4. Resolution 4752 - Board of Investments LoanCity of Kalispell
Post Office Be, 1997 - Kalispell, Montana 59903-1997 -Telephone (406)758-7700 Fax(406)758-7758
REPORT TO: Mayor Kennedy and City Council Members
FROM: Amy Robertson, Finance Director
Chris Kukulski, City Manager
SUBJECT: Resolutions 4752 & 4753 authorizing participation in the Board of
Investments Loan Program for several items budgeted for in the
Special Street Maintenance Budget and the General Fund.
MEETING DATE: November 18.2002
BACKGROUND: Resolution 4752: The City was approved by the Board of
Investments for a loan to finance three items in the Special Street Maintenance Budget. (1)
$52,000 to remove and replace an 8 bay lean-to at the City Shop, (2) $81,500 for a single axle
dump truck w/plow and sander and (3) $27,500 for a 3/4 ton pick-up w/plow. These items will be
financed for 5 years. Photos of the vehicles attached.
Resolution 4753: The City was approved by the Board of Investments for a loan to finance the
aerator for the Parks Department and a utility truck for Public Works. The deep tyne aerator used
for turf maintenance at the athletic complex was budgeted at $22,000 and will be financed for
three years. The Utility Truck is a 3/4 ton service truck budgeted at $27,000 in the Sign & Signal
budget and will be financed for five years. These items are General Fund purchases.
Current interest rates are 3.15%. The Board of Investments adjusts rates each February, this is a
variable rate loan program. Separate resolutions are required as each loan is approved per
funding source, Special Street Maintenance Fund and General Fund.
RECOMMENDATION: Adoption of these resolutions.
FISCAL EFFECTS: $161,000 - loan Special Street Maintenance
$ 49,000 - loan General Fund
ALTERNATIVES: As suggested by Council.
Amy ft Robertson Chris A. Kukulski
Finance Director City Manager
Report compiled: November 12, 2002
Attachments: photos and description (after the first resolution)
RESOLUTION NO.4752
RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS OF
THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE TENDER OPTION
MUNICIPAL FINANCE CONSOLIDATION ACT BONDS (INTERCAP REVOLVING
PROGRAM), APPROVING THE FORM AND TERMS OF THE LOAN AGREEMENT AND
AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED
THERETO
BE IT RESOLVED BY THE CITY COUNCIL (the Governing Body) OF THE CITY OF KALISPELL
(the Borrower) AS FOLLOWS:
ARTICLE I
DETERMINATIONS AND DEFINITIONS
Section 1.01. Defmitions. The following terms will have the meanings indicated below for all purposes
of this Resolution unless the context clearly requires otherwise. Capitalized terms used in this Resolution and not
defined herein shall have the meanings set forth in the Loan Agreement.
Adjusted Interest Rate means the rate of interest on the Bonds determined in accordance with the
provisions of Section 3.03 of the Indenture.
Authorized Representative shall mean the officers of the Borrower designated and duly empowered by
the Governing Body and set forth in the application.
Board shall mean the Board of Investments of the State of Montana, a public body corporate organized
and existing under the laws of the State and its successors and assigns.
Board Act shall mean Section 2-15-1808, Title 17, Chapter 5, Part 16, MCA, as amended.
Bonds shall mean the Bonds issued by the Board pursuant to the Indenture to finance the Program.
Borrower shall mean the Borrower above named.
Indenture shall mean that certain Indenture of Trust dated March 1, 1991 by and between the Board and
the Trustee pursuant to which the Bonds are to be issued and all supplemental indentures thereto.
Loan means the loan of money by the Board to the Borrower under the terms of the Loan Agreement
pursuant to the Act and the Borrower Act and evidenced by the Note.
Loan Agreement means the Loan Agreement between the Borrower and the Board, including any
amendment thereof or supplement thereto entered into in accordance with the provisions thereof and hereof.
Loan Agreement Resolution means this Resolution or such other form of resolution that the Board may
approve and all amendments and supplements thereto.
Loan Date means the date of closing a Loan.
Loan Rate means the rats of interest on the Loan which is initially 3.15% per annum through February
15, 2003 and thereafter a rate equal to the Adjusted Interest Rate on the Bonds and up to 1.5%per annum as necessary to
pay Program Expenses.
Note means the promissory note to be executed by the Borrower pursuant to the Loan Agreement, in
accordance with the provisions hereof and thereof, in substantially the form set forth in the Promissory Note, or in such
form that may be approved by the Board.
Program shall mean the INTERCAP Program of the Board pursuant to which the Board will issue and
sell Bonds and use the proceeds to make loans to participating Eligible Government Units.
RESOLUTION-2
Proiect shall mean those items of equipment, personal or real property improvements to be acquired,
installed, financed or refinanced under the Program as set forth in the Description of the Project/Summary of Draws.
Security Instrument means a security agreement in substantially the form set forth, and, a Uniform
Commercial Code financing statement, in a form acceptable to the Board and the Trustee granting a security interest in,
or a lien on, the property constituting the Project or other real or personal properties added to or substituted therefor.
Trustee shall mean U. S. Bank Trust National Association MT (formerly known as First Trust Company
of Montana National Association) and its successors.
Section 1.02. Authority. The Borrower is authorized to undertake the Project and is further authorized
by the Borrower Act to enter into the Loan Agreement for the purpose of obtaining a loan to finance or refinance the
acquisition and installation costs of the Project.
Section 1.03. Execution of Agreement and Delivery of Note. Pursuant to the Indenture and the Board
Act, the Board has issued and sold the Bonds and deposited a part of proceeds thereof in the Loan Fund held by the
Trustee. The Board has, pursuant to the Term Sheet, agreed to make a Loan to the Borrower in the principal amount of
$161,000.00 and upon the further terms and conditions set forth herein, and as set forth in the Term Sheet and the Loan
Agreement.
ARTICLE II
THE LOAN AGREEMENT
Section 2.01. Terms. (a) The Loan Agreement shall be dated as of the Loan Date, in the principal
amount of $161,000.00 and shall constitute a valid and legally binding obligation of the Borrower. The obligation to
repay the Loan shall be evidenced by a Promissory Note. The Loan shall bear interest at the initial rate of 3.15% per
annum through February 15, 2003 and thereafter at the Adjusted Interest Rate, plus up to 1.5% per annum as necessary
to pay the cost of administering the Program (the Program Expenses). All payments may be made by check or wire
transfer to the Trustee at its principal corporate trust office.
(b) The Loan Repayment Dates shall be February 15 and August 15 of each year.
(c) The principal amount of the Loan may be prepaid in whole or in part provided that the Borrower
has given written notice of its intention to prepay the Loan in whole or in part to the Board no later than 30 days prior to
the designated prepayment date.
(d) The Prepayment Amount shall be equal to the principal amount of the Loan outstanding, plus
accrued interest thereon to the date of prepayment.
(e) Within fifteen days following an Adjustment Date, the Trustee shall calculate the respective
amounts of principal and interest payable by each Borrower on and with respect to its Loan Agreement and Note for the
subsequent August 15 and February 15 payments, and prepare and mail by first class mail a statement therefor to the
Borrower.
Section 2.02. Use and Disbursement of the Proceeds. The proceeds of the Loan will be expended solely
for the purposes set forth in the Description of the Project/Summary of Draws. The proceeds from the sale of the Note to
the Board shall remain in the Borrower's Account pending disbursement at the request of the Borrower to pay the
budgeted expenditures in anticipation of which the Note was issued. Requests for disbursement of the Loan shall be
made to the Board. Prior to the closing of the Loan and the first disbursement, the Borrower shall have delivered to the
Trustee a certified copy of this Resolution, the executed Loan Agreement and Note in a form satisfactory to the
Borrower's Counsel and the Board's Bond Counsel and such other certificates, documents and opinions as set forth in the
Loan Agreement or as the Board or Trustee may require. The Borrower will pay the loan proceeds to a third party
within five business days afterthe date they are advanced (except for proceeds to reimburse the Borrower for previously
paid expenditures, which are deemed allocated on the date advanced).
Section 2.03. Payment and Security for the Note. In consideration of the making of the Loan to the
Borrower by the Board, the provisions of this Resolution shall be a part of the Agreement of the Borrower with the
Board. The provisions, covenants and Agreements herein set forth to be performed by or on behalf of the Borrower shall
be for the benefit of the Board. The Loan Agreement and Note shall constitute a valid and legally binding obligation of
the Borrower and the principal of and interest on the Loan shall be payable from the special street maintenance fund of
RESOLUTION-3
the Borrower, and any other money and funds of the Borrower otherwise legally available therefor. The repayment of
the Loan shall be secured by a security interest in the Project being financed. The Borrower shall enforce its rights to
receive and collect all such taxes and revenues to insure the prompt payment of the Borrower obligations hereunder.
Section 2.04. Representation Regarding the Property Tax Limitation Act. The Borrower recognizes and
acknowledges that the amount of taxes it may levy is limited by the state pursuant to Section 15-10-402, et. seq. (the
Property Tax Limitation Act). The Borrower is familiar with the Property Tax Limitation Act and acknowledges that the
obligation to repay the Loan under the Agreement and Note are not exceptions to the provisions of the Property Tax
Limitation Act. The Borrower represents and covenants that the payment of principal of and interest on the Loan can
and will be made from revenues available to the Borrower in the years as they become due, notwithstanding the
provisions of the Property Tax Limitation Act.
Section 2.05. Levy and Appropriate Funds to Repav Loan. The Borrower agrees that in order to meet
its obligation to repay the Loan and all other payments hereunder that it will budget, levy taxes for and appropriate in
each fiscal year during the term of the Loan an amount sufficient to pay the principal of and interest hereon within the
limitations of the Property Tax Limitation Act, as may be amended, and will reduce other expenditures if necessary to
make the payments hereunder when due.
ARTICLE III
CERTIFICATIONS, EXECUTION AND DELIVERY
Section 3.01. Authentication of Transcript. The Authorized Representatives are authorized and directed
to prepare and furnish to the Board and to attorneys approving the validity of the Bonds, certified copies of this
Resolution and all other resolutions and actions of the Borrower and of said officers relating to the Loan Agreement, the
Note, the Security Agreement and certificates as to all other proceedings and records of the Borrower which are
reasonably required to evidence the validity and marketability of the Note. All such certified copies and certificates shall
be deemed the representations and recitals of the Borrower as to the correctness of the statements contained therein.
Section 3.02. Legal Opinion. The attorney to the Borrower is hereby authorized and directed to deliver
to the Board at the time of Closing of the Loan his or her opinion regarding the Loan, the Loan Agreement, the Note and
this Resolution in substantially the form of the opinion set 'forth in the Attorney's Opinion.
Section 3.03. Execution. The Loan Agreement, Note, Security Agreement and any other document
required to close the Loan shall be executed in the name of the Borrower and shall be executed on behalf of the
Borrower by the signatures of the Authorized Representatives of the Borrower.
PASSED AND APPROVED by the this day of
.2002.
Pamela B. Kennedy
Mayor
Attest:
Theresa White
City Clerk
RESOLUTION - 4
Excerpts from FY2003 budget
General Fund Budget:
Traffic Sign & Signal -Machinery & Equipment - $27,000
3/4 Ton 4x4 Service Truck w/Utility Box. This is the primary vehicle for TSS and
would replace a 1987 Dodge with 155,000 miles on it (unit # 240). Out of all the vehicle:
that are used on a daily basis this truck is in the poorest condition. It was requested in
in FY02 but was left unfunded. Funding with 5 year Board of Investment loan.
Parks Department - Machinery & Equipment - $22,000
Deep Tyne Aerator, new turf maintenance essential in the maintaining and development o
athletic turf to insure durability and longevity of high use areas of athletic fields.
This will be financed for 3 years with Montana Board of Investments
Special Street Maintenance Fund budget:
Building - $52,000 financed
Remove the old lean-to. The lack of structural integrity warrants replacing it with a new
48' x 96' eight bay lean-to.
Machinery & Equipment - $81,500 financed
$81,500 - (1) Single Axle Dump Truck w/Plow and Sander. This would replace unit 433_`
a 1972 Sand Truck. This truck is over thirty years old and is in very poor condition.
Vehicles - $27,500 financed
3/4 Ton 4x4 Pick-up w/plow. This will allow us to continue the turnover of used pick-up
As part of the equipment upgrade program in FY02 we were able to retire a pick-up that
was 32 years old. At this time, our oldest pick-up is still over 21 years old. The purchase
of this pick-up was requested in FY02 and was left unfunded.
•
9
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Street
#335 — 1972 Chevy C50 Truck
Mileage — 85,779
The suspension and brake system is worn out. The transmission does not
shift properly and parts are difficult to locate for a 30-year-old vehicle. The
body is very badly rusted. In the last 10,000 miles we have spent $3,012.50
on repairs.
5
1984 Chevy Pickup
— 90,170
e used this vehicle only as a last option in the last several years
t starts). The engine has been replaced twice in the last ten years;
smission and front suspension are failing. The floorboard is also
hrough. This is not a safe vehicle to have on the road. In the last
miles we have spent $751.60 in repairs.
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