Resolution 4536 - Approval of $2,500,000 West Side District Tax Increment Urban Renewal Revenue Bond for Stream2054
RESOLUTION NO. 4536
RESOLUTION RELATING TO $2,500,000 WEST SIDE DISTRICT TAXABLE TAX
INCREMENT URBAN RENEWAL REVENUE BOND, SERIES 2000; AUTHORIZING AND
DIRECTING THE ISSUANCE AND PRESCRIBING THE FORM AND TERMS THEREOF
AND THE SECURITY THEREFOR.
BE IT RESOLVED by the City Council (the "Council") of the City of Kalispell, Montana
(the "City"), as follows:
Section 1. Definitions. Authorizations and Findings.
1.01. Definitions. The terms defined in this Section 1.01 shall for all purposes of this
Resolution have the meanings herein specified, unless the context clearly otherwise requires:
A. "Resolution" means this Resolution No. 4536 as originally adopted or as it may from
time to time be amended or supplemented pursuant to the provisions hereof.
B. All references in this Resolution to designated sections and other subdivisions are to the
designated sections and other subdivisions of this Resolution as originally adopted.
C. The words "herein," "hereof ' and "hereunder" and other words of similar import without
reference to any particular section or subdivision refer to this Resolution as a whole and not to any
particular section or other subdivision unless the context clearly indicates otherwise.
D. The terms defined in this Section include plural as well as the singular.
E. All accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with generally accepted accounting principles applicable to governmental entities.
F. All computations provided herein shall be made in accordance with generally accepted
accounting principles applicable to governmental entities consistently applied.
Accountant shall mean a Person engaged in the practice of accounting as a certified public
accountant, whether or not employed by the City.
Act shall mean the Urban Renewal Law, Montana Code Annotated, Title 7, Chapter 15, Parts
42 and 43, as amended or supplemented.
Additional Bonds shall mean any Additional Bonds issued pursuant to Section 6.
Additional Parity Bonds shall mean any Additional Bonds issued pursuant to Sections 6.02
or 6.03.
Additional Parity Tax Increment shall have the meaning assigned such term in Section 7.03.
Additional Subordinate Bonds shall mean any Additional Bonds issued pursuant to Section
6.04.
Authority shall mean the Flathead County Economic Development Authority or any
successor to its functions under the Interlocal Agreement.
Board of Investments shall mean the Board of Investments of the State of Montana, or any
successor to its functions, as the Original Purchaser of the Series 2000 Bond.
Bond Account shall mean the account so designated in the Tax Increment Debt Service Fund.
Bond Counsel shall mean any firm of nationally recognized bond counsel experienced in
matters relating to tax-exempt financing, selected by the City.
Bond Registrar shall mean the registrar maintained for the purpose of registering the
ownership, transfer and exchange of the Bonds of any series.
Bondowner shall mean the Owner of a Bond.
Bonds shall mean all Bonds issued pursuant to this Resolution, including the Series 2000
Bond and any Additional Bonds.
Business Da shall mean, with respect to the Bonds of any series, any day other than a
Saturday, Sunday or other day on which the Registrar for such series of Bonds is not open for
business.
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91y shall mean the City of Kalispell, Montana, or its successor.
Ci Resolution shall mean a resolution, ordinance or other appropriate enactment by the
Council to have been duly adopted and to be in full force and effect.
Code shall mean the International Revenue Code of 1986, as amended from time to time.
Company shall mean Stream International Services Corp., a Delaware corporation, or its
permitted successors and assigns.
Construction Account shall mean the account so designated in the Tax Increment Capital
Project Fund.
Council shall mean the City Council of the City or any successor governing body of the City.
CouM shall mean Flathead County, Montana, or its successor.
County Resolution shall mean a resolution, ordinance or other appropriate enactment by the
Board certified by the Clerk and Recorder to have been duly adopted and to be in full force and
effect.
Deficiency Tax Pa ents shall mean the payments to be made by the Company to the City
pursuant to Section 5.7 of the Location, Development and Use Agreement.
District shall mean the West Side Urban Renewal District created and established as an urban
renewal area pursuant to the Act and Ordinance No. 1259, as such area may be enlarged or reduced
in accordance with the Act and this Resolution.
Financial Consultant shall mean an Independent Person selected by the City, qualified to
study urban renewal areas and projects and tax increment financing plans, and in the judgment of
the Council, having a favorable repute for skill and experience in such work.
Fiscal Year shall mean the period commencing on the first day of July of any year and
ending on the last day of June of the next calendar year, or any other twelve-month period
authorized by law and specified by the Council as the City's fiscal year.
General Reserve Re uirement shall mean, as of the date of calculation, an amount equal to
the maximum amount of Principal and Interest Requirements on all Outstanding Additional Parity
Bonds in the then current or any future Fiscal Year.
Government Obligations shall mean direct obligations of, or obligations the principal of and
interest on which are fully and unconditionally guaranteed as to payment by, the United States of
America.
Independent shall mean, when used with respect to any specified Person, such a Person who
(i) is in fact independent; (ii) does not have any direct financial interest or any material indirect
financial interest in the City, other than the payment to be received under a contract for services to
be performed by such Person; and (iii) is not connected with the City as an officer, employee,
promoter, trustee, partner, director, underwriter or person performing similar functions. Whenever
it is herein provided that any Independent Person's opinion or certificate shall be furnished, such
Person shall be appointed by the City and such opinion or certificate shall state that the signer has
read this definition and the signer is Independent within the meaning hereof.
Interest Subaccount shall mean the subaccount so designated in the Bond Account.
Interest Pa ent Date shall mean the Stated Maturity of an installment of interest on any of
the Bonds.
Interlocal Agreement shall mean the Interlocal Agreement dated as of February 8, 2000,
between the City, County and Authority, relating to the acquisition, ownership, management and
financing of the Property.
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Loan Repayment shall mean 5.9l11.5 of each payment received by the City from the
Company as, or treated as, interest on the loan in the amount of $1,000,000 made by the City to the
Company pursuant to the Location, Development and Use Agreement,
Loan Rea ent Subaccount shall mean the subaccount so designated and created in the
Revenue Account in the Tax Increment Debt Service Fund.
Location, Development and Use Agreement shall mean Location, Development and Use
Agreement dated as of February S, 2000, between the City and the Company relating to the 2000
Project.
Maturily shall mean, when used with respect to any Bond, the date on which the principal
of such Bond becomes due and payable as therein or herein provided, whether at its Stated Maturity
or by declaration of acceleration, redemption or otherwise.
Opinion of Counsel shall mean a written opinion of counsel, who may (except as otherwise
expressly provided in this Resolution) be counsel for the City.
Orijzinal Purchaser shall mean, with respect to any series of Bonds, the Person or Persons
who purchase such series of Bonds from the City when first issued. The Original Purchaser of the
Series 2000 Bond is the Board of Investments.
Owner shall mean, with respect to any Bond, the Person in whose name such Bond is
registered in the Bond Registrar.
Outstanding shall mean, with reference to Bonds, as of the date of determination, all Bonds
theretofore issued and delivered under this Resolution except:
(i) Bonds theretofore cancelled by the City or delivered to the City cancelled or for
cancellation;
(ii) Bonds and portions of Bonds for whose payment or redemption money or
Government Obligations (as provided in Section 9) shall have been theretofore deposited in
trust for the Owners of such Bonds; provided, however, that if such Bonds are to be
redeemed, notice of such redemption shall have been duly given pursuant to this Resolution
or irrevocable instructions to call such Bonds for redemption at a.stated Redemption Date
shall have been given by the City; and
(iii) Bonds in exchange for or in lieu of which other Bonds shall have been issued
and delivered pursuant to this Resolution;
provided, however, that in determining whether the Owners of the requisite principal amount of
Outstanding Bonds have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Bonds owned by the City shall be disregarded and deemed not to be Outstanding.
Parfty Bonds shall mean the Series 2000 Bond and any Additional Parity Bonds.
Person shall mean any individual, corporation, partnership, limited liability company, limited
liability partnership, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Plan shall mean the West Side Urban Renewal Plan adopted by the Council on
March 17, 1997, including all amendments thereof entered into in accordance with the Act and this
Resolution.
Pledized Revenues shall mean the Tax Increment, the User Fee, the Loan Repayments and
the Port Authority Pledged Levy and the Port Authority Deficiency Levy.
Port Authority shall mean the Flathead County Economic Development Authority, created
by the County as a local port authority pursuant to the Port Authority Act.
Port Authorily Subaccount shall mean the subaccount so designated and created in the
Revenue Account in the Tax Increment Debt Service Fund.
Port Authority Act shall mean Montana Code Annotated, Title 7, Chapter 14, Part 11, and
Sections 67-10-401 and 67-10-402, as amended.
Port Authority Levy shall mean the property tax levy that the County has covenanted and 2057
agreed to levy on all taxable property in the County for port purposes for the benefit of the Port
Authority in the amount of two mills or, to the extent required for purposes of payment of the Series
2000 Bond under this Resolution, such higher amount as may then be permitted under applicable
law but not greater than the levy required, if collected in full, to generate $156,000 in collections,
pursuant to Montana Code Annotated, Sections 7-14-1131, 7-14-1132, 67-10-401 and 67-10-402,
or any amendatory or successory statute.
Port Authority Deficiency Levy shall mean, for any Fiscal Year, the lesser of (i) the
difference, if any, between the collections of the Port Authority Levy in such Fiscal Year and the
Port Authority Pledged Levy, and (ii) $31,000.
Port Authorijy Pledged LeV shall mean, for any Fiscal Year, the lesser of (i) collections of
the Port Authority Levy in such Fiscal Year (including delinquent collections), or (ii) $125,000.
Principal and Interest Requirements shall mean, with respect to any Bonds and for any Fiscal
Year or other specified period, the amount required to pay the principal of and interest on such
Bonds during such Fiscal Year or other period, determined on the assumption that each Serial Bond
is to be paid on its Stated Maturity and each Term Bond is to be paid on the Sinking Fund Payment
Dates according to the mandatory redemption requirements established for such Term Bond by the
applicable section of this Resolution or any Supplemental Resolution.
Principal Pa ent Date shall mean the Stated Maturity of principal of any Serial Bond and
the Sinking Fund Payment Date for any Term Bond.
Projects shall mean the 2000 Project and any other urban renewal project undertaken under
the Act, the costs of which are to be paid, in whole or in part, from the proceeds of the Bonds.
Prol2egy shall mean the real property and improvements acquired by the City from the
proceeds of the Series 2000 Bond as part of the 2000 Project.
Qualified Investments shall mean the investments described as such in Section 7.07.
Redemption Date when used with respect to any Bond to be redeemed shall mean the date
on which it is to be redeemed.
Redemption Price when used with respect to any Bond to be redeemed shall mean the price
at which it is to be redeemed.
Re ig s shall mean the Person appointed by the City to maintain the Bond Register for a
series of Bonds and designated by or pursuant to this Resolution to receive and disburse the principal
of, premium, if any, and interest on such Bonds.
Fund. Reserve Account shall mean the account so designated in the Tax Increment Debt Service
Serial Bonds shall mean Bonds which are not Term Bonds.
Series 2000 Bond shall mean the City's West Side District Taxable Tax Increment Urban
Renewal Revenue Bond, Series 2000, issued in the original aggregate principal amount of
$2,500,000 pursuant to this Resolution.
Sinking Fund Subaccount shall mean the subaccount so designated in the Bond Account.
Sinking Fund Pa ent Date shall mean a date set forth in any applicable provision of this
Resolution or a Supplemental Resolution for the making of a mandatory principal payment for the
redemption of a Term Bond.
Stated Maturity when used with respect to any Bond or any installment of interest thereon
shall mean the date specified in such Bond a the fixed date on which principal of such Bond or such
installment of interest is due and payable.
Su lemental Resolution shall mean any resolution supplemental to this Resolution adopted
pursuant to Section 9.
Tax increment shall mean the sum of (i) the amount received by the City pursuant to the Act
and the Plan from the extension of levies of Taxes against the incremental taxable value, as defined
in the Act, of all taxable property within the District and shall include any payments in lieu of Taxes
attributable to the incremental taxable value, (ii) all payments received by the City designated as
replacement revenues for lost Tax Increment, as provided in Section 8.12; and (iii) all Deficiency
Tav Aoxrm a"to
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Tax Increment Debt Service Fund shall mean the fund established pursuant to Section 7.01.
Tax Increment Development Fund shall mean the fund established pursuant to Section 7.01.
Tax Increment Funds shall mean the Tax Increment Capital Project Fund, the Tax Increment
Debt Service Fund and the Tax Increment Development Fund.
Taxes shall mean all taxes levied on an ad valorem basis by a Taxing Body against taxable
real and personal property located within the District (exclusive of the six -mill levy levied by the
State of Montana for the state university system) and shall include all payments in lieu of taxes
received by the City with respect, to property within the District.
Taxing Body shall mean the City, the County, Flathead County School District
No. 5, the State of Montana and any other political subdivision or governmental unit which may
hereafter levy Taxes against taxable rental or personal property within the District.
Term Bond shall mean any Bond for the payment of the principal of which mandatory
payments are required by the Resolution or Supplemental Resolution to be made at times and in
amounts sufficient to redeem all or a portion of such Bond prior to its Stated Maturity.
2000 Project shall mean the Project described in Section 1.07.
2000 Reserve Requirement shall mean, as of the date of calculation and if the Series 2000
Bond is Outstanding, an amount equal to the maximum amount of Principal and Interest
Requirements on the Series 2000 Bond in the then current or any future Fiscal Year.
2000 Tax Increment shall have the meaning assigned such term in Section 7.03.
User Fee shall mean the fee imposed by the City with respect to the Property pursuant to
Montana Code Annotated, Section 17-6-316, as amended, as specified in the Location, Development
and Use Agreement.
User Fee Subaccount shall mean the subaccount so designated and created in the Revenue
Account in the Tax Increment Debt Service Fund.
1.02. Authorization. Under the provisions of the Act, the City is authorized to create urban
renewal areas, prepare and adopt an urban renewal plan therefor and amendments thereto, undertake
urban renewal projects therein, provide for the segregation and collection of tax increment with
respect to property taxes collected in such areas, issue its bonds to pay the costs of such projects and
to refund bonds previously issued under the Act and pledge to the repayment of the bonds the tax
increment and other revenues derived from projects undertaken within the urban renewal area.
1.03. Prior City Actions. The Council pursuant to Ordinance No. 1259 (the "Ordinance"),
adopted on March 17, 1997, created the West Side Urban Renewal District (the "District") as an
urban renewal area under the Act and approved the West Side Urban Renewal Plan for the District
containing a tax increment financing provision all as set forth in the Ordinance. The District and
the Plan providing for the segregation and collection of the Tax Increment have been duly and
validly created and adopted in strict accordance with applicable provisions of the Act and are in full
force and effect.
1.04. Creation of Port Authority: Approval of 2000 Project by Port Authority: Interlocal
Agreement: Authority- Covenants. By Resolution No. 1346, duly adopted on July 22, 1999, the
Board of County Commissioners of the County created the Port Authority as a local port authority
pursuant to the Port Authority Act. The Board of County Commissioners of the County has
appointed the Commissioners of the Port Authority and has pursuant to Resolution No. 1346
delegated certain powers, duties and responsibilities to the Port Authority. The Board of
Commissioners of the Port Authority has approved the 2000 Project as an authorized corporate
activity of the Port Authority under the Port Authority Act for which collections of the Port
Authority Pledged Levy and the Port Authority Deficiency Levy may be applied. The Board of
Commissioners of the Port Authority has determined that the 2000 Project may be j ointly undertaken
by the Port Authority with the City and the County pursuant to the Interlocal Agreement, which has
been approved by the Board of Commissioners of the Port Authority, and acknowledged and agreed
therein that the Series 2000 Bond is being issued on its behalf and that the Port Authority Pledged
Levy and, to the extent required, the Port Authority Deficiency Levy shall be pledged to the
repayment of the Series 2000 Bond as herein provided. Pursuant to the Interlocal Agreement, the
Port Authority has agreed that in each year that the Series 2000 Bond is Outstanding it will request
the County to levy the Port Authority Levy and, if and to the extent required, the Port Authority
Deficiency Levy and remit it to the City for application as provided in this Resolution.
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1.05. Interlocal A eement• Coua1y Covenants. The County, pursuant to the Interlocal
Agreement, which has been approved by the Board of County Commissioners, has covenanted and
agreed to levy the Port Authority Levy during each Fiscal Year that the Series 2000 Bond is
Outstanding. The County has covenanted and agreed to make the Port Authority Levy,
acknowledging that the levy of the Port Authority may, under applicable law (including SB 195,
adopted by the Montana Legislature in 1997), require that property tax levies of the County for other
purposes be reduced.
1.06.Outstanding Bonds. There are no obligations or other indebtedness of the City now
outstanding that is payable in whole or in part from, or is secured by the pledge of, the Tax
Increment or other Pledged Revenues.
1.07. The 2000 ProjectXi1y AV12roval of Interlocal A eement. Pursuant to the Act and the
procedures contained in the Plan, the City has designated and approved the acquisition of the
Property as an urban renewal project (the 2600 Project) and has given notice and conducted a public
hearing with respect thereto and has approved the Interlocal Agreement.
1.08. Estimated Costs of 2000 Project. The cost of the acquisition of the Property to be paid
from the proceeds of the Series 2000 Bond is $2,500,000.
1.09. Findings and Determinations. It is hereby found, determined and declared by this
Council as follows:
A. The 2000 Project comprises an urban renewal project under the Act located within the
District;
B. The District has been duly determined to be blighted and appropriate for the 2000
Project;
C. The undertaking of the 2000 Project will encourage farther development and
redevelopment within the District and will be consistent with and promote the objectives and
policies of the Plan;
D. (i) No displacement of businesses, homes or persons will occur as a result of the
2000 Project;
(ii) the Plan conforms to the comprehensive plan of the City;
(iii) the Plan and the 2000 Prc j ect will afford maximum opportunity, consistent with
the sound needs of the City as a whole, for the rehabilitation or redevelopment of the District
by private enterprise; and
(iv) a sound and adequate financial program exists for the financing of the 2000
Project;
E. The Tax Increment and other Pledged Revenues are reasonably estimated to be sufficient
to pay the principal of and interest on the Series 2000 Bond when due; and
F. It is in the best interests of the City and its residents to undertake the 2000 Project and
to issue and sell the Series 2000 Bond as provided in this Resolution.
1.10. Determination of Adequacy of Pledged Revenues. The Series 2000 Bond is payable
from the Tax Increment and the Pledged Revenues. Taking into consideration the actual Tax
Increment collected for the Fiscal Year ended June 30, 1999, of $235,000, assuming a 90% future
collection rate, and revenues to be received from the State as replacement revenues for lost Tax
Increment for the Fiscal Year ended June 30, 2000, estimated to be $39,000, and based on the
imposition of the Port Authority Levy for fiscal year 2000 and thereafter in the amount of $125,000,
and a Loan Repayment estimated to be $38,000 annually, it is estimated that the Pledged Revenues
(exclusive of the User Fee) to be received during the Fiscal Year ending June 30, 2000 and each
Fiscal Year thereafter, during the time the Series 2000 Bond is expected to be outstanding, will be
not less than $437,000. Based on additional development in the District in calendar year 1999, and
the tax increment anticipated to be received as a result of the 2000 Project, with a certain
development agreement between the City and American Capital Group, LLC, the City anticipates
that the Pledged Revenues (exclusive of the Users Fee) to be received during the Fiscal Year ending
June 30, 2001, and each Fiscal Year thereafter, during the time the Series 2000 Bond is expected to
be outstanding will not be less than $615,000. The maximum annual debt service payable on the
Series 2000 Bond in any Fiscal Year during its term, assuming an initial interest rate of 8.71% per
annum is $398,896 and, assuming the anticipated adjusted interest rate of 6.21% per annum, which
is anticipated to become effective no later than January 1, 2001, is $336,234. It is hereby found,
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termined and declared that the estimated Pledged Revenues to be receivedby the City and pledged
the payment of the Series 2000 Bond will be sufficient to pay the principal thereof and interest
thereon when due.
Section 2. The Bond.
2.01. General Title. The general title of the Bonds of all series shall be "Tax Increment
Urban Renewal Bonds," with appropriate additions for Subordinate Bonds and to distinguish Bonds
of each series from Bonds of each other series.
2.02. General Limitations: Issuable in Series. The aggregate principal amount ofBonds that
may be authenticated and delivered and Outstanding under this Resolution is not limited, except as
provided in Section 6 and except as may be limited by law.
The Bonds may be issued in series as from time to time authorized by the Council.
The Bonds are special, limited obligations of the City. Principal of, premium, if any, and
interest on the Bonds (except to the extent payable out of proceeds of the Bonds) are payable solely
from the Tax Increment and from other revenues, if any, derived by the City from Projects or other
sources which may be pledged by this Resolution or a Supplemental Resolution to the payment of
any series of Bonds. The Bonds shall not pledge the general credit or taxing powers of the City, and
the State of Montana shall not in any event be liable for the payment of the principal of, premium,
if any, or interest on the Bonds or for the performance of any pledge of any kind whatsoever that
may be undertaken by the City. Neither the Bonds nor any of the agreements or obligations of the
City contained herein or therein shall be construed to constitute an indebtedness of the State of
Montana, the City of Kalispell or Flathead County within the meaning of any constitutional or
statutory provisions whatsoever.
With respect to the Bonds of any particular series, the City may incorporate in or add to the
general title of such Bonds any words, letters or figures designed to distinguish that series.
If any Stated Maturity, Redemption Date or Sinking Fund Payment Date shall be on a day
which is not a Business Day, then payment of principal or interest due on such day may be made on
the next succeeding Business Day, with the same force and effect as if made on such Stated
Maturity, Redemption Date or Sinking Fund Payment Date (whether or not such next succeeding
Business Day occurs in a succeeding month).
2.03. Terms of Particular Series. Each series of bonds (except the Series 2000 Bond, which
is created by Section 3) shall be created by a Supplemental Resolution. The Bonds of each series
(other than the Series 2000 Bond, as to which specific provision is made in Section 3) shall bear
such date or dates, shall be payable at such place or places, shall have such Stated Maturities and
Redemption Dates, shall bear interest at such rate or rates, from such date or dates, payable in such
installments and on such dates and at such place or places, may have attached thereto such coupons
for interest, and may be redeemable at such price or prices and upon such terms (in addition to the
prices and terms herein specified for redemption of all Bonds) as shall be provided in the
Supplemental Resolution creating that series. The City may, at the time of the creation of any series
of Bonds or at any time thereafter, make, and the Bonds of that series may contain, provision for:
A. a sinking, amortization, improvement or other analogous fund;
B. limiting the aggregate principal amount of the Bonds of that series or of all Additional
Bonds thereafter issued; or
C. exchanging Bonds of that series, at the option of the Owners thereof, for other Bonds of
the same series of the same aggregate principal amount of a different authorized kind and/or
authorized denomination or denominations;
D. the issuance of Bonds not registered as to principal or interest or Bonds registrable as to
principal only with appurtenant and detachable coupons, and the exchange of such Bonds for fully
registered Bonds;
all upon such terms as the City may determine. All Bonds of the same series shall be substantially
identical except as to denomination and the differences specified herein or in the Supplemental
Resolution between interest rates, Stated Maturities and redemption provisions.
2.04. Form and Denominations. The form of the Bonds (other than the Series 2000 Bond,
as to which specific provisions are made in Section 4) shall be established by the Supplemental
Resolution creating such series. The Bonds of each series shall be distinguished from the Bonds of
other series in such manner as the Council may determine.
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The Bonds of any series shall be issuable as fully registered Bonds unless the Supplemental
Resolution provides otherwise.
The Bonds of each series shall be issuable in such denominations as shall be provided in the
provisions of the Supplemental Resolution creating such series (other than the Series 2000 Bond,
as to which specific provisions are made in Section 3). In the absence of any such provision with
respect to the Bonds of any particular series, Bonds shall be in the denomination of $5,000 or any
integral multiple thereof, of a single maturity.
2.05. Execution. Authentication and Deliy . Each Bond shall be executed on behalf of the
City by the officials of the City specified in a City Resolution. The signature of any official may
be facsimile, if permitted by applicable law. The seal of the City need not be affixed to or imprinted
on any Bond.
Bonds bearing the manual or facsimile signatures of individuals who were at any time the
proper officials of the City shall bind the City, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the delivery of such Bonds or did not hold such offices at
the date of such Bonds.
2.06. Temnorary Bonds. Pending the preparation of definitive Bonds, the City, if authorized
by law, may execute and deliver, temporary Bonds which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination, substantially of the tenor of the
definitive Bonds in lieu of which they are issued, in registered form, and with such appropriate
insertions, omissions, substitutions and other variations as the officers of the City executing such
Bonds may determine, as evidenced by their signing of such Bonds.
If temporary Bonds are issued, the City will cause definitive Bonds to be prepared out
unreasonable delay. After the preparation of definitive Bonds, the temporary Bonds shall be
exchangeable for definitive Bonds upon surrender of the temporary Bonds, without charge to the
Owner. Upon surrender for calculation of any one or more temporary Bonds (accompanied by any
um -natured coupons appertaining thereto) the City shall execute and deliver in exchange therefor a
like principal amount of definitive Bonds of authorized denominations. Until so exchanged the
temporary Bonds shall in all respects be entitled to the security and benefits under this Resolution,
and interest thereon, when and as payable, shall be paid to the bearers of the temporary Bonds upon
presentation thereof for notation of such payment thereon, unless such temporary Bonds shall be
fully registered Bonds or shall bear coupons for such interest.
Section 3. The Series 2000 Bond.
3.01. General Terms. The City shall forthwith issue the Series 2000 Bond in the principal
amount of $2,500,000. The Series 2000 Bond shall denominated "West Side District Taxable Tax
Increment Urban Renewal Revenue Bond, Series 2000," shall be one in number, shall be dated as
of the date of its delivery to and payment therefor by the Board of Investments, and shall bear
interest at the rate of eight and seventy-one hundredths percent (8.71 %) per annum unless and until
such rate is adjusted as provided in the next sentence. Effective on the first day of the month next
occurring after receipt and approval on a quarterly basis of any Job Credit Certification by the Board
of Investments, the interest rate on the Series 2000 Bond will be reduced to a rate commensurate
with the number of jobs then certified and approved under the Job Credit Certification in increments
of .05% per job, as provided in 17-6-318, M.C.A., but in no event shall the rate be less than 6.21%
per annum. Upon an interest rate adjustment, the outstanding principal amount of the Series 2000
Bond shall be reamortized by the holder thereof over the remainder of the term of the Series 2000
Bond ending on the final Stated Maturity and a new Schedule A will be attached thereto by the
holder and provided to the City. Such principal and interest shall be paid in consecutive equal
semiannual installments on January 1 and July 1 of each year, commencing January 1, 2001, and
continuing through July 1, 2010 (the final Stated Maturity of the Series 2000 Bond), subject to the
rights and duties of prepayment set forth below. All payments on the Series 2000 Bond shall be
applied first to interest due on the Series 2000 Bond and then to reduce the principal amount thereof.
If any installment of principal or interest is not paid when due, each and every such delinquent
installment shall bear interest, to the extent permitted by law, at the annual rate of interest then bome
by the Series 2000 Bond from the due date of such installment until payment thereof. The final
semiannual installment may be in such lesser or greater amount as is necessary to pay the balance
of principal and interest then remaining due. Such installment payments shall be made to the
registered holder of the Series 2000 Bond, at its address as it appears on the Bond Register, in lawful
money of the United States of America. The entire proceeds of the Series 2000 Bond shall be
advanced by the Board of Investments and disbursed at closing, and the Board of Investments shall
enter that amount on Schedule A attached to the Series 2000 Bond under "Advances" and under
"Total Amount Advanced."
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3.02. Reizistration. The Series 2000 Bond shall be fully registered as to both principal and
interest and shall initially be registered in the name of and payable to the Original Purchaser thereof.
The Registrar shall establish and maintain a Bond Register for the purpose of recording the names
and addresses of the registered owners of the Series 2000 Bond and the date of registration of any
transfer.
3.03. Optional Prepayment. The Series 2000 Bond shall be subject to prepayment at the
option of the City in whole or in part, on any date, in the principal amount thereof plus accrued
interest, without premium. Not less than 15 days before the date specified for prepayment thereof,
the City Finance Officer shall mail notice of the prepayment, specifying the date and amount of the
prepayment, to the registered owner thereof at the address as it appears on the registration books of
the Bond Registrar.
3.04. System of Registration, The City shall appoint, and shall maintain, a Registrar for the
Series 2000 Bond. This Section 3.05 shall establish a system of registration for the Series 2000
Bond as defined in the Model Public Obligations Registration Act of Montana, and shall govern in
the event provisions of the Bond Resolution relating to registration, transfer or exchange of Bonds
are inconsistent herewith. The effect of registration and the rights and duties of the City and the
Registrar with respect thereto shall be as follows:
(a) Re ister. The Registrar shall keep at its principal office a bond register in which
the Registrar shall provide for the registration of ownership of Series 2000 Bond and the
registration of transfers and exchanges thereof.
(b) Transfer. Upon surrender for transfer of any Series 2000 Bond duly endorsed
by the registered owner thereof or accompanied by a written instrument of transfer, in form
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney
duly authorized by the registered owner in writing, the Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, a new Series 2000 Bond of
a like aggregate principal amount, interest rate and maturity as requested by the transferor.
(c) Exchange. Whenever any Series 2000 Bond is surrendered by the registered
owner for exchange, the Registrar shall authenticate and deliver one new Series 2000 Bond
of a like aggregate principal amount, interest rate and maturity, as requested by the
registered owner or the owner's attorney in writing,
(d) Cancellation. The Series 2000 Bond surrendered upon any transfer or exchange
shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the
City.
(e) Improper or Unauthorized Transfer. When any Series 2000 Bond is presented
to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied
that the endorsement on such Series 2000 Bond or separate instrument of transfer is legally
authorized. The Registrar shall incur no liability for the refusal, in good faith, to make
transfers which it, in its judgment, deems improper or unauthorized.
(f) Persons Deemed Owners. The City and the Registrar may treat the person in
whose name the Series 2000 Bond is at any time registered in the bond register as the
absolute owner of the Series Z000 Bond, whether the Series 2000 Bond shall be overdue or
not, for the purpose of receiving payment of, or on account of, the principal of, premium, if
any, and interest on the Series 2000 Bond and for all other purposes, and all such payments
so made to any such registered owner or upon the owner's order shall be valid and effectual
to satisfy and discharge the liability of the City upon such Series 2000 Bond to the extent of
the sum or sums so paid.
(g) Taxes Fees and Charges. For every transfer or exchange of Series 2000 Bond,
the Registrar may impose a charge upon the owner thereof sufficient to reimburse the
Registrar for any tax, fee or other governmental charge required to be paid with respect to
such transfer or exchange.
(h) Mutilated Lost Stolen or Destro ed Series 2000 Bond. In case the Series 2000
Bond shall become mutilated or be, lost, stolen or destroyed, the Registrar shall deliver a new
Series 2000 Bond of a like amount, number, maturity date and tenor in exchange and
substitution for and upon cancellation of any such mutilated Series 2000 Bond or in lieu of
and in substitution for any such Series 2000 Bond lost, stolen or destroyed, upon the
payment of the reasonable expenses and charges of the Registrar in connection therewith;
and, in the case of a Series 2000 Bond lost, stolen or destroyed, upon filing with the
Registrar of evidence satisfactory to it that such Series 2000 Bond was lost, stolen or
1
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destroyed, and of the ownership thereof, and upon furnisg to the Registrar of an
appropriate bond or indemnity in form, substance and amount satisfactory to it, in which
both the City and the Registrar shall be named as obligees. The Series 2000 Bond so
surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall
be given to the City. If the mutilated, lost, stolen or destroyed Series 2000 Bond has already
matured or such Series 2000 Bond has been called for redemption in accordance with its
terms, it shall not be necessary to issue a new Series 2000 Bond prior to payment.
3.05. Initial Registrar. The City hereby appoints the City Finance Officer as the initial
Registrar for the Series 2000 Bond. The City reserves the right to appoint a successor Registrar, and
the City agrees to pay the reasonable and customary charges of the Registrar for the services
performed. Upon merger or consolidation of a bank or trust company that is acting as the Registrar,
if the resulting corporation is a bank or trust company authorized by law to conduct such business,
such corporation shall be authorized to act as successor Registrar. The City reserves the right to
remove any Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in
which event the predecessor Registrar shall deliver all cash and securities in its possession as
Registrar to the successor Registrar and shall deliver the bond register to the successor Registrar.
On or before each principal or interest due date, without further order of this Council, the City
Finance Officer shall transmit to the Registrar, solely from money in the Bond Account of the Tax
Increment Fund available therefor, as the case may be, money sufficient for the payment of all
principal, premium, if any, and interest then due on the Series 2000 Bond.
3.06. Execution and Delivery. The Series 2000 Bond shall be forthwith prepared for
execution under the direction of the City Finance Officer, at the expense of the City, and shall be
executed on behalf of the City by the signatures of the Mayor, City Manager and City Finance
Officer; provided that said signatures may be printed, engraved or lithographed facsimiles thereof.
The seal of the City need not be affixed to or imprinted on the Series 2000 Bond. In case any officer
whose signature or a facsimile of whose signature shall appear on the Series 2000 Bond shall cease
to be such officer before the delivery of any Series 2000 Bond, such signature or facsimile shall
nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in
office until delivery. Notwithstanding such execution, no Series 2000 Bond shall be valid or
obligatory for any purpose or be entitled to any security or benefit under the Bond Resolution unless
and until a certificate of authentication on such Series 2000 Bond has been duly executed by the
manual signature of an authorized representative of the Registrar. Certificates of authentication on
each Series 2000 Bond need not be signed by the same representative. The executed certificate of
authentication on each Series 2000 Bond shall be condlusive evidence that it has been authenticated
and delivered under the Bond Resolution and in accordance with the provisions hereof. When the
Series 2000 Bond has been fully executed and authenticated, it shall be delivered by the Registrar
to the Board of Investments upon payment of the purchase price in accordance with the contract of
sale heretofore made and executed, and the Board of Investments shall not be obligated to see to the
application of the purchase price.
3.07. Transcript Certification. The officers of the City are directed to furnish to the
Purchaser and to bond counsel certified copies of all proceedings and information in their official
records relevant to the authorization and issuance of the Series 2000 Bond, and such certificates and
affidavits as to other matters appearing in their official records or otherwise known to them as may
be reasonably required to evidence the validity and security of the Series 2000 Bond, and all such
certified copies, certificates and affidavits, including any heretofore furnished, shall constitute
representations and recitals of the City as to the correctness of all facts stated therein and the
completion of all proceedings stated therein to have been taken.
Section 4. Application of Proceeds of Series 2000 Bond. The City shall deposit the proceeds
of the sale of the Series 2000 Bond in the Construction Account in the Capital Projects Tax
Increment Fund to be used to pay costs of the 2000 Project and costs of issuance of the Series 2000
Bond.
Section 5. Form of the Series 2000 Bond. The Series 2000 Bond to be issued pursuant to
this Resolution shall be prepared in substantially the following form, with such appropriate
variations, omissions and insertions as are permitted or required by this Resolution:
2064 UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
WEST SIDE DISTRICT
TAXABLE TAX INCREMENT URBAN RENEWAL REVENUE BOND
SERIES 2000
No. R-1 $2,500,000
FOR VALUE RECEIVED, THE CITY OF KALISPELL (the "City"), a duly organized and
validly existing municipal corporation of the State of Montana, acknowledges itself to be specially
indebted and hereby promises to pay, solely from the Bond Account of its Tax Increment Debt
Service Fund, to the Board of Investments of the State of Montana (the "Board of Investments"),
or registered assigns, the principal sum of Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00), in installments as set forth below, and to pay interest thereon, solely from the Bond
Account, at a rate of and eight and seventy-one hundredths percent (8.71 %) per annum unless and
until such interest rate is adjusted as provided in the next sentence. Effective on the first day of the
month next occurring after receipt and approval on a quarterly basis of any Job Credit Certification
by the Board of Investments, the interest rate on this Bond will be reduced to a rate commensurate
with the number of jobs then certified and approved under the Job Credit Certification in increments
of .05% per job, as further provided in 17-6-318, M.C.A., but in no event shall the interest rate on
this Bond be less than 6.21 %per annum. Upon an interest rate adjustment, the outstanding principal
amount of this Bond shall be reamortized over the remainder of the term of this Bond ending on July
1, 2010 (the "Final Maturity Date") and a new schedule A shall be attached thereto and provided to
the City. Principal hereof and interest hereon are payable in consecutive equal semiannual
installments on January 1 and July 1 of each year, commencing on January 1, 2001, and continuing
through the Final Maturity Date, subject to the rights and duties of prepayment set forth below.
Upon presentation and surrender hereof at the office of the City Finance Officer in Kalispell,
Montana, the interest hereon and the principal hereof are payable in lawful money of the United
States of America to the registered owner of this Bond as it appears in the Bond Register of the City.
This Bond is one in number and comprises all of a duly authorized series of Bonds of the
City (the "Series 2000 Bond") issued, and to be issued from time to time in one or more series
(collectively, the "Bonds") pursuant to a resolution duly adopted by the City Council of the City on
February 7, 2000 (the "Resolution"), to which Resolution, copies of which are on file with the City,
reference is hereby made for a description of the nature and extent of the security for the Series 2000
Bond, the conditions under which additional Bonds may be issued on a parity as to payment with
the Series 2000 Bond or otherwise, the conditions under which the Resolution may be amended and
the rights of the Holders of the Series 2000 Bond. The Series 2000 Bond is issued by the City for
the purpose of financing the acquisition of an office facility in the Gateway West Complex to be
leased to Stream International Service Corp., a business enterprise that has agreed to provide new
jobs in the City for at least 500 full time employees for a period of not less than 10 years (the "2000
Project").
This Bond is issued pursuant to and in full compliance with the Constitution and laws of the
State of Montana, particularly Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as
amended or supplemented (the "Act"), and pursuant to the Resolution. This Bond is payable from
the Tax Increment received by the City and resulting from the extension of certain ad valorem taxes
levied by certain Taxing Bodies against the incremental taxable value of properties within the
District pursuant to the Act (as defined in the Resolution, the "Tax Increment") of the Kalispell West
Side Urban Renewal District, an urban renewal area within the City (the "District"), and other
revenues and income pledged and appropriated and from time to time credited to the Series 2000
Bond Subaccount in the Tax Increment Debt Service Fund, the Port Authority Levy, certain Loan
Repayments from the Company and the User Fee of the Company (as further defined and provided
in the Resolution, the "Pledged Revenues").
The City has reserved the right to issue additional Bonds payable from the Tax Increment
on a parity with the pledge of the Tax Increment for the Series 2000 Bond, but has agreed that the
Pledged Revenues not constituting Tax Increment are pledged solely to the payment of the Series
2000 Bond.
This Bond is not a general obligation of the City and the City's general credit and taxing
powers are not pledged to the payment of the Bond or the interest thereon. This Bond shall not
constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter
limitations.
2065
The interest on this Bond is includable in gross income purposes oor ur ederal
taxation. f Pf Income
The City may prepay the principal of this Bond many date, in whole or part, any unpaid
principal of this Bond at a price equal to the principal amount to be redeemed plus interest accrued
to the date of redemption, without premium. Notice of any such prepayment will be mailed by the
District not less than 15 days prior to the date specified for payment, to the registered holder of this
Bond at his address as it appears on the Bond Register maintained by the City Finance Officer.
If provision is made for the payment of principal of and interest on this Bond in accordance
with the Resolution, this Bond shall no longer be deemed Outstanding under the Resolution, shall
cease to be entitled to the benefits of the Resolution, and shall thereafter be payable solely from the
funds provided for payment.
The Resolution permits, with certain exceptions as therein provided, the amendment thereof
and the modification of the rights and obligations of the City and the Owners of the
Bonds at any time without the consent of any Bondowner or with the consent of the Owners of a
majority in aggregate principal amount of the Bonds at the time Outstanding (as defined in the
Resolution) which are affected by such modifications. The Resolution also contains provisions
permitting Owners of a majority in aggregate principal amount of the Bonds of all series at the time
Outstanding, on behalf of all the Owners of all Bonds, to waive compliance by the City with certain
provisions of the Resolution and certain past defaults under the Resolution and their consequences.
Any such consent or waiver by the Owner of this Bond shall be conclusive and binding upon such
Owner and on all future Owners of this Bond and of any Bond issued in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond.
The Owner of this Bond shall have no right to enforce the provisions of the Resolution, or
ti institute action to enforce the covenants therein or take any action with respect to a default under
the Resolution or to institute, appear in or defend any suit or other procedure with respect thereto
except as provided in the Resolution.
This Bond is a negotiable investment security as provided in the Montana Uniform
Commercial Code. As provided in the Resolution and subject to certain limitations set forth therein,
this Bond is transferable upon the books of the City at the office of the City Finance Officer, by the
registered owner hereof in person or by his attorney duly authorized in writing upon surrender
hereof together with a written instrument of transfer satisfactory to the City Finance Officer, duly
executed by the registered owner or his attorney. Upon such transfer, the City will cause a new
Bond to be issued in the name of the transferee or registered owner, of the same aggregate principal
amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement
for any tax, fee or governmental charge required to be paid with respect to such transfer.
The City may deem and treat the .person in whose name this Bond is registered as the
absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment
and for all other purposes, and the City shall not be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND DECLARED that all acts,
conditions and things required by the Constitution and laws of the State of Montana and the home
rule charter and ordinances and resolutions of the City to be done, to exist, to happen and to be
performed in order to make this Bond a valid and binding special, limited obligation of the City in
accordance with its terms have been done, do exist, have happened and have been performed as so
required; that this Bond has been issued by the City in connection with an urban renewal project (as
defined in the Act); that the City, in and by the Resolution has validly made and entered into
covenants and agreements with and for the benefit of the holders from time to time of all Bonds
issued thereunder including covenants that it will pledge, appropriate and credit the Tax Increment
derived from the District to the Tax Increment Debt Service Fund of the City; that additional Bonds
may be issued and made payable from the Tax Increment on a parity with the Series 2000 Bond
upon certain conditions set forth in the Resolution, but no obligation will be otherwise incurred and
made payable from the Tax Increment unless the lien thereof shall be expressly made subordinate
to the lien of the Series 2000 Bond on the Tax Increment; that all provisions for the security of the
Owners of the Bonds as set forth in the Resolution will be punctually and faithfully performed as
therein stipulated; and that the issuance of the Series 2000 Bond does not cause the indebtedness of
the City to exceed any constitutional, statutory or charter Iimitation.
2066
IN WITNESS WHEREOF, the City of Kalispell, Flathead County, State of Montana, by its
City Council, has caused this Bond to be executed on its behalf by the facsimile signatures of the
Mayor, the City Manager and the City Finance Officer.
Dated:
CITY OF KALISPELL, MONTANA
(Facsimile Signature)
Mayor
(Facsimile Signature)
City Manager
(Facsimile Signature)
City Finance Officer
REGISTER
The ownership of the unpaid Principal Balance of this Bond and the interest accruing thereon
is registered on the books of the City of Kalispell, Montana in the name of the registered holder
appearing on the first page hereof or as last noted below;
Date of Name and Address Signature of
Registration of Registered Holder Clerk Financial Officer
2000 State of Montana
Board of Investments
2401 Colonial Drive
Helena, MT 59620-0126
PROVISIONS FOR THE REGISTRATION OF TRANSFER AND EXCHANGE
The ownership ofthis Bond and the interest payable hereon may be transferred to a bona fide
purchaser only by delivery with an assignment duly executed by the registered owner or his attorney
or legal representative, and the City may treat the registered owner as the person exclusively entitled
to receive payments of principal of, premium, if any, and interest on this Bond and to exercise all
the rights and powers of an owner until this Bond is presented to the City Finance Officer, as Bond
Registrar, accompanied by said assignment and by assurance of the nature provided by law that the
same is genuine and effective, and until such transfer is registered on the books of the City and noted
hereon by the Bond Registrar.
NO WRITING HEREON EXCEPT BY CITY FINANCE OFFICER
AS BOND REGISTRAR
The City Finance Officer has transferred on the books of the City of Kalispell, Flathead
County, Montana, on the date last noted below, to the registered assign noted opposite said date,
ownership of the principal amount of and interest on this Bond, except the amounts of principal and
interest theretofore paid:
Date of Transfer Registered Assign Signature of Finance Officer
Section 6. Additional Bonds.
206.7
6.01. General Provisions. In addition to the Series 2000 Bond, whose issuance and delivery
is provided for in Section 3, Additional Bonds may at any time and from time to time be issued, sold
and delivered by the City but only upon compliance with the conditions of, Sections 6.02, 6.03, or
6.04, whichever may be applicable, and upon filing with the Clerk of the Council the following:
A. A Supplemental Resolution authorizing the issuance and creating the designated
series of Additional Bonds and the sale thereof to the purchaser or purchasers named therein
for the purchase price set forth therein;
B. A certificate executed by the City Manager and City Finance Officer stating that
upon the issuance of the Additional Bonds, no default hereunder has occurred and is
continuing which would not be cured upon the issuance of the Additional Bonds and
application of the proceeds thereof.
C. An Opinion of Bond Counsel stating that:
(1) all conditions precedent provided for in this Resolution relating to the issuance
and delivery of such Additional Bonds have been complied with, including any conditions
precedent specified in this Section 6;
(2) the series of Additional Bonds when issued and delivered by the City will be
valid and binding special, limited obligations of the City in accordance with their terms
and entitled to the benefits of and secured by this Resolution;
(3) the issuance of such Additional Bonds will not affect the tax-exempt status, if
any, for federal income tax purposes of any Bonds then outstanding; and
No Additional Parity Bonds shall be issued unless, immediately after the issuance thereof
the balance on hand in the Reserve Account will be at least equal to the Reserve Requirement after
giving effect to the issuance of such Additional Parity Bonds.
Any Additional Bonds shall be dated, shall bear interest at a rate or rates not exceeding the
maximum rate, if any, permitted by law, shall have Stated Maturities, and may be subject to
redemption at such times and prices and on such terms and conditions, all as may be provided by
the Supplemental Resolution authorizing their issuance. All Additional Bonds issued pursuant to
Sections 6.02 and 6.03 shall be payable and secured ratably and equally and on a parity with the
Series 2000 Bond and any Additional Parity Bonds theretofore issued, entitled to the same benefits
and security of this Resolution.
6.02. Additional Parity Bonds To Pay the Cost of Projects. Additional Parity Bonds may
be issued under this Section 6.02, at one time or from time to time, subject to the conditions
provided in Section 6.01 and this Section 6.02, for the purpose of providing funds, in an aggregate
amount sufficient with any other funds available and committed therefor to pay the cost of one or
more Projects.
Before any Additional Parity Bonds shall be issued under this Section 6.02, the City shall
adopt a Supplemental Resolution authorizing the issuance of such series ofAdditional Parity Bonds,
fixing the amount and the details thereof, describing in brief and general terms the Projects to be
acquired, constructed, altered or improved and estimating the costs thereof.
In addition, prior to the execution and delivery of any series of Additional Parity Bonds
under this Section 6.02, there shall be filed with the Clerk of the Council:
(a) A certificate executed by the City Manager and City Finance Officer stating:
(i) the estimated cost of the Projects being financed thereby, including an allowance for
contingencies and all fees, expenses and financing costs, (ii) the amount, if any, which will
be required to be deposited to the credit of the Reserve Account in connection with the
issuance of the Additional Parity Bonds, (iii) the amount, if any, which will be required to
be credited to the Bond Account to pay interest on the Additional Parity Bonds prior to
collection of Tax Increment pledged thereto, (iv) the amount of Tax Increment received by
the City in the last completed Fiscal Year, (v) the amount of the maximum Principal and
Interest Requirements on the Outstanding Parity Bonds and the Additional Parity Bonds
proposed to be issued for any future Fiscal Year during the term of the Outstanding Parity
Bonds, and (vi) that the principal amount of such Additional Parity Bonds is sufficient to
provide for the payment of all estimated costs of Projects and credits to the Reserve Account
and Bond Account as set forth above; and
that: (b) a certificate executed by the City Manager and City Finance Officer stating
(i) the Tax Increment and Port Authority Pledged Levy received by the City in the
last completed Fiscal Year was equal to at least 150% of the maximum Principal and Interest
Requirements for any future Fiscal Year (during the term of the Outstanding Parity Bonds)
with respect to Outstanding Parity Bonds and the Additional Parity Bonds proposed to be
issued; and
(ii) the Port Authority Pledged Levy and Tax Increment received by the City in the
last completed Fiscal Year, adjusted as provided in this Section 6.02(b)(ii), was, and the Tax
Increment estimated to be received in the next succeeding three Fiscal Years, adjusted as
provided in Section 6.02(c), is estimated to be, equal to at least 150% of the maximum
Principal and Interest Requirements for any future Fiscal Year (during the term of the
Outstanding Parity Bonds) with respect to the Outstanding Parity Bonds and the Additional
Parity Bonds proposed to be issued, adjusted as provided in Section 6.02(d). For this
purpose, the Tax Increment received by the City in the last completed Fiscal Year may be
adjusted by adding any increase in Tax Increment which would have resulted from applying
the tax rate effective for the last completed Fiscal Year to the value, as determined by
certification of the County Assessor, of any projects which have been completed in the
District before the date of issuance of the Additional Parity Bonds and the taxable values of
which as so completed are not included in the "actual taxable value" of the District (within
the meaning of the Act).
The Council shall approve and confirm the findings and estimates set forth in the
above -described certificates in the Supplemental Resolution authorizing the issuance of the
Additional Bonds.
(c) For purposes of the foregoing paragraph (b), in estimating the Tax Increment to be
received in any future Fiscal Year, the City Manager and City Finance Officer shall assume that:
(1) 90% of the Taxes levied in the District will be collected in any Fiscal Year, (2) no Taxes
delinquent in a prior Fiscal Year will be collected in any subsequent Fiscal Year and (3) there will
be no increase in the Tax Increment to be received in any future Fiscal Year resulting from (A)
projected inflation in property values or projected increases in Taxes; (B) the completion of
improvements to real property which are under construction at the time of the issuance of the
Additional Bonds unless the improvements are substantially completed at the time of the issuance
of the Additional Bonds and the City Manager and City Finance Officer reasonably believe that the
improvements will be completed within the period for which the estimate is to be made; (C) the
completion of an improvement to real estate for which construction has not commenced or is not
substantially completed at the time of the issuance of the Additional Bonds unless (i) the City has
entered into an agreement with the Person undertaking the improvement wherein the Person agrees
to complete the improvement in accordance with a described plan and within the period for which
the estimate is to be made and to pay and satisfactorily secure to the City, in the event the
improvement is not completed in accordance with the described plan, the difference between the
estimated Tax Increment to be derived from such improvement and the actual Tax Increment derived
therefrom (adjusted upwards to reflect reductions in the mill rates from those assumed in the
estimate), and (ii) the City Manager and City Finance Officer reasonably believe the improvement
will be completed within the period for which the estimate is to be made; or (D) improvements to
be completed later than the end of the second full Fiscal Year following the issuance of the
Additional Bands. In estimating the Tax Increment to be derived from future development, the City
shall assume the taxable value of the development upon completion to be 66-2/3% of the estimated
taxable valuation.
6.03. Additional Parity Bonds for Refund -in& Purposes. Additional Parity Bonds may be
issued at any time or from time to time, subject to the conditions hereinafter stated in this Section
6.03, for the purpose of providing funds, with any other funds available and committed therefor, for
paying at, or redeeming prior to, their Stated Maturities any Outstanding Bonds, including the
payment of any redemption premium thereon and interest which will accrue on such Bonds to any
Redemption Date or the Stated Maturities thereof, and any expenses in connection with such
financing. Such Additional Parity Bonds shall be designated substantially as the Bonds to be
refunded, with the addition of the term "Refunding."
Prior to authentication and delivery of any Additional Parity Bonds under this Section 6.03
there shall be filed with the Clerk of the Council such documents as shall be required to show that
provisions have been duly made in accordance with the provisions of this Resolution for the
redemption of all of the Outstanding Bonds to be refunded.
2069 The City shall not deliver any Additional Parity Bonds under this Section 6.03 unless there
shall be filed with the Clerk of the Council:
(i) a report of an Independent Accountant to the effect that (a) the proceeds
(excluding accrued interest but including any premium) of the Additional Parity Bonds plus
any moneys to be withdrawn from the Bond Account for such purpose, together with any
other funds deposited for such purpose, will be not less than an amount sufficient to pay the
principal of and redemption premium, if any, on the Outstanding Bonds to be refunded and
the interest which will become due and payable on and prior to the Redemption Date or
Stated Maturities of the Bonds to be refunded, or (b) from such proceeds there shall be
deposited in trust, Government Obligations which do not permit the redemption thereof at
the option of the issuer, the principal of and the interest on which when due and payable (or
redeemable at the option of the holder thereof) will provide, together with any other moneys
which shall have been deposited in trust irrevocably for such purpose, but without
reinvestment, sufficient moneys to pay such principal, redemption premium and interest;
(ii) an opinion of Bond Counsel to the effect that the issuance of such Additional
Bonds will not prejudice the exclusion from gross income for purposes of federal income
taxation of the interest accruing on any of the Outstanding Bonds; and
(iii) if Additional Parity Bonds are issued to refund Outstanding Bonds issued
pursuant to Section 6.04, the conditions for the issuance ofAdditional Parity Bonds pursuant
to Section 6.02 are satisfied.
6.04. Subordinate Bonds. Except as provided in Sections 6.01 to 6.03, no Additional Bonds
will be issued under or secured by the provisions of this Resolution, and no Additional Bonds will
be made payable from the Tax Increment pledged thereto, unless the pledge and appropriation of
such Tax Increment for the payment and security of such Additional Bonds is expressly
subordinated to the pledge and appropriation made for the benefit and security of the Series 2000
Bond and all Additional Parity Bonds issued and to be issued under and secured by this Resolution
in accordance with Sections 6.01 to 6.03. Thirty days prior to the issuance of any Subordinate
Bonds, the City shall provide the holder of the Series 2000 Bond of its intent to issue the
Subordinate Bonds and the estimated principal amount thereof. In the event of the issuance of any
such Additional Bonds, the principal, interest and redemption premiums thereon will be made
payable from one or more additional accounts created within the Tax Increment Funds for that
purpose, and the balance of funds at any time on hand in any such accounts shall be available and
shall be transferred whenever needed to meet the current requirements of the Bond Account and
Reserve Account set forth in Sections 7.04 and 7.05.
Section 7. The Tax Increment Funds.
7.01. Bond Proceeds and Tax Increment Pledged and Appronnated. Three funds to be
designated as the "Tax Increment Capital Project Fund," the "Tax Increment Debt Service Fund"
and the "Tax Increment Development Fund" (the Tax Increment Funds) are established and shall
be maintained as separate and special bookkeeping accounts on the official books of the City until
all Bonds have been fully paid, or the City's obligation with reference to all Bonds has been
discharged as provided in this Resolution. Within the Tax Increment Debt Service Fund there shall
be designated and maintained a Revenue Account and a Bond Account. All proceeds of Bonds and
all other funds hereafter received or appropriated for purposes of the Projects are appropriated to the
Tax Increment Funds as provided in this Section 7. All Tax Increment and other Pledged Revenues
are irrevocably pledged and appropriated and shall be credited as received to the Tax Increment
Debt Service Fund.
The Parity Bonds shall be secured by a first pledge of and lien on all of the Tax Increment
and of all other moneys from time to time in the Tax Increment Funds in the manner and to the
extent provided in this Section 7, except as to Pledged Revenues not constituting Tax Increment,
which shall secure only the Series 2000 Bond. The City shall not issue any obligation or security
superior to or on a parity with the Series 2000 Bond, payable or secured, in whole or in part, from
or by the Tax Increment other than Additional Parity Bonds issued pursuant to Section 6, until the
Series 2000 Bond has been paid or discharged as provided herein. The Tax Increment Funds shall
be subdivided into separate accounts as designated and described in Sections 7.02 to 7.07.
7.02. Construction Account. For each Project, including the 2000 Project, there shall be
established a separate Construction Account within the Tax increment Capital Project Fund, to be
used only to pay as incurred and allowed costs which under accepted accounting principles are costs
of the particular Project, including but not limited to payments due for work and materials
performed and delivered under construction contracts, architectural, engineering, inspection,
supervision, fiscal and legal expenses, the cost of lands and easements, interest accruing on Bonds
during the period of construction of a Project financed thereby and for a period of time thereafter
authorized by the Act and deemed necessary by the Council, if and to the extent that the related
v 7 Qbaccount in the Interest Subaccount is not sufficient for payment of such interest, reimbursement
of any advances made from other City fiinds, and all other expenses incurred in connection with the
acquisition, construction and financing ofthe Proj ect. To the Construction Account shall be credited
as received all proceeds of Bonds issued to finance such Project, except amounts otherwise
appropriated in a Supplemental Resolution or received from Additional Bonds issued to refund
Outstanding Bonds pursuant to Section 6 and all other funds appropriated by the City for the Project,
and all income received from the investment of the Construction Account. Upon completion of any
Project and payment of the cost thereof, the City may transfer any money then remaining in the
Construction Account for that Project to the Development Fund or as provided in a Supplemental
Resolution. Money in the Construction Account shall be transferred as needed to the related
subaccount in the Interest Subaccount to pay interest on Bonds payable therefrom to the extent
moneys therein are insufficient.
7.03. Revenue Account. All Tax Increment received by the City and all other Pledged
Revenues shall be deposited as received in the Revenue Account of the Tax Increment Debt Service
Fund as provided in this Section 7.03. Within the Revenue Account there shall be created and
maintained four separate subaccounts as follows: the Tax Increment Subaccount, the User Fee
Subaccount, Loan Repayment Subaccount and the Port Authority Levy Subaccount. The City shall
deposit the Pledged Revenues as received to the respective subaccounts in the Revenue Account:
Type of Pledged Revenues
Tax Increment
User Fee
Loan Repayments
Port Authority Pledged Levy
Port Authority Deficiency Levy
Subaccount
Tax Increment Subaccount
User Fee Subaccount
Loan Repayment Subaccount
Port Authority Levy Subaccount
Port Authority Levy Subaccount
Interest income or investment gain on funds held in any subaccount in the Revenue Account shall
be credited to the subaccount in which such funds are held. All money on hand in the Revenue
Account is available for use and pledged to payment of the Series 2000 Bond and Additional Bonds
issued pursuant hereto.
So long as the Series 2000 Bond is Outstanding, amounts deposited in the Tax Increment
Subaccount shall be allocated for bookkeeping purposes, as follows: (i) ifno Additional Parity Bond
is Outstanding, all such amounts shall be deemed allocated to the Series 2000 Bond (amounts so
allocated are referred to herein as "2000 Tax Increment") and (ii) if Additional Parity Bonds are
Outstanding, such amounts shall be apportioned between the Series 2000 Bond (the 2000 Tax
Increment) and such Additional Parity Bonds (the "Additional Parity Tax Increment") in proportion
to the Principal and Interest Requirements on the Series 2000 Bond and the Outstanding Additional
Parity Bonds, respectively, in the 12-month period ending on the next succeeding July 1.
7.04. Bond Account: Allocation of Pledged Revenues. (a) The Bond Account is hereby
established as a special account within the Tax Increment Debt Service Fund. There are hereby
established within the Bond Account two separate subaccounts, designated as the Interest
Subaccount and the Sinking Fund Subaccount. Furthermore, there are hereby established within
each of the Interest Subaccount and the Sinking Fund Subaccount two separate subaccounts,
designated as the 2000 Subaccount and the General Subaccount.
(b) Allocation of Pledged Revenues. Five days prior to each Payment Date, the City shall
transfer moneys on hand in the respective subaccounts in the Revenue Account as follows:
(1) To the Interest Subaccount:
(i) first, from the Loan Repayment Subaccount to the 2000 Subaccount in the
Interest Subaccount, until the balance on hand in the 2000 Subaccount is at least equal to all
interest on the Series 2000 Bond due and payable within the next six full calendar months
(the "2000 Interest Requirement");
00 second, from the User Fee Subaccount to the 2000 Subaccount in the Interest
Subaccount, to the extent the balance in the 2000 Subaccount, after the transfer in clause (i),
is less than the 2000 Interest Requirement;
(iii) third, from 2000 Tax Increment in the Tax Increment Subaccount to the 2000
Subaccount in the Interest Subaccount, 63% of the amount, if any, by which the balance in
the 2000 Subaccount, after the transfers in clauses (i) and (ii), is less than the 2000 Interest
Requirement; and
i
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(iv) fourth, from Port Authority Levy Subaccount to the 2000 Subaccount in the
Interest Subaccount, 37% of the amount, if any, by which the balance in the 2000
Subaccount, after the transfers in. clauses (i) and (ii), is less than the 2000 Interest
Requirement.
(2) To the Sinking Fund Subaccount:
W first, from the Loan Repayment Subaccount to the 2000 Subaccount in the
Sinking Fund Subaccount, until the balance on hand in the 2000 Subaccount is at least equal
to all principal of the Series 2000 Bond due and payable within the next twelve full calendar
months (the "2000 Principal Requirement");
(ii) second, from the User Fee Subaccount to the 2000 Subaccount in the Sinking
Fund Subaccount, to the extent the balance in the 2000 Subaccount, after the transfer in
clauses (i), is less than the 2000 Principal Requirement;
(iii) third, from 2000 Tax Increment in the Tax increment Subaccount to the 2000
Subaccount in the Sinking Fund Subaccount, 63% of the amount, if any, by which the
balance in the 2000 Subaccount, after the transfers in clauses (i) and (ii), is less than the
2000 Principal Requirement; and
(iv) fourth, from the Port Authority Levy Subaccount to the 2000 Subaccount in
the Sinking Fund Subaccount, 37% of the amount, if any, by which the balance in the 2000
Subaccount, after the transfers in clauses (i) and (ii), is less than the 2000 Principal
Requirement.
(3) To the Reserve Account, after any transfers to the Interest Subaccount or the Sinking
Fund Subaccount required by the preceding clauses (1) and (2), as follows:
(i) To the 2000 Subaccount in the Reserve Account to the extent the balance therein
is less than the 2000 Reserve Requirement, from the following accounts in the following
order: first, from any remaining balance in the Loan Repayment Subaccount; second, from
any remaining balance in the User Fee Subaccount; third, from 2000 Tax Increment in the
Tax Increment Subaccount, 63% of the amount, if any, by which the balance in the 2000
Subaccount in the Reserve Account, after the transfers in clauses (i) and (ii), is less than the
2000 Reserve Requirement; and fourth, from the Port Authority Levy Subaccount, 37% of
the amount, if any, by which the balance in the 2000 Subaccount in the Reserve Account,
after the transfers in clauses (i) and (ii), is less than the 2000 Reserve Requirement; and
(ii) To the General Subaccount in the Reserve Account to the extent the balance
therein is less than the General Reserve Requirement, Additional Parity Tax Increment in
the Tax Increment Subaccount.
(4) To the Tax Increment Development Fund, after any transfers to the Interest Subaccount,
Sinking Fund Subaccount or the Reserve Account required by the preceding clauses, the balance of
the funds in the Revenue Account, subject to the appropriation thereof to other accounts as provided
in Section 6.04; provided, however, that any moneys remaining in the Port Authority Levy
Subaccount after the transfers required in clauses (1), (2) and (3) shall be remitted to the Port
Authority.
Notwithstanding the foregoing provisions of this subsection (b), during any Fiscal Year for
which the County levied the Port Authority Deficiency Levy, moneys on hand in the Port Authority
Levy Subaccount representing the Port Authority Deficiency Levy shall be transferred to the 2000
Subaccount in the Bond Account and used only to pay the principal of and interest on the Series
2000 Bond to the extent that funds on hand in the 2000 Subaccount in the Bond Account are
insufficient therefor on any Interest or Principal Payment Date. On July 2 of the Fiscal Year next
following the Fiscal Year in which the Port Authority Deficiency Levy is collected, the City shall
to the extent not needed for the purposes set forth in the preceding sentence, transfer any collections
of the Port Authority Deficiency Levy then remaining in the Port Authority Levy Subaccount to the
County which may remit it to the Port Authority for other authorized purposes under the Port
Authority Act.
(c) Interest Subaccount. There shall be credited to the Interest Subaccount the following
amounts: (i) any amount specified in any Supplemental Resolution to be credited to the Interest
Subaccount; (ii) from the Revenue Account, the amounts specified in Section 7.04(b); and (iii)
investment income from all funds and accounts in the Tax Increment Funds, except for the Revenue
Account, the Construction Account and, to the extent provided in Section 7.05, for the Reserve
Account, which income shall be apportioned between the 2000 Subaccount and the General
Subaccount in the same proportion that the amount of 2000 Tax Increment then bears to the
Additional Parity Tax Increment.
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On or before each Interest Payment Date, the City shall withdraw from the 2000 Subaccount
in the Interest Subaccount an amount sufficient to pay the interest coming due on the Series 2000
Bond on such Interest Payment Date, and shall use such amount to pay, or make provision with the
Paying Agent for the payment of, interest on the Series 2000 Bond on such Interest Payment Date.
If on any Interest Payment Date the balance in the 2000 Subaccount in the Interest Subaccount is
not sufficient to pay the total amount of interest due on the Series 2000 Bond on such Interest
Payment Date, the City shall transfer any money then on hand in the Development Fund, the
Construction Account, in the 2000 Subaccount in the Reserve Account or the 2000 Subaccount in
the Sinking Fund Subaccount, in the order listed and in an amount equal to such deficiency, to the
2000 Subaccount in the Interest Subaccount.
On or before each Interest Payment Date, the City shall withdraw from the General
Subaccount in the Interest Subaccount an amount sufficient to pay the interest coming due on any
Additional Parity Bonds on such Interest Payment Date, and shall use such amount to pay, or make
provision with the Paying Agent for the payment of, interest on the Additional Parity Bonds on such
Interest Payment Date. If on any Interest Payment Date the balance in the General Subaccount in
the Interest Subaccount is not sufficient to pay the total amount of interest due on the Additional
Parity Bonds on such Interest Payment Date, the City shall transfer any money then on hand in the
Development Fund, the Construction Account, in the General Subaccount in the Reserve Account
or the General Subaccount in the Sinking Fund Subaccount, in the order listed and in an amount
equal to such deficiency, to the General Subaccount in the Interest Subaccount.
(d) Sinkinez Fund Subaccount. (1) There shall be credited to the Sinking Fund Subaccount
the following amounts: (i) any amount specified in a Supplemental Resolution to be credited to the
Sinking Fund Subaccount; and (ii) from the Revenue Account, the amounts specified in Section
7.04(b).
(2) Amounts on hand in the 2000 Subaccount in the Sinking Fund Subaccount shall be used
on any Interest Payment Date to make up a deficiency in the 2000 Subaccount in the Interest
Subaccount, after the transfers to the Interest Subaccount required by Section 7.04(b).
On or before each Principal Payment Date for the Series 2000 Bond, the City shall withdraw
from the 2000 Subaccount in the Sinking Fund Subaccount an amount sufficient to pay the principal
due on the Series 2000 Bond on such Principal Payment Date, and shall use such amount to pay, or
make provision with the Paying Agent for the payment of, principal of the Series 2000 Bond on such
Principal Payment Date, whether a Stated Maturity or a Sinking Fund Payment Date.
If on any Principal Payment Date for the Series 2000 Bond the balance in the 2000
Subaccount in the Sinking Fund Subaccount is not sufficient to pay the total amount of principal of
the Series 2000 Bond due on such Principal Payment Date, the City shall transfer any money then
on hand in the Development Fund, the Construction Account or the 2000 Subaccount in the Reserve
Account, in the order listed and in an amount equal to such deficiency, to the 2000 Subaccount in
the Sinking Fund Subaccount.
(3) Amounts on hand in the General Subaccount in the Sinking Fund Subaccount shall be
used on any Interest Payment Date to make up a deficiency in the General Subaccount in the Interest
Subaccount, after the transfers to the Interest Subaccount required by Section 7.04(b).
On or before each Principal Payment Date for the Additional Parity Bonds, the City shall
withdraw from the General Subaccount in the Sinking Fund Subaccount an amount sufficient to pay
the principal due on the Additional Parity Bonds on such Principal Payment Date, and shall use such
amount to pay, or make provision with the Paying Agent or Agents for the payment of, principal of
the Additional Parity Bonds on such Principal Payment Date, whether a Stated Maturity or a Sinking
Fund Payment Date.
If on any Principal Payment Date for the Additional Parity Bonds the balance in the General
Subaccount in the Sinking Fund Subaccount is not sufficient to pay the total amount of principal of
the Additional Parity Bonds due on such Principal Payment Date, the City shall transfer any money
then on hand in the Development Fund, the Construction Account or the General Subaccount in the
Reserve Account, in the order listed and in an amount equal to such deficiency, to the General
Subaccount in the Sinking Fund Subaccount.
7.O5. Reserve Account. (1) The Reserve Account is hereby established as a special account
within the Tax Increment Debt Service Fund. There are hereby established within the Reserve
Account two separate subaccounts, designated as the 2000 Subaccount and the General Subaccount.
There shall be credited to the Reserve Account the following amounts: (i) from the Revenue
Account, the amounts specified in Section 7.04(b), if any; and (ii) any amount specified in any
Supplemental Resolution to be credited to the Reserve Account.
2073 (2) If on any Interest Payment Date or on an Principal
Y p Payment Date there shall exist, after
the other transfers required by Sections 7.04(b) and (c), a deficiency in the 2000 Subaccount in the
Interest Subaccount or the Sinking Fund Subaccount, the City shall transfer from the 2000
Subaccount in the Reserve Account to such subaccount an amount equal to such deficiency.
All income derived from the investment of amounts in the 2000 Subaccount in the Reserve
Account shall be credited as received to the 2000 Subaccount in the Reserve Account until such time
as the balance in the 2000 Subaccount in the Reserve Account is equal to the 2000 Reserve
Requirement, and thereafter all such investment income as received shall be transferred to the 2000
Subaccount in the Interest Subaccount.
If at any time (including, but not limited to, any Principal Payment Date and any Redemption
Date), the balance in the 2000 Subaccount in the Reserve Account exceeds the 2000 Reserve
Requirement, the City shall transfer such excess to the 2000 Subaccount in the Bond Account to
establish the required balance therein.
(3) If on any Interest Payment Date or on any Principal Payment Date there shall exist, after
the other transfers required by Sections 7.04(b) and (c), a deficiency in the General Subaccount in
the Interest Subaccount or the Sinking Fund Subaccount, the City shall transfer from the General
Subaccount in the Reserve Account to such subaccount an amount equal to such deficiency.
All income derived from the investment of amounts in the General Subaccount in the
Reserve Account shall be credited as received to the General Subaccount in the Reserve Account
until such time as the balance in the General Subaccount in the Reserve Account is equal to the
General Reserve Requirement, and thereafter all such investment income as received shall be
transferred to the General Subaccount in the Interest Subaccount.
If at any time (including, but not limited to, any Principal Payment Date and any Redemption
Date), the balance in the General Subaccount in the Reserve Account exceeds the General Reserve
Requirement, the City shall transfer such excess to the General Subaccount in the Bond Account to
establish the required balance therein.
7..06. Development Fund. There shall be credited to the Development Fund any and all Tax
Increment remaining after the required credits to the Bond Account and Reserve Account and other
moneys in any of the accounts within the Tax Increment Funds in excess of the requirements of said
accounts and which the City determines in its discretion to transfer to the Development Fund.
Money from time to time on hand in the Development Fund shall be transferred to the Bond
Account and Reserve Account as provided by Sections 7.04 and 7.05 and in addition may be used
for any of the following purposes and not otherwise:
(a) to be transferred to the Construction Account to pay costs authorized to be paid
therefrom;
(b) to pay costs incurred in connection with Projects within the District as
authorized by the Act;
(c) to redeem or discharge Bonds prior to their Stated Maturities in accordance
with the provisions of this Resolution or any Supplemental Resolution;
(d) to purchase Bonds on the open market; and
(e) to pay to Taxing Bodies a portion of the annual Tax Increment received by the
City pursuant to an agreement authorized by the Act; provided that the City may remit to
Taxing Bodies pursuant to such an agreement only the Tax Increment received in the Fiscal
Year and on hand in the Development Fund, only if, on the date of remittance, the balance
in the 2000 Subaccount in the Reserve Account is not less than the 2000 Reserve
Requirement, the balance in the General Subaccount in the Reserve Account is not less than
the General Reserve Account and the funding requirements of the Bond Account have been
satisfied, and only to the extent that the balance on deposit in the Development Fund, after
such remittance, is not less than 50% of the principal of and interest payable on Outstanding
Parity Bonds in the Fiscal Year such Tax Increment is received; and provided, further, that
if the Constitution or laws of the State of Montana are amended to abolish or substantially
reduce or eliminate real property taxation, and so long as alternate or supplemental revenues
are not available to pay principal of and interest on the Bonds in accordance with the
provisions of Section 8.12, money in the Development Fund is to be used, so long as any
Bonds are outstanding, solely for the payment of principal of, interest or premium, if any,
on Outstanding Bonds, whether at their Stated Maturities, on a Redemption Date or
otherwise, or to purchase Bonds on the open market.
2074
7.07. Investments. The City Finance Officer shall cause all moneys from time to time in
the Tax Increment Funds to be deposited as received with one or more depository banks duly
qualified in accordance with the provisions of Montana Code Annotated, Section 7-6-201, and shall
cause the balances in such accounts, except any part thereof covered by federal deposit insurance,
to be secured by the pledge of bonds or securities of the kinds required by law, and no money shall
at any time be withdrawn from such deposit accounts except for the purposes of the Tax Increment
Funds as defined and authorized by this Resolution. The funds to the credit of the several accounts
within the Tax Increment Funds may be commingled in one or more deposit accounts. The balance
on hand in any of the accounts of the Tax Increment Funds may at any time be invested and
reinvested in Qualified Investments, maturing and bearing interest payable at the times and in the
amounts estimated to be required to provide cash when needed for the purposes of the respective
accounts; provided that the Reserve Account and Development Fund shall be invested in Qualified
Investments maturing not later than five years from the date of investment.
Section 8. Other Covenants of City.
8.01. Punctual Pa ment. The City will punctually pay or cause to be paid the principal and
interest to become due in respect to all the Bonds, in strict conformity with the terms of the Bonds
and of this Resolution, and it will faithfully observe and perform all ofthe conditions, covenants and
requirements of this Resolution and all Supplemental Resolutions and of the Bonds. Nothing herein
contained shall prevent the City from making advances of its own moneys however derived to any
of the uses or purposes referred to herein, nor shall be deemed or constitute a pledge or appropriation
of funds or assets of the City other than those expressly pledged or appropriated hereby.
8.02. Accumulation of CIaims of Interest. In order to prevent any accumulation of claims
for interest after maturity, the City will not, directly or indirectly, extend or consent to the extension
of the time for the payment of any claim for interest on any of the Bonds and will not, directly or
indirectly, be a party to or approve any such arrangements by purchasing or funding said claims for
interest or in any other manner. In case any such claim for interest shall be extended or funded,
whether or not with the consent of the City, such interest so extended or funded shall not be entitled,
in case of default hereunder, to the benefits of this Resolution, except subject to the prior payment
in full of the principal of all of the Bonds then outstanding and of all claims for interest which shall
not have been so extended or funded.
8.03. Against Encumbrances. The City will not encumber, pledge or place any charge or.
lien upon any of the Tax Increment superior to or on a parity with the pledge and lien herein created
for the benefit of the Parity Bonds, except as herein specifically provided. The City will not;
encumber, pledge or place any charge or lien upon any ofthe Pledged Revenues not constituting Tax
Increment superior to or on a parity with the pledge and lien herein created for the benefit of the
Series 2000 Bond, except as herein specifically provided.
8.04. Management and O eration ofPro erties. The City will manage and operate or cause
to be managed and operated all Projects owned by the City in a sound and business -like manner, and
will keep such Projects insured at all times in conformity with sound business practice.
8.05. Books and Accounts: Financial Statements. The City will keep, or cause to be kept,
proper books of record and accounts, separate from all other records and accounts of the City, in
which complete and correct entries shall be made of all transactions relating to the Projects, Tax
Increment and the Tax Increment Funds. Such books of record and accounts shall be at all time
during business hours subject to the inspection of the Holders of not less than ten percent (10%) of
the principal amount of the Bonds then Outstanding, or their representatives authorized in writing.
The City will prepare and file with the Clerk of the Council annually, within one hundred
eighty (180) days after the close of each Fiscal Year so long as any of the Bonds are Outstanding,
complete financial statements with respect to the preceding Fiscal Year showing (1) the actual
taxable value, the base taxable value and the incremental taxable value (each as defined in the Act)
of the District; (2) the mill rates of all Taxing Bodies; (3) the Tax Increment, including a breakdown
of Tax Increment attributable to current and delinquent property tax collections and to Delinquency
Tax Payments; (4) all disbursements from the Tax Increment Funds; (5) the financial conditions of
the Projects; and (6) the balances in the Tax Increment Funds and accounts therein as of the end of
each such Fiscal Year, which statements shall be accompanied by a certificate or opinion in writing
of an Independent Accountant. The City will furnish a copy of such statements to any Bondholder
upon request.
75
8.06. CoMletion of Projects. The City will commence, and will continue to completion,_ Q
with all practicable dispatch, the 2000 Project and all other Projects undertaken in the District, and
the 2000 Project will be accomplished and completed in a sound and economical manner and in
conformity with the Plan and the Act. `
8.07. Taxation of Leased Property. Other than a Project owned and operated as a public
improvement or facility, whenever the City leases real property in the District to any Person other
than a governmental entity, the property shall to the extent authorized by law be assessed and taxed
in the same manner as privately -owned property and the lease shall provide (1) that the lessee shall
pay Taxes upon the taxable value for the entire property and not merely upon the assessed value of
his or its leasehold interest, and (2) that if for any reason the Taxes paid by the lessee on such
property in any year during the term of the lease shall be less than the Taxes which would have been
payable upon the assessed value of the entire property if the property were assessed and taxed in the
same manner as privately -owned property, the lessee shall pay such difference to the City within
thirty days after the Taxes for such year become payable to the Taxing Bodies and in any event prior
to the delinquency date of such Taxes established by law. All such payments to the City shall be
treated as Tax Increment and shall be deposited by the City in the Tax Increment Funds.
8.08. Dis osition of Pro e . The City will not authorize the disposition of any land or real
property in the District to anyone which will result in such property becoming exempt from taxation
because of public ownership or use or otherwise (except property planned for such ownership or use
by the Urban Renewal Plan in effect on the date of this Resolution) if such disposition shall consist
of more than two percent (2%) of the land area in the District, except as provided in this Section
8.08. The City shall appoint a reputable Independent Financial Consultant and direct said consultant
to report on the effect of said disposition. If the Report of the Independent Financial Consultant
concludes that Tax Increment (including any amounts resulting from payments in lieu of taxes
agreed to be paid with respect to the property) will not be reduced by the proposed disposition in
each of the three complete Fiscal Years following such disposition (based on tax levies not greater
than those for the current Fiscal Year) below 150% of the maximum Principal and Interest
Requirements on all Outstanding Bonds in any future Fiscal Year and that the security of the Bonds
or the rights of the Bondholders will not be materially impaired by said proposed disposition, the
City may make the proposed disposition.
8.09. Further Assurances. The City will adopt, make, execute and deliver any and all such
further resolutions, instruments and assurances as may be reasonably necessary or proper to carry
out the intention or to facilitate the performance of this Resolution, and for the better assuring and
confirming unto the Holders of the Bonds of the rights and benefits provided in this Resolution.
8.10. Amendment of Plan. Except to authorize additional Projects, the City will not amend
or modify the Plan or reduce the size of the District if an effect thereof will be to materially and
adversely affect the security of the Bonds; provided, however, the City may reduce the size of the
District if a report as provided in Section 8.08 is received from the Independent Financial Consultant
regarding the reduction in size of the District.
8.1 L Federal Tax Exem tion. The City will not use the proceeds of any Bonds or use or
permit the use of any Project financed from the proceeds ofthe Bonds or revenues derived therefrom
in such a way as to cause the exemption from federal income taxation of interest on any Bonds to
become adversely affected.
8.12. Pledge of R lacement Revenues. The City covenants and agrees that in the event the
Constitution or laws of the State of Montana are amended to reduce or eliminate real or personal
property taxation and Montana law then or thereafter provides to the City an alternate or
supplemental source or sources of revenue, whether such revenue may be realized by the levying
or imposing of a tax, fee or charge by the City or some other entity, to replace or supplement
reduced or eliminated Tax Increment, then the City will appropriate annually, subject to the
limitations of then applicable law, to the Bond Account in the Tax increment Fund, for the equal and
ratable benefit of all Outstanding Parity Bonds, as further provided in Section 7.04, from such
alternate or supplemental revenues an amount that will, with money on deposit in the Bond Account
or available and to be transferred to the Bond Account during such Fiscal Year, be sufficient to pay
the principal of, premium, if any, and interest on the Outstanding Parity Bonds payable in that fiscal
year. If the City observes such covenants and appropriates funds to the Bond Account in such
amounts, the violation of other covenants in this Resolution (including without limitation the
obligation to maintain the 2000 Reserve Account in an amount equal to the 2000 Reserve
Requirement and to maintain the General Reserve Account in an amount equal to the General
Reserve Requirement, but excluding the covenant to apply money in the Bond Account to the
payment of principal of, premium, if any, and interest on the Bonds) is not to be deemed a default
by the City of its obligations under this Resolution.
r 8.13. Adjustment of Base Taxable Value. The City shall not adjust the tax incremental base
of the District pursuant to Section 7-15-4287 of the Act so long as any Bonds are Outstanding, if the
effect thereof would be to materially and adversely affect the amount of Tax Increment.
8.14. Bondholder Rights. No Holder of any Parity Bond issued and secured under the
provisions of this Resolution shall have the right to institute any proceeding, judicial or otherwise,
for the enforcement of the covenants herein contained, without the written concurrence of the
Holders of not less than 25% in aggregate principal amount of all Parity Bonds which are at the time
Outstanding; but the Holders of this amount of such Parity Bonds may, either at law or in equity,
by suit, action or other proceedings, protect and enforce the rights of all Holders of such Parity
Bonds and compel the performance of any and all of the covenants required herein to be performed
by the City and its officers and employees. The Holder of a majority in principal amount of such
Outstanding Parity Bonds shall have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Holders or the exercise of any power conferred on them,
and the right to waive a default in the performance of any such covenant, and its consequences,
except a default in the payment of the principal of or interest on any Bond when due. However,
nothing herein shall impair the absolute and unconditional right of the Holder of each Bond to
receive payment of the principal of and interest on such Bond as such principal and interest
respectively become due, and to institute suit for the enforcement of any such payment. In the event
of default in any such payment, any court having jurisdiction of the action may appoint a receiver
to administer the Tax Increment Funds and to collect and segregate and apply the Tax Increment and
other Pledged Revenues pledged thereto as provided by this Resolution and the Act.
Section 9. Supplemental Resolutions.
9.01. General. The City reserves the right to adopt Supplemental Resolutions to this
Resolution from time to time and at any time, for the purpose of curing any ambiguity or of curing,
correcting or supplementing any defective provision contained herein, or of making such provisions
with regard to matters or questions arising hereunder as the City may deem necessary or desirable
and not inconsistent with this Resolution, and which shall not adversely affect the interests of the
Holders of Bonds issued hereunder, or for the purpose of adding to the covenants and agreements
herein contained, or to the Pledged Revenues herein pledged, other covenants and agreements
thereafter to be observed and additional revenues or income thereafter appropriated to the Tax
Increment Funds, or for the purpose of surrendering any right or power herein reserved to or
conferred upon the City, or for the purpose of authorizing the creation and issuance of a series of
Additional Bonds, as provided in and subject to the conditions and requirements of Section 5. Any
such Supplemental Resolution may be adopted by resolution, without the consent of the Holder of
any of the Bonds issued hereunder.
9.02. Consent ofBondholders. With the consent ofthe Holders of Outstanding Parity Bonds
as provided in Section 9.03, the City may from time to time and at any time adopt a Supplemental
Resolution for the purpose of amending this Resolution by adding any provisions hereto or changing
in any manner or eliminating any of the provisions hereof or of any Supplemental Resolution, except
that no Supplemental Resolution shall be adopted at any time without the consent of the Holders of
all Outstanding Bonds affected thereby, if it would extend the time of payment of interest thereon,
would reduce the amount of the principal thereof or redemption premium thereon, would give to any
Bond or Bonds any privilege over any other Bond or Bonds (except for the privilege accorded Parity
Bonds over Subordinate Bonds), would reduce the sources of Tax Increment or other Pledged
Revenues appropriated to the Tax Increment Funds, or would reduce the percentage in principal
amount of such Bonds required to authorize or consent to any such Supplemental Resolution.
9.03. Notice. Notice of a Supplemental Resolution to be adopted pursuant to Section 9.02
shall be mailed by first-class mail, postage prepaid, to the Holders of all Outstanding Parity Bonds
at their addresses appearing in the Bond Register and shall become effective only upon the filing
of written consents with the Clerk of the Council, signed by the Holders of not less than two-thirds
in principal amount of the Parity Bonds issued hereunder which are then Outstanding. Any written
consent to the Supplemental Resolution may be embodied in and evidenced by one or any number
of concurrent written instruments of substantially similar tenor signed by Holders in person or by
agent duly appointed in writing, and shall become effective when delivered to the Clerk of the
Council. Any consent by the Holder of any Bond shall bind that Holder and every future Holder of
the same Bond with respect to any Supplemental Resolution adopted by the City pursuant to such
consent; provided that any Holder may revoke his consent with reference to any Bond by written
notice received by the Clerk of the Council before the Supplemental Resolution has become
effective. In the event that unrevoked consents of the Holders ofthe required amount of Bonds have
not been received by the Clerk_ of the Council within one year after the publication of notice of the
Supplemental Resolution, the Supplemental Resolution and all consents theretofore received shall
be of no further force and effect.
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9.04. Manner of Consent. Proof of the execution of any consent, or of a writing appointing
any agent to execute the same, or of the ownership by any Person of Bonds payable to nearer; shall
be sufficient for any purpose of this Resolution and shall be conclusive in favor of the City if made
in the manner provided in this Section 9.04. The fact and date of the execution by any Person of any
such consent or appointment may be proved by the affidavit of a witness of such execution or by the
certification of any notary public or other officer authorized by law to take acknowledgment of
deeds, certifying that the Person signing it acknowledged to him the execution thereof. The fact and
date of execution of any such consent may also be proved in any other manner which the City may
deem sufficient; but the City may nevertheless, in its discretion, require further proof in cases where
it deems further proof desirable. The ownership of any registered Bonds shall be proved by the
Bond Register.
Section 10. Defeasance,
10.01. General. When the liability of the City on all Bonds issued under and secured by this
Resolution and all interest thereon has been discharged as provided in this Section 10, all pledges,
covenants and other rights granted by this Resolution to the Holders of such Bonds shall cease.
10.02. Maturity. The City may discharge its liability with reference to all Bonds and interest
thereon which are due on any date by depositing with the Paying Agent for such Bonds on or before
the date a sum sufficient for the payment thereof in full; or if any Bond or interest shall not be paid
when due, the City may nevertheless discharge its liability with reference thereto by depositing with
the Paying Agent a sum sufficient for the payment thereof in full with interest accrued to the date
of such deposit.
10.03. Redemption. The City may also discharge its liability with reference to any Bonds
which are called for redemption on any date in accordance with their terms, by depositing with the
Paying Agent on or before that date an amount equal to the principal, interest and redemption
premium, if any, which are then due thereon; provided that notice of such redemption has been duly
given as provided in this Resolution or a Supplemental Resolution.
10.04. Escrow. The City may also at any time discharge its liability with reference to any
Bond subject to the provisions of law now or hereafter authorizing and regulating such action, by
depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose,
cash or securities which are general obligations of the United States or securities of United States
agencies which are authorized by law to be so deposited, bearing interest payable at such times and
at such rates and maturing on such dates as shall be required to provide funds sufficient to pay all
principal and interest to become due on all such Bonds on or before the Stated Maturities thereof
or, if such Bonds are subject to redemption and the City has given the redemption notice required
therefor or given irrevocable instructions to give such notice and the funds provided will also be
sufficient to pay any applicable redemption premium, to an earlier Redemption Date.
Section 11. Effective Date. This Resolution shall be in full force and effect from and after
its final passage and approval according to law.
PASSED AND APPROVED by the City Council of the City of Kalispell, Montana, this 7th
day of February, 2000.
Wm.- .BdharS�i
Wm. E. Boharski, Mayor
Attest:
Theresa White
City Clerk