I6. Resolution 6023 SRF Bond for Section 35 Stormwater facilityCity 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:
MEMORANDUM
Doug Russell, City Manager
Charles Harball, City Attorney
Tel 406.758.7709
Fax 406.758.7758
charball@kalispell.com
SUBJECT: Resolution 6023 - Authorizing the Issuance and Fixing the Terms and
Conditions Relating to a $2,460,000 Sewerage System Revenue Bond,
Series 2021A Bond
MEETING DATE: May 3, 2021 — Regular Council Meeting
BACKGROUND: This financing transaction provides financing for the acquisition, construction,
and equipping of regional stormwater infrastructure in the area north of Quarter Horse Estates, south of
Reserve Drive, and bounded by West Spring Creek Road and Stillwater Road to the west and east in
the City of Kalispell, Montana. This project shall provide a regional stormwater facility to serve the
needs of new development within the City located within the environs of Section 35.
The total authorized funding from the bond is $2,460,000. The term of this bond shall be 20 years and
bear a fixed rate of 2.5% per annum. The City may not prepay any part of the outstanding principal
amount of the Series 2021A Bond unless it obtains the prior written consent of the DNRC and no Loan
Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent.
All payments of principal and interest on the 2021A Loan shall be special, limited obligations of the
City payable with respect to the Series 2021A Bond solely out of the net revenues of the sewer/storm
sewer system and shall not, except at the option of the City and as permitted by law, be payable out of
any other revenues of the City.
RECOMMENDATION: It is recommended that the Council approve the issuance of the Series
2021A sewer bonds in order to fund the above -described storm sewer project.
ALTERNATIVES: The Council may discuss other alternatives with city staff regarding the financing
of this project.
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 RELATING TO $2,460,000 SEWERAGE SYSTEM REVENUE BOND (DNRC
WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM), SERIES 2021A 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 May 3, 2021 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 May, 2021.
City Clerk
(SEAL)
SUPPLEMENTAL RESOLUTION
Relating to
$2,460,000
SEWERAGE SYSTEM REVENUE BOND
(DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM),
SERIES 2021A
CITY OF KALISPELL, MONTANA
Adopted: May 3, 2021
TABLE OF CONTENTS
(For convenience only, not a part of this Supplemental Resolution)
Page
ARTICLE I DEFINITIONS, RULES OF CONSTRUCTION AND APPENDICES ..........................2
SectionI.I. Definitions.............................................................................................................2
Section 1.2. Other Rules of Construction..................................................................................7
Section1.3. Appendices............................................................................................................8
ARTICLE II AUTHORIZATION, FINDINGS, REPRESENTATIONS AND COVENANTS ...........8
Section 2.1. Authorization and Findings...................................................................................8
Section2.2. Representations.....................................................................................................9
Section2.3. Covenants............................................................................................................I I
Section 2.4. Covenants Relating to the Tax -Exempt Status of the State Bonds......................13
Section 2.5. Maintenance of System; Liens............................................................................14
Section 2.6. Maintenance of Existence; Merger, Consolidation, Etc.; Disposition of
Assets...................................................................................................................15
ARTICLE III USE OF PROCEEDS; THE 2021 PROJECT.................................................................15
Section3.1. Use of Proceeds...................................................................................................15
Section 3.2. The 2021 Project.................................................................................................15
Section 3.3. 2021 Project Representations and Covenants......................................................16
Section 3.4. Completion or Cancellation or Reduction of Costs of the 2021 Project .............17
Section 3.5. Reduction in Reserve Account Allocable to Outstanding Bonds and the Optional
Prepayment of Certain Outstanding Bonds..................................................................................17
ARTICLE IV THE 2021A LOAN.........................................................................................................18
Section 4.1.
The 2021A Loan; Disbursement of 2021A Loan................................................18
Section 4.2.
Commencement of Loan Term............................................................................19
Section 4.3.
Termination of Loan Term..................................................................................19
Section 4.4.
2021A Loan Closing Submissions......................................................................19
ARTICLE V REPAYMENT OF 2021A LOAN..................................................................................20
Section 5.1. Repayment of 2021A Loan.................................................................................20
Section 5.1.1. Interest and Surcharges....................................................................................20
Section5.1.2. [Reserved]........................................................................................................20
Section 5.1.3. Repayment of 2021A Loan..............................................................................20
Section 5.1.4. Details Regarding 2021A Loan Repayments...................................................20
Section 5.2. Additional Payments...........................................................................................21
Section5.3. Prepayments........................................................................................................21
Section 5.4. Obligations of City Unconditional......................................................................21
Section 5.5. Limited Liability..................................................................................................21
Section 5.6 Amendment to Section 3.05 of the Original Ordinance Relating
To the Replacement and Depreciation Account..................................................22
ARTICLE VI INDEMNIFICATION OF DNRC AND DEQ...............................................................22
i
ARTICLE VII ASSIGNMENT...............................................................................................................22
Section7.1. Assignment by City.............................................................................................22
Section 7.2. Assignment by DNRC.........................................................................................22
Section 7.3. State Refunding Bonds........................................................................................22
ARTICLE VIII THE SERIES 2021A BOND..........................................................................................23
Section 8.1.
Net Revenues Available......................................................................................23
Section 8.2.
Issuance and Sale of the Series 2021A Bond
......................................................23
Section8.3.
Terms...................................................................................................................23
Section 8.4.
Negotiability, Transfer and Registration.............................................................23
Section 8.5.
Execution and Delivery.......................................................................................23
Section8.6.
Form....................................................................................................................24
ARTICLE IX SECURITY FOR THE SERIES 2021A BOND, DECREASE IN AMOUNTS
IN THE RESERVE ALLOCABLE TO THE OUTSTANDING BONDS,
AND AMENDMENT TO THE RATE COVENANT...................................................24
Section 9.1 Security for the Series 2021A Bond....................................................................24
ARTICLE X TAX MATTERS.............................................................................................................24
Section 10.1
Use of 2021 Project and System
..........................................................................24
Section10.2
General Covenant................................................................................................24
Section 10.3
Arbitrage Certification.........................................................................................25
Section10.4
Arbitrage Rebate..................................................................................................25
Section 10.5
Information Reporting.........................................................................................25
ARTICLE XI CONTINUING DISCLOSURE......................................................................................25
ARTICLE XII MISCELLANEOUS.......................................................................................................26
Section12.1.
Notices.................................................................................................................26
Section 12.2.
Binding Effect.....................................................................................................26
Section12.3.
Severability..........................................................................................................26
Section12.4.
Amendments........................................................................................................26
Section12.5.
Applicable Law...................................................................................................26
Section 12.6.
Captions; References to Sections........................................................................26
Section 12.7.
No Liability of Individual Officers, Directors, Trustees
CityCouncil Members........................................................................................27
Section 12.8.
Payments Due on Holidays.................................................................................27
Section 12.9.
Right of Others to Perform City's Covenants.....................................................27
Section 12.10.
Authentication of Transcript................................................................................27
Section 12.11.
Repeals and Effective Date.................................................................................27
APPENDIX A Description of and Estimated Budget for the 2021 Project .................................... A-1
APPENDIX B Form of Series 2021A Bond...................................................................................B-1
APPENDIX C Collateral Documents............................................................................................. C-1
APPENDIX D Compliance Certificate and Request...................................................................... D-1
11
RESOLUTION NO.6023
RESOLUTION RELATING TO $2,460,000 SEWERAGE SYSTEM REVENUE
BOND (DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN
PROGRAM), SERIES 2021A; AUTHORIZING THE ISSUANCE AND FIXING
THE TERMS AND CONDITIONS THEREOF
RECITALS:
WHEREAS, pursuant to the Montana Water Pollution Control State Revolving Fund Act, Montana
Code Annotated, Title 75, Chapter 5, Part 11, as amended (the "State Act"), the State of Montana (the
"State") has established a revolving loan program (the "Program") to be administered by the Department
of Natural Resources and Conservation of the State of Montana, an agency of the State (the "DNRC"), and
by the Department of Environmental Quality of the State of Montana, an agency of the State (the "DEQ"),
and has provided that a water pollution control state revolving fund (the "Revolving Fund") be created
within the State treasury and all federal, state and other funds for use in the Program be deposited into the
Revolving Fund, including, but not limited to, all federal grants for capitalization of a state water pollution
control revolving fund under the Federal Water Pollution Control Act (the "Clean Water Act"), all
repayments of assistance awarded from the Revolving Fund, interest on investments made on money in the
Revolving Fund and payments of principal of and interest on loans made from the Revolving Fund; and
WHEREAS, the State Act provides that funds from the Program shall be disbursed and
administered for the purposes set forth in the Clean Water Act and according to rules adopted by the DEQ
and the DNRC; and
WHEREAS, the DNRC will fund the 2021A Loan (as hereinafter defined) entirely from proceeds
of the EPA Capitalization Grant (as hereinafter defined); and
WHEREAS, the City of Kalispell, Montana (the "City"), has applied to the DNRC for the 2021A
Loan from the Revolving Fund to enable the City to finance, refinance or reimburse itself for a portion of
the costs of the 2021 Project (as hereinafter defined) which will carry out the purposes of the Clean Water
Act and to pay costs of issuance of the Series 2021A Bond (as hereinafter defined); and
WHEREAS, the DNRC offered to make loans in the total principal amount of $2,460,000 available
to the City; and
WHEREAS, the Series 2021A Bond is issued on a parity with the Outstanding Bonds that are Parity
Bonds; and
WHEREAS, the City is authorized under applicable laws, ordinances and regulations to adopt this
Supplemental Resolution and to issue the Series 2021A Bond to evidence the 2021A Loan for the purposes
set forth herein.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY, AS
FOLLOWS:
ARTICLE I
DEFINITIONS, RULES OF CONSTRUCTION AND APPENDICES
Section I.I. Definitions. In this Supplemental Resolution, unless a different meaning clearly
appears from the context, the following terms shall have the following meanings:
"Accountant" or "Accountants" means an independent certified public accountant or a firm of
independent certified public accountants satisfactory to the DNRC.
"Act" means (i) with respect to the City, the Enabling Act, and (ii) with respect to the DNRC, the
State Act, as amended from time to time.
"Additional Bonds" means any Bonds in addition to the Outstanding Bonds issued pursuant to the
Original Ordinance as amended by this Supplemental Resolution in Section 2.1(e).
"Administrative Expense Surcharge" means a surcharge equal to twenty-five hundredths of one
percent (0.25%) per annum on the outstanding principal amount of the 2021A Loan from the date of each
advance thereof, payable by the City on a Payment Date.
"Authorized DNRC Officer'' means the Director or Deputy Director of the DNRC, and, when used
with reference to an act or document, also means any other individual authorized by resolution of the DNRC
to perform such act or sign such document. If authorized by the DNRC, an Authorized DNRC Officer may
delegate all or a portion of his authority as an Authorized DNRC Officer to another individual, and such
individual shall be deemed an Authorized DNRC Officer for purposes of exercising such authority.
"Bond Counsel" means any Counsel nationally recognized as experienced in matters relating to the
issuance by states or political subdivisions of tax-exempt obligations selected by the City and acceptable to
the DNRC.
"Bonds" means the Series 2004 Bond, the Series 2007 Bond, the Series 2013 Bond, the Series
2018B Bond, the Series 2018C Bond, the Series 2021A Bond, and any Additional Bonds to be issued on a
parity therewith pursuant to the Ordinance.
"Borrower" or "City" means the City of Kalispell, Montana, or any permitted successor or assign.
"Business Day" means any day which is not a Saturday or Sunday, a legal holiday in the State or a
day on which banks in the State are authorized or required by law to close.
"City Council" means the City Council of the City.
"Clean Water Act" means the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251-1387,
as amended and all regulations, rules and interpretations issued by the EPA thereunder, as may be amended.
"Closing" means the date of delivery of the Series 2021A Bond to the DNRC.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Documents" means any security agreement, guaranty or other document or agreement
delivered to the DNRC securing the obligations of the City under this Supplemental Resolution and the
Series 2021A Bond. If no Collateral Documents secure such obligations, any reference to Collateral
Documents in this Supplemental Resolution shall be without effect.
"Committed Amount" means the aggregate amount of the 2021 Loan committed to be lent by the
DNRC to the City pursuant to Section 4.1 of this Supplemental Resolution, as such amount may be reduced
pursuant to Sections 3.2 and 3.4 of this Supplemental Resolution.
"Compliance Certificate and Request" means the certificate and request substantially in the form
of the attached Appendix D delivered by the DNRC to the City following the final advance of principal of
the 2021A Loan, to be completed, executed and delivered by the City to the DNRC pursuant to Section
5.1.3 of this Supplemental Resolution.
"Construction Account" means the account created in the Fund pursuant to the Original Ordinance.
"Consultant" means a nationally recognized consultant or firm of consultants, or an independent
engineer or firm of independent engineers, or an Accountant, which in any case is qualified and has skill
and experience in the preparation of financial feasibility studies or projections for facilities similar to the
System or the 2021 Project, selected by the City and satisfactory to the DNRC.
"Counsel" means an attorney duly admitted to practice law before the highest court of any state
and satisfactory to the DNRC.
"Debt" means, without duplication, in respect of the System, (1) indebtedness of the City for
borrowed money or for the deferred purchase price of property or services; (2) the obligation of the City as
lessee under leases which should be recorded as capital leases under generally accepted accounting
principles; and (3) obligations of the City under direct or indirect guarantees in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to in clause (1) or (2) above.
"Debt Service Account" means the account created in the Fund pursuant to the Original Ordinance.
"DEQ" means the Department of Environmental Quality of the State of Montana, an agency of the
State, or any successor to its powers, duties and obligations under the State Act or the EPA Agreements.
"DNRC" means the Department of Natural Resources and Conservation of the State of Montana,
an agency of the State, and any successor to its powers, duties and obligations under the State Act.
"Enabling Act" means Montana Code Annotated, Title 7, Chapter 7, Parts 44 and 45, and Section
7-7-109, as amended from time to time, which authorizes the City to own and operate the System, to
undertake the 2021 Project and to issue the Series 2021A Bond to finance costs of the 2021 Project.
"EPA" means the Environmental Protection Agency, an agency of the United States of America,
and any successor to its functions under the Clean Water Act.
"EPA Agreements" means all capitalization grant agreements and other written agreements
between the DEQ, the DNRC and the EPA concerning the Program.
"EPA Capitalization Grant" means a grant of funds to the State by the EPA under Title VI of the
Clean Water Act and any grant made available by the EPA for deposit in the Revolving Fund pursuant to
Section 205(m) of the Clean Water Act.
"Fund" means the Sewerage System Fund (which includes revenues of both stormwater and
sanitary sewer revenues) established pursuant to Section 3 of the Original Ordinance.
"Government Obligations" means direct obligations of, or obligations the principal of and the
interest on which are fully and unconditionally guaranteed as to payment by, the United States of America.
"Governmental Unit" means governmental unit as such term is used in Section 145(a) of the Code.
"Indenture" means the Indenture of Trust, dated as of June 1, 1991, between the Board of
Examiners of the State and the Trustee, as such may be supplemented or amended from time to time in
accordance with the provisions thereof, pursuant to which, among other things, the Series 2021A Bond are
to be or have been issued.
"Loan Loss Reserve Surcharge" means a surcharge equal to twenty-five hundredths of one percent
(0.25%) per annum on the outstanding principal amount of the 2021A Loan from the date of each advance
thereof, payable by the City on a Payment Date.
"Loan Term" means that period of time commencing and ending as set in Sections 4.2 and 4.3 of
this Supplemental Resolution.
"MMIA" means the same as defined in Section 2.3 of this Supplemental Resolution, its successor
and assigns.
"Net Revenues" means the entire amount of the gross revenues of the System (as described in
Section 3.03 of the Ordinance No. 859) remaining upon each such quarterly apportionment, after crediting
to the Operating Account the amount required hereby, including sums required to maintain the Operating
Reserve in the minimum amount required by the Ordinance.
"Operating Account" means the account created in the Fund pursuant to Section 3.03 of the Original
Ordinance.
"Operating Reserve" means the reserve to be maintained in the Operating Account as required by
the Original Ordinance.
"Opinion of Bond Counsel" means a written opinion of Bond Counsel.
"Ordinance" means the Original Ordinance, as amended and supplemented by this Supplemental
Resolution and other supplemental resolutions.
"Ordinance No. 859" means Ordinance No. 859, originally adopted on June 21, 1976.
"Original Ordinance" means Ordinance No. 859, 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), 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), 5617 (May 6, 2013), 5865 (April 16, 2018), 5879 (July 2, 2018), and 5883
(August 20, 2018), all as duly passed and adopted by the City Council of the City.
"Outstanding" means, as of the date of determination, all Bonds or notes theretofore issued except:
(i) obligations theretofore cancelled by the City or the Registrar or delivered to the City or the Registrar
cancelled or for cancellation; (ii) obligations and portions of obligations for whose payment or redemption
4
money or government obligations shall have been theretofore deposited in trust for the holders of such
obligations; provided, however, that if such obligations are to be redeemed, notice of such redemption shall
have been duly given pursuant to the Ordinance or irrevocable instructions to call such obligations for
redemption at a stated redemption date shall have been given to the City; and (iii) obligations in exchange
for or in lieu of which other obligations shall have been issued and delivered pursuant to the Ordinance;
provided, however, that in determining whether the holders of the requisite principal amount of outstanding
obligations have given any request, demand, authorization, direction, notice, consent or waiver hereunder,
obligations owned by the City shall be disregarded and deemed not to be outstanding.
"Outstanding Bonds" means the Series 2004 Bond, the Series 2007 Bond, the Series 2013 Bond,
the Series 2018B Bond, the Series 2018C Bond, and any other bonds that are Outstanding and issued on a
parity therewith, including, from and after its issuance, the Series 2021A Bond.
"Parity Bonds" means the City's Outstanding Bonds.
"Payment Date" means, with respect the 2021A Loan, each January 1 and July 1 during the term
of the Series 2021A Bond on which a payment of interest or principal and interest is due, as determined
under this Supplemental Resolution.
"Person" means any Private Person or Public Entity.
"Private Person" means an individual, corporation, partnership, association, joint venture, joint
stock company or unincorporated organization, except a Public Entity.
"Program" means the Water Pollution Control State Revolving Fund Program established by the
Act.
"Project" means the costs of designing, engineering, acquiring, constructing, installing, improving,
or enlarging the System, or any part thereof, financed, refinanced, or the costs of which is being reimbursed
to the City in part with proceeds of the Bonds, subordinate obligations, or other funds of the City, including
the 2021 Project.
"Public Entity" means a municipality, town, county, school district, political or administrative
subdivision of State government, irrigation district, drainage district or other public body established by
State law.
"Rebate Account" means the account created in the Fund pursuant to the Original Ordinance.
"Recycled Money" means payments and prepayments of principal of loans made under the
Program, and any other amounts transferred to the Principal Subaccount in the Revenue Subaccount in the
State Allocation Account (as such terms are defined in the Indenture).
"Registrar" means, with respect to the Series 2021A Bond, the Finance Director or any successor
appointed pursuant to this Supplemental Resolution, and, with respect to any other series of Bonds, the
Person or Persons designated by or pursuant to this Supplemental Resolution or a Supplemental Resolution
to receive and disburse the principal of, premium, if any, and interest on the Bonds on behalf of the City
and to hold and maintain the Bond Register.
"Regulations" means the Treasury Department, Income Tax Regulations, as amended or any
successor regulation thereto, promulgated under the Code or otherwise applicable to the Series 2021A
Bond.
"Replacement and Depreciation Account" means the Account created in the Fund pursuant to the
Original Ordinance.
"Reserve" means the reserve account created in the Fund pursuant to the Original Ordinance.
"Reserve Requirement" means, as of the date of calculation, an amount equal to one-half the sum
of the highest amount of principal and interest payable on all outstanding Bonds (not including the Series
2021A Bond) in any one future fiscal year (giving effect to mandatory sinking fund redemption, if any).
The initial deposit to the Reserve for the Series 2021A Bond is $78,625.
"Reserved Amounts" means any undisbursed 2021A Committed Amount which will or may be
required to pay any remaining costs of the 2021 Project upon completion thereof as provided in Section
3.4(a) of this Supplemental Resolution.
"Revenue Bond Account" means the account created in the Fund pursuant to the Original
Ordinance.
"Revolving Fund" shall have the meaning set forth in the recitals hereof.
"Series 2004 Bond" means the First Amended and Restated Sewerage System Revenue Bond
(DNRC Revolving Loan Program), Series 2004, issued by the City, in the original principal amount of
$1,009,000.
"Series 2007 Bond" means the First Amended and Restated Sewerage System Revenue Bond
(DNRC Water Pollution Control State Revolving Loan Program), Series 2007, in the original principal
amount of $12,827,000.
"Series 2013 Bond" means the City's Sewerage System Revenue Bond (DNRC Water Pollution
Control State Revolving Loan Program), Series 2013, in the original principal amount of $1,271,000.
"Series 2018 Bonds" means, collectively, the Series 2018A Bond, the Series 2018B Bond, and the
Series 2018C Bond.
"Series 2018A Bond" means the City's Subordinate Lien Sewerage System Revenue Bond (DNRC
Water Pollution Control State Revolving Loan Program), Taxable Series 2018A, in the original principal
amount of $400,000.
"Series 2018B Bond" means the City's Sewerage System Revenue Bond (DNRC Water Pollution
Control State Revolving Loan Program), Taxable Series 2018B, in the original aggregate principal amount
of $7,000,000.
"Series 2018C Bond" means the City's Sewerage System Revenue Bond (DNRC Water Pollution
Control State Revolving Loan Program), Taxable Series 2018C, in the original aggregate principal amount
of $7,000,000.
"Series 2021A Bond" means the City's Sewerage System Revenue Bond (DNRC Water Pollution
Control State Revolving Loan Program), Series 2021A, in the original aggregate principal amount of
$2,460,000 issued by the City to the DNRC to evidence the 2021A Loan.
"State" means the State of Montana.
"State Act" means Montana Code Annotated, Title 75, Chapter 5, Part 11, as amended from time
to time.
"State Bonds" means the State's General Obligation Bonds (Water Pollution Control State
Revolving Fund Program), issued or to be issued pursuant to the Indenture.
"Supplemental Resolution" means this Supplemental Resolution of the City, adopted on
May 3, 2021, as it may from time to time be amended or supplemented in accordance with its terms.
"Surplus Account" means the account created in the Fund pursuant to the Original Ordinance.
"Surplus Net Revenues" means that portion of the Net Revenues in excess of the current
requirements of the Operating Account, the Revenue Bond Account and the Reserve.
"System" means the sewerage system of the City, which includes, without limitation, the sanitary
sewer facilities and storm sewer facilities of the City's sewerage system, and all extensions, improvements
and betterments thereof hereafter constructed and acquired, including the 2021 Project.
"Trustee" means U.S. Bank National Association, in Seattle, Washington or any successor trustee
under the Indenture.
"2021 Loan" or "Loan" means the loan made to the City by DNRC pursuant to the Program in the
maximum amount of the Committed Amount to provide funds to pay costs of the 2021 Project, fund the
Reserve Requirement and pay costs of issuance of the Series 2021A Bond.
"2021 Project" means the designing, engineering and construction of the facilities, improvements
and activities the cost of which is being financed by or reimbursed to the City in part with proceeds of the
2021A Loan, described in Appendix A hereto.
"2021A Committed Amount" means the amount of the 2021A Loan committed to be lent by the
DNRC to the City pursuant to Section 4.1 of this Supplemental Resolution, as such amount may be reduced
pursuant to Section 3.2 and Section 3.4 of this Supplemental Resolution.
"2021A First Advance" means the first advance of funds of the 2021A Loan by the DNRC to the
City.
"2021A Loan" means the loan made to the City by the DNRC pursuant to the Program in the
maximum amount of the 2021A Committed Amount to provide funds to pay costs of the 2021 Project
payable under the Program, fund the Reserve Requirement for the Series 2021A Bond, and to pay costs of
issuance of the Series 2021A Bond.
"Undisbursed Committed Amount" means any undisbursed 2021A Committed Amount which is
not required to pay costs of the 2021 Project as provided in Section 3.4 of this Supplemental Resolution.
Section 1.2. Other Rules of Construction. For all purposes of this Supplemental Resolution,
except where the context clearly indicates otherwise:
(a) All accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted government accounting standards.
(b) Terms in the singular include the plural and vice versa.
(c) All references to time shall refer to Kalispell, Montana time, unless otherwise
provided herein.
(d) All references to mail shall refer to first-class mail postage prepaid.
(e) Words of the masculine gender shall be deemed and construed to include
correlative words of the feminine and neuter genders.
(f) "Or" is not exclusive, but is intended to permit or encompass one, more or all of
the alternatives conjoined.
Section 1.3. Appendices. Attached to this Supplemental Resolution and hereby made a part
hereof are the following Appendices:
Appendix A: a description of and estimated budget for the 2021 Project;
Appendix B: the form of the Series 2021A Bond;
Appendix C: additional agreements and representations of the City; and
Appendix D: Compliance Certificate and Request.
ARTICLE II
AUTHORIZATION, FINDINGS, REPRESENTATIONS AND COVENANTS
Section 2.1. Authorization and Findings.
(a) Authorization. Under the provisions of the Enabling 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 or 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 general obligation for the
payment of which taxes may be levied except to pay for services provided by the undertaking to the City.
(b) The System. The City, pursuant to the Enabling Act and other laws of the State, has
established and presently owns and operates the System.
(c) The 2021 Project. After investigation of the facts and as authorized by the Enabling Act,
this City Council has determined it to be necessary and desirable and in the best interests of the City to
acquire and construct the 2021 Project.
(d) Outstanding Bonds. Pursuant to the Enabling Act and the Ordinance, the City has
previously issued, and has outstanding, the Series 2004 Bond, the Series 2007 Bond, and the Series 2013
Bond. The Series 2004 Bond, the Series 2007 Bond, the Series 2013 Bond, the Series 2018B Bond, the
Series 2018C Bond, and the Series 2021A Bond are payable from Net Revenues of the System, and the
Series 2018A Bond is payable solely out of Surplus Net Revenues. No other bonds or indebtedness are
outstanding that are payable from or secured by revenues of the System.
(e) Additional Pari . Bonds. The City reserved the right under Section 4.03 of Ordinance
No. 859 to issue Additional Bonds payable from the Revenue Bond Account of the Fund on a parity as to
both principal and interest with the Outstanding Bonds the conditions of Section 4.03 of Ordinance No. 859,
are satisfied. In no event shall any additional Bonds be issued and made payable from the Revenue Bond
Account if the City is then in default in any payment of principal of or interest on any Outstanding Bonds
payable therefrom, or if there then exists any deficiency in the balances required by the Ordinance to be
maintained in any of the accounts of the Fund, which will not be cured or restored upon the issuance of the
additional Bonds. Based on a certificate executed or to be executed by the City Manager and the Finance
Director, or either of them, it is hereby determined that the City is authorized to issue $2,460,000 in
aggregate principal amount of Additional Bonds pursuant to Section 4.03 of Ordinance No. 859 payable
from and secured by the Net Revenues on a parity with the Outstanding Bonds.
The provisions of Section 2.1(e) of Resolution No 8579 adopted on July 2, 2018, amended all of
the prior Ordinances (including Section 4.03 of the Original Ordinance) such that the provisions of Section
2.1(e) of Resolution No. 8579 apply to the issuance of Additional Bonds going forward for the Borrower
and the required debt service coverage ratio is reduced from 125% to 110% for all Additional Bonds to be
issued by the City in the future. In addition, the holder of the Outstanding Bonds also consented in writing
to the change contained in Section 2.1(e) of Resolution No. 8579. Based on a certificate executed or to be
executed by the City Manager and the Finance Director of the City, it is determined that the City is
authorized to issue $2,460,000 in original aggregate principal amount of a Series 2021A Bond payable from
and secured by the Net Revenues on a parity with the Outstanding Bonds.
Section 2.2. Representations. The City represents as follows:
(a) Organization and Authority_. The City:
(i) is duly organized and validly existing as a municipal corporation and political
subdivision of the State;
(ii) has all requisite power and authority and all necessary licenses and permits
required as of the date hereof to own, construct and operate the 2021 Project, to adopt this
Supplemental Resolution and to enter into the Collateral Documents and to issue the Series 2021A
Bond and to carry out and consummate all transactions contemplated by this Supplemental
Resolution, the Series 2021A Bond and the Collateral Documents;
(iii) is a Governmental Unit and a Public Entity; and
(iv) has taken all proper action to authorize the execution, delivery and performance of
its obligations under this Supplemental Resolution, the Series 2021A Bond and the Collateral
Documents and the incurrence of the Debt evidenced by the Series 2021A Bond in the maximum
amount of the 2021A Committed Amount.
(b) Pending Litigation. There is no litigation or proceeding pending or, to the knowledge of
the City, threatened against or affecting the City in any court or before or by any governmental authority or
arbitration board or tribunal that, if adversely determined, would materially and adversely affect the
existence, corporate or otherwise, of the City, or the ability of the City to make all payments and otherwise
perform its obligations under this Supplemental Resolution, the Series 2021A Bond and the Collateral
Documents, or the financial condition of the City, or the transactions contemplated by this Supplemental
Resolution, the Series 2021A Bond and the Collateral Documents or the validity and enforceability of this
Supplemental Resolution, the Series 2021A Bond and the Collateral Documents. If any such litigation
should be initiated or threatened, the City will forthwith notify in writing the DNRC, and will furnish the
DNRC a copy of all documents, including pleadings, in connection with such litigation. No referendum
petition has been filed with respect to any resolution or other action of the City relating to the 2021 Project,
the Series 2021A Bond or any Collateral Documents.
(c) Borrowing Legal and Authorized. The adoption of this Supplemental Resolution, the
execution and delivery of the Series 2021A Bond and the Collateral Documents and the consummation of
the transactions provided for in this Supplemental Resolution, the Series 2021A Bond and the Collateral
Documents and compliance by the City with the provisions of this Supplemental Resolution, the Series
2021A Bond and the Collateral Documents, to the knowledge of the City:
(i) are within the powers of the City and have been duly authorized by all necessary
action on the part of the City; and
(ii) do not and will not result in any breach of any of the terms, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the City pursuant to any ordinance, resolution,
indenture, loan agreement or other agreement or instrument (other than this Supplemental
Resolution and any Collateral Documents) to which the City is a party or by which the City or its
property may be bound, nor will such action result in any violation of the provisions of any charter
or similar document, if applicable, any laws, ordinances, governmental rules or regulations or court
or other governmental orders to which the City, its properties or operations are subject.
(d) No Defaults. To the knowledge of the City, no event has occurred and no condition exists
that, upon execution and delivery of the Series 2021A Bond and the Collateral Documents, would constitute
a default under this Supplemental Resolution or the Collateral Documents. To the knowledge of the City,
the City is not in material violation of any term of any agreement, bond resolution, trust indenture, charter
or other instrument to which it is a party or by which it or its property may be bound which violation would
materially and adversely affect the transactions contemplated hereby or the compliance by the City with
the terms hereof or of the Series 2021A Bond and the Collateral Documents.
(e) Governmental Consent. To the knowledge of the City, the City has obtained or made all
permits, findings and approvals required to the date of adoption of this Supplemental Resolution by any
governmental body or officer for the making and performance by the City of its obligations under this
Supplemental Resolution, the Series 2021A Bond and the Collateral Documents (including any necessary
rate increase) or for the 2021 Project, the financing or refinancing thereof or the reimbursement of the City
for costs thereof. To the knowledge of the City, no consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority (other than those, if any, already obtained) is
required on the part of the City as a condition to adopting this Supplemental Resolution, issuing the Series
2021A Bond or entering into the Collateral Documents and the performance of the City's obligations
hereunder and thereunder. If a utility board or commission manages or controls the System, such board or
commission has agreed with the DNRC to abide by the terms of the Ordinance and the Collateral
Documents, including approving any necessary rate increases.
(f) Binding Obligation. The Ordinance, the Series 2021A Bond and any Collateral Documents
to which the City is a parry are the valid and binding special, limited obligations and agreements of the
City, enforceable against the City in accordance with their terms except to the extent that the enforceability
thereof may be limited by laws relating to bankruptcy, moratorium, reorganization, insolvency or similar
laws affecting creditors' rights and general principles of equity.
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(g) The 2021 Project. The 2021 Project consists and will consist of the facilities,
improvements and activities described in Appendix A, as such Appendix A may be amended from time to
time in accordance with Article III of this Supplemental Resolution. The 2021 Project comprises facilities
of a type that, as determined by the EPA, will facilitate compliance with the national primary sewer system
regulations applicable to the 2021 Project or will otherwise significantly further the health protection
objectives of the Clean Water Act.
(h) The System. The System is a "sewer system" within the meaning of the State Act and the
Clean Water Act in that it is a sewer system, comprising collection, treatment, storage and distribution
facilities for the provision to the public of sewer services, that serves not less than 15 service connections
used by year-round residents of the area served by the System or regularly serves not less than 25 year-
round residents.
(i) Full Disclosure. There is no fact that the City has not specifically disclosed in writing to
the DNRC that materially and adversely affects or (so far as the City can now foresee), except for pending
or proposed legislation or regulations that are a matter of general public information, that will materially
and adversely affect the properties, operations and finances of the 2021 Project, the City's status as a Public
Entity and Governmental Unit, its ability to own and operate the 2021 Project or the City's ability to perform
its obligations under this Supplemental Resolution, the Series 2021A Bond and the Collateral Documents
and to pledge any revenues or other property pledged to the payment of the Series 2021A Bond.
0) Compliance with Law. To the knowledge of the City, it:
(i) is in compliance with all laws, ordinances, governmental rules and regulations and
court or other governmental orders, judgments and decrees to which it is subject and which are
material to the properties, operations and finances of the System or its status as a Public Entity and
Governmental Unit; and
(ii) has obtained all licenses, permits, franchises or other governmental authorizations
necessary to the ownership of the 2021 Project and the operation thereof and agrees to obtain all
such licenses, permits, franchises or other governmental authorizations as may be required in the
future for the 2021 Project and the operation thereof, which failure to obtain might materially and
adversely affect the ability of the City to conduct the operation of the 2021 Project as presently
conducted or the condition (financial or otherwise) of the 2021 Project or the City's ability to
perform its obligations under this Supplemental Resolution, the Series 2021A Bond and the
Collateral Documents.
(k) Outstanding Debt. Prior to the issuance of the Series 2021A Bond, the City has the
following outstanding bonds payable solely from Net Revenues of the System: (i) the Series 2004 Bond;
(ii) the Series 2007 Bond; (iii) the Series 2013 Bond; (iv) the Series 2018B Bond; and (v) the Series 2018C
Bond.
Section 2.3. Covenants.
(a) Insurance. In addition to the requirements of the Ordinance, the City at all times shall keep
and maintain with respect to the System property and casualty insurance and liability insurance with
financially sound and reputable insurers, or self-insurance as authorized by State law, against such risks
and in such amounts, and with such deductible provisions, as are customary in the State in the case of
entities of the same size and type as the City and similarly situated and shall carry and maintain, or cause
to be carried and maintained, and pay or cause to be paid timely the premiums for all such insurance. All
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such insurance policies shall name the DNRC as an additional insured to the extent permitted under the
policy or program of insurance or risk coverage of the City. Each policy must provide that it cannot be
cancelled by the insurer without giving the City and the DNRC 30 days' prior written notice. The City
shall give the DNRC prompt notice of each insurance policy it obtains or maintains to comply with this
section and of each renewal, replacement, change in coverage or deductible under or amount of or
cancellation of each such insurance policy and the amount and coverage and deductibles and carrier of each
new or replacement policy. Such notice shall specifically note any adverse change as being an adverse
change. The City shall deliver to the DNRC at Closing a certificate providing the information required by
this section. To the extent that the City has risk coverage from the Montana Municipal Interlocal Authority
("MMIA") and includes the System on the City's schedule of property to be coverage by MMIA, then such
risk coverage shall be deemed to be acceptable insurance for the DNRC.
(b) Right of Inspection and Notice of Change of Location. The DNRC, the DEQ and the EPA
and their designated agents shall have the right at all reasonable times during normal business hours and
upon reasonable notice to enter into and upon the property of the City for the purpose of inspecting the
System or any or all books and records of the City relating to the System.
(c) Further Assurance. The City shall execute and deliver to the DNRC all such documents
and instruments and do all such other acts and things as may be necessary or required by the DNRC to
enable the DNRC to exercise and enforce its rights under the Ordinance, the Series 2021A Bond and the
Collateral Documents and to realize thereon, and record and file and re-record and refile all such documents
and instruments, at such time or times, in such manner and at such place or places, all as may be necessary
or required by the DNRC to validate, preserve and protect the position of the DNRC under the Ordinance,
the Series 2021A Bond and the Collateral Documents.
(d) Maintenance of Security: Recordation of Interest.
(i) The City shall, at its expense, take all necessary action to maintain and preserve
the lien and security interest of the Ordinance and the Collateral Documents so long as any amount
is owing under the Ordinance or the Series 2021A Bond;
(ii) The City shall forthwith, after the execution and delivery of the Series 2021A Bond
and thereafter from time to time, cause the Ordinance and any Collateral Documents granting a
security interest in revenues or real or personal property and any financing statements or other
notices or documents relating thereto to be filed, registered and recorded in such manner and in
such places as may be required by law in order to perfect and protect fully the lien and security
interest hereof and thereof and the security interest in them granted by the Ordinance and, from
time to time, shall perform or cause to be performed any other act required by law, including
executing or causing to be executed any and all required continuation statements and shall execute
or cause to be executed any further instruments that may be requested by the DNRC for such
perfection and protection; and
(iii) Except to the extent it is exempt therefrom, the City shall pay or cause to be paid
all filing, registration and recording fees incident to such filing, registration and recording, and all
expenses incident to the preparation, execution and acknowledgment of the documents described
in subparagraph (ii), and all federal or state fees and other similar fees, duties, imposts, assessments
and charges arising out of or in connection with the execution and delivery of the Series 2021A
Bond and the Collateral Documents and the documents described in subparagraph (ii).
(e) Additional Agreements. The City covenants to comply with all representations, covenants,
conditions and agreements, if any, set forth in Appendix C hereto.
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(f) Financial Information. This Section 2.3(f) supplements, and is not intended to limit, the
requirements in the Original Ordinance. The City agrees that for each fiscal year it shall furnish to the
DNRC and the DEQ, promptly when:
(i) the preliminary budget for the System, with items for the 2021 Project shown
separately; and
(ii) when adopted, the final budget for the System, with items for the 2021 Project
shown separately.
(g) Project Accounts. The City shall maintain the 2021 Project accounts in accordance with
generally accepted government accounting standards, and as separate accounts, as required by Section
602(b)(9) of the Clean Water Act.
(h) Records. After reasonable notice from the EPA or the DNRC, the City shall make available
to the EPA or the DNRC such records as the EPA or the DNRC reasonably requires to review and determine
compliance with the Clean Water Act, as provided in Section 606(e) of the Clean Water Act.
(i) Compliance with Clean Water Act. The City has complied and shall comply with all
conditions and requirements of the Clean Water Act pertaining to the 2021A Loan and the 2021 Project and
shall maintain sufficient financial, managerial and technical capability to continue to effect such
compliance.
0) Compliance with DEQ Requirements. The City shall comply with plan, specification and
other requirements for public sewer systems such as the System that have been established by the DEQ, as
required by Section 75-5-1113(1)(g) of the State Act.
Section 2.4. Covenants Relating to the Tax -Exempt Status of the State Bonds.
(a) The City covenants and agrees that it will not use or permit to be used any of the proceeds
of the Series 2021A Bond or any other funds of the City in respect of the 2021 Project or the Series 2021A
Bond, directly or indirectly, in a manner that would cause, or take any other action that would cause, any
State Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code or would otherwise
cause the interest on the State Bonds to be included in gross income for purposes of federal income taxation.
(b) The City agrees that it will not enter into, or allow any "related person" (as defined in
Section 147(a)(2) of the Code) to enter into, any arrangement, formal or informal, for the purchase of the
State Bonds or any other obligations of the DNRC in an amount related to the amount of the 2021A Loan
or the portion of the 2021A Loan derived directly or indirectly from proceeds of the State Bonds or that
would otherwise cause any State Bond to be an "arbitrage bond" within the meaning of Section 148 of the
Code.
(c) The City shall not use or permit the use of the 2021 Project directly or indirectly in any
trade or business carried on by any Person who is not a Governmental Unit. For the purpose of this
subparagraph, use as a member of the general public (within the meaning of the Regulations) shall not be
taken into account and any activity carried on by a Person other than a natural person shall be treated as a
trade or business.
(d) Any portion of the 2021 Project being refinanced or the cost of which is being reimbursed
was acquired by and is now and shall, during the term of the 2021A Loan, be owned by the City and not by
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any other Person. Any portion of the 2021 Project being financed shall be acquired by and shall, during
the term of the 2021A Loan, be owned by the City and not by any other Person. Notwithstanding the
previous two sentences, the City may transfer the 2021 Project or a portion thereof to another Governmental
Unit which is also a Public Entity if such transfer is otherwise permitted under the Ordinance and if such
organization agrees with the DNRC to comply with Section 2.3(h), Section 2.3(1) and this Section 2.4 of
this Supplemental Resolution and if the DNRC receives an Opinion of Bond Counsel that such transfer will
not violate the State Act or the Clean Water Act or adversely affect the exclusion of interest on the State
Bonds from gross income or purposes of federal income taxation. In addition, except as otherwise provided
in the Ordinance or in any Collateral Documents, the City may sell or otherwise dispose of any portion of
the 2021 Project which has become obsolete or outmoded or is being replaced or for other reasons is not
needed by the City or beneficial to the general public or necessary to carry out the purposes of the Clean
Water Act.
(e) At the Closing of the 2021A Loan, the DNRC will, if necessary to obtain the Opinion of
Bond Counsel described in Section 7.05(a) of the Indenture, deliver to the City instructions concerning
compliance by the City with the arbitrage rebate requirements of Section 148 of the Code (the "Arbitrage
Rebate Instructions"). The City shall comply with the Arbitrage Rebate Instructions, if any, delivered to it
by the DNRC at Closing, as such Instructions may be amended or replaced by the DNRC from time to time.
The Arbitrage Rebate Instructions may be amended or replaced by new Arbitrage Rebate Instructions
delivered by the DNRC and accompanied by an Opinion of Bond Counsel to the effect that the use of said
amended or new Arbitrage Rebate Instructions will not adversely affect the excludability of interest on the
State Bonds or any Additional State Bonds (except State Bonds the interest on which the State did not
intend to be excluded from gross income for federal income tax purposes) from gross income of the
recipients thereof for federal income tax purposes.
(f) The City agrees that during the term of the 2021A Loan it will not contract with or permit
any Private Person to manage the 2021 Project or any portion thereof except according to a written
management contract and upon delivery to the DNRC of an Opinion of Bond Counsel to the effect that the
execution and delivery of such management contract will not violate the State Act or the Clean Water Act
or adversely affect the exclusion of interest on State Bonds from gross income or purposes of federal income
taxation.
(g) The City may not lease the 2021 Project or any portion thereof to any Person other than a
Nonexempt Person which agrees in writing with the City and the State not to cause any default to occur
under the Ordinance; provided the City may lease all or any portion of the 2021 Project to a Nonexempt
Person pursuant to a lease which in the Opinion of Bond Counsel delivered to the DNRC will not cause the
interest on the State Bonds to be included in gross income for purposes of federal income taxation.
(h) The City shall not change the use or nature of the 2021 Project if (i) such change will
violate the Clean Water Act, or (ii) so long as the State Bonds are outstanding unless, in the Opinion of
Bond Counsel delivered to the DNRC, such change will not result in the inclusion in gross income of
interest on the State Bonds for federal income tax purposes.
Section 2.5. Maintenance of System: Liens. The City shall maintain the System, including the
2021 Project, in good condition and make all necessary renewals, replacements, additions, betterments and
improvements thereto. The City shall not grant or permit to exist any lien on the 2021 Project or any other
property making up part of the System, other than liens securing Debt where a parity or senior lien secures
the Series 2021A Bond; provided that this Section 2.5. shall not be deemed to be violated if a mechanic's
or contractor's lien is filed against any such property so long as the City uses its best efforts to obtain the
discharge of such lien and promptly reports to the DNRC the filing of such lien and the steps it plans to
take and does take to discharge such lien.
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Section 2.6. Maintenance of Existence. Merger, Consolidation, Etc.: Disposition of Assets.
The City shall maintain its corporate existence, except that it may consolidate with or merge into another
Governmental Unit or permit one or more Governmental Units to consolidate with or merge into it or may
transfer all or substantially all of its assets to another Governmental Unit and then dissolve if the surviving,
resulting or transferee entity (if other than the City) (i) is a Public Entity and (ii) assumes in writing all of
the obligations of the City under the Ordinance, the Series 2021A Bond and the Collateral Documents, and
(a) such action does not result in any default in the performance or observance of any of the terms, covenants
or agreements of the City under the Ordinance, the Series 2021A Bond and the Collateral Documents, (b)
such action does not violate the State Act or the Clean Water Act, and (c) the City delivers to the DNRC
on the date of such action an Opinion of Bond Counsel that such action complies with this Section 2.6.
Other than pursuant to the preceding paragraph, the City shall not transfer the System or any portion
thereof to any other Person, except for property which is obsolete, outmoded, worn out, is being replaced
or otherwise is not needed for the operation of the System, unless the provisions of (a) and (b) of the
preceding paragraph are satisfied and the City delivers to the DNRC an Opinion of Bond Counsel to that
effect and, in addition, the DNRC consents to such transfer.
ARTICLE III
USE OF PROCEEDS; THE 2021 PROJECT
Section 3.1. Use of Proceeds. The City shall apply the proceeds of the 2021A Loan solely as
follows:
(a) The City shall apply the proceeds of the 2021A Loan solely to the financing or
reimbursement of costs of the 2021 Project as set forth in Appendix A hereto, fund the deposit to the Reserve
equal to the Reserve Requirement, and this Section 3.1 and to pay costs of issuance of the Series 2021A
Bond. The 2021A Loan will be disbursed in accordance with Article IV hereof and Article VII of the
Indenture. The City shall, as quickly as reasonably possible, complete the 2021 Project and expend
proceeds of the 2021A Loan to pay costs of completing the 2021 Project. The City's Finance Director is
also authorized to deposit such additional amounts into the Reserve or any other funds and accounts as
required by the DNRC.
(b) No portion of the proceeds of the 2021A Loan shall be used to reimburse the City for costs
paid prior to the date of adoption of this Supplemental Resolution or a Project the construction or acquisition
of which occurred or began earlier than March 7, 1985. In addition, if any proceeds of the 2021A Loan is
to be used to reimburse the City for 2021 Project costs paid prior to the date of adoption of this Supplemental
Resolution, the City shall have complied with Section 1.150-2 of the Regulations in respect of such costs.
(c) Any Debt to be refinanced with proceeds of the 2021A Loan was incurred after March 7,
1985, or with respect to a Project the construction or acquisition of which began after March 7, 1985. No
proceeds of the 2021A Loan shall be used for the purpose of refinancing an obligation the interest on which
is exempt from federal income tax or excludable from gross income for purposes of federal income taxation
unless the DNRC has received an Opinion of Bond Counsel, satisfactory to it, to the effect that such
refinancing will not adversely affect the exclusion of interest on the State Bonds from gross income for
purposes of federal income taxation.
Section 3.2. The 2021 Project. Set forth in Appendix A to this Supplemental Resolution is a
description of the 2021 Project, which describes the property which has been or is to be acquired, installed,
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constructed or improved and the other activities, if any, to be funded from the 2021A Loan (the 2021 Project
may consist of more than one facility or activity), and an estimated budget relating to the 2021 Project. The
2021 Project may be changed and the description thereof in Appendix A may be amended from time to
time by the City but only after delivery to the DNRC of the following:
(a) a certificate of the City setting forth the amendment to Appendix A and stating the
reason therefor, including statements as to whether the amendment would cause an increase or
decrease in the cost of the 2021 Project or an increase or decrease in the amount of proceeds of the
2021A Loan which will be required to complete the 2021 Project and whether the change will
materially accelerate or delay the construction schedule for the 2021 Project;
(b) a written consent to such change in the 2021 Project by an Authorized DNRC
Officer; and
(c) an Opinion of Bond Counsel stating that the 2021 Project, as constituted after such
amendment, is, and was at the time the State Bonds were issued, eligible for financing under the
State Act and is, and was at the time the Series 2021A Bond were issued, eligible for financing
under the Enabling Act, such amendment will not violate the State Act or the Enabling Act and
such amendment will not adversely affect the exclusion of interest on the State Bonds or the Series
2021A Bond from gross income for purposes of federal income taxation. Such an Opinion of Bond
Counsel shall not be required for amendments which do not affect the type of facility to be
constructed or activity to be financed.
The City acknowledges and agrees that an increase in the principal amount of the 2021A Loan may
be made only upon an application to the DEQ, the DNRC and the Trustee, in such form as the DEQ shall
specify, which is approved by the DEQ and the DNRC, in their sole and absolute discretion, and adoption
by the governing body of the City of a supplemental resolution authorizing the additional loan and delivery
of written certifications by officers of the City to the DEQ, the DNRC and the Trustee to the effect that all
representations and covenants contained in this Supplemental Resolution as it may be so amended or
supplemented are true as of the date of closing of the additional loan and compliance with applicable tests
for the incurrence of such debt. No assurance can be given that any additional loan funds will be available
under the Program at the time of any such application. The City acknowledges and agrees that neither the
DEQ, the DNRC, the Trustee nor any of their agents, employees or representatives shall have any liability
to the City and have made no representations to the City as to the sufficiency of the 2021A Loan to pay
costs of the 2021 Project or as to the availability of additional funds under the Program to increase the
principal amount of the 2021A Loan.
Section 3.3. 2021 Project Representations and Covenants. The City hereby represents to and
covenants with the DNRC that:
(a) all construction of the 2021 Project has complied and will comply with all federal
and state standards, including, without limitation, EPA regulations;
(b) all future construction of the 2021 Project, if any, will be done only pursuant to
fixed price construction contracts. The City shall obtain a performance and payment bond from
the contractor for each construction contract in the amount of 100% of the construction price and
ensure that such bond is maintained until construction is completed to the City's, the DNRC's and
the DEQ's satisfaction;
(c) all future construction of the 2021 Project will be done in accordance with plans
and specifications on file with the DNRC and the DEQ, provided that changes may be made in such
plans and specifications with the written consent of an Authorized DNRC Officer and the DEQ;
(d) all laborers and mechanics employed by contractors and subcontractors on the
2021 Project have been and will be paid wages at rates not less than those prevailing on projects of
a character similar in the locality as determined by the United States Secretary of Labor in
accordance with subchapter IV of chapter 31 of title 40, United States Code;
(e) the iron and steel products used in the 2021 Project comply with the "American
Iron and Steel" requirements of Section 436 of the Consolidated Appropriations Act of 2016 (P.L.
113-76), as those requirements are further interpreted by applicable EPA guidance;
(f) to the City's knowledge, the 2021 Project is a project of the type permitted to be
financed under the State Act, the Enabling Act and the Program and Title IV of the Clean Water
Act; and
(g) the City has commenced the 2021 Project and will cause the 2021 Project to be
completed as promptly as practicable with all reasonable dispatch, except only as completion may
be delayed by a cause or event not reasonably within the control of the City; it is estimated by the
City that the 2021 Project will be substantially completed by October 31, 2021.
Section 3.4. Completion or Cancellation or Reduction of Costs of the 2021 Project.
(a) Upon completion of the 2021 Project, the City shall deliver to the DNRC a certificate
stating that the 2021 Project is complete and stating the amount, if any, of the Undisbursed Committed
Amount. If Appendix A describes two or more separate projects as making up the 2021 Project, a separate
completion certificate shall be delivered for each.
(b) If all or any portion of the 2021 Project is cancelled or cut back or its costs are reduced or
for any other reason the City will not require the full 2021A Committed Amount, the City shall promptly
notify the DNRC in writing of such fact and the amount of the Undisbursed Committed Amount.
Section 3.5. Reduction in Reserve Account Allocable to Outstanding Bonds and the Optional
Prepayment of Certain Outstanding Bonds.
(a) Section 9.2 of Resolution No. 5879 adopted by the City Council on July 2, 2018 authorized
the reduction in the Reserve Requirement for the Series 2004 Bond, the Series 2007 Bond and the Series
2013 Bond such that the Reserve Requirement for each such parity Outstanding Bond was reduced from
the highest amount of principal and interest payable in each year to an amount that in equal to one-half of
the highest amount of the principal and interest payable on all outstanding Bonds. The DNRC, as
bondholder, agreed to such change in the Reserve Requirement for the Series 2004 Bond, the Series 2007
Bond and the Series 2013 Bond.
(b) Therefore the City is allowed to reduce the amount currently on hand in the Reserve to the
amount authorized under Resolution No. 5879. The City Manager and the City Finance Director are hereby
authorized to work with DNRC to apply the amount in the Reserve above the Reserve Requirement for the
Series 2004 Bond, the Series 2007 Bond, and the Series 2013 Bond to the partial redemption of any or all
of the Series 2004 Bond, the Series or the Series 2013 Bond. Such reduction and prepayment shall occur
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on the July 1, 2021 payment date and the City will work with the DNRC on new amortization schedules
for such Outstanding Bonds.
ARTICLE IV
THE 2021A LOAN
Section 4.1. The 2021A Loan, Disbursement of 2021A Loan.
(a) The DNRC has agreed to lend to the City, from time to time as the requirements of this
Section 4.1 are met, an amount up to $2,460,000 (the "2021A Committed Amount") for the purposes of
financing, refinancing or reimbursing the City for costs of the 2021 Project, funding a deposit to the Reserve
in the amount of the Reserve Requirement, and paying costs of issuance of the Series 2021A Bond; provided
the DNRC shall not be required to disburse any proceeds of the 2021A Loan after December 31, 2022. The
2021A Committed Amount may be reduced as provided in Sections 3.2 and 3.4 hereof.
(b) The DNRC intends to disburse the 2021A Loan through the Trustee. In consideration of
the issuance of the Series 2021A Bond by the City, the DNRC shall make, or cause the Trustee to make, a
disbursement of all or a portion of the 2021A Loan upon receipt of the following documents:
(i) an Opinion of Bond Counsel as to the validity and enforceability of the Series
2021A Bond and the security therefor and stating in effect that interest on the Series 202IA Bond
is not includable in gross income of the owner thereof for purposes of federal income taxation, in
form and substance satisfactory to the DNRC;
(ii) the Series 2021A Bond, fully executed and authenticated;
(iii) a certified copy of the Original Ordinance and this Supplemental Resolution;
(iv) any other security instruments or documents required by the DNRC or DEQ as a
condition to their approval of the 2021A Loan;
(v) if all or part of a 2021 Loan is being made to refinance a Project or reimburse the
City for costs of a Project paid prior to the Closing, evidence, satisfactory to the DNRC and the
Bond Counsel referred to in subparagraph (1) above, (A) that the acquisition or construction of the
Project was begun no earlier than March 7, 1985 or the debt was incurred no earlier than March 7,
1985, (B) of the City's title to the Project, (C) of costs of such Project and that such costs have been
paid by the City, and (D) if such costs were paid before adoption of this Supplemental Resolution
that the City has complied with Section 1.150-2 of the Regulations;
(vi) the items required by the Indenture for the portion of the 2021A Loan to be
disbursed at Closing; and
(vii) such other certificates, documents and other information as the DNRC, the DEQ
or the Opinion of Bond Counsel referred to in subparagraph (1) may require (including any
necessary arbitrage rebate instructions).
(c) In order to obtain a disbursement of a portion of the 2021A Loan to pay costs of the 2021
Project, the City shall submit to the DNRC and the Trustee a signed request for disbursement on the form
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prescribed by the DNRC, with all attachments required by such form. The City may obtain disbursements
only for costs which have been legally incurred and are due and payable. All 2021 Loan disbursements
will be made to the City only upon proof that cost was incurred.
(d) Provided that the EPA Capitalization Grant is available to the Program, from and after the
2021A First Advance, the 2021A Loan shall be disbursed, subject to the other terms and conditions of this
Supplemental Resolution.
(e) The City shall not be entitled to, and the DNRC shall have no obligation to make, the
2021A First Advance or any subsequent advance of any amounts under the 2021A Loan until such time as
the City shall have funded the Reserve in an amount then required to satisfy the Reserve Requirement for
the applicable issue.
(f) The City shall submit the request for the 2021A First Advance in the form required by the
DNRC so that it is received in sufficient time for the DNRC to process the information by the date desired
by the City for the making of the 2021A First Advance.
(g) For refinancings, a disbursement schedule complying with the requirements of the Clean
Water Act shall be established by the DNRC and the City at Closing.
(h) If all or a portion of the 2021A Loan is made to reimburse a City for 2021 Project costs
paid by it prior to Closing, the City shall present at Closing the items required by Section 4.1(b) relating to
such costs. The Trustee shall disburse such amounts to the City pursuant to a disbursement schedule
complying with the requirements of the Clean Water Act established by the DNRC and the City at the
Closing.
(i) Notwithstanding anything herein to the contrary, the Trustee shall not be obligated to
disburse the 2021A Loan any faster or to any greater extent than it has available EPA Capitalization Grants,
Bond proceeds and other amounts available therefor in the Revolving Fund. The DNRC shall not be
required to do "overmatching" pursuant to Section 5.04(b) of the Indenture, but may do so in its discretion.
The City acknowledges that if 2021 Project costs are incurred faster than the City projected at Closing,
there may be delays in making 2021 Loan disbursements for such costs because of the schedule under which
EPA makes EPA Capitalization Grant money available to the DNRC. The DNRC will use its reasonable
best efforts to obtain an acceleration of such schedule if necessary.
0) Upon making each 2021A Loan disbursement, the Trustee shall note such disbursement on
Schedule A to the Series 2021A Bond. At Closing, Schedule A to the Series 2021A Bond shall note the
2021A First Advance is made.
(k) The City agrees that it will deposit in the Reserve upon receipt thereof, on the date of the
2021A First Advance and any subsequent disbursement dates, any proceeds of the 2021A Loan borrowed
for the purpose of increasing the balance in the Reserve to equal the Reserve Requirement. The City further
acknowledges and agrees that any portion of the 2021A Loan representing capitalized interest shall be
advanced only on Payment Dates and shall be transferred by the Trustee on the Payment Date directly to
the Revenue Bond Account. The amount of any such transfer shall be a credit against the interest payments
due on the Series 2021A Bond and interest thereon shall accrue only from the date of transfer.
(1) Compliance by the City with its representations, covenants and agreements contained in
this Supplemental Resolution and the Collateral Documents shall be a further condition precedent to the
disbursement of the 2021A Loan in whole or in part. The DNRC and the Trustee, in their sole and absolute
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discretion, may make one or more disbursements, in whole or in part, notwithstanding such noncompliance,
and without liability to make any subsequent disbursement of the 2021A Loan.
Section 4.2. Commencement of Loan Term. The City's obligations under this Supplemental
Resolution and the Collateral Documents shall commence on the date hereof unless otherwise provided in
this Supplemental Resolution. However, the obligation to make payments under Article V hereof shall
commence only upon the first disbursement by the Trustee of the 2021A First Advance.
Section 4.3. Termination of Loan Term. The City's obligations under this Supplemental
Resolution and the Collateral Documents in respect of the Series 2021A Bond shall terminate upon payment
in full of all amounts due under the Series 2021A Bond and this Supplemental Resolution; provided,
however, that the covenants and obligations provided in Article VI of this Supplemental Resolution shall
survive the termination of this Supplemental Resolution.
Section 4.4. 2021 Loan Closing Submissions. On or prior to the Closing, the City will have
delivered to the DNRC and the Trustee the closing submissions required by Section 7.05 of the Indenture.
ARTICLE V
REPAYMENT OF 2021A LOAN
Section 5.1. Repayment of 2021A Loan. The City shall repay the amounts borrowed by it
pursuant to Section 4.1 hereof in accordance with this Section 5.1.
5.1.1. Interest and Surcharges. The 2021A Loan shall each bear interest at the rate of two percent
(2.00%) per annum and the City shall pay the Administrative Expense Surcharge and Loan Loss Reserve
Surcharge on the outstanding principal amounts of the 2021 A Loan at the rate of twenty-five hundredths of
one percent (0.25%) per annum. For purposes of this Supplemental Resolution and the Program, with
respect to the 2021A Loan, the term "interest on the 2021A Loan", when not used in conjunction with a
reference to any surcharges, shall include the Administrative Expense Surcharge and the Loan Loss Reserve
Surcharge, if applicable. The City shall pay all Loan Repayments and surcharges in lawful money of the
United States of America to the DNRC. Interest, Administrative Expense Surcharge, and Loan Loss
Reserve Surcharge shall be calculated on the basis of a year of 360 days comprising 12 months of 30 days
each.
5.1.2. [Reserved].
5.1.3. Repayment of 2021A Loan. The Loan Repayments and surcharges on the 2021A 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 2021A Loan shall be payable on each January 1 and
July 1, beginning on January 1, 2022, and concluding on July 1, 2041; and
(ii) the principal of the 2021A Loan shall be repayable on each Payment Date,
beginning on January 1, 2022 and concluding July 1, 2041, 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 2021A Loan is payable only in amounts that are multiples of
$1,000.
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5.1.4. Details Regarding 2021A Loan Repayments. Upon each disbursement of the 2021A Loan
to the City pursuant to Section 4.1 hereof, the Trustee shall enter or cause to be entered the amount advanced
on Schedule A to the Series 2021A Bond under "Advances" and the total amount advanced under Section
4.1, including such disbursement, under "Total Amount Advanced." Loan Repayments and the
Administrative Expense Surcharge and the Loan Loss Reserve Surcharge on the 2021A Loan accrue on
each such advance from the date of disbursement and shall be due and payable on the dates and in the
amounts shown in Schedule B to the Series 2021A Bond, as such Schedule B shall be modified from time
to time as provided in Sections 5.1.3 and 5.1.4 hereof and below. The portion of each such Loan Repayment
consisting of principal, of interest, of Administrative Expense Surcharge and of Loan Loss Reserve
Surcharge shall be set forth in Schedule B to the Series 2021A Bond.
Past -due Loan Repayments and the Administrative Expense Surcharge and the Loan Loss Reserve
Surcharge shall bear interest at the rate of ten percent (10.00%) per annum, until paid.
Any payment of principal and interest as to the Series 2021A Bond, and the Administrative Expense
Surcharge and the Loan Loss Reserve Surcharge as to the Series 2021A Bond under this Section 5.1 shall
be credited against the same payment obligation under the Series 2021A Bond.
Section 5.2. Additional Payments. The City shall also pay, within 30 days after receipt of a bill
therefor, from any legally available funds therefor, including proceeds of the 2021A Loan, all reasonable
expenses of the DNRC and the Trustee in connection with the 2021A Loan, the Collateral Documents and
the Series 2021A Bond, including, but not limited to:
(a) the cost of reproducing this Supplemental Resolution, the Collateral Documents
and the Series 2021A Bond;
(b) the fees and disbursements of Bond Counsel and other Counsel utilized by the
DNRC and the Trustee in connection with the 2021A Loan, the Ordinance, the Collateral
Documents and the Series 2021A Bond and the enforcement thereof, and
(c) all taxes and other governmental charges in connection with the execution and
delivery of the Collateral Documents or the Series 2021A Bond, whether or not the Series 2021A
Bond is then outstanding, including all recording and filing fees relating to the Collateral
Documents and the pledge of the State's right, title and interest in and to the Series 2021A Bond,
the Collateral Documents and the Ordinance (and with the exceptions noted therein) and all
expenses, including attorneys' fees, relating to any amendments, waivers, consents or collection or
enforcement proceedings pursuant to the provisions hereof or thereof.
Section 5.3. Prepayments. The City may not prepay all or any part of the outstanding principal
amount of the Series 2021A Bond, unless (i) it obtains the prior written consent of the DNRC thereto, and
(ii) 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,
Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the
amount of principal prepaid. If the Series 2021A Bond is prepaid in part pursuant to this Section 5.3, such
prepayments shall be applied to principal payments in inverse order of maturity.
Section 5.4. Obligations of City Unconditional. The obligations of the City to make the
payments required by the Ordinance and the Series 2021A Bond and to perform its other agreements
contained in the Ordinance, the Series 2021A Bond and Collateral Documents shall be absolute and
unconditional, except as otherwise provided herein or in such documents. The City (a) shall not suspend
or discontinue any payments provided for in the Ordinance and the Series 2021A Bond, (b) shall perform
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all its other agreements in the Ordinance, the Series 2021A Bond, and the Collateral Documents and
(c) shall not terminate the Ordinance, the Series 2021A Bond or the Collateral Documents for any cause,
including any acts or circumstances that may constitute failure of consideration, destruction of or damage
to the 2021 Project or the System, commercial frustration of purpose, any dispute with the DNRC or the
EPA, any change in the laws of the United States or of the State or any political subdivision thereof or any
failure of the DNRC to perform any of its agreements, whether express or implied, or any duty, liability or
obligation arising from or connected with the Ordinance.
Section 5.5. Limited Liability. All payments of principal of and interest on the 2021A Loan
and other payment obligations of the City hereunder and under the Series 2021A Bond shall be special,
limited obligations of the City payable with respect to the Series 2021A Bond solely out of the Net Revenues
and shall not, except at the option of the City and as permitted by law, be payable out of any other revenues
of the City. The obligations of the City under the Ordinance and the Series 2021A Bond shall never
constitute an indebtedness of the City within the meaning of any State constitutional provision or statutory
or charter limitation and shall never constitute or give rise to a pecuniary liability of the City or a charge
against its general credit or taxing power. The taxing powers of the City may not be used to pay principal
of or interest on the Series 2021A Bond, no funds or property of the City other than the Net Revenues may
be required to be used to pay principal of or interest on the Series 2021A Bond, and no funds or property
of the City other than the Surplus Net Revenues may be required to be used to pay principal of or interest,
if any, on the Series 2021A Bond.
Section 5.6. Amendment to Section 3.05 of the Original Ordinance Relating to the Replacement
and Depreciation Account. The City acknowledges that the Original Ordinance, in Section 3.05 created a
Replacement and Depreciation Account within the Fund and that the Ordinance requires the City to make
regular monthly deposits into the Replacement and Depreciation Account from the Net Revenues of the
System. The City hereby irrevocably promises to increase the monthly deposit to the Replacement and
Depreciation Account by an amount agreed to by the City and DNRC upon issuance of the Series 2021A
Bond. The City shall periodically review (at least every 3 years) the amount that it is depositing in the
Replacement and Depreciation Account and adjust the amount necessary to be deposited monthly into the
Replacement and Depreciation Account if the City determines that such increased amount is prudent based
upon the City's review.
ARTICLE VI
INDEMNIFICATION OF DNRC AND DEQ
The City shall, to the extent permitted by law, indemnify and save harmless the DNRC and the
DEQ and their officers, employees and agents (each an "Indemnified Party" or, collectively, the
"Indemnified Parties") against and from any and all claims, damages, demands, expenses, liabilities and
losses of every kind asserted by or on behalf of any Person arising out of the acts or omissions of the City
or its employees, officers, agents, contractors, subcontractors, or consultants in connection with or with
regard or in any way relating to the condition, use, possession, conduct, management, planning, design,
acquisition, construction, installation or financing of the 2021 Project. The City shall, to the extent
permitted by law, also indemnify and save harmless the Indemnified Parties against and from all costs,
reasonable attorneys' fees, expenses and liabilities incurred in any action or proceeding brought by reason
of any such claim or demand. If any proceeding is brought against an Indemnified Party by reason of such
claim or demand, the City shall, upon notice from an Indemnified Party, defend such proceeding on behalf
of the Indemnified Party.
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ARTICLE VII
ASSIGNMENT
Section 7.1. Assignment b. The City may not assign its rights and obligations under the
Ordinance or the Series 2021A Bond, except as provided in Section 2.6 hereof
Section 7.2. Assignment by DNRC. The DNRC will pledge its rights under and interest in the
Ordinance, the Series 2021A Bond and the Collateral Documents (except to the extent otherwise provided
in the Indenture) as security for the payment of the State Bonds and may further assign such interests to the
extent permitted by the Indenture, without the consent of the City.
Section 7.3. State RefundingBonds. onds. In the event the State Bonds are refunded by bonds which
are not State Bonds, all references in the Ordinance to State Bonds shall be deemed to refer to such
refunding bonds (together, the "Refunding Bonds") or, in the case of a crossover refunding, to the State
Bonds and the Refunding Bonds. In the event the State Bonds are refunded by an issue of Additional State
Bonds, all references in the Ordinance to the State Bonds shall be deemed to refer to such Additional State
Bonds or, in the case of a crossover refunding, both the State Bonds and such Additional State Bonds.
ARTICLE VIII
THE SERIES 2021A BOND
Section 8.1. Net Revenues 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 Series 2021A Bond 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 2021A Bond are
expected to be more than sufficient to pay the principal and interest when due on the Series 2021A Bond,
and to create and maintain reasonable reserves therefor and to provide an adequate allowance for
replacement and depreciation, as prescribed herein.
Section 8.2. Issuance and Sale of the Series 2021A Bond. The City Council has investigated
the facts necessary and hereby finds, determines and declares it to be necessary and desirable for the City
to issue the Series 2021A Bond to evidence the 2021A Loan. The Series 2021A Bond is issued to the DNRC
without public sale pursuant to Montana Code Annotated, Section 7-7-4433.
Section 8.3. Terms. The Series 2021A Bond shall be in the maximum principal amount equal
to the original 2021A Committed Amount, shall each be issued as a single, fully registered bond numbered
R-1, shall be dated as of the date of delivery to the DNRC, and shall bear interest at the rate charged by the
DNRC on the 2021A Loan. The principal of and interest on the Series 2021A Bond and any Administrative
Expense Surcharge and Loan Loss Reserve Surcharge shall be payable on the same dates and in the same
amounts as Loan Repayments are payable. Advances of principal of the Series 2021A Bond shall be
deemed made when advances of the 2021A Loan, are made under Section 4.1 hereof, and such advances
shall be payable in accordance with Schedule B to the Series 2021A Bond, as it may be revised by the
DNRC from time to time in accordance with Section 5.1 hereof. The City may prepay the Series 2021A
Bond, in whole or in part, only upon the terms and conditions under which it can prepay the 2021A Loan
under Section 5.3 hereof.
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Section 8.4. Negotiability. Transfer and Registration. The Series 2021A Bond shall be fully
registered as to both principal and interest, and shall be initially registered in the name of and payable to
the DNRC, shall be dated the date of delivery. While so registered, principal of and interest on the Series
2021A Bond shall be payable to the DNRC at the Office of the Department of Natural Resources and
Conservation, 1625 Eleventh Avenue, Helena, Montana 59620 or such other place as may be designated
by the DNRC in writing and delivered to the City. The Series 2021A Bond shall be negotiable, subject to
the provisions for registration and transfer contained in this Section 8.4. No transfer of the Series 2021A
Bond shall be valid unless and until (1) the holder, or his duly authorized attorney or legal representative,
has executed the form of assignment appearing on the Series 2021A Bond, and (2) the Finance Director of
the City (or successors), as bond registrar (the "Registrar"), has duly noted the transfer on the Series 2021A
Bond and recorded the transfer on the registration books of the Registrar. The Registrar may, prior to noting
and recording the transfer, require appropriate proof of the transferor's authority and the genuineness of the
transferor's signature. The City shall be entitled to deem and treat the Person in whose name the Series
2021A Bond is registered as the absolute owner of the Series 2021A Bond for all purposes, notwithstanding
any notice to the contrary, and all payments to the registered holder shall be valid and effectual to satisfy
and discharge the City's liability upon such Series 2021A Bond to the extent of the sum or sums so paid.
Section 8.5. Execution and Delivery. The Series 2021A Bond shall be executed on behalf of
the City by the manual signatures of the Mayor, City Manager and Finance Director. Any or all of such
signatures may be affixed at or prior to the date of delivery of the Series 2021A Bond. In the event that any
of the officers who shall have signed the Series 2021A Bond shall cease to be officers of the City before
the Series 2021A Bond is issued or delivered, their signatures shall remain binding upon the City.
Conversely, the Series 2021A Bond may be signed by an authorized official who did not hold such office
on the date of adoption of this Supplemental Resolution. The Series 2021A Bond shall be delivered to the
DNRC, or its attorney or legal representative.
Section 8.6. Form. The Series 2021A Bond shall be prepared in substantially the form attached
as Appendix B.
ARTICLE IX
SECURITY FOR THE SERIES 2021A BOND, DECREASE IN AMOUNTS IN THE RESERVE
ALLOCABLE TO THE OUTSTANDING BONDS, AND AMENDMENT TO THE RATE
COVENANT
Section 9.1. Security for the Series 2021A Bond. The Series 2021A Bond is issued as
Additional Bonds under the Section 4.03 of the Ordinance and shall, with 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 under the provisions of Sections 4.01 and 4.03 of the Original Ordinance, be equally and
ratably secured by the provisions of the Ordinance and payable out of the Net Revenues appropriated to the
Revenue Bond Account of the Fund, without preference or priority, all as provided in the Ordinance, and
secured by the Reserve, as further provided in Section 4.03 of the Ordinance and in the following sentence.
On the date of Closing, the City shall deposit in the Reserve, an amount equal to the initial Reserve
Requirement assuming the entire 2021A Committed Amount is advanced on the date of Closing. If less
than the entire 2021A Committed Amount is advanced, then on the date of the final disbursement of
proceeds of the Series 2021A Bond, the City shall be entitled, in its discretion, to transfer any amount in
excess of the Reserve Requirement to the Revenue Bond Account or the Replacement and Depreciation
Account, so long as the amount remaining in the Reserve equals the Reserve Requirement. No payment of
principal or interest shall be made on any Subordinate Obligation if the City is then in default in the payment
of principal of or interest on any Bond or if there is a deficiency in the Operating Account or the Revenue
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Bond Account or the balance in the Reserve is less than the Reserve Requirement. The City shall keep,
perform and observe each and every one of its covenants and undertakings set forth in the Original
Ordinance for the benefit of the registered holders from time to time of the Series 2021A Bond.
ARTICLE X
TAX MATTERS
Section 10.1. Use of 2021 Project and System. The 2021 Project and the System will be owned
and operated by the Borrower and available for use by members of the general public on a substantially
equal basis. The Borrower shall not enter into any lease, use or other agreement with any non -governmental
person relating to the use of the 2021 Project or the System or security for the payment of the Series 2021A
Bond which might cause the Series 2021A Bond to be considered a "private activity bond" or "private loan
bond" within the meaning of Section 141 of the Code.
Section 10.2. General Covenant. The Borrower covenants and agrees with the owners from time
to time of the Series 2021A Bond that it will not take or permit to be taken by any of its officers, employees
or agents any action which would cause the interest on the Series 2021A Bond to become includable in
gross income for federal income tax purposes under the Code and the Regulations, and covenants to take
any and all actions within its powers to ensure that the interest on the Series 2021A Bond will not become
includable in gross income for federal income tax purposes under the Code and the Regulations.
Section 10.3. Arbitrage Certification. The Mayor, City Manager, and the City Clerk, being the
officers of the Borrower charged with the responsibility for issuing the Series 2021A Bond pursuant to this
Supplemental Resolution, are authorized and directed to execute and deliver to the DNRC a certificate in
accordance with the provisions of Section 148 of the Code, and Section 1.148-2(b) 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 2021A Bond, it is reasonably expected that the proceeds of the Series 2021A Bond will be
used in a manner that would not cause the Series 2021A Bond to be an "arbitrage bond" within the meaning
of Section 148 of the Code and the Regulations.
Section 10.4. Arbitrage Rebate. The Borrower acknowledges that the Series 2021A Bond is
subject to the rebate requirements of Section 148(f) of the Code. The Borrower covenants and agrees to
retain such records, make such determinations, file such reports and documents and pay such amounts at
such times as are required under said Section 148(f) and applicable Treasury Regulations to preserve the
exclusion of interest on the Series 2021A Bond from gross income for federal income tax purposes, unless
the Series 2021A Bond qualifies for the exception from the rebate requirement under Section 148(f)(4)(B)
of the Code and no "gross proceeds" of the Series 2021A Bond (other than amounts constituting a "bona
fide debt service fund") arise during or after the expenditure of the original proceeds thereof. In furtherance
of the foregoing, the City Clerk is hereby authorized and directed to execute a rebate or tax certificate with
respect to the Series 2021A Bond, substantially in the form to be prepared by Bond Counsel, and the
Borrower hereby covenants and agrees to observe and perform the covenants and agreements contained
therein, unless amended or terminated in accordance with the provisions thereof.
Section 10.5 Information Reporting. The Borrower shall file with the Secretary of the Treasury,
not later than August 15, 2021, a statement concerning the Series 2021A Bond containing the information
required by Section 149(e) of the Code.
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ARTICLE XI
CONTINUING DISCLOSURE
The City understands and acknowledges that the DNRC is acquiring the Series 2021A Bond under
the Program pursuant to which the State issues from time to time State Bonds to provide funds therefor.
The City covenants and agrees that, upon written request of the DNRC from time to time, the City will
promptly provide to the DNRC all information that the DNRC reasonably determines to be necessary or
appropriate to offer and sell State Bonds or to provide continuing disclosure in respect of State Bonds,
whether under Rule 15c2-12 (17 C.F.R. § 240.15c2-12) promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, or otherwise. Such information shall
include, among other things and if so requested, financial statements of the City prepared in accordance
with governmental accounting standards promulgated by the Governmental Accounting Standards Board
or as otherwise provided under Montana law, as in effect from time to time (such financial statements to
relate to a fiscal year or any period therein for which they are customarily prepared by the City, and, if for
a fiscal year and so requested by the DNRC, subject to an audit report and opinion of an accountant or
government auditor, as permitted or required by the laws of the State). The City will also provide, with any
information so furnished to the DNRC, a certificate of the Mayor, City Manager and Finance Director of
the City to the effect that, to the best of their knowledge, such information does not include any untrue
statement of a material fact or omit to state any material fact required to be stated therein to make the
statements made, in light of the circumstances under which they are made, not misleading.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Notices. All notices or other communications hereunder shall be sufficiently sent
or given and shall be deemed sent or given when delivered or mailed by certified mail, postage prepaid, to
the parties at the following addresses:
DNRC: Department of Natural Resources and Conservation
1539 Eleventh Avenue
P. O. Box 201601
Helena, Montana 59620-1601
Attn: Conservation and Resource Development Division
Trustee: U.S. Bank National Association
c/o Corporate Trust Services
1420 Fifth Avenue, 7th Floor
Seattle, Washington 98101
City: City of Kalispell
201 lst Avenue East
P.O. Box 1997
Kalispell, Montana 59901
Attn: City Finance Director
Any of the above parties may, by notice in writing given to the others, designate any further or different
addresses to which subsequent notices or other communications shall be sent.
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Section 12.2. Binding Effect. This Supplemental Resolution shall inure to the benefit of and
shall be binding upon the DNRC, the City and their respective permitted successors and assigns.
Section 12.3. Severability. If any provision of this Supplemental Resolution shall be determined
to be unenforceable at any time, it shall not affect any other provision of the Ordinance or the enforceability
of that provision at any other time.
Section 12.4. Amendments. This Supplemental Resolution may not be effectively amended
without the written consent of the DNRC.
Section 12.5. Applicable Law. This Supplemental Resolution shall be governed by and
construed in accordance with the laws of the State.
Section 12.6. Captions; References to Sections. The captions in this Supplemental Resolution
are for convenience only and do not define or limit the scope or intent of any provisions or Sections of this
Supplemental Resolution. References to Articles and Sections are to the Articles and Sections of this
Supplemental Resolution, unless the context otherwise requires.
Section 12.7. No Liability of Individual Officers, Directors. Trustees or City Council Members.
No recourse under or upon any obligation, covenant or agreement contained in this Supplemental
Resolution shall be had against any director, officer or employee, as such, past, present or future, of the
DNRC, the DEQ or the Trustee, either directly or through the DNRC, the DEQ or the Trustee, or against
any officer, or member of the governing body or employee of the City, past, present or future, as an
individual so long as such individual was acting in good faith. Any and all personal liability of every nature,
whether at common law or in equity, or by statute or by constitution or otherwise, of any such officer or
member of the governing body or employee of the DNRC, the Trustee or the City is hereby expressly
waived and released by the City and by the DNRC as a condition of and in consideration for the adoption
of this Supplemental Resolution and the making of the 2021A Loan.
Section 12.8. Payments Due on Holidays. If the date for making any payment or the last date
for performance of any act or the exercise of any right, as provided in this Supplemental Resolution or the
Series 2021A Bond, shall not be a Business Day, such payments may be made or act performed or right
exercised on the next succeeding Business Day with the same force and effect as if done on the nominal
date provided in this Supplemental Resolution or the Series 2021A Bond.
Section 12.9. Right of Others to Perform City's Covenants. In the event the City shall fail to
make any payment or perform any act required to be performed hereunder, then and in each such case the
DNRC or the provider of any Collateral Document may (but shall not be obligated to) remedy such default
for the account of the City and make advances for that purpose. No such performance or advance shall
operate to release the City from any such default and any sums so advanced by the DNRC or the provider
of any Collateral Document shall be paid immediately to the party making such advance and shall bear
interest at the rate of ten percent (10%) per annum from the date of the advance until repaid. The DNRC
and the provider of any Collateral Document shall have the right to enter the 2021 Project or the facility or
facilities of which the 2021 Project is a part or any other facility which is a part of the System in order to
effectuate the purposes of this Section.
Section 12.10. Authentication of Transcript. The officers of the City are hereby authorized and
directed to furnish to the DNRC and to Bond Counsel certified copies of all proceedings relating to the
issuance of the Series 2021A Bond and such other certificates and affidavits as may be required to show
the right, power and authority of the City to issue the Series 2021A Bond, and all statements contained in
27
and shown by such instruments, including any heretofore furnished, shall constitute representations of the
City as to the truth of the statements of fact purported to be shown thereby.
Section 12.11. Repeals and Effective Date.
(a) Repeal. All provisions of other resolutions and other actions and proceedings of the City
and this City Council that are in any way inconsistent with the terms and provisions of this Supplemental
Resolution are repealed, amended and rescinded to the full extent necessary to give full force and effect to
the provisions of this Supplemental Resolution.
(b) Effective Date. This Supplemental Resolution shall take effect immediately.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE
CITY OF KALISPELL, THIS 3RD DAY OF MAY, 2021.
ATTEST:
Aimee Brunckhorst, CMC
City Clerk
Mark Johnson
Mayor
28
APPENDIX A
DESCRIPTION OF AND ESTIMATED BUDGET FOR THE 2021 PROJECT
The acquisition, construction, and equipping of stormwater infrastructure in the area north of
Quarter Horse Estates, south of Reserve Drive, and bounded by West Spring Creek Road and Stillwater
Road to the west and east in the City of Kalispell, Montana.
The estimated budget for the 2021 Project is as follows:
Updated: Anna Miller Kalispell Storm Sewer WW Project April 26, 2021
Administrative/Finance Costs
Source:
SRF-21607
Loan
$2,460,000
20YR@2.5%
Source:
City Funds
Total
Personnel Costs
-
-
-
Office Costs
-
-
-
Professional Services
-
Legal Costs
-
-
-
Audit Fees
-
-
-
Travel & Training
-
-
-
Debt Service Reserve
78,625
-
78,625
Interim Interest
-
I -
-
Bond Counsel & Related costs
15,000
-
15,000
ADMIN/FINANCE COSTS:
93,625
-
93,625
Land Acquisition
-
115,000
115,000
Preliminary Engineering
-
201,374
201,374
Engineering/Arch. Design
-
424,750
424,750
Construction En r. Services
-
101,200
101,200
Construction
2,056,668
550,000
2,606,668
Contingency
309,707
82,500
392,207
ACTIVITY COSTS
2,366,375
1,474,824
3,841,199
TOTAL PROJECT COSTS
2,460,000
1,474,824
3.934.824
** Debt Service Reserve 1/2 Year
FEW
APPENDIX B
[Form of the Series 2021A 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),
SERIES 2021A
No. R-1 $2,460,000
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 2021A 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, 2022 and concluding on July 1, 2041.
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 2021A Bond shall be made to the registered holder of this Series 2021A Bond, at its
address as it appears on the Bond register, in lawful money of the United States of America.
This Series 2021A 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 $2,460,000 (the "Series 2021A Bond"). The Series 2021A Bond is issued to finance a portion of costs of the
construction of certain stormwater improvements to the Sewerage System of the City (the "System") and to pay costs
of issuance of the Series 2021A Bond (as defined herein). The Series 2021A 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
B-1-1
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), 5617 (May 6, 2013),
5865 (April 16, 2018), 5879 (July 2, 2018), and 5883 (August 20, 2018) (collectively, the "Original Ordinance"), and
Resolution No. 6023, adopted by the City Council of the City on May 3, 2021 (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 2021A Bond is issuable only as a single, fully
registered bond. The Series 2021A Bond is issued on a parity with the City's outstanding Series 2004 Bond, the
Series 2007 Bond, the Series 2013 Bond, the Series 2018B Bond, and the Series 2018C Bond.
Reference is made to the Ordinance for a more complete statement of the terms and conditions upon which
the Series 2021A 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, the Series 2013 Bond,
the Series 2018B Bond, the Series 2018C Bond, this Series 2021A 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 2021A Bond.
The City may prepay the principal of the Series 2021A Bond only if (i) it obtains the prior written consent of
the DNRC thereto, and (ii) 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 2021A Bond is prepaid in part, such prepayments shall be applied to
principal payments in inverse order of maturity.
The Series 2021A 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 2021A Bond is registered as the absolute
owner hereof, whether this Series 2021A 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 2021A 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 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, the Series 2021A
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, the Series
2021A 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, the Series 2021A Bond, and additional Parity Bonds on such Net Revenues; that all
provisions for the security of the holder of this Series 2021A 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 2021A 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 2021A
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 2021A 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 Series 2021A 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 2021A Bond to be dated as of the date set forth below.
Dated: May , 2021
CITY OF KALISPELL, MONTANA
Mayor
City Manager
Finance Director
ATTEST:
City Clerk
REGISTRATION AND TRANSFER
The Series 2021A 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 2021A Bond, or his duly authorized attorney or
legal representative, executes the form of assignment appearing on the Series 2021A 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
2021A Bond is registered as absolute owner thereof for all purposes, notwithstanding any notice to the contrary.
Payments on account of the Series 2021A 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 2021A 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
May _, 2021
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 2021A 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 Regis
FORM OF ASSIGNMENT
For value received, the Series 2021A 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
SRF-21507
SCHEDULE B
PAYMENT SCHEDULE
STATE OF MONTANA
GENERAL OBLIGATION BONDS
WASTEWATER
(REVOLVING FUND PROGRAM)
BORROWER: Kalispell Storm Sewer
PROJECT NAME:
LOAN COMMITMENT: $2,460,000
LOAN AMOUNT: 2,460,000
INTEREST RATE: 2.50%
FINAL LOAN PAYMENT: 7/1/2041
# OF LOAN PAYMENTS: 40
PROJECT NUMBER:
DATE OF FUNDING: 5/26/2021
Preliminary Schedule
PAYMENT
LOAN LOSS
ADM EXPENSE
INTEREST
PRINCIPAL
O/S LOAN
TOTAL AMOUNT
DUE
RESERVE
SURCHARGE
PAYMENT
PAYMENT
BALANCE
OFPAYMENT
1 l/l/2022
3,672.92
3,672.92
29,383.33
48,000.00
2,412,000.00
$84,729.17
$ 84,729.17
2 7/1/2022
3,015.00
3,015.00
24,120.00
48,000.00
2,364,000.00
$78,150.00
3 l/l/2023
2,955.00
2,955.00
23,640.00
49,000.00
2,315,000.00
$78,550.00
$ 156,700.00
4 7/l/2023
2,893.75
2,893.75
23,150.00
50,000.00
2,265,000.00
$78,937.50
5 1/l/2024
2,831.25
2,831.25
22,650.00
50,000.00
2,215,000.00
$78,312.50
$ 157,250.00
6 7/l/2024
2,768.75
2,768.75
22,150.00
51,000.00
2,164,000.00
$78,687.50
7 1/l/2025
2,705.00
2,705.00
21,640.00
51,000.00
2,113,000.00
$78,050.00
$ 156,737.50
8 7/l/2025
2,641.25
2,641.25
21,130.00
52,000.00
2,061,000.00
$78,412.50
9 l/1/2026
2,576.25
2,576.25
20,610.00
53,000.00
2,008,000.00
$78,762.50
$ 157,175.00
10 7/l/2026
2,510.00
2,510.00
20,080.00
53,000.00
1,955,000.00
$78,100.00
11 1/l/2027
2,443.75
2,443.75
19,550.00
54,000.00
1,901,000.00
$78,437.50
$ 156,537.50
12 7/l/2027
2,376.25
2,376.25
19,010.00
55,000.00
1,846,000.00
$78,762.50
13 l/l/2028
2,307.50
2,307.50
18,460.00
55,000.00
1,791,000.00
$78,075.00
$ 156,837.50
14 7/1/2028
2,238.75
2,238.75
17,910.00
56,000.00
1,735,000.00
$78,387.50
15 l/1/2029
2,168.75
2,168.75
17,350.00
57,000.00
1,678,000.00
$78,687.50
$ 157,075.00
16 7/l/2029
2,097.50
2,097.50
16,780.00
58,000.00
1,620,000.00
$78,975.00
17 l/l/2030
2,025.00
2,025.00
16,200.00
58,000.00
1,562,000.00
$78,250.00
$ 157,225.00
18 7/l/2030
1,952.50
1,952.50
15,620.00
59,000.00
1,503,000.00
$78,525.00
19 l/l/2031
1,878.75
1,878.75
15,030.00
60,000.00
1,443,000.00
$78,787.50
$ 157,312.50
20 7/1/2031
1,803.75
1,803.75
14,430.00
60,000.00
1,383,000.00
$78,037.50
21 1/l/2032
1,728.75
1,728.75
13,830.00
61,000.00
1,322,000.00
$78,287.50
$ 156,325.00
22 7/l/2032
1,652.50
1,652.50
13,220.00
62,000.00
1,260,000.00
$78,525.00
23 l/l/2033
1,575.00
1,575.00
12,600.00
63,000.00
1,197,000.00
$78,750.00
$ 157,275.00
24 7/1/2033
1,496.25
1,496.25
11,970.00
64,000.00
1,133,000.00
$78,962.50
25 l/l/2034
1,416.25
1,416.25
11,330.00
64,000.00
1,069,000.00
$78,162.50
$ 157,125.00
26 7/l/2034
1,336.25
1,336.25
10,690.00
65,000.00
1,004,000.00
$78,362.50
27 l/l/2035
1,255.00
1,255.00
10,040.00
66,000.00
938,000.00
$78,550.00
$ 156,912.50
28 7/l/2035
1,172.50
1,172.50
9,380.00
67,000.00
871,000.00
$78,725.00
29 l/1/2036
1,088.75
1,088.75
8,710.00
68,000.00
803,000.00
$78,887.50
$ 157,612.50
30 7/l/2036
1,003.75
1,003.75
8,030.00
68,000.00
735,000.00
$78,037.50
31 l/1/2037
918.75
918.75
7,350.00
69,000.00
666,000.00
$78,187.50
$ 156,225.00
32 7/l/2037
832.50
832.50
6,660.00
70,000.00
596,000.00
$78,325.00
33 l/l/2038
745.00
745.00
5,960.00
71,000.00
525,000.00
$78,450.00
$ 156,775.00
34 7/l/2038
656.25
656.25
5,250.00
72,000.00
453,000.00
$78,562.50
35 l/l/2039
566.25
566.25
4,530.00
73,000.00
380,000.00
$78,662.50
$ 157,225.00
36 7/l/2039
475.00
475.00
3,800.00
74,000.00
306,000.00
$78,750.00
37 1/l/2040
382.50
382.50
3,060.00
75,000.00
231,000.00
$78,825.00
$ 157,575.00
38 7/l/2040
288.75
288.75
2,310.00
76,000.00
155,000.00
$78,887.50
39 l/l/2041
193.75
193.75
1,550.00
77,000.00
78,000.00
$78,937.50
$ 157,825.00
40 7/1/2041
97.50
97.50
780.00
78,000.00
0.00
$78,975.00
$ 78,975.00
68,742.92 68,742.92 549,943.33 2,460,000.00
3,147,429.17
3,147,429.17
3,147,429.17
i
none
APPENDIX C
ADDITIONAL AGREEMENTS, REPRESENTATIONS AND COVENANTS
C-1
APPENDIX D
City of Kalispell, Montana
Sewerage System Revenue Bonds
(DNRC Water Pollution Control State Revolving Loan Program),
$2,460,000 Series 2021A Bond
COMPLIANCE CERTIFICATE AND REQUEST
We, Mayor, City Manager and Finance Director, hereby certify that we are on the date hereof the
duly qualified and acting Mayor, City Manager and Finance Director, respectively, of the City of Kalispell,
Montana (the "City"), and that:
L Pursuant to Ordinance No. 859 of the City adopted on June 1976 (the "Original
Ordinance"), as amended and supplemented by a Resolution adopted on July 2, 2018 (the Supplemental
Resolution, as so amended and supplemented, the "Ordinance"), the City issued its Sewerage System
Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2021A, dated, as
originally issued, as of May , 2021, in the maximum aggregate principal amount of $2,460,000 (the
"Series 2021A Bond"). The City has reviewed the Supplemental Resolution, including, without limitation,
Articles II and III thereof, and the definitions relating thereto. The City acknowledges and agrees that the
Series 2021A Bond evidences a loan made to the City from the DNRC from funds made available to the
DNRC from the EPA Capitalization Grant, and that this Certificate is being relied upon by the DNRC for
ensuring compliance with requirements applicable to the City, the DNRC, and the 2021 Project (as
hereinafter defined). Capitalized terms used herein without definition shall have the meanings given them
in the Original Ordinance or the Supplemental Resolution.
2. The Series 2021A Bond is issued to finance costs of construction and installation of various
improvements to the System, generally described as the 2021 Project (the "2021 Project") in the
Supplemental Resolution and to pay costs of issuing the Series 2021A Bond. Construction of the 2021
Project has complied with all federal and state standards, including, without limitation, EPA regulations
and standards. The 2021 Project has been completed.
3. Costs of the 2021 Project in the amount of $ have been paid as of the date of
delivery of this Certificate. The City hereby waives its right to any remaining 2021A Committed Amount
not advanced or to be advanced upon delivery hereof.
4. As of the date hereof, the City has spent the following amounts in connection with the 2021
Project and costs related thereto:
Professional Services
Debt Service Reserve $
Bond Counsel & Related costs
Construction Engr. Services
Construction
TOTAL PROJECT COSTS $
Of such amounts, $ were paid from advances of proceeds of the Series 2021A Bond.
5. The Trustee has delivered to the City a copy of Schedule B to be attached to the Series
2021A Bond, which reflects the amortization of all advances made or to be made on the date hereof of
D-1
proceeds of the Series 2021A Bond (i.e., $ ). The City hereby acknowledges and agrees that
Schedule B has been calculated in accordance with the provisions of the Ordinance and the Indenture, and
that the Series 2021A Bond, with said Schedule B attached to each thereto, have been duly issued pursuant
to the Ordinance and are a valid and binding obligation of the City in accordance with its terms and the
terms of the Ordinance.
6. The representations of the City contained in Articles II and III of the Supplemental
Resolution are true and complete as of the date hereof as if made on this date, except to the extent that the
City has specifically advised the DEQ and the DNRC otherwise in writing.
7. No default in any covenant or agreement on the part of the City contained in the Ordinance
has occurred and is continuing.
8. The City is delivering this Certificate to the DNRC, in part, to ensure compliance with EPA
regulations and standards. The City certifies that all laborers and mechanics employed by contractors and
subcontractors on the 2021 Project have been and will be paid wages at rates not less than those prevailing
on projects of a character similar in the locality as determined by the United States Secretary of Labor in
accordance with Subchapter IV of Chapter 31 of Title 40, United States Code, and that the iron and steel
products used in the 2021 Project comply with the "American Iron and Steel' requirements of Section 436
of the Consolidated Appropriations Act of 2016 (P.L. 113-76), as those requirements are further interpreted
by applicable EPA guidance.
WITNESS our hands on behalf of the City as of this day of 120
DMNORTH #7462064 v5/077787.00/00341225
CITY OF KALISPELL, MONTANA
Mayor
City Manager
Finance Director
D-2