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Tab 15 Offering CircularV%i� A� D.A. Davidson &Co. memtwr SIPC New Issue Bank Qualifled Bozernan,M`T(406)587-5461.. Boise, ID (208) 388 -4200 Davidson Building Butte, MT(406)782-8321 Coeur d'Alene, ID (208) 667-1212 Great Falls, Montana 59401 Great Falls, MT006) 727-4200 Lewiston, ID (208) 743-0818 (406) 727-4200 Hamilton, MT (4M) 363-0266 - W. (W-;0 U7-71 9 .1-600-332-591 5 Havre':MT (406) 265-5574 Gillette, WY (W7) M2--�� Fax (406) 791-7380 Helena, MT (406) 442-9WO Jackson,, WY (307) 733-1672 Branch Offices: Kalispell, MT (406) 752-6212 Spokane, WA (509) 4564M3 Billings, MT (406) 248-7851 Missoula, MT (40,13) 543-8244 Wenatchee, WA (509) 664-M INTEREST EXEMPT FROM ALL PRESENT FEDERAL AND MONTANA INDIVIDUAL INCOME TAXES OFFERING CIRCULAR $2099000 CITY OF KALISPELL, MONTANA SPECIAL IMPROVEMENT DISTRICT N2 342 BONDS, SERIES 1995 Not Rated DATED: November 1, 1995 DUE: July 1, as shown below The City of Kalispell, Special Improvement District N11 342 Bonds, Series 1995 (the "Bonds") will be issued as registered bonds in denominations of $5,OW each or integral multiples thereof. Interest will be payable on each January I and July 1, commencing January 1, 1997. MATURITY SCHEDULE Principal Interest Year Amount Rate 1997 $9,000 4.50% 1998 109,000 4.75 1999 1000 5.00 2000 M000 5.20 2001 101,000 5.40 2002 10,000 5.60 2003 15,000 5.75 2004 15,000 5.90 Principal Interest Year Amount Rate 2005 $15�000 6-00% 2006 15,000 6.10 2007 15�000 6.15 2008 15,000 6.20 2009 20,000 6.25 2010 20,000 6.25 2011 20�000 6.25 * All Bonds Priced at Par * USE OF PROCEEDS,-, The proceeds of the Bonds will be used by the City of Kalispell (the "City"), together witb a $15,000 contribution from Ronald Pack, a developer, and $3,843 in available funds of the City, for purposes of financing the costs of installing a storm sewer system, water mains, street lights, curb, gutter and paved road, on Corporate Drive within the boundaries of Special Improvement District N9 342 (the "District"). Proceeds of the Bonds will also be used to pay the costs of engineering, the costs associated with the sale and issuance of the Bonds, the creation and administration of the District, funding a deposit in the amount of $10,450 to the'City's Special Improvement District Revolving Fund (the "Revolving Fund") and the establishment of a reserve account in the District Fund in the amount of $10,450 (the "Reserve Account"). MANDATORY AND OPTIONAL REDEMPTION: The Bonds are subject to mandatory redemption and prepayment. in order of registration, on any interest payment date at par plus accrued interest either from unexpended proceeds of the Bonds or from the prepayment of special assessments levied against the property in the District. The Bonds shall not be callable from the proceeds of an issue of refunding bonds prior to July 1, 2001. Notice of redemption will be given by First Trust Company of Montana, in Billings, Montana as registrar and paying agent for the Bonds not less than 30 days before the date fixed for redemption. SECURITY: The Bonds are payable from a special tax or assessment levied on the real property benefitted by the improvements, which assessments are a lien against the property within the District to be paid into the Special Improvement District NQ 342 Fund of the City (the "District Fund"). The special assessments to be levied by the City are payable on November 30 and May 31, in equal, semiannual installments of principal over a 15-year term, with unpaid installments of the assessments bearing interest at an annual rate equal to the sum of 1/2of I% per annum plus the average annual interest rate borne by the Bonds. Assessments are a prior lien on the property, superior to mortgages and other encumbrances, subject to general taxes. In the event of mortgage foreclosure, outstanding taxes and assessments must be paid before any amounts can be applied toward a liquidation of a mortgage debt. In the event money on hand in the Bond and Interest Accounts of the District Fund is insufficient to pay principal of or interest on the Bonds when due, the City Council has covenanted in the Resolution to order the transfer of available money on deposit in the Reserve Account, funded initially in the amount of $10,450, to satisfy the deficiency, to the extent funds are available. The District Reserve Account must be exhausted before a loan may be made from the Revolving Fund. If money available in the Reserve Account is insufficient to satisfy the -The: information on this and any following pages is from sources considered reliable but it is not. guaranteed. as to accuracy or completeness. This is: not. an offer to buy or sell any securities. The firm D.A.: Davidson Co. and/or its officers may hold a position in the -securities mentioned herein. deficiency then the City Council has covenanted in the Resolution to order the transfer of available money on deposit in the Revolving Fund to the District Fund to satisfy the deficiency, to the extent funds are available. The City has also agreed to provide funds for the Revolving Fund by levying a tax or making a loan froin the General Fund to the Revolving Fund, as is necessary to cause such payment, subject to the limitations contained in State law. So long as any of the Bonds are outstanding, the City hereby agrees to maintain the Revolving Fund in an amount equal to no less than 5.00% of all outstanding special improvement district bonds and sidewalk, curb and gutter bonds of the City. Loans to the District Fund from the Revolving Fund constitute a lien upon the District Fund but are payable from excess funds remaining after the payment of the Bonds and any interest thereon. As of the date of sale of the Bonds, the aggregate principal amount of outstanding special improvement district bonds and sidewalk, curb and gutter bonds of the City secured by the Revolving Fund equalled $453,235, including the Bonds. Also as of this date, the City had a cash balance of $23,056 in its Revolving Fund, including a deposit of $10,450 from the proceeds of the Bonds. The City's cash balance in the Revolving Fund equals 5.09% of the total outstanding bonds of the City secured by the Revolving Fund. The Bonds are not general obligations of the City and the taxing power of the City is not pledged to the payment of principal thereof or interest thereon. The principal of and interest on the Bonds are payable primarily from special assessments levied against beneritted property. Those considering an investment in the Bonds should look to the assessed property as providing the priniary security for payment ofthe Bonds. GENERAL INFORMATION - THE DISTRICT GENERAL DESCRIPTION: The District contains 7 lots with 4 separate owners which will be assessed for the Improvements. Approximately 65% of the property being assessed in the District is undeveloped. The amount of assessments per lot are calculated on a front footage basis. The total lineal footage of the lots bordering or abutting such Improvements and to be so assessed is 2,421.50 feet. Of the 4 property owners within the District, one owner, Dennis Foster and Jerry Ford, representing 15.07% of the assessments in the District, protested (lie creation of the District. Total assessments of $2099000 represent 9.22% of the total market value in the District of $2,267,684. The special assessments to be levied against property in the District are less than the estimated increase in value of the property as a result of the construction of the Improvements. Other than assessments for the Bonds, there are no outstanding special assessments on property within the District. As of the date of issuance of the Bonds, none of the property within the District had any delinquent property taxes. According to the City, total delinquencies for outstanding SID and Sidewalk and Curb Bonds equal approximately 2.0%. The property in the District is located within City limits along Corporate Drive near U.S. Highway 2 and is zoned General Business and Community Business. The District currently contains a strip mail with a number of retail stores. SUMMARY OF PROPERTY OWNERS: The following table lists general information relating to the District. ProDertv Owner Number of Lots Assessment of Total Market Value Ronald Pack 4 $134,773.65 64.49% $79,384 Dennis Foster/Jerry Ford 1 $31,502.57 15.07% $94,088 Ashley Square Partnership 1 $237736-13 11.36% $1,514,612 Super Value Food Stores 1 $18, 87.65 9.09% $579,600 Totals 7 $209,000.00 100.00% $2$267,684 ADDITIONAL SECURITY: Approximately 64-49% of the assessments are payable by Ronald Pack, a local developer. As required by the City, Mr. Pack has provided additional security in the form of a certificate of deposit issued by BankWest, N.A., in Kalispell, payable jointly to the City of Kalispell and Mr. Pack in the total amount of $55,389.65, an amount equal to the difference between Mr. Pack's assessments outstanding and the market value of such property. Should Mr. Pack default on assessment payments, the additional security will provide funds, up to $55,389.65, to provide payment in lieu of such delinquent assessments. According to the agreement between Mr. Pack and the City, the additional security may not be withdrawn or reduced in amount until released by the City. Dorsey & Whitney, as Bond Counsel, will not express an opinion as to the enforceability of the additional security agreement. Investors - in the Bonds should not rely on the additional security for payment of principal of and interest on the Bonds as the certificate of deposit is payable to the City and not to holders of the Bonds - TAX EXEMPTION: In the opinion of Dorsey and Whitney, Missoula, Montana and Minneapolis, Minnesota as Bond Counsel,, interest on the Bonds is not includable in gross income of the recipient for federal income tax purposes and State of Montana individual income tax purposes under existing laws, regulations, rulings and decisions. Interest on the Bonds is not includable in the computation of the alternative minimum taxable income of individuals for purposes of the federal alternative minimum tax. Interest is includable, however, in the computation of the alternative minimum taxable income of corporations for purposes of the federal alternative minimum tax and environmental tax. EXPECTED DELIVERY: On or about November 16, 1995. This Offering Circular contains abbreviated descriptions of certain provisions relating to the Cio� of Kalispellp Montana, Special Improvement District No. 342 Bonds, Series 1995. For additional information concerning the District or the Bonds contact the City Finance Office.