Resolution 4326 - Refunding 1986 Sewer Revenue Bonds574
RESOLUTION NO. 4326
RESOLUTION RELATING TO SEWERAGE SYSTEM REFUNDING
REVENUE BONDS, SERIES 1997; AUTHORIZING THE ISSUANCE
AND PRIVATE NEGOTIATED SALE THEREOF AND DELEGATING
CERTAIN DUTIES RELATED THERETO TO THE CITY MANAGER
AND FINANCE DIRECTOR
BE IT RESOLVED by the City Council (the "Council") of the City of Kalispell,
Montana (the "City"), as follows.
Section 1. Recitals. Under the provisions of Title 7, Chapter 7, Parts 45 and
46 (the "Act"), the City is authorized to issue bonds to refund revenue bonds issued
for any of the purposes authorized in Title 7, Chapter 7, Part 44. Pursuant to such
authorization, this Council issued and sold Sewerage System Revenue Bonds, Series
1986, of the City, dated as of June 1, 1986, in the original aggregate principal amount
of $1,300,000 (the "Outstanding Bonds"). The Outstanding Bonds are currently
outstanding in the aggregate principal amount of $955,000, mature on June 15 in the
years 1997 through 2006, and bear interest at the basic rates of 6.80% to 7.10% per
annum. The Finance Director of the City estimates that, in today's market, the
Outstanding Bonds can be refunded to achieve a net present value debt service
savings of $45,000, or 4.75% of the principal amount of the Outstanding Bonds,
using the yield of the Series 1997 Bonds as the discount factor, calculated over the
term of the Outstanding Bonds.
Section 2. Authorization. For the purpose of reducing the interest cost on
the indebtedness authorized in Section 1, evidenced by the Outstanding Bonds, it is
hereby determined that it is in the best interests of the Council to sell its sewerage
system refunding revenue bonds, pursuant to the Act, in order to refund the
Outstanding Bonds. Such bonds shall be denominated "Sewerage System
Refunding Revenue Bonds, Series 1997" (the "Series 1997 Bonds"), and shall be
issued in the aggregate principal amount necessary, but not greater than the amount
necessary, to provide funds to pay or redeem the Outstanding Bonds and to pay all
costs of issuing the Series 1997 Bonds including, without limitation, the fees and
expenses of bond counsel, the fees of the paying agent and registrar, the fee of the
escrow agent, if any, and the costs of printing the Preliminary Official Statement, the
Official Statement and the Series 1997 Bonds (the "Costs of Issuance"). The
Outstanding Bonds are subject to redemption on June 15, 1997, at a redemption price
equal to the principal amount thereof to be redeemed plus interest accrued to the
date of redemption. It is hereby determined to be in the best interest of the Council
that the Outstanding Bonds be called for redemption on June 15, 1997 and that the
-1-
1
157S
Council issue its refunding bonds (the "Series 1997 Bonds"), as authorized by Section
7-7-4501 of the Act and the Bond Resolution), in order to refund the Outstanding
Bonds and pay costs associated therewith.
Section 3. Authorization of Sale of Bonds. Pursuant to the Act, this Council
hereby determines that it would be in the best interests of the Council to sell the
Series 1997 Bonds at a private negotiated sale to D. A. Davidson & Co., of Great Falls,
Montana (the "Purchaser"). The Series 1997 Bonds shall be sold to the Purchaser on
the terms and at a purchase price subject to the following limitations and
conditions: (1) the aggregate principal amount of the Series 1997 Bonds shall not
exceed the amount necessary to refund the Outstanding Bonds, pay Costs of Issuance
and to provide underwriter's discount of up to 2%; (2) the debt service payable on
the Series 1997 Bonds (including any additional interest) is such that the net present
value of debt service savings to be achieved by the refunding is not less than
4.75% of the principal amount of the Outstanding Bonds to be refunded, using the
yield of the Bonds as the discount factor, calculated over the term of the Outstanding
Bonds; (3) the average annual interest rate on the Series 1997 Bonds (including any
additional interest) is at least fifty -hundredths percent (0.50%) less than the average
annual interest rate on the Outstanding Bonds; and (4) the term of the Series 1997
Bonds shall not exceed 9 years and 1 month. All Costs of Issuance shall be paid by
the City from either the proceeds of the Series 1997 Bonds or other available funds of
the City.
The City Manager and the Finance Director are hereby authorized and
directed to approve the principal amount, purchase price, maturity dates (provided
that the final maturity date is not later than June 15, 2006), principal amounts,
interest rates and redemption provisions of the Series 1997 Bonds, subject to the
limitations contained in the preceding paragraph and the Act. Upon approving
such terms, the City Manager and the Finance Director are hereby authorized and
directed to approve, execute and deliver to the Purchaser a bond purchase
agreement (the "Bond Purchase Agreement"), containing the agreement of the City
to sell, and the agreement of the Purchaser to purchase, the Series 1997 Bonds on the
terms so approved, and containing such other provisions as the City Manager,
Finance Director and the City Attorney shall deem necessary and appropriate. In the
event of the absence or disability of the City Manager or the Finance Director, or
such other officer of the City as the City Attorney shall deem to be authorized, shall
make such approvals and execute and deliver the Bond Purchase Agreement. The
execution and delivery by appropriate officers of the City of the Bond Purchase
Agreement shall be conclusive as to the approval of such officers of the terms of the
Series 1997 Bonds and the agreement of the City to sell the Series 1997 Bonds on
such terms in accordance with the provisions thereof.
-2-
1 576
The form of the Series 1997 Bonds and the security therefor shall be
prescribed by a subsequent resolution to be adopted by this Council.
Section 4. Preliminary Official Statement. The City Manager and the
Finance Director and other officers of the City, in cooperation with the Purchaser,
are hereby authorized and directed to prepare a Preliminary Official Statement to be
distributed by the Purchaser to potential purchasers of the Series 1997 Bonds. The
City Manager and the Finance Director (or in the event of the absence or disability of
either the City Manager or the Finance Director, another member of this Council)
are hereby authorized and directed on behalf of the City to approve the Preliminary
Official Statement and deem it a "final" official statement as of its date, in
accordance with Rule 15c2-12(b)(1) promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
Section 5. Continuing Disclosure. Bidders and other participating
underwriters in the primary offering of the Series 1997 Bonds need not 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"), because the
aggregate principal amount of the Series 1997 Bonds and any other securities
required to be integrated with the Series 1997 Bonds is less than $1,000,000.
Consequently, the City will not enter into any undertaking to provide continuing .
disclosure of any kind with respect to the Series 1997 Bonds.
Passed and approved this 7th day of April, 1997.
Attest: m
Clerk of C(6W
Egli
CITY OF KALISPELL, MONTANA
1