I6. Resolution 6267, Reimbursement through Bonds for AWWTP DewateringJOHNNA PREBLE, City Attorney
ANDREW CLEGG, Chief Deputy
TYSON PARMAN, Asst. Attorney
STACY BOMAN, Asst. Attorney
CHRISSY FRERICH, Administrator
JUDI FUNK, Administrator
CITY OF
KALISPELL
201 1 n Avenue East
Kalispell, Montana 59901
Tele: (406) 758-7977 (Civil)
(406) 758-7709 (Criminal)
Fax: (406) 758-7771
TO: Doug Russell, City Manager
FROM: Johnna Preble, City Attorney
Cc Susie Turner, P.E., Public Works Director
SUBJECT: Resolution No. 6267 — A Resolution of Intent to Reimburse Certain
Allowable Expenditures Made by the City on the Biosolids Dewatering
Project from State Revolving Fund Bond Proceeds
MEETING DATE: July 7, 2025
BACKGROUND: As previously discussed with the City Council during budget discussions and
workshops, the city has finished all preliminary designs on the capital improvement Biosolids
Dewatering Project, has pre -procured dewatering equipment, and is advertising for contractor
proposals for construction. The application for financing from the Department of Natural
Resources and Conservation State Revolving Fund is also complete and the final Department of
Environmental Quality review is forthcoming. We anticipate that a resolution approving this
financing will come before the City Council as early as this fall.
The purpose of the resolution before the City Council is to approve the reimbursement of any
allowable preliminary expenditures made by the City on the project to be reimbursed by the tax-
exempt bond when those funds become available. This resolution is necessary to comply with
certain treasury regulations that otherwise permit the reimbursement of capital expenditures and
the costs of issuance of bonds on a capital project.
RECOMMENDATION: It is recommended that Council pass Resolution No. 6267.
ACTION REQUESTED: Motion to approve Resolution No. 6267, a resolution declaring the
official intent of the city to reimburse certain original expenditures related to the equipping of the
Advanced Wastewater Treatment Plant from State Revolving Fund Bond proceeds.
ALTERNATIVES: As suggested by the City Council.
ENCLOSURE: Resolution No. 6267
CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE
I, the undersigned, being the duly qualified and acting City Clerk of the City of Kalispell, Montana
(the "City"), hereby certify that the attached resolution is a true copy of a Resolution entitled:
"RESOLUTION DECLARING THE OFFICIAL INTENT OF THE CITY OF KALISPELL, MONTANA
TO REIMBURSE CERTAIN ORIGINAL EXPENDITURES RELATED TO THE EQUIPPING OF THE
ADVANCED WASTEWATER TREATMENT PLANT FROM THE PROCEEDS OF TAX-EXEMPT
BONDS TO BE ISSUED BY THE CITY AFTER THE PAYMENT OF SUCH ORIGINAL
EXPENDITURES" (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 July 7, 2025 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
members of the City Council voted in favor thereof:
voted against the same:
abstained from voting thereon:
or were absent:
WITNESS my hand officially this day of July, 2025.
City Clerk
RESOLUTION NO.6267
RESOLUTION DECLARING THE OFFICIAL INTENT OF THE CITY OF
KALISPELL, MONTANA TO REIMBURSE CERTAIN ORIGINAL
EXPENDITURES RELATED TO THE EQUIPPING OF THE ADVANCED
WASTEWATER TREATMENT PLANT FROM THE PROCEEDS OF TAX-
EXEMPT BONDS TO BE ISSUED BY THE CITY AFTER THE PAYMENT OF
SUCH ORIGINAL EXPENDITURES
WHEREAS, U.S. Treasury Regulations, Section 1.150-2 (the "Reimbursement Regulations"),
promulgated pursuant to Section 150 of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that the allocation of the proceeds of tax-exempt bonds to expenditures for governmental
purposes originally paid from a source other than such tax-exempt bonds will be treated as expenditures
of such tax-exempt bonds only if certain requirements of the Reimbursement Regulations are satisfied
by the issuer of such tax-exempt bonds; and
WHEREAS, the City of Kalispell, Montana (the "City"), expects to pay certain original
expenditures for the acquisition and equipping of dewatering equipment for the Advanced Wastewater
Treatment Plant in the City (the "Project"), which original expenditures are expected to be financed
temporarily from the City's Sanitary Sewer Fund and which original expenditures are expected to be
reimbursed from the proceeds of one or more series of tax-exempt bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL, MONTANA AS FOLLOWS:
1. The City has a reasonable expectation (within the meaning of U.S. Treasury Regulations,
Section 1.148-1 (b)) that it will make expenditures for the Project in 2025 and 2026 out of the City's
Sanitary Sewer Fund. The City has a reasonable expectation that it will issue one or more series of tax-
exempt bonds (the "Bonds") in the estimated maximum principal amount not to exceed $2,900,000 to
finance the Project and that the City will make reimbursement allocations with respect to such original
expenditures for the Project from the proceeds of such Bonds.
2. This Resolution shall be maintained as part of the books and records of the City at the
main administrative office of the City, and shall be continuously available during normal business hours
of the City on every business day of the period beginning not more than thirty (30) days after adoption
of this Resolution and ending on the last date of issue of any Bonds.
3. This Resolution has been adopted not later than sixty (60) days after payment of any
original expenditure for a Project to be subject to a reimbursement allocation with respect to the proceeds
of the Bonds.
4. All reimbursement allocations with respect to the Bonds will be made not later than
eighteen (18) months after the later of. (1) the date the original expenditure is paid; or (ii) the date the
Project is placed in service or abandoned, but in no event more than three (3) years after the original
expenditure for a specific Project. If the Bonds are eligible for the small issuer exception from arbitrage
rebate, the "18-month" limitation above is extended to "three years" and the "three-year" maximum
reimbursement period is disregarded.
5. All original expenditures to which reimbursement allocations are to be made constitute:
(1) capital expenditures; (ii) costs of issuance of the Bonds; (iii) expenditures for extraordinary,
nonrecurring items that are not customarily payable from current revenues, such as casualty losses or
extraordinary legal judgments in amounts in excess of reasonable insurance coverage, and for which no
reserve is maintained; or (iv) a grant (as defined in U.S. Treasury Regulations, Section 1.148-6(d)(4), as
a transfer for a governmental purpose of money or property to a transferee that is not a related parry to or
an agent of the transferor with respect to which no obligation or condition is imposed to directly or
indirectly repay any amount to the transferor).
6. Limitations set forth in paragraphs 3 and 4 of this resolution do not apply to: (1) the costs
of issuance of the Bonds; (ii) an amount not in excess of the lesser of $100,000 or five percent (5%) of
the proceeds of the Bonds; or (iii) preliminary expenditures up to an amount not in excess of twenty
percent (20%) of the aggregate issue price of the Bonds that finance or are reasonably expected by the
City to finance the Project for which the preliminary expenditures were incurred. The term "preliminary
expenditures" includes architectural, engineering, surveying, soil testing, reimbursement bond issuance,
and similar costs that are incurred prior to commencement of acquisition, construction, or rehabilitation
of a Project, other than land acquisition, site preparation, and similar costs incident to commencement of
construction.
7. This Resolution is an expression of the reasonable expectations of the City based on the
facts and circumstances known to the City as of the date hereof. The anticipated original expenditures
for the Project are consistent with the City's budgetary and financial circumstances. No sources other
than proceeds of Bonds to be issued by the City are, or are reasonably expected to be, reserved, allocated
on a long-term basis, or otherwise set aside pursuant to the City's budget or financial policies to pay such
Project expenditures.
8. This Resolution is intended to constitute a declaration of official intent for purposes of the
Reimbursement Regulations.
9. No reimbursement allocation of the proceeds of the Bonds to Project expenditures will
employ an abusive arbitrage device (within the meaning of Treasury Regulations, Section 1.148-10) to
avoid the arbitrage restrictions or to avoid the restrictions of Sections 141 through 150 of the Code.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY
OF KALISPELL THIS 7TH DAY OF JULY, 2025.
ATTEST:
Aimee Brunckhorst, CMC
City Clerk
Mark Johnson
Mayor