Resolution 3980 - REPLACES RESOLUTION 3976 - Authorize Issuance of $2,815,000 BondsW!@e
RESOLUTION NO. 39.so
RES0LU-n0N RELATING TO $2,815,000 SEWERAGE SYSTEM REVENUE
BONDS, SERIES 1991; AUTHORIZING THE ISSUANCE AND FDCING THE TERMS
AND CONDITIONS THEREOF
BE IT RESOLVED by the City Council of the City of Kalispell, Montana (the "City'), as
follows:
Section 1. Authorizafion and Recitals,
1.01. Authorization- The City pursuant to authority conferred by Montana Code
Annotated, Title 7, Chapter 7, Parts 44 and 45, as amended (the "Act"), and other laws of the State
of Montana, hu established arid presently owns and operates a municipal sewerage system (the
I'System"). Under the provisions of the Act, the City is authorized to issue and sell its revenue
bonds payable during a term not exceeding forty years from their date of issue, to provide funds
for the reconstruction, improvement, betterment and extension of the System and to refund its
revenue bonds issued for such purpose; provided that the bonds and the interest thereon are to be
payable solely out of the net income and revenues to be derived from rates, fees and charges for the
services, facilities and commodities furnished by the undertaking, and are not to create any
obligation for the payment of which taxes may be levied except to pay for services provided by the
System to the City.
1.02. Outstanding Bonda. In accordance with the authorization described in Section I and
pursuant to Ordinance Nos. 859 and 10 11 and Resolution Nos. 2861 and 3649, the City issued
and sold the following bonds which are currently outstanding: Sewerage System Revenue Bonds,
dated as of January 1, 1972; Sewerage System Revenue Bonds, dated as of July 1, 1976;
Sewerage System Revenue Bonds� Series 1983, dated as of September 1, 1983, currently
outstanding in the aggregate principal amount of $740,000 (the "Series 1983 Bonds"), and its
Sewerage System Revenue Bonds, Series 1986, dated, as originally issued, as of June 1, 1986
(collectively, exclusive of the Series 1983 Bonds, the "Outstanding Bonds"), for the purpose of
financing part of the costs of construction of improvements to the System. No other bonds or
indebtedness are outstanding that are payable from revenues of the System. The Outstanding
Bonds are outstanding in the aggregate principal amount of $1,485,000.
1.03. Ile Impl=ments, This Council has heretofore determined that ftu-ther
ments and betterments to the System, including a new wastewater treatment plant and
related appurtenances and improvements (the "Improvements"), are necessary and appropriate The
costs of the Improvements, including costs of engineering and construction and providing the
required additional amounts in the reserve fund for the bonds, are presently estimated to be
approximately $12,665,000 in excess of revenues and other funds available for the payment
thereof.
1.04. So=rs of Funding, RefiuuUng the Series 1983 Bonds. It is proposed that the costs
of the Improvements be paid from the following sources: approximately $5,820,000 from a grant
that the City has received from the United States Environmental Protection Agency, approximately
$4,818,000 from proceeds of revenue bonds to be issued as parity bonds under Ordinance Nos.
859 and 1011 to the Department of Natural Resources of the State of Montana under the State's
Wastewater Treatment Works Revolving Fund Loan Program, established under Montana Code
Annotated, Title 75, Chapter 5, Part 11. as amended, and approximately $2,027,000 from
proceeds of revenue bonds hereinafter authorizeA It is also necessary and desirable as hereinafter
determined to advance refund the Series 1983 Bonds fi-om the proceeds of revenue bonds
I
M
hereinafter authorized in the approximate Principal amount of $806,000. The debt service savings
to result from the refunding of the Series 1983 Bonds is presently estimated to approximate
$91,297, calculated on a present -value basis, and using a discount rate of 6.8% over the term of
the bonds herein authorized. As required by Montana Code Annotated, Section 7-7-4502(l), the
average annual interest rate on the bonds herein authorized is more than three -eighths of one
percent (0.375%) less than the average annual interest rate on the Series 1983 Bonds.
1.05. PWjly Bonds In Section 4.03 of Ordinance No. 859, the City reserved the right to
issue additional bonds payable from and secured by the net revenues of the System on a parity with
the Outstanding Bonds on certain terms and conditions. Based on the net revenues of the System
for the fiscal year ended June 30, 1990, adjusted as permitted by Section 4.03 to take into account
the wastewater rate increase that took effect on April 1, 1991, a review of the System's operations
and Ordinance No. 859 by officers of the City and the assumed interest rate, amoirtization and term
of the revenue bonds to be issued to the Department of Natural Resources and Conservation, it is
hereby determined that the City is authorized to issue $7,673,000 of additional parity lien bonds to
finance the Improvements as described in Section 1.04 and to refund the Series 1983 Bonds under
Section 4.03 of Ordinance No. 859, not counting as outstanding in any future year the Series 1983
Bonds. It is further determined that the City is authorized to issue a.series of bonds (the "Series
1991 Bonds") in the aggregate principal amount of $2,815,000 to finance a portion of the costs of
the Improvements and to advance refund the Series 1983 Bonds, which bonds would be payable
from and secured by the net revenues of the System on a parity with the Outstanding Bonds.
1.06. Ha Revenucs Available. The City is authorized to charge just and equitable rates,
charges and rentals for all services directly or indirectly furnished by the System and to pledge and
appropriate to the Outstanding Bonds and the Series 1991 Bonds the net revenues to be derived
from the operation of the System, including improvements, betterments or extensions thereof
hereafter constructed or acquired. The net revenues to be produced by such rates, charges and
rentals during the term of the Series 1991 Bonds and the useful life of the improvements financed
or refinanced thereby will be more than sufficient to pay the principal and interest when due on the
Outstanding Bonds and the Series 1991 Bonds, and to create and maintain reasonable reserves
therefor and to provide an allowance for replacement and depreciation, as herein prescribed.
1.07. Sale of Seweragg Syqtem E=nue Bonds Pursuant to the authority recited in
Sections 1.01 and 1.05 and for the purposes of financing a portion of the costs of the
improvements and advance refunding the Series 1983 Bonds, this Council authorized the issuance
of the Series 1991 Bonds upon certain terms and conditions in Resolution No. 3 9 76, adopted
March 18, 199 1. The City hereby ratifies and confirms the issuance and sale of revenue bonds to
be designated as Sewerage System Revenue Bonds, Series 1991 in the aggregate principal amount
of $2,815,000 in accordance with the provisions of Ordinance Nos. 859 and this Resolution, to
D.A. Davidson & Co., of Great Falls, Montana (the "Purchaser"). To the extent the terms of the
Series 1991 Bonds as contained herein differ from those in Resolution No. 3976 , the provisions
of this resolution shall be controlling.
__1
�I�MWMVM
2.01. Denominations. Maturide"L Basic I= . The Sewerage System Revenue Bonds,
Series 1991, to be issued hereunder, in the aggregate principal amount of $2,815,000, shall be
issued in fully registered form only, in denominations of $5,000 or any integral multiple thereof of
single maturities, shall mature on July 1 in the following respective years and amounts and shall
bear basic interest from April 15, 1991 to their respective maturities or prior dates upon which they
have been duly called for redemption at the rates per annum set forth opposite such years and
amounts, as follows:
-3-
91
Basic
Basic
Amount
E=
Y=
E=
1992
$95,000
5.20%
2002
$135,0 00
6.70%
1993
125.000
5.40
2003
155,000
6.80
1994
45,000
5.60
2004
165.000
6.90
1995
1996
45,000
55,000
5.80
6.00
2005
2006
150,000
150,000
7.00
7.05
1997
115,000
6.15
2007
190,000
7.10
1998
1999
120,000
120,000
6.30
6.40
2008
2009
205,000
220,000
7.15
7.20
2000
120,000
6.50
2010
230,000
7.25
2001
125,000
6.60
2011
250,000
7.25
2.02. Additional Luterest Cenifi=. All Series 1991 Bonds shall bear additional interest
at the rate of three and oventy-five hundredths percent (3.75%) per annum for the period from
July 1, 1991 until June 30, 1992, payable on July 1, 1992. The additional interest on such Series
1991 Bonds shall be represented by separate additional interest certificates (the "Certificates").
One or mom Certificates shall be issued to represent all additional interest to be paid on all Series
1991 Bonds on the additional interest payment date; provided that all such Certificates shall
represent an integral multiple of five hundredths of one percent (0.05%) of the additional interest
payable on said date.
2.03. Pa=n The Series 1991 Bonds and the C&rtificates shall be issuable only in fully
registered form and the ownership of the Series 1991 Bonds and the Certificates shall be
transferred only upon the bond register of the City hereinafter describe& Basic interest on the
Series 1991 Bonds shall be payable on January 1 and July in each year, commencing January 1,
1992, to the owners of record of the Series 1991 Bonds as such appear on the bond register as of
the close of business on the fifteenth day of the immediately preceding month, wheduT or not such
day is a business day. The basic interest on, and, upon presentation and surrender thereof, the
principal of, each Series 1991 Bond, and, upon presentation and surrender of any Certificate, the
amount payable with respect thereto, shall be payable in lawful money of the United States of
America by check or draft issued by the Registrar described herein.
2.04. Dating of Bonds and QcWficateq. Each Series 1991 Bond shall be dated, as
originally issued, as- of April 15, 199 1, and each Certificate shall be dated as of April 15, 199 1.
Upon the original delivery of the Series 1991 Bonds pursuant to Section 2.08 or upon the delivery
of a Series 1991 Bond upon an exchange or transfer pursuant to Section 2.05, the Registrar shall
date each Series 1991 Bond so delivered as of the date of its authentication.
2.05. SYsICW of Registration. The City shall appoint, mid shall maintain, a bond registrar,
trander agent and paying agent for. e Bonds and the Czrdficates (the 111kegistraet). This Section
2.05 shall establish a system of registration for the Series 1991 Bonds and the Certificates as
defined in the Model Public Obligations Registration Act of Montan& Tile effect of registmdon
and the rights and dudes of the City and the Registrar with respect thereto shall be as follows:
(a) Bond Regig= Ile Registrar shall keep at its principal office a Bond Register
in which the Registrar shall provide for the registration of ownership of Series 1991 Bonds
and Cerfficates and the registration of transfers and exchanges of Series 1991 Bonds and
Certificates entitled to be registered, transferred or exchanged.
-4-
I
92
(b) Transfer of Series 1221 Bonds and Certificates Upon surrender for amsfer of
any Series 1991 Bond at Certificate duly endorsed by the registered owner thereof or
a wri instrument of transfer, in form satisfactory to the Registrar, duly
executed by the registered owner thereof or by an attorney duly authorized by the registered
owner in writing, the Registrar shall authenticate and deliver, in the name of die desi pated
transferee or transferees, one or more new Series 1991 Bonds of a like aggregate principal
amount and maturity, or one or more new Certificates of like aggregate amount and
payment date and representing the same additional interest period, as the case may be, as
requested by the transferor. The Registrar may, however, close the books for registration
of the transfer of a Series 1991 Bond or portion thereof selected for redemption.
(c) Exchange of Series 1991 Bonda 1Wd Cad&=. Whenever any Series 1991
Bonds or Certificates are surrendered by the registered owner for exchange, the Registrar
shall authenticate and deliver one or more new Series 1991 Bonds of a like aggregate
principal amount and maturity, or one or more new Certificates of like aggregate amount
and payment date and representing the same additional interest period, as the case may be,
as requested by the registered owner or the owner's attorney in writing.
(d) Cancellatign. All Series 1991 Bonds and Certificates surrendered upon any
transfer or exchange shall be prompdy cancelled by the Registrar and thereafter disposed of
as directed by the City.
(e) LMg= or Unauthgdzed Tran When any Series 1991 Bond or Certificate
is presented to the Regisaw for transfer, the Regis= may refuse to transfer the same until
it is satisfied that the endorsement on such Series 1991 Bond, Certificate or separate
instrument of transfer is legally authorize& The Registrar shall incur no liability for its
refusal, in good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(f) Persong ]2eemed Owners. The City and the Registrar may treat the person in
whose name any Series 1991 Bond or Certificate is at any time registered in the Bond
Register as the absolute owner of such Series 1991 Bond or Certificate, whether such
Series 1991 Bond or Certificate shall be overdue or nm for the purpose of receiving
payment of, or on account of, the principal of, premium, if any, and basic interest on such
Series 1991 Bond or the amount of such Certificate and for all other purposes, and all such
payments so made to any such registered owner or upon the owner's order shall be valid
and effectual to satisfy and discharge the liability of the City upon such Series 1991 Bond
or Certificate to the extent of the sum or sums to paid.
(g) Taxes. Fees and Chargas. For every minsfer or exchange of a Series 1991
Bond or Certificate (except for an exchange upon a partial redemption of any Series 1991
Bond), the Registrar may impose a charge upon the owner thereof sufficient to reimburse
the Registrar for any tax, fee or other governmental charge required to be paid with respect
to such transfer or exchange.
(h) Mutilated. Lost- Stolen or Destroyed Series 1991 Bonds or Certificates, In
case any Series 1991 Bond or CAWMCUe shall become mutilated or be lost, stolen or
destroye4 the Registrar shall deliver a new Series, 1991 Bond or Certificate of like amount,
number, maturity date and tenor in exchange and substitution for and upon cancellation of
any such mutilated Series 1991 Bond or Certificate or in lieu of and in substitution for any
such Series 1991 Bond lost, stolen or destroyed, upon the payment of the reasonable
-5-
I
I
I
h!W I KI
I
expenses and charges of the Registrar in connection therewith; and, in the case of a Series
1991 Bond or Certificate lost, stolen or destroyed, upon receipt by the Registrar of
evidence satisfactory to it that such Series 1991 Bond or Certificate was lost, stolen or
destroyed, and of the ownership thereof, and upon receipt by the Registrar of an
ap ate bond of indemnity in form, substance and amount satisfactory to it, in which
both City and the Registrar shall be named as obligees. All Series 1991 Bonds and
C&rdficates so surrendered to the Registrar shall be cancelled by it and evidence of such
cancellation shall be given to the City. If the mutilated, los4 stolen or destroyed Series
1991 Bond or Certificate has already matured or such Series 1991 Bond has been called for
redemption in accordance with its terms, it shall not be necessary to issue a new Series
1991 Bond or Certificate before payment.
2.06. Inigal Regir- The City hereby appoints First Trust Company of Montana, N. A.,
of Bfll�ngs, Montana, as- the initial Registrar. Ile Mayor and City Clerk -Treasurer are hereby
authorized to execute and deliver, on behalf of the City, a contract with First Trust Company of
Montana, as Registrar. Upon merger or consolidation of the Registrar with another corporation, if
the resulting corporation is a bank or trust company authorized by law to conduct such business,
such corporation shall be authorized to act as successor Registrar. The City agrees to pay the
reasonable and customary charges of the Registrar for the services performed. The City reserves
the right to remove any Registrar upon 30 days'notice and upon the appointment of a successor
Registrar, in which event the predecessor Registrar shall deliver all cash and Series 1991 Bonds
and Certificates in its possession to the successor Registrar and shall deliver the Bond Register to
the successor Registrar. On or before each principal or interest due date, without ftirther order of
this Council, the City Treasurer shall transmit to the Registrar, solely from moneys in the Revenue
Bond Account of the Sewerage System Fund available therefor, moneys sufficient for the payment
of all principal, premium, if any, and interest then due on the Series 1991 Bonds.
2.07. &W=Prim - Series 1991 Bonds having stated maturity dates in 2002 and later
years are sul�ect to redemption at the option of the City, in inverse order of maturities and in
$5,000 principal amounts selected by lot or other man= deemed fair by the Registrar within a
maturity, on July 1, 200 1, or any miterest payment date thereafter, at the redemption prices set forth
below (expressed as a percentage of the principal arnount thereof to be redeemed) plus interest
accrued to the date of redemption:
July 1, 2001 and January 1, 2002 102%
July 1, 2002 and January 1, 2003 101
July 1, 2003 and thereafter 100
Notice of redemption of any Series 1991 Bond shall be mailed by the -City Clerk -Treasurer, at least
30 days before.the redemption date, by first-class mail to the Registrar and the owner thereof at his
address appearing in the Bond Register, provided that any failure to give or any defect in such
notice shall not affect the validity of proceedings for the redemption of any Series 1991 Bond not
affected thereby. The notice of re&mptiork shall specify the redemption date, redemption price, the
numbers, intcrest rates and CUSIP numbers of the Series 1991 Bonds to be redeemed and the
place at which the Series 1991 Bonds are to be surrendered for payment, which is the principal
office of the Registrar. Official notice of redemption having been given as aforesaid, the Series
1991 Bonds or poitons thereof so to be redeemed shall, on the redemption date, become due and
payable at the redemption price therein specified and from and after such date (unless the City shall
default in the payment of the redemption price) such Series 1991 Bonds or portions thereof shall
cease to bear interest.
154.0
Mi
In addition to the notice prescribed by the preceding the Treasurer shall also
I
give, or cause to be given, not= of the redemption of any Bond or Bonds or portions
thereof at least 35 days before the redemption date by caaed mail or telecopy to the Purchaser
and all registered securities depositories then in the business of holding substantial amounts of
obligations of the character of the Series 1991 Bonds (such depositories now being The Depository
Trust Company, of Garden City, New York; Midwest Securities Trust Company, of Chicago,
Illinois; and Philadelphia Depository Trust Company, of Philadelphia, Pennsylvania) and one or
mom national informadon services that disseminate information regarc . ling Municipal bond scribed
re&mptions; provided that any defect in or any failure to give any notice of redemption pre
by this parugraph shall not affect the validity of the proceedings for the redemption of any Series
1991 Bond or portion thereof
Series 1991 Bon& in a denomination Luger than $5,000 may be redeemed in Part in any
integral multiple of $5,000. The owner of any Series 1991 Bond redeemed in part shall receive,
upon surrender of such Series 1991 Bond to the Registrar, one or more new Series 1991 Bonds in
&utho&,ed denominations equal in principal amount to the unredeemed portion of the Series 1991
Bond so surrendered. All selections of Series 1991 Bonds for redemption by lot or other manner
deemed fair by the Registrar shall be made in $5,000 principal amounts.
2.08. Fxecution and Delivery The Series 1991 Bonds and the Certificates shall be
executed in the name of the City by the signatures of the Mayor and the City Clerk -Treasurer, and
the official seal of the City shall be affixed thereto; provided that all signatures and the seal may be
printed facsimiles of the originals thereof On the reverse side of each Series 1991 Bond shall be
printed a copy of the legal opinion to be rendered by bond counsel. certified by the facsimile
signatures of the Mayor and the City Clerk -Treasurer. In case any officer whose signature or a
facsimile of whose signature appears on the Series 1991 Bonds or Certificates shall cease to be
such officer before the delivery of any Series 1991 Bonds or Certificates, such signature or
facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had
remained in office until delivery. Notwithstanding such execution, no Series 1991 Bond or
Czrtificate shall be valid or obligatory for any purpose or be entitled to any security or benefit
under Ordinance No. 859 or this Resolution unless and until a certificate of authentication on such
Series 1991 Bond or Certificate has been duly executed by the manual signature of an authorized
representative of the Registrar. Certificates of authentication on different Series 1991 Bonds or
Certificates need not be signed by die same representative. The executed certificate of
authentication on a Series 1991 Bond or Czrtificate shall be conclusive evidence that it has been
authenticated and delivered under Ordinance No. 859 and this Resolution. When the Series 1991
Bonds and Certificates have been fully executed and authenticated, they shall be delivered by the
Registrar to the Purchaser upon payment of the purchase price in accordance with the contrad of
sale heretofore made and executed, and the Purchaser shall not be obligated to see to the application
of the purchase price.
Section 3. Fonns
3.0 1. Form gf Series 1221 Bond The Series 1991 Bonds shall be prepared in
substantially the following form, with such appropriate variations, omissions and insertions as are
perrnitted or required by Ordinance No. 859 or this Resolution:
&A
I
I
I
95
I
I
1�
Interwt
Rate
REGISTERED OWNER:
PRINCIPAL AMOUNT:
[Face of the Series 1991 Bonds]
UNffM STATES OF AMMCA
STATE OF MONTANA
COUNTY OF FIATHEAD
CITY OF KALISPEI .1
SEWERAGE SYSTEM REVENUE BOND
SERIES 1991
Date of
OrigiW Is= CUST
April 15,1991
SEE REVERSE FOR
CERTAIN DEFINITIONS
FOR VALUE RECEBIED, THE CITY OF KALISPEI I (the "City"), a duly organized
m ipal on located in Flathead County, Montana, acknowledges itself to be specially
indebted and hereby promises to pay to the registered owner identified above or registered assigns,
solely from the Revenue Bond Account of its Sewerage System Fund, the principal amount
specified above on the maturity date specified above, or, if this Bond is prepayable as stated
below, on an earlier date on which it shall have been duly called for redemption, upon presentation
and surrender hereof at the principal office of the Bond Registrar hereinafter named, with basic
interest thereon, horn April 15, 199 1, or from such later date to which interest has been paid or
duly provided for, until the principal amount hereof is paid or until this Bond, if prepayable, has
been duly called for redemption, at the annual interest rate specified above. Basic int=st is
payable semiannually on January I and July I in each year, commencing January 1, 1992, to the
registered owner of this Bond as such appears of record in the bond register as of the close of
business on the fifteenth day (whether or not a business day) of the immediately preceding month.
Basic interest is payable by check or dmft mailed by First Trust Company of Montana, N.A., in
Billings, Montana, as Bond Registrar, Transfer Agent and Paying Agent, or its successor
designated under the Ordinance described herein (the "Bond Registrar").
Bonds with stated maturities in 1992, 1996 and 2002 through 2011 bear additional interest
from July 1, 1991 to June 30, 1992, at the rate of dum and seventy-five hundredths percent
(3.75%) per annum, payable on July 1, 1992. The additional interest on this and on all other such
Bonds is represented by, and payable in accordance with and upon presentation and surrender at
the principal offfm of die Bond Registw of, separately registered additional interest certificates.
The p�incipal of and interest on this Bond are payable in lawful money of the United States of
America.
-8-
W
Additional provisions of this Bond are contained on the reverse hereof and such provisions
shall for all purposes have the same effect as though fully set forth hereon.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Ordinance until the Certificate of Authentication hereon shall have
been executed by the Bond Registrar by the manual signature of one of its authorized
representatives.
IN VaTNESS WJEEREOF, the City of KalispelL Flathead County, Montana, by its City
Council, has caused this Bond and the certificate on the reverse side hereof to be executed by the
facsimile signatures of the Mayor and the City Clerk -Treasurer and has caused a facsimile of the
official seal of the City to be imprinted hereon.
(Facsimile Signature) (Facsimile Signature)
Mayor City Clerk -Treasurer
(Facsimile Seal)
Date.
CERTIFICATE OF AUTEENTICATION
This is one of the Sewerage System Revenue Bonds, Series 1991 delivered pursuant to the
Ordinance mentioned within.
FIRST TRUST COMPANY OF
MONTANA, N.A.
as Bond Registrar, Transfer Agent
and Paying Agent
By
Authorized Representative
[Reverse of Series 1991 Bonds]
This Bond is one of a series in the aggregate principal amount of $2,815,000 (the "Series
1991 Bonds"), all of like date of original issue and tenor except as to serial number, interest rate,
date, maturity date, denomination and redemption privilege, and all issued for the purposes of
financing kinprovements to the City's municipal sewerage system (the "System") and of advance
refunding certain valid outstanding sewerage system revenue bonds of the City, under authority of
and in conformity with the Constitution and laws of the State of Montana and the ordinances and
resolutions of the City, including Montana Code Annotated, as amended, Title 7, Chapter 7, Parts
44 and 45, as amended, and Ordinance No. 859 and Resolution No. — duly enacted by the City
CouncU (collectively, the "Ordinance!'). Ile Series 1991 Bonds are issuable only as fully
registered bonds of a single maturity, in denominations of $5,000 or any integral multiple thereof.
Ile Series 1991 Bonds are issued on a parity and are equally and ratably secured by the Net
Revenues of the System with outstanding sewerage system revenue bonds of the City, Series
-9-
I
I
114A
I
7-7
1972, Series 1976 and Series 1986, dated as of January 1, 1972, July 1, 1976 and June 1, 1986,
respectively (the "Outstanding Bonds").
Reference is made to the Ordinance for a more complete statement of the terms and
conditions upon which the Series 1991 Bonds have 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 firorn such net revenues on
a patity with the Outstanding Bonds and the Series 1991 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 1991 Bonds.
The Series 1991 Bonds maturing in the years 1992 through 2001 are not subject to
redemption before maturity, but Series 1991 Bonds having sued maturity dates in the years 2002
and later years are each subject to redemption at the option of the City, in whole or in part, in
inverse order of maturities and in $5,000 principal amounts selected by lot within a maturity, on
July 1, 2001, and any interest payment date thereafter, at the redemption prices set forth below
(expressed as a percentage of the principal amount thereof to be redeemed) plus interest accrued to
the date of redemption:
Rede=don Date Red=ption Price
July 1, 2001 and January 1, 2002 102%
July 1, 2002 and January 1, 2003 101
July 1, 2003 and thereafter 100
Notice of the call for redemption of any Series 1991 Bond will be mailed, at least thirty days before
said redemption date, by first-class mail to the registered owner thereof at the address appearing in
the registration books maintained by the Registrar, provided that any failure to give or any defect in
such notice shall not affect the validity of proceedings for the redemption of any Bond not affected
thereby. Official notice of redemption having been given as aforesaid, the Series 1991 Bonds or
portions thereof so to be redeemed ", on the redemption date, become due and payable at the
redemption price die= specified, and from and after such date (unless the City shall default in the
payment of the redemption price) such Series 1991 Bonds or portions thereof shall cease to bear
interesL Upon partial redemption of any Series 1991 Bond, a new Series 1991 Bond or Bonds
will be delivered to the owner without charge, representing the remaining principal amount
outstanding.
This Bond is a negotiable investment security as provided in the Montana Uniform
Commercial Code. As provided in the Ordinance and subject to certain limitations set forth therein,
this Bond is transferable upon the books of the City at the principal office of the Bond Registrar,
by the registered owner hereof in person or by his attorney duly authorized in writing, upon
surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar,
duly executed by the registered owner or his attorney-, and may also be surrendered in exchange for
Series 1991 Bonds of other authorized denominations. Upon such transfer or exchange, the City
will cause a new Series 1991 Bond or Bonds to be issued in the name of the transferee or
registered owner, of the same aggregate principal amount, bearing interest at the same rate and
maturing on the same date, subject to reimbursement for any tax, fee or govemmental charge
required to be paid with respect to such transfer or exchange.
The City and the Bond Registrar may deem and treat the person in whose name this Bond
9 op.
re'l-al
ltxt
(Facsimile Signature)
City Clerk -Treasurer
(Facsimile Signature)
Mayor
3.03. E= of Certifigates The Certificates referred to in Section 2.02 shall be prepared
in substantially the following form:
[Face of Certificates]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FIATHEAD
CITY OF KALISPELL
REGISTERED ADDMONAL INTEREST CERTIFICATE RELATING TO
SEWERAGE SYSTEM REVENUE BONDS, SERIES 1991
DATED, AS ORIGINALLY ISSUED, AS OF APRIL 15,1991
No.
Additional
Interest
Rat& Taterest Period
REGISTERED OWNER:
AMOUNT:
Date of Percentage of
EQ=n - omagrsbip
SEE REVERSE FOR
CERTAIN
DEFINITIONS
FOR VALUE RECEIVED, TBE CITY OF KALISPELL (the "City"), a duly organized
municipal corporation located in Flathead County, Montana, will pay to the registered owner
named above, or registered assigns, on the date specified above an amount equal to the percentage
of ownership specified above multiplied by the amount then due representing additional interest at
the annual rate and for the limited period specified above on the Sewerage System Revenue Bonds,
Series 1991, dated, as originally issued, as of April 15, 1991, of the City, with stated maturities in
1992, 1996 and 2002 through 2011, to the extent such Bonds have not been paid prior to said
date. Such additional interest is payable, in lawfiil money of the United States of America, upon
presentation and surrender of this Certificate at the principal office of First Trust Company of
Montana, N. A., in Billings, Montana, as Bond Registrar, Transfer Agent and Paying Agent or its
successor designated under the provmons of the Ordinance described herein (the "Registrar"),
solely from the Revenue Bond Account of the City's Sewemge System FuncL
-13-
I
I
I
W4
ffAm
Additional provisions of this Certificate are contained on the reverse hereof and such
provisions shall for all purposes have the same effect as though fully set forth herein.
This Certificate shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Qrdinance until the Certificate of Authenticadon hereon shall have
been executed by the Regisow by the manual signarm of one of its authorized representatives.
IN WITNESS V&MREOF, the City of Kalispell, Montana, by its City Council, has caused
this Certificate to be executed by the facsimile signatures of the Mayor and the City Clerk -Treasurer
and by a facsimile of the official seal of the City, and has caused this Certificate to be dated as of
April 15, 1991.
(Facsimile Signature) (Facsimile Signature)
City Clerk -Treasurer Mayor
(Facsimile Seal)
CERTIFICATE OF AUTHEI%MCATION
This is one of the Certificates representing additional interest on the Series 1991 Bonds
delivered pursuant to the Ordinance mentioned herein.
FIRST TRUST COMPANY OF
MONTANA, N. A.
as Registrar
S-A
Authotized Representative
[Reverse of Certificates]
As provided in Ordinance No. 859 and Resolution No. _ duly adopted by the City Council
of the City (collectively, the "Ordinance"), pursuant to which the Bonds and this Certificate were
issued, and subject to certain limitations set forth therein, this Certificate is transferable upon the
books of the City at the principal office of the Registrar, by the registered owner hereof in person
or by his attorney duly authorized in writing upon presentation hereof together with a written
instrurnent of transfer satisfactory to the Registrar, duly executed by the registered owner or his
attorney and may also be surrendered in exchange for one or more Certificates representing other
authorized percentages of the amount of additional interest payable on the date of payment
hereinbefore specified. Upon such transfer or exchange, the City will cause one or more new
Certificates to be issued in the name of the tratisferee or registered owner, representing additional
interest to be paid at the same rate and on the same date, subject to reimbursement for any tax, fee
or governmental charge required to be paid with respect to such transfer or exchange.
T'he City and the Regis= may deem and tr;eat the person in whose name this Certificate is
registered as the absolute owner hereof, whether this Certificate is overdue or not, for the purpose
of receivm*g payment and for all other purposes, and neither the City nor the Registrar shall be
affected by any notice to the contrary.
-14-
I
1.00
TEN COM --as tenants UTMA ........... Custodian .............
in common (Cust) (Minor)
TEN ENT --as tenants
by the entireties
under Uniform Transfers to
JT TEN —as joint tenants Minors Act ....................................................
with right of (State)
survivorship and
not as tenants in
common
Additional abbreviations may also be used.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
hereby irrevocably constitutes and appoints— the within Certificate and all rights thereunder, and
attortiey to transfer the within Certificate on the books kept for registration thereof, with full powe I r
of substitution in the premises.
Dated:
PLEASE INSERT SOCIAL SECURITY
OR OTHER INDENTIFYING NUMBER
OF ASSIGNEE:
SIGNATURE GUARANTEE
Signamav(s) must be guaranteed
by a commercial bank or trust
company or by a brokerage firm
having a membership in one
of the major stock exchanges.
-15-
NOTICE: The signature to this
assignment must correspond
with the name as it appears
upon the face of the within
Certificate in every pard-
cular� without alteration,
enlargement or any change
whatsoever.
11
I
I
101
4.01. 'Me proceeds of the Series 1991 Bonds are appropriated to the Sewerage System
Fund created by Ordinance No. 859 and to the escrow account established pursuant to Section
4.02 and are to be deposited or applied as follows:
(a) Any accrued interest on the Series 1991 Bonds shall be credited to the Revenue Bond
Account;
(b) $176,500 shall be credited to the reserve in the Revenue Bond Account, so that the
balance therein equals the amount required by Section 3.04 of Ordinance No. 859, assuming the
issuance of the Series 1991 Bonds and that the Series 1983 Bonds are no longer outstanding;
(c) $793,300 shall be applied as provided in Section 4.02 to refund the Series 1983
Bonds;and
(d) The balance of the proceeds of the Series 1991 Bonds shall be credited to the
Construction Account and applied to payment of costs of the Improvements and to pay costs of
issuance of the Series 1991 Bonds and of the refunding of the Series 1983 Bonds.
4.02. Simultaneously with the delivery of the Series 1991 Bonds, the City Clerk -Treasurer
shall deposit in escrow with First Interstate Bank of Billings, National Association, in Billings,
Montana, the proceeds of the Series 1991 Bonds described in Section 4.01(c), and shall also
transmit to said escrow agent, from money now on hand and available therefor, any additional sum
required to provide funds for the purchase of the securities described in this Section 4.02. The
City Clerk -Treasurer shall cause the amount so deposited to be invested in securities of the type
described in Montana Code Annotated, Section 7-7-4504, maturing on the dates and bearing
interest at the rates required to provide funds sufficient to pay the interest when due on each Series
1983 Bond to maturity or earlier redemption and to pay each Series 1983 Bond at maturity or upon
the redemption thereof on September 1, 1993. The escrow account and all investments thereof
shall be held in safekeeping by said escrow agent, and said account and all income therefrom are
irrevocably appropriated for the purposes stated in this Section 4.02.
4.03. At or before the time of making the deposit and investment described in Section
4.02, the Mayor and the City Clerk -Treasurer, or, in the event of their absence or disability, the
acting Mayor or the acting City Clerk -Treasurer, shall execute on the part of the City an escrow
agreement with said escrow agent� substantially in accordance with the form of such agreement
which has been presented to this Council at the meeting at which this resolution was adopted, and
is hereby approved.
4.04. Eri accordance with the provisions of the escrow agreement approved in Section
4.03, the Series 1983 Bonds having stated maturity dates in 1994 and later years are hereby called
for redemption on September 1, 1993.
4.05. The officers of the City are hereby authorized and directed to subscribe for the
purchase of United States Treasury Obligations, —State and Local Government Series as an
investment for the escrow fund established wider the Escrow Agreement and any previous
subscription therefor is hereby ratified and confirmed.
Section 5. Securily for the Series 1291 Bonds. The Series 1991 Bonds are issued under
Section 4.03 of Ordinance No. 859 and shall, with the Outstanding Bonds and any other additional
bonds issued under the provisions of said Section 4.03 or Section 4.02 of Ordinance No. 859, be
-16-
I
102
equally and ratably secured by the provisions Of Ordinance NO- 859 and this Resolution and
payable out of the net revenues appropriated to the Revenue Bond Account of the Sewerage
System Fund, without preference or priority, all as provided in Ordinance No. 859, and secured
by the reserve established in the Revenue Bond Account. Upon the issuance of the Series 1991
Bonds, the City Clerk -Treasurer shall deposit, from other available funds in the Sewerage System
Fund, the amount required to cause the balance in said reserve to equal the maximum amount Of
principal of and interest payable on the Outstanding Bonds and the Series 1991 Bonds in any
future fiscal year. The City shall keep, perform and observe each and every one of its covenants
and undertakings set forth in Ordinance No. 859 and shall cause the Improvements to be
undertaken and completed expeditiously.
Section 6. Tax Matters.
6.01. The facilities of the System refinanced of financed in whole or in part with proceeds
of the Series 1991 Bonds (the .project-) are and will be owned and operated by the City and used
by the City to provide �;ewerage services to members of the general public. No user of the System
is granted any concession, license or special arrangement with respect to the System. The City
shall not enter into any lease, use or other agreement with any non-goverrimental person relating to
the use of the Project or security for the payment of the Series 1991 Bonds which might cause the
Series 1991 Bonds to be considered "private activity bonds" or "private loan bonds" within the
meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the "Code").
6.02. 'Me City covenants and agrees with the owners from time to time of the Series 1991
Bonds that it will not take or permit to be taken by any of its officers, employees or agents any
action which would cause the basic interest on the Series 1991 Bonds to become includable in
gross income for federal income- tax purposes under the Code and applicable Treasury Regulations
(the "Regulations"), and covenants to take any and all actions within its powers to ensure that the
basic interest on the Series 1991 Bonds will not become includable in gross income for federal
income tax purposes under the Code and the Regulations.
6.03. The Mayor and the City Clerk -Treasurer. being the officers -of the City charged with
the responsibility for issuing the Series 1991 Bonds pursuant to this resolution, are authorized and
directed to execute and deliver to the Purchaser a certificate in accordance with the provisions of
Section 148 of the Code, and Sections 1. 103- 13, 1.103-14 and 1. 103- 15 of the, Regulations,
stating that on the basis of facts, estimates and circumstances in existence on the date of issue and
delivery of the Series 1991 Bonds, it is reasonably expected that the proceeds of the Series 1991
Bonds will be used in a manner that would not cause the Series 1991 Bonds to be "arbitrage
bonds" within the meaning of Section 148 of the Code and the Regulations.
6.04. 'Me City acknowledges that the Series 1991 Bonds are subject to the rebate
requirements of Section 148(f) of the Code. The City covenants and agrees to retain such records,
make such detaminations, file such reports and documents and pay such amounts at such tirws as
are required under said Section 148(f) and applicable Treasury Regulations to preserve the
exclusion of interest on the Series 1991 Bonds from gross income for federal income tax purposes,
unless the Bonds qualify for the exception from the rebate requirement under Section 148(f)(4)(B)
of the Code and no "gross proceeds" of the Series 1991 Bonds (other than amounts constituting a
"bona fide debt service fund") arise during or after the expenditure of die original proceeds thereof.
In furtherance of die foregoing, the City Clak-Treasurer is hereby authorized and directed to
execute a Rebate Certificate containing such covenants and agreements, and the City hereby
covenants and agrees to observe and perform the covenants and agreements contained therein,
unless amended or terminated in accordance with the provisions thereof.
-17-
I
103
6.05. ne City shall file with the Secretary of the Treasury, not later than August 15,
199 1, a statement concerning the Series 1991 Bonds containing the information required by
Section 149(e) of the Code.
Section 7. Aaftadcadmgf Transmio The officers of the City are hereby authorized and
directed to furnish to the Purchaser and to bond counsel cerdfied copies of all proceedings relating
to the issuance of the Series 1991 Bonds and such other certificates and affidavits as may be
required to show the right, power and authority of die City to issue the Series 1991 Bonds, and all
statements contained in and shown by such instruments, including any heretofore furnished, shall
constitute representations of the City as to the truth of the statements purported to be shown
thereby Section 8. Qfflcial StAW&gcn The Official Statement relating to the Series 1991 Bonds is
hereby approved and the determination of the City Manager that the Official Statement is deemed
final for purposes of SEC Rule 15c2-12 is ratified and confirmed. The officers of the City are
hereby authorized and directed to execute such certificates as may be appropriate concerning the
accuracy, completeness and sufficiency of the Official Statement and to deliver to the Purchaser
within seven business days after the date of adoption of this resolution copies of the Official
Statement in a reasonable quantity as requested by the Purchaser.
Section 9. Effective DaLc. This resolution shall be in full force and effect from and after its
passage.
Passed and adopted by the City Council of the City of Kalispell, Montana, this 15th day of
April, 1991.
Mayor
A U e s t:
TTty C16rk-Trea'surer—
-18-
I