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Tab 15 Offering CircularW%k A mk� U7 Boise, ID (M) 388-4200 M-Ml Coe ur d'Alene, ID (20B) 667-1212 ..... ............ Great F. W I .......... 'Great Faft, W (406) 727-4200 ........ Lewiston, ID (208) 743-0818 .... .. . ... ... .... .. H itton Iff (406) 727 4200 am W (W) W7,71!9 A-800-332 5915 H aym NIT (4N).26-5-5574, Gillette, WY (307) 682-6W D.A. Davidson U Coo Wona, Mrr (406) 44Z.96CO Brimch -offfm:.: ...... Kalispell MT..(406) 752-6212 ja� VN (30 -7) 733-16-n 156-M3 Spolam, WA (5W) 4, memoer S, PC :Billings, NIT (4061248.4851.':: Misswla, W.( . ... .... . . INTEREST EXEMPT FROM ALL PRESENT FEDERAL AND' MONTANA INDIVIDUAL INCOME TAXES New Issue Not Rated Bank Qualified $1009000 CITY OF KALISPELL, MONTANA SPECIAL IMPROVEMENT DISTRICT N2 341 BONDS, SERIES 1995 DATED- September 1, 1995 DUE: July 1, as shown below a The City of Kalispell, Special Improvement District N2 341 Bonds, Series 1995 (the "Bonds") will be issued as registered bonds in denominations of $5,000 each or integral multiples thereof. Interest will be payable on each January I and July 1, commencing January 1, 1997. NIATURITY SCHEDULE Principal Interest Principal Interest Year Amount Rate Year Amount Rate 1997 $5,000 4.40% 2005 $5,000 5.50% 1998 5tOOO 4.60 2006 51,000 5.60 1999 5,000 4.75 2007 10,000 5.75 2000 5,000 4.90 2008 10,000 5.90 2001 5�000 5.00 2009 1000 6.00 2002 5�000 5.10 2010 10,000 6.10 2003 5,000 5.25 2011 10,000 6.20 2004 5,000 5.40 * All Bonds Priced at Par USE OF PROCEEDS: The proceeds of the Bonds will be used by the City of Kalispell (the "City"), together with approximately $40,000 of City of Kalispell Sewer Fund Reserves, for purposes of financing the costs of constructing a sanitary sewer main within the boundaries of the Special Improvement District N2 341 (the "District"), which includes services to the property line on Fifth Avenue East beginning at Fourteenth Street East and continuing South to the City limits line. 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 admimistration of the District, funding a deposit in the amount of $5,000 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 $5,000 securing the Bonds (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 benefitted property of the City or from other sources of funds available to the City. 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 not less than 30 days before the date of redemption fixed by the office of the City Finance Officer (the "Registrar"). 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 N2 341 Fund of the City (the "District Fund"). The special assessments to be levied by the City are payable 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 one-half of one percent 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 aiiiounts 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 of the District Fund 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 ... .. ..... The information on this and any following pages. is from sources considered reliable but R 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 securitie s mentioned herein. Revolving Fund. If money available in the Reserve Account is insufficient to satisfy the 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 from the General Fund to the Revolving Fund, as is necessary to cause such payment, subject to the limitations contained in the Act. 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 $244,233, including the Bonds. Also as of this date, the City had a cash balance of $421,212 in its Revolving Fund, including a deposit of $5,000 from the proceeds of the Bonds. The City's cash balance in the Revolving Fund currently equals approximately 17.3% of the total outstanding bonds of the City secured by the Revolving Fund. The Bonds are not general obligations of the City of Kalispell 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 of the City, and those considering an investment in the Bonds should look to the assessed property as providing the primary security for payment of the Bonds. GENERAL INFORMATION - TIRE DISTRICT The District contains 35 lots with 33 separate owners which will be assessed for the Improvements. The lots are primarily developed as single family -owner occupied residences. The District is approximately 94% developed with two lots currently undeveloped. There are no outstanding special assessments on property within the District, other than assessments for the Bonds. The amount of assessments per lot are calculated on a front footage basis, with the exception of a few properties which do not have front footage to the Improvements and were therefore assessed based on the average front footage assessed for all lots., The total lineal footage of the lots bordering or abutting such Improvements and to be so assessed is 2,867.03 feet. The average assessment per lot equals $2,857, with the highest assessment equalling an estimated $4,604 and the lowest assessment equalling an estimated $1,647. Only one of the property owners within the District protested the creation of the District. The market value of the property is $1,600,600 or an average of $45,731 per lot, with the highest market value equalling $74,609 and the lowest equalling $13,182. Total assessments of $100,000 represents 6.2% of the market value of the property. According to the Flathead County Treasurer's Office, total unpaid and delinquent taxes equal $1,963.38 and consist of three properties with delinquencies of $842.74, $717.66 and $402.98, respectively. Delinquent taxes in the District represent 0. 12 % of the District's total market value. Currently the City's General Fund Levy has a delinquency rate of approximately 2.0%. The City has total outstanding SID and Sidewalk and Curb Bonds in the amount of $144,232 (not including the Bonds) and total delinquencies on such Bonds equal $2,859 or approximately 2.0%. The property in the District is located within City limits and is zoned Residential Apartment (RA-1) allowing multi -family dwellings. All of the lots are of sufficient size to allow duplexes and most would allow at least fourplexes under the current zoning. Currently, there is a need for additional housing units within the City and multi -family property is in demand. The property within the proposed District cannot be used for multi -family housing without municipal sewer system. The property included in the District comprises the last significant area within the City limits not served by City sewer. The area is currently served by septic systems for individual properties. The City Public Works Department estimates that every lot within the District would increase in value at least $5,000 after the improvements have been completed. The special assessments to be levied against property in the District is less than the estimated increase in value of the property as a result of the construction of the Improvements. 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 September 26, 1995. This Offering C!ircular contains abbreviated des * lions of certain provisions relating to the City of Kalispell, cnp Montana, Special Improvement District No. 341 Bonds, Series 1995. All information and references herein are subject in all respects to more complete information in the FYnal Offering Circular.