limited to ten percent (10%) of the assessed value for the

previous year.

Special Provisions for Those 65 or Over and Disabled Persons. Amendment 79 allows persons who

reach 65 years of age or who become disabled on or after January 1, 2001, to pay ad valorem taxes based

on lower assessed values of homestead property (but not substantial improvements to such property) after

reaching 65 or after becoming disabled.

Homestead Exemption. Amendment 79 provides for an annual state credit against ad valorem property

tax on a homestead in an amount not more than $350 (but not below zero). The General Assembly

implemented this homestead exemption with the passage of Act 1544 of 2001, which provides that,

effective with the assessment year 2000 and thereafter, the amount of real property taxes assessed on the

homestead of each property owner is reduced by up to $350. Property owners have until October 31 in

each year to certify that their property is subject to this homestead exemption, notwithstanding that taxes

are due and payable by October 15.

Property Tax Relief Trust Fund. Following the passage of Amendment 79, the Arkansas General

Assembly increased the state sales and use tax from 4.625% to 5.125%. The proceeds of this one half of

one percent (0.5%) increase are paid into the State’s Property Tax Relief Trust Fund (“PTRTF”). Act

1544 of 2001, implementing the homestead exemption, also provided for annual distributions to each

county treasurer from the PTRTF in accordance with the county’s proportionate share of the total

statewide property tax reduction for that calendar year resulting from the $350 homestead exemption.

County treasurers, in turn, are required to distribute these payments to the taxing entities in the county in

proportion to each taxing entity’s millage rate.

In addition to the proportionate distribution described in the preceding paragraph for each of the State’s

fiscal years 2013 and 2014, an additional two million dollars ($2,000,000) was appropriated to be payable

from the PTRTF to cities, provided such amounts were remaining in the PTRTF after the proportional

distributions made pursuant to Act 1544 of 2001. Accordingly, the City is not able to predict the amount,

if any, it will receive in any year from the PTRTF.

According to the State Treasurer’s Office, the amounts paid out of PTRTF in 2008 through 2016, are as

follows:

Fiscal

Year

Regular Property

Tax Relief

Assessor’s

Property

Tax Relief

Municipal

Property Tax

Relief

County

Property

Tax Relief

Total

Pine Bluff

Portion

2008 $219,554,981.45 $1,020,491.24 $4,000,000.00 $4,000,000.00 $228,575,472.69

2009 215,266,557.77 1,032,834.60 4,000,000.00 4,000,000.00 224,299,392.37

2010 202,574,865.12 827,839.83 4,000,000.00 4,000,000.00 211,402,704.95 $ 125,205.09 2011 212,905,106.14 659,779.38 4,000,000.00 4,000,000.00 221,564,885.52 125,205.09

2012 218,017,102.97 485,669.36 4,000,000.00 4,000,000.00 226,502,772.33 104,467.81

2013 220,827,337.65 371,937.95 4,000,000.00 4,000,000.00 229,199,275.60 104,456.81 2014 231,595,367.20 335,607.89 2,000,000.00 2,000,000.00 235,930,975.09 52,228.40

2015 238,220,926.36 369,806.86 2,000,000.00 2,000,000.00 242,590,733.22 52,151.52

2016 247,948,710.39 475,159.46 2,000,000.00 2,000,000.00 252,423,869.85 52,055.58

Total $2,006,910,955.05 $5,579,126.57 $30,000,000.00 $30,000,000.00 $2,072,490,081.62 $ 615,770.30

37

Bond Protection. Amendment 79 requires the General Assembly to provide procedures for adjusting ad

valorem tax rates in such a way that will not interfere with the payment of bonded indebtedness secured

by such taxes or millage. Millage rates for real, personal, and public utility and regulated carrier property

shall be equal unless adjustment of personal property rates is necessary to pay bonded indebtedness in

accordance with an indenture agreement.

The City is subject to a constitutional limitation for bonded indebtedness equal to 20% of the total

assessed value for tax purposes of real and personal property as determined by the last tax assessment. At

December 31, 2015, the legal debt limit for bonded debt was $72,768,200. There were no property tax

secured bond issues.

Other. Amendment 79 directs the General Assembly to prescribe the method for reassessing real

property and to establish the frequency of reassessment, which should occur at least once every five (5)

years. Millage rollback will not be affected except to the extent that the adjustments under Amendment 79

are made prior to rollback.

Collection. The sheriff of each county serves as collector of property taxes (except as to certain counties,

for which the legislature has separated the offices of the sheriff and tax collector). All taxes levied are

collected in the calendar year immediately following the year in which levied, except that personal

property taxes levied on motor vehicles owned by individuals are collected in the calendar year in which

levied.

Property taxes are payable at any time from March 1 through October 15 of each year and are payable in

installments at the option of the taxpayer.

Delinquent Taxes. All taxes unpaid after October 15 of any year are considered to be delinquent and

delinquent taxpayers are subject to a penalty of ten percent (10%) of the taxes due. It is the duty of the tax

collector to diligently collect all delinquent personal property taxes, and in the performance of these

duties the collector is empowered to distrain and sell at public auction personal property for the purpose

of enforcing collection of personal property taxes and to garnish the wages or other money owed to the

delinquent taxpayer.

If real property taxes remain unpaid for two (2) years following the date the taxes were due, the land is

certified to the Commissioner of State Lands for collection or sale. In the absence of any bid in an amount

at least equal to the assessed value of the land, the Commissioner may negotiate a sale. Real property may

be redeemed by the taxpayer at a price equal to the taxes due, ten percent (10%) interest for each year of

delinquency, a ten percent (10%) penalty for each year of delinquency, and costs. The right of redemption

must be exercised within 30 days after real property is sold.

Remittance of Tax Collections. The county collector is required by law to pay over to the county

treasurer, by the fifth day of each month, all funds in the collector’s hands belonging to the county or to

any municipality or school district located in the county. Upon a certificate of the county clerk, which

shall be issued on or before the thirtieth day of each month, the county treasurer is required to transfer to

the various taxing bodies, ninety percent (90%) of all funds received by the treasurer from the county

collector. Upon final settlement, adjustments are made and the balance is distributed upon order of the

county court approving the final settlement. Because of administrative difficulties, it is generally assumed

that no substantial portion of annual tax collections is available to the taxing bodies until December of

each year.

Miscellaneous. If the assessed value of all classes of taxable property located in the City remains at the

same level, without increase or decrease, and the total tax rates applicable to all taxable property in the

City remain constant, the annual revenues derived from taxable property will be the same in each year.

This would be true of annual revenues available for debt service on the Bonds, as well as other annual

revenues of the City (subject in the case of such other revenues to adjustments in the tax rate).

38

In recent years, initiatives which would reduce or abolish property taxes collected pursuant to the

Arkansas Constitution have been approved for submission to the voters of Arkansas; however, to date, no

initiatives have been approved for submission to the voters at the next general election.

TAX EXEMPTION

In the opinion of Wright, Lindsey & Jennings LLP, bond counsel, under existing law, interest on the

Bonds is excludable from gross income for federal income tax purposes and is not an item of tax

preference for purposes of the federal alternative minimum tax imposed on individuals and corporations;

bond counsel notes, however, that for the purpose of computing the alternative minimum tax imposed on

corporations (as defined for federal income tax purposes), such interest is taken into account in

determining adjusted current earnings. The opinion of bond counsel is subject to the condition that the

City and the System comply with all requirements of the Internal Revenue Code of 1986, as amended,

that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue

to be, excludable from gross income for federal tax purposes. The City and the System have covenanted

to comply with each such requirement. Failure to comply with certain of such requirements may cause the

inclusion of interest on the Bonds in gross income for federal tax purposes to be retroactive to the date of

issuance of the Bonds.

The proposed opinion of bond counsel is attached as Appendix A hereto. Bond counsel expresses no

opinion regarding other federal tax consequences arising with respect to the Bonds.

Purchasers of the Bonds, particularly purchasers that are corporations (including S corporations and

foreign corporations operating branches in the United States); property and casualty insurance companies,

banks, thrifts, or other financial institutions; certain recipients of Social Security or Railroad Retirement

benefits; taxpayers otherwise entitled to claim the earned income tax credit; and taxpayers who may be

deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations, should

consult their tax advisors concerning their tax consequences of purchasing and holding the Bonds.

From time to time, there are legislative proposals in Congress that, if enacted, could alter or amend the

federal tax matters referred to above or adversely affect the market value of the Bonds. It cannot be

predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would

apply to bonds issued prior to enactment. Each purchaser of the Bonds should consult his or her own tax

advisor regarding any pending or proposed federal tax legislation. Bond counsel expresses no opinion

regarding any pending or proposed federal tax legislation.

Tax Treatment of Original Issue Discount. When the initial public offering price for any Bond, as

reflected on the confirmation of sale received from the Underwriter, is less than the original amount

payable at maturity for such Bonds (the "OID Bonds"), such difference constitutes original issue discount

which is treated as interest and is excluded from gross income for federal income tax purposes subject to

the caveats and provisions described above.

In the case of an owner of an OID Bond, the amount of original issue discount which is treated as having

accrued with respect to such OID Bond is added to the cost basis of the owner in determining, for federal

income tax purposes, gain or loss upon disposition of such OID Bond (including its sale, redemption, or

payment at maturity). Amounts received upon disposition of such OID Bond which are attributable to

accrued original issue discount will be treated as tax-exempt interest, rather than as taxable gain, for

federal income tax purposes.

Original issue discount is treated as compounding semiannually, at a rate determined by reference to the

yield to maturity of each individual Bond bearing original issue discount, on days which are determined

39

by reference to the maturity of such Bond. The amount treated as original issue discount on such OID

Bond for a particular semiannual accrual period is equal to (i) the product of (a) the yield to maturity for

such OID Bond (determined by compounding at the close of each accrual period) and (b) the amount

which would have been the tax basis of such OID Bond at the beginning of the particular accrual period if

held by the original purchaser, (ii) less the amount of any payments on such OID Bond during the accrual

period. The tax basis is determined by adding to the initial public offering price on such OID Bond the

sum of the amounts which would have been treated as original issue discount for such purposes during all

prior periods. If such OID Bond is sold between semiannual compounding dates, original issue discount

which would have accrued for that semiannual compounding period for federal income tax purposes is to

be apportioned in equal amounts among the days in such compounding period.

Owners of OID Bonds should consult their own tax advisors with respect to the determination for federal

income tax purposes of original issue discount accrued with respect to OID Bonds as of any date, with

respect to the accrual of original issue discount for such OID Bonds purchased in the secondary markets

and with respect to the state and local tax consequences of owning OID Bonds.

State Tax Exemption. Further, in the opinion of bond counsel, under existing laws, the Bonds and

interest thereon are exempt from all Arkansas state, county, and municipal taxation.

Current or future legislative proposals, if enacted into law, may cause interest on the Bonds to be

subject, directly or indirectly, to federal income taxation or otherwise prevent holders of the Bonds

from realizing the full current benefit of the tax status of such interest. Recent legislative proposals

include provisions that would limit the amount of the exclusions (including tax-exempt interest) and

deductions available to certain taxpayers. It cannot be predicted whether or in what form any such

proposal might be enacted or whether, if enacted, it would apply to bonds issued prior to

enactment. The introduction or enactment of any such legislative proposals may also affect the

market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should

consult their own tax advisors regarding any such pending or proposed federal or state tax

legislation, regulations, or litigation, as to which Bond Counsel expresses no opinion.

It is not an event of default on the Bonds if legislation is enacted reducing or eliminating the

exclusion of interest on state and local government bonds from gross income for federal or state

income tax purposes.

LEGAL MATTERS

Legal matters incident to the authorization and issuance of the Bonds are subject to the approving opinion

of Wright, Lindsey & Jennings LLP, Little Rock, Arkansas, bond counsel. The proposed opinion of bond

counsel is attached as Appendix A hereto. Copies of such opinion will be available at the time of the

delivery of the Bonds. Certain legal matters will be passed upon for the City by Althea Hadden - Scott,

Esq., City Attorney.

Except as set forth below, there is no controversy or litigation of any nature now pending or threatened

restraining or enjoining the issuance, sale, execution, or delivery of the Bonds, or in any way contesting

or affecting the validity of the Bonds, any proceedings of the City or the System taken with respect to the

issuance or sale thereof, the pledge or application of the Library Tax and the Special Tax Collections or

other moneys that may be provided for the payment of the Bonds, the existence or powers of the City or

the System or the title of any officers of the City or the System to their respective positions, or the ability

of the City or the System to make payment on the Bonds.

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ENFORCEABILITY OF REMEDIES

Rights of the registered owners of the Bonds and the enforceability of the remedies available under the

Authorizing Ordinance may depend on judicial action and may be subject to the valid exercise of the

constitutional powers of the United States of America and of the sovereign police powers of the State of

Arkansas or other governmental units having jurisdiction, and to the application of federal bankruptcy

laws or other debtor relief or moratorium laws in general. Therefore, enforcement of those remedies may

be delayed or limited, or the remedies may be modified or unavailable, subject to the exercise of judicial

discretion in accordance with general principles of equity. Bond counsel expresses no opinion as to any

effect upon any right, title, interest or relationship created by or arising under the Authorizing Ordinance

resulting from the application of state or federal bankruptcy, insolvency, reorganization, moratorium or

similar debtor relief laws affecting creditors’ rights which are presently or may from time to time be in

effect.

UNDERWRITING

Under a Bond Purchase Agreement (the “Agreement”) entered into by and between the City and Stephens

Inc. as Underwriter (the “Underwriter”), the Bonds are being purchased for $$13,135,005.30 (which

represents the par amount of the bonds, less original issue discount of $36,363.45, minus the Underwriter’s

discount in the amount of $183,631.25). The Agreement provides that the Underwriter will purchase all of

the Bonds if any are purchased. The obligations of the Underwriter to accept delivery of the Bonds is

subject to various conditions contained in the Agreement, including the absence of pending or threatened

litigation questioning the validity of the Bonds or any proceedings in connection with the issuance

thereof, and the absence of material adverse changes in the financial or business condition of the City.

The Underwriter intends to offer the Bonds to the public initially at the offering prices set forth on the

cover page of this Official Statement, which prices may subsequently change without any requirement of

prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the

Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers at prices lower than the

public offering price.

BOND RATING

Standard and Poor’s Corporation has assigned a rating of “AA” to the Bonds based on the understanding

that the scheduled payment of principal of and interest on the Bonds will be guaranteed under a municipal

bond insurance policy to be issued concurrently with the delivery of the Bonds by Build America Mutual

Assurance Company. The underlying credit rating for the Bonds is “A+” by Standard and Poor’s

Corporation.

The ratings reflect only the view of the rating agency. Any explanation of the significance of the ratings

may be obtained only from the rating agency. The City furnished to the rating agency certain information

and materials, some of which have been included in this Official Statement, relating to the Bonds and the

City. Generally, rating agencies base their ratings on such information and materials and investigation,

studies and assumptions by the rating agencies. There can be no assurance that a rating when assigned

will continue for any given period of time or that it will not be lowered or withdrawn entirely by a rating

agency if in its judgment circumstances so warrant.

CONTINUING DISCLOSURE AGREEMENT

In the past five years, the City has been a party to certain continuing disclosure agreements in

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connection with its outstanding bonds. Such agreements require the City to file annual reports with the

Municipal Securities Rulemaking Board on its Electronic Municipal Market Access system ("EMMA")

within the time periods set forth in the agreements. The following summarizes a nonexhaustive

discussion of the City's compliance with its continuing disclosure obligations over the past five years.

As part of its annual reports, the City has been obligated to file on EMMA certain statistical information

concerning the City or the City’s wastewater system (the “Sewer System”), as appropriate for the type of

bonds issued (e.g., sales and use tax bonds, sewer revenue bonds, or revenue bonds secured by the City’s

franchise fees). During the past five years, all statistical information required by the continuing disclosure

agreements was filed in a timely manner except for the statistical information for the year ended

December 31, 2012, relating to the City’s outstanding sewer revenue bonds, which was filed

approximately six days late.

Also as part of its annual reports, the City has been obligated to file on EMMA audited financial

statements of the City and the Sewer System, as appropriate for the type of bonds issued. If the audited

financial statements were not available at the time the annual report was due, the City was obligated to

file such audited financial statements within a certain amount of time after becoming available. In

addition, the continuing disclosure agreement related to the City’s 2009 franchise fee revenue bonds

required that the City file unaudited financial statements of the City if the audited financial statements of

the City were not available at the time the annual report was due. The audited financial statements of the

Sewer System for the years ended December 31, 2012 through December 31, 2014 were filed in a timely

manner.

The audited financial statements of the Sewer System for the year ended December 31, 2015 are not yet

available. The audited financial statements of the City for the years ended December 31, 2012 through

December 31, 2015 were filed in a timely manner. The audited financial statements of the City for the

year ended December 31, 2016 are not yet available.

The continuing disclosure agreements also obligated the City to file a notice of the occurrence of any

event listed in Securities and Exchange Commission Rule 15c2-12(b)(5). Included in such list are bond

calls. The City failed to file a notice of the optional redemption of its 2009 franchise fee revenue bonds. A

notice concerning such failure was not filed on EMMA. That bond issue is no longer outstanding.

Finally, the continuing disclosure agreement related to the City’s 2009 franchise fee revenue bonds

required that the City’s audited financial statements be prepared in accordance with generally accepted

accounting principles. This was contrary to the indenture securing such bonds and contrary to the City’s

financial reporting practices since 2001. The financial statements of the City are prepared on a regulatory

basis of accounting as prescribed by Arkansas Code Annotated § 10-4-412 (“Regulatory Basis of

Accounting”). Regulatory Basis of Accounting is a basis of accounting other than generally accepted

accounting principles. Accordingly, the financial statements of the City for the year ended December 31,

2012 were prepared using accounting principles that did not comply with the continuing disclosure

agreement related to the City’s 2009 franchise fee revenue bonds. That issue was redeemed in May 2014.

Purpose of the Continuing Disclosure Agreement. The Continuing Disclosure Agreement is executed and

delivered by the City and the Trustee for the benefit of the Beneficial Owners of the Series 2017 Bonds

and in order to assist the Underwriter in complying with the Securities and Exchange Commission, Rule

15c2-12(b)(5).

Definitions. In addition to the definitions set forth in this Official Statement, the following capitalized

terms shall have the following meanings:

“Annual Report” shall mean any Annual Report provided by the City pursuant to, and as described in, the Continuing Disclosure Agreement.

42

“Dissemination Agent” shall mean the Trustee, acting in its capacity as Dissemination Agent, or

any successor Dissemination Agent designated in writing by the City and which has filed with the

Trustee a written acceptance of such designation.

“EMMA” shall mean the Electronic Municipal Market Access system as described in 1934 Act

Release No. 59062 and maintained by the MSRB for purposes of the Rule.

“Listed Events” shall mean any of the events listed hereunder.

“MSRB” shall mean the Municipal Securities Rulemaking Board.

“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under

the Securities Exchange Act of 1934, as the same may be amended from time to time.

Provision of Annual Report.

(a) The City has agreed to provide, not later than 180 days after the end of the City’s preceding

fiscal year, its unaudited annual financial statements.

Additionally, the City has agreed to provide its audited Regulatory Basis Financial Statements

and Other Reports (“Legislative Audit Report” or “LAR”) within sixty (60) days of receiving it

from the Legislative Joint Auditing Committee, Division of Legislative Audit of the State of

Arkansas ("Legislative Audit"). The City's audit is currently conducted by the Legislative Audit.

Due to the large number of audits conducted by Legislative Audit, the City has little control over

when the audit will be conducted. However, within sixty (60) days after the audit is submitted to

the City, the City will submit the audit to the Municipal Securities Rulemaking Board’s

(“MSRB”) Electronic Municipal Market Access System. The City’s audit is also filed and

accessible by the public at the Legislative Audit website (www.legaudit.state.ar.us).

The City has also agreed to provide the remainder of its Annual Report, consisting of the items

described in paragraphs 1 and 2, below, not later than 180 days after the end of the City’s fiscal

year (presently December 31), commencing with the 2017 fiscal year.

The City has agreed to provide this information in an effort to comply with Rule 15c2-12 of the

Securities and Exchange Commission (the “Rule”).

Any or all of the foregoing information may be incorporated by reference from other documents,

including official statements of debt issues with respect to the City that have been filed with the Securities

and Exchange Commission, and in the case of a final official statement, that is available from the MSRB,

or as available through the MSRB’s continuing disclosure service portal by EMMA at

http://www.emma.msrb.org.

(b) Not later than fifteen (15) days prior to the dates specified in subsection (a) for providing the

unaudited Financial Statement, Legislative Audit Report, or the remainder of the Annual Report to the

MSRB, the City shall provide such items to the Dissemination Agent. The Dissemination Agent shall use

its best efforts to contact the City to determine if the City is in compliance with Section 3(a) above if the

Dissemination Agent has not received a copy of the required filings and proof of filing with the MSRB by

the date specified in the first sentence of this subsection (b).

(c) If the Dissemination Agent is unable to verify that the required filings have been provided to

the MSRB by the dates required in subsection (a), the Dissemination Agent shall file a notice to the

MSRB.

http://www.legaudit.state.ar.us/

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Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference

the following:

1. Information of the type set forth in the Official Statement dated April 6, 2017 describing

the Bonds under the caption “DESCRIPTION OF THE CITY OF PINE BLUFF” with respect to

(i) the City and Jefferson County, Arkansas (the “County”) population figures in the latest year

for which figures are available and the four (4) previous years for which figures are available, (ii)

unemployment rates for the Pine Bluff Metropolitan Statistical Area and the State of Arkansas in

the latest year for which figures are available and the four (4) previous years, and (iii) the major

employers in the City.

2. Ad valorem tax collections in the City for the latest calendar year and the four (4)

previous years, if available.

3. The Legislative Audit Report.

Any or all of the items above may be included by specific reference to other documents, including official

statements of debt issues of the City or related public entities, which have been submitted to the MSRB,

or filed with the Securities and Exchange Commission. If the document incorporated by reference is a

final official statement, it must be available from the MSRB. The City shall clearly identify each such

other document so incorporated by reference and certify that the submitted documents comply with the

requirements of the Continuing Disclosure Agreement. The Dissemination Agent shall not be responsible

in any manner for the content of any notice or Annual Report prepared or delivered by the City pursuant

to the Continuing Disclosure Agreement and shall have no duty or obligation to review any such notice or

Annual Report.

Reporting of Significant Events. (a) This caption describes the giving of notices of the occurrence of any

of the following events:

1. Principal and interest payment delinquencies.

2. Non-payment related defaults, if material.

3. Unscheduled draws on debt service reserves reflecting financial difficulties.

4. Unscheduled draws on credit enhancements reflecting financial difficulties.

5. Substitution of credit or liquidity providers, or their failure to perform.

6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed

or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-

TEB), or other material events affecting the tax-exempt status of the security.

7. Modification to rights of security holders, if material.

8. Bond calls (excluding mandatory sinking fund redemptions), if material.

9. Defeasances and tender offers.

10. Release, substitution, or sale of property securing repayment of the securities, if

material.

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11. Rating changes.

12. Bankruptcy, insolvency, receivership, or similar event of the City.

13. The consummation of a merger, consolidation, or acquisition involving the City

or the sale of all or substantially all of the assets of the City, other than in the

ordinary course of business, the entry into a definitive agreement to undertake

such action or the termination of a definitive agreement relating to any such

actions, other than pursuant to its terms, if material.

14. Appointment of a successor or additional trustee or the change of name of a

trustee, if material.

(b) After the occurrence of a Listed Event (excluding a Listed Event described in (a)(8)

above), the City shall promptly notify the Dissemination Agent (if other than the City) in writing in a

timely manner which will allow the Dissemination Agent to file notice within the time period set forth in

(c) below. Such notice shall instruct the Dissemination Agent to report the occurrence.

(c) A notice of the occurrence of any of the Listed Events (excluding a Listed Event

described in (a)(8) above), shall be filed in a timely manner not in excess of ten (10) business days after

the occurrence of such Listed Event with the MSRB, through its continuing disclosure service portal

provided through EMMA at http://www.msrb.emma.org, or any other similar system that is acceptable to

the Securities and Exchange Commission. In the event of a Listed Event described in (a)8 above, notice

need not be given under this subsection any earlier than required to be given to registered owners of

affected Series 2017 Bonds pursuant to the terms of the Series 2017 Bonds. Each notice of the occurrence

of a Listed Event shall be captioned “Notice of Material Event” and shall be filed in electronic format as

prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the

MSRB.

Termination of Reporting Obligation. The City’s obligations under the Continuing Disclosure

Agreement shall terminate upon the defeasance, prior redemption, or payment in full of all the Series

2017 Bonds.

Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to

assist it in carrying out its obligations under the Continuing Disclosure Agreement, and may discharge

any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent

shall not be responsible in any manner for the content of any notice or report prepared by the City

pursuant to the Continuing Disclosure Agreement. If at any time there is not any other designated

Dissemination Agent, the Trustee shall be the Dissemination Agent. The initial Dissemination Agent shall

be Bank of the Ozarks.

Amendment; Waiver. Notwithstanding any other provision of the Continuing Disclosure Agreement, the

City and the Dissemination Agent may amend the Continuing Disclosure Agreement, and any provisions

of the Continuing Disclosure Agreement may be waived, provided that the following conditions are

satisfied:

(a) If the amendment or waiver relates to the requirements for providing an Annual Report, to

the contents of the Annual Report, or the reporting of Listed Events, it may only be made in connection

with a change in circumstances that arises from a change in legal requirements, change in law, or change

in the identity, nature, or status of an obligated person with respect to the Series 2017 Bonds, or the type

of business conducted;

(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of

http://www.msrb.emma/

45

nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the

original issuance of the Series 2017 Bonds, after taking into account any amendments or interpretations

of the Rule, as well as any change in circumstances; and

(c) The amendment or waiver either (i) is approved by the Beneficial Owners of the Series

2017 Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the

consent of Beneficial Owners, or (ii) does not, in the opinion of nationally recognized bond counsel,

materially impair the interests of the Beneficial Owners of the Series 2017 Bonds.

In the event of any amendment or waiver of a provision of the Continuing Disclosure Agreement, the City

shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative

explanation of the reason of the amendment or waiver and its impact on the type (or in the case of a

change of accounting principles, on the presentation) of financial information or operating data being

presented by the City. In addition, if the amendment relates to the accounting principles to be followed in

preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed

Event, and (ii) the Annual Report for the year in which the change is made should present a comparison in

narrative form (and also, if feasible, in quantitative form) between the financial statements as prepared on

the basis of the new accounting principles and those prepared on the basis of the former accounting

principles.

Additional Information. Nothing in the Continuing Disclosure Agreement shall be deemed to prevent the

City from disseminating any other information, using the means of dissemination set forth in the

Continuing Disclosure Agreement or any other means of communication, or including any other

information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is

required by the Continuing Disclosure Agreement. If the City chooses to include any information in any

Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required

by the Continuing Disclosure Agreement, the City shall have no obligation under the Continuing

Disclosure Agreement to update such information or include it in any future Annual Report or notice of

occurrence of a Listed Event.

Default. In the event of a failure of the City or the Dissemination Agent to comply with any provision of

the Continuing Disclosure Agreement, the Trustee, the City, or any Beneficial Owner may (and the

Trustee, at the request of the Underwriter or the Beneficial Owners of at least twenty-five percent (25%)

aggregate principal amount of outstanding Series 2015 Bonds, shall) take such actions as may be

necessary and appropriate, including seeking mandamus or specific performance by court order, to cause

the City or the Dissemination Agent, as the case may be, to comply with its obligations under the

Continuing Disclosure Agreement. A default under the Continuing Disclosure Agreement shall not be

deemed a default under the Indenture, and the sole remedy under the Continuing Disclosure Agreement in

the event of any failure of the City or the Dissemination Agent to comply with the Continuing Disclosure

Agreement shall be an action to compel performance. The City, the Dissemination Agent, and their

members, officers, and employees shall incur no liability under the Continuing Disclosure Agreement by

reason of any act or failure to act thereunder.

Duties, Immunities, and Liabilities of the Dissemination Agent. The Dissemination Agent shall have only

such duties as are specifically set forth in the Continuing Disclosure Agreement and no further duties or

responsibilities shall be implied. The Dissemination Agent’s obligation to deliver the information at the

times and with the contents described in the Continuing Disclosure Agreement shall be limited to the

extent the City has provided such information to the Dissemination Agent as required by the Continuing

Disclosure Agreement. The Dissemination Agent shall have no duty with respect to the content of any

disclosures or notice made pursuant to the terms thereof. The Dissemination Agent shall have no duty or

obligation to review or verify any Annual Report, notice of Listed Events, or any other information,

disclosures, or notices provided to it by the City and shall not be deemed to be acting in any fiduciary

capacity for the City, the Beneficial Owners of the Series 2017 Bonds, or any other party. Other than as

46

expressly set forth in the Continuing Disclosure Agreement, the Dissemination Agent shall have no

responsibility for the City’s failure to report a Listed Event to the Dissemination Agent. The

Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the

City has complied with the Continuing Disclosure Agreement. The Dissemination Agent may

conclusively rely upon certifications of the City at all times.

The Dissemination Agent shall have only such duties as are specifically set forth in the Continuing

Disclosure Agreement, and the City has agreed to indemnify and save the Dissemination Agent, its

officers, directors, employees, and agents, harmless against any loss, expense, and liabilities, which it

may incur arising out of or in the exercise or performance of its powers and duties thereunder, including

the costs and expenses (including attorney’s fees) of defending against any claim of liability, but

excluding liabilities due to the Dissemination Agent’s gross negligence or willful misconduct.

The Dissemination Agent shall not have any liability to any party in connection with any failure to timely

file any such information or report with the MSRB through EMMA if such information or report is not

timely received by the Dissemination Agent from the City; nor shall the Dissemination Agent have any

liability to any party for any failure of the MSRB or its EMMA system to timely post or register filing of

any such report if the Dissemination Agent has timely submitted such report for filing with the MSRB.

The City is solely responsible for the accuracy, completeness, and timeliness of any information or report

provided to the Dissemination Agent.

Beneficiaries. The Continuing Disclosure Agreement shall inure solely to the benefit of the City, the

Dissemination Agent, the Underwriter, and the Beneficial Owners and shall create no rights in any other

person or entity.

MISCELLANEOUS

Any statements made in this Official Statement involving matters of opinion or of estimates, whether or

not so expressly stated, are set forth as such and not as representations of fact, and no representation is

made that any of the estimates will be realized. This Official Statement is not to be construed as a contract

or agreement between the City and the purchasers or owners of any of the Bonds.

47

The execution of this Official Statement has been duly authorized by the City.


By:

Shirley Washington, Mayor

Dated: As of the Cover Page hereof.

A-1

APPENDIX “A”

Form of Bond Counsel’s Opinion

Re: $13,355,000 City of Pine Bluff, Arkansas Library Construction Bonds, Series 2017

Ladies and Gentlemen:

We have acted as Bond Counsel in connection with the issuance by the City of Pine Bluff, Arkansas (the

“City”) of $13,285,000.00* City of Pine Bluff, Arkansas Library Construction Bonds, Series 2017 dated

May 9, 2017 (the “Bonds” or the “Series 2017 Bonds”). The Series 2017 Bonds are being issued to (i)

finance the cost to construct a new 35,000 square foot main library branch in downtown Pine Bluff and to

construct an addition of approximately 2,000 square feet to the existing downtown branch libraries operated

by the City and the Pine Bluff – Jefferson County Library System (“Improvements”); and (ii) to pay the

costs of issuing the Series 2017 Bonds. The Bonds, in the principal amount of $14,060,000.00, were

authorized by the electors of the City at the general election held on November 8, 2016. We have examined

the law and such certified proceedings and other papers as we deem necessary to render this opinion,

including, particularly a certified copy of Ordinance No. 6566 of the City adopted and approved on April 3,

2017.

As to questions of fact material to our opinion we have relied upon the certified proceedings and other

certifications of public officials furnished to us without undertaking to verify such facts by independent

investigation.

Based on our examination, we are of the opinion, as of the date hereof and under existing law, as follows:

1. The Bonds have been lawfully authorized and issued under the Constitution and laws of the

State of Arkansas now in force, including particularly Amendment No. 30, as amended by Amendment No.

72 to the Constitution of the State of Arkansas and Arkansas Code Annotated § 14-142-201, et seq. (Act 920

of the Acts of Arkansas of 1993), and are valid and binding limited obligations of the City enforceable in

accordance with their terms.

2. The Bonds are payable from a tax of three (.003) mills for each dollar of the assessed

valuation of the taxable real and personal property in the City (the “Library Tax”) which was approved by

the electors of the City at the general election on November 8, 2016. The City will levy in 2017 the Library

Tax at the rate of three (.003) mills for collection in the year 2017, and the City has covenanted that such tax

shall be levied and collected each year thereafter until the Bonds are paid in full. The City has pledged the

Library Tax and the Special Tax Collections (hereafter defined) as security for the Bonds until all the

outstanding Bonds have been paid in full. The Bonds are limited obligations of the City payable solely from

revenues from the Library Tax, as that term is defined in the Trust Indenture by and between the City and

Simmons Bank, Pine Bluff, Arkansas, as Trustee, dated as of May 9, 2017, (the “Indenture”) and are not

secured by any lien or security interest in any physical properties of the City, and the pro rata portion of the

proceeds of a statewide one half of one percent (0.5%) Sales and Use Tax implemented pursuant to

Amendment 79 to the Arkansas Constitution (the “Special Tax Collections”).

3. The interest on the Bonds (a) is excluded from gross income for federal income tax

purposes, and (b) is not an item of tax preference for purposes of the federal alternative minimum tax

imposed on individuals and corporations; however, it should be noted that with respect to corporations (as

defined for federal income tax purposes), such interest is taken into account in determining adjusted current

earnings for the purpose of computing the alternative minimum tax imposed on such corporations. The

opinion set forth in clause (a) above is subject to the condition that the City comply with all requirements of

A-2

the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the

issuance of the Bonds in order that interest thereon be (or continue to be) excluded from gross income for

federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on

the Bonds to be so included in gross income retroactive to the date of issuance of the Bonds. The City has

covenanted in the Authorizing Ordinance to comply with all such requirements. We express no opinion

regarding other federal tax consequences arising with respect to the Bonds.

4. Interest on the Bonds is exempt from State of Arkansas income taxes and the Bonds are not

subject to property taxes in the State of Arkansas.

It is understood that the rights of the registered owners of the Bonds and the enforceability thereof may be

subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors

heretofore or hereafter enacted and that their enforcement may be subject to the exercise of judicial

discretion in accordance with general principles of equity.

Certain requirements and procedures contained or referred to in the Authorizing Ordinance and other

relevant documents may be changed and certain actions may be taken or omitted under the circumstances

and subject to the terms and conditions set forth in such documents, upon the advice or with an approving

opinion of nationally recognized bond counsel. No opinion is expressed herein as to any Bond or the interest

thereon on or after such change that occurs or action that is taken or omitted upon the advice or approval of

counsel other than ourselves.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings, and court

decisions. Such opinions may be affected by actions taken or events occurring after the date hereof. We

have not undertaken to determine, or to inform any person, whether any such actions or events are taken or

occur.

Sincerely,

WRIGHT, LINDSEY & JENNINGS LLP

B-1

APPENDIX “B”

Summary of the Trust Indenture

The following, in addition to certain other information contained under the caption “Bonds Being

Offered” herein, summarizes certain provisions of the Indenture, to which document in its entirety reference

is made for the detailed provisions thereof. Capitalized terms not defined herein shall have the definition set

forth in the Indenture.

Registration and Exchange

Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books

required to be kept pursuant to the provisions of the Indenture, by the person in whose name it is registered,

in person or by a duly authorized attorney, upon surrender of such Bond for cancellation or, if applicable,

notation of the new Holder together with the signature of the Trustee or any applicable Transfer Agent on the

back of such Bond or on a form of record attached to such Bond for such purpose, accompanied by delivery

of a written instrument of transfer in a form approved by the Trustee, duly executed.

Whenever any Bond shall be surrendered for transfer, the Trustee or any Transfer Agent shall

authenticate and deliver a new fully registered Bond or Bonds duly executed by the City or, if applicable,

shall deliver the same Bond, duly annotated with the new Holder and signed by the Trustee or any applicable

Transfer Agent on the back of such Bond or on a form of record attached to such Bond for such purpose, for

like aggregate principal amount. The Trustee or any Transfer Agent shall require the payment by the

Bondholder requesting such transfer of any tax or other governmental charge required to be paid with respect

to such transfer.

The City, the Trustee, and any Transfer Agent shall not be required (a) to issue, register the transfer

of, or exchange any Bond during a period beginning at the opening of business 15 days before the date of the

mailing of a notice of redemption of Bonds selected for redemption under the Indenture and ending at the

close of business on the day of such mailing, or (b) to register the transfer of or exchange any Bond so

selected for redemption in whole or in part, except the unredeemed portion of Bonds being redeemed in part.

Exchange of Bonds. Fully registered Bonds may be exchanged at the principal corporate trust office

of the Trustee or of any Transfer Agent for a like aggregate Principal amount of fully registered Bonds of the

same maturity of authorized denominations. The Trustee or any Transfer Agent shall require the payment by

the Bondholder requesting such exchange of any tax or other governmental charge required to be paid with

respect to such exchange. No such exchange shall be required to be made subsequent to the Record Date.

Bond Registration Books. The Trustee will keep or cause to be kept, at its principal corporate trust

office, sufficient books for the registration and transfer of Bonds, which shall at all times be open to

inspection by the City; and, upon presentation for such purpose, the Trustee shall, under such reasonable

regulations as it may prescribe, register, or transfer bonds on said books.

Selection of Bonds for Redemption

Redemption Within a Maturity. So long as the Bonds are issued in book-entry only form if fewer

than all of a particular maturity of the Bonds are to be called for redemption, the particular Bonds to be

redeemed will be selected pursuant to the procedures established by The Depository Trust Company

(“DTC”). If the Bonds are no longer held pursuant to the Book-Entry Only System, and if fewer than all

of a particular maturity of the Bonds then outstanding shall be called for redemption, the Bonds or

portions of Bonds to be redeemed within such maturity shall be selected by the Trustee by lot in such

manner as the Trustee shall determine appropriate.

B-2

Notice and Effect of Redemption

Notice of Redemption. Notice of redemption shall be given as follows:

(i) The Trustee shall mail a copy of such notice by first-class mail, postage prepaid, not less

than thirty (30) days and not more than sixty (60) days before such redemption date, to the owner of any

Bond, all or a portion of which is to be redeemed, at the last address appearing upon the registration

books maintained by the Trustee. Failure to give such notice by mail to any owner, or any defect therein,

shall not affect the validity of any proceedings for the redemption of other Bonds.

(ii) The Trustee also shall mail a copy of such notice by registered or certified mail or

overnight delivery service or transmit via telecopier, for receipt not less than two (2) business days prior

to sending such notice to the owners, to the following: The Depository Trust Company, 711 Stewart

Avenue, Garden City, New York 11530, Attention: Call Notification Department (telecopier number:

516-227-4190 or 516-227-4039), or such other notice address as is subsequently provided by DTC;

provided, however, that such mailing shall not be a condition precedent to such redemption and failure to

so mail any such notice shall not affect the validity of any proceedings for the redemption of the Bonds.

After the date specified in such call, the Bonds so called will cease to bear interest, provided that

funds for their payment have been deposited with the Trustee, and, except for the purpose of payment,

shall no longer be protected by the Indenture and shall not be deemed to be outstanding under the

provisions of the Indenture.

While the Bonds are being held by DTC under the book-entry system, notice of redemption will

be sent only to DTC.

Deposit of Redemption Price. The City shall deposit with the Trustee the money required for

payment of the Redemption Price of and the accrued interest to the redemption date on all Bonds then to be

called for redemption at least one day before the date fixed for such redemption.

Partial Redemption of Bonds; Disposition of Redeemed Bonds. Upon surrender of any Bond

redeemed in part only, the City shall duly execute and the Trustee or any Transfer Agent shall authenticate

and deliver to the registered owner thereof, at the expense of the City, a new Bond or Bonds of the same

maturity and of authorized denominations equal in aggregate Principal amount to the unredeemed portion of

the Bond surrendered.

Effect of Redemption. If notice of redemption has been duly given as described above, and moneys

for payment of the Redemption Price, together with interest to the redemption date on the Bonds so called for

redemption, are held by the Trustee, then such Bonds shall, on the redemption date designated in such notice,

become due and payable at the Redemption Price specified in such notice and interest accrued thereon to the

redemption date; and from and after the date so designated, interest on the Bonds so called for redemption

shall cease to accrue.

Bond Insurance Provisions.

(a) Notice and Other Information to be given to BAM. The City will provide BAM with all

notices and other information it is obligated to provide (i) under its Continuing Disclosure Agreement and

(ii) to the Bondholders or the Trustee under the Security Documents.

The notice address of BAM is: Build America Mutual Assurance Company, 200 Liberty Street, 27th

Floor, New York, NY 10281, Attention: Surveillance, Re: Policy No. 2017B0191, Telephone: (212) 235-

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2500, Telecopier: (212) 235-1542, Email: [email protected]. In each case in which notice or

other communication refers to an event of default or a claim on the Policy, then a copy of such notice or

other communication shall also be sent to the attention of the General Counsel at the same address and at

[email protected] or at Telecopier: (212) 235-5214 and shall be marked to indicate “URGENT

MATERIAL ENCLOSED.”

(b) Amendments, Supplements and Consents.

(1) Amendments. Wherever any Security Document requires the consent of

Bondholders, BAM’s consent shall also be required. In addition, any amendment,

supplement or modification to the Security Documents that adversely affect the rights or

interests of BAM shall be subject to the prior written consent of BAM.

(2) Consent of BAM Upon Default. Anything in any Security Document to the

contrary notwithstanding, upon the occurrence and continuance of a default or an event of

default, BAM shall be deemed to be the sole holder of the Bonds for all purposes and

shall be entitled to control and direct the enforcement of all rights and remedies granted

to the holders of the Bonds or the trustee, paying agent, registrar, or similar agent (the

“Trustee”) for the benefit of such holders under any Security Document. The Trustee may

not waive any default or event of default or accelerate the Insured Obligations without

BAM’s written consent.

(c) BAM As Third Party Beneficiary. BAM is explicitly recognized as and shall be deemed to

be a third party beneficiary of the Security Documents and may enforce any right, remedy or claim

conferred, given or granted thereunder.

(d) Policy Payments.

(1) In the event that principal and/or interest due on the Bonds shall be paid by BAM

pursuant to the Policy, the Bonds shall remain outstanding for all purposes, not be

defeased or otherwise satisfied and not be considered paid by the City, the assignment

and pledge of the trust estate and all covenants, agreements and other obligations of the

City to the registered owners shall continue to exist and shall run to the benefit of BAM,

and BAM shall be subrogated to the rights of such registered owners including, without

limitation, any rights that such owners may have in respect of securities law violations

arising from the offer and sale of the Bonds.

(2) Irrespective of whether any such assignment is executed and delivered, the City

and the Trustee shall agree for the benefit of BAM that:

(i) They recognize that to the extent BAM makes payments directly or

indirectly (e.g., by paying through the Trustee), on account of principal of or

interest on the Bonds, BAM will be subrogated to the rights of such holders to

receive the amount of such principal and interest from the City, with interest

thereon, as provided and solely from the sources stated in the Security Document

and the Bonds; and

(ii) They will accordingly pay to BAM the amount of such principal and

interest, with interest thereon, but only from the sources and in the manner

provided in the Security Documents and the Bonds for the payment of principal

of and interest on the Bonds to holders, and will otherwise treat BAM as the

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owner of such rights to the amount of such principal and interest.

(3) If an Insurer Default shall occur and be continuing, then, notwithstanding

anything in paragraph B above to the contrary, (1) if at any time prior to or following an

Insurer Default, BAM has made payment under the Policy, to the extent of such payment

BAM shall be treated like any other holder of the Bonds for all purposes, including

giving of consents, and (2) if BAM has not made any payment under the Policy, BAM

shall have no further consent rights until the particular Insurer Default is no longer

continuing or BAM makes a payment under the Policy, in which event, the foregoing

clause (1) shall control. For purposes of this paragraph (3), “Insurer Default” means: (A)

BAM has failed to make any payment under the Policy when due and owing in

accordance with its terms; or (B) BAM shall (i) voluntarily commence any proceeding or

file any petition seeking relief under the United States Bankruptcy Code or any other

Federal, state or foreign bankruptcy, insolvency or similar law, (ii) consent to the

institution of or fail to controvert in a timely and appropriate manner, any such

proceeding or the filing of any such petition, (iii) apply for or consent to the appointment

of a receiver, trustee, custodian, sequestrator or similar official for such party or for a

substantial part of its property, (iv) file an answer admitting the material allegations of a

petition filed against it in any such proceeding, (v) make a general assignment for the

benefit of creditors, or (vi) take action for the purpose of effecting any of the foregoing;

or (C) any state or federal agency or instrumentality shall order the suspension of

payments on the Policy or shall obtain an order or grant approval for the rehabilitation,

liquidation, conservation or dissolution of BAM (including without limitation under the

New York Insurance Law).

(e) Definitions.

“BAM” shall mean Build America Mutual Assurance Company, or any successor thereto.

“Policy” shall mean the Municipal Bond Insurance Policy issued by BAM that guarantees the scheduled

payment of principal of and interest on the Bonds when due.

“Security Documents” shall mean the resolution, trust agreement, ordinance, loan agreement, bond, note

and/or any additional or supplemental document executed in connection with the Bonds.

Project Fund

The Indenture creates and establishes a Project Fund, to be held by the Trustee, in which the Trustee

may establish one or more Project Accounts, and one or more subaccounts in each Project Account. There

shall be paid into the Project Fund the amounts required to be so paid by the provisions of the Indenture.

The proceeds of insurance maintained in connection with construction of the Improvements during

the period of construction of such Improvements against physical loss of or damage to properties of the

City, or of contractors’ performance bonds with respect thereto, pertaining to the period of construction

thereof, shall be paid into the Project Fund.

Amounts in the Project Fund shall be applied to pay the Project Costs of the Improvements. All net

income earned on any moneys or investments in the Project Fund shall be held in the Project Fund and

applied to pay Project Costs of the Improvements.

The substantial completion of construction of the Improvements shall be evidenced by a Written

Certificate of the City. Upon the filing of such Certificate, the balance in the Project Fund in excess of the

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amount, if any, stated in such Certificate as being required for payment of any remaining part of the Project

Costs of such Improvements shall be (a) used to purchase Bonds, (b) deposited into the Bond Fund, (c)

transferred into any other Project Account to pay Costs of Construction of a Project, or (d) used for any

other purpose for which proceeds of Bonds may be used under applicable law and covenants regarding the

use of proceeds of Bonds.

The Costs of Issuance will be paid from the Cost of Issuance Account within the Project Fund.

Proceeds deposited to the Costs of Issuance Account which are not needed to pay costs of issuance will be

transferred to the Project Fund and applied to pay the Project Costs of the Improvements.

Revenue Fund

All proceeds of the Library Tax and the Special Tax Collections as permitted by law shall be

promptly deposited by the City, and the System on behalf of the City, to the credit of the Revenue Fund.

Bond Fund

The Indenture creates and establishes a Series 2017 Bond Account in the Bond Fund (the “Bond

Fund”) in which are created a Series 2017 Debt Service Account, and a Series 2017 Redemption Account,

to be held by the Trustee. There should be promptly deposited to the Bond Fund from the Revenue Fund not

less than one (1) business day prior to any date on which the payment of the principal of and interest on the

Bonds shall be due and payable, an amount of Library Tax and Special Tax Collections sufficient to pay the

principal of, interest on, and expenses of the Trustee and paying agent, as the same become due and payable.

Amounts deposited in the Bond Fund shall be used solely for the payment of principal of and interest on the

Bonds, fees of the Trustee, and costs of redemption either at maturity or at redemption prior to maturity, in

accordance with the provisions of the Indenture. Moneys deposited to the Bond Fund shall be applied to pay

at maturity or as due all principal of, interest on, and fees of the Trustee in connection with all Outstanding

Bonds.

There shall be deposited into the Bond Fund the amounts required to be so deposited pursuant to the

Indenture. The Trustee shall pay out of the Bond Fund (1) on or before each interest payment date for the

Bonds, the amount required for the interest payable on such date; (2) on or before each Principal installment

due date, the amount required for the Principal installment payable on such due date; and (3) on or before

any redemption date for the Bonds, the amount required for the payment of the Redemption Price of and

accrued interest on such Bonds then to be redeemed. The Trustee shall retain in the Bond Fund an amount

sufficient to pay interest due on the Bonds on the next succeeding interest payment date.

Purchase of Bonds

The City may purchase Bonds from any available funds at public or private sale, as and when and at

such prices as the City may in its discretion determine, but at a price not exceeding the Principal amount

thereof plus accrued interest thereon, or in the case of Bonds which by their terms are subject to redemption

prior to maturity, at the then current or first applicable Redemption Price (plus accrued interest), as the case

may be. In the case of the purchase of Bonds of a maturity for which Sinking Fund Installments shall have

been established, the City shall elect the manner in which the Principal amount of such Bonds shall be

credited toward Sinking Fund Installments.

Covenants of the City

Punctual Payment of Bonds. The City will punctually pay or cause to be paid the Principal,

Redemption Price of, and interest on the Bonds in strict conformity with the terms of the Bonds and the

Indenture, and the City will punctually pay or cause to be paid all Sinking Fund Installments which may be

established for the Bonds. The City’s obligations under the Indenture are limited to the proceeds of the

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Library Tax and Special Tax Collections and any other funds or assets which constitute part of the Trust

Estate.

Construction of Improvements. If the City or the System undertakes the acquisition or

construction of Improvements, the City, by and through the System, shall cause the acquisition or

construction to be accomplished in a sound and economic manner and as expeditiously as is practicable.

Against Encumbrances. The City will not create, and will use its good faith efforts to prevent the

creation of, any mortgage or lien upon the Improvements or any property essential to the proper operation of

the Improvements. The City will not create, or permit the creation of, any pledge, lien, charge, or

encumbrance upon the Library Tax and Special Tax Collections except only as provided in or permitted by

the Indenture.

Limitation on Sale or Other Disposition of Property. The City and the System will not sell or

otherwise dispose of all or a substantial part of the Public Libraries except the City may sell or otherwise

dispose of any facilities, or an interest in facilities, constituting a part of the Private Libraries which have

ceased to be necessary for the efficient operations of the Private Libraries.

The City and the System will not enter into any lease or other agreement which impairs or

impedes the operation of the Public Libraries or the tax-exempt status of the bonds, or which impairs or

impedes the rights of the Bondholders with respect to the Library Tax and the Special Tax Collection.

The proceeds of any sale or other disposition described above shall be deposited into the Revenue

Fund.

Operation and Maintenance. The City and the System will operate the Public Libraries

continuously in an efficient and economical manner, to the extent practicable under then existing conditions.

The City and the System will at all times maintain, preserve, and keep the Public Libraries in good repair,

working order, and condition so that the operating efficiency thereof will be of high character. The City and

the System will cause all necessary and proper repairs and replacements to be made so that the business

carried on in connection with the Public Libraries may be properly and advantageously conducted at all

times in a manner consistent with prudent management, and that the rights and security of the Holders of the

Bonds may be fully protected and preserved.

Maintenance of Library Tax. The City and the System will not sell, convey, mortgage, encumber,

or otherwise dispose of any part of the Library Tax, except as otherwise permitted by the Indenture.

Insurance. Subject in each case to the condition that insurance is obtainable at reasonable rates and

upon reasonable terms and conditions:

(1) the City and the System will procure and maintain insurance on the Public

Libraries and public liability insurance in such amounts and against such risks as are usually

insurable in connection with similar libraries and are usually carried by municipalities operating

similar libraries;

(2) the City and the System will procure and maintain adequate fidelity insurance or

bonds on the persons handling or responsible for funds of the City related to the Public Libraries;

and

(3) the City and the System will place on file with the Trustee annually, within 120

days after the beginning of each Fiscal Year, a Written Statement of the City or a certificate from

the insurer containing a summary of all insurance policies then in effect with respect to the Public

Libraries.

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Accounts and Reports. The City and the System will at all times keep proper books of record and

accounts, separately identified from all other records and accounts of the City and the System, in which

complete and accurate entries shall be made of all transactions relating to the Public Libraries and the

Library Tax and Special Tax Collections. Such books of record and accounts shall at all times during

business hours be subject to the inspection of the Trustee, the Holders of not less than twenty-five percent

(25%) of the Bonds then Outstanding, or their representatives authorized in writing.

Collection of Library Tax.

In order to assure full and continuous performance of the covenants contained in the Indenture

relating to the punctual payment of Bonds and the collection of Library Tax, with a margin for

contingencies and temporary unanticipated reduction in Library Tax, the City covenants and agrees to

collect the Library Tax, together with other income, which are reasonably expected to yield available

revenues at least equal to the Annual Debt Service Requirement for the forthcoming Fiscal Year.

Operation By the System.

The City recognizes that the System is a joint instrumentality of the City and Jefferson County

designated by ordinances of the City to operate and manage the Public Libraries and their related

properties and facilities, with full and complete authority to manage, operate, improve, extend, and

maintain the Public Libraries and their related properties and facilities. Such authority and responsibility

of the System is confirmed and continued, and the System is further designated and appointed as the

agency and instrumentality of the City to act for and on behalf of the City in connection with the

discharge of the duties of the City, and the realization of all rights of the City, under and pursuant to the

Indenture. The City covenants with the Trustee and the Holders of the Bonds that such authorization and

authority will not be rescinded so long as any Bonds are Outstanding.

The Trustee

The City has appointed Simmons Bank, Pine Bluff, Arkansas, as Trustee for the Holders of the

Bonds, to act as the legal depository of the City for the purpose of receiving all moneys which the City is

required to pay to the Trustee under the Indenture and to hold, allocate, use, and apply the same as provided

in the Indenture. The Trustee shall also act as Registrar and Transfer Agent for the Bonds, with the duties

provided in the Indenture. In acting as Registrar and Transfer Agent, the Trustee shall be the agent of the

City.

Resignation of the Trustee. The Trustee may at any time resign or be discharged of its duties and

obligations created by the Indenture by giving not less than 60 days’ written notice to the City, specifying

the date when such resignation shall take effect, and mailing notice thereof to the Holders of all Bonds then

Outstanding, and such resignation shall take effect on the day specified in such notice unless previously a

successor shall have been appointed in the manner described below and as provided in the Indenture, in

which event such resignation shall take effect immediately upon the appointment of such successor;

provided, however, that such resignation of the Trustee shall in no event take effect until such successor

shall have been appointed and accepted the duties of Trustee.

Removal of the Trustee. The City may at any time remove the Trustee initially appointed or any

successor thereto by the adoption of a resolution by the System providing for such removal, for the

appointment of a successor, and for the effective date of the change of Trustee; provided, however, that such

removal of the Trustee shall in no event take effect until such successor shall have been appointed and

accepted the duties of Trustee.

Appointment of Successor Trustee. Notice of the resignation or removal of the Trustee and the

appointment of a successor shall be mailed by first class mail to the registered Holders of all Bonds then

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Outstanding (and by publication in a Financial Newspaper or Journal if any Bonds then Outstanding are not

in fully registered form), within thirty (30) days after adoption by the System of the resolution providing for

such appointment. Any successor Trustee shall be a bank or trust company with a capital stock, undivided

profits, and surplus of not less than $50,000,000 (or in the case of a corporation or trust company included in

a bank holding company system, the related bank holding company system shall have a capital stock,

undivided profits, and surplus of not less than $50,000,000).

Terms and Conditions of the Trusts. The Trustee shall perform the trusts contained in the Indenture

as a corporate trustee ordinarily would perform said trusts under a corporate indenture, only upon and

subject to the express terms and conditions of the Indenture, including without limitation the following:

(1) The Trustee shall not be required to take notice or be deemed to have notice of

any default under the Indenture except (a) failure by the City to cause to be made any of the

payments to the Trustee required to be made pursuant to Article V of the Indenture or (b) failure

of the City to file with the Trustee any document required by the Trust Indenture to be so filed

prior to or subsequent to the issuance of the Bonds provided that, the Trustee shall be required to

take notice or be deemed to have notice of any default under the Indenture if specifically notified

in writing of such default by the Holders of not less than ten percent (10%) in aggregate Principal

amount of Bonds then Outstanding, and all notices or other instruments required by the Trust

Indenture to be delivered to the Trustee must, in order to be effective, be delivered at the principal

corporate trust office of the Trustee and in the absence of such notice, the Trustee may

conclusively assume there is not default except as aforesaid;

(2) The Trustee shall be under no obligation to exercise any of the trusts or powers

vested in it by the Indenture at the request, order, or direction of any of the Bondholders pursuant

to the provisions of the Indenture, unless such Bondholders shall have offered to the Trustee

reasonable security or indemnity against the costs, expenses, and liabilities which might be

incurred therein or thereby.

(3) The Trustee shall not be bound to make any investigation into the facts or matters

stated in any resolution, ordinance, certificate, statement, instrument, opinion, report, notice,

request, consent, order, approval, appraisal, Bond, or other paper or document, unless requested in

writing to do so by the Holders of not less than twenty five percent (25%) in aggregate Principal

amount of the Bonds then Outstanding, provided that if the timely payment to the Trustee of the

costs, expenses, or liabilities likely to be incurred in the making of such investigation is, in the

opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the

terms of the Indenture, the Trustee may require reasonable indemnity against such expenses or

liabilities as a condition to so proceeding. The reasonable expense of every such inquiry or

examination shall be paid by the City or, if paid by the Trustee, shall be repaid by the City.

Intervention by the Trustee. In any judicial proceeding to which the City is a party and which in

the opinion of the Trustee has a substantial bearing on the interests of Holders of the Bonds, the Trustee

may intervene on behalf of Bondholders and shall do so if requested in writing by the Holders of a

majority of the aggregate Principal amount of Bonds then Outstanding. The rights and obligations of the

Trustee described in this paragraph are subject to the approval of a court of competent jurisdiction.

Successor Trustee. Any corporation or association into which the Trustee may be converted or

merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business

or assets as a whole or substantially as a whole, or any corporation or association resulting from any such

conversion, sale, merger, consolidation, or transfer to which it is a party, shall be and become a successor

Trustee under the Indenture and vested with all the trusts, powers, discretion, immunities, privileges, and all

other matters as was its predecessor, without the execution or filing of any instrument or any further act,

deed, or conveyance on the part of the Trustee or the City.

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Compensation of the Trustee and its Lien. The City covenants and agrees to pay to the Trustee

from time to time, and the Trustee shall be entitled to, reasonable compensation and, except as otherwise

expressly provided, the City covenants and agrees to pay or reimburse the Trustee upon its request for all

reasonable expenses, disbursements, and advances incurred or made by the Trustee in accordance with any

of the provisions of the Indenture (including the reasonable compensation and the expenses and

disbursements of its counsel and of all persons not regularly in its employ including but not limited to any

Paying Agent, Transfer Agent, or Depository) except any such expense, disbursement, or advance as may

arise from its negligence or bad faith. The City also covenants to indemnify the Trustee for, and to hold it

harmless against, any loss, liability, or expense incurred without negligence or bad faith on the part of the

Trustee, arising out of or in connection with the acceptance or administration of the trust evidenced by the

Indenture, including the costs and expenses of defending itself against any claim of liability in the premises.

The obligations of the City to compensate and indemnify the Trustee and to pay or reimburse the Trustee for

expenses, disbursements, and advances shall constitute additional indebtedness under the Indenture, shall be

subject to the same limitations with respect to sources of payment as all other indebtedness of the City

thereunder, and shall survive the satisfaction and discharge of the Indenture. Such additional indebtedness

shall be secured by a lien prior to that of the Bonds upon all property and funds held or collected by the

Trustee as such, except funds held in any Rebate Fund and funds held in trust for the benefit of the Holders

of particular Bonds.

Modification or Amendment of the Indenture

Amendments Permitted. The Indenture and the rights and obligations of the City and of the Holders

of the Bonds may be modified or amended at any time pursuant to the affirmative vote at a meeting of

Bondholders, or with the written consent without a meeting, of the Holders of at least sixty percent (60%) in

Principal amount of the Bonds then Outstanding.

The Indenture and the rights and obligations of the City and the Holders of the Bonds may also be

modified or amended at any time, without the consent of any Bondholders, for any of the following

purposes:

(1) to add to the covenants and agreements of the City contained in the Indenture, to

add other covenants and agreements thereafter to be observed, or to surrender any right or power

therein reserved to or conferred upon the City;

(2) to make such provisions for the purpose of curing any ambiguity, or of curing or

correcting any defective provision contained in the Indenture or in regard to questions arising

under the Indenture, as the City may deem necessary or desirable, and which shall not adversely

affect the interests of the Holders of the Bonds;

(3) to provide for the issuance of refunding bonds in accordance with the provisions

of the Indenture;

(4) to make any change which in the judgment of the Trustee shall not materially

adversely affect the rights or interests of the Holders of any Outstanding Bonds requested by a

Rating Agency in order to obtain or maintain any rating on the Bonds; and

(5) to make any change necessary (a) to establish or maintain the exemption from

federal income taxation of interest on the Bonds as a result of any modifications or amendments

to Section 148 of the Code (or any successor provision of law) or interpretations thereof by the

Internal Revenue Service, or (b) to comply with the provisions of Section 148(f) of the Code (or

any successor provision of law), including provisions for the payment of all or a portion of the

investment earnings of any of the Funds established under the Indenture to the United States of

America.

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No modification or amendment permitted as described above shall (1) extend the fixed maturity of

any Bond, or reduce the Principal amount or Redemption Price thereof, or reduce the rate or extend the time

of payment of interest thereon, without the consent of the Holder of each Bond so affected; (2) reduce the

aforesaid percentage of Bonds required for the affirmative vote or written consent to an amendment or

modification of the Indenture, without the consent of the Holders of all of the Bonds then Outstanding; or

(3) without its written consent thereto, modify any of the rights or obligations of the Trustee.

Bondholders’ Meetings. The Trustee may, and upon the Written Request of the City shall, at any time, call

a meeting of the Holders of Bonds, to be held at such place as may be selected by the Trustee and specified

in the notice calling such meeting. Written notice of such meeting, stating the time and place of the meeting

and in general terms the business to be submitted, shall be mailed by the Trustee, postage prepaid, not less

than thirty (30) nor more than sixty (60) days before such meeting to each registered owner of Bonds then

Outstanding at the owner’s address, if any, appearing upon the Bond register of the City. The cost and

expense of the giving of such notice shall be borne by the City, and the Trustee shall be reimbursed by the

City for any expense incurred by it.

Prior to calling any meeting of the Holders of Bonds, the Trustee shall adopt regulations for the

holding and conduct of such meeting, and copies of such regulations shall be filed at the principal corporate

trust office of the Trustee and at the office of the City and shall be open to the inspection of all Bondholders.

The regulations shall include such provisions as the Trustee may deem advisable for evidencing the

ownership of Bonds, for voting in person or by proxy, for the selection of temporary and permanent officers

to conduct the meeting and inspectors to tabulate and canvass the votes cast at the meeting, the adjournment

of any meeting, and the records to be kept of the proceedings of such meeting, including rules of order for

the conduct of such meeting and such other regulations as, in the opinion of the Trustee, may be necessary

or desirable.

Disqualified Bonds. Bonds owned or held by or for the account of the City shall not be deemed

Outstanding for the purpose of any vote, consent, or other action or any calculation of Outstanding Bonds

for the purpose of amending the Indenture, and neither the City nor any owner or Holder of such Bonds

shall be entitled to vote or consent to, or to take, any other such action.

Events of Default and Remedies

Events of Default. The occurrence of one or more of the following events shall constitute an “Event

of Default”:

(1) failure by the City to make the due and punctual payment of the Principal or

Redemption Price of any Bond when and as the same shall become due and payable, whether at

maturity as therein expressed, by proceedings for redemption, by declaration, or otherwise;

(2) failure by the City to make the due and punctual payment of any installment of

interest on any Bond or any Sinking Fund Installment when and as such interest installment or

Sinking Fund Installment shall become due and payable;

(3) failure by the City to observe any of the covenants, agreements, or conditions on

its part contained in the Indenture or the Bonds, and failure to remedy the same for a period of

sixty (60) days after written notice thereof, specifying such failure and requiring the same to be

remedied, shall have been given to the City by the Trustee, or to the City and the Trustee by the

Holders of not less than twenty five percent (25%) in aggregate principal amount of the Bonds at

the time Outstanding; or

(4) bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings,

including without limitation proceedings under Chapter 9 of Title 11, United States Code (as the

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same may from time to time be hereafter amended), or other proceedings for relief under any

federal or state bankruptcy law or similar law for the relief of debtors are instituted by or against

the City and, if instituted against the City, said proceedings are consented to or are not dismissed

within thirty (30) days after such institution.

Acceleration. Upon the occurrence of an Event of Default, unless the principal of all the Bonds

shall have already become due and payable:

(1) the Trustee may, or

(2) upon receipt of the written request of the Holders of not less than twenty five

percent (25%) of the aggregate Principal amount of the Bonds at the time Outstanding, the

Trustee shall,

declare upon notice in writing to the City the Principal of all of the Bonds then Outstanding, and the interest

accrued thereon, to be due and payable immediately. Upon such declaration such Principal and interest shall

be immediately due and payable, notwithstanding anything to the contrary contained in the Indenture or in

the Bonds.

The right of the Trustee to request the Trustee to make any such declaration as aforesaid,

however, is subject to the conditions that: if, at any time after such declaration, any overdue installments

of interest upon the Bonds, together with the reasonable and proper charges, expenses, and liabilities of

the Trustee, and all other sums then payable by the City under the Indenture (except the Principal of and

interest accrued since the next preceding interest payment date on the Bonds due and payable solely by

virtue of such declaration) shall either be paid by the City or provision satisfactory to the Trustee shall be

made for such payment, and all defaults under the Bonds or under the Indenture (other than the payment

of Principal and interest due and payable solely by reason of such declaration) shall be made good or be

secured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall be made

therefor; then and in every such case the Holders of a majority in aggregate Principal amount of the Bonds

at the time Outstanding, by written notice to the City and to the Trustee, may rescind such declaration and

annul such default in its entirety, then any such declaration shall ipso facto be deemed to be rescinded and

any such default and its consequences shall ipso facto be deemed to be annulled, but no such rescission and

annulment shall extend to or affect any subsequent default or impair or exhaust any right or power

consequent thereon.

Accounting and Examination of Records After Default. The City covenants that if an Event of

Default shall have happened and shall not have been remedied, the books of record and accounts of the City

and all other records of the City relating to the Improvements shall at all times be subject to the inspection

and use of the Trustee and of its agents and attorneys. The City covenants that if an Event of Default shall

happen and shall not have been remedied, the City, upon demand of the Trustee, will account, as if it were

the trustee of an express trust, for the Library Tax, the Special Tax Collections, and other moneys, securities,

and funds pledged or held under the Indenture for such period as shall be stated in such demand.

Application of Pledged Revenues and Other Moneys After Default. During the continuance of an

Event of Default, the Trustee shall apply the Library Tax, the Special Tax Collections, and such moneys,

securities, and funds and the income therefrom as follows and in the following order, provided that moneys

held in the Bond Fund shall not be used for purposes other than payment of the interest and Principal or

Redemption Price then due on the Bonds in accordance with paragraph (2) below:

(1) to the payment of the reasonable and proper charges and expenses of the Trustee

and the reasonable fees and disbursements of its counsel;

B-12

(2) to the payment of the interest and Principal or Redemption Price then due on the

Bonds, as follows:

(a) unless the Principal of all of the Bonds shall have become or have been

declared due and payable,

FIRST: To the payment to the persons entitled thereto of all installments of

interest then due on the Bonds in the order of the maturity of such installments and, if the

amount available shall not be sufficient to pay in full any installment or installments

maturing on the same date, then to the payment thereof ratably, according to the amounts

due thereon, to the persons entitled thereto, without any discrimination or preference; and

SECOND: To the payment to the persons entitled thereto of the unpaid Principal

or Redemption Price of any Bonds which shall have become due, whether at maturity or

by call for redemption, in the order of their due dates and, if the amount available shall

not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof

ratably, according to the amounts of Principal or Redemption Price due on such date, to

the persons entitled thereto, without any discrimination or preference.

(b) if the Principal of all of the Bonds shall have become or have been

declared due and payable, to the payment of the Principal and interest then due and

unpaid upon the Bonds without preference or priority of Principal over interest or of

interest over Principal, or of any installment of interest over any other installment of

interest, or of any Bond over any other Bond, ratably, according to the amounts due

respectively for Principal and interest, to the persons entitled thereto without any

discrimination or preference.

If and whenever all overdue payments on all Bonds, together with the reasonable and proper

charges and expenses of the Trustee, shall be paid, or provision satisfactory to the Trustee shall be made for

such payment, and all defaults under the Indenture or the Bonds shall be made good or secured to the

satisfaction of the Trustee or provision deemed to be adequate shall be made therefor, the Trustee shall pay

over to the City all Library Tax and Special Tax Collections and any other funds then remaining

unexpended in the hands of the Trustee. The City and the Trustee shall be restored to their former positions

and rights under the Indenture, and all Library Tax and Special Tax Collections and any other funds shall

thereafter be applied as provided in the Indenture. No such payment over to the City by the Trustee or

resumption of the application of Library Tax and Special Tax Collections and any other funds as provided in

the Indenture shall extend to or affect any subsequent default under the Indenture or impair any right

consequent thereon.

Rights and Remedies of Bondholders. No Holder of any Bond shall have any right to institute any

proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or

trustee, or for any other remedy hereunder, unless

(1) such Holder has previously given written notice to the Trustee of a continuing

Event of Default;

(2) the Holders of not less than twenty five (25%) in aggregate Principal amount of

the Outstanding Bonds shall have made written request to the Trustee to institute proceedings in

respect of such Event of Default in its own name as Trustee under the Indenture;

(3) such Holders have offered to the Trustee reasonable indemnity against the costs,

expenses, and liabilities to be incurred in compliance with such request;

B-13

(4) the Trustee has failed to institute any such proceedings for sixty (60) days after

its receipt of such notice, request, and offer of indemnity; and

(5) no direction inconsistent with such written request has been given to the Trustee

during such sixty (60) day period by the Holders of a majority in Principal amount of the

Outstanding Bonds;

it being understood and intended that no one (1) or more Holders of Bonds shall have any right in any

manner whatever by virtue of, or by availing of, any provision of the Indenture to affect, disturb, or

prejudice the rights of any other such parties, or to obtain or to seek to obtain priority or preference over any

other such parties or to enforce any right under the Indenture, except in the manner therein provided and for

the equal and ratable benefit of all such parties in accordance with the provisions of the Indenture.

Notwithstanding any other provision in the Indenture, the Holder of any Bond shall have the right,

which is absolute and unconditional, to receive payment of the Principal and Redemption Price of and

interest on such Bond on the respective stated maturities expressed in such Bond (or, in the case of

redemption, on the redemption date of such Bond) and to institute suit for the enforcement of any such

payment. Such right to receive payment shall not be impaired without the consent of such Holder.

The Holders of a majority of the Principal amount of the Outstanding Bonds shall have the right to

direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee or

exercising any trust or power conferred on the Trustee, provided that: such direction shall not be in conflict

with any rule of law or the Indenture, the Trustee shall not determine that the action so directed would be

unjustly prejudicial to the Holders not taking part in such direction, and the Trustee may take any other

action deemed proper by the Trustee which is not inconsistent with such direction.

Appointment of Receiver. Upon the occurrence of an Event of Default, and upon the filing of a

suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the

Bondholders, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or

receivers of the trust estate created by the Trust Indenture, including, without limitation, the proceeds of

the sale of the Bonds, the Library Tax, the Special Tax Collections, and any other funds, and the Funds,

including the investments, if any, thereof, pending such proceedings, with such powers as a court making

such appointments shall confer.

Investment of Funds

Moneys held in any Fund or account shall be invested and reinvested by the City or the Trustee to the

fullest extent practicable in Investment Securities which mature not later than such times as shall be necessary

to provide moneys when needed for payments to be made from such Fund or account, provided that the

Trustee shall make such investments only in accordance with instructions received from an Authorized

Officer of the City;

Subject to any required rebate of earnings on investments in any Fund or account to the United States

of America pursuant to Section 148(f) of the Code: (1) all moneys earned as an investment of moneys in the

Project Fund shall be retained therein; (2) net income earned on any moneys or investments in the Bond Fund

during the period commencing from the date of issuance of the bonds and continuing through the completion

of the Improvements (the “Project Period”), but in any event not later than May 1, 2020, shall be transferred

to the Project Fund; (3) net income earned on any moneys or investments in the Bond Fund after the Project

Period shall remain in the Bond Fund; and (4) net income earned on any moneys or investments in the

Revenue Fund shall be transferred as provided in the Indenture.

B-14

Defeasance

Discharge of Indebtedness. If the City shall pay, or there shall otherwise be paid to the Holder of all

Bonds the Principal or Redemption Price, if applicable, and interest due or to become due thereon, at the

times and in the manner stipulated therein, then the pledge of the Library Tax and the Special Tax

Collections and any other funds and other moneys, securities, and funds pledged under the Indenture and all

covenants, agreements, and other obligations of the City to the Bondholders shall thereupon cease,

terminate, and become void and be discharged and satisfied. Such Bonds shall cease to be entitled to any

lien, benefit, or security under the Indenture, and all covenants, agreements, and obligations of the City to

the Holders of such Bonds shall thereupon cease, terminate, and become void and be discharged and

satisfied.

Bonds or interest installments for the payment or redemption of which moneys shall have been set

aside and shall be held in trust by the Fiduciaries (through deposit by the City of funds for such payment or

redemption or otherwise) at the maturity or redemption date thereof shall be deemed to have been paid

within the meaning and with the effect expressed in the paragraph above. All Outstanding Bonds shall be,

prior to the maturity or redemption date thereof, deemed to have been paid within the meaning and with the

effect expressed in the paragraph above if (1) in case any of said Bonds are to be redeemed on any date prior

to their maturity, the City shall have given to the Trustee in form satisfactory to it irrevocable instructions to

mail notice of redemption of such Bonds on said date; (2) there shall have been deposited with the Trustee

either moneys in an amount which shall be sufficient, or Government Obligations (including any

Government Obligations issued or held in book-entry form on the books of the Department of the Treasury

of the United States of America) the principal of and the interest on which when due will provide moneys

which, together with the moneys, if any, deposited with the Trustee at the same time, shall be sufficient, to

pay when due the Principal or Redemption Price, if applicable, of and interest due and to become due on

said Bonds on and prior to the redemption date or maturity date thereof, as the case may be; and (3) in the

event said Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the

City shall have given the Trustee in form satisfactory to it irrevocable instructions to mail, first class postage

prepaid, a notice to the Holders of such Bonds that the deposit required by (2) above has been made with the

Trustee and that said Bonds are deemed to have been paid in accordance with the Indenture and stating such

maturity or redemption date upon which moneys are to be available for the payment of the Principal or

Redemption Price, if applicable, of said Bonds. Neither Government Obligations nor moneys deposited with

the Trustee nor principal or interest payments on any such Government Obligations shall be withdrawn or

used for any purpose other than, and shall be held in trust for, the payment of the Principal or Redemption

Price, if applicable, and interest on said Bonds; provided that any cash received from such principal or

interest payments on such Government Obligations deposited with the Trustee, if not then needed for such

purpose, shall be, to the extent practicable, reinvested in Government Obligations maturing at times and in

amounts sufficient to pay when due the Principal or Redemption Price, if applicable, and interest to become

due on said Bonds on and prior to such redemption date or maturity date thereof, as the case may be, and

interest earned from such reinvestments shall be paid over to the City, as received by the Trustee, free and

clear of any trust, lien, or pledge.

Unclaimed Moneys. Any moneys held by a Fiduciary in trust for the payment and discharge of any

of the Bonds which remain unclaimed for five (5) years after the date when such Bonds have become due and

payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the

Fiduciary at such date, or for five (5) years after the date of deposit of such moneys if deposited with the

Fiduciary after the said date when such Bonds become due and payable, shall be repaid by the Fiduciary to

the City, as its absolute property and free from trust, and the Fiduciary thereupon shall be released and

discharged with respect thereto and the Bondholders shall look only to the City for the payment of such

Bonds. Before being required to make any such payment to the City, the Fiduciary shall, at the expense of the

City, cause to be published at least twice in a Financial Newspaper or Journal of general circulation in New

York, New York, at an interval of not less than seven (7) days between publications, a notice that said

B-15

moneys remain unclaimed and that, after a date named in said notice, which date shall be not less than thirty

(30) days after the date of the first publication of such notice, the balance of such moneys then unclaimed will

be returned to the City.

1416084

C-1

APPENDIX “C”

Financial Statements and Accompanying Information and Independent Auditors’ Report for

Pine Bluff and Jefferson County Library System, December 31, 2015

See attached.

LEGISLATIVE JOINT AUDITING COMMITTEE

City of Pine Bluff, Arkansas

Regulatory Basis Financial Statementsand Other Reports

December 31, 2015


TABLE OF CONTENTS

FOR THE YEAR ENDED DECEMBER 31, 2015

Independent Auditor's ReportReport on Internal Control Over Financial Reporting, Compliance and Other Matters, and Other Issues Based on an

Audit of Financial Statements Performed in Accordance with Government Auditing Standards

REGULATORY BASIS FINANCIAL STATEMENTS

Exhibit

Balance Sheet ^ Regulatory Basis AStatement of Revenues, Expenditures, and Changes in Fund Balances ^

Regulatory Basis BStatement of Revenues, Expenditures, and Changes in Fund Balances ^

Budget and Actual ^ General and Street Funds ^ Regulatory Basis CNotes to Financial Statements

SUPPLEMENTARY INFORMATION

ScheduleCombining Balance Sheet ^ Other Funds in the Aggregate ^

Regulatory Basis 1Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ^

Other Funds in the Aggregate ^ Regulatory Basis 2Notes to Schedules 1 and 2

OTHER INFORMATION

Schedule of Capital Assets (Unaudited) 3Schedule of Selected Information for the Last Five Years ^

General Fund - Regulatory Basis (Unaudited) 4-1Schedule of Selected Information for the Last Five Years ^

Street Fund - Regulatory Basis (Unaudited) 4-2Schedule of Selected Information for the Last Five Years ^

Other Funds in the Aggregate ^ Regulatory Basis (Unaudited) 4-3

500 WOODLANE STREET, SUITE 172 ]75@@71 >; /6 $ ->6 -9?-? *((& '-'& ,, ]<4; 91: (501) 683-+)& & ]2-C: (501) 683-8605www.arklegaudit.gov

Sen. Jimmy Hickey, Jr.Senate Chair

Sen. Linda ChesterfieldSenate Vice Chair

Roger A. Norman, JD, CPA, CFE, CFFLegislative Auditor

LEGISLATIVE JOINT AUDITING COMMITTEEARKANSAS LEGISLATIVE AUDIT

Rep. Mary BroadawayHouse Chair

Rep. Sue ScottHouse Vice Chair

INDEPENDENT AUDITOR'S REPORT

City of Pine Bluff, Arkansas Officials and Council MembersLegislative Joint Auditing Committee

Report on the Financial Statements

We have audited the accompanying regulatory basis financial statements of the general fund, street fund, and other funds inthe aggregate of the City of Pine Bluff, Arkansas, as of and for the year ended December 31, 2015, and the related notes tothe financial statements as listed in the table of contents.

&(0(,+/+0584 '+42104-)-.-57 for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financialreporting provisions of Ark. Code Ann. § 10-4-412, as described in Note 1, to meet the requirements permitted by the State ofArkansas; this includes determining that the regulatory basis of accounting is an acceptable basis for the preparation of thefinancial statements in the circumstances. Management is also responsible for the design, implementation, and maintenance ofinternal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error.

%6*-51384 '+42104-)-.-57

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordancewith auditing standards generally accepted in the United States of America and the standards applicable to financial auditscontained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.@KH SURFHGX UHV V HOHFWHG GHSHQG RQWKH DX GLWRUaV MX GJ P HQW$ LQFOX GLQJ WKH DV V HV V P HQWRIWKH ULV N V RIP DWHULDOP LV V WDWHP HQWRIWhefinancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controlUHOHYDQWWR WKH HQWLW\aV SUHSDUDWLRQDQG IDLUSUHV HQWDWLRQRIWKH ILQDQFLDOV WDWHP HQWV LQRUGHUWR GHV LJ QDX GLWSURFHGX UHV WKat areappropriate in the circumstances, but not for the pX USRV H RIH[SUHV V LQJ DQRSLQLRQRQWKH HIIHFWLYHQHV V RIWKH HQWLW\aV LQWHUQDOcontrol. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of significant accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1 of the financial statements, the financial statements are prepared by the City on the basis of thefinancial reporting provisions of Ark. Code Ann. § 10-4-412, which is a basis of accounting other than accounting principlesgenerally accepted in the United States of America, to meet the requirements permitted by the State of Arkansas.

The effects on the financial statements of the variances between the regulatory basis of accounting described in Note 1 andaccounting principles generally accepted in the United States of America, although not reasonably determinable, arepresumed to be material.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, EHFDX V H RI WKH V LJ QLILFDQFH RIWKH P DWWHU GLV FX V V HG LQ WKH _.DV LV IRU -GYHUV H ; SLQLRQ RQA%?% 3 HQHUDOO\-FFHSWHG -FFRX QWLQJ <ULQFLSOHV ` SDUDJ UDSK$ WKH ILQDQFLDOV WDWHP HQWV UHIHUUHG WR DERYH GR QRWSUHV HQWIDLUO\$ LQDFFRUGDQFHwith accounting principles generally accepted in the United States of America, the financial position of the City of Pine Bluff,Arkansas, as of December 31, 2015, or the revenues, expenditures, and changes in net position and, where applicable,cash flows thereof for the year then ended.

-2-

Basis for Qualified Opinions on Regulatory Basis of Accounting

The City’s financial statements do not disclose all the required information concerning investment risks. In our opinion,disclosure of this information is required by the regulatory basis of accounting described in Note 1.

Qualified Opinions on Regulatory Basis of Accounting

In our opinion, except for the omission of the information described in the “Basis for Qualified Opinions on Regulatory Basisof Accounting” paragraph, the financial statements referred to above present fairly, in all material respects, the regulatorybasis financial position of the other funds in the aggregate of the City of Pine Bluff, Arkansas, as of December 31, 2015, andthe regulatory basis revenues, expenditures, and changes in net position for the other funds in the aggregate for the yearthen ended in accordance with the financial reporting provisions of Ark. Code Ann. § 10-4-412 described in Note 1.

Unmodified Opinions on Regulatory Basis of Accounting

In our opinion, the financial statements referred to above present fairly, in all material respects, the regulatory basis financialposition of the general fund and street fund of the City of Pine Bluff, Arkansas, as of December 31, 2015, the regulatory basisrevenues, expenditures, and changes in net position, and the budgetary comparisons for the general fund and street fund for theyear then ended in accordance with the financial reporting provisions of Ark. Code Ann. § 10-4-412 described in Note 1.

Emphasis of Matter

As discussed in Note 1 to the financial statements, the City would have included some funds under accounting principlesgenerally accepted in the United States of America (GAAP) as established by the Government Accounting Standards Board.However, under the regulatory basis, these funds are not required to be included as part of the reporting entity.

Other Matters

Supplementary and Other Information

Our audit was conducted for the purpose of forming opinions on the accompanying regulatory basis financial statements. Theaccompanying supplementary information and other information listed in the table of contents are presented for purposes ofadditional analysis and are not a required part of the financial statements.

The supplementary information is the responsibility of management and was derived from and relates directly to the underlyingaccounting and other records used to prepare the financial statements. Such information has been subjected to the auditingprocedures applied in the audit of the regulatory basis financial statements and certain additional procedures, includingcomparing and reconciling such information directly to the underlying accounting and other records used to prepare the financialstatements or to the financial statements themselves, and other additional procedures in accordance with auditing standardsgenerally accepted in the United States of America. In our opinion, except for the omission of the information described above,the supplementary information is fairly stated, in all material respects, in relation to the regulatory basis financial statements as awhole on the basis of accounting described in Note 1.

The other information has not been subjected to the auditing procedures applied in the audit of the regulatory basis financialstatements, and accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated July 8, 2016, on our consideration ofthe City's internal control over financial reporting and on our tests of its compliance with certain provisions of the state constitution,laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of ourtesting of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion oninternal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance withGovernment Auditing Standards in considering the City’s internal control over financial reporting and compliance.

ARKANSAS LEGISLATIVE AUDIT

Roger A. Norman, JD, CPA, CFELegislative Auditor

Little Rock, ArkansasJuly 8, 2016LOM107615

500 WOODLANE STREET, SUITE 172 ]75@@71 >; /6 $ ->6 -9?-? *((& '-'& ,, ]<4; 91: (501) 683-+)& & ]2-C: (501) 683-8605www.arklegaudit.gov

Sen. Jimmy Hickey, Jr.Senate Chair

Sen. Linda ChesterfieldSenate Vice Chair

Roger A. Norman, JD, CPA, CFE, CFFLegislative Auditor

LEGISLATIVE JOINT AUDITING COMMITTEEARKANSAS LEGISLATIVE AUDIT

Rep. Mary BroadawayHouse Chair

Rep. Sue ScottHouse Vice Chair

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING, COMPLIANCE AND OTHER MATTERS,AND OTHER ISSUES BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS

5901<19019@ -A05@; >a? >1<; >@

City of Pine Bluff, Arkansas Officials and Council MembersLegislative Joint Auditing Committee

We have audited in accordance with the auditing standards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States,the accompanying regulatory basis financial statements of the general fund, street fund, and other funds in the aggregate of theCity of Pine Bluff, Arkansas, as of and for the year ended December 31, 2015, and the related notes to the financial statements,and have issued our report thereon dated July 8, 2016. We issued an adverse opinion because the financial statements areprepared by the City on the basis of the financial reporting provisions of Ark. Code Ann. § 10-4-412, which is a basis of accountingother than accounting principles generally accepted in the United States of America. The effects on the financial statements of thevariances between the regulatory basis of accounting described in Note 1 and accounting principles generally accepted in theUnited States of America, although not reasonably determinable, are presumed to be material. However, with respect to theregulatory basis of accounting described in Note 1, our opinion on the other funds in the aggregate was qualified because requireddisclosures were not made concerning investment risks, and our opinions on the general fund and street fund were unmodified.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we FRQV LGHUHG WKH /LW\aV internal control over financial reporting(internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing ouropinions on the financial statements, but not for the purpose oIH[SUHV V LQJ DQRSLQLRQRQWKH HIIHFWLYHQHV V RIWKH /LW\aV LQWHUQDOcontrol. -FFRUGLQJ O\$ Z H GR QRWH[SUHV V DQRSLQLRQRQWKH HIIHFWLYHQHV V RIWKH /LW\aV LQWHUQDOFRQWURO%

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed toidentify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, materialweaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified a certaindeficiency in internal control that we consider to be a material weakness.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in thenormal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. Amaterial weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility thatD P DWHULDOP LV V WDWHP HQWRIWKH /LW\aV ILQDQFLDOV WDWHP HQWV Z LOOQRWEH SUHYHnted, or detected and corrected on a timely basis. Weconsider the following deficiency to be a material weakness:

2015-1 To ensure the proper safeguarding of assets, financial accounting duties relating to initiating, receipting, depositing,disbursing, and recording transactions should be distributed among appropriate employees. The City officials, asspecified in the Other Issues section of this report, again did not segregate these duties to sufficiently reduce theULV N V RI IUDX G RU HUURU DQG SURSHUO\ V DIHJ X DUG WKH /LW\aV DV V HWV $ EHFDX V H RI OLP LWHG ILQDQFLDO UHV RX UFHV % B Hrecommend that the financial accounting duties in each office be segregated among employees to the extentpossible.

The City officials, as specified in the Other Issues section of this report, responded and indicated that their offices willsegregate the duties relating to initiating, receipting, depositing, disbursing, and recording transactions to the extentpossible with the current staffing levels.

-4-

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, weperformed tests of its compliance with certain provisions of the state constitution, laws, regulations, contracts, and grantagreements, noncompliance with which could have a direct and material effect on the determination of financial statementamounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that arerequired to be reported under Government Auditing Standards.

Entity’s Response to Finding

The City’s response to the finding identified in our audit is described above. The City’s response was not subjected to theauditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

Other Issues

The commentary contained in this section relates to the following officials that held office during 2015:

Mayor: Debe HollingsworthCity Collector: Sharon JohnsonFinance Director: Steve MillerCity Clerk: Loretta WhitfieldDistrict Court Clerk (Division 1): Debbie DrakeDistrict Court Clerk (Division 2): Veronica YoungPolice Chief: Jeff Hubanks

We reviewed the City's compliance with certain Arkansas laws concerning general and district court accounting, budgeting,purchasing, and investing and depositing of public funds.

Our audit procedures indicated that the above offices were in substantial compliance with Arkansas fiscal and financial laws.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of thattesting, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is anintegral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal controland compliance. Accordingly, this communication is not suitable for any other purpose. However, pursuant to Ark. Code Ann.§ 10-4-417, all reports presented to the Legislative Joint Auditing Committee are matters of public record and distribution is notlimited.

ARKANSAS LEGISLATIVE AUDIT

Marti Steel, CPADeputy Legislative Auditor

Little Rock, ArkansasJuly 8, 2016

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-9-

CITY OF PINE BLUFF, ARKANSASNOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2015

-10-

NOTE 1: Summary of Significant Accounting Policies

A. Financial Reporting Entity

The City of Pine Bluff was incorporated under the laws of the State of Arkansas and operates under anelected Mayor-Council form of government. The reporting entity includes all funds of the City. Underaccounting principles generally accepted in the United States of America (GAAP) as established by theGovernment Accounting Standards Board, the following funds of the City would have been included in thereporting entity: Waste Water Utility Commission, Civic Auditorium Complex Commission, Advertising andTourist Promotion Commission, and Aviation Commission Funds. However, under Arkansas’s regulatorybasis described below, inclusion of these funds is not required and these funds are not included in thisreport.

B. Basis of Presentation – Regulatory

The financial statements are presented in accordance with the regulatory basis of presentation asprescribed or permitted by Ark. Code Ann. § 10-4-412. The law requires that the financial statements bepresented on a fund basis with, as a minimum, the general fund and street fund presented separately withall other funds included in the financial statements presented in the aggregate. This law also stipulates thatthe financial statements consist of a balance sheet; a statement of revenues, expenditures, and changes infund balances; a comparison of the final adopted budget to the actual expenditures for the general andstreet funds; notes to financial statements; and a supplemental schedule of capital assets.

A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash andother financial resources, together with related liabilities and residual balances, and changes therein, whichare segregated for purposes of carrying on specific activities or attaining certain objectives in accordancewith special regulations, restrictions, or limitations.

The following types of funds are recognized in the accompanying regulatory basis financial statements.

General Fund - The General Fund is used to account for and report all financial resources not accountedfor and reported in another fund. The General Fund heading as it appears in the financial statementsincludes the following accounts: General, Sewer Improvement District Loan, Capital Projects, Public SafetyFacility Building, Parks and Recreation Commission, Police Department Special Projects, Police AthleticLeague, and Summer Academic and Culture Enrichment Program.

Street Fund - The Street Fund (Special Revenue Fund) is used to account for and report the proceeds ofspecific revenue sources that are restricted or committed to expenditure for specified purposes other thandebt service or capital projects. The Street Fund accounts for and reports the proceeds of state highwayturnback and property taxes that are restricted or committed for maintaining and constructing highways andstreets.

Other Funds in the Aggregate - Other Funds in the Aggregate consist of all funds included in the financialstatements except for the General and Street Funds. The following types of funds are included in thiscolumn as follows:

Special Revenue Funds - Special Revenue Funds are used to account for and report the proceeds ofspecific revenue sources that are restricted or committed to expenditure for specified purposes otherthan debt service or capital projects. The following Special Revenue Funds are reported with otherfunds in the aggregate: Community Development, Historic District Commission, Jail Fee,Administration of Justice, Southeast Arkansas Arts and Science Center Commission, Vice IntelligenceNarcotics, Grants, Emergency Vehicle, Department of Housing and Urban Development StormRecovery Drainage Grant, and Transit.

Capital Projects Funds - Capital Projects Funds are used to account for and report financial resourcesthat are restricted, committed, or assigned to expenditure for capital outlay, including the acquisition orconstruction of capital facilities and other capital assets. The following Capital Projects Funds arereported with other funds in the aggregate: Sales and Use Tax Capital Improvements Series 2012,Sales and Use Tax Capital Improvements Series 2011, and Capital Improvement Series 2014.


DECEMBER 31, 2015

-11-

NOTE 1: Summary of Significant Accounting Policies (Continued)

B. Basis of Presentation – Regulatory (Continued)

Other Funds in the Aggregate (Continued)

Debt Service Funds - Debt Service Funds are used to account for and report financial resources thatare restricted, committed, or assigned to expenditure for principal and interest. The following DebtService Funds are reported with other funds in the aggregate: Sales and Use Tax Improvement BondSeries 2011-2012 and Franchise Fee Improvement Refunding and Improvement Bond Series 2014.

Permanent Funds – Permanent Funds are used to account for and report resources that are restrictedto the extent that only earnings, and not principal, may be used for purposes that support the reportinggovernment’s programs – that is, for the benefit of the government or its citizenry. The followingPermanent Fund is reported with other funds in the aggregate: Cemetery Trust.

Pension Trust Funds – Pension Trust Funds are used to report resources that are required to be heldin trust for the members and beneficiaries of pension plans. The following Pension Trust Funds arereported with other funds in the aggregate: City Retirement and Policemen’s Pension and Relief.

Agency Funds - Agency Funds are used to report resources held by the reporting government in apurely custodial capacity (assets equal liabilities). The following Agency Funds are reported with otherfunds in the aggregate: District Court (Division 1), District Court (Division 2), Payroll, and HealthInsurance Premium.

C. Basis of Accounting - Regulatory

The financial statements are prepared on the regulatory basis of accounting as prescribed or permitted byArk. Code Ann. § 10-4-412. This regulatory basis differs from accounting principles generally accepted inthe United States of America. Revenues generally are recognized as soon as they are both measurableand available. Revenues are considered to be available when they are collectible within the current periodor soon enough thereafter to pay liabilities of the current period. For this purpose, the governmentconsiders revenues to be available if they are collected within 60 days of the end of the current period.However, most state aid received from the State Treasury is by state law revenue of the year in which itwas received by the government. Expenditures generally are recorded when a liability is incurred.However, debt service expenditures, as well as expenditures related to compensated absences and claimsand judgments, are recorded only when payment is due. As a result of the use of this regulatory basis ofaccounting, capital assets and long-term debt are not recorded in these financial statements.

D. Assets, Liabilities, and Fund Balances

Cash and Cash Equivalents

For the purpose of financial reporting, “cash and cash equivalents” includes all demand and savingsaccounts, certificates of deposit, treasury bills, and short-term investments with an original maturity of threemonths or less.

Investments

Investments are reported at cost.

Settlements Pending

Settlements pending are considered fines, forfeitures, costs, interest, and insurance premiums that havenot been transferred to the appropriate entities.

Fund Balance Classifications

1. Nonspendable fund balance - amounts that cannot be spent because they are either (a) not inspendable form or (b) legally or contractually required to be maintained intact.


DECEMBER 31, 2015

-12-


D. Assets, Liabilities, and Fund Balances (Continued)

Fund Balance Classifications (Continued)

2. Restricted fund balance - amounts that are restricted when constraints placed on the use of resourcesare either (a) externally imposed by creditors (such as through debt covenants), grantors, contributors,or laws or regulations of other governments; or (b) imposed by law through constitutional provisions orenabling legislation.

3. Committed fund balance - amounts that can only be used for specific purposes pursuant to constraintsimposed by formal action of the City Council (passage of an ordinance).

4. Assigned fund balance - amounts that are constrained by the City Council]S INTENT TO BE USED FORspecific purposes, but are neither restricted nor committed.

5. Unassigned fund balance Z amounts that have not been assigned to other funds and that have notbeen restricted, committed, or assigned to specific purposes within the general fund. Thisclassification may also include negative amounts in other governmental funds, if expenditures incurredfor specific purposes exceeded the amounts restricted, committed, or assigned to those purposes.

E. Property Taxes

A lien attaches to the real property in January and on personal property in June of each year. Propertytaxes are collectible beginning the first business day of March of the subsequent year, but are notconsidered delinquent until after October 15. Property taxes reflected as revenues on the financialstatements include the property tax relief distribution made by the State of Arkansas. The purpose of thisdistribution is to reimburse the municipality for property tax credits in accordance with Arkansas Code.

F. Budget Law

State law requires that these procedures be followed in establishing the budgetary data:

a. Prior to December 1, the Mayor submits to the City Council a proposed operating budget for thecalendar year commencing the following January 1. The operating budget includes proposedexpenditures and the means of financing them.

b. The proposed budget is discussed at a City Council meeting prior to adoption.

c. Prior to February 1, the budget is legally enacted by ordinance or resolution of the City Council.

d. Appropriations lapse at the end of each year.

e. Under certain conditions, the budget may be amended subsequent to the year-end.

The budgeted revenues and expenditures represent the formal operating budget adopted by the CityCouncil, as amended by the Council during the year.

Basis of Accounting

The City prepared an annual budget on the regulatory basis for the General Fund, Street Fund, and theother operating funds.

G. Fund Balance Classification Policies and Procedures

>HE 9UNICIPALITY]S HIGHEST LEVEL OF DECISION-making authority is its City Council. The establishment ofamounts classified as committed fund balances and any subsequent modifications to such balances are theresult of formal action taken by the City Council through passage of an ordinance. The City Council isauthorized to assign amounts to a specific purpose, although a formal policy has not been established.


DECEMBER 31, 2015

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G. Fund Balance Classification Policies and Procedures (Continued)

The Municipality does not have a policy addressing whether it considers restricted or unrestricted amountsto have been spent when an expenditure is incurred for purposes for which both restricted and unrestrictedamounts are available. For classification of fund balance amounts, restricted resources are consideredspent before unrestricted. The Municipality does not have a policy addressing which resources to usewithin the unrestricted fund balance when committed, assigned, or unassigned fund balances are available.When expenditures are incurred for purposes for which amounts in any of the unrestricted fund balanceclassifications could be used, committed amounts are reduced first, followed by assigned amounts, andthen unassigned amounts.

NOTE 2: Cash Deposits with Financial Institutions

Cash deposits are carried at cost (carrying value). A comparison of the bank balance and carrying value is asfollows:

The above total deposits do not include cash on hand of $10,631.

Custodial credit RISK IS THE RISK THAT IN THE EVENT OF A BANK FAILURE% THE 0ITY]S DEPOSITS MAY NOT BE RETURNED TO IT&>HE 0ITY DOES NOT HAVE A DEPOSIT POLICY FOR CUSTODIAL CREDIT RISK& .S OF 1ECEMBER *(% )'(+% NONE OF THE 0ITY]Sbank balances were exposed to custodial credit risk.

NOTE 3: Legal or Contractual Provisions for Deposits and Investments

State law generally requires that municipal funds be deposited in federally insured banks located in the State ofArkansas. The municipal deposits may be in the form of checking accounts, savings accounts, and timedeposits. Public funds may be invested in eligible investment securities having a maturity of not longer than 5years from the date of acquisition unless, as documented at the time of acquisition, the investment is to fund orsupport a specific purpose and there are no expectations that the investment will be sold before maturity; anArkansas bank certificate of deposit; an account established by a local government joint investment trust; or anArkansas financial institution repurchase agreement for eligible investment securities in which the seller agreesto repurchase the investment at a price including interest earned during the holding period as determined by therepurchase agreement.

Pension Trust Funds

State law generally requires that pension funds be deposited in banks. Pension funds may be invested ininterest-bearing bonds of the United States, of the State of Arkansas, or of the city in which the board is located,in a local government joint investment trust, in the Arkansas Local Police and Fire Retirement System, or insavings and loan associations duly established and authorized to do business in this state. State law alsoprovides that if the total assets of the pension trust fund exceed $100,000, the board may employ an investmentadvisor to invest the assets, subject to terms, conditions, limitations, and restrictions imposed by law upon theArkansas Local Police and Fire Retirement System.

Carrying Bank

Amount Balance

Insured (FDIC) 2,269,487$ 2,276,175$

Collateralized:

Collateral held by pledging bank or pledging

bank's trust department or agent not in the

City's name 12,720,596 12,613,306

Total Deposits 14,990,083$ 14,889,481$


DECEMBER 31, 2015

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NOTE 4: Public Fund Investments

A summary of investments by fund types is as follows:

These investments are composed of the following:

Investment risks related to credit risk, concentration of credit risk, interest rate risk, and foreign currency riskhave not been provided as required by Governmental Accounting Standards Board Statement no. 40.

NOTE 5: Accounts Receivable

The accounts receivable balance at December 31, 2015, is composed of the following:

NOTE 6: Accounts Payable

The accounts payable balance at December 31, 2015, is composed of the following:


DECEMBER 31, 2015

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NOTE 7: Interfund Balances

Individual fund interfund receivable and payable balances are as follows:

Interfund receivables and payables consist of errors in depositing restricted revenues, matching grant funds, andreimbursement for expenses paid by the General Fund. The General Fund received $371,000 prior to July 8,2016 and the remainder is expected to be repaid later in 2016.

NOTE 8: Legal Debt Limit

A. Property Tax Secured Bonded Debt

The City is subject to a constitutional limitation for bonded indebtedness equal to 20% of the total assessedvalue for tax purposes of real and personal property as determined by the last tax assessment. AtDecember 31, 2015, the legal debt limit for the bonded debt was $72,768,200. There were no property taxsecured bond issues.

B. Short-term Financing Obligations

The City is subject to a constitutional limitation for short-term financing obligations equal to 5% of theassessed value of taxable property within the City as determined by the last tax assessment. AtDecember 31, 2015, the legal debt limit for short-term financing obligations was $19,834,844. The amountof short-term financing obligations was $596,730, leaving a legal debt margin of $19,238,114.

NOTE 9: Federal Funds Program Compliance

The federal grants of the City have not yet received a compliance audit in accordance with federal programrequirements and therefore, any instances of noncompliance with federal grant requirements have not beendetermined. However, a federal compliance audit is currently being conducted for 2015 federal funds. Aseparate report was issued for the 2014 federal funds.

The following material instances of noncompliance were reported for the Supportive Housing Program:

Finding 2014-1 During our testing of cash management, from a population of six draw downs, a sample of onedraw down for $91,880 on February 28, 2014 was tested. From this draw down, we noted that$39,688 was not expended until March 20, 2014, April 7, 2014, and April 21, 2014, whichindicates excess cash balances were on hand. Therefore, funds are not being disbursed in areasonable time period.

Finding 2014-2 The Annual Progress Reports for 2013 and 2014 were submitted on September 9, 2014 andJune 30, 2015, respectively, which exceeded the 90-day deadline for timely submission.Further, the reported financial information did not agree to the accounting records.


DECEMBER 31, 2015

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NOTE 9: Federal Funds Program Compliance (Continued)

The following material instances of noncompliance were reported for the COPS Hiring Recovery Program:

Finding 2014-3 The City uses a spreadsheet to separately track salary and benefit expenses for officers hiredunder the COPS Hiring grant program to ensure salaries charged are within budgetary limits setforth by the grant. Personnel preparing and approving reimbursement requests were unawareof the matching requirement.

Finding 2014-4 The City uses a spreadsheet to separately track salary and benefit expenses for officers hiredunder the COPS Hiring grant program to ensure salaries charged are within budgetary limits setforth by the grant. Personnel preparing and approving reimbursement requests were unawareof the budgetary limits set forth in the grant.

The following material instance of noncompliance was reported for the HOME Investment Partnership Program:

Finding 2014-5 The first semi-annual report was submitted May 2, 2014 and the second semi-annual report wassubmitted December 12,2014.

Disbursements that are not in accordance with the federal program requirements are subject to reimbursement bythe City.

NOTE 10: Details of Fund Balance Classifications

Fund balance classifications at December 31, 2015, are composed of the following:

General Street Other Funds inDescription Fund Fund the Aggregate

Fund Balances:Nonspendable 483,533$

Restricted for:General government 146,000$ 122,576Law enforcement 165,501 475,460Highways and streets 590,516$Recreation and culture 419 58,401Capital outlay 1,378,616Pension benefits 38,767,164

Total Restricted 311,920 590,516 40,802,217

Committed for:Debt service 1,713,459Recreation and culture 338,073Capital outlay 241,685

Total Committed 2,293,217

Assigned to:General government 24,577Law enforcement 8,055Highways and streets 374,773Capital outlay 23,935 200Recreation and culture 16,582 261,597

Total Assigned 73,149 374,773 261,797

Unassigned 7,295,592 (188,890)

Totals 7,680,661$ 965,289$ 43,651,874$


DECEMBER 31, 2015

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NOTE 11: Deficit Fund Balances

The following fund has a deficit fund balance as of December 31, 2015:

NOTE 12: Commitments

Total commitments consist of the following at December 31, 2015:

Long-term liabilities

Long-term liabilities at December 31, 2015, are comprised of the following:

Due to the City’s regulatory basis of accounting, these liabilities are not recorded in the financial statements.


DECEMBER 31, 2015

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NOTE 12: Commitments (Continued)

Post Employment Benefits Other Than Pensions

The amount of any actuarially determined accrued liability for post employment benefits other than pensions wasnot determined.

Debt Service Requirements to Maturity

The City is obligated for the following amounts at December 31, 2015:

United States Department of Housing and Urban Development Grant Repayment

>HE 0ITY OF <INE /LUFF]S 0OMMUNITY 1EVELOPMENT 1EPARTMENT RECEIVED NOTIFICATION FROM THE ?NITED =TATESDepartment of Housing and Urban Development of instances of noncompliance within the 0ITY]S 0OMMUNITYDevelopment Block Grant and Home Investment Partnerships (HOME) Program. These instances ofnoncompliance will result in repayment of nonfederal funds of $157,061.

Construction Contracts

The City was contractually obligated for the following construction contracts at December 31, 2015:

NOTE 13:Interfund Transfers

The General Fund transferred $384,470 to Other Funds in the Aggregate for the following: $63,527 to theCommunity Development Fund to provide matching funds for a community development grant; $49,097 tosupplement the Southeast Arkansas Arts and Science Center Commission Fund; and $271,846 to supplementthe Transit Fund. The Other Funds in the Aggregate transferred $40,084 to the General Fund as reimbursementof expenses from the Jail Fee Fund.


DECEMBER 31, 2015

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NOTE 14: Pledged Revenues

A. Franchise Fees

The City pledged future franchise fees to repay $6,015,000 in capital improvement refunding andimprovement bonds that were issued in 2014 to refund the 2009 series refunding and acquisition bonds andto provide funding for various capital improvements. Total principal and interest remaining on the bonds are$5,705,000 and $1,804,520, respectively, payable through May 2039. For 2015, principal and interest paidwere $310,000 and $175,953, respectively.

Franchise fees in excess of debt service requirements are permitted to be used for other city expenditures.The City received $3,248,537 in franchise fees.

B. Sales and Use Tax

The City pledged future five-eighths percent sales and use taxes to repay $9,640,000 bonds that wereissued in 2011 for various capital improvements and to repay $5,355,000 bonds that were issued in 2012for various capital improvements. Total principal and interest remaining on the bonds are $7,540,000 and$3,028,055 for the 2011 bond issue and $4,885,000 and $2,261,286 for the 2012 bond issue, respectively,payable October 1, 2012 through October 1, 2036. For 2015, principal and interest paid were $485,000and $272,730, respectively, for the 2011 bond issue. For 2015, principal and interest paid were $170,000and $171,765, respectively, for the 2012 bond issue.

Any sales taxes collected in excess of debt service payments on these bonds is permitted to be used forother city expenditures. The City received $4,329,945 in sales taxes for the repayment of these bonds.

NOTE 15: Joint Ventures

A. Metropolitan Emergency Communications Association

The City of Pine Bluff belongs to the Metropolitan Emergency Communications Association as set up by anamended interlocal cooperation agreement, dated May 13, 1996, which is composed of the Cities ofPine Bluff, White Hall, Redfield, Altheimer, Wabbaseka, Humphrey, and Sherrill and Jefferson County. The.SSOCIATION 6S GOVERNED BY SEVEN COMMISSIONERS WHICH INCLUDE THE 0ITY OF <INE /LUFF]S 9AYOR% <OLICE 0HIEF ,AND 3IRE 0HIEF- 7EFFERSON 0OUNTY]S 0OUNTY 7UDGE AND =HERIFF- THE ;FFICE OF 2MERGENCY =ERV icesCoordinator; and the Chairman of the 911 Administrative Board by virtue of their term in office oremployment with the local government. Pursuant to the aforementioned amended agreement for 1996,THE PARTICIPANTS] PERCENTAGE SHARES OF ANY DEFICIT between 911 telephone fee revenue and operatingexpenses were as follows:

City of Pine Bluff 70.76%City of White Hall 2.25%City of Redfield .63%City of Altheimer .57%City of Wabbaseka .19%City of Humphrey .21%City of Sherrill .04%Jefferson County 25.35%

Total 100.00%

The City paid Metropolitan Emergency Communications Association $632,676 in 2015. Separate financialstatements are not available.


DECEMBER 31, 2015

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NOTE 15: Joint Ventures (Continued)

B. Pine Bluff and Jefferson County Library System

The City of Pine Bluff and Jefferson County entered into an agreement in August 1979, in accordance withArk. Code Ann. §§ 25-20-101 Z 25-20-108, to establish a library system for the Jefferson County, Arkansasarea. The Pine Bluff and Jefferson County Library System is composed of five members appointed by theJefferson County Judge with Quorum Court approval and six members appointed by the Mayor of Pine Bluffand ratified by the City Council. Title to fixed assets held by the constituent governmental units and usedfor library purposes at the time of the execution of this agreement shall remain unchanged althoughadditional assets may be acquired in the name of the Pine Bluff and Jefferson County Library System. TheBoard shall fix the number and salaries of employees of the Pine Bluff and Jefferson County LibrarySystem. The City paid the Pine Bluff and Jefferson County Library System $600,302 in 2015. Separatefinancial statements are available at 200 East Eighth Street, Pine Bluff, Arkansas 71601.

NOTE 16: Risk Management

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errorsand omissions; and natural disasters. These risks are covered by commercial insurance purchased fromindependent third parties and participation in a public entity risk pool. The amount of settlements, if any, has notexceeded the insurance coverage for each of the past three years. There were no settlements paid by the Cityin 2013. Payments made by the City in 2015 and 2014 IN EXCESS OF .RKANSAS 9UNICIPAL 8EAGUE]S COVERAGEtotaled $175,000 and $2,500, respectively. There were no significant reductions in insurance coverage in themajor categories of risk from coverage in the prior year.

The City participates in the Arkansas Municipal League Program (public entity risk pools) for coverage in thefollowing areas:

@ORKERS] 0OMPENSATION - This program provides statutory benefits for losses incurred by municipalofficials, employees, and volunteer fire fighters while performing work for the municipality. Rates formunicipalities participating in this program are revised by class code on an annual basis by the Arkansas@ORKERS] 0OMPENSATION 0OMMISSION&

Municipal Vehicle Program

A. Liability - This program may pay all sums the municipality legally must pay as damages because ofbodily injury, death or property damage to which this agreement applies involving a coveredmunicipal vehicle and for which the municipality is liable. The limit of payment by the program is asfollows: $25,000 because of bodily injury to or death of one person in any one accident; $50,000because of bodily injury to or death of two or more persons in any one accident; and $25,000because of injury to or destruction of property of others in any one accident. The City shall pay intothe program each year a charge established annually by the program administrator for coveredmunicipal vehicles and self-propelled mobile equipment owned or leased by the City.

B. Physical Damage - This program covers motor vehicles and permanently attached equipment whichare the property of the participating municipality. Property is valued at the full cost to repair orreplace the property after deduction for depreciation. Loss amounts payable will be reduced by thedeductible amount of $1,000 per occurrence. The City agrees to pay into the program each year aservice charge established annually by the program administrator for covered property.

Municipal Legal Defense Program - The program shall, at the sole discretion of the programadministrators, provide extraordinary legal defense and extraordinary expenses in suits against municipalofficials and employees and civil rights suits against the municipal government of a participatingmunicipality and pay extraordinary judgments (for actual damages Z not punitive damages) imposed onmunicipal officials and employees and the municipal government. The program shall never be liable toreimburse the municipal government, municipal officials, and employees because of judgment in any onelawsuit for more than 25% OF THE PROGRAM]S AVAILABLE FUNDS AT TIME THE LAWSUIT WAS FILED OR THE JUDGMENTbecomes final, or $1 million, whichever is less. The City agrees to pay into the program each year acharge established by the steering committee. Each city also agrees to pay the first $3,000 of theaggregate cost for all expenses on each lawsuit. This cost deposit is not refundable.


DECEMBER 31, 2015

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NOTE 16: Risk Management (Continued)

The City also participates in the Self-Insured Fidelity Bond Program administered by the Governmental BondingBoard. This program covers actual losses sustained by the participating entity through any fraudulent ordishonest act or acts committed by any of the officials or employees, acting alone or in collusion with others,during the bond period to an amount not exceeding the lesser of $250,000 or the amount of the bond.Premiums for coverage are determined by the State Risk Manager and approved by the Board. Thesepremiums are paid by the State Treasurer from funds withheld from the Municipal Aid Fund. There is a $2,500deductible per occurrence.

NOTE 17: Policemen's Pension and Relief Plan

Plan Description

The Policemen's Pension and Relief Plan is a single-employer defined benefit pension plan that covers municipalpolicemen employed prior to January 1, 1983. The plan, administered by the City, provides retirement, disability,and survivor benefits. Benefit and contribution provisions are established by State law and can be amended onlyby the Arkansas General Assembly. State law does provide that upon actuarial soundness of the plan, the Boardmay increase retirement benefits. The plan was closed to new entrants on January 1, 1983. The plan does notissue a stand-alone financial report but is included in the City's financial report.

Contributions

Active participants of the plan are required to make contributions of 6% of their salary to the plan, provided thatsuch monthly deduction shall be 4% for policemen contributing to the social security system unless increased,but not to exceed 6%, by the majority of the contributing members of the police department covered by socialsecurity. The City is required by state law to contribute an amount equal to but not less than 6% of theparticipant's salary; provided, however, that the City's contributions shall not exceed the amount contributed bythe policemen except where authorized by appropriation of the City's governing body. The plan is also fundedwith state insurance tax; property tax on real estate and personal property; all forfeitures and fines imposedupon any member of the police department by way of discipline; all money given or donated to such fund; allmoney deducted from the salary of any member of the police department on account of absence or loss of time;all rewards paid for any purpose and 10% of all fines and forfeitures collected for violation of ordinances or statelaw. If the funds in the plan should be insufficient to make full payment of the amount of pensions to all personsentitled, the beneficiaries shall be paid prorating the funds available among them. Based on the December 31,2014 actuarial valuation, the plan has a net pension liability of $11,471,193.

Deferred Retirement Option Plan

The local policemen's pension and relief board of trustees approved the participation in the Arkansas PoliceOfficer's Deferred Retirement Option Plan (DROP). Any police officer who is a member of the policemen'spension and relief fund who has at least 20 years of credited service and who is eligible to receive a serviceretirement pension may elect to participate in the plan. The duration of participation shall not exceed 5 years,except in certain circumstances as allowed by law.

When a member begins participation in the DROP, the contribution of the police officer and the employercontribution shall continue to be paid. Municipal matching contributions for employees who elect the DROPshall be credited equally to the policemen's pension and relief fund and to the deferred retirement plan. Themonthly retirement benefits that would have been due had the member elected to cease employment andreceive a service retirement shall be paid into the DROP account.

The participant has certain options regarding the method of payment.

At the conclusion of the member's participation, the member shall terminate employment with all participatingmunicipalities as a police officer and start receiving the member's accrued monthly retirement benefit from thepolicemen's pension and relief fund.


DECEMBER 31, 2015

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NOTE 18: Local Police and Fire Retirement System (LOPFI)(A Defined Benefit Pension Plan)

Plan Description

The City contributes to the Local Police and Fire Retirement System (LOPFI), an agent multiple employerretirement system that acts as a common investment and administrative agent for cities and towns in Arkansas.The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits toplan members and beneficiaries. Benefit provisions are established by State law and can be amended only bythe Arkansas General Assembly. The Arkansas Local Police and Fire Retirement System issues a publiclyavailable financial report that includes financial statements and required supplementary information for LOPFI.That report may be obtained by writing to Arkansas Local Police and Fire Retirement System, 620 W. 3rd,Suite 200, Little Rock, Arkansas 72201, by calling 1-866-859-1745, or on their website www.lopfi-prb.com.

Funding Policy

The employee contribution rate depends on the type of service being rendered and whether or not the service isalso covered by Social Security. The different employee contribution rates required by state law are:

A. Paid service not covered by Social Security: 8.5% of gross pay

B. Paid service also covered by Social Security: 2.5% of gross pay

C. Volunteer fire service: no employee contribution

The City is required to contribute at an actuarially determined rate. The contribution requirements of planmembers are established and may be amended by State law. The contribution requirements of the City areestablished and may be amended by the LOPFI Board of Trustees. The plan is also funded with state insurancetax. >HE 0ITY]S CONTRIBUTION TO THE PLAN WAS $549,256 and the amount of insurance tax paid by the state to the planfor the benefit of the City was $986,525 for the year ended December 31, 2015.

Net Pension Liability

>HE 0ITY]S PROPORTIONATE SHARE OF THE COLLECTIVE NET PENSION LIABILITY AT 1ECEMBER *(% 2014 (actuarial valuation dateand measurement date) was $10,126,199.

NOTE 19: Arkansas Public Employees Retirement System

Plan Description

The City contributes to the Arkansas Public Employees Retirement System (APERS), a cost-sharing multiple-employer defined benefit pension plan that covers municipal employees whose municipalities have electedcoverage under this System. APERS, administered by a Board of Trustees, provides retirement and disabilitybenefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefitprovisions are established by State law and can be amended only by the Arkansas General Assembly. TheArkansas Public Employees Retirement System issues a publicly available financial report that includes financialstatements and required supplementary information for APERS. That report may be obtained by writing toArkansas Public Employees Retirement System, 124 W. Capitol, Suite 400, Little Rock, Arkansas 72201, bycalling 1-800-682-7377, or on their website www.apers.org.

Funding Policy

APERS has contributory and non-contributory plans. Contributory members are required by State law tocontribute 5% of their salary. Each participating employer is required by State law to contribute at a rateestablished by the Board of Trustees of the system, based on the annual actuarial valuation. >HE 0ITY]Scontribution on behalf of the District Court Clerk only was $6,962 for the year ended December 31, 2015.


DECEMBER 31, 2015

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NOTE 20: City Retirement Plan

Plan Description

The City Retirement Plan for the City of Pine Bluff is a single-employer defined pension plan that covers all non-uniformed full-time employees of the City. The plan provides retirement and death benefits to plan membersand their beneficiaries. Benefit provisions and contribution requirements may be amended by the City ofPine Bluff Retirement Board and the Pine Bluff City Council.

Funding Policy

3UNDING IS PROVIDED BY CONTRIBUTIONS OF *$ BY THE EMPLOYEE AND ,$ BY THE 0ITY OF THE EMPLOYEE]S TOTAL ANNUALcompensation. >HE 0ITY]S CONTRIBUTION TO THE PLAN WAS $532,365 for the year ended December 31, 2015. Basedon the January 1, 2016 actuarial valuation, the plan has an unfunded actuarial liability of $1,881,000.

NOTE 21: Voluntary Grant Reduction in Lieu of Repayment

The CiTY VOLUNTARILY REQUESTED REDUCTIONS IN GRANT FUNDING FOR THE 0ITY]S 0OMMUNITY 1EVELOPMENT /LOCK 4RANTand HOME Investment Partnership Program to resolve findings of noncompliance by the United StatesDepartment of Housing and Urban Development. These reductions will total $214,211 and will be withheld overthe next two years as follows:

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aring

gra

nts

for

law

enfo

rcem

ent

purp

oses.

Gra

nts

Esta

blis

hed

topro

cess

various

sta

teand

federa

lg

rants

.

Em

erg

ency

Vehic

leA

rk.

Co

de

An

n.

§27-2

2-1

03

esta

blis

hed

fund

for

the

fine

for

failu

reto

insure

moto

rve

hic

les

tobe

used

for

the

purc

hase

and

ma

inte

nance

of

rescue,

em

erg

ency

medic

al,

and

law

enfo

rcem

ent

vehic

les,

co

mm

unic

ation

equ

ipm

ent,

anim

als

ow

ned

or

used

by

law

enfo

rcem

ent

ag

encie

s,

life-s

avi

ng

medic

al

app

ara

tus,

and

law

enfo

rcem

ent

appara

tus.

Depart

ment

of

Housin

ga

nd

Urb

an

Deve

lopm

ent

Sto

rmR

ecove

ryD

rain

ag

eG

rant

Esta

blis

hed

top

roce

ss

the

United

Sta

tes

Depart

me

nt

of

Housin

gand

Urb

an

Deve

lopm

ent's

Sto

rmR

ecove

ryG

rant.

CIT

YO

FP

INE

BLU

FF

,A

RK

AN

SA

SN

OT

ES

TO

SC

HE

DU

LE

S1

AN

D2

DE

CE

MB

ER

31,

2015

-29

-

The

follo

win

gfu

nds

an

dde

scrip

tion

sre

pre

sent

all

funds

report

ed

as

oth

er

funds

inth

ea

gg

reg

ate

.

Fund

Nam

eF

un

dD

escri

ption

CIT

YO

FP

INE

BLU

FF

,A

RK

AN

SA

SN

OT

ES

TO

SC

HE

DU

LE

S1

AN

D2

DE

CE

MB

ER

31,

2015

Tra

nsit

Esta

blis

hed

top

roce

ss

reve

nu

es

and

exp

enditu

res

of

the

City

Tra

nsit

Depart

ment

inclu

din

gg

rants

issued

und

er

the

United

Sta

tes

Depart

ment

of

Tra

nsp

ort

ation

Urb

an

Ma

ss

Tra

nsport

ation

Act

of

1964.

Sale

sand

Use

Tax

CapitalIm

pro

vem

en

tsS

eries

2012

Pin

eB

luff

Ord

inance

no.

6400

(Ju

ly16,

2012)

auth

orize

dth

eis

suance

of

sale

sand

use

tax

impro

vem

ent

bonds

as

app

rove

dby

refe

ren

dum

on

Febru

ary

8,

2011.

Tru

ste

eesta

blis

hed

fund

toaccount

for

the

dis

burs

em

ent

of

debt

pro

ceeds

for

capitalim

pro

vem

ents

.

Sale

sand

Use

Tax

CapitalIm

pro

vem

en

tsS

eries

2011

Pin

eB

luff

Ord

inance

no.

6363

(Se

pte

mbe

r19,

2011)

auth

orize

dth

eis

suance

of

sale

sand

use

tax

impro

vem

ent

bonds

as

appro

ved

by

refe

ren

dum

on

Febru

ary

8,

2011.

Tru

ste

eesta

blis

hed

fund

toaccount

for

the

dis

burs

em

ent

of

debt

pro

ceeds

for

capita

lim

pro

vem

ents

.

CapitalIm

pro

vem

ent

Series

2014

Pin

eB

luff

Ord

inance

no.

6481

(Ma

rch

17,

2014)

auth

orize

dth

eis

suance

of

franchis

efe

ere

venue

refu

ndin

gand

impro

vem

ent

bonds.

Tru

ste

eesta

blis

hed

fund

toaccount

for

the

dis

burs

em

ent

of

pro

ceeds

for

capitalim

pro

vem

ents

.

Sale

sand

Use

Tax

Impro

vem

ent

Bond

Series

2011

-2012

Pin

eB

luff

Ord

inance

no.

6363

(Se

pte

mbe

r19,

2011)

and

no.

6400

(July

16,

2012)

auth

orize

dth

eis

suance

of

sa

les

and

use

tax

imp

rove

men

tbonds

as

appro

ved

by

refe

rendum

on

Febru

ary

8,

2011.

Tru

ste

ee

sta

blis

hed

fund

topro

cess

the

paym

ents

on

the

bonded

debt.

Fra

nchis

eF

ee

Impro

vem

ent

Refu

ndin

gand

Impro

vem

ent

Bond

Series

2014

Pin

eB

luff

Ord

inance

no.

6481

(Ma

rch

17,

2014)

auth

orize

dth

eis

suance

of

franchis

efe

ere

venue

refu

ndin

gand

impro

vem

ent

bonds.

Tru

ste

eesta

blis

hed

fund

topro

cess

the

paym

ents

on

the

bonded

debt.

Cem

ete

ryT

rust

Ark

.C

ode

An

n.

§§

20-1

7-1

01

3-

1016

esta

blis

hed

fund

toin

vest

20%

of

reve

nue

genera

ted

from

plo

tsale

sto

pro

vide

perm

anent

main

tenance

of

the

City

'sce

mete

ry.

City

Retire

ment

Pin

eB

luff

City

Co

de

§19-3

6(1

993)

esta

blis

hed

fund

topro

cess

the

self-s

upport

ed

retire

ment

pla

nfo

rn

on

un

ifo

rmed

em

plo

yees.

Polic

em

en's

Pensio

nand

Relie

fA

rk.

Co

de

An

n.

§24-1

1-4

03

esta

blis

hed

fund

tore

ceiv

epro

pert

yta

xes,

sta

teaid

,and

oth

er

reve

nues

allo

we

db

yla

wfo

rsupport

of

polic

ere

tire

mentp

rog

ram

s.

-30

-

The

follo

win

gfu

nds

an

dde

scrip

tion

sre

pre

sent

all

funds

report

ed

as

oth

er

funds

inth

ea

gg

reg

ate

.

Fund

Nam

eF

un

dD

escri

ption

CIT

YO

FP

INE

BLU

FF

,A

RK

AN

SA

SN

OT

ES

TO

SC

HE

DU

LE

S1

AN

D2

DE

CE

MB

ER

31,

2015

Dis

tric

tC

ourt

(Div

isio

n1)

Ark

.C

ode

An

n.

§16-1

0-2

04

esta

blis

hed

account

tore

ceiv

efines,

forf

eiture

s,

and

costs

colle

cte

dby

the

dis

tric

tcourt

.

Dis

tric

tC

ourt

(Div

isio

n2)

Ark

.C

ode

An

n.

§16-1

0-2

04

esta

blis

hed

account

tore

ceiv

efines,

forf

eiture

s,

and

costs

colle

cte

dby

the

dis

tric

tcourt

.

Payr

oll

Esta

blis

hed

topro

cess

the

payr

oll

of

all

em

plo

yees.

Health

Insura

nce

Pre

miu

mE

sta

blis

hed

top

roce

ss

insura

nce

pre

miu

ms

withheld

from

em

plo

yees'

earn

ing

sand

forw

ard

ed

toth

ein

sura

nce

pro

vider.

-31

-

Schedule 3

December 31,2015

Land 613,981$Buildings 20,400,540Infrastructure 18,696,329Improvements 3,656,006Heavy equipment 9,871,423Vehicles 6,510,319Equipment 3,669,839

Total 63,418,437$

CITY OF PINE BLUFF, ARKANSASOTHER INFORMATION

SCHEDULE OF CAPITAL ASSETS

(Unaudited)DECEMBER 31, 2015

-32-

Schedule

4-1

Gen

era

l2015

2014

2013

2012

2011

Tota

lA

ssets

8,3

48,5

20

$8,1

83,9

23

$8,7

13,0

56

$7,5

34,5

22

$6,8

31,1

67

$

Tota

lLia

bili

ties

667,8

59

696,2

31

508,4

72

301,6

55

246,7

55

Tota

lF

und

Bala

nces

7,6

80,6

61

7,4

87,6

92

8,2

04,5

84

7,2

32,8

67

6,5

84,4

12

Tota

lR

eve

nues

28,9

13,9

85

28,0

53,6

02

30,0

84,1

82

29,6

53,4

07

29,0

74,1

06

Tota

lE

xpenditure

s28,9

26,6

31

28,5

11,8

61

29,0

92,2

05

29,2

70,2

90

28,6

05,8

10

Tota

lO

ther

Fin

ancin

gS

ourc

es/

Uses

205,6

15

(38,0

05)

306,4

27

265,3

38

354,0

04

CIT

YO

FP

INE

BLU

FF

,A

RK

AN

SA

S

SC

HE

DU

LE

OF

SE

LE

CT

ED

INF

OR

MA

TIO

NF

OR

TH

ELA

ST

FIV

EY

EA

RS

-G

EN

ER

AL

FU

ND

-R

EG

ULA

TO

RY

BA

SIS

DE

CE

MB

ER

31,

2015

(Unaudited)

$0

$5,0

00,0

00

$10,0

00,0

00

$15,0

00,0

00

$20,0

00,0

00

$25,0

00,0

00

$30,0

00,0

00

$35,0

00,0

00

To

talA

sse

tsT

ota

lLia

bili

tie

sT

ota

lFu

nd

Ba

lan

ce

sT

ota

lRe

ven

ue

sT

ota

lE

xp

en

ditu

res

Gen

era

lF

un

d

2015

2014

2013

2012

2011

-33

-

Schedule

4-2

Str

eet

2015

2014

2013

2012

2011

Tota

lA

ssets

1,0

23,4

60

$851,7

18

$354,6

42

$748,6

75

$1,0

38,1

88

$

Tota

lLia

bili

ties

58,1

71

61,3

20

264,9

09

40,7

36

14,7

07

Tota

lF

und

Bala

nces

965,2

89

790,3

98

89,7

33

707,9

39

1,0

23,4

81

Tota

lR

eve

nues

3,8

77,6

49

4,2

27,2

91

3,4

26,9

27

3,4

41,0

64

3,3

84,6

78

Tota

lE

xpenditure

s3,7

02,7

58

3,5

26,6

26

3,8

71,4

33

3,7

56,6

06

3,3

79,9

41

Tota

lO

ther

Fin

ancin

gS

ourc

es/

Uses

CIT

YO

FP

INE

BLU

FF

,A

RK

AN

SA

S

SC

HE

DU

LE

OF

SE

LE

CT

ED

INF

OR

MA

TIO

NF

OR

TH

ELA

ST

FIV

EY

EA

RS

-S

TR

EE

TF

UN

D-

RE

GU

LA

TO

RY

BA

SIS

DE

CE

MB

ER

31,

2015

(Unaudited)

$0

$500,0

00

$1,0

00,0

00

$1,5

00,0

00

$2,0

00,0

00

$2,5

00,0

00

$3,0

00,0

00

$3,5

00,0

00

$4,0

00,0

00

$4,5

00,0

00

Tota

lAssets

Tota

lLia

bili

ties

Tota

lFu

nd

Bala

nce

sT

ota

lReve

nu

es

Tota

lE

xpenditu

res

Str

eet

Fu

nd

2015

2014

2013

2012

2011

-34

-

Schedule

4-3

Oth

er

Fu

nd

sin

the

Ag

gre

gate

2015

2014

2013

2012

2011

Tota

lA

ssets

44,7

30,7

99

$48,8

66,7

15

$50,5

38,9

38

$63,1

69,7

96

$61,0

52,9

39

$

Tota

lLia

bili

ties

1,0

78,9

25

1,0

19,2

14

1,3

46,7

24

721,2

20

490,0

12

Tota

lF

und

Bala

nces

43,6

51,8

74

47,8

47,5

01

49,1

92,2

14

62,4

48,5

76

60,5

62,9

27

Tota

lR

eve

nues

9,6

84,0

55

9,4

78,3

15

6,7

48,2

47

7,8

62,1

58

7,5

61,5

21

Tota

lE

xpenditure

s14,2

24,0

68

12,3

24,9

78

14,1

63,2

68

11,5

75,6

08

10,3

95,7

07

Tota

lO

ther

Fin

ancin

gS

ourc

es/

Uses

344,3

86

1,2

81,3

22

(6,0

15,6

69)

5,5

99,0

99

9,6

55,1

59

CIT

YO

FP

INE

BLU

FF

,A

RK

AN

SA

S

SC

HE

DU

LE

OF

SE

LE

CT

ED

INF

OR

MA

TIO

NF

OR

TH

ELA

ST

FIV

EY

EA

RS

-O

TH

ER

FU

ND

SIN

TH

EA

GG

RE

GA

TE

-R

EG

ULA

TO

RY

BA

SIS

DE

CE

MB

ER

31,

2015

(Unaudited)

$0

$5,0

00,0

00

$10,0

00,0

00

$15,0

00,0

00

$20,0

00,0

00

$25,0

00,0

00

$30,0

00,0

00

$35,0

00,0

00

$40,0

00,0

00

$45,0

00,0

00

$50,0

00,0

00

$55,0

00,0

00

$60,0

00,0

00

$65,0

00,0

00

Tota

lAssets

Tota

lLia

bili

ties

Tota

lFu

nd

Bala

nces

Tota

lReve

nues

Tota

lE

xpen

diture

s

&0+

).

$1-(/

,-0+

)#

**.)

*'0)

2015

2014

2013

2012

2011

-35

-

1416084

D-1

APPENDIX “D”

Specimen Municipal Bond Insurance Policy

See attached.

MUNICIPAL BOND INSURANCE POLICY

ISSUER: [NAME OF ISSUER]

MEMBER: [NAME OF MEMBER]

Policy No: _____

BONDS: $__________ in aggregate principal amount of [NAME OF TRANSACTION] [and maturing on]

Effective Date: _________

Risk Premium: $__________ Member Surplus Contribution: $ _________

Total Insurance Payment: $_________

BUILD AMERICA MUTUAL ASSURANCE COMPANY (“BAM”), for consideration received, hereby UNCONDITIONALLY

AND IRREVOCABLY agrees to pay to the trustee (the “Trustee”) or paying agent (the “Paying Agent”) for the Bonds named above (as set forth in the documentation providing for the issuance and securing of the Bonds), for the benefit of the Owners or, at the election of BAM, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer.

On the later of the day on which such principal and interest becomes Due for Payment or the first Business Day following the Business Day on which BAM shall have received Notice of Nonpayment, BAM will disburse (but without duplication in the case of duplicate claims for the same Nonpayment) to or for the benefit of each Owner of the Bonds, the face amount of principal of and interest on the Bonds that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by BAM, in a form reasonably satisfactory to it, of (a) evidence of the Owner’s right to receive payment of such principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner’s rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in BAM. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by BAM is incomplete, it shall be deemed not to have been received by BAM for purposes of the preceding sentence, and BAM shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, any of whom may submit an amended Notice of Nonpayment. Upon disbursement under this Policy in respect of a Bond and to the extent of such payment, BAM shall become the owner of such Bond, any appurtenant coupon to such Bond and right to receipt of payment of principal of or interest on such Bond and shall be fully subrogated to the rights of the Owner, including the Owner’s right to receive payments under such Bond. Payment by BAM either to the Trustee or Paying Agent for the benefit of the Owners, or directly to the Owners, on account of any Nonpayment shall discharge the obligation of BAM under this Policy with respect to said Nonpayment.

Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. “Business Day” means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer’s Fiscal Agent (as defined herein) are authorized or required by law or executive order to remain closed. “Due for Payment” means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity (unless BAM shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration) and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. “Nonpayment” means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. “Nonpayment” shall also include, in respect of a Bond, any payment made to an Owner by or on behalf of the Issuer of principal or interest that is Due for Payment, which payment has been recovered from such Owner pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court having competent jurisdiction. “Notice” means delivery to BAM of a notice of claim and certificate, by certified mail, email or telecopy as set forth on the attached Schedule or other acceptable electronic delivery, in a form satisfactory to BAM, from and signed by an Owner, the Trustee or the Paying Agent, which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount, (d) payment instructions and (e) the date such claimed amount becomes or became Due for Payment. “Owner” means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that “Owner” shall not include the Issuer, the Member or any other person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds.

2

BAM may appoint a fiscal agent (the “Insurer’s Fiscal Agent”) for purposes of this Policy by giving written notice to the Trustee, the Paying Agent, the Member and the Issuer specifying the name and notice address of the Insurer’s Fiscal Agent. From and after the date of receipt of such notice by the Trustee, the Paying Agent, the Member or the Issuer (a) copies of all notices required to be delivered to BAM pursuant to this Policy shall be simultaneously delivered to the Insurer’s Fiscal Agent and to BAM and shall not be deemed received until received by both and (b) all payments required to be made by BAM under this Policy may be made directly by BAM or by the Insurer’s Fiscal Agent on behalf of BAM. The Insurer’s Fiscal Agent is the agent of BAM only, and the Insurer’s Fiscal Agent shall in no event be liable to the Trustee, Paying Agent or any Owner for any act of the Insurer’s Fiscal Agent or any failure of BAM to deposit or cause to be deposited sufficient funds to make payments due under this Policy.

To the fullest extent permitted by applicable law, BAM agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to BAM to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy. This Policy may not be canceled or revoked.

This Policy sets forth in full the undertaking of BAM and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW. THIS POLICY IS ISSUED WITHOUT CONTINGENT MUTUAL LIABILITY FOR ASSESSMENT.

In witness whereof, BUILD AMERICA MUTUAL ASSURANCE COMPANY has caused this Policy to be executed on its behalf by its Authorized Officer.

BUILD AMERICA MUTUAL ASSURANCE COMPANY By: _______________________________________ Authorized Officer

3

Notices (Unless Otherwise Specified by BAM) Email: [email protected] Address: 1 World Financial Center, 27th floor 200 Liberty Street New York, New York 10281 Telecopy: 212-962-1524 (attention: Claims)