H01. Reso 5883 - Amends Sewerage System Revenue BondsCity of Kalispell
Charles A. Harball Office of City Attorney
City Attorney 201 First Avenue East
P.O. Box 1997
Kalispell, MT 59903-1997
TO:
FROM:
SUBJECT:
MEETING DATE:
MEMORANDUM
Doug Russell, City Manager
Charles Harball, City Attorney
Tel 406.758.7709
Fax 406.758.7771
charball@kalispell.com
Resolution No. 5883 — Amending Resolution 5879 to Correct
the Final Maturity Date for the Series 2018 Westside
Interceptor Sewer Bonds
August 20, 2018 — Regular Council Meeting
BACKGROUND: The City Council passed Resolution No. 5879 on July 2, 2018
authorizing the issuance of bonds to finance the Westside Sewer Interceptor project
through the State Revolving Fund. The initial amortization schedule provided a final
maturity date of July 1, 2049 for each series. However, it was finally determined that,
based upon the date of the first payment, the final maturity date would instead be July 1,
2048. Resolution No. 5879 carried the error of using the first maturity date and must
now be resolved so that the official transcripts of the transaction will be correct.
Resolution No. 5883, which is now before the Council, corrects that error.
RECOMMENDATION: It is recommended that the Council consider and pass
Resolution No. 5883.
ALTERNATIVES: Although this resolution merely corrects a clerical error, the Council
may seek and will receive any further clarification it may require.
Memorandum
To: Doug Russell, City Manager
Charlie Harball, City Attorney
City of Kalispell, Montana
From: Ben Johnson, Barnes & Thornburg LLP
Date: August 20, 2018
Re: Resolution 5883 amending Resolution No. 5879 relating to the Issuance of $14,400,000
City of Kalispell, Montana Sewerage System Revenue Bond (DNRC Water Pollution
Control State Revolving Loan Program), Subordinate Lien Taxable Series 2018A, Taxable
Series 2018B, and Taxable Series 2018C
You have requested a memorandum describing and explaining the proposed amendment to
Supplemental Resolution No. 5879, adopted on July 2, 2018 ("Resolution 5879") authorizing the issuance
of the above -referenced bonds (the "Series 2018 Bonds") by the City of Kalispell (the City") for the
Westside Interceptor sewer line project (the "2018 Project"). This memorandum (the "Memo') will
describe the proposed Resolution (the "Resolution") that will amend Resolution 5879.
The City Council of the City adopted Resolution 5879 on July 2, 2018 providing for the issuance
of and sale of the Series 2018 Bonds. After the closing of the Series 2018 Bonds it was discovered that the
terms of Resolution 5879 did not quite match the final terms of the Series 2018 Bonds with respect to the
final maturity date of the Series 2018 Bonds and the date of the first principal payment of the Series 2018B
Bond and the Series 2018C Bond. Resolution 5879 listed (i) a final maturity date of July 1, 2049 for each
series of the Series 2018 Bonds when the final maturity date is July 1, 2048, and (ii) the first principal
payment date for the Series 2018B Bond and the Series 2018C Bond as July 1, 2019 when the first principal
payment of the Series 2018B Bond and the Series 2018C Bond will actually be January 1, 2019.
Enclosed with this Memo is the form of Resolution that makes the required changes to conform
Resolution 5879 to the final terms of the Series 2018 Bonds that is discussed in this Memo. As Bond
Counsel to the City, we would advise the City Council to adopt Resolution.
Please do not hesitate to contact me at bjohnson@btlaw.com or (612) 367-8794 if you or any
members of the City Council have any questions regarding the form of the Resolution or this Memo.
66139-6 (BWJ)
12983469v1
CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE
I, the undersigned, being the duly qualified and acting recording officer of the City of Kalispell,
Montana (the "City"), hereby certify that the attached resolution is a true copy of a Resolution entitled:
"RESOLUTION AMENDING RESOLUTION NO. 5879 RELATING TO $14,400,000 SEWERAGE
SYSTEM REVENUE BONDS (DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN
PROGRAM), CONSISTING OF $400,000 SUBORDINATE LIEN TAXABLE SERIES 2018A BOND,
$7,000,000 TAXABLE SERIES 2018B BOND and $7,000,000 TAXABLE SERIES 2018C BOND;
AUTHORIZING THE ISSUANCE AND FIXING THE TERMS AND CONDITIONS THEREOF" (the
"Resolution"), on file in the original records of the City in my legal custody; that the Resolution was duly
adopted by the City Council of the City at a regular meeting on August 20, 2018 and that the meeting was
duly held by the City Council and was attended throughout by a quorum, pursuant to call and notice of such
meeting given as required by law; and that the Resolution has not as of the date hereof been amended or
repealed.
I further certify that, upon vote being taken on the Resolution at said meeting, the following City
Council members voted in favor thereof:
voted against the same:
abstained from voting thereon:
or were absent:
WITNESS my hand and seal officially this day of August, 2018.
Aimee Brunckhorst, CMC
City Clerk
(SEAL)
AMENDING
SUPPLEMENTAL RESOLUTION
5883
Relating to
Resolution No. 5879, adopted July 2, 2018,
in connection with the issuance of the
$14,400,000
SEWERAGE SYSTEM REVENUE BONDS
(DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM)
CONSISTING OF
$400,000 SUBORDINATE LIEN TAXABLE SERIES 2018A BOND,
$7,000,000 TAXABLE SERIES 2018B BOND AND
$7,000,000 TAXABLE SERIES 2018C BOND
CITY OF KALISPELL, MONTANA
Adopted: August 20, 2018
RESOLUTION NO. 5883
AMENDING RESOLUTION NO. 5879 RELATING TO $14,400,000 SEWERAGE
SYSTEM REVENUE BONDS (DNRC WATER POLLUTION CONTROL STATE
REVOLVING LOAN PROGRAM), CONSISTING OF $400,000 SUBORDINATE
LIEN TAXABLE SERIES 2018A BOND, $7,000,000 TAXABLE SERIES 2018B
BOND AND $7,000,000 TAXABLE SERIES 2018C BOND; AUTHORIZING THE
ISSUANCE AND FIXING THE TERMS AND CONDITIONS THEREOF
RECITALS:
WHEREAS, on July 2, 2018, the City Council of the City of Kalispell, Montana (the "City"),
adopted Resolution No. 5879 ( "Resolution 5879") authorizing the issuance of its (i) Sewerage System
Revenue Bonds (DNRC Water Pollution Control State Revolving Loan Program), Subordinate Lien
Taxable Series 2018A, in the maximum principal amount of $400,000 (the "Series 2018A Bond"), (ii)
Taxable Sewerage System Revenue Bonds (DNRC Water Pollution Control State Revolving Loan
Program), Series 2018B Bond, in the maximum principal amount of $7,000,000 (the "Series 2018B Bond"),
and (iii) the Taxable Sewerage System Revenue Bonds (DNRC Water Pollution Control State Revolving
Loan Program), Series 2018C Bond, in the maximum principal amount of $7,000,000 (the "Series 2018C
Bond"), in order to fund the 2018 Project (as described in the Resolution); and
WHEREAS, the City desires to amend Resolution 5879 to conform such resolution to the final
maturity date and certain payment terms for the Series 2018A Bond, Series 2018B Bond, and the Series
2018C Bond and the date principal payments begin as set forth in Sections 5.1.2(a) and 5.1.3 of Resolution
5879 to correctly match the payment schedule.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY, AS
FOLLOWS:
Section 1. Section 5.1.2(a) of the Resolution 5879 is hereby amended in its entirety to read
as follows:
5.1.2. Repayment of 2018A Loan; Principal Forgiveness.
(a) The City is obligated to repay the principal of and interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge on the 2018A Loan, unless the DNRC forgives the City's
obligation to repay the principal of the 2018A Loan as provided in Section 5.1.2(b) below. Subject to the
provisions of Section 5.1.2(b) hereof, the Loan Repayments and the Administrative Expense Surcharge and
Loan Loss Reserve Surcharge on the 2018A Loan shall be due on each Payment Date, as follows:
(i) Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge
on the outstanding principal balance of the 2018A Loan shall be payable on each Payment Date
following the date of delivery by the DNRC of a Noncompliance Statement and concluding on July
1, 2048 and
(ii) the principal of the 2018A Loan shall be payable on each Payment Date, beginning
on the Payment Date that is the first to occur following delivery by the DNRC of a Noncompliance
Statement and concluding on July 1, 2048, and the amount of each principal payment shall be
calculated on the basis of a substantially level debt service at the rate of 2.00% per annum; provided
that principal of the 2018A Loan is payable only in amounts that are multiples of $1,000.
Section 2. Section 5.1.3 of the Resolution 5879 is hereby amended in its entirety to read as
follows:
5.1.3. Repayment of 2018B Loan and 2018C Loan. The Loan Repayments and surcharges on the
2018B Loan and 2018C Loan required by this Section 5.1 shall be due on each Payment Date, as follows:
(i) interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge
on the outstanding principal balance of the 2018B Loan shall be payable on each Payment Date,
beginning on January 1, 2019, and concluding on July 1, 2048;
(ii) the principal of the 2018B Loan shall be repayable on each Payment Date,
beginning on January 1, 2019 and concluding July 1, 2048, and the amount of each principal
payment shall be calculated on the basis of a substantially level debt service at a rate of 2.50% per
annum; provided that principal of the 2018B Loan is payable only in amounts that are multiples of
$1,000;
(iii) interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge
on the outstanding principal balance of the 2018C Loan shall be payable on each Payment Date,
beginning on January 1, 2019, and concluding on July 1, 2048; and
(iv) the principal of the 2018C Loan shall be repayable on each Payment Date,
beginning on January 1, 2019 and concluding July 1, 2048, and the amount of each principal
payment shall be calculated on the basis of a substantially level debt service at a rate of 2.50% per
annum; provided that principal of the 2018C Loan is payable only in amounts that are multiples of
$1,000.
Section 3. Appendix B-1 of Resolution 5879 is hereby amended to correct the date the
obligation to repay the principal amount of the 2018A Loan, if not forgiven, is July 1, 2048.
Section 4. Appendix B-2 of Resolution 5879 is hereby amended such that the form of the
Series 2018B Bond has a final maturity date of July 1, 2048.
Section 5. Appendix B-3 of Resolution 5879 is hereby amended such that the form of the
Series 2018B Bond has a final maturity date of July 1, 2048.
Section 6. Except as specifically amended by this Amending Supplemental Resolution,
Resolution No. 5879 is hereby ratified and confirmed and remains in full force and effect.
Section 7. This Amending Supplemental Resolution shall take effect immediately.
2
PASSED AND ADOPTED by the City Council of the City of Kalispell, Montana, this 20th day of
August, 2018.
Mark Johnson, Mayor
ATTEST:
Aimee Brunckhorst, CMC
City Clerk
APPENDIX B-1
[Form of the Series 201 SA Bond]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
CITY OF KALISPELL
SUBORDINATE LIEN SEWERAGE SYSTEM REVENUE BOND
(DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM),
TAXABLE SERIES 2018A
No. R-1
$400,000
FOR VALUE RECEIVED, the City of Kalispell, Montana (the "City"), a duly organized and
existing municipal corporation in Flathead County, Montana, acknowledges itself to be specially indebted
and, for value received, hereby promises to pay to the Department of Natural Resources and Conservation
of the State of Montana (the "DNRC"), or its registered assigns, solely out of available Surplus Net
Revenues in the Replacement and Depreciation Account or the Surplus Account of its Sewerage System
Fund (the "Fund"), the sum of the principal amounts entered on Schedule A attached hereto under "Total
Amount Advanced," with interest on each such amount from the date such amount is advanced hereunder
at the rate of two percent (2.00%) per annum on the unpaid balance until paid, together with an
Administrative Expense Surcharge and Loan Loss Reserve Surcharge on the outstanding principal amount
of this Subordinate Series 2018A Bond from the date of each advance of principal, each at the rate of
twenty-five hundredths of one percent (0.25%) per annum, all subject to the effect of the immediately
following paragraph. Principal, interest, Administrative Expense Surcharge and Loan Loss Reserve
Surcharge shall be payable in semiannual installments payable on each January 1 and July 1 (each a
"Payment Date") commencing with the Payment Date that is the first to occur following delivery by the
DNRC to the City of a statement that the City's obligation to repay the principal amount of the 2018A Loan
is not forgiven and ending on July 1, 2048, all as described in the Supplemental Resolution (as hereinafter
defined), subject to earlier redemption. Each installment shall be in the amount set forth opposite its due
date in Schedule B attached hereto under "Total Loan Payment." The portion of each such payment
consisting of principal, of interest, of Administrative Expense Surcharge and of Loan Loss Reserve
Surcharge shall be as set forth in Schedule B attached hereto. Upon each disbursement of the 2018A Loan,
the DNRC shall enter (or cause to be entered) the principal amount advanced on Schedule A under
"Advances" and the total amount advanced under the Supplemental Resolution, including such advance,
under "Total Amount Advanced." The DNRC shall prepare Schedule B and any revised Schedule B, or
cause Schedule B and any revised Schedule B to be prepared, as provided in Section 5.1 of the Supplemental
Resolution, and the final Schedule B will reflect repayments under Section 5.1.4 of the Supplemental
Resolution. Schedule B shall be calculated and recalculated on a level debt service basis assuming an
interest rate of two and one-half percent (2.50%) per annum. Past -due payments of principal and interest
and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall bear interest at the rate of
ten percent (10.00%) per annum, until paid. Interest and Administrative Expense Surcharge and Loan Loss
Reserve Surcharge shall be calculated on the basis of a 360-day year comprising 12 months of 30 days each.
All payments under this Subordinate Series 2018A Bond shall be made to the registered holder of this
Subordinate Series 2018A Bond, at its address as it appears on the bond register, in lawful money of the
United States of America.
B-1-1
NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SUBORDINATE SERIES
2018A BOND, IN THE EVENT THAT THE CITY TIMELY DELIVERS A COMPLIANCE
CERTIFICATE AND REQUEST (AS DEFINED IN THE SUPPLEMENTAL RESOLUTION) IN FORM
AND SUBSTANCE SATISFACTORY TO THE DNRC AND THE DNRC IN RESPONSE THERETO
SUPPLIES TO THE CITY A FORGIVENESS STATEMENT, THEN THEREUPON INTEREST SHALL
BE DEEMED TO ACCRUE ON THE PRINCIPAL OF THIS BOND FROM THE DATE OF EACH
ADVANCE AT THE RATE OF ZERO PERCENT (0.00%) PER ANNUM AND THE CITY'S
OBLIGATION TO REPAY PRINCIPAL ADVANCED HEREUNDER SHALL BE FORGIVEN, AND
THE CITY SHALL HAVE NO OBLIGATION TO REPAY THE DNRC OR ITS REGISTERED
ASSIGNS ANY AMOUNTS ADVANCED HEREUNDER OR INTEREST OR ANY SURCHARGE
THEREON. THIS SUBORDINATE SERIES 2018A BOND SHALL THEREUPON BE MARKED
"CANCELLED" AND RETURNED BY THE HOLDER TO THE CITY, AND THIS SUBORDINATE
SERIES 2018A BOND SHALL NO LONGER CONSTITUTE AN OBLIGATION OF THE CITY OR OF
THE SYSTEM (AS HEREINAFTER DEFINED). IN ADDITION, UNTIL THE DELIVERY OF A
DETERMINATION STATEMENT BY THE DNRC TO THE CITY, THE OBLIGATION OF THE CITY
TO REPAY THE OUTSTANDING PRINCIPAL AMOUNT HEREOF SHALL BE DEFERRED UNTIL
THE PAYMENT DATE FIRST OCCURRING AFTER DELIVERY OF A NONCOMPLIANCE
STATEMENT AND INTEREST SHALL BE DEEMED TO ACCRUE ON THE PRINCIPAL OF THIS
BOND FROM THE DATE OF EACH ADVANCE UNTIL DELIVERY OF SUCH A
NONCOMPLIANCE STATEMENT AT THE RATE OF ZERO PERCENT (0.00%) PER ANNUM.
This Subordinate Series 2018A Bond is one of an issue of Sewerage System Revenue Bonds of the
City authorized to be issued in one or more series from time to time, and constitutes a series in the maximum
authorized principal amount of $400,000 (the "Series 2018A Bond"). This Subordinate Series 2018A Bond
is issued to finance costs of the construction of certain improvements to the Sewerage System of the City
(the "System") and to pay costs of issuance of the Series 2018 Bonds (as defined herein). This Subordinate
Series 2018A Bond is issued pursuant to and in full conformity with the Constitution and laws of the State
of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, Part 44 and 45, as
amended, and ordinances and resolutions duly adopted by the governing body of the City, including
Ordinance No. 859 of the City adopted on June 1976, as amended and supplemented by Ordinance Nos.
862 (August 4, 1976), 1002 (February 1, 1982), 1011 (May 3, 1982), 1421 (May 20, 2002), and 1476
(August 18, 2003), all as duly passed and adopted by the City Council of the City, and by Resolution Nos.
2861 (April 10, 1972), 3649 (April 21, 1986), 3980 (April 15, 1991), 4022 (November 4, 1991), 4685
(March 18, 2002), 4910 (July 6, 2004), 5246 (October 15, 2007), 5577 (August 20, 2012), and 5617 (May
6, 2013) (collectively, the "Original Ordinance"), and Resolution No. 5879, adopted by the City Council of
the City on July 2, 2018 (the "Supplemental Resolution," and together with the Original Ordinance, the
"Ordinance"). Terms used with initial capital letters but not defined herein have the meanings given to
them in the Ordinance. This Subordinate Series 2018A Bond is issuable only as a single, fully registered
bond. This Subordinate Series 2018A Bond is issued as a Subordinate Obligation payable out of available
Surplus Net Revenues in the Replacement and Depreciation Account or the Surplus Account in the Fund.
Simultaneously herewith, the City is issuing its (i) $7,000,000 Sewerage System Revenue Bond (DNRC
Water Pollution Control State Revolving Loan Program), Taxable Series 2018B (the "Series 2018B Bond")
and (ii) $7,000,000 Sewerage System Revenue Bond (DNRC Water Pollution Control State Revolving
Loan Program), Taxable Series 2018C (the "Series 2018C Bond," and together with the Series 2018B Bond
and the Series 2018A Bond, the "Series 2018 Bonds"), each of which are payable from the Revenue Bond
Account in the Fund on a parity with the City's outstanding Series 2004 Bond, the Series 2007 Bond, and
the Series 2013 Bond (together with the Series 2018B Bond and the Series 2018C Bond, the "Outstanding
Bonds"). Following the 2018B First Advance, the total amount of each advance will be split equally
between the Series 2018A Bond and the Series 2018B Bond, until the entire amount of the Series 2018A
Bond is advanced; provided that the initial advance shall include the 2018B First Advance, and once the
Series 2018B Bond is fully advanced, then the 2018C First Advance will occur.
Reference is made to the Ordinance for a more complete statement of the terms and conditions
upon which this Subordinate Series 2018A Bond has been issued, the conditions upon which the Ordinance
may be amended, the rights, duties and obligations of the City, and the rights of the owners of this
Subordinate Series 2018A Bond.
The City may prepay the principal of this Subordinate Series 2018A Bond only if (i) a
Determination Statement has been delivered, (ii) it obtains the prior written consent of the DNRC thereto,
and (iii) no Loan Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then
delinquent. Any prepayment permitted by the DNRC must be accompanied by payment of accrued interest,
and Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the
amount of principal prepaid. If this Subordinate Series 2018A Bond is prepaid in part, such prepayments
shall be applied to principal payments in inverse order of maturity.
This Subordinate Series 2018A Bond, including interest and any premium, are payable solely from
the Surplus Net Revenues available for the payment hereof and do not constitute a debt of the City within
the meaning of any constitutional or statutory limitation or provision.
The City may deem and treat the person in whose name this Series 2018A Bond is registered as the
absolute owner hereof, whether this Subordinate Series 2018A Bond is overdue or not, for the purpose of
receiving payment and for all other purposes, and the City shall not be affected by any notice to the contrary.
This Subordinate Series 2018A Bond may be transferred as hereinafter provided.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has duly
authorized and will forthwith construct and complete the improvements to the System hereinabove
described; that it will prescribe and collect reasonable rates and charges for all services and facilities
afforded by the System, including all additions thereto and replacements and improvements thereof, and
has created a special Fund into which the gross revenues of the System will be paid, and a separate and
special Replacement and Depreciation Account and Surplus Account in that Fund, into which will be paid,
subject to the prior lien thereon of the Operating Account, the Revenue Bond Account and the Reserve,
Surplus Net Revenues; that the rates and charges for the System will from time to time be made and kept
sufficient, to provide gross income and revenues adequate to pay promptly the reasonable and current
expenses of operating and maintaining the System, to produce in each fiscal year Net Revenues in excess
of such current expenses, equal to at least 110% of the maximum amount of principal and interest payable
from the Revenue Bond Account in any subsequent fiscal year, and to produce in each fiscal year adequate
Surplus Net Revenues to pay the principal of and interest on this Subordinate Series 2018A Bond as and
when due; that additional Parity Bonds and refunding Bonds may be issued and made payable from the
Revenue Bond Account on a parity with the Outstanding Bonds and other parity Bonds upon certain
conditions set forth in the Ordinance, but no obligation will be otherwise incurred and made payable from
the Net Revenues of the System, unless the lien thereof shall be expressly made subordinate to the lien of
the Outstanding Bonds and additional parity Bonds on such Net Revenues and such obligations are payable
only from Surplus Net Revenues (as is the case with this Subordinate Series 2018A Bond); that all
provisions for the security of the holder of this Subordinate Series 2018A Bond set forth in the Ordinance
will be punctually and faithfully performed as therein stipulated; that all acts, conditions and things required
by the Constitution and laws of the State of Montana and the ordinances and resolutions of the City to be
done, to exist, to happen and to be performed in order to make this Subordinate Series 2018A Bond a valid
and binding special obligation of the City according to its terms have been done, do exist, have happened
and have been performed as so required; and that this Subordinate Series 2018A Bond and the premium, if
any, and interest hereon are payable solely out of available Surplus Net Revenues in the Replacement and
Depreciation Account or the Surplus Account of the Fund and do not constitute a debt of the City within
the meaning of any constitutional or statutory limitation or provision and the issuance of this Subordinate
B-1-3
Series 2018A Bond does not cause either the general or the special indebtedness of the City to exceed any
constitutional or statutory limitation.
IN WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana, by its City Council,
has caused this Subordinate Series 2018A Bond to be executed on its behalf by the facsimile or manual
signatures of the Mayor, City Manager and Finance Director and has caused this Subordinate Series 2018A
Bond to be dated as of the date set forth below.
Dated: July 19, 2018
ATTEST:
City Clerk
CITY OF KALISPELL, MONTANA
Mayor
City Manager
Finance Director
11 151
REGISTRATION AND TRANSFER
The Subordinate Series 2018A Bond shall be fully registered as to both principal and interest. No
transfer of the Subordinate Series 2018A Bond shall be valid unless and until (1) the registered holder of
the Bond, or his duly authorized attorney or legal representative, executes the form of assignment appearing
on the Subordinate Series 2018A Bond, and (2) the Finance Director, as bond registrar (the "Registrar"),
has duly noted the transfer on the Subordinate Series 2018A Bond and recorded the transfer on the
Registrar's registration books. The City shall be entitled to deem and treat the person in whose name the
Subordinate Series 2018A Bond is registered as absolute owner thereof for all purposes, notwithstanding
any notice to the contrary. Payments on account of the Subordinate Series 2018A Bond shall be made only
to the order of the registered holder thereof, and all such payments shall be valid and effectual to satisfy
and discharge the City's liability upon the Subordinate Series 2018A Bond to the extent of the sum or sums
so paid.
REGISTER
The ownership of the outstanding principal balance of the Subordinate Series 2018A Bond and the
interest accruing thereon is registered on the books of City of Kalispell, Montana in the name of the
registered holder appearing on the first page hereof or as last noted below:
Date of
Registration
July 19, 2018
Name and Address
of Registered Holder
Department of Natural
Resources and Conservation
1625 Eleventh Avenue
Helena, MT 59620
Signature of
Finance Director
THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The Finance Director of the City of Kalispell, Montana, acting as Bond Registrar, has transferred,
on the books of the City, on the date last noted below, ownership of the principal amount of and the accrued
interest on the Subordinate Series 2018A Bond to the new registered holder noted next to such date, except
for amounts of principal and interest theretofore paid.
Name of New Signature of
Date of Transfer Registered Holder Bond Re isg tray
B-1-5
FORM OF ASSIGNMENT
For value received, the Subordinate Series 2018A Bond is hereby transferred and assigned by the
undersigned holder, without recourse,
to
of
on this day
By:
(Authorized Signature)
For:
(Holder)
SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED
Total Amount
Date Advances Advanced Notation Made
B-1-7
Date Principal Interest
SCHEDULE B
Administrative
Expense Surcharge
Loan Loss
Reserve Total Loan
Surcharge Payment
MM
APPENDIX B-2
[Form of the Series 2018B Bond]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
CITY OF KALISPELL
SEWERAGE SYSTEM REVENUE BOND
(DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM),
TAXABLE SERIES 2018B
No. R-1
$7,000,000
FOR VALUE RECEIVED, the City of Kalispell, Montana (the "City"), a duly organized and
existing municipal corporation in Flathead County, Montana, acknowledges itself to be specially indebted
and hereby promises to pay to the Department of Natural Resources and Conservation of the State of
Montana (the "DNRC"), or its registered assigns, solely from the Revenue Bond Account of its Sewerage
System Fund (the "Fund"), the principal sum equal to the sum of the amounts entered on Schedule A
attached hereto under "Total Amount Advanced," with interest on each such amount from the date such
amount is advanced hereunder at the rate of two percent (2.00%) per annum on the unpaid balance until
paid. In addition, the City shall pay an Administrative Expense Surcharge and a Loan Loss Reserve
Surcharge on the outstanding principal amount of this Series 2018B Bond, each at the rate of twenty-five
hundredths of one percent (0.25%) per annum. Interest and Administrative Expense Surcharge and Loan
Loss Reserve Surcharge shall be payable in semiannual installments payable on each January 1 and July 1
(each a "Loan Repayment Date") commencing on January 1, 2019 and concluding on July 1, 2048.
Principal shall be payable on the dates set forth in Schedule B hereto. Each installment shall be in the
amount set forth opposite its due date in Schedule B attached hereto under "Total Loan Payment." The
portion of each such payment consisting of principal, the portion consisting of interest, the portion
consisting of Administrative Expense Surcharge, and the portion consisting of Loan Loss Reserve
Surcharge shall be as set forth in Schedule B hereto. Upon each disbursement of Loan amounts to the City
pursuant to the Resolution described below, the DNRC shall enter (or cause to be entered) the amount
advanced on Schedule A under "Advances" and the total amount advanced under the Supplemental
Resolution (as hereinafter defined), including such disbursement, under "Total Amount Advanced." The
DNRC shall prepare Schedule B and any revised Schedule B, or cause Schedule B and any revised Schedule
B to be prepared, as provided in Section 5.1 of the Supplemental Resolution, and the final Schedule B will
reflect repayments under Section 5.1.4 of the Supplemental Resolution. Schedule B shall be calculated and
recalculated on a level debt service basis assuming an interest rate of 2.50% per annum. Past -due payments
of principal and interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall
bear interest at the rate of ten percent (10.00%) per annum, until paid. Interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year comprising
12 months of 30 days each. All payments under this Series 2018B Bond shall be made to the registered
holder of this Series 2018B Bond, at its address as it appears on the Bond register, in lawful money of the
United States of America.
This Series 2018B Bond is one of an issue of Sewerage System Revenue Bonds of the City
authorized to be issued in one or more series from time to time, and constitutes a series in the maximum
authorized principal amount of $7,000,000 (the "Series 2018B Bond"). The Series 2018B Bond is issued
to finance a portion of costs of the construction of certain improvements to the Sewerage System of the
B-2-1
City (the "System") and to pay costs of issuance of the Series 2018 Bonds (as defined herein). The Series
2018B Bond is issued pursuant to and in full conformity with the Constitution and laws of the State of
Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, Part 44 and 45, as
amended, and ordinances and resolutions duly adopted by the governing body of the City, including
Ordinance No. 859 of the City adopted on June 1976, as amended and supplemented by Ordinance Nos.
862 (August 4, 1976), 1002 (February 1, 1982), 1011 (May 3, 1982), 1421 (May 20, 2002), and 1476
(August 18, 2003), all as duly passed and adopted by the City Council of the City, and by Resolution Nos.
2861 (April 10, 1972), 3649 (April 21, 1986), 3980 (April 15, 1991), 4022 (November 4, 1991), 4685
(March 18, 2002), 4910 (July 6, 2004), 5246 (October 15, 2007), 5577 (August 20, 2012), and 5617 (May 6,
2013) (collectively, the "Original Ordinance"), and Resolution No. 5879, adopted by the City Council of
the City on July 2, 2018 (the "Supplemental Resolution," and together with the Original Ordinance, the
"Ordinance"). Terms used with initial capital letters but not defined herein have the meanings given to
them in the Ordinance. The Series 2018B Bond is issuable only as a single, fully registered bond. The
Series 2018B Bond is issued on a parity with the City's outstanding Series 2004 Bond, the Series 2007
Bond, and the Series 2013 Bond. Simultaneously herewith, the City is issuing its (i) $400,000 Subordinate
Lien Sewerage System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program),
Taxable Series 2018A (the "Series 2018A Bond") and (ii) $7,000,000 Sewerage System Revenue Bond
(DNRC Water Pollution Control State Revolving Loan Program), Taxable Series 2018C (the "Series 2018C
Bond," and together with the Series 2018A Bond and the Series 2018B Bond, the "Series 2018 Bonds").
The 2018B First Advance has been advanced at Closing. Following the 2018B First Advance, the total
amount of each advance will be split equally between the Series 2018A Bond the Series 2018B Bond, until
the entire amount of the Series 2018A Bond has been advanced; provided that the initial advance shall
include the 2018B First Advance, and once the Series 2018B Bond is fully advanced, then the 2018C First
Advance will occur.
Reference is made to the Ordinance for a more complete statement of the terms and conditions
upon which the Series 2018B Bond has been issued, the Net Revenues of the System pledged and
appropriated for the payment and security thereof, the conditions upon which additional Bonds may be
issued under the Ordinance and made payable from such Net Revenues on a parity with the Series 2004
Bond, the Series 2007 Bond, and the Series 2013 Bond, this Series 2018B Bond, the Series 2018C Bond,
and any other parity Bond (collectively, the "Bonds") or otherwise, the conditions upon which the
Ordinance may be amended, the rights, duties and obligations of the City, and the rights of the owners of
the Series 2018B Bond.
The City may prepay the principal of the Series 2018B Bond only if (i) a Determination Statement
has been delivered, (ii) it obtains the prior written consent of the DNRC thereto, and (iii) no Loan
Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. Any
prepayment permitted by the DNRC must be accompanied by payment of accrued interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the
amount of principal prepaid. If the Series 2018B Bond is prepaid in part, such prepayments shall be applied
to principal payments in inverse order of maturity.
The Series 2018B Bond, including interest and any premium, are payable solely from the Net
Revenues pledged for the payment hereof and do not constitute a debt of the City within the meaning of
any constitutional or statutory limitation or provision.
The City may deem and treat the person in whose name this Series 2018B Bond is registered as the
absolute owner hereof, whether this Series 2018B Bond is overdue or not, for the purpose of receiving
payment and for all other purposes, and the City shall not be affected by any notice to the contrary. The
Series 2018B Bond may be transferred as hereinafter provided.
B-2-2
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has duly
authorized and will forthwith construct and complete the improvements to the System hereinabove
described, that it will prescribe and collect reasonable rates and charges for all services and facilities
afforded by the System, including all additions thereto and replacements and improvements thereof, and
has created a special Fund into which the gross revenues of the System will be paid, and a separate and
special Revenue Bond Account in that Fund, into which will be paid each month, from and as a first and
prior lien on the Net Revenues then on hand, an amount equal to not less than the sum of one- sixth of
principal and the interest to become due within the next six months with respect to all Bonds payable semi-
annually from the Revenue Bond Account; that the City has created a Reserve in the Fund into which shall
be paid additional Net Revenues, after required credits to the Revenue Bond Account, sufficient to establish
and maintain a reserve therein equal to, as of the date of calculation, the Reserve Requirement; that the
Revenue Bond Account will be used only to pay the principal of, premium, if any, and interest on the Series
2004 Bond, the Series 2007 Bond, the Series 2013 Bond, the Series 2018B Bond, the Series 2018C Bond,
and any other additional Bonds issued pursuant to the Ordinance on a parity therewith; that the rates and
charges for the System will from time to time be made and kept sufficient, to provide gross income and
revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the
System and to produce in each fiscal year Net Revenues in excess of such current expenses equal to at least
110% of the maximum amount of principal and interest payable from the Revenue Bond Account in any
subsequent fiscal year; that additional Bonds and refunding Bonds may be issued and made payable from
the Revenue Bond Account on a parity with the Series 2004 Bond, the Series 2007 Bond, the Series 2013
Bond, the Series 2018B Bond, the Series 2018C Bond, and other parity Bonds upon certain conditions set
forth in the Ordinance, but no obligation will be otherwise incurred and made payable from the Net
Revenues of the System, unless the lien thereof shall be expressly made subordinate to the lien of the Series
2004 Bond, the Series 2007 Bond, the Series 2013 Bond, the Series 2018B Bond, the Series 2018C Bond,
and additional Parity Bonds on such Net Revenues and such obligations are payable only from Surplus Net
Revenues (as is the case with the Series 2018A Bond); that all provisions for the security of the holder of
this Series 2018B Bond set forth in the Ordinance will be punctually and faithfully performed as therein
stipulated; that all acts, conditions and things required by the Constitution and laws of the State of Montana
and the ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order
to make this Series 2018B Bond a valid and binding special obligation of the City according to its terms
have been done, do exist, have happened and have been performed as so required; and that this Series 2018B
Bond and the premium, if any, and interest hereon are payable solely from the Net Revenues of the System
pledged and appropriated to the Revenue Bond Account and do not constitute a debt of the City within the
meaning of any constitutional or statutory limitation or provision and the issuance of the Series 2018B Bond
does not cause either the general or the special indebtedness of the City to exceed any constitutional or
statutory limitation.
(The remainder of this page is intentionally left blank.)
B-2-3
IN WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana, by its City Council,
has caused this Series 2018B Bond to be executed on its behalf by the facsimile or manual signatures of the
Mayor, City Manager and Finance Director and has caused this Series 2018B Bond to be dated as of the
date set forth below.
Dated: July 19, 2018
ATTEST:
City Clerk
CITY OF KALISPELL, MONTANA
Mayor
City Manager
Finance Director
MW
REGISTRATION AND TRANSFER
The Series 2018B Bond shall be fully registered as to both principal and interest. No transfer of the
Bond shall be valid unless and until (1) the registered holder of the Series 2018B Bond, or his duly
authorized attorney or legal representative, executes the form of assignment appearing on the Series 2018B
Bond, and (2) the Finance Director as bond registrar (the "Registrar"), has duly noted the transfer on the
Bond and recorded the transfer on the Registrar's registration books. The City shall be entitled to deem
and treat the person in whose name the Series 2018B Bond is registered as absolute owner thereof for all
purposes, notwithstanding any notice to the contrary. Payments on account of the Series 2018B Bond shall
be made only to the order of the registered holder thereof, and all such payments shall be valid and effectual
to satisfy and discharge the City's liability upon the Bond to the extent of the sum or sums so paid.
REGISTER
The ownership of the outstanding principal balance of the Series 2018B Bond and the interest
accruing thereon is registered on the books of City of Kalispell, Montana in the name of the registered
holder appearing on the first page hereof or as last noted below:
Date of
Registration
July 19, 2018
Name and Address
of Registered Holder
Department of Natural
Resources and Conservation
1625 Eleventh Avenue
Helena. MT 59620
Signature of
Finance Director
THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The Finance Director of the City of Kalispell, Montana, acting as Bond Registrar, has transferred,
on the books of the City, on the date last noted below, ownership of the principal amount of and the accrued
interest on the Series 2018B Bond to the new registered holder noted next to such date, except for amounts
of principal and interest theretofore paid.
Name of New Signature of
Date of Transfer Registered Holder Bond Registrar
FORM OF ASSIGNMENT
For value received, the Series 2018B Bond is hereby transferred and assigned by the undersigned
holder, without recourse,
to
of
on this day
By:
(Authorized Signature)
For:
(Holder)
mm
SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED
Total Amount
Date Advances Advanced Notation Made
B-2-7
SCHEDULE B
PAYMENT SCHEDULE
[Attached]
SRF-19441 Preliminary Schedule
STATE OF MONTANA
GENERAL OBLIGATION BONDS
WATER POLLUTION CONTROL
(REVOLVING FUND PROGRAM)
BORROWER: Kalispell InteteeptnrB
PROJECT NAME.
LOAN COMMITMENT: $7,000,000
LOAN AMOUNT: 7,000,000
INTEREST RATE: 2.50%
FINAL LOAN PAYMENT: 7/l2048
S OF LOAN PAYMENTS: 60
PROJECT NUMBER:
DATE OF FUNDING: 71192018
PAYMENT
LOAN LOSS
ADM EXPENSE
INTEREST
PRINCIPAL
O/S LOAN
TOTAL AMOUNT
DUE
RESERVE
SURCHARGE
PAYMENT
PAYMENT
BALANCE
OF PAYMENT
1 1/1/2019
7,875.00
7,875.00
63,000.00
79,000.00
6,921,000.00
S157,750.00 $
157,750.00
2 7/12019
8,651.25
8,651.25
69,210.00
80,000.00
6,841,000.D0
S166.512.50
3 I/l2020
8,55125
8,551.25
68,410.00
81,000.00
6,760,000.00
$166,512.50 S
333,025.00
4 7112020
8,450.00
8,450.00
67,600.00
82,000.00
6,678,000.00
$166,500.00
5 1112021
8,34T50
8.347.50
66,780.00
83,000.00
6,595,000.00
$166,475.00 S
332,975.00
6 7112021
8,243.75
9,243.75
65,950,00
84,000.00
6,511,000.00
S166,437.50
7 1/12022
8,138.75
8.138.75
65,110.00
85,000.00
6,426,000.00
$166,387.50 S
332,825.00
8 7/l2022
8,032.50
8,032.50
64,260.00
96,000.00
6,340,000.00
$166,325.00
9 l/l2023
7,925.00
7,925.00
63,4D0.00
87,000.D0
6,253,0W.00
S166,250.00 $_
312,575.00
10 7/l2023
7,916.25
7,816.25
62.530.00
88,000.00
6,165,000.00
S166,162.50
11 1112024
7,706.25
7,706.25
61,650.00
89,000.00
6,076,000.00
S166,062.50 S 332,225.00
12 7112024
7,595.00
7,595.00
60,760.00
91,000.00
5,995,000.00
S166,950.00
13 I/l2025
7,48123
7,481.25
59,850.00
92,000.00
5,893,000,00
$166,812.50 S
333,762.50
14 7/l2025
7,366.25
7,36615
58,930ZO
93,000.00
5,800,000.00
$166,662.50
15 1/1/2026
7,250.D0
7,250.00
58,000.00
94,000.00
5,706,000.00
S166,500.00 S
333,162.50
16 7/12026
7,132.50
7,132.50
57,060.00
95,000.00
5,611,000.00
S166,325.00
17 1/12027
7,01335
7,01175
56,110.00
96,000.00
5,515,000.00
S166,137.50 S
332.462.50
18 7/l2027
6,893.75
6,893.75
55,150.00
98,000.00
5,417,000.00
S166,937.50
19 1/l/2028
6,77125
6,771.25
54,170.00
99,000,00
5,318,000.00
$166,712.50 S
333,650.00
20 7112028
6,647.50
6,647.50
53,180,00
100,000.00
5,218,000.00
$166,475.00
21 1/l2029
6,522.50
6,522.50
52,180.00
101,000.D0
5,117,000.00
$166,225.00 S
332.700.00
22 7/12029
6,39625
6,396.25
51,170.00
103,000.00
5,014,000.00
$166,962.50
23 U12030
6,267.50
6,267,50
50,140.00
104,DW.00
4,910,000.00
S166,675.00 S
333,637.50
24 7/12030
6,137.50
6,137.50
49,100.00
105,000.00
4,805,000.D0
S166,375.00
25 I/l2031
6,DD6.25
6,006,25
49.050.00
106,000.00
4,699,000.00
$166,062.50 S
332.437.50
26 7/l2031
5,973.75
5,873.75
46,990.00
108,000.00
4,591,000.00
S166,737.50
27 I/l2032
5,738.75
5,738,15
45,910.00
109,000.00
4,482,000.00
S166,387.50 S
333,125,00
28 7/l/2032
5,602.50
5,602.50
44.820.00
111,000.00
4,371,000.00
$167,025.00
29 1/12D33
5,463.75
5,463.73
43,710.00
112,000.00
4,259,000.00
S166,637.50 S
333.662,50
30 7/l2033
5,323.75
5,323.75
42,590.00
113,000.00
4,146,000.00
S166,23750
31 1/12034
5,182.50
5,182.50
41,460.00
11spo0.00
4,031,000.00
$166,825.00 S
333,062.S0
32 7/12034
5,038.75
5,038.75
40,310.00
116,000.00
3,915,000.00
$166,387.50
33 1/12035
4,893.75
4,893.75
39,150.00
118,000.00
3,797,000.00
$166,937.50 S
333,325.00
34 7/12035
4.746.25
4,74625
37,970.00
119,000.()0
3,678,000.00
$166,462.50
35 1112036
4,597.50
4,59150
36,780.00
121.000.00
3,557,000.00
S166,975.00 S
333,437.50
36 7112036
4,446.25
4,446.25
35,570.00
122,000.00
3,435,000.00
$166,462-50
37 l/l2037
4,293,75
4,293.75
34.350.00
124,000.00
3,311,000.00
$166,937.50 $
333,400.00
38 7/12037
4,138.75
4,138.75
33,110,00
125,000,00
3,186,000.00
$166,387.50
39 1/12038
3,982.50
3,982.50
31,860.00
127,000.00
3,059,000.00
S166,825.00 S
333.212.50
40 7/l2038
3,823-75
3,823.75
30,590.00
128,000.00
2,931,000.00
S166,23750
41 1/12039
3,663.75
3,663.75
29,310.00
130,000.00
2,801,000.00
S166,637.50 S
332,875.00
42 7/12039
3,501.25
3,501.25
28,010.00
132,000.00
2,669,000.00
S167,012.50
43 1112040
3,33625
3,33625
26,690.00
133,000.00
2,536,000.00
$166,362.50 S 333,375.00
44 7/l2040
3,170.00
3,170.00
25,360.00
135,000.00
2,401,000.00
S166,700.00
45 l/l2041
3,001.25
3,001,25
24,010.00
137,000.00
2,264,000.00
$167,012.50 S
333,712.50
46 7/l2041
2,830.00
2,830.00
22,640.00
138,000.00
2,126,000.00
S166,300.00
47 1/12042
2,65750
2,657.50
21,260.00
140,000.00
1,986,000.00
S166,575.00 S
332,875.00
48 7/l2042
2,482.50
2,482.50
19,960.00
142,000.00
1,844,000.00
$166,825.00
49 1112043
2,305.00
2.305.00
18,440.D0
143,000.00
1,701,000.00
$166,050.00 S
332,875.00
50 7/1/2043
2,126.25
2,126.25
17,010.00
145,000.00
1,556,000.00
S166,262.50
51 1112044
1.945.00
1,945.00
15560.00
147,000.00
1,409,000.00
S166,450.00 S
33271230
52 7/12044
1.76115
1,761.25
14,090.00
149,000.00
1,260,000.00
S166,612.50
53 I/1/2045
1,575.D0
1,575.00
12,600.00
151,000.00
1,109,000.00
$166,750.00 S
333.362.50
54 7112045
1,386.25
1,386.25
11,090.00
153,000.00
956,000.00
S166,862.50
55 I/l2046
1,195.00
1,195.00
9,560.D0
155,000.00
$01,000.00
$166.950.00 S
333,812.50
56 7/12046
1,001.25
1,001.25
8,010.00
157,000.00
644,000.00
S167,012,50
57 I/l2047
805.00
805.00
6,440.00
158,000.00
496.000.00
S166,050.00 S
333,06250
58 7/12047
60750
607.50
4,860.00
160,000.00
326,000.00
S166,075.00
59 1/12048
40750
407.50
3,260.00
162,000.00
164,000.00
S166,075.00 S
332,150.00
60 7/12048
205.00
205.00
1.640.00
164,000.00
0,00
$166.050.00 S
166,050.00
298,327.50
298,327,50
2,396,620.00
7,000,000,00
9,983,275.00
9,983,275.00
9A3,275.00
APPENDIX B-3
[Form of the Series 2018C Bond]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
CITY OF KALISPELL
SEWERAGE SYSTEM REVENUE BOND
(DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM),
TAXABLE SERIES 2018C
No. R-1 $7,000,000
FOR VALUE RECEIVED, the City of Kalispell, Montana (the "City"), a duly organized and
existing municipal corporation in Flathead County, Montana, acknowledges itself to be specially indebted
and hereby promises to pay to the Department of Natural Resources and Conservation of the State of
Montana (the "DNRC"), or its registered assigns, solely from the Revenue Bond Account of its Sewerage
System Fund (the "Fund"), the principal sum equal to the sum of the amounts entered on Schedule A
attached hereto under "Total Amount Advanced," with interest on each such amount from the date such
amount is advanced hereunder at the rate of two percent (2.00%) per annum on the unpaid balance until
paid. In addition, the City shall pay an Administrative Expense Surcharge and a Loan Loss Reserve
Surcharge on the outstanding principal amount of this Series 2018C Bond, each at the rate of twenty-five
hundredths of one percent (0.25%) per annum. Interest and Administrative Expense Surcharge and Loan
Loss Reserve Surcharge shall be payable in semiannual installments payable on each January 1 and July 1
(each a "Loan Repayment Date") commencing on January 1, 2019 and concluding on July 1, 2048.
Principal shall be payable on the dates set forth in Schedule B hereto. Each installment shall be in the
amount set forth opposite its due date in Schedule B attached hereto under "Total Loan Payment." The
portion of each such payment consisting of principal, the portion consisting of interest, the portion
consisting of Administrative Expense Surcharge, and the portion consisting of Loan Loss Reserve
Surcharge shall be as set forth in Schedule B hereto. Upon each disbursement of Loan amounts to the City
pursuant to the Resolution described below, the DNRC shall enter (or cause to be entered) the amount
advanced on Schedule A under "Advances" and the total amount advanced under the Supplemental
Resolution (as hereinafter defined), including such disbursement, under "Total Amount Advanced." The
DNRC shall prepare Schedule B and any revised Schedule B, or cause Schedule B and any revised Schedule
B to be prepared, as provided in Section 5.1 of the Supplemental Resolution, and the final Schedule B will
reflect repayments under Section 5.1.4 of the Supplemental Resolution. Schedule B shall be calculated and
recalculated on a level debt service basis assuming an interest rate of 2.50% per annum. Past -due payments
of principal and interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall
bear interest at the rate of ten percent (10.00%) per annum, until paid. Interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year comprising
12 months of 30 days each. All payments under this Series 2018C Bond shall be made to the registered
holder of this Series 2018C Bond, at its address as it appears on the Bond register, in lawful money of the
United States of America.
This Series 2018C Bond is one of an issue of Sewerage System Revenue Bonds of the City
authorized to be issued in one or more series from time to time, and constitutes a series in the maximum
authorized principal amount of $7,000,000 (the "Series 2018C Bond"). The Series 2018C Bond is issued
to finance a portion of costs of the construction of certain improvements to the Sewerage System of the
B-3-1
City (the "System") and to pay costs of issuance of the Series 2018 Bonds. The Series 2018C Bond is issued
pursuant to and in full conformity with the Constitution and laws of the State of Montana thereunto
enabling, including Montana Code Annotated, Title 7, Chapter 7, Part 44 and 45, as amended, and
ordinances and resolutions duly adopted by the governing body of the City, including Ordinance No. 859
of the City adopted on June 1976, as amended and supplemented by Ordinance Nos. 862 (August 4, 1976),
1002 (February 1, 1982), 1011 (May 3, 1982), 1421 (May 20, 2002), and 1476 (August 18, 2003), all as
duly passed and adopted by the City Council of the City, and by Resolution Nos. 2861 (April 10, 1972),
3649 (April 21, 1986), 3980 (April 15, 1991), 4022 (November 4, 1991), 4685 (March 18, 2002), 4910
(July 6, 2004), 5246 (October 15, 2007), 5577 (August 20, 2012), and 5617 (May 6, 2013) (collectively,
the "Original Ordinance"), and Resolution No. 5879, adopted by the City Council of the City on July 2,
2018 (the "Supplemental Resolution," and together with the Original Ordinance, the "Ordinance"). Terms
used with initial capital letters but not defined herein have the meanings given to them in the Ordinance.
The Series 2018C Bond is issuable only as a single, fully registered bond. The Series 2018C Bond is issued
on a parity with the City's outstanding Series 2004 Bond, the Series 2007 Bond, and the Series 2013 Bond.
Simultaneously herewith, the City is issuing its (i) $400,000 Subordinate Lien Sewerage System Revenue
Bond (DNRC Water Pollution Control State Revolving Loan Program), Taxable Series 2018A (the "Series
2018A Bond") and (ii) $7,000,000 Sewerage System Revenue Bond (DNRC Water Pollution Control State
Revolving Loan Program), Taxable Series 2018B (the "Series 2018B Bond," and together with the Series
2018A Bond and the Series 2018C Bond, the "Series 2018 Bonds"). The 2018A First Advance and the
2018B First Advance have been advanced at Closing. Following the 2018B First Advance, the total amount
of each advance will be split equally between the Series 2018A Bond and the Series 2018B Bond, until the
entire amount of the Series 2018A Bond is advanced; provided that the initial advance shall include the
2018B First Advance, and once the Series 2018B Bond is fully advanced, then the 2018C First Advance
will occur.
Reference is made to the Ordinance for a more complete statement of the terms and conditions
upon which the Series 2018C Bond has been issued, the Net Revenues of the System pledged and
appropriated for the payment and security thereof, the conditions upon which additional Bonds may be
issued under the Ordinance and made payable from such Net Revenues on a parity with the Series 2004
Bond, the Series 2007 Bond, and the Series 2013 Bond, the Series 2018B Bond, this Series 2018C Bond,
and any other parity Bond (collectively, the "Bonds") or otherwise, the conditions upon which the
Ordinance may be amended, the rights, duties and obligations of the City, and the rights of the owners of
the Series 2018C Bond.
The City may prepay the principal of the Series 2018C Bond only if (i) a Determination Statement
has been delivered, (ii) it obtains the prior written consent of the DNRC thereto, and (iii) no Loan
Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. Any
prepayment permitted by the DNRC must be accompanied by payment of accrued interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the
amount of principal prepaid. If the Series 2018C Bond is prepaid in part, such prepayments shall be applied
to principal payments in inverse order of maturity.
The Series 2018C Bond, including interest and any premium, are payable solely from the Net
Revenues pledged for the payment hereof and do not constitute a debt of the City within the meaning of
any constitutional or statutory limitation or provision.
The City may deem and treat the person in whose name this Series 2018C Bond is registered as the
absolute owner hereof, whether this Series 2018C Bond is overdue or not, for the purpose of receiving
payment and for all other purposes, and the City shall not be affected by any notice to the contrary. The
Series 2018C Bond may be transferred as hereinafter provided.
B-3-2
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has duly
authorized and will forthwith construct and complete the improvements to the System hereinabove
described, that it will prescribe and collect reasonable rates and charges for all services and facilities
afforded by the System, including all additions thereto and replacements and improvements thereof, and
has created a special Fund into which the gross revenues of the System will be paid, and a separate and
special Revenue Bond Account in that Fund, into which will be paid each month, from and as a first and
prior lien on the Net Revenues then on hand, an amount equal to not less than the sum of one- sixth of
principal and the interest to become due within the next six months with respect to all Bonds payable semi-
annually from the Revenue Bond Account; that the City has created a Reserve in the Fund into which shall
be paid additional Net Revenues, after required credits to the Revenue Bond Account, sufficient to establish
and maintain a reserve therein equal to, as of the date of calculation, the Reserve Requirement; that the
Revenue Bond Account will be used only to pay the principal of, premium, if any, and interest on the Series
2004 Bond, the Series 2007 Bond, the Series 2013 Bond, the Series 2018B Bond, the Series 2018C Bond,
and any other additional Bonds issued pursuant to the Ordinance on a parity therewith; that the rates and
charges for the System will from time to time be made and kept sufficient, to provide gross income and
revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the
System and to produce in each fiscal year Net Revenues in excess of such current expenses equal to at least
110% of the maximum amount of principal and interest payable from the Revenue Bond Account in any
subsequent fiscal year; that additional Bonds and refunding Bonds may be issued and made payable from
the Revenue Bond Account on a parity with the Series 2004 Bond, the Series 2007 Bond, the Series 2013
Bond, the Series 2018B Bond, the Series 2018C Bond, and other parity Bonds upon certain conditions set
forth in the Ordinance, but no obligation will be otherwise incurred and made payable from the Net
Revenues of the System, unless the lien thereof shall be expressly made subordinate to the lien of the Series
2004 Bond, the Series 2007 Bond, the Series 2013 Bond, the Series 2018B Bond, the Series 2018C Bond,
and additional Parity Bonds on such Net Revenues and such obligations are payable only from Surplus Net
Revenues (as is the case with the Series 2018A Bond); that all provisions for the security of the holder of
this Series 2018C Bond set forth in the Ordinance will be punctually and faithfully performed as therein
stipulated; that all acts, conditions and things required by the Constitution and laws of the State of Montana
and the ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order
to make this Series 2018C Bond a valid and binding special obligation of the City according to its terms
have been done, do exist, have happened and have been performed as so required; and that this Series 2018C
Bond and the premium, if any, and interest hereon are payable solely from the Net Revenues of the System
pledged and appropriated to the Revenue Bond Account and do not constitute a debt of the City within the
meaning of any constitutional or statutory limitation or provision and the issuance of the Series 2018C Bond
does not cause either the general or the special indebtedness of the City to exceed any constitutional or
statutory limitation.
(The remainder of this page is intentionally left blank.)
B-3-3
IN WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana, by its City Council,
has caused this Series 2018C Bond to be executed on its behalf by the facsimile or manual signatures of the
Mayor, City Manager and Finance Director and has caused this Series 2018C Bond to be dated as of the
date set forth below.
Dated: July 19, 2018
ATTEST:
City Clerk
CITY OF KALISPELL, MONTANA
Mayor
City Manager
Finance Director
IC 15!
REGISTRATION AND TRANSFER
The Series 2018C Bond shall be fully registered as to both principal and interest. No transfer of the
Bond shall be valid unless and until (1) the registered holder of the Series 2018C Bond, or his duly
authorized attorney or legal representative, executes the form of assignment appearing on the Series 2018C
Bond, and (2) the Finance Director as bond registrar (the "Registrar"), has duly noted the transfer on the
Bond and recorded the transfer on the Registrar's registration books. The City shall be entitled to deem
and treat the person in whose name the Series 2018C Bond is registered as absolute owner thereof for all
purposes, notwithstanding any notice to the contrary. Payments on account of the Series 2018C Bond shall
be made only to the order of the registered holder thereof, and all such payments shall be valid and effectual
to satisfy and discharge the City's liability upon the Bond to the extent of the sum or sums so paid.
REGISTER
The ownership of the outstanding principal balance of the Series 2018C Bond and the interest
accruing thereon is registered on the books of City of Kalispell, Montana in the name of the registered
holder appearing on the first page hereof or as last noted below:
Date of
Registration
July 19, 2018
Name and Address
of Registered Holder
Department of Natural
Resources and Conservation
1625 Eleventh Avenue
Helena, MT 59620
Signature of
Finance Director
THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The Finance Director of the City of Kalispell, Montana, acting as Bond Registrar, has transferred,
on the books of the City, on the date last noted below, ownership of the principal amount of and the accrued
interest on the Series 2018C Bond to the new registered holder noted next to such date, except for amounts
of principal and interest theretofore paid.
Name of New Signature of
Date of Transfer Registered Holder Bond Registrar
B-3-5
FORM OF ASSIGNMENT
For value received, the Series 2018C Bond is hereby transferred and assigned by the undersigned
holder, without recourse,
to
of
on this day
By:
(Authorized Signature)
For:
(Holder)
Date
SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED
Advances
Total Amount
Advanced
Notation Made By
B-3-7
SCHEDULE B
PAYMENT SCHEDULE
[Attached]
B-3-8
SRF•19441 Preliminary Scbcdulc
STATE OF MONTANA
GENERAL OBLIGATION BONDS
WATER POLLUTION CONTROI.
(REVOLVING FUND PROGRAM)
BORROWER: Kalispell Interceptor B
PROJECT NAME:
LOAN COMMITMENT: S7,000,000
LOAN AMOUNT: 7,000,000
INTEREST RATE: 2.50%
FINAL LOAN PAYMENT: 7/12048
N OF LOAN PAYMENTS: 60
PROJECT NUMBER:
DATE OF FUNDING: 7/192018
PAYMENT
LOAN LOSS
ADM EXPENSE
INTEREST
PRINCIPAL
O/S LOAN
TOTAL AMOUNT
DUE
RESERVE
SURCHARGE
PAYMENT
PAYMENT
BALANCE
OFPAYMENT
1 I/12019
7,875.00
7,875.00
63,000.00
79,000.00
6,921,000.00
$157,750.00 S
157,750.00
2 7/1/2019
8,651.25
8,651.25
69,210.00
80,000.00
6,941,000.00
$166,512.50
3 I/12020
8,551.25
8,551.25
68,410.00
$1,000.00
6,760,000.00
$166,512.50 S
333A25.00
4 7/12020
8,450.00
8,450.00
67,600.00
$2.000.00
6,678,000.00
$166,500.00
5 11WO21
8347.50
8,347.50
66,780.00
83,000.00
6,595,000.00
$166,475.00 S
332,975.00
6 7/12021
8,243.75
8243.75
65.950.00
84,000.00
6,511,000.00
$166,437.50
7 I/l2022
8,138.75
8,138.75
65,110.00
85.0moo
6,426,000.00
$166,397.50 S
332,825.00
8 7/l2022
8,032.50
9,032,50
64,260.00
86,000.00
6,340,000.00
S166,325.00
9 1112023
7.925.00
7,925.00
63,400.00
87,000.00
6,253,000.00
$166,250.00 $
332,575,00
10 7/12023
7.816.25
7,816.25
62,530.00
88,000.00
6,165,000.00
S166,162.50
11 1112024
7,70625
7,706,25
61,650.00
89,000.00
6,076,0W.00
$166,062.50 S 332225.00
12 7/l2024
7,595,00
7,595.00
60,7%00
91,000.00
5,985,000.00
S166,950.00
13 I/12025
7,48125
7,481.25
59,850.00
92,000.00
5,893,000.00
$166,812.50 S
333,762.50
14 7/12025
7.366.25
7,366.25
58.930.00
93,000.00
5,800,000.00
$166.662.50
IS 1/1,2026
7.250.00
7,250.00
58,000.00
94,000.00
5,706,000.00
$166,500.00 S
333,162.50
16 7112026
7,132.50
7,132.50
57,060.00
95,000.00
5,611,000.00
$166,325.00
17 l/l2027
7,013.75
7,013.75
56,110-00
96,000.00
5,515,000.00
$166.137.50 S
332,462.50
18 7/12027
6,893.75
6,893.75
55,150.00
98,000.00
5,417,000.00
S166,93T50
19 1112029
6,77125
6,77125
54,170.00
9910W.00
5,318,000.00
$166,712.50 $
333,650.00
20 7/l2028
6,647.50
6,64750
53,180.00
100,000.00
5,218,000.00
S166,475.00
21 1112029
6,522.50
6,522.50
52,180.00
101,000.00
5,117,000.00
$166,225.00 S
332.700.00
22 7/12029
6,39625
6,396.2S
51,170.00
103,000.00
5,014,000.00
$166,962.50
23 1112030
626750
6,267.50
50,140.00
104,000.00
4,910,000.00
S166,675.00 S
333,637.50
24 7/12030
6,137.50
6,137.50
49,100.00
105,000.00
4,805,000.00
$166,375.00
25 1/1/2031
6,006.S
6,006.25
48,050.00
106,000.00
4.699.000.00
S166,062.50 S
332.437.50
26 7/l2031
5,873.75
5,873.75
46,990.00
108,000.00
4,591,000.00
$166,737.50
27 I/W032
5,738.75
5,738.75
45,910.00
109,000.00
4,482,000.00
$166,387.50 S
333,125.00
28 7/ln032
5,602.50
5,602-30
44,820.00
111,000.00
4,371,000.00
$167,025.00
29 1/12033
5,463.75
5.463.75
43,710.00
112,000.00
4,259,000.00
S166,63T50 S
333,662.50
30 7/12033
5,323.75
5,323.75
42,590.00
113,000.00
4,146,000.00
$166,237.50
31 I/l2034
5,182.50
5,182.50
41,460.00
115,000.00
4,031,000.00
$166,825.00 $
333,062.50
32 7112034
5,038.75
5,038.75
40,310.00
116,000.00
3,915,000.00
S166,387.50
33 l/l2035
4,893.75
4,893.75
39,150.00
119.000.00
3,797,000.00
$166,937.50 S
333,325.00
34 7/12035
4,746.25
4,74625
37,970.00
119,000.00
3,678,000.00
S166,462.50
35 I/l2036
4,597.50
4,597.50
36,780.00
121,000.00
3,357,000.00
$166,975.00 S
333,437.50
36 7112036
4,446.25
4,44625
35,570.00
122,000.00
3,435,000.00
$166,462.50
37 l/l2037
4,293.75
4,293.75
34,350.00
124,000.00
3,311,000.00
$166,937.50 S
333,400.00
38 7112037
4,138.75
4.138.75
33,110.00
125,000.00
3,186,000.00
$166.387.50
39 1/12038
3,982.50
3,982.50
31,860.00
127,000.00
3,059,000.00
$166,925.00 S
333.212.50
40 7112038
3,923.75
3,823.75
30,590.00
128,000.00
4931,000.00
$166,237.50
41 l/l2039
3,663.75
3,663.75
29,310,00
130,000.00
2,801,000.00
$166,637.50 S
332,875.00
42 7/12039
3,501.25
3.501.25
29.010.00
132,000.00
2,669,000.00
$167.012.50
43 1112040
3.336.25
3,33625
26,690.00
133,000.00
2,536,000.00
$166,362,50 $
333,375.00
44 7/12040
3,170.00
3,170.00
25,360.00
135,000.00
2,401,000.00
$166,700.00
45 1112041
3,001.25
3,00125
24,010.00
137.000.00
2,264,000.00
S167,01250 S
333,712.50
46 7/l2041
2,830.00
2,830.00
22,640.00
138,000.00
2,126,000.00
$166300.00
47 1/12042
2,657.50
2.657.50
21260.00
140,000.00
1,986,000.00
$166,575.00 S
332.875.00
48 7/12042
2,482.50
2,482.50
19.860.00
142.000.00
1,844,000.00
S166,825.00
49 1/12043
2,305.00
2,305.00
18,440.00
143,000.00
1,701,000.00
$166,050.00 S
332,875.00
50 7/V2043
2.126.25
2,12625
17,010.00
145,000.00
1,556,000.00
$166,262.50
51 1/12044
1,945.00
1,945.00
15,560.00
147,000.00
1,409,000.00
S166,450.00 S
332,712.50
52 7/1/2044
1,76125
1,761.25
14,090.00
149,000.00
1260,000.00
S166,612.50
53 1/l2045
1,575.00
1,575.00
12,600.00
151,000.00
1,109,000.00
S166,750.00 $
333,36250
54 7112045
1,386.25
1386.25
11,090.00
153,000.00
956,000.00
S166,862.50
55 1/12046
1,195.00
1,195.00
9,560.00
15S,000.00
801,000.00
$166,950.00
333,812.50
56 7/12046
1,001.25
1,001.25
8,010.00
1$7,000.00
644,000.00
_$
$167,012.50
57 1/1/2047
805.00
905.00
6,440.00
158,000.00
486,000.00
S166,050.00 S
333,062.50
58 7112047
607.50
607.50
4,860.00
160,000.00
326,0W.00
S166,075.00
59 I/l2048
407.50
407.50
3,260.00
162,000.00
164,000.00
S166,075.00 S
332,150.00
60 7112048
205.00
205.00
1,640.00
164,000.00
0.00
$166,050.00 S
166,050.00
298,327.50
298,327.50
2,396,620.00
7,000,000.00
9,983,275.00
9,983,275.00
9,983,275.00
MOW