1. Resolution 5317 - Multi-Family Housing Revenue Bonds■
Charles A. Harball office of City Attorney
City Attorney 201 First Avenue East
P.O. Box 1.997
Kalispell, MT 59903-1997
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TO: Mayor Pamela B. Kennedy
and Kalispell City Council
Tel 406.758.7977
Fax 406.758.7979
charbalI C kalispel1.com
FROM: Charles Harball, City Attorney
James H. Patrick, City Manager
SUBJECT. Resolution No. 5317 Reaffirming the Preliminary
Approval the Issuance of Revenue Bonds for the
Financing of the Acquisition and Rehabilitation of a
Multifamily Housing Development Located in the City of
Kalispell
MEETING DATE: Monday, October 6, 2008 — Regular Council Meeting
BACKGROUND: Prior on the agenda to this resolution the Council will bear
evidence from the public regarding the City's consideration to issue revenue bonds
in the approximate aggregate principal amount not to exceed $5,000,000. These
funds will be loaned by the City to Glacier state Associates, LP, a Montana limited
partnership (the Borrower). Morena Glacier, LLC and. the United way, Inc. will be
general partners in. the Borrower. The Borrower will apply the proceeds derived
from the Bonds to the costs of the acquisition, rehabilitation, and equipping of (a) a
61-unit multifamily housing development known as "Glacier Manor" located. at 506
1st Avenue west, Kalispell, Montana and (b) a 38-unit multifamily housing
development known as "Treasure state Plaza Apartments" located at Coo Liberty
Street, Kalispell, Montana (collectively, the "Project.) After the Borrower's
acquisition of the Project, the Project will be known as the Glacier state
Apartments.
Montana lave authorizes the City to issue revenue bonds for the purpose of
defraying the cost of acquiring or improving any land, building or other
improvement, that is suitable for, among other things, multifamily housing. .As a
condition to the issuance of such revenue bonds, the City is holding a public hearing
in accordance with the requirements of the Internal Revenue Code and the City
Council must also authorize the submission of an application to the Montana
Department of Administration for an allocation of bonding authority ,with respect to
the Project and such revenue bonds.
Memorandum for resolution 5317
October 2, 2005
Page -- 2
An application for an allocation of the bonding authority from the State of
Montana must be made by the City to the Department of Administration of the
State pursuant to MICA §17-5-1301 to 1323, (the `Allocation Act"). Adoption of a
preliminary resolution by the City and evidence of a public hearing of the City
Council of the City in accordance with the provisions of the Code is required prior to
the City being able to make application to the Department of Administration of the
State for an allocation of volume cap for the Bonds. This is the purpose of the
resolution currently before the Council
The Project consists of a multifamily housing development designed and
intended to be used for rental occupancy in accordance with the terms of the Act.
The Borrower will operate the Project in a manner that complies with the income
restrictions set forth in Section 142(d) of the Code in order that the Project qualifies
as a "qualified residential rental project." The City's purpose is and the effect will
be to promote the public welfare of the City and its residents by retaining and
improving affordable multifamily housing in the City.
The Bonds shall not be or create an encumbrance upon any property of the
City except the City's interest in the loan or revenue agreement with respect to the
Bonds and the Project. The Bonds shall recite in substance that the Bonds,
including interest thereon, are payable solely from the revenues received from. the
Project, the property pledged to the payment thereof and other sources of security
for the Bonds, and shall not constitute a liability on the general obligation of the
City, within the meaning of any constitutional or statutory limitation. The full
faith, credit and taxing power of the City are not pledged to the payment of the
Bonds.
RECOMMENDATION: That Council consider and pass Resolution No. 5317
reaffirming preliminary approval to the issuance of the Bonds subject to final
approval following the preparation of bond documents, and subject to final
determination by this City Council that the financing of the Project and the
issuance of the Bonds are in the best interest of the City, and authorizing the
submission of an application for an allocation of bonding authority to the
Department of Administration of the State.
FISCAL EFFECTS: None at this time.
mes H. Patrick, City Manager
Office of City Attorney
City of Kalispell
RESOLUTION NO, 5317
RESOLUTION REAFFIRMING THE PRELIMINARY APPROVAL OF THE
ISSUANCE OF REVENUE BONDS FOR THE FINANCING OF THE ACQUISITION
AND REHABILITATION OF A MULTIFAMILY HOUSING DEVELOPMENT
LOCATED IN THE CITY OF KALISPELL AFTER HOLDING A PUBLIC HEARING
WITH RESPECT THERETO
BE IT RESOLVED by the City Council (the "City Council") of the City of Kalispell,
Flathead County, Montana (the "City") as follows:
Section 1. Recitals.
1.01. Montana Code Annotated, Title 90 Chapter 5 Part 1, as amended (the "Act"),
authorizes the City to issue revenue bonds for the purpose of defraying the cost of acquiring or
improving any land, building, other improvement, and real or personal property considered
necessary in connection with an improvement that is suitable for: (i) commercial, manufacturing,
agricultural, or industrial enterprises; (ii) recreation or tourist facilities; (iii) local, state, and
federal governmental facilities; (iv) multifamily housing; (v) hospitals; (vi) long-term care
facilities; (vii) community -based facilities for individuals who are persons with developmental
disabilities as defined in Montana Code Annotated Title 53 Chapter 20 Part 102, as amended;
(viii) medical facilities; (ix) higher education facilities; (x) electric energy generation facilities;
(xi) family service provider facilities; (xii) the production of energy using an alternative
renewable energy source as defined in Montana Code Annotated, Title 90 Chapter 4 Part 102, as
amended; and (xiii) any combination of these projects.. As a condition to the issuance of such
revenue bonds, the City must hold a public hearing in accordance with the requirements of
Section 147 (f) of the Internal Revenue Code of 1986, as amended (the "Code"), and the
requirements of the Act. The City Council of the City must also authorize the submission of an
application to the Montana Department of Administration for an allocation of bonding authority
with respect to the Project (as hereafter defined) and such revenue bonds.
1.02. The City has been requested to issue its revenue bonds in the approximate
aggregate principal amount not to exceed $5,000,000, in one or more series at one time or from
time to time (the "Bonds"), the proceeds of which will be loaned by the City to Glacier State
Associates, LP, a Montana limited partnership (the "Borrower"). Morena Glacier, LLC and the
United Way, Inc. will be general partners in the Borrower.
1.03. Under Section 147(f) of the Code and the Act, prior to the issuance of the Bonds,
the City must hold a public hearing.
Section 2. Public Hearin.
Kennedy & Graven, Chartered, P.C., as bond counsel to the City, with cooperation from
City staff and staff of the Borrower, prepared a Notice of Public Hearing (the "Hearing Notice")
with respect to the Project and the issuance of the Bonds by the City. As required by the Act, the
Hearing Notice was published in the Daily Inter Lake once a week for three consecutive weeks in
preparation for a public hearing. The public hearing was held by the City Council prior to
consideration of this resolution on Monday, October 6, 2008. All persons who appeared at the
public hearing were given an opportunity to express their views with respect to the Project and
the issuance of the Bonds.
Section 3. Preliminary,,,Approval.
The City hereby confirms the preliminary approval to the issuance of the Bonds on
September 2, 2008, subject to final approval following the preparation of bond documents, and
subject to final determination by this City Council that the financing of the Project and the
issuance of the Bonds are in the best interest of the City.
Section 4. Submission of Allocation Application.
Under the Code, the City must receive an allocation of the bonding authority of the State
of Montana for the Bonds. An application for such an allocation must be made by the City to the
Department of Administration of the State of Montana. The City Council hereby confirms the
submission of an application for allocation of bonding authority pursuant to the Code. The
Mayor of the City, the City Manager, and Kennedy & Graven, Chartered, P.C., acting as bond
counsel to the City with respect to the Project and the Bonds, shall take all actions, in cooperation
with the Borrower, as are necessary to submit an application for an allocation of bonding
authority to the Department of Administration of the State of Montana.
Section 5. Effective Date. This Resolution shall be in full force and effect from and
after its passage.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE
CITY OF KALISPELL TIIIS 6TH DAY OF OCTOBER, 2008.
ATTEST:
Theresa white
City Clerk
Pamela B. Kennedy
Mayor
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