Resolution 5111/SID 344/Authorizing IssuanceRESOLUTION NO.5111
RESOLUTION RELATING TO SPECIAL IMPROVEMENT DISTRICT NO. 344
BONDS, SERIES 2006; AUTHORIZING THE ISSUANCE AND CALLING FOR THE
PUBLIC SALE THEREOF AND AUTHORIZING THE PLEDGE OF THE REVOLVING
FUND TO THE SECURITY THEREOF
BE IT RESOLVED by the City Council (the "City Council") of the City of Kalispell,
Montana (the "City"), as follows:
Section 1. Recitals.
(a) This City Council has duly and validly created and established in the City under
Montana Code Annotated, Title 7, Chapter 12, Parts 41. and 42, as amended (the "SID Act"), a
special improvement district, designated as Special Improvement District No. 344 ("District
344"), for the purpose of financing costs of certain public improvements of special benefit to the
properties within District 344 (the "Improvements") and paying costs incidental thereto,
including: (i) costs associated with the sale and the security of special improvement district
bonds of the City drawn on District 344; (ii) creation and administration of District 344; (iii)
funding of a deposit to the City's Special Improvement District Revolving Fund (the "Revolving
Fund"); and (iv) funding of a deposit to the District Reserve Account securing the Bonds in the
District Fund (as defined herein)(the "Reserve Account"). The total estimated costs of the
Improvements, including the costs enumerated in (ii)-(iv) above, to be financed by District 344
are $4,520,000. The costs of the Improvements are to be paid from the proceeds of Special
Improvement District No. 344 Bonds, Series 2006 (the "Bonds"), which are to be payable
primarily from special assessments to be levied against property in District 344, which property
will be specially benefited by the Improvements in an amount not less than. $4,520,000.
(b) The City has also validly created and established, pursuant to Montana Code
Annotated, Title 7, Chapter 15, Part 42, as amended (the "TIF Act"), its (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 Section 7-
1.5-4290 of the TIF Act, 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) to the
payment of special assessment bonds (such as the Bonds) issued to pay industrial district and
technology district costs described in Sections 7-15-4288 and 7-1.5-4289 of the TIF Act.
Pursuant to Section 7-15-4288 of the TIF Act, eligible costs to be paid by the City with tax
increments include public improvements (such as the Improvements) authorized to be made
pursuant to the SID Act. Certain tax increment revenues derived from the Technology District
and the Industrial District will be available for the payment of and pledged to the cost of the
Improvements or paying on the Bonds.
(c) The City is authorized by Section 7-1.2-4204(1) of the SID Act to sell the Bonds
at a price less than the principal amount thereof, but including interest thereon to the date of
delivery, if this City Council determines that such sale is in the best interests of District 344 and
the City.
(d) It is necessary that the Bonds be issued and sold in an original aggregate principal
amount estimated not to exceed $4,520,000 to finance the costs of the Improvements, including
incidental costs, described in Subsection (a). The costs of the Improvements are currently
estimated, as follows:
Project Construction Fund Deposit (Project Costs and $3,875,600
Contingency)
Revolving Fund Deposit 226,000
Reserve Account Deposit 226,000
City Administration Fee 40,000
Costs of Issuance 62,000
Underwriter's Discount 90,400
Total $4 52(}
Costs in excess of the Bond proceeds will be paid from funds that the City has on hand in
the amount of $0.00.
Section 2. Allowance for Bond Discount. The minimum price for the Bonds is
$4,429,600 (98% of par), plus interest accrued thereon to the date of delivery. 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.
Section 3. Findings.. and Determination To Pledge the Revolving* Fund and Tax
Increments; and Covenant to Create District Fund.
(a) In a resolution of intention to create District No. 344, adopted on October 3, 2005,
this City Council found it to be in the public interest and in the best interest of the City and
District 344, to secure payment of principal of and interest on the Bonds by the Revolving Fund
and, based on the factors required to be considered under Section 7-12-4225(4) of the SID Act,
authorized the City to enter into the undertakings and agreements authorized in the SID Act in
respect of the Bonds. Those findings and determinations were ratified and confirmed in the
resolution adopted by this City Council on November 7, 2.006, creating District 344. The prior
actions of this City Council relating to District 344 are hereby ratified and confirmed. It is
hereby covenanted and recited that the City has the power under the SID Act to pledge the
Revolving Fund to payment of the principal of and interest on the Bonds.
(b) Pursuant to Section 7-12-4209 of the TIF Act, the City is authorized to pledge tax
increments from the Technology District and the Industrial District to the payment of special
assessment bonds (such as the Bonds). The City may pledge certain tax increment revenues
derived from the Technology District and the Industrial District to the payment of the principal
of and interest on the Bonds.
(c) The City hereby covenants that it will create and establish a fund designated as
the "Special Improvement District No. 344 Fund" (the "Fund") and various accounts required
therein for the Bonds. The Finance Director of the City will establish and maintain the District
Fund on the books and records of the City separate and apart from all other funds of the City.
Section 4. Terms of the Bonds. This City Council hereby authorizes the issuance and
sale of the Bonds, to be denominated "Special Improvement District No. 344 Bonds, Series
2006" of the City in the estimated original aggregate principal amount of $4,520,000 for the
purpose of financing the Improvements and the incidental costs listed above in Section 1(a). The
Bonds shall be dated, as originally issued, May .15 or on such dates as the Finance Director of the
City may reasonably determine, and shall bear interest payable semiannually on January 1. and
July 1. of each year, commencing January 1, 2007, at a rate or rates designated by the successful
bidder at public sale and approved by this City Council. If issued as serial bonds, the Bonds
shall mature on July 1. in each of the following years and principal 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
201.1
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 for the Bonds will have the option of combining the Bonds maturing on and after
2007 through and including 2013 and on and after 201.4 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.
The Bonds shall be issuable only as fully registered bonds and shall be executed by the
manual or facsimile signatures of the Mayor and the City Clerk. The Bonds shall be secured by
(i) special assessments payable by taxpayers .in District 344, (ii) certain tax increment revenues,
if any, pledged to the Bonds, (iii) the Reserve Account, and (iv) the Revolving Fund.
Section 5. Public Sale. The Bonds shall be sold at a public competitive sale which is
hereby called, as determined by the Finance Director of the City, and shall be awarded at a
regular meeting of this City Council. The Finance Director is hereby authorized to schedule the
public competitive sale of the Bonds. The City will receive sealed bids for the Bonds, due at
12:00 P.M., M.T., on the Bond sale date in accordance with the notice of sale hereinafter
prescribed. The City Clerk is hereby authorized and directed, upon a determination of the Bond
sale date by the Finance Director, to cause notice of the sale to be published, as required by
Montana Code Annotated, Sections 7-12-4204, 7-7-4252 and 1.7-5-106, in the Daily Inter Lake,
once each week for two successive weeks preceding the week which contains the date of sale of
the Bands. The notice of sale shall be published and mailed in substantially the form set forth as
EXHIBIT A to this resolution, with such necessary variations, omissions, and insertions as are
not materially inconsistent with such form and as the Finance Director, in her discretion, shall
determine (which notice of sale is hereby incorporated herein and made a part hereof), and this
City Council hereby adopts the terms and conditions set forth in such notice of sale as the terms
and conditions of the sale of the Bonds.
Section 6. Official Statement. The Finance Director and other officers of the City, in
cooperation with D.A. Davidson & Co., of Bozeman and Great Falls, Montana, financial
consultants to the City, are hereby authorized and directed to prepare on behalf of the City an
official statement to be distributed to potential purchasers of the Bonds. The Official Statement
will contain the terms and conditions of sale set forth in the notice of sale adopted in. Section. 5
and such other information as shall be advisable and necessary to describe accurately the City
and the security for, and terms and conditions of, the Bonds. The Official Statement shall be
deemed final by the City within the meaning of the Rule (as defined below).
Section 7. Continuing Disclosure. In order to permit bidders for the Bonds and other
participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5)
of Rule 15c2-1.2 promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934 (the "Rule"), the City will covenant and agree, for the benefit of the
registered holders and beneficial owners from time to time of the outstanding Bonds, in a
Continuing Disclosure Undertaking, to provide annual reports of specified information and
.notice of the occurrence of certain events, if material.. The City and District Fund and Revolving
Fund are the only "obligated persons" in respect of the Bonds within the meaning of the Rule for
the purposes of disclosing information on an ongoing basis. The form of the Continuing
Disclosure Undertaking is set forth in the Official Statement. Failure of the City to enter into a
Continuing Disclosure Undertaking substantially similar to that described in the Official
Statement would relieve the successful bidder of its obligation to purchase the Bonds. The City
has complied in all material respects with any undertaking previously entered into by it under the
Rule.
PASSED AND APPROVED BY THE CITY COUNCIL -AND SIGNED BY THE MAYOR OF
NC
THE CITY OF KALISPELL, THIS 3RD DAY OF RIL, 2 06.
la B. Kennedy Mayor
ATTEST: ;
�i
Theresa White, City Clerk