Tab 23 Opinion of Bond CounselOORSEY-
DORSEY & WIIITNFY LL.P
City of Kalispell
Kalispell, Montana
Department of Natural Resources
and Conservation of the
State of Montana
Helena, Montana
Re: $242,000 Special Improvement District No. 345 Bond (DNRC Water Pollution
Control State Revolving Loan Program), Series 2014
City of Kalispell, Montana
Ladies and Gentlemen:
We have acted as Bond Counsel to the City of Kalispell, Montana (the "City") in
connection with the authorization, issuance and sale by the City of the obligation described
above, dated, as originally issued, as of the date hereof and issued in the maximum authorized
principal amount of $242,000 (the "Bond"). In that capacity, we have examined certified copies
of certain proceedings taken, and certain certificates and affidavits furnished, by the City in the
authorization, sale and issuance of the Bond, including Resolution No. 5659, adopted by the City
Council of the City on February 3, 2014, establishing the form and terms of the Bond (the
"Resolution"). As to questions of fact material to our opinion, we have assumed the authenticity
of and relied upon the proceedings, certificates and affidavits furnished to us without undertaking
to verify the same by independent investigation. Terms used with initial capital letters but not
defined herein shall have the meanings given them in the Resolution.
From our examination of such proceedings, certificates and affidavits, and on the basis of
existing law, it is our opinion that:
1. The City has validly created Special Improvement District No. 345 (the "District"),
provided for the construction of various improvements of special benefit to the District and has
covenanted to levy special assessments for a portion of the costs of the improvements, estimated
at $242,000, against each benefitted lot or parcel of land within the District. The special
assessments are to be payable in installments, with interest on the balance of the special
assessments remaining unpaid, and are to be deposited in the Special Improvement District No.
345 Fund of the City (the "District Fund"). The principal of and interest on the Bond are payable
solely from the District Fund.
2. The City has also validly established a District reserve account and a Special
Improvement District Revolving Fund (the "Revolving Fund") to secure the payment of certain
of its special improvement district bonds, including the Bond. The City has also agreed, to the
extent permitted by Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as amended
(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
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OORSEY-
City of Kalispell
Department of Natural Resources
and Conservation of the
State of Montana
Page 2
principal of or interest on the Bond, 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 subject to durational limitations specified in the Act. Any property tax levy to be
made by the City to provide funds for the Revolving Fund is subject to levy limits under current
law.
The Bond is not a general obligation of the City and, except to the extent described in this
paragraph (2), the taxing power of the City is not pledged to the payment of the principal thereof
or the interest thereon.
3. The Bond and the Resolution are valid and binding special limited obligations of the
City enforceable in accordance with their terms and the provisions of the Constitution and laws
of the State of Montana now in force, including the Act and Montana Code Annotated, Title 7,
Chapter 7, Part 44, as amended.
4. Interest on the Bond: (a) is not includable in gross income for federal income tax
purposes; (b) is not an item of tax preference includable in alternative minimum taxable income
for purposes of the federal alternative minimum tax applicable to all taxpayers; and (c) is
includable in adjusted current earnings of corporations in determining alternative minimum
taxable income for purposes of the federal alternative minimum tax.
5. Interest on the Bond is not includable in gross income for purposes of State of
Montana individual income taxation, but is not excluded from the computation of income for
purposes of the Montana alternative corporate income tax and the Montana corporate income tax.
The opinions expressed in paragraphs 1, 2, and 3 above are subject, as to enforceability,
to the effect of any state or federal laws relating to bankruptcy, insolvency, reorganization,
moratorium or creditors' rights and principles of equity, whether considered at law or in equity.
The opinions expressed in paragraph 4 above are subject to the condition of the City's
compliance with all requirements of the Internal Revenue Code of 1986, as amended, that must
be satisfied subsequent to the issuance of the Bond in order that interest may be, and continue to
be, excluded from gross income for federal income tax purposes. The City has covenanted to
comply with these continuing requirements. Its failure to do so could result in the inclusion of
interest in gross income for federal income tax purposes, retroactive to the date of issuance of the
Bond. Except as stated in this opinion, we express no opinion regarding federal, state or other
DORSEY & WHITNEY LLP
GORSEY'"
City of Kalispell
Department of Natural Resources
and Conservation of the
State of Montana
Page 3
tax consequences to the owners of the Bond. We also express no opinion regarding the tax
treatment of the Loan Loss Reserve Surcharge or the Administrative Expense Surcharge, each as
defined in the Bond.
We have not been engaged, and have not undertaken, to review the accuracy,
completeness or sufficiency of any offering materials relating to the Bond and, accordingly, we
express no opinion with respect thereto.
Dated: May 15, 2014
Very truly yours,
DORSEY & WHITNEY LLP