Affidavit of Publication/Bond SaleSTATE OF MONTANA
FLATHEAD COUNTY
AFFIDAVIT OF PUBLICATION
CHRIS SCHULD EISS BEING DULY
SWORN, DEPOSES AND SAYS: THAT SHE IS THE
LEGAL CLERK OF THE DAILY INTER LAKE A
DAILY NEWSPAPER OF GENERAL CIRCULATION,
PRINTED AND PUBLISHED IN THE CITY OF
KALISPELL, IN THE COUNTY OF FLATHEAD,
STATE OF MONTANA, AND THAT NO. 10634
t
PRINTED AND PUBLISHED IN THE REGULAR AND
ENTIRE ISSUE OF SAID PAPER, AND IN EACH AND
EVERY COPY THEREOF ON THE DATES OF
MAY 28, JUNE 4, 2006
AND THE RATE CHARGED FOR THE ABOVE
PRINTING DOES NOT EXCEED THE MINIMUM
GOING RATE CHARGED TO ANY OTHER
ADVERTISER FOR THE SAME PUBLICATION,
SET IN THE SAME SIZE TYPE AND PUBLISHED
F R THE SAME NUMBER OF INSERTIONS.
Subscribed and sworn to ,
Before me this JUNE 5, 2006 0 ._
Notary Public for the State of Montana
Residing in Kalispell
My Commission expires 9/11/09
I NOTICE OF BOND SALE
$4,520,000
CITY OF KALISPELL, MONTANA
SPECIAL IMPROVEMENT DISTRICT NO. 344 BONDS.
SERIES 2006
NOTICE IS HEREBY GIVEN that the City of Kalispell, Montana (the "City"),
will sell to the highest and best bidder for cash, as evidenced by sealed bids.
Special Improvement District No. 344 Bonds, Series 2006 (the "Bonds")
drawn against the fund of Special Improvement District No. 344 (the District
Fund") in the principal amount estimated not to exceed $4,520,000.
Sealed bids for the purchase of the Bonds will be received at the office of the
Finance Director in Kalispell; Montana; at City Hall, 312 1 st Avenue East,
Kalispell, Montana 59901, or bids for the purchase of the Bonds will be
received by the City by electronic transmission through ParityTM, in either
base until 11:00 A.M., MT, on Tuesday, the 13th day of June, 2006. The bids
will be opened (or accessed) and tabulated and the City Council of the City
will meet at 12:00 RM, M.T., on the same day in the City Council Chambers to
consider the bids and the award of sale of the Bonds and, if a responsive and
acceptable bid is received, award the Bonds to the responsive bidder whose
bid reflects the lowest true interest cost (TIC) to the City.
Bids may submitted by facsimile to the Finance Director at (406) 758-7755
until 11:00 AM., M.T., on Tuesday, June 13, 2006.
Puroose and Securitv
The Bonds will be issued for the purpose.of financing the cost of construction
of certain'local improvementss(the "Improvements") within orfor the benefit of
Special Improvement District No: 344`(the "District 344"), in accordance with
the provisions of Montana Code Annotated, Title 7, Chapter 12, Parts 41 and
42, as amended (the "SID Act"). The Bonds will be special, limited obligations
of the City and do not constitute general obligations of the City.
The Bonds are payable primarily from the collection of a special tax or
assessment which is alien against the assessable real property within District
344 benefited by the Improvements to be Undertaken therein of therefor. The
special assessments are. payable in equal; semiannual installments pf
principal overa term a term not exceeding twenty (20) years; each in equal
semiannual installments of principal, plus interest,'with unpaid°installments of
the special assessments bearinginterest at a rate equal, from time to time, to
the sum of (1) the average rate of interest borne by the then outstanding
Bonds, plus (ii) one-half of one percent (0.50%) per annum.
The City will establish a Reserve Account in the District Fund (the "Reserve
Account") to secure the Bonds. The Reserve Account will be fund from Bond
proceeds with a deposit equal to five percent (5.00%) of the principal amount
of the Bonds, from which money is to be applied to pay principal of and
interest on the Bonds in the event collections of special assessments are
insufficient therefor. The City has no obligation to replenish the Reserve
Account if the funds therein are withdrawn.
To the extent available, the Bonds are also, secured by a pledge of certain tax
increments derived from (i) Old School Station Technology Tax Increment
District (the "Technology District"), and (ii) Old School Station Industrial Tax
Increment District (the "Industrial District"). The Technology District and the
Industrial District are both located within the boundaries of District 344.
Pursuant to Montana Code Annotated, Section 7-1-4290, the City may pledge
tax increment derived from an industrial district (such as the Industrial District)
or a technology district (Such as the Technology District) for the payment of
special assessments bonds (such as the Bonds) issued to pay for
Improvement costs that are also authorized to be made pursuant to the SID
Act. Certain tax increment revenues derived from the Technology District and
the Industrial District may be available for and may be pledged by the City to
the payment of the Bonds.
The Bonds are further secured by the Special Improvement District Revolving
Fund of the City (the "Revolving Fund"). The deposit to Revolving Fund will be
funded from Bond proceeds with a deposit equal to five percent (5.00%) of
the principal amount of the Bonds being deposited therein. The Citywill agree
to make a loan from the Revolving Fund to the District Fund to make good
any deficiency then existing in the principal and interest accounts therein after
depiction of the Reserve Account; and use of tax increments to the extent
available. The City will also agree to provide funds for the Revolving Fund by
levying a tax or making a loan from the City's general fund to the extent and
for the period authorized by the SID Act.
Date and Time
The Bonds will be dated, as originally issued, as of June 15, 2006 or such
other date as the Finance Director of the City shall determine, and will be
issued as negotiable investment securities in registered form as to both
principal and interest.
Maturities and Form
If issued as serial bonds, the Bonds shall mature, subject to redemption, on
July 1 in the following years and amounts
Year Principal Amount Year Principal Amount
2007
$225,000
2017
$225,000
2008
225,000
2018
225,000
2009
225,000
2019
225,000
2010
225,000
2020
225,000
2011
225,000
2021
225,000
2012
225,000
2022
225,000
2013
225,000
2023
230,000
2014
225,000
2024
230,000
2015
225,000
2025
230,000
2016
225,000
2026
230,000
Bidders will have the option of combining the Bonds maturing on and after
2007 through and including 2013 and on and after 2014 into one or more
terms bonds. If any Bonds are issued as term bonds, such term bonds will be
subject to annual mandatory sinking fund redemption on each July 1,
concluding no later than 2026, unless the Bonds are earlier redeemed; at a
redemption price equal to the principal amount of such Bonds or portions'
thereof to be redeemed with interest accrued thereon and payable on January
1 and July 1 to the redemption date, in installments and in the same amounts
and same dates as the bonds would have matured if they were not included
in a term bond.
Serial bonds shall be in the denomination of $5,000 each or any integral
multiple thereof of single maturities.
Book Entry
The Bonds will be issued by means of a book entry system with no physical
distribution of Bonds made to the public. The Bonds will be issued in fully
registered form and one Bond, representing the aggregate principal amount
of the Bonds maturing in each year, will be registered in the name of Cede &
Co, as nominee of The Depository Trust Company ("DTC"), New York, New
York, which will act as securities depository of the Bonds. Individual
purchases of the Bonds may be made in the principal amount of $5,000 or
any multiple thereof of a single maturity, through book entries made on the
books and records of DTC and its participants. Principal and interest are
payable by the registrar to DTC or its nominee as registered owner of the
Bonds. Transfer of principal and interest payments to participants of DTC will
be the responsibility of DTC; transfer of principal and interest payments to
beneficial owners by.participants will be the responsibility of such participant's
and other nominees of beneficial owners. The purchaser, as a condition of
delivery of the Bonds, will be required to deposit the Bonds with DTC.
Mandatory Redemption. If on any interest payment date there will be a
balance in the District Fund after payment of the principal and interest due on
all Bonds drawn against it, either from the prepayment of special
assessments levied in District 344 or from the transfer of surplus money from
the Construction Account to the Principal Account, outstanding Bonds, or
portions thereof, in an amount which, together with the interest thereon to the
interest payment date, will equal the amount of such funds on deposit in the
District Fund on that date are subject to mandatory redemption on that
interest payment date. The redemption price shall equal the amount of the
principal amount of the Bonds to be redeemed plus interest accrued to the
date of redemption. Tax increments and Available Tax Increments, as such
terms are defined herein, shall not be applied to redemption of the Bonds
pursuant to this Section 2.05(a).
Optional Redemption. The Bonds are subject to redemption, in whole or in
part, at the option of the City from sources of funds (including tax increments)
available therefor other than those described under "Mandatory Redemption"
on the terms of,this paragraph. The Bonds with stated maturities on or after
July 1, 2014 will be subject to redemption on July 1, 2013, and any date
thereafter, at the option of the City, in whole or in part, at a redemption price
equal to the principal amount thereof to be redeemed plus interest accrued to
the redemption date, ,without premium However, the Bonds shall not be called
for redemption, (i) from amounts on deposit in the Reserve Account or (ii)
before July 1, 2013, from the proceeds of refunding "special improvement
district bonds or wan -ants. The redemption price shall equal the principal
amount of the Bonds to be redeemed plus interest accrued to the date of
redemption, without premium.
Election of Bonds for Redem" tp ioh If less than all of the Bonds are to be
redeemed; Bonds shall be redeemed in order of the stated maturities thereof.
.If less than all Bonds of a stated maturity are to be redeemed, the Bonds of
such maturity shall be selected for redemption in $5,000 principal amounts
selected by the Registrar by lot or other manner it deems fair.
Interest Payment Dates, Rates
Interest will be payable each January 1 and July 1, commencing January 1,
2007, to the registered owners of the Bonds as such appear in the bond
register as of the close of business on the 15th day (whether or not a
business day) of the immediately preceding month.
All Bonds of the same stated maturity must bear interest from date of original
issue until paid at a single, uniform rate. Each rate must be expressed in an
integral multiple of 1/8 or 5/100 of 1 %. Interest will be calculated on the basis
of a 360-day year consisting of twelve 30-day months. Individual interest rates
may be no higher than 7.00%, with the difference between the highest and
lowest rate being no greater than 4.50%.
Bond Reaistrar, Transfer Agent
and Paying Agent
U.S. Bank National Association of Seattle, Washington, will act as bond
registrar, transfer agent and paying agent (the "Registrar"). The bond register
will be kept, transfers of ownership will be effected and principal of and
interest on the Bonds will be paid by the Registrar. The City will pay the
charges of the Registrar for such services. The City reserves the right to
remove the Registrar and to appoint a suitable successor.
D liv
Within twenty (20) days after the sale, the City will deliver to the Registrar the
printed Bonds ready for completion and authentication: The original purchaser
of the Bonds must notify the Registrar, at least five (5) business days before
issuance of the Bonds, of the persons in whose names the Bonds will be
initially registered and the denominations of the Bonds to be originally issued.
If notification is not received by that date, the Bonds will be registered in the
name of the original purchaser and, if serial bonds, will be issued in
denominations corresponding to the principal maturities of the Bonds. On the
day of closing, the City will furnish to the purchaser the opinion of Bond
Counsel hereinafter described, an arbitrage certification and a certificate
stating that no litigation in any manner questioning the validity of the Bonds is
then pending or, to the knowledge of officers of the City, threatened. Payment
for the Bonds must be received by the City in immediately available funds at
its designated depository on the day of closing, the successful bidder shall
submit to the City Clerk not earlier than forty-eight (48) hours after the award
of sale and not later than the day of closing a certificate, inform satisfactory
to Kennedy & Graven, Chartered, Bond Counsel', as to the initial reoffering
price of each stated maturity of the Bonds and stating that at least ten percent
(10%) of the principal amount of such Bonds of each stated maturity has been
sold at such respective prices.
Qualified Tax -Exempt Obligations
ions
The Bonds will be designated by the City as "qualified tax-exempt obligations"
within the meaning of Section 265(b)(3) of the Internal Revenue Code of
1986, as amended (the "Code").
Legal O ip nion
An opinion as to the validity of the Bonds and the exclusion of the interest
thereon from gross income for federal income tax purposes and Montana
individual income tax purposes will be furnished by Kennedy & Graven,
Chartered, of Minneapolis, Minnesota, as Bond Counsel, at the expense of
the Purchaser The legal opinion will state that the Bonds are valid and binding
special, limited obligations of the City enforceable in accordance with their
terms, except to the extent to which enforceability thereof may be limited by
the exercise of judicial discretion or by state or federal laws relating to
bankruptcy, reorganization, moratorium or creditors' rights.
Type of Bid and Good Faith Deposit
Sealed bids for not less than $4,429,600 (98.00% of par) and accrued interest
on the principal amount of $4,520,000 must be mailed or delivered to the
undersigned and must be received at the office of the Finance Director prior
to the time stated above. The City reserves the right to adjust the principal
amount of the Bonds offered for sale in each maturity by the amounts
determined by the City, in consultation with its financial advisor, to reflect the
actual premium and/or discount and/or unused underwriter's discount in the
winning bid, and to create the most efficient debt service structure for the
Bonds. Any such change in maturity amounts will be made in multiples of
$5,000 and no serial bond maturity principal amount or mandatory sinking
fund redemption principal amount may be changed by more than $20,000.
Bidders ;must bid for all or none of the Bonds. Each bid must be unconditional.
Bids may be transmitted electronically through ParityTM, in accordance with
these terms and conditions.
Except for a bid by or on behalf of the Board of Investments of the Si
Montana, a good faith deposit (the "Deposit") in the form of money, c
check, certified check, bank money order, or bank draft drawn and is
a federally chartered or state chartered bank insured by the federal r,
insurance corporation or a financial surety bond in the sum of $90,4C
payable to the order of the City is required for a bid to be considered
money, cashier's check, certified check, bank money order, or bank-(
used, it must accompany the bid and be delivered to the Finance Din
financial surety bond is used, it must be from an insurance company
and qualified to issue such a bond in the State of Montana and such
must be submitted to the Finance Director or the City's financial advii
to,the opening of the bids. The financial surety bond must identify ea(
whose Deposit is guaranteed by such financial surety bond. If the Bo
awarded to a bidder utilizing a financial surety bond, then that PUrche
required to submit its Deposit to the City in the form of a cashier's chi
wire transfer such amount as instructed by the City or its financial ad,
later than 1,:00 p.m., Mountain Daylight Time, on the next business di
following the award. If such Deposit is not received by that time, the f
surety bond may be drawn by the City to satisfy the Deposit requirem
interest on the Deposit will accrue to the Purchaser. The Deposit will
applied to the purchase price of the Bonds. In the event the Purchase
honor its accepted bid, the Deposit will be retained by the City as liqu
damages. The Deposit of the unsuccessful bidders will be returned
immediately on award of the Bonds to the Purchaser or after rejectior
bids. Instructions for wiring the Deposit may be obtained from the Citi
Financial Advisor, DA. Davidson & Co., Aaron Rudio (406) 791-7210 ,
Bridget Ekstrom (406) 556-6965.
Award
The bid authorizing the lowest true interest cost (a present value calc
of total interest on all Bonds from and to their maturities, less any prei
plus any discount) (TIC), will be deemed the most favorable. In the ev
two or more bids state the lowest net interest cost, the sale of the Bor
be awarded by lot. No oral bid will be considered. The City Council wi
consider sealed bids or bids transmitted electronically through the Pai
system. The City reserves the rights to reject any and all bids, to waiv
informalities in any bid and to adjourn the sale.
Electronic Transmission
To the extent any instructions or directions set forth in ParityTM conflict
this Notice of Sale, the terms of this Notice of Sale shall control. For ft
information about ParityTM potential bidders may contact the financial
consultants to the City, City's Financial Advisor, D.A. Davidson & Co.,
Rudio (406) 791-7210 or Bridget Ekstrom (406) 556-6965. In the ever
malfunction in the electronic bidding process, bidders may submit thei
by sealed bid including facsimile transmission to the Finance Director,
Robertson, at facsimile number (406) 758-7771 (phone (406) 758-775
CUSIP Numbers
The City will assume no obligation for the assignment or printing of CL
numbers on the Bonds'or for the correctness of any numbers printed t
but will permit such numbers to be assigned and printed at the expen:
purchaser, if the original purchaser waives any delay in delivery occas
thereby.
Official Statement
The City will prepare an Official Statement relating to the Bonds which
City will deem, or purposes of SEC Rule 15c2-12, to be final as of its c
The City will deliver, at closing; a certificate executed by the Mayor, the
Clerk and the Finance Director to the effect that, to the best of their
knowledge, as of the date of closing, the information contained in the <
Statement, including any supplement thereto, does not contain any un
statement of a material fact or omit to state a material fact necessary ti
the statements therein, in light of the circumstances in which they are r
not misleading; provided that no comment will be made with respect to
information provided by the successful bidder for inclusion in any supp
to the Official Statement.
By submitting a bid for the Bonds, the successful bidder agrees: (1) to
disseminate to all members of the underwriting syndicate copies of the
Statement, including any supplements prepared by the City, (2) to file
promptly a copy of the Official Statement, including any supplement pn
by the City, with a nationally recognized municipal securities repository
(3) to take any and all other actions necessary to comply with applicabl
of the Securities and Exchange Commission and the Municipal Securitl
Rulemaking Board governing the offering, sale and delivery of the Boni
ultimate purchasers.
Within seven (7) business days after the sale the City will furnish to the
successful bidder without charge, up to one hundred (100) copies of the
Official Statement relating to the Bonds. The successful bidder must no
Finance Director in writing within seven (7) business days after the awe
sale of the Bonds if it requires additional copies of the Official Statemer
cost of additional copies shall be paid by the successful bidder.
Continuing Disclosure
In order to permit bidders for the Bonds and other participating underwr
the primary offering of the Bonds to comply with paragraph (b)(5) of Rul
15c2-12 promulgated by the Securities and Exchange Commission and
Securities Exchange Act of 1934 (the "Rule"), the City will covenant anc
agree, for the benefit of the registered holders and beneficial owners frc
time to time of the outstanding Bonds, in a Continuing Disclosure Undei
as set forth in the Official Statement to provide annual reports of specifil
information and notice of the occurrence of certain events, if material. T
City, the District Fund and Revolving Fund are the only "obligated persc
respect of the Bonds within the meaning of the Rule for the purposes of
disclosing information on an ongoing basis. Failure of the City to enter ii
undertaking substantially similar to that described in the Official Stateme
would relieve the successful bidder of its obligation to purchase the Bon
The City has complied in all material respects with any undertaking pre%
entered into by it under the Rule.
Information for bidders and bidding forms may be obtained from Theresa
White, City Clerk, at City Hall, 312 1 st Avenue East, Kalispell, Montana
59901, (406) 758-7756, or from the City's Financial Advisor, D.A. David;
Co., Aaron Rudio (406) 791-7210 or Bridget Ekstrom. (406) 556-6965.
Dated: April 3, 2006
BY ORDER OF THE CITY COUNCIL OF THE
CITY OF KALISPELL, MONTANA
/s/Theresa White
Theresa White
City Clerk
May 28, June 4, 2006