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4. Resolution 4606 - Authorizing Participation in Board of Investment Loan Program - Solid Waste TruckCity of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758 REPORT TO: Mayor Boharski and City Council Members FROM: Amy Robertson, Finance Director Chris Kukulski, City Manager SUBJECT: Resolution authorizing participation in the Board of Investments Loan Program for purchase of the Garbage Truck for $159,265. MEETING DATE: March 19, 2001 BACKGROUND: The City was approved by the Board of Investments for a loan to finance the purchase of the new Garbage Truck. Since this is a Enterprise fund and there is an existing Revenue Bond (sold in 1999 for the construction of the washbay), this Resolution is called a Supplemental Resolution. A reserve of $16,000 is required. The term of the loan is 5 years. The current interest rate is 4.75 %. This is a variable rate adjusted by the Board in February. RECOMMENDATION: Adoption of this resolution. FISCAL EFFECTS: ALTERNATIVES: Amy H. Robertson Finance Director $159,265 - 5 year loan. As suggested by Council. Report compiled: March 16, 2001 Attached: Debt Service schedule Chris A. Kukulski City Manager ANNUAL ADJUSTABLE RA MUNICIPAL FINANCE CONSOLIDATION ACT BONDS (INTERCAP REVOLVING PROGRAM) Municipality: City of Kalispell Final Bond Payment: August 15, 2005 Total Commitment: $159,265.00 Total N of Bond Payments: 10 Total Draws to Date: 0.00 Loan/Draw Number: 0755-01 This Draw Down: 159,265.00 Date of this Draw: March 23, 2001 Remaining Commitment: $0.00 Date of Bond: March 23, 2001 Project: Garbage Truck Series: 2000 Payment Interest N Days Interest Principal O/S Bond Total Amount Due Rate Due Payment Payment Balance of Payment "Beginning Balance" 159,265.00 08/15/01 4.750% 145 3,005.31 31,853.00 127,412.00 34,858.31 02/15/02 4.750% 184 3,050.91 0.00 127,412.00 3,050.91 08/15/02 181 0.00 31,853.00 95,559.00 02/15/03 184 0.00 0.00 95,559.00 08/15/03 181 0.00 31,853.00 63,706.00 02/15/04 - 184 0.00 0.00 63,706.00 08/15/04 182 0.00 31,853.00 31,853.00 02/15/05 184 0.00 0.00 31,853.00 08/15/05 181 0.00 31,853.00 0.00 Interest payments shown are actual payments that will be due. Interest payments shown from February 16, 2001 to February 15, 2002 are computed at 4.75 percent. After February 15, 2062 interest rates will be adjusted to reflect the adjusted interest rate applied on the outstanding principal balance. Please mail a copy of the amortization OR schedule with a check made payable to: U.S. Bank Trust-SpA Lockbox CM9695 ATTN: Operations Center 1200 Energy Park Drive St. Paul, MN 55108 Please wire funds to: U.S. Bank N.A. (Minneapolis) ABA 091000022 FFC: U.S. Bank Trust N.A. Account# 180121167365 Wire Clearing Account # 47300023 ATTN: 50364256/996103 DKO INTERCAP: City of Kalispell SUPPLEMENTAL RESOLUTION NO. 666 SUPPLEMENTAL RESOLUTION RELATING TO $159,265.00 SOLID WASTE SYSTEM REVENUE BONDS, SERIES 2001 AUTHORIZING THE ISSUANCE, AWARDING THE SALE AND FIXING THE TERMS AND CONDITIONS THEREOF AND CREATING SPECIAL FUNDS AND ACCOUNTS AND PLEDGING CERTAIN REVENUES AS SECURITY THEREFOR BE IT RESOLVED by the City Council of the City of Kalispell, Montana, as follows: Section 1. Definitions, Authorizations and Findings. 1.01. Definitions. The terms defined in this Section 1.01 shall for all purposes ofthis Supplemental Resolution have the meanings herein specified, unless the contest clearly otherwise requires: Act shall mean Montana Code Annotated, Title 7, Chapter 7, Parts 44 and 45, as heretofore and hereafter amended or supplemented. Board of Investments shall mean the Board of Investments of the State of Montana, or any successor to its functions under State law. Bonds shall mean the Series 2001 Bonds and all outstanding bonds of the System. Bondholder shall mean the Board of Investments. Bond Register shall mean, with respect to the Series 2001 Bonds, the registration books maintained by the Clerk/Treasurer pursuant to Section 4.02. Business Day shall mean any day other than a Saturday, Sunday or other day on which commercial banks located in the City in which the principal office of the Registrar are not open for business or are authorized by law to close. 9ty shall mean the City of Kalispell, Montana, its successors and assigns. Council shall mean the City Council of the City or any successor governing body of the City. Fiscal Year shall mean the period commencing on the first day of July of any year and ending on the last day of June of the next year, or any other specified twelve-month period, authorized by law and specified by the Council as the fiscal year of the City. Holder shall mean a Bondholder. Interest Payment Date shall mean a date specified in the Bonds and in this Supplemental Resolution as a fixed date for payment of an installment of interest on any of the Bonds. Maturi shall mean, when used with respect to any Bonds, the date on which the principal of such Bonds becomes due and payable as therein or herein provided, whether at its Stated Maturity or if by early redemption. Net Revenues shall mean the Revenues for a specified period less the Operating Expenses for the same period. RESOLUTION-2 2001 Proiect shall mean the improvements to the System described in Section 1.03. Operating Expenses shall mean the current expenses, paid or accrued, of operation, maintenance and minor repair of the System, excluding interest on the Bonds and depreciation, as calculated in accordance with generally accepted accounting principles, and shall include, without limitation, administrative expenses of the City relating solely to the System, premiums for insurance on the properties thereof, labor and the cost of materials and supplies used for current operation and for maintenance, and charges for the accumulation of appropriate reserves for current expenses which are not recurrent regularly but may reasonably be expected to be incurred. Original Purchaser shall mean, with respect to the Series 2001 Bonds, the Board of Investments. Outstanding Bonds shall mean bonds issued for the benefit of the City's System on September 17, 1999 and as further described in Section 1.04. Person shall mean any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. Principal and Interest Requirements shall mean, with respect to any Bonds and for any Fiscal Year, the amount of principal of and interest on such Bonds due and payable during such Fiscal Year. Principal Payment Date shall mean the Stated Maturity of principal of any serial bonds. Proiect shall mean an improvement, betterment, reconstruction or extension of the System, including, without limitation, the 2001 Project. Redemption Date when used with respect to any Bonds to be redeemed shall mean the date on which it is to be redeemed pursuant hereto. Redemption Price when used with respect to any Bonds to be redeemed shall mean the price at which it is to be redeemed pursuant hereto. Registrar shall mean, with respect to the Series 2001 Bonds, the Clerk/Treasurer of the City. Resolution shall mean the resolution described in Section 1.04. Revenues shall mean all revenues and receipts from rates, fees, charges and rentals imposed for the availability, benefit and use of the System, and from penalties and interest thereon, and from any sales of property which is a part of the System and income received from the investment of such revenues and receipts, including interest earnings on the accounts of the System. Series 2001 Bonds shall mean the City's Solid Waste System Revenue Bonds, Series 2001, issued in the original principal amount of $159,265.00 pursuant to this Supplemental Resolution. State shall mean the State of Montana. Stated Maturity when used with respect to any Bonds shall mean the date specified in such Bonds as the fixed date on which the principal of such Bonds is due and payable. Supplemental Resolution shall mean this Supplemental Resolution No. . System shall mean the City's municipal solid waste system, as it may at anytime exist, including any replacement, expansion and improvement thereof. RESOLUTION-3 Solid Waste System Fund shall mean the fund as created by the City's Resolution No. 4506 on September 9, 1999. 1.02. Authorization. Under the provisions of Title 7, Chapter 7, Part 44, Montana Code Annotated, as amended (the "Act"), the City is authorized to issue and sell its revenue Bonds payable during a term not exceeding forty years from their date of issue, to provide funds for the construction, reconstruction, improvement, betterment and extension of a solid waste system for the City (the System) provided that the Bonds and the interest thereon are to be payable solely out of the income and revenues to be derived from rates, fees and charges for the services, facilities and commodities furnished by such solid waste system, and are not to create any obligation for the payment of which taxes may not be levied except to pay for services provided by such solid waste system to the City. 1.03. The 2001 Project The City has determined the necessity of upgrading the System by the 2001 Project. The 2001 Project consists of the purchase of a 2001 Volvo Garbage Truck. The estimated cost of the Project is $159,265.00 with the City receiving approximately $159,265.00 in Bond proceeds. The City will fund the reserve requirement of $15,926.50. 1.04. Outstanding Bonds and Resolutions In accordance with the Act, as amended, and pursuant to Resolution No. 4506 (the "Original Resolution") adopted by the Council on September 9, 1999, the City issued $145,000.00 of Solid Waste System Revenue Bonds, Series 1999. The Original Resolution and this Supplemental Resolution are referred to herein as the "Resolution". The Outstanding Bonds are the bonds issued pursuant to the Resolution as described and referred to herein, not including the 2001 Bond. 1.05. Net Revenues Available. The City is authorized to charge just and equitable rates, charges and rentals for all services directly or indirectly furnished by the System, and to pledge and appropriate to the Series 2001 Bonds the Net Revenues to be derived from the operation of the System. The Net Revenues to be produced by such rates, charges and rentals during the term of the Series 2001 Bonds and the useful life of the improvements financed thereby will be more than sufficient to pay the principal and interest when due on the Series 2001 Bonds, and to create and maintain reasonable reserves therefor and to provide an allowance for replacement and depreciation, as prescribed by City ordinance and resolutions. 1.06. Sale of Series 2001 Bonds. Pursuant to the authority recited in Section 1.02 and for the purpose of undertaking the 2001 Project, this Council hereby authorizes the issuance of the Series 2001 Bonds. The Board of Investments has agreed, subject to certain terms and conditions, to lend the City $159,265,00 to finance the cost of the 2001 Project. The terms and conditions of the loan, as set forth in a Term Sheet dated November 3, 2000, are reasonable and advantageous to the City and are hereby accepted. It is hereby found and determined to be necessary and expedient for the City to issue and sell to the Board of Investments, pursuant to Montana Code Annotated, Section 7-7-4433(2)(a), the Series 2001 Bonds, to be designated as the "Solid Waste System Revenue Bonds, Series 2001," in the principal amount of $159,265.00, at a price equal to its principal amount. 1.07. Recitals. All acts, conditions and things required by the Constitution and laws of the State to be done, to exist, to happen and to be performed prior to the issuance of the Series 2001 Bonds have been done, do exist, have happened, and have been performed in due time, form and manner, wherefore it is now necessary for this Council to establish the form and terms of the Series 2001 Bonds, to provide for the security thereof and to issue the Series 2001 Bonds forthwith. Section 2. The 2001 Bonds. The Bonds shall be special, limited obligation of the City. Principal of, Premium, if any, and interest on the Bonds shall be payable solely from Net Revenues (other than to the extent payable out of proceeds of the Bonds). The Bonds shall not be or constitute a pledge of the general credit or taxing powers of RESOLUTION-4 the City of any kind whatsoever. Neither the Bonds nor any of the agreements or obligations of the City contained herein shall be construed to constitute an indebtedness of the State or the City within the meaning of any constitutional or statutory provisions whatsoever. Section 3. Form of the Series 2001 Bonds. The Series 2001 Bonds shall be prepared in substantially the following form, with such appropriate variations, omissions and insertions as are permitted or required by this Supplemental Resolution: [Beginning of Bond Form] UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF FLATHEAD CITY OF KALISPELL SOLID WASTE SYSTEM REVENUE BONDS Series 2001 No. R-1 $159,265.00 FOR VALUE RECEIVED, THE City of Kalispell (the "City'), a duly organized municipal corporation of the State of Montana, acknowledges itself to be specially indebted and hereby promises to pay, solely from the Debt Service Account of its Solid Waste System Fund, to the Board of Investments of the State of Montana (the "Board of Investments"), or registered assigns (the "Owner"), the principal sum of ONE HUNDRED FIFTY-NINE THOUSAND TWO HUNDRED SIXTY-FIVE DOLLARS ($159,265.00), in installments as set forth in Exhibit A attached, and to pay interest thereon, solely from the Debt Service Account, at an interest rate per annum equal to the Variable Rate (as hereinafter defined). Principal and interest are payable in semiannual installments on each Payment Date (as hereinafter defined), with the principal payable on such Payment Dates in the respective amounts set forth in Exhibit A hereto (which is hereby incorporated herein and made a part hereof), with interest then accrued and unpaid on the outstanding principal amount hereof. All outstanding principal, together with accrued and unpaid interest hereon, shall be payable on the final Payment Date. As used herein, "Payment Date" means each February 15 and August 15, commencing August 15, 2001 and concluding August 15, 2005. The installments of principal and interest are payable at the office of U.S. Bank Trust National Association MT (fonnerly known as First Trust Company of Montana National Association) as trustee for the INTERCAP Program, in St. Paul, Minnesota, or such other place as the Board of Investments shall designate. The Bonds are issuable pursuant to Montana Code Annotated, Title 7, Chapter 7, Parts 44 and 45, as amended (the "Act"), and a Supplemental Resolution duly adopted by the City Council of the City on Kalispell (the "Supplemental Resolution'). The Bonds comprise all of the Bonds of the series designated by its title (the "Series 2001 Bonds") and are issued for the purpose of financing certain improvements (the "Improvements") to the municipal solid waste system of the City (the "System"), pursuant to and in full conformity with the Constitution and laws of the State of Montana and Supplemental Resolutions of the City thereunto enabling, including the Act and Supplemental Resolution, to which Supplemental Resolution reference is made for the terms and conditions, other than those herein stated, upon which the Bonds are issued and secured. The Bonds, including the interest thereon, are payable solely from the revenues pledged to the payment thereof and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation or provision. Outstanding principal installments of the Series 2001 Bonds shall bear interest from the date thereof until paid at the Variable Rate (as hereinafter defined), as such may be adjusted from time to time as hereinafter RESOLUTION • 5 provided. Until the initial Adjustment Date (as hereinafter defined), the Variable Rate shall be four and seventy-five hundredths percent (4.75%) per annum. Thereafter, for each Adjustment Period (as hereinafter defined), the Variable Rate shall be the rate per annum equal to the interest rate then borne by the Board of Investments' INTERCAP Program as of the Adjustment Date, but in no event to exceed fifteen percent (15.00%) per annum. As used herein, "Adjustment Date" means February 15 in the years 2002 through 2005, and "Adjustment Period" means the period beginning on an Adjustment Date and ending on the day before the next succeeding Adjustment Date or the final stated maturity of the Series 2001 Bonds, whichever is earlier; provided that if the Series 2001 Bonds are notpaid at the final stated maturity, the final Adjustment Period with respect to the Series 2001 Bonds shall extend until all principal installments hereof are paid or provision has been duly made for their payment. The City may redeem any installment of principal of the Bonds on any Business Day at a price equal to the principal amount to be redeemed plus interest accrued to the date of redemption provided that the City gives at least thirty days notice to the Holder. The Bonds shall be registered in the name of the holder on the Bond Register of the City kept by the Clerk/Treasurer as Bond Registrar. The Bonds are not transferable. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City will prescribe and collect reasonable rates and charges for all services and facilities afforded by the System; including all additions thereto and replacements and improvements thereof, and has created a special Solid Waste System Fund into which the Revenues (as defined in the Supplemental Resolution) of the System will be paid, and a separate and special Debt Service Account in that fund, into which will be credited periodically, at least once in each calendar month, Net Revenues of the System then on hand (the gross revenues remaining after the payment of Operating Expenses of the System) an amount not less than the installment next payable on the Series 2001 Bonds, and that it will deposit to the Reserve Account in the Solid Waste System Fund upon the issuance of this Series 2001 Bonds $15,926.50 (the Reserve Requirement (as stated in the Supplemental Resolution), and thereafter, from each monthly apportionment, from remaining Net Revenues after the required credits to the Debt Service Account such additional amounts as may be necessary to maintain therein a balance equal to the Reserve Requirement; that the Debt Service Account and the Reserve Account will be used only to pay the principal of, premium, if any, and interest on Bonds; that the rates and charges for the System will, from time to time be made and kept sufficient to provide Net Revenues (Revenues less Operating Expenses, as defined in the Supplemental Resolution) for each Fiscal Year at least equal to the amount of principal and interest payable on the Series 2001 Bonds to maintain the balance in the Reserve Account at the Reserve Requirement, to pay promptly the reasonable current expenses of operating and maintaining the System and to provide reserves for the repair and replacement of the System; that all provisions for the security of the holder of the Bonds set forth in the Supplemental Resolution will be punctually and faithfully performed as therein stipulated; that all acts, conditions and things required by the Constitution and laws of the State of Montana and the ordinances and Supplemental Resolutions of the City to be done, to exist, to happen and to be performed in order to make the Bonds valid and binding special obligations of the City according to the terms have been done, do exist have happened and have been performed as so required; and that the Bonds and the interest and premium, if any, hereon are payable solely from the Net Revenues of the System pledged and appropriated to the Debt Service Account and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation or provision and the issuance of the Series 2001 Bonds do not cause either the general or the special indebtedness of the City to exceed any constitutional or statutory limitation. RESOLUTION - 0 IN WITNESS WHEREOF the City of Kalispell, Flathead County, State of Montana, by its City Council, has caused the Bonds to be executed on its behalf by the signatures of the Mayor and countersigned by the City Clerk, sealed with the official corporate seal of the City, and has caused the Bonds to be dated as of , 2001. City of Kalispell, Montana By Mayor Attest: City Clerk (SEAL) EXHIBIT A SCHEDULE OF PRINCIPAL INSTALLMENTS PAYABLE ON THE SERIES 2001 BONDS Paymentbate Principal August 15, 2001 $31,853.00 August 15, 2002 31,853.00 August 15, 2003 31,853.00 August 15, 2004 31,853.00 August 15, 2005 31,853.00 [end of bond form] Section 4. Terms of the Series 2001 Bonds. 4.01. Date, Maturity and Interest The Series 2001 Bonds to be issued and sold pursuant to this Supplemental Resolution shall be designated Solid Waste System Revenue Bonds, Series 2001, shall be in the principal amount of $159,265.00, may be several in number, shall be dated as of the date of delivery to and payment therefor by the Board of Investments, and shall bear interest from the date of issuance of the Series 2001 Bonds at the rate per annum equal to the Variable Rate (as hereinafter defined), as such may be adjusted from time to time as hereinafter provided. Interest shall be computed on the basis of the actual number of days in the year and the actual number of days outstanding. Principal and interest are payable in semiannual installments on each Payment Date (as hereinafter defined), with principal payable on such Payment Dates in the respective amounts set forth in Exhibit A hereto (which is hereby incorporated herein and made a part hereof), with interest then accrued and unpaid on the outstanding principal amount hereof. All outstanding principal, together with accrued and unpaid interest hereon shall be payable on the final Payment Date. As used herein, "Payment Date" means each February 15 and August 15 commencing August 15, 2001. RESOLUTION-7 Outstanding principal installments of the Series 2001 Bonds shall bear interest from the date thereof until paid at the Variable Rate, as such may be adjusted from time to time as hereinafter provided. Until the initial Adjustment Date (as hereinafter defined), the Variable Rate shall be four and seventy-five hundredths percent (4.75%) per annum. Thereafter, for each Adjustment Period (as hereinafter defined), the Variable Rate shall be the rate per annum equal to the interest rate than borne by the Board of Investments' INTERCAP Program as of the Adjustment Date, but in no event to exceed fifteen percent (15.00%) per annum. As used herein, "Adjustment Date" means February 16 in the years 2002 through 2005 and "Adjustment Period" means the period beginning on an Adjustment Date and ending on the day before the next succeeding Adjustment Date or the final stated maturity of the Series 2001 Bonds, whichever is earlier; provided that if the Series 2001 Bonds are not paid at the final stated maturity, the final Adjustment Period with respect to the Series 2001 Bonds shall extend until all principal installments hereof are paid or provision has been duly made for their payment. 4.02. Registration. The Series 2001 Bonds shall be fully registered as to both principal and interest and shall be registered in the name of and payable to the Board of Investments. 4.03. Redemption. The City may redeem any installment of principal of the 2001 Bonds on any Business Day at a price equal to the principal amount to be redeemed plus interest accrued to the date of redemption provided that the City gives at least thirty days notice to the Holder. 4.04. Execution and Delivery. The Series 2001 Bonds shall be prepared under the direction of the City Clerk and shall be executed on behalf of the City by the signatures of the Mayor and countersigned by the City Clerk, and sealed with the official corporate seal of the City. When the Series 2001 Bonds have been executed, the City Clerk shall cause them to be dated as of the date of delivery and delivered to the Board of Investments, as purchaser thereof, upon payment of the purchase price heretofore agreed upon. Section 5. Use of Proceeds of Series 2001 Bonds. The proceeds of the Series 2001 Bonds are hereby appropriated to the Solid Waste System Fund created by the City's Resolution No. 4506 and shall be deposited in accordance with the Resolution. The proceeds will be used only to accomplish the Project or to pay debt service. $15,926.50. Section 6. Reserve Requirement. The reserve requirement for the entire Series 2001 Bonds is Section 7. Additional Bonds. No additional bonds are authorized by this Resolution. The City agrees that if additional bonds are necessary and if they are to be issued and secured by the revenues of the System, that the City will obtain written permission from the Board of Investments authorizing the City to issue additional bonds. Section 8. Solid Waste System Fund. So long as the City's 2001 Solid Waste Revenue Bonds are outstanding, the City will administer, maintain and properly account for its Solid Waste System Fund as required under the City's Resolution No. 4506 adopted September 9, 1999. Section 9. Covenants. 9.01, General. The City covenants and agrees with the Holder that until all Bonds are fully discharged as provided in this Supplemental Resolution, it will continue to hold, maintain and operate the System as a public convenience, free from all liens thereon or on the income therefrom other than the liens herein granted or provided for, and will maintain, expend and account for its Solid Waste System Fund as provided by City Resolution, and will not incur a further lien or charge on the income or revenues of the System except upon the conditions and in the manner prescribed in Section 7, and will perform and cause all officers and employees of the City to perform and enforce each and all of the additional covenants and agreements set forth in Section 9. The City further covenants to cause the System to be properly maintained. RESOLUTION - 8 9.02. Competing Service. The City will not establish or enfranchise any other facilities in competition with the facilities of the System. 9.03. Property Insurance. The City will cause all buildings, properties, fixtures and equipment constituting a part of the System to be kept insured with a reputable insurance carrier or carriers, qualified under the laws of the State, in such amounts as are ordinarily carried, and against loss or damage by such hazards and risks as are ordinarily insured against, by public bodies owning and operating properties of a similar character and size; provided that if at any time the City is unable to obtain insurance, it will obtain insurance in such amounts and against risks as are reasonably obtainable. 9.04. Liability Insurance and Surety Bonds. The City will carry insurance against liability of the City and its employees for damage to persons and property resulting from the operation of the System in such amounts as the City determines from time to time to be necessary or advisable by reason of the character and extent of such operation. 9.05. Books and Records. The City will cause proper and adequate books of record and account to be kept showing complete and correct entries of all receipts, disbursements and other transactions relating to the System, the Net Revenues derived from its operation, and the segregation and application of the Net Revenues in accordance with this Supplemental Resolution, in such reasonable detail as may be determined by the City in accordance with generally accepted accounting practice and principles. 9.06. Cost of Insurance and Accounting. The costs of insurance for the System and the costs of bookkeeping herein provided for and of the billings and collection of the Revenues shall be payable from the Operating Account. 9.07. Rates and Charges. While any Bonds are Outstanding and unpaid, the rates, charges and rentals for all services and facilities furnished and made available by the System to the City and its inhabitants, and to all customers within or without the boundaries of the City shall be reasonable and just, taking into consideration the cost and value of the System and the cost of maintaining and operating them, and the amounts necessary for the payment of all Bonds and the interest accruing thereon, and the proper and necessary allowances for the depreciation of the System, and no free service shall be provided to any person or corporation. It is covenanted and agreed that the rates, charges and rentals to be charged to all recipients of solid waste services shall be maintained and shall be revised whenever and as often as may be necessary, according to schedules such that the revenues for each Fiscal Year will be at least sufficient to pay the current expenses of operation and maintenance as herein defined, to maintain the operating reserve herein established, to produce Net Revenues during each Fiscal Year commencing with the Fiscal Year ending June 30, 2001, 125% of the maximum Principal and Interest Requirements of the Outstanding Bonds and the Series 2001 Bonds in the current or any future Fiscal Year and, if not otherwise so provided, to provide an allowance adequate for repairs, replacements and depreciation of the System. If at the close of any Fiscal Year the Net Revenues actually received during such year have been less than required hereby, the City will forthwith prepare a schedule of altered rates, charges and rentals which are just and equitable and sufficient to produce Net Revenues in compliance with this Supplemental Resolution in such amount, and will do all things necessary to the end that such schedule will be placed in operation at the earliest possible date. The establishment of the above ratio of Net Revenues available for the Debt Service Account is deemed necessary for the issuance of the Series 2001 Bonds upon terms most advantageous to the City. The excess of the Net Revenues over the annual principal and interest and reserve requirements of the Series 2001 Bonds may be used to redeem the Series 2001 Bonds, if the City then determines such application to be advantageous as otherwise provided in Section 4.03 of this Supplemental Resolution. 9.08. Billing, The charges for solid waste services shall be billed at least monthly, and if the bill is not paid within 60 days of the date of billing, or if the customer fails to comply with all rules and regulations RESOLUTION-9 established for the System within 60 days after notice of violation thereof (which notice shall be given promptly upon discovery of any such violation), the solid waste service to the premises involved shall be discontinued and shall not be resumed until payment of all past -due bills for solid waste service and compliance with all such rules and regulations. Section 10. Amendments to Supplemental Resolution As long as any 2001 Bonds are outstanding, the terms, conditions, and covenants of this Supplemental Resolution may be amended only with the written consent of the City and the Bondholder. Section 11. Effective Date: Repeals. This Supplemental Resolution shall become effective upon passage and all provisions of ordinances, Supplemental Resolutions and other actions and proceedings of the City which are in any way inconsistent with the terms and provisions of this Supplemental Resolution are repealed, amended and rescinded to the full extent necessary to give full force and effect to the provisions of this Supplemental Resolution. Passed by the City Council of the City of Kalispell, Montana, on this day of , 2001. Mayor Attest: City Clerk (SEAL) RESOLUTION - 10