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03. Resolution 4329 - Refund 1986 Sewer Revenue BondsAgenda -April 28, 1997 AGENDA ITEM 3 - RESOLUTION -REFUND 1986 SEATER REVENUE BONDS BACKGROUND/CONSIDERATION: To continue/complete the refunding process for the bond, a resolution will need to be approved by the Council. At this time, we do not have the resolution from the bonding attorney. 97 04/28 17:36 %T4065430863 DORSEI & WHITNEY 6004/019 I6b 1qP`po RESOLUTION NO. `r 3 Z 9 RESOLUTION RELATING TO $925,000 SEWERAGE SYSTEM REVENUE REFUNDING BONDS, SERIES 1997; AUTHORIZING THE ISSUANCE AND FDCING THE TERMS AND CONDITIONS THEREOF BE IT RESOLVED by the City Council of the City of Kalispell, Montana (the "City"), as follows: Section 1. Authoriz. nn and Recitals. 1.01. Authorization. The City pursuant to authority conferred by Montana Code Annotated, Title 7, Chapter 7, Parts 44 and 45, as amended (the "Act"), and other laws of the State of Montana, has established and presently owns and operates a municipal sewerage system (the "System"). Under the provisions of the Act, the City is authorized to issue and sell its revenue bonds payable during a term not exceeding forty years from their date of issue, to provide funds for the reconstruction, improvement, betterment and extension of the System and to refund its revenue bonds issued for such purpose; provided that the bonds and the interest thereon are to be payable solely out of the net income and revenues to be derived from. rates, fees and charges for the services, facilities and commodities furnished by the undertaking, and are not to create any obligation for the payment of which taxes may be levied except to pay for services provided by the System to the City. 1.02, Outstanding lion de. In accordance with the authorization described in Section 1 and pursuant to Ordinance Nos. $59 and 1011 and Resolution Nos. 2861, 3649, 3984 and 4022, the City issued and sold the following bonds which are currently outstanding: Sewerage System Revenue Bonds, Series 1991, dated as originally issued as of April 15, 1991 (the "Series 1991 Bonds") and its Sewerage System Revenue Bonds, Series 1.991A, dated as of November 15, 1991 (the "Series 1991A Bonds"), currently outstanding in the aggregate principal amounts of $2,450,000 and $3,346,000, respectively (collectively, exclusive of the Series 1997 Bonds, the "Outstanding Bonds"), for the purpose of financing part of the costs of construction of improvements to the System. No other bonds or indebtedness are outstanding that are payable from revenues of the System other than the Sewerage System Revenue Bonds, Series 1986, dated as originally issued as of June 1, 1986 (the "Series 1986 Bonds"). The Series 1986 Bonds are outstanding in the aggregate principal amount of $955,000. 1,03. Sources of Funding; Refunding the Series 1986 Bonds. It is necessary and desirable as hereinafter determined to refund the Series 1986 Bands from the proceeds of revenue bonds hereinafter authorized in the approximate principal amount of $925,000. The debt service savings to result from the refunding of the Series 1986 Bonds is presently estimated to approximate $58,338.07, calculated on a present -value basis, and using a discount rate of 5.0368% over the term of the bonds herein authorized. As required by Montana Code Annotated, Section 7-7-4502(1), the average annual interest rate on the bonds herein authorized is more than three -eighths of one percent (0.375%) less than the average annual interest rate on the Series 1986 Bonds. 1..04. Parity Bonds. In Section 4.03 of Ordinance No. 859, the City reserved the right to issue additional bonds payable from and secured by the net revenues of the System on a parity with the Outstanding Bonds on certain terms and conditions. It is determined that the City is authorized to issue a series of bonds (the "Series 1997 Bonds") in the aggregate principal amount of $925,000 to refund the Series 1986 Bonds, which bonds would be payable from and secured by the net revenues of the System on a parity with the Outstanding Bonds.