4. Resolution 4689 - General Obligation Bonds - Aquatic FacilityCity of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fa (406)758-7758
REPORT TO
FROM:
SUBJECT:
MEETING DATE:
Mayor Kennedy and City Council
Amy Robertson, Finance Director
Chris Kukulski, City Manager
G. O. Bond — issue 2002 Pool for $3,675,000
April 1, 2002
BACKGROUND: The voters of the City of Kalispell approved the construction of a
new aquatics facility and skate park to be financed by General
Obligation Bonds. Previous Council action authorized the bond
sale and awarded the bid to D. A. Davidson. This Resolution sets
the terms and conditions of the bond issue. It includes bond reserve
requirements, audit requirements; it provides information regarding
the escrow account, the construction account, debt service account,
arbitrage exemption and the form of the bonds themselves. This is
the final resolution related to this bond issue.
For more information on the Series 2002 G. O. Bond you may refer
to the Official Statement. Copies are available in the Finance
Office.
RECOMMENDATION: Adopt Resolution 4689, the final bond resolution.
FISCAL EFFECTS: $3,675,000 proceeds of bonds will be used for design, construction
and equipping the new facility. Costs for issuance and legal
counsel will be paid from the bond funds also. Bond closing is
scheduled for April 16`h, 2002.
ALTERNATIVES: As suggested by Council.
AmRobertson
Finance Director
Report compiled: March 27, 2002
Chris A. Kukulski
City Manager
RESOLUTION NO. A fL8 9
RESOLUTION RELATING TO $3,675,000 GENERAL
OBLIGATION BONDS, SERIES 2002; DETERMINING THE
FORM AND DETAILS, AUTHORIZING THE EXECUTION
AND DELIVERY AND LEVYING TAXES FOR THE
PAYMENT THEREOF
BE IT RESOLVED by the City Council (the "Council") of the City of Kalispell,
Montana (the "City"), as follows:
Section 1. Authorization and Sale; Recitals.
1.01. Authorization and Sale. At an election duly called and held November 6, 2001, the
electors of the City authorized this Council to issue and sell $3,675,000 principal amount of
general obligation bonds (the "Bonds") of the City for the purpose of designing, constructing and
equipping an aquatic recreational facility and skate park in Woodland Park (the "Project") and
paying costs associated with the sale and issuance of the bonds. On March 4, 2002, the City
authorized and provided for the issuance and sale of its general obligation bonds in the amount of
$3,675,000 to fund the authorized Project. Pursuant to such authorization, this Council at a
public sale duly noticed and held on March 18, 2002, awarded the sale of the Bonds to D.A.
Davidson & Co. of Great Falls, Montana, on a bid to purchase the Bonds at a price of $3,675,000
and accrued interest to the date of delivery, the Bonds to bear interest at the rates designated by
the Purchaser in such bid and as set forth in Section 2.01 of this resolution, which rates result in a
true interest cost of 4.6642%. The rates of interest designated by the Purchaser result in a total
dollar interest cost of $2,116,420.83. It is hereby found, determined and declared that the
interest rates designated by the Purchaser and set forth in Section 2.01 are consistent with the
Purchaser's bid accepted by this Council on March 18, 2002 and are hereby approved. It is now
desirable, proper and in the best interest of the City that the form and details of the Bonds be set
forth and prescribed in the official proceedings of this Council.
1.02. Recitals. All acts, conditions and things required by the Constitution and laws of
the State of Montana, including Montana Code Annotated, Title 7, Chapter 7, Part 42, as
amended, in order to make the Bonds valid and binding general obligations in accordance with
their terms and in accordance with the terms of this resolution have been done, do exist, have
happened and have been performed in regular and due form, time and manner as so required.
The indebtedness to be evidenced by the Bonds, together with all other indebtedness of
the City, will not exceed 1.51 % of the total assessed valuation of taxable property of the city,
determined as provided in Section 15-8-111, M.C.A., ascertained by the last assessment for state
and county taxes. City indebtedness for various cultural, social and recreational purposes will
not exceed 0.9% of the total assessed value of taxable property, determined as provided in
Section 15-8-111, M.C.A., subject to taxation by the City as ascertained by the last completed
assessment for state and county taxes prior to this date.
Section 2. Bond Terms, Execution and Delivery.
2.01. Term of Bonds. The Bonds shall be designated "General Obligation Bonds, Series
2002." The Bonds shall be in the denomination of $5,000 each or any integral multiple thereof
of single maturities. The Bonds shall mature on July 1 in the years and amounts listed below,
and Bonds maturing in such years and amounts shall bear interest from date of original issue
until paid or duly called for redemption at the rates shown opposite such years and amounts, as
follows:
Year
Amount
Rate
Year
Amount
Rate
2003
$ 80,000
4.625%
2013
$185,000
4.300%
2004
120,000
4.625
2014
190,000
4.450
2005
130,000
4.625
2015
200,000
4.500
2006
135,000
4.500
2016
210,000
4.600
2007
140,000
4.500
2017
220,000
4.700
2008
145,000
4.500
2018
230,000
4.800
2009
155,000
4.500
2019
240,000
4.850
2010
160,000
4.375
2020
250,000
4.900
2011
170,000
4.375
2021
265,000
4.900
2012
175,000
4.200
2022
275,000
4.900
2.02. Registered Form, Interest Payment Dates. The Bonds shall be issuable only in
fully registered form, and the ownership of the Bonds shall be transferred only upon the bond
register of the City hereinafter described. The interest on the Bonds shall be payable on
January 1 and July I in each year, commencing January 1, 2003. Interest on the Bonds shall be
payable to the owners of record thereof as such appear on the bond register as of the close of
business on the fifteenth day of the month immediately preceding each interest payment date,
whether or not such day is a business day. Interest on, and upon presentation and surrender
thereof, the principal of each Bond, and, upon presentation and surrender thereof, shall be
payable by check or draft issued by the Registrar described herein.
2.03. Dated Date. Each Bond shall be originally dated as of April 15, 2002, and upon
authentication of any Bond the Bond Registrar, Transfer Agent and Paying Agent shall indicate
thereon the date of such authentication.
2.04. Registration. The City shall appoint, and shall maintain, a bond registrar, transfer
agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of
the City and the Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at its principal office a bond register in
which the Registrar shall provide for the registration of ownership of Bonds and the
registration of transfers and exchanges of Bonds entitled to be registered, transferred or
exchanged.
(b) Transfer of Bonds. Upon surrender to the Registrar for transfer of any Bond
duly endorsed by the registered owner thereof or accompanied by a written instrument of
transfer, in form satisfactory to the Registrar, duly executed by the registered owner
thereof or by an attorney duly authorized by the registered owner in writing, the Registrar
shall authenticate and deliver, in the name of the designated transferee or transferees, one
or more new Bonds of a like aggregate principal amount and maturity, as the case may
be, as requested by the transferor. The Registrar may, however, close the books for
registration of any transfer after the fifteenth day of the month preceding each interest
payment date and until such interest payment date.
(c) Exchange of Bonds. Whenever any Bond is surrendered by the registered
owner for exchange, the Registrar shall authenticate and deliver one or more new Bonds
of a like aggregate principal amount, interest rate and maturity, as requested by the
registered owner or the owner's attorney in writing.
(d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be
promptly canceled by the Registrar and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized Transfer. When any Bond is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that
the endorsement on such Bond or separate instrument of transfer is valid and genuine and
that the requested transfer is legally authorized. The Registrar shall incur no liability for
the refusal, in good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the person in
whose name any Bond is at any time registered in the bond register as the absolute owner
of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving
payment of, or on account of, the principal of and interest on such Bond and for all other
purposes, and all such payments so made to any such registered owner or upon the
owner's order shall be valid and effectual to satisfy and discharge the liability of the City
upon such Bond to the extent of the sum or sums so paid.
(g) Taxes, Fees and Charges. For every transfer or exchange of Bonds, the
Registrar may impose a charge upon the owner thereof sufficient to reimburse the
Registrar for any tax, fee or other governmental charge required to be paid with respect to
such transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroyed Bonds. In case any Bond shall become
mutilated or be lost, stolen or destroyed, the Registrar shall deliver a new Bond of like
amount, number, maturity date and tenor in exchange and substitution for and upon
cancellation of any such mutilated Bond or in lieu of and in substitution for any such
Bond lost, stolen or destroyed, upon the payment of the reasonable expenses and charges
of the Registrar in connection therewith; and, in the case of a Bond lost, stolen or
destroyed, upon filing with the Registrar of evidence satisfactory to it that such Bond was
lost, stolen or destroyed, and of the ownership thereof, and upon furnishing to the
Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory
to it, in which both the City and the Registrar shall be named as obligees. All Bonds so
surrendered to the Registrar shall be canceled by it and evidence of such cancellation
shall be given to the City. If the mutilated, lost, stolen or destroyed Bond has already
matured or such Bond has been called for redemption in accordance with its terms, it
shall not be necessary to issue a new Bond prior to payment.
2.05. Appointment of Initial Registrar. The City hereby appoints U.S. Bank National
Association, of Billings, Montana (formerly U.S. Bank Trust National Association MT), to act as
registrar, transfer agent and paying agent (the "Registrar"). The City reserves the right to
appoint a successor bond registrar, transfer agent or paying agent, as authorized by the Model
Public Obligations Registration Act of Montana, Montana Code Annotated, Title 17, Chapter 5,
Part 11, as amended (the "Registration Act'), but the City agrees to pay the reasonable and
customary charges of the Registrar for the services performed.
2.06. Optional Redemption. Bonds maturing in the years 2003 through 2012 shall not be
subject to redemption prior to maturity, but Bonds maturing in the years 2013 through 2022 shall
each be subject to redemption at the option of the City, in whole or in part, and if in part from
such stated maturities and in such principal amounts as the City may designate in writing to the
Registrar (or, if no designation is made, in inverse order of maturities and within a maturity in
$5,000 principal amounts selected by the Registrar by lot or other manner it deems fair), on
July 1, 2012, at a price equal to the principal amount thereof and interest accrued to the
redemption date. The date of redemption and the principal amount of the Bonds shall be fixed
by the City Finance Director who shall give notice thereof to the Registrar at least forty days
prior to the date of redemption. The Registrar shall cause notice of redemption to be published
as required by law, and, at least thirty days prior to the designated redemption date, shall cause
notice of redemption to be mailed, by first class mail, or by other means required by the
securities depository, to the registered owners of each Bond to be redeemed at their addresses as
they appear on the bond register described in Section 2.04, but no defect in or failure to give such
mailed notice shall affect the validity of proceedings for the redemption of any Bond not affected
by such defect or failure. The notice of redemption shall specify the redemption date,
redemption price, the numbers, interest rates and CUSIP numbers of the Bonds to be redeemed
and the place at which the Bonds are to be surrendered for payment, which is the principal office
of the Registrar. Official notice of redemption having been given as aforesaid, the Bonds or
portions thereof so to be redeemed shall, on the redemption date, become due and payable at the
redemption price therein specified and from and after such date (unless the City shall default in
the payment of the redemption price) such Bonds or portions thereof shall cease to bear interest.
In addition to the notice prescribed by the preceding paragraph, the Registrar shall also
give, or cause to be given, notice of the redemption of any Bond or Bonds or portions thereof at
least 35 days before the redemption date by certified mail or telecopy to the Purchaser and all
registered securities depositories then in the business of holding substantial amounts of
obligations of the character of the Bonds (such depository now being The Depository Trust
Company, of New York, New York) and one or more national information services that
disseminate information regarding municipal bond redemptions; provided that any defect in or
any failure to give any notice of redemption prescribed by this paragraph shall not affect the
validity of the proceedings for the redemption of any Bond or portion thereof.
2.07. Form. The Series 2002 Bonds shall be prepared in substantially the form set forth
in Exhibit A hereto, which is hereby incorporated by reference and made a part hereof.
M
2.08. Execution and Delivery. The Bonds shall be forthwith prepared for execution
under the direction of the City Finance Director and the Purchaser, and shall be executed on
behalf of the City by the signatures of the Mayor, City Manager and Finance Director, and shall
be sealed with the official seal of the City, provided that said signatures and the seal may be
printed, engraved or lithographed facsimiles thereof. In case any officer whose signature or a
facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the
delivery thereof, such signature or facsimile shall nevertheless be valid and sufficient for all
purposes, the same as if such officer had remained in office until delivery. When the Bonds have
been so executed by said City officers, they shall be registered by the Finance Director in
accordance with Montana Code Annotated, Section 7-7-4257. Notwithstanding such execution,
no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit
under this resolution unless and until a certificate of authentication on such Bond has been duly
executed by the manual signature of an authorized representative of the Registrar. Certificates of
authentication on different Bonds need not be signed by the same representative. The executed
certificate of authentication on each Bond shall be conclusive evidence that it has been
authenticated and delivered under this resolution. When the Bonds have been fully executed and
authenticated, they shall be delivered by the Finance Director to the Purchaser upon payment of
the purchase price in accordance with the contract of sale heretofore made and executed, and the
Purchaser shall not be obligated to see to the application of the purchase price.
2.09. Securities Depository for the Bonds.
(a) For purposes of this Section 2.09, the following terms shall have the following
meanings:
"Beneficial Owner" shall mean, whenever used with respect to a Bond, the
person in whose name such Bond is recorded as the beneficial owner of such
Bond by a Participant on the records of such Participant, or such person's
subrogee.
"Cede & Co." shall mean Cede & Co., the nominee of DTC, and any
successor nominee of DTC with respect to the Bonds.
"DTC" shall mean The Depository Trust Company of New York,
New York.
"Participant" shall mean any broker -dealer, bank or other financial
institution for which DTC holds Bonds as securities depository.
"Representation Letter" shall mean the Blanket Issuer Letter of
Representations executed by the City to DTC pursuant to which the City agrees to
comply with DTC's Operational Arrangements.
(b) The Bonds shall be initially issued as separately authenticated fully registered
Bonds, and one Bond shall be issued in the principal amount of each stated maturity of
the Bonds. Upon initial issuance, the ownership of such Bonds shall be registered in the
Bond register in the name of Cede & Co., as nominee of DTC. The Registrar and the
City may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds
5
registered in its nan
Bonds, selecting the
permitted or require
registering the trans
Registrar nor the Ci
Registrar nor the Ci
Person claiming a b
any Participant, or a
registered owner of
DTC or any Particil
amount with respec'
notice which is pen
Resolution, with re;
receive payment in
consent given or ott
any Bond is register
shall pay all princip
to such Bond, only
such payments shalt
obligations with res
sum or sums so pai(
each separate stated
principal and intere
effect that DTC has
Bonds will be trans:
(c) In the e)
Owners that they be
notify DTC and the
availability through
will be transferable
discontinue provide
to the City and the 1
under applicable la`
paragraph (e) hereo
(d) The Red
other things, notice
Beneficial Owners
with respect to its
resolution.
for the purposes of payment of the principal of or interest on the
Bonds or portions thereof to be redeemed, if any, giving any notice
1 to be given to registered owners of Bonds under this Resolution,
br of Bonds, and for all other purposes whatsoever; and neither the
y shall be affected by any notice to the contrary. Neither the
y shall have any responsibility or obligation to any Participant, any
.neficial ownership interest in the Bonds under or through DTC or
ry other Person which is not shown on the Bond register as being a
my Bonds, with respect to the accuracy of any records maintained by
ant, with respect to the payment by DTC or any Participant of any
to the principal of or interest on the Bonds, with respect to any
fitted or required to be given to owners of Bonds under this
)ect to the selection by DTC or any Participant of any person to
he event of a partial redemption of the Bonds, or with respect to any
or action taken by DTC as registered owner of the Bonds. So long as
;d in the name of Cede & Co., as nominee of DTC, the Registrar
d of and interest on such Bond, and shall give all notices with respect
:) Cede & Co. in accordance with the Representation Letter, and all
be valid and effective to fully satisfy and discharge the City's
)ect to the principal of and interest on the Bonds to the extent of the
. No Person other than DTC shall receive an authenticated Bond for
maturity evidencing the obligation of the City to make payments of
t. Upon delivery by DTC to the Registrar of written notice to the
determined to substitute a new nominee in place of Cede & Co., the
erable to such new nominee in accordance with paragraph (e) hereof
ent the City determines that it is in the best interest of the Beneficial
able to obtain Bonds in the form of Bond certificates, the City may
Registrar, whereupon DTC shall notify the Participants of the
DTC of Bonds in the form of certificates. In such event, the Bonds
n accordance with paragraph (e) hereof. DTC may determine to
.g its services with respect to the Bonds at any time by giving notice
.egistrar and discharging its responsibilities with respect thereto
,. In such event the Bonds will be transferable in accordance with
sentation Letter sets forth certain matters with respect to, among
consents and approvals by registered owners of the Bonds and
id payments on the Bonds. The Registrar shall have the same rights
ions thereunder as it has with respect to its actions under this
(e) In the event that any transfer or exchange of Bonds is permitted under
paragraph (b) or (c)ihereof, such transfer or exchange shall be accomplished upon receipt
by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments
of transfer to the per
permitted transferee in accordance with the provisions of this resolution.
0
In the event Bonds
its successor as not
depository as owne
all matters relating
the form of Bond c
such Bonds in the 1
Section 3.
i the form of certificates are issued to owners other than Cede & Co.,
.nee for DTC as owner of all the Bonds, or another securities
of all the Bonds, the provisions of this Resolution shall also apply to
iereto, including, without limitation, the printing of such Bonds in
tifrcates and the method of payment of principal of and interest on
rm of Bond certificates.
3.01. Construction Account: Use of Proceeds. There is hereby created a special account
to be designated as the "2002 Construction Account" (the "Construction Account"), to be held
and administered by the City Finance Director of the City separate and apart from all other funds
of the City. The City appropriates to the Construction Account (a) the proceeds of the sale of the
Bonds in the amount of $3,675,000 and (b) all income derived from the investment of amounts
on hand in the Construction Account. The Construction Account shall be used solely to defray
expenses of the Project, including but not limited to the transfer to the Debt Service Account
described in Section 3.02 of amounts sufficient for the payment of interest and principal, if any,
due upon the Bonds prior to the completion and payment of all costs of the Project. Upon
completion and payment of all costs of the Project, any remaining proceeds of Bonds in the
Construction Account shall'I be credited and paid to the Debt Service Account.
3.02. Debt Service Account. So long as any of the Bonds are outstanding and any
principal thereof or interest) thereon unpaid, the City Finance Director shall maintain a separate
and special 2002 Debt Service Account (the "Debt Service Account") to be used for no purpose
other than the payment of the principal of and interest on the Bonds. The City irrevocably
appropriates to the Debt Service Account: (a) any proceeds of the Bonds in excess of
$3,675,000; (b) all funds to be credited and paid thereto in accordance with the provisions of
Section 3.01; (c) any taxes levied in accordance with this resolution; (d) all income derived from
the investment of amounts on hand in the Debt Service Account; and (e) such other money as
shall be received and annrdDriated to the Debt Service Account from time to time.
Section 4. Tax Levies. The full faith, credit and taxing powers of the City shall be and
are hereby irrevocably pledged to the payment of the Bonds and interest due thereon, and the
City shall cause taxes to be'I levied annually on all taxable property in the City sufficient to pay
the interest on the Bonds when it falls due and to pay and discharge the principal at maturity of
each and all of the Bonds as they respectively become due.
Section 5. Arbitra Ile and Certification of Proceedings.
5.01. Certification.) The Mayor, City Manager and Finance Director, being among the
officers of the City charged with the responsibility for issuing the Bonds, are authorized and
directed to execute and deliver to the Purchaser a certification in accordance with the provisions
of Section 148 of the Codej and the Treasury Regulations, Section 1.148-2(b), stating the facts,
estimates and circumstances in existence on the date of issue and delivery of the Bonds which
make it reasonable to expect that the proceeds of the Bonds will not be used in a manner that
would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code
and applicable Treasury Regulations. The certification shall further state that to the best of the
knowledge and belief of
which would materially
5.02. Covenant. TI
Bonds that it will not take c
action that would cause the
provisions of the Code and
agrees that it will take or ca
their powers to prevent the
purposes of federal income
5.03.
(a) The City
for small governmental
Code. Specifically, the
certifying officers no other facts, estimates or circumstances exist
ige this expectation.
City covenants and agrees with the holders from time to time of the
permit to be taken by any of its officers, employees or agents any
iterest on the Bonds to become subject to taxation under the
to Treasury Regulations applicable thereunder, and covenants and
se its officers, employees or agents to take any action within its or
iterest on the Bonds from becoming includable in gross income for
txation under the Code and applicable Treasury Regulations.
by represents that the Series 2002 Bonds qualify for the exception
to the arbitrage rebate provisions contained in Section 148(f) of the
represents:
(1) Substantially all (not less than 95%) of the proceeds of the Series 2002
Bonds (except for amounts to be applied to the payment of costs of issuance) will be used
for local governmental activities of the City.
(2) The
contracts, leases an
or on behalf of the
expected not to exc
exempt bonds, and
exempt bonds, othf
Water Revolving L
No. 343 Bonds, $2
Revenue Bond, Sei
Series 1997.
(b) If
arbitrage rebate F
the Borrower her
rebate to the Unit
Section 148(f).
5.04. Information I
later than August 15, 2002,
required by Section 149(e)
Section 6.
6.01. General.
this Resolution and all
face amount of all "tax-exempt bonds" (including warrants,
other indebtedness, but excluding private activity bonds) issued by
ity and all subordinate entities thereof during 2002 is reasonably
ed $5,000,000. To date in 2002, the City has issued no such tax-
i the calendar years 1997 through 2001, the City issued no tax -
than its $761,000 Water System Revenue Bond (DNRC Drinking
an Program), Series 2001, $1,581,500 Special Improvement District
00,000 West Side District Taxable Tax Increment Urban Renewal
;s 2000 and $925,000 Sewerage System Revenue Refunding Bonds,
withstanding the provisions of paragraph (a) of this Section 10.4, the
risions of Section 148(f) of the Code apply to the Series 2001 Bond,
covenants and agrees to make the determinations, retain records and
States the amounts at the times and in the manner required by said
.enortinQ. The City shall file with the Secretary of the Treasury, not
a statement concerning the Bonds containing the information
if the Code.
the liability of the City on all Bonds issued under and secured by
t thereon has been discharged as provided in this section, all
pledges, covenants and
cease.
6.02. Maturity. Th
interest thereon which are
before the date a sum suffri
shall not be paid when due,
thereto by depositing with
interest accrued to the date
rights granted by this Resolution to the Holders of such Bonds shall
s City may discharge its liability with reference to all Bonds and
ue on any date by depositing with the Registrar for such Bonds on or
ient for the payment thereof in full; or if any Bond or interest thereon
the City may nevertheless discharge its liability with reference
he Registrar a sum sufficient for the payment thereof in full with
:)f such deposit.
6.03. Redemption. The City may also discharge its liability with reference to any
prepayable Bonds which are called for redemption on any date in accordance with their terms, by
depositing with the Registrar on or before that date an amount equal to the principal, interest and
redemption premium, if any, which are then due thereon, provided that notice of such
redemption has been duly given as provided in this Resolution.
6.04. Escrow. The
reference to any Bonds sul
regulating such action, by
escrow agent for this purpi
States or securities of Unit
bearing interest payable at
required, without reinvestr
redemption premiums, if a
Bonds are prepayable and
for, to such earlier Redeml
Section 7. Desi
265(b)(3)(B)(ii) of the I
obligations" for the pur
bonds in 2002 under Se
does not anticipate that
obligations bearing inte
(including "qualified Y
Sections 141(a) and 14:
Section 8.
(a) Purpose and BE
information relating to the
and other participating unc
amendments to Rule 15c2-
"SEC") under the Securitie
continuing disclosure (as ii
enhance the marketability
agreements for the benefit
Outstanding Bonds. The (
City may also at any time discharge its liability in its entirety with
ect to the provisions of law now or hereafter authorizing and
epositing irrevocably in escrow, with a bank qualified by law as an
se, cash or securities which are general obligations of the United
d States agencies which are authorized by law to be so deposited,
;uch times and at such rates and maturing on such dates as shall be
ent, to provide funds sufficient to pay all principal, interest and
y, to become due on such Bonds at their Stated Maturities or, if such
iotice of redemption thereof has been given or irrevocably provided
Lion Date.
Pursuant to Section
the City hereby designates the Bonds as "qualified tax-exempt
;s of Section 265(b)(3) of the Code. The City has not designated any
n 265(b)(3) other than the Bonds. The City hereby represents that it
City and all "subordinate entities" of the City will issue in 2002
exempt from federal income taxation under Section 103 of the Code
►(3) bonds" but excluding other "private activity bonds," as defined in
of the Code) in an amount greater than $10,000,000.
refrciaries. To provide for the public availability of certain
3onds and the security therefor and to permit the original purchaser
srwriters in the primary offering of the Bonds to comply with
2 promulgated by the Securities and Exchange Commission (the
Exchange Act of 1934 (17 C.F.R. § 240.15c2-12), relating to
effect and interpreted from time to time, the "Rule"), which will
f the Bonds, the City hereby makes the following covenants and
if the Owners (as hereinafter defined) from time to time of the
ity is the only "obligated person" in respect of the Bonds within the
0
meaning of the Rule for purposes of identifying the entities in respect of which continuing
disclosure must be made. The City has complied in all material respects with any undertaking
previously entered into by it under the Rule.
If the City fails to comply with any provisions of this Section 8, any person aggrieved
thereby, including the Owners of any Outstanding Bonds, may take whatever action at law or in
equity may appear necessary or appropriate to enforce performance and observance of any
agreement or covenant contained in this Section 8, including an action for a writ of mandamus or
specific performance. Direct, indirect, consequential and punitive damages shall not be
recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything
to the contrary contained herein, in no event shall a default under this Section 8 constitute a
default under the Bonds or under any other provision of this resolution.
As used in this Section 81 "Owner" or `Bondowner" means, in respect of a Bond, the
registered owner or owners thereof appearing in the bond register maintained by the Registrar or
any `Beneficial Owner" (as hereinafter defined) thereof, if such Beneficial Owner provides to
the Registrar evidence of such beneficial ownership in form and substance reasonably
satisfactory to the Registrar. As used herein, `Beneficial Owner" means, in respect of a Bond,
any person or entity which (i) has the power, directly or indirectly, to vote or consent with
respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds
through nominees, depositories or other intermediaries), or (b) is treated as the owner of the
Bond for federal income tax purposes.
(b) Information To Be Disclosed. The City will provide, in the manner set forth in
subsection (c) hereof, either directly or indirectly through an agent designated by the City, the
following information at the following times:
(1) on or before 270 days after the end of each fiscal year of the City, commencing with
the fiscal year ending June 30, 2002, the following financial information and operating data in
respect of the City (the "Disclosure Information"):
(A) the audited financial statements of the City for such fiscal year,
accompanied by the audit report and opinion of the accountant or government
auditor relating thereto, as permitted or required by the laws of the State of
Montana, containing balance sheets as of the end of such fiscal year and a
statement of operations, changes in fund balances and cash flows for the fiscal
year then ended, showing in comparative form such figures for the preceding
fiscal year of the City, prepared in accordance with generally accepted
accounting principles promulgated by the Financial Accounting Standards
Board as modified in accordance with the governmental accounting standards
promulgated by the Governmental Accounting Standards Board or as
otherwise provided under Montana law, as in effect from time to time, or, if
and to the extent such financial statements have not been prepared in
accordance with such generally accepted accounting principles for reasons
beyond the reasonable control of the City, noting the discrepancies therefrom
and the effect thereof, and certified as to accuracy and completeness in all
material respects by the fiscal officer of the City; and
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(B) To the extent not included in the financial statements referred to
in paragraph (A) hereof, the information for such fiscal year or for the period
most recently available of the type set forth below contained in the Official
Statement, dated as of March 22, 2002, for such fiscal year or for the period
most recently available, which information may be unaudited:
(1) updated figures for the City for the then current fiscal year to
include general obligation bonds outstanding, market valuation, taxable
valuation, estimated City population and debt capacity;
(2) a description of any additional borrowing or future financing
of the City;
(3) tax levy figures for the then current fiscal year in format
similar to the table on page 8 in the section "Tax Levies" in the Official
Statement;
(4) tax collection figures for the then most recent completed
fiscal year in format similar to the table on page 8 in the section "Tax
Collections" in the Official Statement;
(5) a list of the major taxpayers for the City for the then current
fiscal year in format similar to the table on page 9 in the section "Major
Taxpayers" in the Official Statement;
(6) updated operating results for the City for the then most
recent completed fiscal year similar to the format shown in Appendix A to the
Official Statement.
Notwithstanding the foregoing paragraph, if the audited financial statements are not
available by the date specified, the City shall provide on or before such date unaudited financial
statements in the format required for the audited financial statements as part of the Disclosure
Information and, within 10 days after the receipt thereof, the City shall provide the audited
financial statements.
Any or all of the Disclosure Information may be incorporated by reference, if it is
updated as required hereby, from other documents, including official statements, which have
been submitted to each of the repositories hereinafter referred to under subsection (c) or the SEC.
If the document incorporated by reference is a final official statement, it must be available from
the Municipal Securities Rulemaking Board. The City shall clearly identify in the Disclosure
Information each document so incorporated by reference.
If any part of the Disclosure Information can no longer be generated because the
operations of the City have materially changed or been discontinued, such Disclosure
Information need no longer be provided if the City includes in the Disclosure Information a
statement to such effect; provided, however, if such operations have been replaced by other City
operations in respect of which data is not included in the Disclosure Information and the City
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determines that certain specified data regarding such replacement operations would be a Material
Fact (as defined in paragraph (3) hereof), then, from and after such determination, the Disclosure
Information shall include such additional specified data regarding the replacement operations.
If the Disclosure Information is changed or this Section 8 is amended as permitted by this
paragraph (b)(1) or subsection (d), then the City shall include in the next Disclosure Information
to be delivered hereunder, to the extent necessary, an explanation of the reasons for the
amendment and the effect of any change in the type of financial information or operating data
provided.
(2) hi a timely manner, notice of the occurrence of any of the following events which is a
Material Fact (as hereinafter defined):
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(C) Unscheduled draws on debt service reserves reflecting financial difficulties;
(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Adverse tax opinions or events affecting the tax-exempt status of the security;
(G) Modifications to rights of security holders;
(H) Bond calls;
(I) Defeasances;
(J) Release, substitution, or sale of property securing repayment of the securities;
and
(K) Rating changes.
As used herein, a "Material Fact' is a fact as to which a substantial likelihood exists that
a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a
Bond or, if not disclosed, would significantly alter the total information otherwise available to an
investor from the Official Statement, information disclosed hereunder or information generally
available to the public. Notwithstanding the foregoing sentence, a "Material Fact' is also an
event that would be deemed "material' for purposes of the purchase, holding or sale of a Bond
within the meaning of applicable federal securities laws, as interpreted at the time of discovery of
the occurrence of the event.
(3) In a timely manner, notice of the occurrence of any of the following events or
conditions:
(A) the failure of the City to provide the Disclosure Information
required under paragraph (b)(1) at the time specified thereunder;
(B) the amendment or supplementing of this Section 8 pursuant to
subsection (d), together with a copy of such amendment or supplement and
any explanation provided by the City under subsection (d)(2);
(C) the termination of the obligations of the City under this Section 8
pursuant to subsection (d);
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(D) any change in the accounting principles pursuant to which the financial
statements constituting a portion of the Disclosure Information are prepared; and
(E) any change in the fiscal year of the City.
(c) Manner of Disclosure. The City agrees to make available the information described
in subsection (b) to the following entities by telecopy, overnight delivery, mail or other means, as
appropriate:
(1) the information described in paragraph (1) of subsection (b), to each then nationally
recognized municipal securities information repository under the Rule and to any state
information depository then designated or operated by the State of Montana as contemplated by
the Rule (the "State Depository"), if any;
(2) the information described in paragraphs (2) and (3) of subsection (b), to the
Municipal Securities Rulemaking Board and to the State Depository, if any; and
(3) the information described in subsection (b), to any rating agency then maintaining a
rating of the Bonds and, at the expense of such Bondowner, to any Bondowner who requests in
writing such information, at the time of transmission under paragraphs (1) or (2) of this
subsection (c), as the case may be, or, if such information is transmitted with a subsequent time
of release, at the time such information is to be released.
(d) Term; Amendments; Interpretation.
(1) The covenants of the City in this Section 8 shall remain in effect so long as any
Bonds are Outstanding. Notwithstanding the preceding sentence, however, the obligations of the
City under this Section 8 shall terminate and be without further effect as of any date on which the
City delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative
action or final judicial or administrative actions or proceedings, the failure of the City to comply
with the requirements of this Section 8 will not cause participating underwriters in the primary
offering of the Bonds to be in violation of the Rule or other applicable requirements of the
Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or
amendatory thereof.
(2) This Section 8 (and the form and requirements of the Disclosure Information) may be
amended or supplemented by the City from time to time, without notice to (except as provided in
paragraph (c)(3) hereof) or the consent of the Owners of any Bonds, by a resolution of this
Council filed in the office of the recording officer of the City accompanied by an opinion of
Bond Counsel, who may rely on certificates of the City and others and the opinion may be
subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is
made in connection with a change in circumstances that arises from a change in law or regulation
or a change in the identity, nature or status of the City or the type of operations conducted by the
City, or (b) is required by, or better complies with, the provisions of paragraph (b)(5) of the Rule;
(ii) this Section 8 as so amended or supplemented would have complied with the requirements of
paragraph (b)(5) of the Rule at the time of the primary offering of the Bonds, giving effect to any
change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect
13
and interpreted at the time of the amendment or supplement was in effect at the time of the
primary offering; and (iii) such amendment or supplement does not materially impair the
interests of the Bondowners under the Rule.
If the Disclosure Information is so amended, the City agrees to provide,
contemporaneously with the effectiveness of such amendment, an explanation of the reasons for
the amendment and the effect, if any, of the change in the type of financial information or
operating data being provided hereunder.
(3) This Section 8 is entered into to comply with the continuing disclosure provisions of
the Rule and should be construed so as to satisfy the requirements of paragraph (b)(5) of the
Rule.
PASSED by the City Council of the City of Kalispell, Montana, this 1 st day of April,
2002.
Attest:
City Clerk
(SEAL)
Mayor
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1011
Rate
EXHIBIT A
[Face of the Bonds]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
GENERAL OBLIGATION BOND, SERIES 2002
REGISTERED OWNER:
19R11[ I, �[iI1 Li
Maturity
Date
July I
CEDE & CO.
Date of
Original Issue
April 15, 2002
CUSIP
DOLLARS
The City of Kalispell, Flathead County, State of Montana (the "City"),
acknowledges itself to be indebted and for value received hereby promises to pay to the
registered owner named above, or registered assigns, the principal amount specified above on the
maturity date specified above or, if this Bond is prepayable as stated herein, on any date prior
thereto on which this Bond shall have been duly called for redemption, and to pay interest on
said principal amount to the registered owner hereof from April 15, 2002 or from such later date
to which interest has been paid or duly provided for until this Bond is paid or, if this Bond is
prepayable, until it has been duly called for redemption, at the rate specified above. Principal of
this Bond is payable upon presentation and surrender hereof to U.S. Bank National Association
(formerly U.S. Bank Trust National Association MT), as Bond Registrar, Transfer Agent and
Paying Agent, at its operations center in St. Paul, Minnesota, or its successor designated under
the Resolution described herein (the "Registrar"). Interest on this Bond is payable semiannually
on each January 1 and July 1, commencing on January 1, 2003, by check or draft mailed by the
Registrar to the person in whose name this Bond is registered as of the close of business on the
15th day (whether or not a Business Day) of the immediately preceding month, at his address as
it appears on the bond register maintained by the Registrar. "Business Day" means any day
other than a Saturday, Sunday or legal holiday of the State of Montana.
The principal of and interest on this Bond are payable in lawful money of the
United States of America. For the prompt and full payment of such principal and interest as the
same respectively become due, the full faith, credit and taxing powers of the City have been and
are hereby irrevocably pledged.
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Notwithstanding any other provisions of this Bond, so long as this Bond is
registered in the name of Cede & Co., as nominee of The Depository Trust Company, or in the
name of any other nominee of The Depository Trust Company or other securities depository, the
Registrar shall pay all principal of and interest on this Bond, and shall give all notices with
respect to this Bond, only to Cede & Co. or other nominee in accordance with the operational
arrangements of The Depository Trust Company or other securities depository as agreed to by
the City.
This Bond is one of an issue in the total principal amount of $3,675,000 (the
"Series 2002 Bonds"), all of like date of original issue and tenor except as to serial number,
denomination, maturity date, interest rate and redemption privilege, all authorized by the
favorable vote of more than the requisite majority of the qualified electors of the City voting on
the question of the issuance thereof at an election duly held, for the purpose of designing,
constructing and equipping an aquatic recreational facility and skate park in Woodland Park and
paying costs associated with the sale and issuance of bonds, all pursuant to resolutions duly
adopted by the City Council, including a resolution adopted on April 1, 2002 (the "Resolution"),
and in full conformity with the Constitution and laws of the State of Montana thereunto enabling
The Series 2002 Bonds are issuable only as fully registered Series 2002 Bonds of single
maturities, in denominations of $5,000 or any integral multiple thereof.
Series 2002 Bonds of this issue maturing in the years 2003 through 2012 are
payable on their respective stated maturity dates without option of prior payment, but Series
2002 Bonds having stated maturity dates in the years 2013 through 2022 are each subject to
redemption at the option of the City, in whole or in part, and if in part from such stated maturities
and in such principal amounts as the City may designate in writing to the Registrar (or, if no
designation is made, in inverse order of maturities and within a maturity in $5,000 principal
amounts selected by the Registrar by lot or other manner it deems fair), on July 1, 2012 and any
day thereafter, at a price equal to the principal amount thereof to be redeemed plus interest
accrued to the redemption date. The date of redemption and the principal amount of the Series
2002 Bonds shall be fixed by the City Finance Director who shall give notice thereof to the
Registrar at least forty days prior to the date of redemption. The Registrar shall cause notice of
redemption to be published as required by law, and, at least thirty days prior to the designated
redemption date, shall cause notice of redemption to be mailed, by first class mail, or by other
means required by the securities depository, to the registered owners of each Bond to be
redeemed at their addresses as they appear on the bond register. Upon partial redemption of any
Series 2002 Bond, a new Bond or Bonds will be delivered to the registered owner without
charge, representing the remaining principal amount outstanding.
As provided in the Resolution and subject to certain limitations set forth therein,
this Bond is transferable upon the books of the City in the principal office of the Registrar, by the
registered owner hereof in person or by his attorney duly authorized in writing, upon surrender
hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed
by the registered owner or his attorney, and may also be surrendered in exchange for Series 2002
Bonds of other authorized denominations. Upon any such transfer or exchange, the City will
cause a new Series 2002 Bond or Bonds to be issued in the name of the transferee or registered
owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on
the same date, subject to reimbursement for any tax, fee or governmental charge required to be
paid with respect to such transfer or exchange.
The City and the Registrar may deem and treat the person in whose name this
Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the
purpose of receiving payment and for all other purposes, and neither the City nor the Registrar
shall be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that
all acts, conditions and things required by the Constitution and laws of the State of Montana to
be done, to exist, to happen and to be performed precedent to and in the issuance of this Bond, in
order to make it a valid and binding general obligation of the City according to its terms, have
been done, do exist, have happened and have been performed in regular and due form, time and
manner as so required; that the City Council will annually levy an ad valorem tax on all of the
taxable property in the City sufficient to pay the interest hereon when it falls due and also to pay
and discharge the principal of this Bond at maturity; that this Bond, together with all other
indebtedness of the City outstanding on the date of original issue hereof and on the date of the
delivery of the Series 2002 Bonds of this issue to the original purchaser thereof, does not exceed
any constitutional or statutory limitation of indebtedness; and that the opinion attached hereto is
a true copy of the legal opinion given by Bond Counsel with reference to the Series 2002 Bonds,
dated the date of original issuance and delivery of the Series 2002 Bonds.
This Bond shall not be valid or become obligatory for any purpose or be entitled
to any security or benefit under the Resolution until the Certificate of Authentication hereon shall
have been executed by the Registrar by the manual signature of one of its authorized
representatives.
IN WITNESS WHEREOF, the City of Kalispell, Flathead County, State of
Montana, by its City Council, has caused this Bond to be executed by the facsimile signatures of
the Mayor, City Manager and Finance Director, and by a facsimile of the official seal of the City.
(Facsimile Seal)
(Facsimile Signature)
Mayor
(Facsimile Signature)
City Manager
(Facsimile Signature)
Finance Director
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Date of Authentication:
CERTIFICATE OF AUTHENTICATION
This is one of the Series 2002 Bonds delivered pursuant to the Resolution
mentioned within.
U.S. BANK NATIONAL ASSOCIATION,
as Bond Registrar, Transfer Agent,
and Paying Agent
LM
MI
The following abbreviations, when used in the inscription on the face of this
Bond, shall be construed as though they were written out in full according to applicable laws or
regulations:
TEN COM -- as tenants
in common
TEN ENT -- as tenants
UTMA............ Custodian .....................
(Cust) (Minor)
by the entireties
under Uniform Gifts to
JT TEN -- as joint tenants Minor Act ............................................
with right of (State)
survivorship and
not as tenants in
common
Additional abbreviations may also be used.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto the within Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints attorney to transfer the within
Bond on the books kept for registration thereof, with full power of substitution in the premises.
Dated:
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
[4]ffW1KY[e]►1=
Signature Guarantee:
Signature(s) must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guaranty program" as may
be determined by the Registrar in addition
to or in substitution for STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Bond in every
particular, without alteration or enlargement
or any change whatsoever.
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STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a policy containing the following
provisions, such policy being on file at U.S. Bank National Association, Billings, Montana.
The Insurer, in consideration of the payment of the premium and subject to the terms of this
policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following
described obligations, the full and complete payment required to be made by or on behalf of the Issuer to U.S. Bank
National Association, Billings, Montana, or its successor (the "Paying Agent") of an amount equal to (i) the
principal of (either at the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund
payment) and interest on, the Obligations (as that term is defined below) as such payments shall become due but
shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement
of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made in such
amounts and at such times as such payments of principal would have been due had there not been any such
acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner
pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable
preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses
(i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts."
"Obligations" shall mean:
$3,675,000
General Obligation Bonds, Series 2002
City of Kalispell, Montana
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by
registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the
Paying Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such
required payment has not been made, the Insurer on the due date of such payment or within one business day after
receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with State
Street Bank and Trust Company, N.A., in New York, New York, or its successor, sufficient for the payment of any
such Insured Amounts which are then due. Upon presentment and surrender of such Obligations or presentment of
such other proof of ownership of the Obligations, together with any appropriate instruments of assignment to
evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer, and appropriate
instruments to effect the appointment of the Insurer as agent for such owners of the Obligations in any legal
proceeding related to payment of Insured Amounts on the Obligations, such instruments being in a form satisfactory
to State Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such
owners or the Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by the
Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure
against loss of any prepayment premium which may at any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any Obligation as indicated
in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The term
owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the underlying security
for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King
Street, Armonk, New York 10504 and such service of process shall be valid and binding.
This policy is non -cancellable for any reason. The premium on this policy is not refundable for
any reason including the payment prior to maturity of the Obligations.
MBIA Insurance Corporation
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