05. Resolution 4237 - SID 341 Bond Resolution'95 09; 13 IS:11 4065430863 DORSEY & WHITNEY Z004/02
RESOLLTnON NO. 4237
fi • # 0*111
s s .. • ITTP79 FE
EYE=ON. AND DE1=Y THERWF
SECURITY ...
BE IT RESOLVED by the City Council of the City of Kalispell, Montana (the
„laity"), as follows:
Section 1. i It is hereby found, determined and declared as follows:
1.01. Resulutit a of Intention. By Resolution No. 4204, adopted May 1, 1995
(the "Resolution of Intention"), this Council declared its intention to create Special
Improvement District No. 341 (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 (the "Improvements") and an approximate estimate of
the costs thereof, in accordance with the provisions of Montana Code Annotated,
Title 7, Chapter 12, Parts 41 and 42, as amended (the "Act"). By the Resolution of
Intention this Council also declared its intention to cause 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 7-124161
to 7-12-4165 and as set forth in the Resolution of Intention.
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 Bonds by the Special Improvement District
Revolving Fund of the City, on the basis of the factors required to be considered
under Section 7-12-4225 of the Act. Those findings are hereby ratified and
confirmed.
1.02 Lice . Notice of the passage of the Resolution of Intention was
given by two publications, with at least six days between publications, the first no
more than 21 days prior to the hearing and the last no less than three days prior to
the hearing, 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
95 O9/13 18:12 U4065430561 DORSEY & ItHTTNE ao05;0:6
character of the Improvements, stated the estimated cost of the Improvements 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 Improvements 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 of Council 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 7-124M of the Act,
the general fund of the City may be used to provide loans to the revolving fiend or a
general tax levy may be imposed on all taxable property in the City to meet the
financial requirements of the revolving fund.
1.03. Creation of Jh&trirt. 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 improvements and the creation of the District, and,
after consideration thereof, 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 Improvements in the District, and this Council did therefore by Resolution
No. 4211, adopted June 5,1995, create the District and order the proposed
Improvements in accordance with the Resolution of intention. In the resolution,
the City Council also declared its intention to reimburse the City for costs paid before
issuance of the Bonds, as required by Section 1.150-2 of the Income Tax Regulations
promulgated under the Internal Revenue Code, and coznfi med the findings it made
with respect to the pledge of the Revolving Fund in the Resolution of intention.
1.04. Constructn„!ntracts. Plans, specifications, maps, profiles and
surveys for construction of the Improvements 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 Improvements 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 proposal for the furnishing of all work and
materials required for constructing the Improvements in accordance with the
approved plans and specifications was the following.
Work
Bidder Contract Fri .
installation of a sanitary sewer main LHC Inc.
with services to the property line,
on Fifth Avenue East beginning at
Fourteenth Street East and continuing
South to the City limits line.
-2-
$107,317.00
A5 09/13 id:13 a065430563 DORSEl & i;HITh'E1 006/026
A contract for the cor stru.ction of the Improvements was therefore awarded to said
bidder, subject to the right of owners of property liable to be assessed for the coats
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 bidder
entered into a written contract for construction of the Improvements upon the
bidder 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.
1.05. Coots. Costs of the improvements in excess of the costs to be assessed
against the District will be paid from other available funds of the City. It is currently
estimated that the costs and expenses 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 and all other costs and expenses,
including the deposits of proceeds in the Revolving Fund and in the District
Reserve Account in the District Fund, are $100,000. Such amount will be levied and
assessed upon the assessable real property within the District on the bases 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 special improvement 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 bonds herein
authorized.
1.06. Sae and Issuance ofBonds. For the purpose of financing the costs and
expenses of making the Improvements, which are to be assessed against the property
within the District as provided in the Resolution of Intention, this Council by
Resolution No. 4223, adopted July 24, 1995, called for the public sale of bonds in the
total aggregate amount of $100,000 (the `Bonds"). Advertisements for bids for the
purchase of the Bonds were published in accordance with the provisions of
Montana Code Annotated, Sections 7-124204, 7-7-4252 and 17-5-106. Pursuant to the
minutes of the August 21.,1995 regular meeting, this Council authorized the City to
enter into a contract with D. A. Davidson & Co., in Great Falls, Montana (the
,,Purchaser"), as the lowest responsible bidder pursuant to which the Purchaser
agreed to purchase from the City the Bonds at a purchase price of $97,000 plus
interest accrued thereon from the date of original issue of the Bonds, at the rates of
interest set forth in Section 2.01 hereof and upon the further terms set forth in this
resolution resulting in a net effective interest rate of 6.0565% per annum and a total
interest cost of $
-3-
1*4 vts%aa 10:1.) Tj--LV1)a4Ju5ioa OURSEY & WHITNEY Z 007;02$
1,017. i�� tals. All acts, conditions and things required by the Constitution
and laws of the State of Montana, including Montana Code Annotated, Title 7,
Chapter 12, Parts 41 and 42, as amended, in order to make the Bonds valid and
binding special obligations in accordance with their terms and in accordance with
the terms of this resolution have been done, do exist, have happened and bAve been
performed in regular and due form, time and manner as so required.
2.01. Frinciivai l Amount MatuxificsDenomLnati . Date, ,t. 's•
Por the purpose of paying the costs and expenses incurred in construction of the
Improvements, and in anticipation of the collection of special assessments to be
levied therefor, and in accordance with the proposal described in Section 1.06, the
City shall forthwith issue and deliver to the Purchaser the Bonds payable solely
from the Special Improvement District No. 341 Fund (the "District Fund") and
denominated "Special Improvement District No. 341 Bonds." The Bonds shall be
dated, as originally issued, and be registered as of September 1, 1990-1 shall each be in
the denomination of $5,000 or any integral multiple thereof of single maturities,
shall mature on July I in the years and principal amounts set forth below, and
Bonds maturing in such years and principal amounts shall bear interest from the
date of original registration until paid or duly called for redemption at the rates per
annurn set forth opposite such years and amounts, respectively:
Principal
Principal
Year
AmfRate
YearAmount
EA19
1997
$ 5,000
4.40%
2005
$ 51000
5.50%
1998
5,000
4.60
2006
5,000
5.60
1999
50000
4.75
2007
10,000
5.75
2000
5,000
4.90
2008
10,000
5.90
2001
5,000
5.00
2009
10,000
6.00
2002
5,000
5.10
2010
10,000
6.10
2003
5,000
5.25
2011
10,000
6.20
2004
51000
540
2.01 Interest Pavmmt Dates. Interest on the Bonds shall be payable on each
January 1 and July 1, commencing January 1, 1997, to the owners of record thereof as
such appear on the bond registrar at the close of business on the fifteenth day of the
immediately preceding month, whether or not such day is a business day. Upon the
original delivery of the Bonds to the Purchaser and upon each subsequent transfer
or exchange of a Bond pursuant to Section 2.04, the Registrar shall date each Bond as
of the date of its authentication.
-4-
Na va%ta 10;L4 -"4v0a4imt;oa DORSEY & WHITNEY Q008/O2f
2.03. Method of kaympiA. The Bonds shall be issued only in fully registered
form The interest on and, upon surrender thereof at the principal office of the
Registrar (as hereinafter defined), the principal of each Bond, shall be payable by
check or draft drawn on the Registrar.
2 04. Egghatmton. The City hereby appoints First Trust Company of
Montana National Association, of Billings, Montana, to act as registrar, transfer
agent and paying agent (the "Registrar"). The City swerves the right to appoint a
successor band registrar, transfer agent or paying agent, as authorized by the Model
public obligations Registration Act of Montana, Montana Code Annotated, Title 17,
Chapter 5, Part 11, as amended (the "Registration Act"), but the City agrees to pay the
reasonable and customary charges of the Registrar for the services performed. This
Section 2.04 shall establish a system of registration for the Blinds as defined in the
Registration .ACE.
The effect of registration and the rights and duties of the City and the
Registrar with respect thereto shall be as follows:
(a) Bond, Regi5ter. The Registrar shall keep at its principal office a
bond register in which the Registrar shall provide for the registration of
ownership of the Bonds and the registration of transfers and exchanges of the
Bonds entitled to be registered, transferred or exchanged.
(b) Transfer. Upon surrender to the Registrar for transfer of any
Bond duly endorsed by the registered owner thereof or accompanied by a
written irfstn=ent of transfers, in form satisfactory to the Registrar, duly
executed by the registered owner thereof or by an attorney duly authorized by
the registered owner in writing, the Registrar shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new
Bonds of a lake aggregate principal amount and maturity, as requested by the
transferor. The Registrar may, however, close the books for registration of
any transfer of any Bond or portion thereof selected or called for redemption
No transfer or exchange of a Bond shall affect its order of registration for
purposes of redemption pursuant to Section 2.05.
(c) Exchange Whenever any Bond is surrendered by the registered
owner for exchange, the Registrar shall authenticate and deliver one or more
new Bonds of a like aggregate principal amount, interest rate and maturity, as
requested by the registered owner or the owner's attorney duly authorized in
writing.
(d) Cancellatii2n. All Bonds surrendered upon any transfer or
exchange shall be promptly cancelled by the Registrar and thereafter disposed
of as directed by the City.
-5-
LJwVV044VOQ4 DORSEY & 'AHITNEY Q009/021
(e) ImpropcL,or Ungut_hQriztd Irm-sia. When any Bond is
presented to the registrar for transfer, the Registrar may refuse to transfer the
same until it is satisfied that the endorsement on such Bond or separate
instrument of transfer is valid and genuine and that the requested transfer is
legally authorized. The Registrar shall ir<cur no liability for the refusal, in
good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(f)e sons 12Owners. The City and the Registrar may treat the
person in whose name any Bond is at any time registered in the bond register
as the absolute owner of such. Bond, whether such Bond shall be overdue or
not, for the purpose of receiving payment of, or on account of, the principal of
and intent on such Bond and for all other purposes, and all such payments
so made to any such registered owner or upon the owner's order shall be
valid and effectual to satisfy and discharge the liability of the City upon such
Bond to the extent of the sum or sums so paid.
(g) Taxes. Fees and Charges. For every transfer of Bonds or exchange
of Bonds (except an exchange upon a partial redemption of a Bond), the
Registrar may impose a charge upon the owner thereof sufficient to
reimburse the registrar for any tax, fee or other governmental charge
required to be paid with respect to such transfer or exchange.
(h) M]a1jlatgd, Lost. Stalen or Destroyed Bonds. In case any Bond
shall become mutilated or be destroyed, stolen or lost, the Registrar shall
deliver a new Bond of like amount, number, maturity date and tenor in
exchange and substitution for and upon cancellation of any such mutilated
Bond or in lieu of and in substitution for any such Bond destroyed, stolen or
lost, upon the payment of the reasonable expenses and charges of the
Registrar in connection therewith, and, in the case of a Bond destroyed, stolen
or lost, upon filing with the Registrar of evidence satisfactory to it that such
Bond was destroyed, stolen or lost, and of the ownership thereof, and upon
furnishing to the Registrar an appropriate bond or indemnity in form,
substance and amount satisfactory to it, in which both the City and the
Registrar shall be named as obligees. All Bonds so surrendered to the
Registrar shall be cancelled by it and evidence of such cancellation shall be
given to the City. If the mutilated, destroyed, stolen or lost Bond has already
matured or such Bond has been called for redemption in accordance with its
terms, it shall not be necessary to issue a new Bond prior to payment.
M
95 09/ 13 16 : 15 U4065430863 DORSEl & WHITNEY11010F U26
I !I k'o-- Me
(a) M ndatory Redemnts�n. If on any interest payment date there will be a
balance in the District Fund after payment of the princ€pal and interest due on all
Bonds drawn against it, either from the prepayment of special assessments lewd in
the Districts or from the transfer of surplus money from. the Construction Account
to the Principal Account as provided in Section 3.02 or otherwise, the City Finance
Director shall call for redemption on the interest payment date outstanding Bonds,
or portions thereof, 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 shall equal the amount of the principal
amount of the Bonds to be redeemed plus interest accrued to the date of
redemption.
(b) Q2jional Redemption. The Bonds are 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 2.05 on any interest payment
date; provided, however, the Bonds shall not be called for redemption (i) from
amounts on deposit in the District reserve account in the District Fund or (ii) before
July 1, 2001, from the proceeds of refunding special improvement district bonds or
warrants. The redemption price shall equal the principal amount of the Bonds to be
redeemed plus interest accrued to the date of redemption
(c) Select on of U-mds imEcd=ption' Partial &dern tion. If less thane all
of the Bonds are to be redeemed, Bonds shall be redeemed in order of the stated
maturities thereof. If less than all Bonds of a stated maturity are to be redeemed, the
Bonds of such maturity shall be selected for redemption in $5,000 principal amounts
selected by the Registrar by lot or other manner it deems fair. Upon partial
redemption of a Bond, a new Bond or Bonds will be delivered to the registered
owner without Charge, representing the remaining principal amount thereof
outstanding.
(d) Notice and Effect of Re emption 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 Bonds at their addresses appearing in the
bond register, of the numbers of the Bonds or portions 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 Bonds
or portions thereof so redeemed shall cease.
2.06. FQIM. The Bonds shall be drawn in substantially the form set forth in
Fxhibit A hereto, and by this reference made a part hereof, with such modifications
as are permitted by the Art.
-7-
04 UZI/10 10.av U 4VU04JV004 DORSEY & WHITN7EY Z011r02
2.07. Ex@cqf=_RgZj&ijtjQ and De iv rcr. The Bonds shall be prepared
under the direction of the City Finance Director and shall be executed on behalf of
the City by the signatures of the Mayor, the City Manager and the City Finance
Director; provided that the signatures and the corporate seal may be printed,
engraved or lithographed facsimiles of the originals. The seat of the City need not
be impressed or imprinted on any Bond. In case any officer whose signature or a
facsimile of whose signature shall appear on the Bonds shaU cease to be such officer
before the delivery of any Bond, such signature or facsie shall nevertheless be
valid and sufficient for all purposes, the same as if such officer had remained in
office until delivery. Notwithstanding such execution, no Bond shall be valid or
obligatory for any purpose or entitled to any security or benefit under this resolution
unless a certificate of authentication on such Bond has been duly executed by the
manual signature of an authorized representative of the Registrar. Certificates of
authentication on different Bonds need not be signed by the same representative.
The executed certificate of authentication on each Band shall be conclusive evidence
that it has been authenticated and delivered under this resolution. The Bonds shall
be registered in order of their serial numbers by the Registrar. When the Bonds
have been so executed, authenticated and registered, they shall be delivered by the
Registrar to the Purchaser upon payment of the purchase price in accordance with
the contract of sale heretofore made and executed. The Purchaser shall not be
obligated to see to the application of the purchase price, but from the proceeds of the
Bonds the City Finance Director shall credit forthwith $$5,000 to the Revolving Fund,
as required by Section 7-124169(2) of the Act, $5,000 to the District Reserve Account
in the District Fund, as authorized by Section 7-12-4169(3) of the Act, any accrued
interest to the Interest Account in the District Fund, and the balance of such
proceeds to the Construction Account in the District Fund.
7Q-0Wj!jj&1N1MThere is hereby created and established the District
Fund designated as the "Special Improvement District No. 341 Fund," which shall
be maintained by the City Finance Director on the books and records of the City
separate and apart from all other funds of the City. Within the District Fund there
shall be maintained four separate accounts, designated as the "Construction
Account," "Principal Account," "Interest Account" and "District Reserve Account,"
respectively.
3.02. Construction Account. There shall be credited to the Construction
Account certain proceeds of the sale of the Bonds as provided in Section 2.07. Any
earnings on investment of money in the Construction Account shall be retained
therein. .All costs and expenses of constructing the Improvements to be paid from
proceeds of the Bonds shall be paid from time to time as incurred and allowed from
the Construction Account in accordance with the provisions of applicable law, and
money in the Construction Account shall be used for no other purpose; provided
4$-
VQ vo/.L%s 10.1V &j4VQa44VU04 DORSE'i & WHITNEY Z012/026
that upon completion of the Improvements and after all claims and expenses with
respect to the improvements have been fully paid and satisfied, any money
remaining in the Construction Account shall be transferred to the Principal Account
and used to redeem Bonds as provided in Section 3.03.
3.03. Fdnaal AccoI= and lnftrest Acc =- Money in the Principal
Account and the Interest Account shall be used only for payment of the principal of
and interest on the Bonds as such payments become due or to redeem Bonds. From
the proceeds of the Bonds, there shall be deposited in the Interest Account any
interest on the Bonds accrued to the date of their delivery. Interest income on fonds
in the 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 Improvements, 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 Bonds
then due and, if money is available, to redeem. Bonds in accordance with Section
2,05; provided that any money transferred to a Principal Account from the
Construction Account pursuant to Section 3.02 shall be applied to redeem Bonds to
the extent possible on the next interest payment date for which notice of redemption
may properly be given pursuant to Section 2.05. Redemption of Bonds shall be as
provided in Section 2.05, 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 Act.
3.04. District Reserve Account. nt. Money in the District Reserve Account shall
be applied on any interest payment date to payment of principal of and interest on
the Bonds at the stated maturity 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 all Bonds
have been paid or discharged as provided in Section 7, such money shall be
transferred to the Revolving Fund, as required by Section 7-12-4169(3).
3.05. Loans from RevolvjUg 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
0
95 09/13 18:17 %Y4065430863 DORSEY & WHITNEY Vj 013/02E
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 December 15 or June 15 (excluding amounts in the
Principal Account representing prepaid special assessments) is less than the amount
necessary to pay Bonds due (other than upon redemption), and interest on all Bonds
payable, on the next succeeding interest payment date.
Pursuant to Ordinance No. 754, the City has undertaken and agreed to
provide funds for the Revolving Fund by levying such tax or making such loan
from the General Fund as authorized by Montana Code Annotated, Section
7-1.2-4222. 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 Fur►d 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 rats, in an amount proportionate to the amount of such deficiency.
Section 4. venan . The City covenants and agrees with the owners from
time to time of each of the Bonds that until all the Bonds and interest thereon are
fully paid:
4.01. Compliance with Reaalution. The City will hold the District Fund and
the Devolving 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. 1'be provisions hereinabove made with respect to the
District Fund and the Revolving Fund are in accordance with the undertaking and
agreement of the City made in connection with the public offering of the Bonds and
the sale of the Bonds as set forth in Section 1.06.
-10-
RV Vol AV d-�v "1VQQ44V004 DORSEY & A-fflTNEY" Z014,02
4.02. struction of lmproy=ents. The City will do all acts and things
necessary to enforce the provisions of the construction contracts and bonds referred
to in Section 1.04 and to ensure the completion of the Improvements for the benefit
of the District in accordance with the plans and specifications and within the tie
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 Bonds
appropriated thereto.
The City will do all acts anal 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
$104,000. Such special assessments shall be levied on the basis or bases prescribed in
the Resolution of Intention, and shall be payable in semiannual installments over a
period of 15 years, each installment being due in an amount equal to one -thirtieth of
the principal amount of each assessment, with interest on the whole amount
remaining unpaid at an annual rate equal to the sum of: (i) the average annual
interest rate borne by the Bonds, plus (ii) one-half of one percent (0.50%) per annum,
interest being payable with principal installments. The assessments to be levied will
be payable on the 30th day of November in each of the years 1996 through 2010 and
on the 31st day of May in the years 1997 through 2011, inclusive, if not theretofore
paid, and shall become _delin u nt on such date unless paid in fulLANNOMIM
e assessments shall constitute a e
upon and agaunst the property against which they are made and levied, which lien
may be extinguished only by payment of the assessment with all penalties, cost 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.
4.04. 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
-11-
aw .. b.*-Vw. VQVv VvKbt.2 & KHITNEF Q015/026
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 Bonds, including investment income therm, are applied
to the redemption of such Bonds, 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 Bonds of the District is decreased or increased, the City will
reduce or Increase, respectively, the assessments levied in the District and tim
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.
4.05. Absence_ of Litigations There is now no litigation pending or, to the
best knowledge of the City, threatened questioning the validity or regularity of the
creation of the District, the contracts for construction of the Improvements 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 Bands or in any manner questioning the existence of any condition
precedent to the exercise of the City's powers in these platters. If any such litigation
should be initiated or threatened, the City will forthwith notify in writing the
Purchaser, and will furnish the Purchaser a copy of all documents, including
pleadings, in connection with such litigation.
4.06. iNaiyt?r of Fenaltand 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 Improvements, unless the City determines, by resolution of
the City Council, that such waiver is in the best interest of the owners of the
outstanding Bonds.
Section 5. Tax Matters.
5.01. Use pf Improvements. The Improvements 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-govemmental person relating to the use of the
improvements or security for the payment of the Bonds which might cause the
Bonds to be considered "private activity bonds" or "private loan bonds" within the
meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the
,.Code").
SK
— Vol S. 4v—V &&4VVQg0V*o3 DORSEY & WHITNEYZ016t421
5.02. en rat fQovenant. The City covenants and agrees with the owners
from time to time of the Bonds 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
Bonds to become includable in gross income for federal income tax purposes under
the Code and applicable Treasury Regulations applicable to the Bonds and
proxnulgated under the Code, including, without limitation, Treasury Regulations
(the "Regulations"), and covenants to take any and all actions within its powers to
ensure that the interest on the Bonds will not become includable in gross dome
for federal income tax purposes under the Code and the Regulations.
5.03. Arb`. itraggg, of eatign. The Mayor, the City Manager and the City.
Finance DiIrector, being the officers of the City charged with the responsiilility for
issuing the Bonds pursuant to this resolution, are authored and directed to execute
and deliver to the Purchaser 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 Bonds, it is reasonably expected that the proceeds of the Bonds will be
used in a manner that would not cause the Bonds to be "arbitrage bonds" within the
meaning of Section 148 of the Code and the Regulations.
(a) The City hereby represents that the Bonds 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:
(1) Substantially all (not less than 95%) of the proceeds of the Bonds
(except for amounts to be applied to the payment of costs of issuance and
amounts to be deposited in the Interest Account pursuant to Section 3.03) will
be used for local governmental activities of the City.
(2) 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 1995 is reasonably Expected not to exceed $5,000,0W. To date in
1995, the City has issued no such tax-exempt bonds, and in the calendar years
1990 through 1994 the average principal amount of such tax-exempt bonds
issued by the City in a single calendar year was $1,422,685.
(b) If notwithstanding the provisions of paragraph (a) of this Section 5.04,
the arbitrage rebate provisions of Section 148(f) of the Code apply to the Bonds, 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).
-13-
95 09/13 18: 20 T24065430863 DORSEI & WHITNEY IZ017i 026
5.05. info xtion Reportip-9. The City shall file with the Secretary of the
Treasury, not later than November 15, 1995, a statement concerning the bonds
contai.nitg the information required by Section 149(e) of the Code.
5.06. " aid ' a -Exempt abli®afl xm." Pursuant to Section
265(b)(3)(B)(ii) of the Code, the City hereby designates the Bonds as "qualified
tax-exempt obligations" for purposes of Section 265(b)(3) of the Code. The City has
not designated any obligations in 1995 other than the Bonds under Section M(b)(3).
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) Ponds" 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 1995 in
an amount greater than $10 000,000.
Section 6. Auth ntiration of ranscrinj. The officers of the City are hereby
authorized and directed to furnish to the Purchaser and to bond counsel certified
copies of all proceedings relating to the issuance of the Bonds and such other
certificates and affidavits as may be required to show the right, power and authority
of the City to issue the Bonds, 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 7. lir ie.
7.01. Canetd. When the liability of the City on all Bonds issued under and
secured by this resolution has been discharged as provided in this Section 7, all
pledges, covenants and other rights granted by this resolution to the owners of such
obligations shall cease.
7.02. Ptm. The City may discharge its liability with reference to any
Bond or installment of interest thereon which is due on any date by on or before
that date depositing with the Registrar funds sufficient, or, if a City officer is the
Registrar, mailing to the registered owner of such Bond a check or draft in a sum
sufficient and providing proceeds available, for the payment thereof in full, or if any
Bond or installment of interest thereon shall not be paid when due, the City may
nevertheless discharge its liability with reference thereto by depositing with the
Registrar funds sufficient, or, if a City officer is the Registrar, by mailing to the
registered owner thereof a check or draft in a sum sufficient and providing proceeds
available, for the payment thereof in full with interest accrued to the date of such
deposit or mailing.
-14-
95 09/13 18:20 4065430863 DORSEY & WHITNTY (10161026
7.03. Prevayment. The City may also discharge its obligations with respect
to any Bonds called for redemption on any date when they are prepayable according
to their terms, by on or before that date depositing with the Registrar funds
sufficient, or, if a City officer is the Registrar, mailing to the registered owner of such
Bond a check or a draft in a sum sufficient and providing proceeds available, for the
payment of the principal, interest and redemption premium, if any, which are then
due; provided that notice of such redemption has been duly given as provided
herein or irrevocably provided for.
7.04. Es . The City may also at any time discharge its liability in its
entirety with reference to the Bonds, subject to the provisions of law now or
hereafter authorizing and regulating such action, by depositing irrevocably in
escrow, with a bank qualified by law as an escrow agent for this purpose, cash or
securities which are authorized by law to be so deposited, bearing interest payable at
such times and at such rates and maturing can such dates as shall be required,
without reinvestment, to provide funds sufficient to pay all principal and interest to
become due on all Bonds on or before maturity or, if any Bond has been duly called
for redemption or notice of such redemption has been irrevocably provided for, on
or before the designated redemption date.
Section 8. Con�tinuin&Disclos_u_re. The Securities and Exchange
Commission (the "SEC") has promulgated certain amendments to Rule 15c2-12
F under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12) (the "Rule") that
make it unlawful for an underwriter to participate in the primary offering of
municipal securities in a principal amount of $1,000,000 or more unless, before
submitting a bid or entering into a purchase contract for the bonds, it has reasonably
determined that the issuer or an obligated person has undertaken in writing for the
benefit of the bondholders to provide certain disclosure information to prescribed -
information repositories on a continuing basis or unless and to the extent the
offering is exempt from the requirements of the Rule.
The principal amount of the Bonds is less than $1,000,000. The City hereby
represents that it has not issued within the six months before the date of issuance of
the Bonds, and that it reasonably expects that it will not issue within six months
after the date of issuance of the Bonds, other bonds of the City of substantially the
same security and providing financing for the same general purpose or purposes as
the Bonds. Consequently, this Council hereby funds that the Rule is inapplicable to
the Bonds, because the aggregate principal amount of the Bonds and any other bond
issue to be integrated with the Bonds thereunder is less than $1,000,000. Therefore,
the City will not enter into any undertaking to provide continuing disclosure of any
kind with respect to the Bonds.
-15-
VI) VNIIJ 10:Z1 'a4U65430863 DORSEY & WH1TNEY Z'019;02
Section. 9. Rmcals and Efftg-tiu Date.
9.01. Rg9g2l. All provisions of other resolutions and other actions and
proceedings of the City and this Council that are In any way inconsistent with the
terms and provisions of this resolution are repealed, amended and rescinded to the
full extent necessary to give W force and effect to the provisions of this resolution.
9.02. Effective 12&k. This resolution shall take effect immediately upon its
passage and adoption by this Council.
PASSED by the City Council of the City of Kalispell, Montana, this 18th day
of September, 1995.
Aftest:-
City Clerk of Council
(SEAL)
-16-
Mayor
95 09/13 18:21 TN065430863 DORSEY & WHITNEY Q0201026
[Face of the bond]
CITY OF KA.LLSPELL
1i 1i1 1 1"'
Interest at the rate per annum specified below
Payable semiannually
on the Ist day of January and the 1st day of July
in each year, commencing January 1, 1997.
No. $
Mr
Date of Original
mkbLdwIssue
September 1.,1995
L
PRINCIPAL AMOUNT.
DOLLARS
FOR VALUE RECEIVED, the City of Kalispell, Flathead County, Montana.,
will pay to the registered owner identified above, or registered assigns, on the
maturity date specified above the principal amount specified above, solely from the
revenues hereinafter specified, as authorized by Resolution No. adopted
September 18, 1995 (the "Resolution"), all subject to the provisions hereinafter
described relating to the redemption of this Bond before maturity. This Bond beaxs
interest at the rate per annum specified above from the date of registration of this
Bond, as expressed herein, or from such later date to which interest hereon has been
A-1
95 09/13 18:22 V4065430863 DORSEI & WHITNEY (}02.t 02
paid or duly provided for, until the maturity date specified above or an earlier date
on which this Bond shall have been duly called for redemption by the City Finance
Director. Interest on this Bond is payable semiannually, commencing January 1,
1997, on the first day of January and the first day of July in each year, to the owner of
record of this Bond appearing as such in the bond register as of the close of business
on the 15th day (whether or not such is a business day) of the immediately preceding
month. Interest on and, upon presentation and surrender hereof, the principal of
this Band are payable by check or draft of First Trust Company of Montana National
Association, as bond registrar and paying agent, at its operations center in St. Paul,
Mirmesota, or its successor designated under the Resolution (the "RegistraM. The
principal of and interest on this Bond are payable in lawful money of the United
States of America.
Additional provisions of this Bond are contained on the reverse hereof and
such provisions shall for all purposes have the same effect as though fully set forth
herein.
This Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Resolution until the Certificate of
Authentication herein shall have been executed by the Registrar by the manual
signature of one of its authorized representatives.
IN WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana,
by its City Council, has caused this Bond and the certificate on the reverse hereof to
be executed by the facsimile signatures of the Mayor, City Manager and City Finance
Director, and by a printed facsimile of the official seal of the City.
CITY OF K.ALISPELL, MONTANA.
(Facsimile Signature)
MAYOR
(Facsimile Seal)
(Facsimile Signature)
CITY MANAGER
(Facsimile Signature)
CITY FINANCE DIRECTOR
A-2
95 08/13 18:22 %T4065430863 DORS£1 & WHITNTY 11022iol6
11T�-9
herein.
This is one of the Bonds delivered pursuant to the Resolution mentioned
FIIRST TRUST COMPANY OF
MONTANA NATIONAL
ASSOCIATION,
as Bond Registrar, Transfer
Agent and Paying Agent
By
Authorized Representative
[Reverse of the Bonds]
This Bond is one of an issue in the aggregate principal amount of $100,000
(the "Bonds"), all of like date of original issue and tenor, except as to serial number,
denomination, date, interest rate and maturity date. The Bonds are issued pursuant
to and in frill conformity with the Constitution and laws of the State of Montana
thereunto enabling, including Montana Code Annotated, Title 7, Chapter 12, Parts
41 and 42, as amended (the "Act"), to finance the costs of certain local improvements
(the "Improvements") for the special benefit of property located in Special
Improvement District No. 341 of the City (the "District"). The Bonds are issuable
only as fully registered bonds of single maturities in denominations of $5,000 or any
integral multiple thereof.
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 $100,000, except as such amount may be
reduced or increased in accordance with provisions of Montana law. Such
assessments constitute a lien against the assessable real estate within the District,
and the Bonds are not general obligations of the City. The City has established in the
District Fund, and funded with certain proceeds of the Bonds, a District Reserve
Account (the "Reserve Account"), from which moneys are to be applied to pay
principal of and interest on the Bonds 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.
A-3
a5 uu/kJ in,c:s DORSEI & WHiTNE1 Z023RQ2
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 Bonds. The City has also agreed,
to the extent permitted by the 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
Bonds 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
raking 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 sec=ed
thereby and the durational limitations specified in the Act.
The Bonds are subject to mandatory redemption in order of stated
maturities and within a stated maturity in $5,000 principal amounts selected by lot
or other manner deemed fair by the Registrar, on any interest payment date if, after
paying all principal and interest then due on the Bonds, there are funds to the credit
of the Special Innprovemez1t District No. 341 Fund of the City, from the prepayment
of assessments levied in the District or from surplus proceeds of the Bonds not
required to pay costs of the Improvements, for the redemption thereof, and in the
manner provided for the redemption of the same. The Bonds are subject to
-` redemption at the option of the City from other sources of funds available therefor
on any interest payment date; provided, however, that the City hereby agrees that
the Bonds are not to be called for redemption (i) from amounts on deposit in the
District Reserve Account in the District Fund or (ii) before July 1, 2001, from the
proceeds of refunding special improvement district bonds or warrants. The
redemption price: is equal to the principal amount of the Bonds or portions thereof
to be redeemed plus interest accrued thereon to the date 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 Bonds at them addresses
shown on the bond register, of the Bonds 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 Bonds or portions thereof so redeemed shall
cease to accrue. Upon partial redemption of any Bond, a new Bond or Bonds will be
delivered to the registered owner without charge, representing the remaining
principal amount outstanding.
The Bonds have been designated by City as "qualified tax-exempt
obligations" pursuant to Section 265 of the Internal Revenue Code of 1986, as
amended.
A.-4
as uv%is to: zs U4L)U5-130863 DOI2SEY & WHITNEYZ024F 026
As provided in the Resolution and subject to certain limitations set forth
therein, this Bond is transferable upon the books of the City at the principal office of
the Registrar, by the registered owner hereof in person or by his attorney duly
authorized in writing upon surrender hereof together with a written instrument of
transfer satisfactory to the Registrar, duly executed by the registered owner or"his
attorney; and may also be surrendered in exchange for Bonds of other authorized
denominations. Upon such transfer or exchange, the city will cause a new Bond or
Bonds to be issued in the name of the transferee or registered owner, of the saute
aggregate principal amount, bearing interest at the same rate and maturing ort the
same date, subject to reimbursement for any tau, fee or governmental charge
required to be paid with respect to such transfer or exchange.
The City and the Registrar may deem and treat the person in whose name
this Bond is registered as the absolute owner hereof, whether this Bond is overdue
or not, for the purpose of receiving payment and for all other purposes, and neither
the City nor the Registrar shall be affected by any notice to the contrary.
TT IS HEREBY C ERTIPIED, READ, 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 of Kalispell,
Montana, relating to the issuance thereof.
The following abbreviations, when used in the inscription on the face of
this Bond, shall be construed as though they were written out in full according to
applicable laws or regulations:
TEN COM -- as tenants
in common
TEN ENT -- as tenants
by the entireties
TT TEN — as joint tenants
with right of
survivorship and
not as tenants in
common
UTMA .
(Cost} (Minor)
under Uniform Transfers
to Minors
Act....................
(State)
Additional abbreviations may also be used.
A-5
UO VV,'13 14:Z4 U40b5330H3 DORSITY & aHITNTY QOzS1,066
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto the within Bond and
all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within
Bond on the books kept for registration thereof, with full power of substitution in
the premises.
Dated:
OR OTHER IDENTIFYING NLTMBER
OF ASSIGNEE:
SIGNATURE GUARANTEED
Signature(s) must be guaranteed by a
member of the Medallion Signature
Program.
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within Bond in every
particular, without alteration,
enlargement or any change
whatsoever.
Certificate as to Legal Opinion
T
The following certificate shall be printed on the reverse of each Bond,
following a full, true and correct copy of the text of the legal opinion given at the
time of delivery of the Bonds:
We certify that the foregoing is a full, true and correct copy of the opinion of
Bond Counsel on the issue of Bonds of the City of Kalispell, Montana, which
includes the within Bond, dated as of the date of delivery of and payment for the
Bonds.
(Facsimile Signature) (Facsimile Signature) (Facsimile $ignature)
MAYOR CrrY MANAGER CITY FINANCE DIRECTOR
A-6