Resolution 5659 - Willows SID #345 - SRF LoanRESOLUTION NO. 5659
RESOLUTION RELATING TO $242,000 SPECIAL IMPROVEMENT DISTRICT NO. 345
BOND (DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN
PROGRAM), SERIES 2014; AUTHORIZING THE ISSUANCE AND FIXING THE TERMS
AND CONDITIONS THEREOF AND PROVIDING FOR THE SECURITY THEREFOR
WHEREAS, pursuant to the Water Pollution Control State Revolving Fund Act, Montana
Code Annotated, Title 75, Chapter 5, Part 11, as amended (the "State Act"), the State of Montana
(the "State") has established a revolving loan program (the "Program") to be administered by the
Department of Natural Resources and Conservation of the State of Montana, an agency of the
State (the "DNRC"), and by the Department of Environmental Quality of the State of Montana,
an agency of the State (the "DEQ"), and has provided that a water pollution control state
revolving fund (the "Revolving Fund") be created within the state treasury and all federal, state
and other funds for use in the Program be deposited into the Revolving Fund, including, but not
limited to, all federal grants for capitalization of a state water pollution control revolving fund
under the Federal Water Pollution Control Act (the "Clean Water Act"), all repayments of
assistance awarded from the Revolving Fund, interest on investments made on money in the
Revolving Fund and payments of principal of and interest on loans made from the Revolving
Fund; and
WHEREAS, the State Act provides that funds from the Program shall be disbursed and
administered for the purposes set forth in the Clean Water Act and according to rules adopted by
the DEQ and the DNRC; and
WHEREAS, the City of Kalispell, Montana (the "City") has applied to the DNRC for a
loan (the "2014 Loan") from the Revolving Fund to enable the City to finance, refinance or
reimburse itself for the costs of the 2013 Project (as hereinafter defined), which will carry out the
purposes of the Clean Water Act; and
WHEREAS, under the provisions of the Montana Code Annotated, Title 7, Chapter 12,
Parts 41 and 42, as amended (the "Enabling Act"), the City is authorized to create special
improvement districts to finance local improvements to be undertaken for the benefit of the
district and to issue its special improvement district bonds; and
WHEREAS, the City has, pursuant to the Enabling Act, created Special Improvement
District No. 345 of the City (the "District") and has provided for the levy and collection of
special assessments against benefitted property therein in accordance with the Resolution of
Intention (as hereinafter defined) and has provided for the pledge of the Special Improvement
District Revolving Fund of the City and the establishment of the District Reserve Account
pursuant to the Enabling Act for the security of the Series 2014 Bond (as hereinafter defined);
and
WHEREAS, the City is authorized under applicable laws, ordinances and regulations to
adopt this Resolution and to issue the Series 2014 Bond to evidence the 2014 Loan for the
purposes set forth herein;
WHEREAS, the DNRC will fund the 2014 Loan in part, directly or indirectly, with State
Bonds (as hereinafter defined) and in part, directly or indirectly, with funds provided by the
United States Environmental Protection Agency.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF KALISPELL, MONTANA, AS FOLLOWS:
ARTICLE I
DEFINITIONS, RULES OF CONSTRUCTION AND EXHIBITS
Section 1.1 Definitions. In this Resolution, unless a different meaning clearly appears
from the context:
"Administrative Expense Surcharge" means a surcharge on the 2014 Loan charged by the
DNRC to the City equal to seventy-five hundredths of one percent (0.75%) per annum on the
outstanding principal amount of the 2014 Loan, payable by the City on the same dates that
payments of interest on the 2014 Loan are due.
"Authorized DNRC Officer" means the Director or Deputy Director of the DNRC, and,
when used with reference to an act or document, also means any other individual authorized by
resolution of the Department of Natural Resources and Conservation to perform such act or sign
such document. If authorized by the DNRC, an Authorized DNRC Officer may delegate all or a
portion of his authority as an Authorized DNRC Officer to another individual, and such
individual shall be deemed an Authorized DNRC Officer for purposes of exercising such
authority.
"Bond Counsel" means any Counsel acceptable to the DNRC which is nationally
recognized as bond counsel. Counsel is nationally recognized as bond counsel if it has rendered
a legal opinion as to the validity and enforceability of state or municipal bonds and as to the
exclusion of interest thereon from gross income for federal income tax purposes (short-term
issues excluded) during the two-year period preceding the date of determination.
"Bond Register" means the register maintained for the purpose of registering the
ownership, transfer and exchange of the Series 2014 Bond.
"Bond Registrar" means the Person, if any, appointed by the City to maintain the Bond
Register for the Series 2014 Bond.
"Bondowner" means the Owner of a Bond.
"Business Day" means any day which is not a Saturday or Sunday, a legal holiday in the
State or a day on which banks in Montana are authorized or required by law to close.
"City" means the City of Kalispell, Montana, or any successor pursuant to Section 6.1.
"Clean Water Act" means the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251-
1387, as amended, and all regulations, rules and interpretations issued by the EPA thereunder.
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"Closing" means the date of delivery of the Series 2014 Bond to the DNRC.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Documents" means any security agreement, guaranty or other document or
agreement delivered to the DNRC, if any, securing the obligations of the City under this
Resolution and the Series 2014 Bond.
"Committed Amount" means the amount of the 2014 Loan committed to be lent by the
DNRC to the City pursuant to Section 4.1, as such amount may be reduced pursuant to
Sections 3.2 and 3.4.
"Construction Account" means the account so designated in the District Fund and
established pursuant to Sections 10.2 and 10.3.
"Counsel" means an attorney duly admitted to practice law before the highest court of
any state and satisfactory to the DNRC.
"DEQ" means the Department of Environmental Quality of the State of Montana, an
agency of the State, or any successor to its powers, duties and obligations under the Act or the
EPA Agreements.
"District Fund" means the Special Improvement District No. 345 Fund of the City,
established pursuant to Section 10.2.
"District Reserve Account" means the account so designated in the District Fund and
established pursuant to Sections 10.2 and 10.5.
"DNRC" means the Department of Natural Resources and Conservation of the State of
Montana, an agency of the State, and any successor to its powers, duties and obligations under
the Act.
"Enabling Act" means Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as
amended, which authorizes the City to undertake the 2013 Project and to issue the Series 2014
Bond to finance a portion of the costs of the 2013 Project.
"EPA" means the Environmental Protection Agency, an agency of the United States of
America, and any successor to its functions under the Clean Water Act.
"EPA Agreements" means all capitalization grant agreements and other written
agreements between the DEQ and the EPA concerning the Program.
"EPA Capitalization Grant" means a grant of funds to the State by the EPA under Title
VI of the Clean Water Act and any grant made available by the EPA for deposit in the Revolving
Fund pursuant to Section 205(m) of the Clean Water Act.
"Governmental Unit" means governmental unit as such term is used in Section 145(a) of
the Code.
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"Fiscal Year" means the period commencing on the first day of July of any year and
ending on the last day of June of the next calendar year, or any other twelve-month period
authorized by law and specified by the Council as the City's fiscal year.
"Government Obligations" means (a) direct general obligations of, or obligations the
prompt payment of the principal of and the interest on which is fully and unconditionally
guaranteed by, the United States of America, (b) obligations the payment of the principal of,
premium, if any, and interest on which is fully guaranteed as a full faith and credit obligation of
the United States of America, and (c) certificates or other evidence of ownership in principal to
be paid or interest to accrue on a pool of obligations of the type described in the foregoing
clause (a) or (b), which obligations are held by a custodian, any obligations described in the
foregoing clause (a) or (b) may be issued or held in book -entry form on the books of the
Department of Treasury of the United States of America.
"Indenture" means the Indenture of Trust, dated as of June 1, 1991, between the Board of
Examiners of the State and the Trustee, as such may be supplemented or amended from time to
time in accordance with the provisions thereof, pursuant to which, among other things, the State
Bonds are to be or have been issued.
"Interest Account" means the account so designated in the District Fund and established
pursuant to Sections 10.2 and 10.4.
"Loan Loss Reserve Surcharge" means a surcharge equal to twenty-five hundredths of
one percent (0.25%) per annum on the outstanding principal amount of the 2014 Loan from the
date of each advance thereof, payable by the City on the same dates that payments of interest on
the 2014 Loan are due.
"Loan Repayments" means periodic installments of principal and interest by City in
repayment of the 2014 Loan, at the rate and times specified in Article V.
"Loan Term" means that period of time commencing and ending as set in Sections 4.2
and 4.3.
"Opinion of Counsel" means a written opinion of Counsel.
"Owner" means, with respect to any Bond, the Person in whose name such Bond is
registered in the Bond Register.
"Person" means any Private Person or Public Entity.
"Pledged Revenues" means the special assessments levied pursuant to Section 6.7,
amounts then on hand in the District Reserve Account, amounts then on hand in the Revolving
Fund and available for transfer to the Interest Account or the Principal Account, as provided in
Section 10.6, and, in respect of the July 1, 2014 principal and interest payment approximately
$1,927.67, approximately $927.67 of which is capitalized interest to be paid from proceeds of the
Series 2014 Bond and approximately $1,000 of which is from funds the City has on hand and
available to pay principal if the Series 2014 Bond.
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"Principal Account" means the account so designated in the District Fund and established_
pursuant to Sections 10.2 and 10.4.
"Private Person" means an individual, corporation, partnership, limited liability company,
limited liability partnership, association, joint venture, joint stock company or unincorporated
organization, except a Public Entity.
"Program" means the Water Pollution Control State Revolving Fund Program established
by the Act.
"Project" means an improvement, betterment, reconstruction or extension of the System,
including the 2013 Project.
"Public Entity" means a State agency, city, town, municipality, irrigation district, county
water and sewer district, a soil conservation district or other public body established by State law
or an Indian tribe that has a federally recognized governing body carrying out substantial
governmental duties and powers over any area.
"Reserved Amounts" means any undisbursed Committed Amount which will or may be
required to pay any remaining costs of the 2013 Project upon completion thereof as provided in
Section 3.4(a).
"Resolution" means this Resolution as it may from time to time be amended or
supplemented in accordance with its terms.
"Resolution of Intention" means Resolution No. 5565, adopted by the City Council on
June 18, 2012.
"Revolving Fund" means the Special Improvement District Revolving Fund of the City
established pursuant to the Enabling Act and Ordinance No. 759, adopted by the City Council on
May 13, 1968.
"Series 2014 Bond" means the $242,000 Special Improvement District No. 345 Bond
(DNRC Water Pollution Control State Revolving Loan Program), Series 2014, issued to the
DNRC to evidence the 2014 Loan.
"Sewerage System" means the municipal sewerage system of the City, including the
sanitary sewer and storm sewer, as it may at any time exist, of which the 2013 Project will
constitute a part.
"State" means the State of Montana.
"State Act" means Montana Code Annotated, Title 75, Part 5, Chapter 11, as amended
from time to time.
"State Bonds" means the State's General Obligation Bonds (Water Pollution Control
State Revolving Fund Program), issued or to be issued pursuant to the Indenture.
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"Trustee" means U.S. Bank National Association, in Seattle, Washington, or any
successor trustee under the Indenture.
"2014 Loan" means the loan made to the City by the DNRC pursuant to the Program in
the maximum amount of the Committed Amount to provide funds to pay all or a portion of the
costs of the 2013 Project, to pay costs of issuance, and to fund a deposit to the District Reserve
Account and a deposit to the Revolving Fund.
"2013 Project" means the designing, engineering, and construction of the facilities,
improvements and activities financed, refinanced or the cost of which is being financed by or
reimbursed to the City with proceeds of the 2014 Loan, described in Appendix A hereto.
Section 1.2 Other Rules of Construction. For all purposes of this Resolution, except
where the context clearly indicates otherwise:
(a) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted government accounting
standards.
(b) Terms in the singular include the plural and vice versa.
(c) All references to time shall refer to Helena, Montana time, unless
otherwise provided herein.
(d) All references to mail shall refer to first-class mail postage prepaid.
(e) Words of the masculine gender shall be deemed and construed to include
correlative words of the feminine and neuter genders.
(f) "Or" is not exclusive, but is intended to permit or encompass one, more or
all of the alternatives conjoined.
(g) All references in this Resolution to designated sections and other
subdivisions are to the designated sections and other subdivisions of this Resolution as
originally adopted.
(h) The words "herein," "hereof' and "hereunder" and other words of similar
import without reference to any particular section or subdivision refer to this Resolution
as a whole and not to any particular section or other subdivision unless the context clearly
indicates otherwise.
(i) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles applicable
to governmental entities.
0) All computations provided herein shall be made in accordance with
generally accepted accounting principles applicable to governmental entities consistently
applied.
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Section 1.3 Exhibits. Attached to this Resolution and hereby made a part hereof are
the following Exhibits:
Appendix A: a description of the 2013 Project;
Appendix B: the form of the Series 2014 Bond; and
Appendix C: additional agreements and representations of the City.
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1 Representations. The City represents as follows:
(a) Organization and Authority. The City:
(i) is duly organized and validly existing as a municipal corporation
and political subdivision of the State;
(ii) has all requisite power and authority and all necessary licenses and
permits required as of the date hereof to own and operate the 2013 Project and to
carry on its current activities with respect to the 2013 Project, to adopt this
Resolution and to enter into the Collateral Documents and to issue the Series 2014
Bond and to carry out and consummate all transactions contemplated by this
Resolution, the Series 2014 Bond and the Collateral Documents;
(iii) is a Governmental Unit and a Public Entity; and
(iv) has taken all proper action to authorize the execution, delivery and
performance of its obligations under this Resolution, the Series 2014 Bond and
the Collateral Documents and the issuance of the Series 2014 Bond in the
maximum amount of the Committed Amount.
(b) Litigation. There is no litigation or proceeding pending, or to the
knowledge of the City threatened, against or affecting the City in any court or before or
by any governmental authority or arbitration board or tribunal that, if adversely
determined, would materially and adversely affect the existence, corporate or otherwise,
of the City, the validity or regularity of the creation of the District, the contracts for
construction of the 2013 Project or the undertaking and agreement of the City to levy
special assessments therefor and to make good any deficiency in the collection thereof
through the levy of taxes for and the making of advances from the Revolving Fund, or the
right and power of the City to issue the Series 2014 Bond or in any manner questioning
the existence of any condition precedent to the exercise of the City's powers in these
matters or the ability of the City to make all payments and otherwise perform its
obligations under this Resolution, the Series 2014 Bond and the Collateral Documents, or
the transactions contemplated by this Resolution, the Series 2014 Bond, and the
Collateral Documents or the validity and enforceability of this Resolution, the
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Series 2014 Bond and the Collateral Documents. No referendum petition has been filed
with respect to any resolution or other action of the City relating to the 2013 Project, the
Series 2014 Bond or any Collateral Documents and the period for filing any such petition
will have expired before issuance of the Series 2014 Bond.
(c) Borrowing Legal and Authorized. The adoption of this Resolution, the
issuance and delivery of the Series 2014 Bond and execution and delivery of the
Collateral Documents and the consummation of the transactions provided for in this
Resolution, the Series 2014 Bond and the Collateral Documents and compliance by the
City with the provisions of this Resolution, the Series 2014 Bond and the Collateral
Documents:
(i) are within the powers of the City and have been duly authorized by
all necessary action on the part of the City; and
(ii) do not and will not result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the City pursuant to any ordinance, resolution, indenture, loan agreement or other
agreement or instrument (other than this Resolution and any Collateral
Documents) to which the City is a party or by which the City or its property may
be bound, nor will such action result in any violation of the provisions of any
laws, ordinances, governmental rules or regulations or court or other
governmental orders to which the City, its properties or operations are subject.
(d) No Defaults. No event has occurred and no condition exists that, upon
issuance and delivery of the Series 2014 Bond and the execution and delivery of the
Collateral Documents, would constitute a default under this Resolution or the Collateral
Documents. The City is not in violation of any term of any agreement, bond resolution,
trust indenture, charter or other instrument to which it is a party or by which it or its
property may be bound which violation would materially and adversely affect the
transactions contemplated hereby or the compliance by the City with the terms hereof or
of the Series 2014 Bond and the Collateral Documents.
(e) Governmental Consent. The City has obtained or made all permits,
findings and approvals required to the date of adoption of this Resolution by any
governmental body or officer for the making and performance by the City of its
obligations under this Resolution, the Series 2014 Bond and the Collateral Documents or
for the 2013 Project, the financing or refinancing thereof or the reimbursement of the
City for the costs thereof. No consent, approval or authorization of, or filing, registration
or qualification with, any governmental authority (other than those, if any, already
obtained) is required on the part of the City as a condition to adopting this Resolution,
issuing the Series 2014 Bond or entering into the Collateral Documents and the
performance of the City's obligations hereunder and thereunder.
(f) Binding Obligation. This Resolution, the Series 2014 Bond and any
Collateral Documents to which the City is a party are the valid and binding obligations
and agreements of the City, enforceable against the City in accordance with their terms
except to the extent that the enforceability thereof may be limited by laws relating to
bankruptcy, moratorium, reorganization, insolvency or similar laws affecting creditors'
rights and general principles of equity.
(g) The 2013 Project. The 2013 Project consists and will consist of the
facilities, improvements and activities described in Appendix A, as such Appendix A
may be amended from time to time in accordance with the provisions of Article III of this
Resolution.
(h) Full Disclosure. There is no fact that the City has not specifically
disclosed in writing to the DNRC that materially and adversely affects or (so far as the
City can now foresee), except for pending or proposed legislation or regulations that are a
matter of general public information, that will materially and adversely affect the
properties, operations and finances of the City, the City's status as a Public Entity and
Governmental Unit, its ability to own and operate the 2013 Project in the manner they are
currently operated or the City's ability to perform its obligations under this Resolution,
the Series 2014 Bond and the Collateral Documents and to pledge any revenues or other
property pledged to the payment of the Series 2014 Bond.
(i) Compliance With Law. The City:
(1) is in compliance with all laws, ordinances, governmental rules and
regulations and court or other governmental orders, judgments and decrees to
which it is subject and which are material to the properties, operations and
finances of the Sewerage System or its status as a Public Entity and Governmental
Unit; and
(2) has obtained all licenses, permits, franchises or other governmental
authorizations necessary to the ownership of the 2013 Project and the Sewerage
System and the operation thereof and agrees to obtain all such licenses, permits,
franchises or other governmental authorizations as may be required in the future
for the 2013 Project and the Sewerage System and the operation thereof, which
failure to obtain might materially and adversely affect the ability of the City to
conduct the operation of the 2013 Project as presently conducted or contemplated
or the condition (financial or otherwise) of the Sewerage System or the City's
ability to perform its obligations under this Resolution, the Series 2014 Bond and
the Collateral Documents.
Section 2.2 Covenants.
(a) Right of Inspection. The DNRC, the DEQ and the EPA and their
designated agents shall have the right at all reasonable times during normal business
hours and upon reasonable notice to enter into and upon the property of the City for the
purpose of inspecting the 2013 Project or any or all books and records of the City relating
to the 2013 Project.
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(b) Further Assurance. The City shall execute and deliver to the DNRC all
such documents and instruments and do all such other acts and things as may be
necessary or required by the DNRC to enable the DNRC to exercise and enforce its rights
under this Resolution, the Series 2014 Bond and the Collateral Documents and to realize
thereon, and record and file and re-record and refile all such documents and instruments,
at such time or times, in such manner and at such place or places, all as may be necessary
or required by the DNRC to validate, preserve and protect the position of the DNRC
under this Resolution, the Series 2014 Bond and the Collateral Documents.
(c) Maintenance of Security, i� f Any; Recordation of Interest.
(i) The City shall, at its expense, take all necessary action to maintain
and preserve the lien and pledge of this Resolution and the Collateral Documents
so long as any amount is owing under this Resolution or the Series 2014 Bond;
(ii) The City shall forthwith, after the execution and delivery of the
Series 2014 Bond and thereafter from time to time, cause this Resolution and any
Collateral Documents granting a security interest in revenues or real or personal
property and any financing statements or other notices or documents relating
thereto to be filed, registered and recorded in such manner and in such places as
may be required by law in order to perfect and protect fully the lien and security
interest thereof and, from time to time, shall perform or cause to be performed any
other act required by law, including executing or causing to be executed any and
all required continuation statements and shall execute or cause to be executed any
further instruments that may be requested by the DNRC for such perfection and
protection; and
(iii) Except to the extent it is exempt therefrom, the City shall pay or
cause to be paid all filing, registration and recording fees incident to such filing,
registration and recording, and all expenses incident to the preparation, execution
and acknowledgment of the documents described in subparagraph (ii), and all
federal or state fees and other similar fees, duties, imposts, assessments and
charges arising out of or in connection with the execution and delivery of the
Series 2014 Bond and the Collateral Documents and the documents described in
subparagraph (ii).
(d) Additional Agreements. The City covenants to comply with all
representations, covenants, conditions and agreements, if any, set forth in Appendix C
hereto.
(e) Financial Information. 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 District, and the segregation and
application of the special assessments and other revenues in accordance with this
Resolution, in such reasonable detail as may be determined by the City in accordance
with generally accepted governmental accounting practice and principles. It will cause
such books to be maintained on the basis of the same Fiscal Year as that utilized by the
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City. The City shall, within 270 days after the close of each Fiscal Year, cause to be
prepared and supply to the DNRC a financial report with respect to the District for such
Fiscal Year. The report shall be prepared at the direction of the Finance Director of the
City in accordance with applicable generally accepted governmental accounting
principles and, in addition to whatever matters may be thought proper by the Finance
Director to be included therein, shall include the following:
(A) A balance sheet of the District Fund, the District Reserve Account,
and the Revolving Fund as of the end of the Fiscal Year;
(B) The amount on hand in each account of the District Fund and in
the Revolving Fund at the end of the Fiscal Year; and
(C) A determination that the report shows full compliance by the City
with the provisions of this Resolution during the Fiscal Year covered thereby, or,
if the report should reveal that the Pledged Revenues have been insufficient for
compliance with this Resolution, the report shall include a full explanation
thereof.
(f) Project Accounts. The City shall maintain Project accounts in accordance
with generally accepted government accounting standards, and as separate accounts, as
required by Section 602(b)(9) of the Clean Water Act.
(g) Records. After reasonable notice from the EPA, the City shall make
available to the EPA such records as the EPA reasonably requires to review and
determine compliance with Title VI of the Clean Water Act, as provided in
Section 606(e) of the Clean Water Act.
(h) Compliance with Clean Water Act. The City has complied and shall
comply with all conditions and requirements of the Clean Water Act pertaining to the
2014 Loan and the 2013 Project.
(i) Program Covenant. The City agrees that neither it nor any "related
person" to the City (within the meaning of Section 147(a)(2) of the Code) shall, whether
pursuant to a formal or informal arrangement, acquire bonds issued by the State under the
Indenture in an amount related to the amount of the Series 2014 Bond.
Section 2.3 Resolution of Intention. By the Resolution of Intention, this Council
declared its intention to create the District for the purpose of making special improvements for
the special benefit of the District. The Resolution of Intention designated the number of the
District, described the boundaries thereof, stated whether the District was an extended district
and stated the general character of the improvements to be made and an approximate estimate of
the costs thereof, in accordance with the provisions of the Enabling Act. By the Resolution of
Intention this Council also declared its intention to cause a portion of the cost and expense of
making the improvements specially benefiting the District to be assessed against the properties
included within the boundaries thereof in accordance with one or more methods of assessment
authorized in Montana Code Annotated, Sections 7-12-4161 to 7-12-4165 and as set forth in the
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Resolution of Intention. In the Resolution of Intention, the City Council also declared its
intention to reimburse the City for costs paid before issuance of the Series 2014 Bond, as
required by Section 1.150-2 of the Income Tax Regulations promulgated under the Internal
Revenue Code.
In the Resolution of Intention, this Council further found that it is in the public interest,
and in the best interest of the City and the District, to secure payment of principal of and interest
on the Series 2014 Bond by the Revolving Fund, on the basis of the factors required to be
considered under Section 7-12-4225 of the Enabling Act.
Section 2.4 Notices. Notice of the passage of the Resolution of Intention was given by
two publications, with at least six days between publications, in a qualified newspaper of general
circulation in the county in which the City is located or, if no such newspaper is published, in a
qualified newspaper published in an adjacent county, as required by Montana Code Annotated,
Sections 7-12-4106(2) and 7-1-2121. Notice of the passage of the Resolution of Intention was
also mailed the same day the notice was first published to all persons, firms or corporations or
the agents thereof having real property within the District listed in their names upon the last
completed assessment roll for state, county and school district taxes, at their last known
addresses. The notice described the general character of the 2013 Project, stated the estimated
cost of the 2013 Project and the method or methods of assessment of such costs against
properties in the District, specified the time when and the place where the Council would hear
and pass upon all protests made against the making of the 2013 Project or the creation or
extension of the District, referred to the Resolution of Intention as being on file in the office of
the City Clerk for a description of the boundaries of the District, all in accordance with the
provisions of the Resolution of Intention, and included a statement that, subject to the limitations
of Section 7-12-4222 of the Enabling Act, the general fund of the City may be used to provide
loans to the revolving fund or a general tax levy may be imposed on all taxable property in the
City to meet the financial requirements of the revolving fund.
Section 2.5 Creation of District. At the time and place specified in the notice
hereinabove described, this Council met to hear, consider and pass upon all protests made against
the making of the 2013 Project and the creation of the District, and, after consideration thereof
and the appropriate City contributions to the 2013 Project, it was determined and declared that
insufficient protests against the creation or extension of the District or the proposed work had
been filed in the time and manner provided by law by the owners of the property to be assessed
for the 2013 Project in the District, and this Council did therefore by Resolution No. 5590,
adopted October 15, 2012, create the District and order the proposed 2013 Project in accordance
with the Resolution of Intention. In the resolution, the City Council also confirmed the findings
it made with respect to the pledge of the Revolving Fund in the Resolution of Intention.
Section 2.6 Construction Contracts. Plans, specifications, maps, profiles and surveys
for construction of the 2013 Project were prepared by the engineers acting for the City, and were
thereupon examined and approved by this Council. An advertisement for bids for construction
of the 2013 Project was published in the official newspaper of the City in accordance with the
provisions of Montana Code Annotated, Section 7-12-4141, after which the bids theretofore
received were opened and examined. After referring the bids to the engineers for the City it was
determined that the lowest regular proposals for the furnishing of all work and materials required
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for constructing the 2013 Project in accordance with the approved plans and specifications were
the following:
Work Bidder Contract Price
Install approximately 1,250linear Schellinger $238,350
feet of storm main, manholes, Construction Co
riprap, stormwater treatment units,
re -grade the existing stormwater
detention pond, and install other
appurtenances as required
A contract for the construction of the 2013 Project was therefore awarded to said bidder, subject
to the right of owners of property liable to be assessed for the costs thereof to elect to take the
work and enter into a written contract therefor in the manner provided by Montana Code
Annotated, Section 7-12-4147, which election the property owners failed to make, whereupon
the City and the successful bidders entered into a written contract for construction of the 2013
Project upon the bidders having executed and filed bonds satisfactory to this Council and in the
form and manner provided by Montana Code Annotated, Title 18, Chapter 2, Part 2, as amended.
Section 2.7 Costs. It is currently estimated that the costs and expenses to be paid from
proceeds of the Series 2014 Bond connected with and incidental to the formation of the District
to the City, including costs of preparation of plans, specifications, maps, profiles, engineering
superintendence and inspection, preparation of assessment rolls, expenses of making the
assessments, the cost of work and materials under the construction contract the costs of
capitalizing interest, and all other costs and expenses, including the deposits of proceeds in the
District Reserve Account and the Revolving Fund are $242,000. Such amount will be levied and
assessed upon the assessable real property within the District on the basis described in the
Resolution of Intention. This Council has jurisdiction and is required by law to levy and assess
such amount, to collect such special assessments and credit the same to the District Fund created
for the District, which fund is to be maintained on the official books and records of the City
separate from all other City funds, for the payment of principal and interest when due on the
Series 2014 Bond herein authorized.
Costs of the 2013 Project not paid from proceeds of the Series 2014 Bond, estimated at
$117,985, will be paid from funds the City has on hand and available therefor.
ARTICLE III
USE OF PROCEEDS; THE 2013 PROJECT
Section 3.1 Use of Proceeds. The City shall apply the proceeds of the 2014 Loan from
the DNRC solely as follows:
(a) The City shall apply the proceeds of the 2014 Loan solely to the financing,
refinancing or reimbursement of a portion of the costs of the 2013 Project as set forth in
Appendix A hereto and this Section 3.1, funding the District Reserve Account and the
Revolving Fund, and paying costs of issuance. The 2014 Loan will be disbursed in
accordance with Article IV hereof and Article VII of the Indenture. If the 2013 Project
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has not been completed prior to Closing, the City shall, as quickly as reasonably possible,
complete the 2013 Project and expend proceeds of the Series 2014 Bond to pay the costs
of completing the 2013 Project.
(b) No portion of the proceeds of the 2014 Loan shall be used to reimburse the
City for costs paid prior to the date of adoption of a reimbursement declaration.
Section 3.2 The 2013 Project. Set forth in Appendix A to this Resolution is a
description of the 2013 Project, which describes the property which has been or is to be acquired,
installed, constructed or improved and the other activities, if any to be funded from the 2014
Loan (the 2013 Project may consist of more than one facility or activity). The 2013 Project may
be changed and the description thereof and of the 2013 Project in Appendix A may be amended
from time to time by the City but only after delivery to the DNRC of the following:
(a) A certificate of the City setting forth the amendment to Appendix A and
stating the reason therefor, including statements whether the amendment would cause an
increase or decrease in the cost of the 2013 Project, an increase or decrease in the amount
of 2014 Loan proceeds which will be required to complete the 2013 Project and whether
the change will materially accelerate or delay the construction schedule for the 2013
Project;
(b) A written consent to such change in the 2013 Project by an Authorized
DNRC Officer; and
(c) An Opinion or Opinions of Bond Counsel stating that the 2013 Project, as
constituted after such amendment, is eligible for financing under the Act and is, and was
at the time the Series 2014 Bond was issued, eligible for financing under the Enabling
Act, and such amendment will not violate the Act or the Enabling Act or the Resolution
of Intention. Such an Opinion of Bond Counsel shall not be required for amendments
which do not affect the type of facility to be constructed or activity to be financed.
Section 3.3 Project Representations and Covenants. The City hereby represents to and
covenants with the DNRC that:
(a) all construction of the 2013 Project has complied and will comply with all
federal and state standards, including, without limitation, EPA regulations and standards;
(b) all future construction of the 2013 Project will be done only pursuant to
fixed price construction contracts. The City shall obtain a performance and payment
bond from the contractor for each construction contract in the amount of 100% of the
construction price and ensure that such bond is maintained until construction is
completed to the City's, the DNRC's and the DEQ's satisfaction;
(c) all future construction will be done in accordance with plans and
specifications on file with the DNRC and the DEQ, provided that changes may be made
in such plans and specifications with the written consent of an Authorized DNRC Officer
and the DEQ;
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(d) all laborers and mechanics employed by contractors and subcontractors on
the 2013 Project have been and will be paid wages at rates not less than those prevailing
on projects of a character similar in the locality as determined by the United States
Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United
States Code;
(e) the 2013 Project is a project of the type permitted to be financed under the
Enabling Act, the Act and the Program and Title VI of the Clean Water Act; and
(f) the City will undertake the 2013 Project promptly after the Closing Date
and will cause the 2013 Project to be completed as promptly as practicable with all
reasonable dispatch, except only as completion may be delayed by a cause or event not
reasonably within the control of the City; the City has determined that the 2013 Project
has been substantially completed, except for minor clean-up and seeding and close out
items.
Section 3.4 Completion or Cancellation or Reduction of Costs of the 2013 Project.
(a) Upon completion of the 2013 Project, the City shall deliver to the DNRC a
certificate stating that the 2013 Project is complete, stating the amount, if any, of the
Reserved Amounts, and releasing the remaining amount, if any, of the Committed
Amount. If any of the Reserved Amounts is not later needed, the City shall so inform the
DNRC and release such amount. If Appendix A describes two or more separate projects
as making up the 2013 Project, a separate completion certificate shall be delivered for
each.
(b) If all or any portion of the 2013 Project is cancelled or cut back or its costs
are reduced or for any other reason the City will not require the full Committed Amount,
the City shall promptly notify the DNRC in writing of such fact and release the portion of
the Committed Amount which will not be needed.
ARTICLE IV
THE 2014 LOAN
Section 4.1 The 2014 Loan; Disbursement of 2014 Loan. The DNRC has agreed to
lend to the City, from time to time as the requirements of this Section 4.1 are met, an amount up
to $242,000 (the "Committed Amount") for the purposes of financing, refinancing or
reimbursing the City for a portion of the costs of the 2013 Project. The Committed Amount may
be reduced as provided in Sections 3.2(b) and 3.4. The 2014 Loan shall be disbursed as provided
in this Section 4.1. The DNRC intends to disburse the 2014 Loan through the Trustee.
(a) In consideration of the issuance of the Series 2014 Bond by the City, the
DNRC shall make, or cause the Trustee to make, a disbursement of all or a portion of the
2014 Loan upon receipt of the following documents:
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(1) an Opinion of Bond Counsel as to the validity and enforceability of
the Series 2014 Bond and the security therefor, in form and substance satisfactory
to the DNRC;
(2) the Series 2014 Bond, fully executed;
(3) a certified copy of this Resolution;
(4) any other security instruments or documents required by the
DNRC or DEQ as a condition to their approval of the 2014 Loan;
(5) if all or part of a Loan is being made to refinance a Project or
reimburse the City for the costs of a Project paid prior to the Closing, evidence,
satisfactory to the DNRC and the Bond Counsel referred to in (1) above, (A) of
the City's title to the 2013 Project, (B) of the costs of such Project and that such
costs have been paid by the City and (C) if such costs were paid in a previous
Fiscal Year of the City, that the City intended at the time it incurred such costs to
finance them with debt or a loan under a state revolving fund program such as the
Program;
(6) the items required by the Indenture for the portion of the 2014
Loan to be disbursed at Closing; and
(7) such other certificates, documents and other information as the
DNRC, the DEQ or the Bond Counsel giving the opinion referred to in
subparagraph (1) may require (including any necessary arbitrage rebate
instructions).
(b) In order to obtain a disbursement of a portion of the 2014 Loan to pay
costs of the 2013 Project, the City shall submit to the DNRC and the Trustee a signed
request for disbursement on the form prescribed by the DNRC, with all attachments
required by such form. The City may obtain disbursements only for costs which have
been.legally incurred and are due and payable. All Loan disbursements will be made to
the City only upon proof that cost was incurred.
(c) Reserved.
(d) If all or a portion of a Loan is made to reimburse the City for Project costs
paid by it prior to Closing, the City shall present at Closing the items required by
Section 4.1(b) relating to such costs. The Trustee shall disburse such amounts to the City
pursuant to a disbursement schedule complying with the requirements of the Clean Water
Act established by the DNRC and the City at the Closing.
(e) Notwithstanding anything else provided herein, the Trustee shall not be
obligated to disburse the 2014 Loan any faster or to any greater extent than it has
available EPA Capitalization Grants, Series 2014 Bond proceeds and other amounts
available therefor in the Revolving Fund. The DNRC shall not be required to do
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"overmatching" pursuant to Section 5.04(b) of the Indenture, but may do so in its
discretion. The City acknowledges that if 2013 Project costs are incurred faster than the
City projected at Closing, there may be delays in making Loan disbursements for such
costs because of the schedule under which EPA makes EPA Capitalization Grant money
available to the DNRC. The DNRC will use its commercially reasonable efforts to obtain
an acceleration of such schedule if necessary.
(f) Upon making each Loan disbursement, the Trustee shall note such
disbursement on Schedule A to the Series 2014 Bond.
(g) The City agrees that it will deposit in each of the District Reserve Account
and the Revolving Fund upon receipt thereof, either on the Closing Date of the 2014
Loan or upon any disbursement date, the budgeted percentage of the proceeds of the 2014
Loan disbursed for costs of the 2013 Project. The City further acknowledges and agrees
that any portion of the 2014 Loan representing capitalized interest shall be advanced only
on Payment Dates and shall be transferred by the Trustee on the Payment Date directly to
the Interest Account. The amount of any such transfer shall be a credit against the
interest payments due on the Series 2014 Bond and interest thereon shall accrue only
from the date of transfer.
Section 4.2 Commencement of 2014 Loan Term. The City's obligations under this
Resolution and the Collateral Documents shall commence on the date hereof unless otherwise
provided in this Resolution. However, the obligation to make payments under Article V hereof
shall commence only upon the first disbursement by the Trustee of 2014 Loan proceeds.
Section 4.3 Termination of 2014 Loan Term. The City's obligations under this
Resolution and the Collateral Documents shall terminate upon discharge of the Series 2014 Bond
and payment in full of all other amounts due under this Resolution; provided, however, that the
covenants and obligations provided in Article VII shall survive the termination of this
Resolution.
Section 4.4 Loan Closing Submissions. On or prior to the Closing, the City will have
delivered to the DNRC and the Trustee the closing submissions required by Section 7.05 of the
Indenture.
ARTICLE V
REPAYMENT OF 2014 LOAN
Section 5.1 Repayment of 2014 Loan. The City shall repay the amounts lent to it
pursuant to Section 4.1 hereof, plus interest on the unpaid amounts lent at the rate of two percent
(2.00%) per annum, in semiannual Loan Repayments. In addition, the City shall pay an
Administrative Expense Surcharge on the outstanding principal amount of the 2014 Loan at the
rate of seventy-five hundredths of one percent (0.75%) per annum and a Loan Loss Reserve
Surcharge equal to twenty-five hundredths of one percent (0.25%) per annum on the outstanding
principal amount of the 2014 Loan. For purposes of this Resolution and the Program, the term
"interest on the 2014 Loan" shall include the Administrative Expense Surcharge and the Loan
Loss Reserve Surcharge. The City shall pay all Loan Repayments and the Administrative
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Expense Surcharge and the Loan Loss Reserve Surcharge in lawful money of the United States
of America to the DNRC. Interest and the Administrative Expense Surcharge and the Loan Loss
Reserve Surcharge shall be calculated on the basis of a year of 360 days comprising 12 months
of 30 days each.
The Loan Repayments required by this Section 5.1, and the Administrative Expense
Surcharge and the Loan Loss Reserve Surcharge shall be due on each January 1 and July 1 (the
"Payment Dates"), as follows:
(1) interest and the Administrative Expense Surcharge and the Loan Loss
Reserve Surcharge on the outstanding principal balance of the 2014 Loan shall be
payable on each January 1 and July 1, beginning on July 1, 2014, which is the first
Payment Date after the closing of the 2014 Loan and concluding on July 1, 2029; and
(2) the principal of the 2014 Loan shall be repayable on each Payment Date,
beginning on July 1, 2014 and concluding on July 1, 2029, and the amount of each
principal payment shall be calculated on the basis of level debt service at a rate of 3.00%
per annum.
The payment of interest due July 1, 2014 will be capitalized and paid from bond proceeds
and the payment of principal in the approximate amount of $1,000 due July 1, 2014 will be paid
from other amounts the City has on hand and available therefor.
The payments of principal of and interest and the Administrative Expense Surcharge and
the Loan Loss Reserve Surcharge on the 2014 Loan shall be due on the dates specified above and
on the dates and in the amounts shown in Schedule B to the Series 2014 Bond, as such
Schedule B shall be modified from time to time as provided below. The portion of each such
Loan Repayment consisting of principal and the portion consisting of interest and the amount of
each Administrative Expense Surcharge and the Loan Loss Reserve Surcharge shall be set forth
in Schedule B to the Series 2014 Bond. Upon each disbursement of 2014 Loan amounts to the
City pursuant to Section 4.1 hereof, the Trustee shall enter or cause to be entered the amount
advanced on Schedule A to the Series 2014 Bond under "Advances" and the total amount
advanced under Section 4.1, including such disbursement, under "Total Amount Advanced."
If the advance was made to pay costs of the 2013 Project pursuant to Section 4.1(b),
interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge on such
advance shall accrue from the date the advance is made and shall be payable on each Payment
Date thereafter. Once the completion certificate for a Project has been delivered to the DNRC,
the Trustee shall revise Schedule B to the Series 2014 Bond in accordance with this Section 5.1,
and the Trustee shall send a copy of such Schedule B to the City within one month after delivery
of the completion certificate.
Past -due payments of principal and interest and the Administrative Expense Surcharge
and the Loan Loss Reserve Surcharge shall bear interest at the rate of ten percent (10.00%) per
annum, until paid.
IM
Any payment of principal, interest, the Administrative Expense Surcharge or the Loan
Loss Reserve Surcharge under this Section 5.1 shall also be credited against the same payment
obligation under the Series 2014 Bond.
Section 5.2 Additional Pam. The City shall also pay, within 30 days after receipt
of a bill therefor, from any legally available funds therefor, including proceeds of the 2014 Loan,
if the City so chooses, all reasonable expenses of the DNRC and the Trustee in connection with
the 2014 Loan, the Collateral Documents and the Series 2014 Bond, including, but not limited to:
(1) the cost of reproducing this Resolution, the Collateral Documents and the
Series 2014 Bond;
(2) the fees and disbursements of Bond Counsel and other Counsel utilized by
the DNRC and the Trustee in connection with the 2014 Loan, this Resolution, the
Collateral Documents and the Series 2014 Bond and the enforcement thereof; and
(3) all taxes and other governmental charges in connection with the execution
and delivery of the Collateral Documents or the Series 2014 Bond, whether or not the
Series 2014 Bond is then outstanding, including all recording and filing fees relating to
the Collateral Documents and the pledge of the State's right, title and interest in and to
the Series 2014 Bond, the Collateral Documents and this Resolution and all expenses,
including attorneys' fees, relating to any amendments, waivers, consents or collection or
enforcement proceedings pursuant to the provisions hereof or thereof.
Section 5.3 Prepayments.
(a) Mandatory Redemption. If on any interest payment date there will be a
balance in the District Fund after payment of the principal and interest due on the Series 2014
Bond drawn against it, either from the prepayment of special assessments levied in the District or
from the transfer of surplus money from the Construction Account to the Principal Account as
provided in Section 10.3 or otherwise, the City Finance Director shall call for redemption on the
interest payment date the applicable portion of the Series 2014 Bond in an amount which,
together with the interest thereon to the interest payment date, will equal the amount of such
funds on deposit in the District Fund on that date. The redemption price of the Series 2014 Bond
shall equal the amount of the principal amount of the Series 2014 Bond to be redeemed plus
interest, Administrative Expense Surcharge and Loan Loss Reserve Surcharge accrued to the
date of redemption.
(b) Optional Redemption. The Series 2014 Bond is subject to redemption, in
whole or in part, at the option of the City from sources of funds available therefor other than
those described in Subsection (a) of this Section 5.3 on any interest payment date; provided,
however, that the City may not prepay all or any part of the outstanding principal amount of the
Series 2014 Bond unless (i) it obtains the prior written consent of the DNRC thereto, and (ii) no
Loan Repayment, Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then
delinquent. The redemption price of the Series 2014 Bond shall equal the amount of the
principal amount of the Series 2014 Bond to be redeemed plus interest, Administrative Expense
Surcharge and Loan Loss Reserve Surcharge accrued to the date of redemption.
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(c) Selection of Principal of Series 2014 Bond for Redemption; Partial
Redemption. If less than all of the Series 2014 Bond is to be redeemed, principal installments of
the Series 2014 Bond shall be redeemed in order of the stated maturities thereof. If less than all
Series 2014 Bond of a stated maturity are to be redeemed, the Series 2014 Bond of such maturity
shall be selected for redemption from each series of Series 2014 Bond in $1,000 principal'
amounts selected by the City Finance Director by lot or other manner it deems fair.
(d) Notice and Effect of Redemption. The date of redemption shall be fixed by
the City Finance Director, who shall give notice, by first class mail, postage prepaid to the owner
or owners of such Series 2014 Bond at their addresses appearing in the Bond Register, of the
numbers of the Series 2014 Bond or principal installments thereof to be redeemed and the date
on which payment will be made, which date shall be not less than thirty (30) days after the date
of mailing notice. On the date so fixed interest on the Series 2014 Bond or principal installments
thereof so redeemed shall cease.
Section 5.4 Obligations of City Unconditional. The obligations of the City to make
the payments required by this Resolution and the Series 2014 Bond and to perform its other
agreements contained in this Resolution, the Series 2014 Bond and Collateral Documents shall
be absolute and unconditional, except as otherwise provided herein or in such documents. The
City (a) shall not suspend or discontinue any payments provided for in this Resolution and the
Series 2014 Bond, (b) shall perform all its other agreements in this Resolution, the Series 2014
Bond and the Collateral Documents and (c) shall not terminate this Resolution, the Series 2014
Bond or the Collateral Documents for any cause, including any acts or circumstances that may
constitute failure of consideration, destruction of or damage to the 2013 Project or the Sewerage
System, commercial frustration of purpose, any dispute with the DNRC or the EPA, any change
in the laws of the United States or of the State or any political subdivision of either or any failure
of the DNRC to perform any of its agreements, whether express or implied, or any duty, liability
or obligation arising from or connected with this Resolution. Provided, however, if the Series
2014 Bond is not issued and no funds are disbursed to the City, this Resolution may be
terminated.
Section 5.5 Limited Liability. All payments of principal of and interest on the 2014
Loan and other payment obligations of the City hereunder and under the Series 2014 Bond shall
be special, limited obligations of the City payable solely out of the Pledged Revenues and shall
not be payable out of any other funds or revenues of the City. The obligations of the City under
this Resolution and the Series 2014 Bond shall never constitute an indebtedness of the City
within the meaning of any state constitutional provision or statutory limitation and shall never
constitute or give rise to a pecuniary liability of the City or a charge against its general credit or
taxing power, except in respect of its obligations to fund the Revolving Fund under the Enabling
Act. The taxing powers of the City are not pledged to pay principal of or interest on the
Series 2014 Bond, and no funds or property of the City other than the Pledged Revenues are
pledged to pay principal of or interest on the Series 2014 Bond.
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ARTICLE VI
OTHER AGREEMENTS OF CITY
Section 6.1 Maintenance of Existence; Merger, Consolidation, Etc.; Disposition of
Assets. The City shall maintain its corporate existence, except that it may consolidate with or
merge into another Governmental Unit or permit one or more Governmental Units to consolidate
with or merge into it or may transfer all or substantially all of its assets to another Governmental
Unit and then dissolve if the surviving, resulting or transferee entity (if other than the City) (i) is
a Public Entity and (ii) assumes in writing all of the obligations of the City under this Resolution,
the Series 2014 Bond and the Collateral Documents, and (a) such action does not result in any
default in the performance or observance of any of the terms, covenants or agreements of the
City under this Resolution, the Series 2014 Bond and the Collateral Documents, (b) such action
does not violate the Act or the Clean Water Act and (c) the City delivers to the DNRC on the
date of such action an Opinion of Bond Counsel that such action complies with this Section 6.1.
Other than pursuant to the preceding paragraph, the City shall not transfer the 2013
Project or any portion thereof to any other Person, except for property which is obsolete,
outmoded, worn out, is being replaced or otherwise is not needed for the operation of the
Sewerage System, unless the provisions of (a) and (b) of the preceding paragraph are satisfied
and the City delivers to the DNRC an Opinion of Bond Counsel to that effect and, in addition,
the DNRC consents to such transfer.
Section 6.2 Punctual Payment. The City will punctually pay or cause to be paid the
principal and interest to become due in respect to the Series 2014 Bond, in strict conformity with
the terms of the Series 2014 Bond and of this Resolution, and it will faithfully observe and
perform all of the conditions, covenants and requirements of this Resolution and of the Series
2014 Bond. Nothing herein contained shall prevent the City from making advances of its own
moneys however derived to any of the uses or purposes referred to herein, nor shall be deemed or
constitute a pledge or appropriation of funds or assets of the City other than those expressly
pledged or appropriated hereby.
Section 6.3 Accumulation of Claims of Interest. In order to prevent any accumulation
of claims for interest after maturity, the City will not, directly or indirectly, extend or consent to
the extension of the time for the payment of any claim for interest on the Series 2014 Bond and
will not, directly or indirectly, be a party to or approve any such arrangements by purchasing or
funding said claims for interest or in any other manner. In case any such claim for interest shall
be extended or funded, whether or not with the consent of the City, such interest so extended or
funded shall not be entitled, in case of default hereunder, to the benefits of this Resolution,
except subject to the prior payment in full of the principal of the Series 2014 Bond then
outstanding and of all claims for interest which shall not have been so extended or funded.
Section 6.4 Against Encumbrances. The City will not encumber, pledge or place any
charge or lien upon any of the Pledged Revenues other than the pledge and lien herein created
for the benefit of the Series 2014 Bond.
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Section 6.5 Compliance with Resolution. The City will hold the District Fund and the
Revolving Fund as trust funds, separate and apart from all of its other funds, and the City, its
officers and agents, will comply with all covenants and agreements contained in this Resolution.
Section 6.6 Construction of 2013 Project. The'City will do all acts and things
necessary to enforce the provisions of the construction contracts and bonds referred to in Section
3 and to ensure the completion of the 2013 Project for the benefit of the District in accordance
with the plans and specifications and within the time therein provided, and will pay all costs
thereof promptly as incurred and allowed, out of the District Fund and within the amount of the
proceeds of the Series 2014 Bond appropriated thereto.
Section 6.7 Levy of Assessments. The City will do all acts and things necessary for
the final and valid levy of special assessments upon all assessable real property within the
boundaries of the District in accordance with the Constitution and laws of the State of Montana
and the Constitution of the United States in an aggregate principal amount not less than the
Committed Amount to be paid from special assessments. Such special assessments shall be
levied on the basis or bases prescribed in the Resolution of Intention and, as authorized by
Montana Code Annotated, Section 7-12-4190(2), shall be payable in substantially equal
semiannual installments of principal and interest. The unpaid installments of the assessments
shall bear interest at an annual rate determined each fiscal year equal to the sum of: (i) the
average annual interest rate borne by the Series 2014 Bond (i.e., 3.00%), plus (ii) one-half of one
percent (0.50%) per annum. The assessments will be payable in installments on the 30th day of
November in each of years 2014 through 2028 and on the 31 st day of May in the years 2015
through 2029, inclusive, if not theretofore paid, and shall become delinquent on such date unless
paid in full. In addition, the City will make the principal payment due on the Series 2014 Bond
on July 1, 2014 from funds it has on hand and available therefor. Capitalized interest from
proceeds of the Series 2014 Bond will pay the interest on the Series 2014 Bond due July 1, 2014;
accordingly, the first assessment shall include interest on the entire assessment outstanding from
July 1, 2014 to January 1, 2015, and each subsequent payment shall include interest for six
months on that payment and the then remaining balance of the special assessment. The payment
due on any installment date shall be the amount necessary to amortize, over the 15-year term in
substantially equal semiannual payments, the principal amount of the assessment, together with
interest to accrue thereon over said term at the interest rate thereon; provided that the amount of
each such installment shall be adjusted each fiscal year to an amount equal to the amount
necessary to amortize fully the then outstanding principal amount of the assessment (excluding
any delinquent amounts), plus interest accrued at the interest rate on the assessments then in
effect in the number of installments then remaining until May 31, 2029. The assessments shall
constitute a lien upon and against the property against which they are made and levied, which
lien may be extinguished only by payment of the assessment with all penalties, costs and interest
as provided in Montana Code Annotated, Section 7-12-4191. No tax deed issued with respect to
any lot or parcel of land shall operate as payment of any installment of the assessment thereon
which is payable after the execution of such deed, and any tax deed so issued shall convey title
subject only to the lien of said future installments, as provided in Montana Code Annotated,
Section 15-18-214.
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Section 6.8 Reassessment. If at any time and for whatever reason any special
assessment or tax herein agreed to be levied is held invalid, the City and this Council, its officers
and employees, will take all steps necessary to correct the same and to reassess and re -levy the
same, including the ordering of work, with the same force and effect as if made at the time
provided by law, ordinance or resolution relating thereto, and will reassess and re -levy the same
with the same force and effect as an original levy thereof, as authorized in Montana Code
Annotated, Section 7-12-4186. Any special assessment, or reassessment or re -levy shall, so far
as is practicable, be levied and collected as it would have been if the first levy had been enforced
including the levy and collection of any interest accrued on the first levy.
If proceeds of the Series 2014 Bond, including investment income thereon, are
applied to the redemption of such Series 2014 Bond, as provided in Montana Code Annotated,
Sections 7-12-4205 and 7-12-4206, or if refunding bonds are issued and the principal amount of
the outstanding Series 2014 Bond of the District is decreased or increased, the City will reduce
or increase, respectively, the assessments levied in the District and then outstanding pro rata by
the principal amount of such prepayment or the increment above or below the outstanding
principal amount of bonds represented by the refunding bonds. The City and this Council, its
officers and employees will reassess and re -levy such assessments, with the same effect as an
original levy, in such reduced or increased amounts in accordance with the provisions of
Montana Code Annotated, Sections 7-12-4176 through 7-12-4178.
Section 6.9 Further Assurances. The City will adopt, make, execute and deliver any
and all such further resolutions, instruments and assurances as may be reasonably necessary or
proper to carry out the intention or to facilitate the performance of this Resolution, and for the
better assuring and confirming unto the Owners of the Series 2014 Bond of the rights and
benefits provided in this Resolution.
Section 6.10 Waiver of Penalty and Interest. The City covenants not to waive the
payment of penalty or interest on delinquent assessments levied on property in the District for
costs of the 2013 Project, unless the City determines, by resolution of the City Council, that such
waiver is in the best interest of the Owners of the Series 2014 Bond.
ARTICLE VII
INDEMNIFICATION OF DNRC AND DEQ
The City shall, to the extent permitted by law, indemnify and save harmless the DNRC
and the DEQ and their officers, employees and agents (each an "Indemnified Party" or,
collectively, the "Indemnified Parties") against and from any and all claims, damages, demands,
expenses, liabilities and losses of every kind asserted by or on behalf of any Person arising out of
the acts or omissions of the City or its employees, officers, agents, contractors, subcontractors, or
consultants in connection with or with regard or in any way relating to the condition, use,
possession, conduct, management, planning, design, acquisition, construction, installation or
financing of the 2013 Project. The City shall also, to the extent permitted by law, indemnify and
save harmless the Indemnified Parties against and from all costs, reasonable attorneys' fees,
expenses and liabilities incurred in any action or proceeding brought by reason of any such claim
or demand. If any proceeding is brought against an Indemnified Party by reason of such claim or
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demand, the City shall, upon notice from an Indemnified Party, defend such proceeding on
behalf of the Indemnified Party.
ARTICLE VIII
ASSIGNMENT
Section 8.1 Assignment by City. The City may not assign its rights and obligations
under this Resolution or the Series 2014 Bond, except as provided in Section 6.1.
Section 8.2 Assignment by DNRC. The DNRC will pledge its rights under and
interest in this Resolution, the Series 2014 Bond and the Collateral Documents (except to the
extent otherwise provided in the Indenture) as security for the payment of the State Bonds to the
extent provided in the Indenture.
Section 8.3 State Refunding Bonds. In the event the State Bonds are refunded, all
references in this Resolution to State Bonds shall be deemed to refer to the refunding bonds and
any bonds of the State on a parity with such refunding bonds (together, the "Refunding Bonds")
or, in the case of a crossover refunding, to the State Bonds and the Refunding Bonds. In the
event the State Bonds are refunded by an issue of bonds other than State Bonds, all references in
this Resolution to the State Bonds shall be deemed to refer to such other bonds or, in the case of
a crossover refunding, both the State Bonds and such other bonds.
ARTICLE IX
THE SERIES 2014 BOND
Section 9.1 Issuance and Sale of the Series 2014 Bond. The Council has investigated
the facts necessary and hereby finds, determines and declares it to be necessary and desirable for
the City to issue the Series 2014 Bond to evidence the 2014 Loan. The Series 2014 Bond is
issued to the DNRC without public sale pursuant to Montana Code Annotated, Section 7-12-
4204(2). All acts, conditions and things required by the Constitution and laws of the State of
Montana, including the Enabling Act, in order to make the Series 2014 Bond valid and binding
special obligations in accordance with their terms and in accordance with the terms of the
Resolution have been done, do exist, have happened and have been performed in regular and due
form, time and manner as so required.
Section 9.2 Terms. The Series 2014 Bond shall be in the maximum principal amount
equal to the original Committed Amount of the 2014 Loan, shall be issued as a single, fully
registered bond numbered R-1, shall be dated as of the date of delivery to the DNRC, and shall
bear interest at the rate charged by the DNRC on the 2014 Loan. The principal of and interest on
the Series 2014 Bond shall be payable on the same dates and in the same amounts on which
principal and interest of the 2014 Loan Repayments are payable. Advances of principal of the
Series 2014 Bond shall be deemed made when advances of the 2014 Loan are made under
Section 4.1, and such advances shall be payable in accordance with Schedule B to the
Series 2014 Bond, as it may be revised by the DNRC from time to time in accordance with
Section 5.1.
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The City may prepay the Series 2014 Bond, in whole or in part, only upon the terms and
conditions under which it can prepay the 2014 Loan under Section 5.3.
Section 9.3 Negotiability, Transfer and Registration. The Series 2014 Bond shall be
fully'registered as to both principal and interest, and shall be initially registered in the name of
and payable to the DNRC. While so registered, principal of and interest on the Series 2014 Bond
shall be payable to the DNRC at the Office of the Department of Natural Resources and
Conservation, 1625 Eleventh Avenue, Helena, Montana 59620 or such other place as may be
designated by the DNRC in writing and delivered to the City. The Series 2014 Bond shall be
negotiable, subject to the provisions for registration and transfer contained in this section. No
transfer of the Series 2014 Bond shall be valid unless and until (1) the holder, or his duly
authorized attorney or legal representative, has executed the form of assignment appearing on the
Bond, and (2) the City Finance Director of the City (the "Registrar"), as Bond Registrar, has duly
noted the transfer on the Series 2014 Bond and recorded the transfer on the registration books of
the Registrar. The Registrar may, prior to noting and recording the transfer, require appropriate
proof of the transferor's authority and the genuineness of the transferor's signature. The City
shall be entitled to deem and treat the Person in whose name the Series 2014 Bond is registered
as the absolute owner of the Series 2014 Bond for all purposes, notwithstanding any notice to the
contrary, and all payments to the registered holder shall be valid and effectual to satisfy and
discharge the City's liability upon such Bond to the extent of the sum or sums so paid.
Section 9.4 Execution and Delivery. The Series 2014 Bond shall be executed on
behalf of the City by the manual signatures of the Mayor, the City Manager and the City Finance
Director. The signature of any official may be facsimile, if permitted by applicable law. The
seal of the City need not be affixed to or imprinted on the Series 2014 Bond. The Series 2014
Bond so executed shall be delivered to the DNRC, or its attorney or legal representative.
Section 9.5 Deposit of Series 2014 Bond Proceeds. The City shall deposit the
proceeds of the sale of the Series 2014 Bond as received from time to time as follows:
(a) Deposit to the credit of the District Reserve Account the amount required by
Section 4.1(g), as authorized by Section 7-12-4169(3) of the Enabling Act;
(b) Deposit to the credit of the Revolving Fund the amount required by Section
4.1(g), as required by Section 7-12-4169(2) of the Enabling Act; and
(c) Deposit the balance of the proceeds of the Series 2014 Bond in the 2014
Construction Account to be used to pay costs of issuance of the Series 2014 Bond and
pay or reimburse the City for a portion of the costs of the 2013 Project.
Section 9.6 Form. The Series 2014 Bond shall be prepared in substantially the form
attached as Appendix B.
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ARTICLE X
DISTRICT FUND; ASSESSMENTS
Section 10.1 Priority of Bond Pam. If at any time the Pledged Revenues on hand
in the District Fund are insufficient to pay principal and interest then due the Series 2014 Bond,
any and all Pledged Revenues then on hand shall be first used to pay the interest accrued on the
Series 2014 Bond.
Section 10.2 District Fund. There is hereby created and established the District Fund
designated as the "Special Improvement District No. 345 Fund," which shall be maintained by
the City Finance Director on the books and records of the City separate and apart from all other
funds of the City. Within the District Fund there shall be maintained four separate accounts,
designated as the "Construction Account," the "Principal Account," the "Interest Account," and
the "District Reserve Account," respectively.
Section 10.3 Construction Account. There shall be credited to the Construction
Account certain proceeds of the sale of the Series 2014 Bond as provided in Section 9.5(c). Any
earnings on investment of money in the Construction Account shall be retained therein.
All costs and expenses of constructing the 2013 Project to be paid from proceeds of the
Series 2014 Bond or of reimbursing the City for such costs shall be paid from time to time as
incurred and allowed from the Construction Account in accordance with the provisions of
applicable law, and money in the Construction Account shall be used for no other purpose;
provided that upon completion of the 2013 Project and after all claims and expenses with respect
to the 2013 Project have been fully paid and satisfied and all reimbursements of the City made,
any money remaining in the Construction Account shall be transferred to the Principal Account
and used to redeem principal installments of the Series 2014 Bond as provided in Section 5.3.
Section 10.4 Principal Account and Interest Account. Money in the Principal Account
and the Interest Account shall be used only for payment of the principal of and interest on the
Series 2014 Bond as such payments become due or to redeem Series 2014 Bond. Interest
income on funds in the Principal and Interest Accounts shall be retained therein and used as any
other funds therein.
Upon collection of the installment of principal and interest due on November 30 and May
31 of each fiscal year on the special assessments to be levied with respect to the 2013 Project, the
City Finance Director shall credit to the Interest Account so much of said special assessments as
is collected as interest payment and the balance thereof to the Principal Account. Any
installment of any special assessment paid prior to its due date with interest accrued thereon to
the next succeeding interest payment date shall be credited with respect to principal and interest
payments in the same manner as other assessments are credited to the District Fund. All money
in the Interest Account and the Principal Account shall be used first to pay interest due, and any
remaining money shall be used to pay Series 2014 Bond then due and, if money is available, to
redeem Series 2014 Bond in accordance with Section 5.3; provided that any money transferred to
a Principal Account from the Construction Account pursuant to Section 10.3 shall be applied to
redeem the Series 2014 Bond to the extent possible on the next interest payment date for which
notice of redemption may properly be given pursuant to Section 5.3. Redemption of the Series
26
2014 Bond shall be as provided in Section 5.3, and interest shall be paid as accrued thereon to
the date of redemption, in accordance with the provisions of Section 7-12-4206 of the Enabling
Act.
Section 10.5 District Reserve Account. Money in the District Reserve Account shall be
applied on any interest payment date to payment of principal of and interest on the Series 2014
Bond on the payment date thereof if funds on hand in the Principal Account and the Interest
Account are insufficient therefor. Funds in the District Reserve Account must be used for such
purpose before a loan is made by the Revolving Fund therefor. If money is on hand in the
District Reserve Account and the Series 2014 Bond has been paid or discharged as provided
herein, such money may be transferred in accordance with the Enabling Act.
Section 10.6 Loans from Revolving_ Fund. The Council shall annually or more often if
necessary issue an order authorizing a loan or advance from the Revolving Fund to the District
Fund in an amount sufficient to make good any deficiency then existing in the Interest Account
and shall issue an order authorizing a loan or advance from the Revolving Fund to the District
Fund in an amount sufficient to make good any deficiency then existing in the Principal Account
in such order and in each case to the extent that money is available in the Revolving Fund;
provided, however, that at the time any such loan or advance is to be made, the District Reserve
Account shall have been or shall be depleted on the next interest payment date. A deficiency
shall be deemed to exist in the Principal Account or the Interest Account if the money on deposit
therein, together with any funds on deposit in the District Reserve Account, on any June 15 or
December 15 (excluding amounts in the Principal Account representing prepaid special
assessments) is less than the amount necessary to pay Series 2014 Bond due (other than upon
redemption) on the next succeeding interest -payment date.
Pursuant to Ordinance No. 759, the City has undertaken and agreed to provide funds for
the Revolving Fund by levying such tax or making such loan from the City's General Fund as
authorized by Montana Code Annotated, Section 7-12-4222. In the event that the balance on
hand in the Revolving Fund fifteen days prior to any date when interest is due on special
improvement district bonds or warrants of the City is not sufficient to make good all deficiencies
then existing in the special improvement district funds for which the City has covenanted to
make loans from the Revolving Fund, the balance on hand in the Revolving Fund shall be
allocated to the funds of the special improvement districts in which such deficiencies then exist
in proportion to the amounts of the deficiencies on the respective dates of receipt of such money,
until all interest accrued on such special improvement district bonds or warrants of the City has
been paid. On any date when all accrued interest on special improvement district bonds and
warrants of the City payable from funds for which the City has covenanted to make loans from
the Revolving Fund has been paid, any balance remaining in the Revolving Fund shall be lent or
advanced to the special improvement district funds for payment and redemption of bonds to the
extent the special improvement district funds are deficient for such purpose, and, if money in the
Revolving Fund is insufficient therefor, pro rata, in an amount proportionate to the amount of
such deficiency.
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ARTICLE XI
CONTINUING DISCLOSURE
The City understands and acknowledges that the DNRC is acquiring the Series 2014
Bond under the Program pursuant to which the State issues from time to time State Bonds to
provide funds therefor. The City covenants and agrees that, upon written request of the DNRC
from time to time, the City will promptly provide to the DNRC all information that the DNRC
reasonably determines to be necessary or appropriate to offer and sell State Bonds or to provide
continuing disclosure in respect of State Bonds, whether under Rule 15c2-12 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934 (17 C.F.R.
§ 240.15c2-12) or otherwise. Such information shall include, among other things and if so
requested, financial statements 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 (such financial statements to relate to a Fiscal Year or any period therein for which they
are customarily prepared by the City, and, if for a Fiscal Year and so requested by the DNRC,
subject to an audit report and opinion of an accountant or government auditor, as permitted or
required by the laws of the State). The City will also provide, with any information so furnished
to the DNRC, a certificate of the City Manager and the City Finance Director to the effect that, to
the best of their knowledge, such information does not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein to make the statements made,
in light of the circumstances under which they are made, not misleading.
ARTICLE XII
DEFEASANCE
Section 12.1 General. When the liability of the City on the Series 2014 Bond and all
interest thereon has been discharged as provided in this Article, all pledges, covenants and other
rights granted by this Resolution to the Owners of the Series 2014 Bond shall cease.
Section 12.2 Maturity. The City may discharge its liability with reference to the Series
2014 Bond and interest thereon which are due on any date by depositing with the Trustee on or
before the date a sum sufficient for the payment thereof in full; or if the Series 2014 Bond or
interest shall not be paid when due, the City may nevertheless discharge its liability with
reference thereto by depositing with the Trustee a sum sufficient for the payment thereof in full
With interest accrued to the date of such deposit.
Section 12.3 Redemption. The City may also discharge its liability with reference to
the Series 2014 Bond called for redemption on any date in accordance with their terms, by
depositing with the Trustee 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.
Section 12.4 Escrow. The City may also at any time discharge its liability with
reference to the Series 2014 Bond by depositing irrevocably in escrow, with a bank qualified by
law as an escrow agent for this purpose, cash or securities which are Government Obligations
which are authorized by law to be so deposited, bearing interest payable at such times and at
such rates and maturing on such dates as shall be required to provide funds sufficient to pay all
principal and interest to become due on the Series 2014 Bond over time or the City has given the
redemption notice required to redeem the Series 2014 Bond and the funds provided will be
sufficient to pay the redemption price, including any applicable redemption premium, to an
earlier redemption date.
ARTICLE XIH
TAX MATTERS
Section 13.1 Use of 2013 Project. The 2013 Project will be owned and operated by the
City and available for use by members of the general public on a substantially equal basis. The
City shall not enter into any lease, use or other agreement with any non -governmental person
relating to the use of the 2013 Project or the Sewerage System or security for the payment of the
Series 2014 Bond which might cause the Series 2014 Bond to be considered "private activity
bonds" or "private activity bonds" within the meaning of Section 141 of the Code.
Section 13.2 General Covenant. The City covenants and agrees with the owners from
time to time of the Series 2014 Bond that it will not take or permit to be taken by any of its
officers, employees or agents any action which would cause the interest on the Series 2014 Bond
to become includable in gross income for federal income tax purposes under the Code and the
Regulations, and covenants to take any and all actions within its powers to ensure that the
interest on the Series 2014 Bond will not become includable in gross income for federal income
tax purposes under the Code and the Regulations.
Section 13.3 Arbitrage Certifications. The Mayor, City Manager and the City Finance
Director, being the officers of the City charged with the responsibility for issuing the Series 2014
Bond pursuant to the Resolution, are authorized and directed to execute and deliver to the DNRC
a certificate in accordance with the provisions of Section 148 of the Code, and Section 1.148-
2(b) of the Regulations, stating that on the basis of facts, estimates and circumstances in
existence on the date of issue and delivery of the Series 2014 Bond, it is reasonably expected that
the proceeds of the Series 2014 Bond will be used in a manner that would not cause the Series
2014 Bond to be "arbitrage bonds" within the meaning of Section 148 of the Code and the
Regulations.
Section 13.4 Arbitrage Rebate Exemption.
(a) The City hereby represents that the Series 2014 Bond qualify for the exception
for small governmental units to the arbitrage rebate provisions contained in Section
148(f) of the Code. Specifically, the City represents:
(i) Substantially all (not less than 95%) of the proceeds of the Series
2014 Bond (except for amounts to be applied to the payment of costs of issuance)
will be used for local governmental activities of the City.
29
(ii) The aggregate face amount of all "tax-exempt bonds" (including
warrants, contracts, leases and other indebtedness, but excluding private activity
bonds) issued by or on behalf of the City and all subordinate entities thereof
during 2014 is reasonably expected not to exceed $5,000,000.
(b) If notwithstanding the provisions of paragraph (a) of this Section 13.4, the
arbitrage rebate provisions of Section 148(f) of the Code apply to the Series 2014 Bond,
the City hereby covenants and agrees to make the determinations, retain records and
rebate to the United States the amounts at the times and in the manner required by said
Section 148(f).
Section 13.5 Information Reporting. The City shall file with the Secretary of the
Treasury, not later than August 15, 2014, a statement concerning the Series 2014 Bond
containing the information required by Section 149(e) of the Code.
Section 13.6 "Qualified Tax -Exempt Obligations". Pursuant to Section 265(b)(3)(B)(ii)
of the Code, the City hereby designates the Series 2014 Bond as a "qualified tax-exempt
obligation" for purposes of Section 265(b)(3) of the Code. The City has not designated any
obligations in 2014 under Section 265(b)(3) other than the Series 2014 Bond. The City hereby
represents that it does not anticipate that obligations bearing interest not includable in gross
income for purposes of federal income taxation under Section 103 of the Code (including
refunding obligations as provided in Section 265(b)(3) of the Code and including "qualified
501(c)(3) bonds" but excluding other "private activity bonds," as defined in Sections 141(a) and
145(a) of the Code) will be issued by or on behalf of the City and all "subordinate entities" of the
City in 2014 in. an amount greater than $10,000,000.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices. All notices or other communications hereunder shall be
sufficiently sent or given and shall be deemed sent or given when delivered or mailed by
certified mail, postage prepaid or by recognized overnight delivery service, to the parties at the
following addresses:
DNRC: Department of Natural Resources and Conservation
1625 Eleventh Avenue
P. O. Box 201601
Helena, Montana 59620-1601
Attn: Conservation and Resource
Development Division
Trustee: U.S. Bank National Association
c/o Corporate Trust Services
1420 — 5th Avenue, 7th Floor
Seattle, Washington 98101
Attn: Corporate Trust Department
9a
City: City of Kalispell
201 15` Avenue East
P.O. Box 1997
Kalispell, Montana 59903
Attn: City Finance Director
Any of the above parties may, by notice in writing given to the others, designate any
further or different addresses to which subsequent notices or other communications shall be sent.
Section 14.2 BindingEffect. This Resolution shall inure to the benefit of and shall be
binding upon the DNRC, the City and their respective permitted successors and assigns, and the
Owners from time to time of the Series 2014 Bond.
Section 14.3 Severability. If any provision of this Resolution shall be determined to be
unenforceable at any time, it shall not affect any other provision of this Resolution or the
enforceability of that provision at any other time.
Section 14.4 Applicable Law. This Resolution shall be governed by and construed in
accordance with the internal laws of the State.
Section 14.5 Captions; References to Sections. The captions in this Resolution are for
convenience only and do not define or limit the scope or intent of any provisions or Sections of
this Resolution. References to Articles and Sections are to the Articles and Sections of this
Resolution, unless the context otherwise requires.
Section 14.6 No Liability of Individual Officers, Directors or Council Members. No
recourse under or upon any obligation, covenant or agreement contained in this Resolution shall
be had against any director, officer or employee, as such, past, present or future, of the DNRC or
the Trustee, either directly or through the DNRC or the Trustee, or against any officer, or
member of the Council or employee of the City, past, present or future, as an individual so long
as such individual was acting in good faith. Any and all personal liability of every nature,
whether at common law or in equity, or by statute or by constitution or otherwise, of any such
officer or member of the governing body or employee of the DNRC, the Trustee or the City is
hereby expressly waived and released by the City and by the DNRC as a condition of and in
consideration for the adoption of this Resolution and the making of the 2014 Loan.
Section 14.7 Payments Due on Holidays. If the date for making any payment or the last
date for performance of any act or the exercise of any right, as provided in this Resolution or any
Bond, shall not be a Business Day, such payments may be made or act performed or right
exercised on the next succeeding Business Day with the same force and effect as if done on the
nominal date provided in this Resolution or the Bond.
Section 14.8 Right of Others To Perform City's Covenants. In the event the City shall
fail to make any payment or perform any act required to be performed hereunder, then and in
each such case the DNRC or the provider of any Collateral Document may (but shall not be
obligated to) remedy such default for the account of the City and make advances for that
purpose. No such performance or advance shall operate to release the City from any such default
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and any sums so advanced by the DNRC or the provider of any Collateral Document shall be
paid immediately to the party making such advance and shall bear interest at the rate of ten
percent from the date of the advance until repaid. The DNRC and the provider of any Collateral
Document shall have the right to enter the 2013 Project or the facility or facilities of which the
2013 Project is a part or any other facility which is a part of the 2013 Project in order to
effectuate the purposes of this Section.
Section 14.9 Authentication of Transcript. The officers of the City are hereby
authorized and directed to furnish to the DNRC and to Bond Counsel certified copies of all
proceedings relating to the issuance of the Series 2014 Bond and such other certificates and
affidavits as may be required to show the right, power and authority of the City to issue the
Series 2014 Bond, and all statements contained in and shown by such instruments, including any
heretofore furnished, shall constitute representations of the City as to the truth of the statements
purported to be shown thereby.
Section 14.10 Effective Date. This Resolution shall take effect immediately.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL, THIS 3RD DAY OF FEBRUARY, 2014.
ATTEST:
Theresa White
City Clerk
son
Counci esident
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APPENDIX A
DESCRIPTION OF THE 2013 PROJECT
The project consists of improvements to the storm water detention facility of the District
(the "Facility") to bring the Facility up to City standards, including design, construction and
installation of a diversion structure and improvements to the detention pond, pond outlet
structure, and the outlet pipe of the Facility.
Application of Proceeds of Series 2014 Bond
Payment or Reimbursement for Project Costs
Revolving Fund Deposit
Reserve Fund Deposit
Bond Counsel
Capitalized Interest
Total
A-1
$206,800.00
12,100.00
11,172.33
11,000.00
927.67
$242,000.00
►►►.:
[Form of the Series 2014 Bond]
UNITED STATES OF AMERICA
STATE OF MONTANA
FLATHEAD COUNTY
CITY OF KALISPELL
SPECIAL IMPROVEMENT DISTRICT NO. 345 BOND
(DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM),
SERIES 2014
No. R-1
$242,000
FOR VALUE RECEIVED, THE CITY OF KALISPELL, MONTANA (the "City"), a
duly organized municipal corporation and political subdivision of the State of Montana,
acknowledges itself to be specially indebted and, for value received, hereby promises to pay to
the Department of Natural Resources and Conservation of the State of Montana (the "DNRC"),
or its registered assigns, solely from the Special Improvement District No. 345 Fund, the
principal sum equal to the sum of the amounts entered on Schedule A attached hereto under
"Total Amount Advanced," with interest on each such amount from the date such amount is
advanced hereunder at the rate of 2.00% per annum on the unpaid balance until paid. In
addition, the City shall pay, solely from said source, an Administrative Expense Surcharge and a
Loan Loss Reserve Surcharge on the outstanding principal amount of this Bond at the rates of
seventy-five hundredths of one percent (0.75%) and twenty-five hundredths of one percent
(0.25%), respectively, per annum. Interest and Administrative Expense Surcharge and the Loan
Loss Reserve Surcharge shall be payable in semiannual installments payable on each January 1
and July 1 (each a "Loan Repayment Date"), commencing July 1, 2014. Principal shall be
payable on the dates set forth in Schedule B hereto. Each installment shall be in the amount set
forth opposite its due date in Schedule B attached hereto under "Total Loan Payment." The
portion of each such payment consisting of principal, the portion consisting of interest, the
portion consisting of Administrative Expense Surcharge, and the portion consisting of Loan Loss
Surcharge shall be as set forth in Schedule B hereto. Upon each disbursement of 2014 Loan
amounts to the City pursuant to the Resolution described below, the DNRC shall enter (or cause
to be entered) the amount advanced on Schedule A under "Advances" and the total amount
advanced under the Resolution (as hereinafter defined), including such disbursement, under
"Total Amount Advanced." The DNRC shall prepare Schedule B and any revised Schedule B,
or cause Schedule B and any revised Schedule B to be prepared, as provided in Section 5.1 of the
Resolution. Schedule B shall be calculated and recalculated on a level debt service basis
assuming an interest rate of 3.00% per annum. Past -due payments of principal and interest and
Administrative Expense Surcharge and the Loan Loss Reserve Surcharge shall bear interest at
the rate of ten percent (10.00%) per annum, until paid. Interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360-day year
comprising 12 months of 30 days each. All payments under this Bond shall be made to the
registered holder of this Bond, at its address as it appears on the Bond register, in lawful money
of the United States of America.
This Bond is the City's "Special Improvement District No. 345 Bond (DNRC Water
Pollution Control State Revolving Loan Program), Series 2014 (the "Series 2014 Bond"), issued
under Resolution No. , adopted by the City Council of the City on February 3, 2014 (the
"Resolution"), to which Resolution, copies of which are on file with the City, reference is hereby
made for a description of the nature and extent of the security, the respective rights thereunder of
the Owners of the Series 2014 Bond and the City and the terms upon which the Series 2014
Bond are to be issued and delivered. Terms used with initial capital letters but not defined herein
have the meanings given them in the Resolution. The Series 2014 Bond is issued in the
maximum authorized principal amount of $242,000. The Series 2014 Bond is issuable only as a
single, fully registered bond. The Series 2014 Bond is issued by the City for the purpose of
financing or reimbursing the City for a portion of the cost of the acquisition and construction of
certain local improvements within Special Improvement District No. 345 of the City (the
"District"), thereby assisting activities in the public interest and for the public welfare of the
City.
The Series 2014 Bond is issued pursuant to and in full compliance with the Constitution
and laws of the State of Montana, particularly Montana Code Annotated, Title 7, Chapter 12,
Parts 41 and 42, as amended (the "Act"), and pursuant to the Resolution. This Bond is payable
from the collection of a special tax or assessment levied upon all assessable real property within
the boundaries of the District, in an aggregate principal amount of not less than the aggregate
principal amount of the Series 2014 Bond to be paid from special assessments, except as such
amount may be reduced or increased in accordance with provisions of Montana law and except
that the payment of principal of and interest on the Series 2014 Bond due July 1, 2014 is from
other funds of the City. Such assessments constitute a lien against the assessable real estate
within the District, and the Series 2014 Bond are not general obligations of the City. The City
has established in the District Fund, and funded with certain proceeds of the Series 2014 Bond, a
District Reserve Account (the "Reserve Account"), from which moneys are to be applied to pay
principal of and interest on the Series 2014 Bond in the event collections of special assessments
are insufficient therefor. There is no obligation for the City to replenish the Reserve Account if
funds are withdrawn therefrom.
The City has also validly established a Special Improvement District Revolving Fund (the
"Revolving Fund") to secure the payment of certain of its special improvement district bonds,
including the Series 2014 Bond. The City has also agreed, to the extent permitted by the
Enabling Act, to issue orders annually authorizing loans or advances from the Revolving Fund to
the District Fund, in amounts sufficient to make good any deficiency in the District Fund to pay
principal of or interest on the Series 2014 Bond after depletion of the Reserve Account, to the
extent that funds are available in the Revolving Fund, and to provide funds for the Revolving
Fund by annually making a tax levy or loan from its general fund in an amount sufficient for that
purpose, subject to the limitation that no such tax levy or loan may in any year cause the balance
in the Revolving Fund to exceed [five percent] of the principal amount of the City's then
outstanding special improvement district bonds secured thereby and the durational limitations
specified in the Enabling Act.
The Series 2014 Bond is subject to mandatory redemption on any interest payment date
if, after paying all principal and interest then due on the Series 2014 Bond, there are funds to the
credit of the Special Improvement District No. 345 Fund of the City, from the prepayment of
assessments levied in the District or from surplus proceeds of the Series 2014 Bond not required
to pay costs of the 2013 Project, for the redemption thereof, and in the manner provided for the
redemption of the same, as further provided in the Resolution. The Series 2014 Bond is subject
to redemption at the option of the City from other sources of funds available therefor on any
interest payment date, subject, however, to the terms and conditions specified in the Resolution.
The redemption price is equal to the principal amount of the Series 2014 Bond or portions
thereof to be redeemed plus interest accrued thereon to the date of redemption. Any prepayment
must be accompanied by payment of accrued Administrative Expense Surcharge and Loan Loss
Reserve Surcharge to the date of prepayment on the amount of principal prepaid. The date of
redemption shall be fixed by the City Finance Director, who shall give notice by first class mail,
postage prepaid, to the owner or owners of such Series 2014 Bond at their addresses shown on
the bond register, of the Series 2014 Bond or portions thereof to be redeemed and the date on
which payment will be made, which date shall not be less than thirty (30) days after the date of
mailing of notice, on which date so fixed interest shall cease. On the date so fixed interest on the
Series 2014 Bond or portions thereof so redeemed shall cease to accrue.
The Series 2014 Bond has been designated by City as "qualified tax-exempt obligations"
pursuant to Section 265 of the Internal Revenue Code of 1986, as amended.
If provision is made for the payment of principal of and interest on this Series 2014 Bond
in accordance with the Resolution, this Series 2014 Bond shall no longer be deemed outstanding
under the Resolution, shall cease to be entitled to the benefits of the Resolution, and shall
thereafter be payable solely from the funds provided for payment.
The City may deem and treat the person in whose name this Series 2014 Bond is
registered as the absolute owner hereof, whether this Series 2014 Bond is overdue or not, for the
purpose of receiving payment and for all other purposes, and the City shall not be affected by
any notice to the contrary. The Series 2014 Bond may be transferred as hereinafter provided.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all
things required to be done precedent to the issuance of this Bond have been properly done,
happened and been performed in the manner prescribed by the laws of the State of Montana and
the resolutions and ordinances of the City relating to the issuance thereof.
IN WITNESS WHEREOF, the City of Kalispell, Montana, by its governing body, has
caused this Bond to be executed by the signatures of the Mayor, the City Manager and the City
Finance Director, and has caused this Bond to be dated as of the [15th] day of [May], 2014.
CITY OF KALISPELL, MONTANA
CI
Mayor
And
City Manager
And
City Finance Director
ME
REGISTRATION AND TRANSFER
This Bond shall be fully registered as to both principal and interest. No transfer of this
Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized
attorney or legal representative, executes the form of assignment appearing on this Bond, and
(2) the City Finance Director of the City, as bond registrar (the "Registrar"), has duly noted the
transfer on the Bond and recorded the transfer on the Registrar's registration books. The City
shall be entitled to deem and treat the person in whose name this Bond is registered as absolute
owner thereof for all purposes, notwithstanding any notice to the contrary. Payments on account
of the Bond shall be made only to the order of the registered holder thereof, and all such
payments shall be valid and effectual to satisfy and discharge the City's liability upon the Bond
to the extent of the sum or sums so paid.
REGISTER
The ownership of the unpaid Principal Balance of this Bond and the interest accruing
thereon is registered on the books of the City of Kalispell, Montana in the name of the registered
holder appearing on the first page hereof or as last noted below:
Date of Registration
[May 15], 2014
Name and Address
of Registered Holder
Department of Natural
Resources and Conservation
1625 Eleventh Avenue
Helena, MT 59620
Signature of
City Finance Director
THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The City Finance Director of the City of Kalispell, Montana, acting as Bond Registrar,
has transferred, on the books of the City, on the date last noted below, ownership of the principal
amount of and the accrued interest on this Bond to the new registered holder noted next to such
date, except for amounts of principal and interest theretofore paid.
Date of Transfer
Name of New, Signature of
Registered Holder Bond Registrar
FORM OF ASSIGNMENT
For value received, this Bond is hereby transferred and assigned by the undersigned
holder, without recourse, to
on this day of ,
For:
(Authorized Signature)
(Holder)
SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED
Total Amount
Date Advances Advanced Notation Made B
I
Date Principal Interest
SCHEDULE B
Administrative
Expense Surcharge
Loan Loss
Reserve
Surcharge
Total Loan
Payment
[None]
APPENDIX C
ADDITIONAL REPRESENTATIONS AND COVENANTS
C-1