Resolution 5063/Resolution of Intent SID 344RESOLUTION NO.5063
RESOLUTION RELATING TO SPECIAL IMPROVEMENT DISTRICT NO.344; DECLARING
IT TO BE THE INTENTION OF THE CITY COUNCIL TO CREATE THE DISTRICT FOR
THE PURPOSE OF UNDERTAKING CERTAIN LOCAL IMPROVEMENTS AND FINANCING
THE COSTS THEREOF AND INCIDENTAL THERETO THROUGH THE ISSUANCE OF
SPECIAL IMPROVEMENT DISTRICT BONDS SECURED IN PART BY THE CITY'S
SPECIAL IMPROVEMENT DISTRICT REVOLVING FUND
BE IT RESOLVED by the City Council (the "City Council") of the City of Kalispell, Montana
(the "City"), as follows:
Section 1. Back round• ProDosed Im rovements• Intention To Create District.
(a) Background. The City proposes to undertake certain improvements (the
"Improvements") to benefit specific property located in the City. The District (defined below) is being
established for the purpose of funding the public infrastructure improvements within the District. The
District will contain the first industrial/technology park in the City and will have 17 lots available for
development. The District will be known as "Old School Station." The land that comprises the District is
approximately 55 acres and is currently used primarily for agricultural purposes. The District will not
need to be rezoned for the contemplated use and development. The District is located just east of
Highway 93 on Demersville Road approximately 1.9 miles south of Four Corners intersection and
directly east of the Rocky Cliff Road intersection. Montana Venture Partners, LLC, the developer of the
District, is financing and contracting for the extension of the City water and wastewater services from the
main City limits to the boundary of the District.
(b) Proposed Improvements. The Improvements, as proposed, consist of the (.i) design,
grading and construction of underground conveyance lines for water, wastewater, and storm water, and
(ii) design, grading and construction of underground utility lines for gas, electric and telephone services,
and (iii) design, grading and construction of streets, gutters and sidewalks, all as more fully describe in
Section 5. All Improvements will be constructed to City of Kalispell Design and Construction Standards.
(c) Intention to Create District. The total estimated construction costs of the Improvements
are $3,897,398 as determined by Morrison Maierle Inc., engineers for the City with respect to the District
(the "Engineers"). The total costs of the Improvements, including the incidental costs discussed in this
Resolution, is estimated not to exceed $4,550,000. It is the intention of this City Council to create and
establish in the City under Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as amended
(the "Act"), a special improvement district (the "District"). The purpose the formation of the District is to
provide a mechanism for financing costs of the Improvements and paying costs incidental thereto. The
costs associated with the District to be financed with proceeds of the City's special improvement district
bonds (the "Bonds"), in the estimated original aggregate principal amount not to exceed $4,550,000, are:
(i) the estimated the costs of the Improvements; (ii) the creation and administration of the .District; (iii) a
deposit to the City s Special Improvement District Revolving Fund (the "Revolving Fund") to secure the
Bonds; (.iv) a deposit to a debt service reserve account in the District Fund (the "Reserve Account') to
secure the Bonds; and (v) the costs of issuance for the Bonds. The total estimated cost of the
Improvements, including the costs listed in (ii)-(v) above, is $4,550,000. The Bonds are to be payable
primarily from special assessments to be levied against property in the District, which property will be
specially benefited by the Improvements in an estimated amount of not less than $4,550,000. In the event
that special assessments are not sufficient to pay debt service on the Bonds, debt service on the Bonds
will be payable from amounts on deposit in the Reserve Account and the Revolving Fund.
Section 2. Number of District. The District, if the same shall be created and established,
shall be known and designated by the City as "Special Improvement District No. 344 of the City of
Kalispell, Montana."
Section 3. Boundaries of District. The limits and boundaries of the District are depicted on
a map attached hereto and made a part hereof as EXHIBIT A and more particularly described on
EXHIBIT B attached hereto and made a part hereof, which boundaries are designated as the boundaries of
the District.
Section 4. Benefited .Property. The District and land included within the limits and
boundaries described in Section 3 and as shown on EXHIBITS A, B and C are hereby declared to be the
District and the land that will benefit and be benefited by the Improvements and will be assessed for the
cost of the Improvements, including the incidental costs, as described in this Resolution. Those particular
portions of the District as set forth in the table below are hereby declared to be benefited by those kinds of
Improvements set forth opposite such portions of property:
Lot, Parcel Tract Benefited by Kind of Improvements
SID Lot Nos. 1 through 17 Grading, Utility and Surface Improvements
Section 5. General Character of the Improvements. The general character of the
Improvements are (i) grading and utility Improvements, consisting of planning, design and performing
site grading for the construction within the District of Schoolhouse Loop, Schoolhouse Drive and
Schoolhouse Circle (including, without limitation, potable watermains, and services, sewer mains and
services, a storm drainage system, telephone, natural gas, and electrical utilities), and (ii) surface
Improvements, consisting of surfacing Schoolhouse Loop, Schoolhouse Drive and Schoolhouse Circle
and installing related surface improvements, such as, without limitation, curbing, aprons, sidewalks,
gutters, and landscaping.
Section 6. Engineer and Estimated Cost. .Morrison & Maierle Inc. shall be the Engineers
for the District. The Engineers have estimated that the costs of the Improvements, including all incidental
costs, but not the costs associated with securing the Bonds and the issuance of the Bonds, is $3,897,398.
Section 7. Assessment Methods.
7.1.. Method for Property To Be Assessed. All properties within the District are to be assessed
for a portion of the costs of the Improvements, as specified herein.
The costs of the Improvements shall be assessed against applicable portions of the property in the
District benefiting from the Improvements, based on, and as described below in this Section 7, the actual
area method of assessment described in Sections 7-12-4162 and 7-12-4163 of the Act, as particularly
applied and set forth in this Section 7.
7.2. Actual Area — Grading, Utility, and Surface Improvements. All of the properties in the
District (described as SID Lot Nos. 1 through 17 on EXHIBIT C) will be assessed for their proportionate
share of the costs of the grading, utility, and surfacing Improvements. The total estimated cost of the
grading, utility, and surfacing Improvements, including all incidental expenses, is $4,550,000 and shall be
assessed against each of: SID Lot Nos. 1 through 17, as shown on the attached EXHIBIT C, for that part
of the costs of the grading, utility, and surface Improvements that the area of each of such tract or parcel
bears to the total area of both of such tracts or parcels exclusive of streets, avenues, alleys, storm water
detention ponds and like features. The total area of the District to be assessed by way of the actual area
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method is estimated to be 2,064,308 square feet. The costs of the grading, utility, and surfacing
Improvements per square foot of area is estimated not to exceed $2.21. The total assessment (not
including interest expense) for each affected lot, tract or parcel of land subjected to the actual area method
of assessment for the grading, utility, and surface Improvements is shown on EXHIBIT D attached hereto
and made a part hereof.
7.3. Assessment Methodologies Equitable and Consistent with Benefit. This City Council, by
this Resolution, determines that the method of assessment and the assessment of costs of the specific
Improvements against the properties benefited thereby as prescribed in this Section 7 are equitable and .in
proportion to and not exceeding the special benefits derived from the respective Improvements by the
lots, tracts and parcels to be assessed therefor within the District.
7.4. Subdivision or Partition. The City understands that none of the property identified on
EXHIBIT C as SID Lot Nos. 1 through 17 is currently intended to be further subdivided or partitioned.
Subsequent lots or parcels within the District created by subdivision or partition shall be specially
assessed from and after their creation and such assessment shall be charged to the then -current owner
thereof in accordance with the provisions of this Section 7.
Section 8. Payment of Special Assessments. The special assessments for the costs of the
Improvements shall be payable over a term not exceeding twenty (20) years, each in equal semiannual
installments of principal, plus interest, or equal semiannual payments of principal and interest, as this City
Council shall prescribe in the resolution authorizing the issuance of the Bonds. Property owners in the
District have the right to prepay assessments as provided by law.
Section 9. Anticipated Method of Financing:Pled e of Revolvin Fund F.indin s and
Determinations. The City has the present intention to issue the Bonds in order to finance the (i) cost of
the Improvements, (ii) the cost of the creation and administration of the District, (iii) fund a deposit to the
Reserve Account, (iv) fund a deposit to the Revolving Fund, and (v) pay costs of issuance of the Bonds.
Principal of and interest on the Bonds will be paid from special assessments levied against the property in
the District and such payment will be secured, in part, by the Reserve Account. This City Council finds it
in the public interest, and in the best interest of the City and the District, to secure payment of principal of
and interest on the Bonds by the Revolving Fund. The City Council hereby authorizes the City to enter
into the undertakings and agreements authorized in Section 7-1.2-4225 of the Act to use the Revolving
Fund to secure the Bonds.
I.n determining to authorize the use of the Revolving Fund to secure the Bonds, this City Council
has taken into consideration the following factors:
(a) Estimated Market Value of Parcels. The City has considered the estimated
market value of the lots, parcels or tracts in the District as of the date of adoption of this
Resolution, as estimated by the County Assessor, as well as the estimated market value of the
lots, parcels or tracts after the Improvements have been completed. The City, in conjunction with
the Engineers, has determined that the value of the properties (in particular, the undeveloped
properties) in the District will be significantly enhanced by the Improvements. The special
assessments to be levied under Section 7 against each lot, parcel or tract in the District are, as of:
the date of this Resolution not anticipated to exceed the increase in estimated market value of the
lot, parcel or tract as a result of the construction of the Improvements.
(b) Diversity of Property Ownership. All of the parcels in the District are privately
held parcels presently within the District and do not contain any real property improvements.
Montana Venture Partners, LLC currently owns 14 of the 17 lots within the District. Montana
Venture Partners, LLC has represented to the City that it is planning on selling all 14 lots that it
owns in the .District to private parties that will develop industrial, commercial and technology
business facilities in the District SID Lot No. 1 is owned by Fun Warehousers II, LLC which is
anticipated to build a distribution center for a beverage distribution business. SID Lot No. 10 is
currently owned by Montana Venture Partners, LLC with a sale pending to Dennis and Almae
Bennett who are anticipated to build a facility for a wholesale janitorial supply service. SID Lot
No. 11 is currently owned by Montana Ventures, LLC with a sale pending to Ronald Sharpe who
is anticipated to build a facility for a janitorial supply service. Given the interactions between
City staff and the partners of Montana Venture Partners, LLC, it is reasonable to conclude that the
lots in the District will be a desirable place to locate industrial, commercial, and technology
business facilities.
(c) Comparison of Special Assessments and Property Taxes and .Market Value. The
City has analyzed the amount of assessments and property taxes against each .lot, parcel or tract in
the District. The City has determined that there are no industrial development bonds secured by a
mortgage against the District. The City concludes that, overall, the estimated market value of the
lots, tracts, or parcels of land in the District well exceeds the sum of special assessments and
current assessments, with the estimated market value after the Improvements of such lots, tracts,
or parcels totaling $7,225,078, and the estimated sum of the current assessments and taxes (based
on the November 2004 tax bill, and accordingly, not including the Improvements) against such
property totaling less than $1,500.00.
(d) Delinquencies. An analysis of the amount of delinquencies in the payment of
outstanding special assessments or property taxes levied against the properties in the District
shows that none of the properties in the District is delinquent
(e) The Public Benefit of the Improvements. The construction of the Improvements
to the District will enhance the opportunity for economic development .in the City and provide for
traffic circulation throughout the District. The construction of the Improvements will also
provide for safe access to and from Demersville Road. The Improvements include widened road
sections, curb and gutter, underground drainage in place of open ditches, sidewalks, handicap
ramps, a walking path, street lighting, and street trees and other landscaping. The proposed
Improvements will increase roadway efficiency. The proposed Improvements include both
pedestrian facilities and automobile roadways that do not now exist or are not presently available
in needed locations. Installation of these Improvements will promote safe and functional access
to the businesses that will be located in the District. This will further increase public safety in the
area and promote the public welfare.
(f) Newly Platted Development. SID .Lot Nos. 1 through 17, as identified on the
attached EXHIBIT C, has been preliminarily approved as a PUD and is not scheduled for further
subdivision. The City, based upon information provided by Montana Venture Partners, LLC,
anticipates that the properties in the District will be developed with industrial, commercial and
technology facilities that will compliment the uses, and that it is realistic to expect that the area
to be developed will be fully developed within four years.
(g) Other Factors. The Improvements are anticipated to integrate the area and help
to facilitate the more efficient delivery of services to the area, thereby assisting the public at large
as well as the particular properties in the District. The aesthetics, safety, and uses of the property
are expected be advanced by the Improvements.
Section .1.0. Reimbursement Expenditures.
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10.1. Regulations. The United States Department of Treasury has promulgated final
regulations governing the use of proceeds of tax-exempt bands, such as the Bonds, all or a portion of
which are to be used to reimburse the City for project expenditures paid by the City prior to the date of
issuance of the Bonds. The final regulations (Treasury Regulations, Section 1.150-2) (the "'Regulations")
require that the City adopt a statement of official intent to reimburse an original expenditure not later than
sixty (60) days after payment of the original expenditure. The Regulations also generally require that tax-
exempt bonds, such as the Bonds, be issued and the reimbursement allocation made from the proceeds of
the tax-exempt bonds within eighteen (18) months (or three (3) years, if the reimbursement bond issue
qualifies for the "small issuer" exception from the arbitrage rebate requirement) after the later of (i) the
date the expenditure is paid or (ii) the date the project is placed in service or abandoned, but (unless the
issue qualifies for the "small issuer" exception from the arbitrage rebate requirement) in no event more
than three (3) years after the date the expenditure is paid.
10.2. Prior Expenditures. The City has not made or paid any expenditures with respect to the
District and the Improvements more than sixty (60) days before the date of adoption of this Resolution
other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures
constituting preliminary expenditures within the meaning of the Regulations, or (iii) expenditures in a "de
minimus" amount, as defined in the Regulations.
10.3. Declaration of Intent. The City reasonably expects to reimburse the expenditures made
for costs of the Improvements out of the proceeds of the Bonds after the date of payment of an or a
portion of the costs of the Improvements. All reimbursed expenditures shall be capital expenditures, a
cost of issuance of the Bonds or other expenditures eligible for reimbursement under the Regulations.
1.0.4. Budgetary Matters. As of the date of this Resolution, there are no City funds reserved,
allocated on a long -terns basis or otherwise set aside (or reasonably expected to be reserved, allocated on
a long-term basis or otherwise set aside) to provide permanent financing for the expenditures related to
the Improvements, other than pursuant to the .issuance of the Bonds. The statement of intent contained in
this Resolution, therefore, is consistent with the City's budgetary and financial circumstances as they exist
or are reasonably foreseeable on the date hereof.
1.0.5. Reimbursement Allocations. The finance officer of the City will be responsible for
making the "reimbursement allocations" described in the Regulations, being generally the transfer of the
appropriate amount of proceeds of the Bonds to reimburse the source of temporary financing used by the
City to make prior payment of the costs of the Improvements. Each allocation will be (i) evidenced by an
entry on the official books and records of the City maintained for the Bonds or the Improvements and
(ii) shall specifically identify the actual original expenditure being reimbursed.
Section 1.1. Publication of Passage and Adoption of this Resolution of Intention. By this
Resolution, the City Clerk is authorized and directed to publish notice (the "Notice") of passage and
approval of this Resolution and the intention of the City to create the .District. The Notice shall be
published in the Daily Inter Lake, a newspaper of general circulation in Flathead County, on October 18,
October 25 and November 1, 2005, all in accordance with the requirements of Section 7-1.2-4106 of the
Act and Montana Code Annotated, Section 7-1-212.1, as amended. The form of the Notice currently on
file with the City Clerk is hereby approved. The City Clerk is also authorized and directed, as required by
Section 7-12-4106(2) of the Act, to mail or cause to be mailed a copy of the Notice to every person, firm,
corporation, or the agent of such person, firm, or corporation having real property within the District
listed .in their name upon the last completed assessment roll for state, county, and school district taxes, at
the last -known address, on or before the same day the Notice is first published.
Section 1.2. Protests of the Resolution of intention. Section 7-12-4110 of the Act sets forth
the requirements for a protest against the proposed Improvements or against the extent or creation of the
District, or both. Any owner of real property within the District subject to assessment and taxation for the
cost and expense of making the Improvements may, until 5:00 p.m., M.T. within fifteen (15) days after
the date of the first publication of the Notice (the "Protest Period") may make and file with the City Clerk
a written pretest against the proposed Improvements or against the creation of the District ,or both. The
Protest Period ends at 5:00 p.m. M.T. on November 2, 2005. Upon receipt of one or more written protests
during the Protest Period, this City Council will, at its next regular meeting after the expiration of the
Protest Period, proceed to hear all protests properly made and filed with the City Clerk. The first regular
meeting for the City Council after the end of the Protest Period is scheduled to be held on November 7,
2005, at 7:00 p.m., in Council Chambers at City Hall, 312 1st Avenue East, in Kalispell, Montana.
PASSED AND ADOPTED by the City Council of the City of Kalispell, Montana, as of the 3rd
day of October, 2005.
F
i
{
Pamela B. Kenned
Mayor
ATTEST:
Theresa White
City Clerk
EXHIBIT A
MAP OF SID 344
qar�. OLD SCHOOL STATION �.
ax :ter 3. rzk ' F-.•. r,. , �� #f L 4, bastion 33.:,tBA� RxaSxL F.tA.. M.
• -. -. _ .. fiethesd C.cw+�ts, A4bntx�t�
A-1
EXHIBIT B
DESCRIPTION OF SID 344 BOUNDARIES
The District is located just east of Highway 93 on Demersville Road approximately 1.9 miles south of
Four Corners intersection and directly east of the Rocky Cliff Road intersection and is legally described
as:
Assessors Tract 2 or Parcel A of Certificate of Survey No. 16337 in the SW 114 of Section 33,
Township 28 North, Range 21. West, P.M.M., Flathead County, Montana
EXHIBIT C
LIST OF SID LOTS AND OWNERS
SID 344
Lot No. Property Owner Property Owner's Address
1
Fun Warehousers II, LLC
2
Montana Venture Partners, LLC
3
Montana Venture Partners, LLC
4
Montana Venture Partners, LLC
5
Montana Venture Partners, LLC
6
Montana Venture Partners, LLC
7
Montana Venture Partners, LLC
8
Montana Venture Partners, LLC
9
Montana Venture Partners, LLC
1.0
Montana Venture .Partners, LLC
with a sale pending to Dennis
and Almae Bennett
1.1
Montana Venture Partners, LLC
with a sale pending to Ronald
Sharpe
12
Montana Venture Partners, LLC
13 Montana Venture Partners, LLC
14 Montana Venture Partners, LLC
15 Montana Venture Partners, LLC
16 Montana Venture Partners, LLC
17 Montana Venture Partners, LLC
1190 Highway 2 West, Kalispell, Montana 59901.
P.O. Box 1477, Kalispell, MT 59903-1477
P.O. Box 1477, Kalispell, MT 59903-1477
P.O. Box 1477, Kalispell, MT 59903-1477
P.O. Box 1477, Kalispell, MT 59903-1477
P.O. Box 1477, Kalispell, MT 59903-1477
P.O. Box 1477, Kalispell, MT 59903-1.477
P.O. Box 1477, Kalispell, MT 59903-1477
P.O. Box 1.477, Kalispell, MT 59903-1477
P.O. Box 1.477, Kalispell, MT 59903-1.477
1896 Airport Road, Kalispell, Montana 59901
P.O. Box 1.477, Kalispell, MT 59903-1477
P.O. Box 7516, Kalispell, Montana 59904
P.O. Box 1477, Kalispell, MT 59903-1477
P.O. Box 1477, Kalispell, MT 59903-1477
P.O. Box 1.477, Kalispell, MT 59903-1477
P.O. Box .1477, Kalispell, MT 59903-1.477
P.O. Box 1.477, Kalispell, MT 59903-1477
P.O. Box 1477, Kalispell, MT 59903-1477
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1W4III11I10.c
LISTING OF PROPOSED ASSESSMENTS
Lot No. Estimated Cost Per Lot*
1
$ 1,007,163.96
2
440,694.24
3
674,963.07
4
454,135.89
5
173,781.39
6
144,977.84
7
144,017.73
8
256,351.55
9
260,192.02
10
11.7,134.42
11
98,892.17
1.2
94,091.58
13
97,932.05
14
229,468.24
1.5
177,621.86
16
87,370.75
1.7
91,211.23
*Interest will be determined as of the time of the sale of the Bands.
KA225-001(BWJ)
268096v.4
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