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H1. Res. 6009, Ambulance Board of Investments LoanKALISPELL CITY (0)F City of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 Telephone (406) 758-7701 Fax - (406) 758-7758 REPORT TO: Doug Russell, City Manager FROM: Rick Wills, Finance Director SUBJECT: Resolution No. 6009 — Authorizing Loan with the Montana Board of Investments for Annual Purchases of Budgeted Equipment MEETING DATE: January 4th, 2021 — Regular Council Meeting BACKGROUND: During those times when the borrowing rates have been advantageous to the City, it has utilized the Montana Board of Investments (BOI) Intercap Loan Program to assist it in making purchases of needed equipment. This helps the City in managing the consistency of its cash flows. The use of this program was again anticipated and calculated into the fiscal year 2021 budget that was presented and approved by the Council. The maximum amount of the loan is $190,000 and is for a term of up to five years. The initial rate is 2.5% and may be adjusted annually by the BOI based upon the market. The City may elect, at any time, to prepay the loan upon giving 30 days' notice. The interest obligation on the loan begins upon making a draw and only to the extent of the draws that are made. As of this date the Ambulance Department has completed the purchase of one (1) ambulance for $189,438.07. It is the intent to make a draw on the loan for this amount so that payments may be made over the term of up to five years thereby assisting the Ambulance Department with its cash flows. RECOMMENDATION: It is recommended that the City Council, by means of Resolution 6009, authorize the City Manager to execute the necessary agreements included in this packet to finalize this loan with the Montana Board of Investments Intercap Loan Program. FISCAL IMPACT: The debt service on the loan proceeds is currently 2.5% and may be adjusted annually. The City may elect to prepay the loan at any time if it becomes apparent that the advantage of the cash flow control is outweighed by the cost of loan. The initial annual debt service will be approximately $42,275. Report compiled: December 29th, 2020 ATTACHMENTS: Resolution 6009 City Attorney Letter www.kalispell.com (GENERAL FUND LOAN) RESOLUTION AUTHORIZING PARTICIPATION IN THE INTERCAP PROGRAM CERTIFICATE OF MINUTES RELATING TO RESOLUTION NO. 6009 Issuer: City of Kalispell Kind, date, time and place of meeting: A regular meeting held on January 4, 2021 at 7 o'clock p.m. in Kalispell, Montana. Members present: Members absent: RESOLUTION NO. 6009 RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS OF THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE TENDER OPTION MUNICIPAL FINANCE CONSOLIDATION ACT BONDS (INTERCAP REVOLVING PROGRAM), APPROVING THE FORM AND TERMS OF THE LOAN AGREEMENT AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO I, the undersigned, being the fully qualified and acting recording officer of the public body issuing the obligations referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of the public body in my legal custody, from which they have been transcribed; that the documents are a correct and complete transcript of the minutes of a meeting of the governing body at the meeting, insofar as they relate to the obligations; and that the meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer this 4th day of January, 2021. Aimee Brunckhorst, CMC City Clerk RESOLUTION NO.6009 RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS OF THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE TENDER OPTION MUNICIPAL FINANCE CONSOLIDATION ACT BONDS (INTERCAP REVOLVING PROGRAM), APPROVING THE FORM AND TERMS OF THE LOAN AGREEMENT AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO. BE IT RESOLVED BY THE CITY COUNCIL (the Governing Body) OF THE CITY OF KALISPELL (the Borrower) AS FOLLOWS: ARTICLE I DETERMINATIONS AND DEFINITIONS Section 1.01. Definitions. The following terms will have the meanings indicated below for all purposes of this Resolution unless the context clearly requires otherwise. Capitalized terms used in this Resolution and not defined herein shall have the meanings set forth in the Loan Agreement. Adjusted Interest Rate means the rate of interest on the Bonds determined in accordance with the provisions of Section 3.03 of the Indenture. Authorized Representative shall mean the officers of the Borrower designated and duly empowered by the Governing Body and set forth in the application. Board shall mean the Board of Investments of the State of Montana, a public body corporate organized and existing under the laws of the State and its successors and assigns. Program. Board Act shall mean Section 2-15-1808, Title 17, Chapter 5, Part 16, MCA, as amended. Bonds shall mean the Bonds issued by the Board pursuant to the Indenture to finance the Borrower shall mean the Borrower above named. Indenture shall mean that certain Indenture of Trust dated March 1, 1991 by and between the Board and the Trustee pursuant to which the Bonds are to be issued and all supplemental indentures thereto. Loan means the loan of money by the Board to the Borrower under the terms of the Loan Agreement pursuant to the Act and the Borrower Act and evidenced by the Note. Loan Agreement means the Loan Agreement between the Borrower and the Board, including any amendment thereof or supplement thereto entered into in accordance with the provisions thereof and hereof. Loan Agreement Resolution means this Resolution or such other form of resolution that the Board may approve and all amendments and supplements thereto. Loan Date means the date of closing a Loan. Loan Rate means the rate of interest on the Loan which is initially 2.50% per annum through February 15, 2021 and thereafter a rate equal to the Adjusted Interest Rate on the Bonds and up to 1.50% per annum as necessary to pay Program Expenses. Note means the promissory note to be executed by the Borrower pursuant to the Loan Agreement, in accordance with the provisions hereof and thereof, in substantially the form set forth in the Promissory Note, or in such form that may be approved by the Board. Program shall mean the INTERCAP Program of the Board pursuant to which the Board will issue and sell Bonds and use the proceeds to make loans to participating Eligible Government Units. Project shall mean those items of equipment, personal or real property improvements to be acquired, installed, financed or refinanced under the Program as set forth in the Description of the Project/Summary of Draws. Security Instrument means a security agreement in substantially the form set forth, and, a Uniform Commercial Code financing statement, in a form acceptable to the Board and the Trustee granting a security interest in, or a lien on, the property constituting the Project or other real or personal properties added to or substituted therefor. Trustee shall mean U. S. Bank National Association (formerly known as First Trust Company of Montana National Association) and its successors. Section 1.02. Authon*ly. The Borrower is authorized to undertake the Project and is further authorized by the Borrower Act to enter into the Loan Agreement for the purpose of obtaining a loan to finance or refinance the acquisition and installation costs of the Project. Section 1.03. Execution of Agreement and Delivery of Note. Pursuant to the Indenture and the Board Act, the Board has issued and sold the Bonds and deposited a part of proceeds thereof in the Loan Fund held by the Trustee. The Board has, pursuant to the Term Sheet, agreed to make a Loan to the Borrower in the principal amount of $190,000.00 and upon the further terms and conditions set forth herein, and as set forth in the Term Sheet and the Loan Agreement. ARTICLE II THE LOAN AGREEMENT Section 2.01. Terms. (a) The Loan Agreement shall be dated as of the Loan Date, in the principal amount of $190,000.00 and shall constitute a valid and legally binding obligation of the Borrower. The obligation to repay the Loan shall be evidenced by a Promissory Note. The Loan shall bear interest at the initial rate of 2.50% per annum through February 15, 2021 and thereafter at the Adjusted Interest Rate, plus up to 1.50% per annum as necessary to pay the cost of administering the Program (the Program Expenses). All payments may be made by check or wire transfer to the Trustee at its principal corporate trust office. (b) The Loan Repayment Dates shall be February 15 and August 15 of each year. (c) The principal amount of the Loan may be prepaid in whole or in part provided that the Borrower has given written notice of its intention to prepay the Loan in whole or in part to the Board no later than 30 days prior to the designated prepayment date. (d) The Prepayment Amount shall be equal to the principal amount of the Loan outstanding, plus accrued interest thereon to the date of prepayment. (e) Within fifteen days following an Adjustment Date, the Trustee shall calculate the respective amounts of principal and interest payable by each Borrower on and with respect to its Loan Agreement and Note for the subsequent August 15 and February 15 payments, and prepare and mail by first class mail a statement therefor to the Borrower. Section 2.02. Use and Disbursement of the Proceeds. The proceeds of the Loan will be expended solely for the purposes set forth in the Description of the Project/Summary of Draws. The proceeds from the sale of the Note to the Board shall remain in the Borrower's Account pending disbursement at the request of the Borrower to pay the budgeted expenditures in anticipation of which the Note was issued. Requests for disbursement of the Loan shall be made to the Board. Prior to the closing of the Loan and the first disbursement, the Borrower shall have delivered to the Trustee a certified copy of this Resolution, the executed Loan Agreement and Note in a form satisfactory to the Borrower's Counsel and the Board's Bond Counsel and such other certificates, documents and opinions as set forth in the Loan Agreement or as the Board or Trustee may require. The Borrower will pay the loan proceeds to a third party within five business days after the date they are advanced (except for proceeds to reimburse the Borrower for previously paid expenditures, which are deemed allocated on the date advanced). Section 2.03. Payment and Security for the Note. In consideration of the making of the Loan to the Borrower by the Board, the provisions of this Resolution shall be a part of the Agreement of the Borrower with the Board. The provisions, covenants and Agreements herein set forth to be performed by or on behalf of the Borrower shall be for the benefit of the Board. The Loan Agreement and Note shall constitute a valid and legally binding obligation of the Borrower and the principal of and interest on the Loan shall be payable from the general fund of the Borrower, and any other money and funds of the Borrower otherwise legally available therefor. [The repayment of the Loan shall be secured by a security interest in the Project being financed.] The Borrower shall enforce its rights to receive and collect all such taxes and revenues to insure the prompt payment of the Borrower obligations hereunder. Section 2.04. Representation Regarding the Property Tax Limitation Act. The Borrower recognizes and acknowledges that the amount of taxes it may levy is limited by the state pursuant to Section 15-10-402, et. seq. (the Property Tax Limitation Act). The Borrower is familiar with the Property Tax Limitation Act and acknowledges that the obligation to repay the Loan under the Agreement and Note are not exceptions to the provisions of the Property Tax Limitation Act. The Borrower represents and covenants that the payment of principal of and interest on the Loan can and will be made from revenues available to the Borrower in the years as they become due, notwithstanding the provisions of the Property Tax Limitation Act. Section 2.05. Levy and Appropriate Funds to Repay Loan. The Borrower agrees that in order to meet its obligation to repay the Loan and all other payments hereunder that it will budget, levy taxes for and appropriate in each fiscal year during the term of the Loan an amount sufficient to pay the principal of and interest hereon within the limitations of the Property Tax Limitation Act, as may be amended, and will reduce other expenditures if necessary to make the payments hereunder when due. ARTICLE III CERTIFICATIONS, EXECUTION AND DELIVERY Section 3.01. Authentication of Transcript. The Authorized Representatives are authorized and directed to prepare and furnish to the Board and to attorneys approving the validity of the Bonds, certified copies of this Resolution and all other resolutions and actions of the Borrower and of said officers relating to the Loan Agreement, the Note, the Security Agreement and certificates as to all other proceedings and records of the Borrower which are reasonably required to evidence the validity and marketability of the Note. All such certified copies and certificates shall be deemed the representations and recitals of the Borrower as to the correctness of the statements contained therein. Section 3.02. Legal Opinion. The attorney to the Borrower is hereby authorized and directed to deliver to the Board at the time of Closing of the Loan his or her opinion regarding the Loan, the Loan Agreement, the Note and this Resolution in substantially the form of the opinion set forth in the Attorney's Opinion. Section 3.03. Execution. The Loan Agreement, Note, Security Agreement and any other document required to close the Loan shall be executed in the name of the Borrower and shall be executed on behalf of the Borrower by the signatures of the Authorized Representatives of the Borrower. PASSED AND APPROVED by the City Council of the City of Kalispell, this 4th day of January, 2021. Mark Johnson Mayor Attest: Aimee Brunckhorst, CMC City Clerk City of Kalispell Charles A. Harball Office of City Attorney Tel 406.758.7708 City Attorney 312 First Avenue East Fax 406.758.7771 P.O. Box 1997 charball@kalispell.com Kalispell, MT 59903-1997 January 15, 2021 Board of Investments of the State of Montana 2401 Colonial Drive, 3rd Floor P.O. Box 200126 Helena, MT 59620-0126 U.S. Bank Global Corporate Trust Services 950 17th Street, 12th Floor DN-CO-TI2CT Denver, CO 80202 Ladies and Gentlemen: I have served as counsel to the City of Kalispell (the "Borrower") in connection with its participation in the INTERCAP Program (the "Program") of the Board of Investments of the State of Montana (the 'Board"). Terms used herein which are defined in the Loan Agreement, dated as of January 15, 2021, (the "Loan Agreement") between the Borrower and the Board shall have the meanings specified therein. The resolution of the Borrower authorizing its participation in the Program and the issuance of its Loan Agreement relating thereto is herein referred to as the Loan Agreement Resolution. I have examined, among other things: i) the Borrower Act; ii) the Loan Agreement dated as of January 15, 2021 and executed by the Borrower; iii) the Promissory Note (the "Note") dated as of January 15, 2021 and executed by the Borrower; iv) Resolution No. 6009 of the Borrower, dated January 4, 2021 (the "Loan Agreement Resolution"); v) the Security Agreement (the "Security Agreement") from the Borrower to the Board, dated as of January 15, 2021; Attorney Opinion January 15, 2021 Page - 2 vi) upon receipt of Title, the Notice of Lien with Title from the Borrower, as debtor, to the Board, as secured party, will be mailed for filing to the office of the Flathead County Treasurer Motor Vehicle Office; vii) the proceedings of the Borrower with respect to the due execution and delivery by the Borrower of the Loan Agreement, Note and Security Agreements (the Program Documents), and such certificates and other documents relating to the Borrower, the Program Documents and the Loan Agreement Resolution of the Borrower and have made such other examination of applicable Montana law and a review of the Borrower's actions with respect to applicable ordinances and resolutions as we have deemed necessary in giving this opinion. Based upon the foregoing, we are of the opinion that: (a) The Borrower is a political subdivision duly organized and validly existing under the laws and Constitution of the State of Montana with full legal right, power and authority to enter into, execute and perform its obligations under the Program Documents and to carry out and effectuate the transactions contemplated thereunder. (b) The execution of the Loan Agreement and Promissory Note have been duly authorized and are valid, binding and enforceable against the Borrower in accordance with its terms. (c) The Loan Agreement Resolution of the Borrower has been duly adopted and is valid, binding and enforceable against the Borrower in accordance with its terms. (d) The Borrower has taken all action required to be taken by it to authorize the execution and delivery of and the performance of the obligations contained in the Program Documents; and such authorization is in full force and effect on the date hereof. (e) The Borrower has complied with all applicable competitive bidding requirements for the purchase, acquisition, and construction of the Project. (f) No consent, approval, authorization, order, filing, registration, qualification, election or referendum, of or by any person, organization, court or governmental agency or public body whatsoever is required to be obtained by the Borrower in connection with the execution, delivery and performance of the Program Documents or the consummation of the other transactions effected or contemplated thereby. Office of City Attorney =�'= City of Kalispell WTW Attorney Opinion January 15, 2021 Page - 3 (g) The execution, delivery and performance of the Program Documents, and compliance with the provisions thereof will not conflict with or constitute a breach of, a violation of, or default under, the Constitution of the State of Montana, or any existing law, charter, judgment, ordinance, administrative regulation, decree, order or resolution of or relating to the Borrower and do not conflict with or result in a violation or breach of, or constitute a default under, any agreement, indenture, mortgage, lease or other instrument, to which the Borrower is a party or by which it is bound or to which it is subject. (h) The Program Documents executed by the Borrower, when delivered to the Board, will have been duly authorized and executed and will constitute validly issued and legally binding obligations of the Borrower according to their terms. (i) No other lien has been filed on this vehicle. 6) The Board has a direct and valid first security interest in the Project. The Notice of Lien has been (or will be) duly filed for record in such manner at such places as required by law, in order to give constructive notice of and to establish, preserve and protect the lien and security interest of the Board on all properties of every kind described in the Security Agreement. No other recording, filing, rerecording or refiling is required. It is understood that the enforceability of the Program Documents may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement or creditors rights. Sincerely, Charles A. Harball City Attorney cc: Rick Wills, Finance Director Office of City Attomey y =- City of Kalispell =1-�