$483,000 in relocating its cable facilities for expressway construction. In 1974, plaintiff requested that this lawsuit be placed in the inactive file primarily because of the lack of construction activity with respect to the expressway system. It is the opinion of the City Attorney that the issue involved in this litigation will be resolved in favor of the defendants as a matter of law and that no monetary damages will occur. A suit is pending in the U. S. District Court, Western District of North Carolina, which seeks to enjoin the construction of a new 10,000 foot runway at Douglas Municipal Airport on the grounds that the runway project had previously been inadequately assessed as to its environmental impact on the surrounding area. At the conclusion of a hearing held in August 1975, the Court ordered that paving and lighting of the new runway not be commenced until a supplementary environmental impact statement has been prepared and submitted to the appropriate Federal agencies. A consultant has been retained by the City and the Federal defendant and work is substantially completed on the preparation of the supplementary environmental impact statement. It is anticipated that the completed statement will be presented to the appropriate Federal agencies on April 1, 1976. A contract for paving the new runway was awarded by the City in June 1975 in the amount of $7,020,014. The paving contractor has given notice that it intends to assert a claim for damages of approximately $1,000,000 for additional costs and losses incurred as a result of the delay in proceeding with construction under the contract. Alleged damages will continue to accrue if further delay is experienced beyond July 1976. A lighting contract for the installation of a lighting system for the new runway was awarded by the City in June 1975 in the amount of $784,498. At present no claim for damages has been made by the lighting contractor. Because of the Court's order, no work is proceeding under either contract at this time. It is the opinion of the City Attorney that, assuming favorable Federal review, work can commence on both contracts by July 1976. The City is a party defendant in numerous other proceedings where (i) an adverse adjudication will not have a material adverse effect on the City's financial condition or (ii) the City's liability, if determined to exist, will be covered by adequate insurance. APPROVAL OF LEGAL PROCEEDINGS Certain legal matters incident to the authorization and issuance of the Bonds are subject to the approval of Brown, Wood, Ivey, Mitchell & Petty, New York, New York, Bond Counsel, whose approving legal opinion will be available at the time of the delivery of the Bonds and will be printed on the Bonds. The proposed form of such opinion is attached hereto as Appendix B. TAX EXEMPTION In the opinion of Bond Counsel, interest on the Bonds is exempt from all present Federal income taxes. CERTIFICATES CONCERNING OFFICIAL STATEMENT Concurrently with the delivery of the Bonds, the Mayor, the City Manager, and the Director of Finance of the City will certify that, to the best of their knowledge, the Official Statement did not as of its date, and does not as of the date of delivery of the Bonds, contain an untrue statement of a material fact or omit to state a material fact which should be included therein for the purpose for which the Official Statement is to be used, or which is necessary in order to make the statements contained therein, in the light of the circumstances in which they were made, not misleading. In addition, concurrently with the delivery of the Bonds, the Secretary of the Local Government Commission will furnish his certificate to the effect that nothing has come to his attention which would lead him to believe that the Official Statement, as of its date and as of the date of delivery of the Bonds, contains an untrue statement of a material fact or omits to state a material fact which should be included therein for the purpose for which the Official Statement is to be used, or which is necessary to make the statements contained therein, in the light of the circumstances in which they were made, not misleading. MISCELLANEOUS Any statements in this Official Statement involving matters of opinion or estimates, whether or not expressly so stated, are intended as such and not as representations of fact. No representation is made that any of the statements will be realized. Reference herein to the State Constitution, the acts authorizing the Bonds and all other acts referred to herein are only brief outlines of certain provisions thereof and do not purport to summarize or describe all provisions thereof. The execution of this Official Statement has been duly authorized by the Local Government Commission of North Carolina and the City Council of the City. APPENDIX A The following financial statements, including the notes thereto, have been prepared by the City and are based on certain audited financial statements included in the City's Annual Financial Reports for the fiscal years ended June 30, 1975, 1974, and 1973. (See "Accounting and Auditing" in the Official Statement.) Short-Term Investments, At Cost Which Approximates Market 13,525,000 |