Tab 15 Offering CircularW%k A mk�
U7 Boise, ID (M) 388-4200
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Coe ur d'Alene, ID (20B) 667-1212
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Great F. W I .......... 'Great Faft, W (406) 727-4200
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Lewiston, ID (208) 743-0818
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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
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156-M3
Spolam, WA (5W) 4,
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:Billings, NIT (4061248.4851.':: Misswla, W.( . ... ....
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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.