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Resolution 4266 - Intent to Sell Bonds - Water System Improvements1313 1 L RESOLUTION NO. 4266 RESOLUTION RELATING TO $1,060,000 WATER SYSTEM REVENUE BONDS, SERIES 1996; AUTHORIZING THE ISSUANCE AND PROVIDING FOR THE PUBLIC SALE THEREOF BE IT RESOLVED by the City Council (the "Council') of the City of Kalispell, Montana (the "City"), as follows: Section 1. Recitals. The City is authorized pursuant to Title 7, Chapter 7, Part 44, Montana Code Annotated to issue its revenue bonds to finance in whole or in part the cost of the acquisition, purchase, construction, reconstruction, improvement, betterment or extension of its water system facilities. The Council investigated the facts necessary and hereby finds, determines and declares it to be necessary and desirable for the City to offer for sale $1,060,000 Water System Revenue Bonds, Series 1996 (the "Bonds") for the purpose of engineering, designing, constructing, and installing certain improvements to the existing water system and related improvements (the "Project") and for funding certain costs incidental to the sale and payment of bonds and to establish the debt service reserve securing the Bonds. Section 2. Tenn of Bonds. Pursuant to the authority described above, this Council shall issue and sell Bonds of the City in the aggregate principal amount not to exceed $1,060,000 for the purpose of providing funds to construct and install the Project, funding the debt service reserve, and paying certain costs incidental to the sale and payment of the Bonds. The Bonds shall be dated, as originally issued, as of June 15, 1996, shall be issued in one series designated Series 1996 and shall bear interest, payable semiannually on January 1 and July 1 of each year commencing January 1,1997, at the rate or rates designated by the successful bidder at public sale and approved by the Council, which rate or rates shall not exceed seven and one- half percent (7.501/6) per annum, with the maximum difference between the highest and lowest rate of interest not exceeding three and one-half percent (3.50%) per annum and must be expressed in integral multiples of 1/8 or 1/20 of 1%. No supplemental or "B" coupon interest shall' be allowed. The Bonds shall mature on July 1 in each of the following years and amounts: Year Amount 1997 $45,000 1998 50,000 1999 55,000 2000 55,000 2001 60,000 2002 60,000 2003 65,000 2004 70,000 -1- Year Amount 2005 $ 75,000 2006 75,000 2007 80,000 2008 85,000 2009 90,000 2010 95,000 2011 100,000 314 s The Bonds shall be in the denomination of $5,000 each or any integral multiple thereof of single maturities. The Bonds shall be issued only as fully registered bonds and shall be executed by the manual or facsimile signatures of the Mayor, City Manager and City Finance Director. The Bonds with stated maturities in 2004 and later years are subject to redemption at the option of the City selected by lot or other manner it deems fair within single maturities on any business day after January 1, 2004, at a redemption price expressed as a percentage of the principal amount of the Bonds, plus accrued interest, according to the following schedule: Red m tion Date Price January 1, 2004 through December 31, 2004 102% _ January 1, 2005 through December 31, 2005 101% January 1, 2006 and thereafter 100% Further terms and conditions for the sale of the Bonds are contained in Exhibit A. Section 3. Notice of Sal. All sealed bids for the Bonds shall be submitted to the City Finance Director, on or before June 11, 1996, at 12:00 noon, Mountain Time. The bids received will be presented to the Council immediately thereafter on the same day in the Council Chambers at the City Hall, 312 - 1st Avenue East, Kalispell, Montana, whereupon the Council will consider the award of sale to the bidder whose bid results in the lowest net effective interest cost payable on the bonds. The City Clerk of Council is authorized and directed to cause the notice of the sale to be published, as required by Section 7-7-4434, M.C.A. once in the Daily Inter Lake, a newspaper circulating in the City of Kalispell at least five days prior to the date of sale, and may publish a summary of the notice in the Bond Buyer, and in any other newspaper as may be determined appropriate by the City Clerk of Council. The notice of sale shall be in substantially the form set forth in Exhibit B to this resolution. Section 4. Continuing Disclo ur . In order to permit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), the City will covenant and agree, for the benefit of the registered holders and beneficial owners from time to time of the outstanding Bonds, in the resolution awarding the sale and prescribing the terms of the Bonds to provide certain specified information, if customarily prepared and publicly available, and notice of the occurrence of certain events, if material. The City's water system is the only "obligated person" in respect of the Bonds within the meaning of the Rule and, giving effect to the issuance of the Bonds, there will not be more than $10 million in principal amount -2- 931E of municipal securitiesoutstanding on the date of issuance of the Bonds as to which the City's water system is an obligated person (excluding municipal securities exempt from the Rule under paragraph (d)(1) thereof). A description of the undertaking is set forth in the Official Statement. Failure of the City to enter into an undertaking substantially similar to that described in the Official Statement would relieve the successful bidder of its obligation to purchase the Bonds. PASSED by the City Council of the City of Kalispell, Montana, on this 20th day of May,1996. ATTEST: LWJ4�t-, ffl City Clerk of 6w- I 1 -3- -® 316 s EXHIBIT A TERMS AND CONDITIONS OF SALE $1,060,000 Water System Revenue Bonds, Series 1996 City of Kalispell, Flathead County, Montana Notice is hereby given by the City Council (the "Council") of Kalispell, Montana (the "City"), that the Council at a meeting on June 11, 1996, at 12:00 noon, M.T., in the City Hall, 312 - 1st Avenue East, Kalispell, Montana, will consider the sale to the highest and best bidder for cash as evidenced by sealed bids, serial bonds of the City in the total principal amount of $1,060,000 (the "Bonds") for the purpose of engineering, designing, constructing, and installing certain improvements to the existing water system, and for funding certain costs incidental to the sale and payment of bonds and to establish the debt service reserve securing the Bonds. The Bonds will be issued as fully registered bonds only. The Bonds will be issued as bonds of single maturities in the denominations of $5,000 each or any integral multiple thereof. The Bonds will mature, subject to prior redemption and prepayment, on July 1, in the following years and amounts: Year Amount Year Amount 1997 $45,000 2005 $ 75,000 1998 50,000 2006 75,000 1999 55,000 2007 80,000 2000 55,000 2008 85,000 2001 60,000 2009 90,000 2002 60,000 2010 95,000 2003 65,000 2011 100,000 2004 70,000 The Bonds, will be dated, as originally issued, as of June 15,1996, and will bear interest at the rate or rates, not exceeding seven and one-half percent (7.50%) per annum, with the maximum difference between the highest and lowest rate of interest not exceeding three and one-half percent (3.50%) and must be expressed in integral multiples of 1/8 or 1/20 of 1%, designated by the successful bidder at the sale. No supplemental or "B" coupon interest is allowed. Interest will be payable semiannually on January 1 and July 1, of each year commencing January 1,1997. A-1 1 .J_ T The Bonds with stated maturities in 2004 and later years are subject to redemption at the option of the City, in $5,000 principal amounts selected by lot or other manner it deems fair within single maturities on any business day after January 1, 2004, at a redemption price expressed as a percentage of the principal amount of the Bonds, plus accrued interest, according to the following schedule: Redemption Date Price January 1, 2004 through December 31, 2004 102% January 1, 2005 through December 31, 2005 101% January 1, 2006 and thereafter 100% BIDDING AND SALE PROCEDURES Submission of Bids. Bids must be on the Official Bid form, a: copy of which may be obtained from the City or the Financial Consultant to the City and enclosed in a sealed envelope marked as follows: "Bid for $1,060,000 Water System Revenue Bonds, Kalispell, Montana, Series 1996." Each envelope when delivered must indicate on the outside the name and address of the bidder, or in the case of a group of bidders, of the representative. The Bids shall be delivered to the City Finance Director no later than 12:00 noon, M.T., on June 11, 1996. Basis of Award. The Bonds will be sold for not less than $1,060,000 (par) with accrued interest to the date of delivery, and all bidders must state the lowest rate of interest at which they will purchase the bonds. Bids will be compared on the basis of lowest net effective interest cost. The Council reserves the right to reject any and all bids and to sell the Bonds at private sale and to waive any informality and irregularity in any and all bids. Good Faith Deposit. A good faith deposit (the "Deposit") in the form of money, cashier's check, certified check, bank money order, or bank draft drawn and issued by a federally chartered or state chartered bank insured by the federal deposit insurance corporation or a financial surety bond in the sum of $21,200 (or 2% of the final principal amount) payable to the order of the City of Kalispell is required for each bid to be considered. If money, cashier's check, certified check, bank money order, or bank draft is used, it must accompany each bid and be delivered to the City Finance Director. If a financial surety bond is used, it must be from an insurance company licensed and qualified to issue such a bond in the State of Montana and such bond must be submitted to the City Finance Director, or its financial advisor prior to the opening of the bids. The financial surety bond must identify each bidder whose Deposit is guaranteed by such financial surety bond. If the Bonds are awarded to a bidder utilizing a financial surety bond, then that purchaser is required to submit its Deposit to the City in the form of a cashier's check (or wire transfer such amount as instructed by the City or its financial advisor) not later than 1:00 p.m., Mountain Time, on the next business day following the award. If such Deposit is not received by that time, the financial surety bond may be drawn by the City to A-2 318 satisfy the Deposit requirement. No interest on the Deposit will accrue to the purchaser. The Deposit will be applied to the purchase price of the Bonds. In the event the purchaser fails to honor its accepted bid, the Deposit will be retained by the City. No interest will be allowed on the Deposit. The Deposit of the unsuccessful bidders will be returned immediately on award of the Bonds to the purchaser or after rejection of all bids. Instructions for wiring Deposit may be obtained from the City's Financial Advisor, D. A. Davidson & Co., 8 Third Street North, Great Falls, Montana 59401, (406) 771-4212. BOND REGISTRAR, TRANSFER AGENT AND PAYING AGENT The City will select a bank, financial institution or trust company to act as bond registrar, transfer agent and paying agent (the "Registrar"). The bond register will be kept, transfers of ownership will be effected and principal of and interest on the Bonds will be paid by the Registrar. The City will pay the charges of the Registrar for such services. The City reserves the right to remove the Registrar and to appoint a successor. DELIVERY Within 30 days after the sale, the City will deliver to the Registrar the printed Bonds ready for completion and authentication. The original purchaser of the Bonds must notify the Registrar, at least five business days before issuance of the Bonds, of the persons in whose names the Bonds will be initially registered and the denominations of the Bonds to be originally issued. If notification is not received by that date, the Bonds will be registered in the name of the original purchaser and will be issued in denominations corresponding to the principal maturities of the Bonds. On the day of closing, the City will furnish to the purchaser the opinion of Bond Counsel hereinafter described, an arbitrage certification and a certificate stating that no litigation in any manner questioning the validity of the Bonds is then pending or, to the knowledge of officers of the City, threatened. Payment for the Bonds must be received by the City in immediately available funds at its designated depository on the day of closing. The successful bidder shall submit to the City, not earlier than 48 hours after the award of sale and not later than the day of closing, a certificate, in form satisfactory to Bond Counsel, as to the initial reoffering price of each stated maturity of the Bonds and stating that at least ten percent of the principal amount of such Bonds of each stated maturity has been sold at such respective prices. CONTINUING DISCLOSURE In order to permit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities A-3 1 3.1- 4 1 Exchange Act of 1934 (the "Rule,"), the City will covenant and agree, for the benefit of the registered holders and beneficial owners from time to time of the outstanding Bonds, in the resolution awarding the sale and prescribing the terms of the Bonds to provide certain specified information, if customarily prepared and publicly available, and notice of the occurrence of certain events, if material. The City's water system is the only "obligated person" in respect of the Bonds within the meaning of the Rule and, giving effect to the issuance of the Bonds, there will not be more than $10 million in principal amount of municipal securities outstanding on the date of issuance of the Bonds as to which the City's water system is an obligated person (excluding municipal securities exempt from the Rule under paragraph (d)(1) thereof). A description of the undertaking is set forth in the Official Statement. Failure of the City to enter into an undertaking substantially similar to that described in the Official Statement would relieve the successful bidder of its obligation to purchase the Bonds. LEGAL OPINION An opinion as to the validity of the Bonds and the exclusion of the interest thereon from gross income for federal income tax purposes and Montana individual income tax purposes will be furnished by Dorsey & Whitney LLP, of Missoula, Montana, and Minneapolis, Minnesota, as Bond Counsel. The legal opinion will be printed on the Bonds. The legal opinion will state that the Bonds are valid and binding special obligations of the City enforceable in accordance with their terms, except to the extent to which enforceability thereof may be limited by the exercise of judicial discretion or by state or federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights. CUSIP NUMBERS The City will assume no obligation for the assignment or printing of CUSIP numbers on the Bonds or for the correctness of any numbers printed thereon, but will permit such numbers to be assigned and printed at the expense of the purchaser, if the original purchaser waives any delay in delivery occasioned thereby. OFFICIAL STATEMENT Within seven business days after the sale the City will furnish to the successful bidder without charge 100 copies of the final Official Statement relating to the Bonds. The successful bidder must notify the City Clerk of Council in writing within seven business days after the award of sale of the Bonds if it requires additional copies of the Official Statement. The cost of additional copies shall be paid by the successful bidder. a� 1320 Additional information regarding the City and the Bonds may be obtained from the City's Financial Advisor, D. A. Davidson & Co., 8 Third Street North, Great Falls, Montana 59401, (406) 771-4212. BY ORDER OF THE CITY COUNCIL IS/ c, City Clerk of CoUU City of Kalispell, ontana I1 Li A-5 r i 132 EXHIBIT B NOTICE OF BOND SALE $1,060,000 Water System Revenue Bonds, Series 1996 City of Kalispell, Montana NOTICE IS HEREBY GIVEN that the City Council (the "Council") of the City of Kalispell, Flathead County, Montana (the "City") will receive and open sealed bids until 12:00 noon, M.T., on Tuesday, June 11, 1996. The bids will be opened and tabulated by the City Finance Director and presented to the Council at their special meeting immediately thereafter. Amortization bonds will not be accepted. The bonds will be in the amount of $5,000 or any integral multiple thereof, and will mature on July 1 in the following years and amounts: Year Amount Year Amoun 1997 $45,000 2005 $ 75,000 1991 1999 50,000 55,000 2006 2007 75,000 80,000 2000 55,000 2008 85,000 2001 60,000 2009 90,000 2002 60,000 2010 95,000 2003 65,000 2011 100,000 2004 70,000 The bonds will be dated, as originally issued, as of June 15,1996, and will bear interest at a rate not exceeding seven and one-half percent (7.50%) per annum, with the maximum difference between the highest and lowest rate of interest not exceeding three and one-half percent (3.50%) per annum expressed in integral multiples of 1/8 or 1/20 of one percent (1.00%). No supplemental or "B" coupons or additional interest certificates are permitted. Interest will be payable on each January 1 and July 1, commencing January 1, 1997, to the registered owners of the bonds appearing of record in the Bond Register as of the 15th day of the immediately preceding month. The bonds with stated maturities in 2004 and later years are subject to redemption at the option of the City, in $5,000 principal amounts selected by lot or other manner it deems fair within single maturities on any business day after January 1, 2004, at a redemption price expressed as a percentage of the principal amount of the Bonds, plus accrued interest, according to the following schedule: B-1 1322 Redemption Date Price January 1, 2004 through December 31, 2004 102% January 1, 2005 through December 31, 2005 101% January 1, 2006 and thereafter 100% The bonds will be sold for not less than $1,060,000 (par) with accrued interest, and all bidders must state the lowest rate of interest at which they will purchase the bonds. The bonds shall be sold by sealed bids. The Council reserves the right to reject any and all bids and to sell the bonds at private sale. A good faith deposit in the form of money, cashier's check, certified check, bank money order, or bank draft drawn and issued by a federally chartered or state chartered bank insured by the Federal Deposit Insurance Corporation or a financial surety bond in the sum of $21,200 payable to the order of the City of Kalispell is required for each bid to be considered, as further specified in the Terms and Conditions of Sale. A legal opinion will be furnished by Dorsey & Whitney LLP, of Missoula, Montana and Minneapolis, Minnesota. Copies of a statement of Terms and Conditions of Sale and additional information may be obtained from D. A. Davidson & Co., 8 Third Street North, Great Falls, Montana, telephone (406) 771- 4212, financial consultants to the City. Prospective bidders should consult the Terms and Conditions of Sale and the Preliminary Official Statement for a description of the Bonds, the security therefor, and the legal opinion. Dated: May 29 , 1996. PUBLICATION DATE: June Z 1996. BY ORDER OF THE CITY COUNCIL City Clerk of o City of Kalispe Flathead County, Montana B-2 1 1 1