Resolution 5051 - Finalizes Urban Renewal Bonds for Phase I - City AirportRESOLUTION NO. 5051
RESOLUTION RELATING TO TAX INCREMENT URBAN RENEWAL
AVENUE BONDS, SERIES 2005A AND SERIES ; RATIFYING THE
SALE AND PRESCRtBING THE FORM AND TEAS THEREOF AND THE
SECURITY THEREFOR.
E IT RESOLVED by the City Council of the City of Kalispell, Montana, as follows:
Section L Definitions Authorizations and Fin
1..01, Definitions. The terms defined in this Section 1.01 shall for all purposes of this
Resolution have the meanings herein spelled, unless the context clearly otherwise requires:
A "Resolution" means this Resolution No. 5051 as originally adopted or as it may from
time to time be amended or supplemented pursuant to the applicable provisions hereof.
B. All references in this Resolution No. 051 to designated sections and other
subdivisions are to the designated sections and other subdivisions of this Resolution No, 5051 as
originally adopted.
C. The words -herein}„ `hereof' and "hereunder" and other words of similar import
without reference to any particular section or subdivision refs to this Resolution as a whole and
not to any particular section or other subdivision Unless the context clearly indicates otherwise.
D. The t.ernas defined in this Section include the 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 sl a l be made in accordance with generally
accepted accounting principles applicable to governmental entities consistently applied.
G. '" r" is not intended to be exclusive,, but is intended to contemplate or encompass one
or more or all of the terms or alternatives conjoined.
Accountant shall mean a Berson 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 T
Additional Pa r s shall mean any Additional Bonds issued pursuant to Sections
.o. through 7.03.
Additional Subordinate Bonds shall mean any Road 'ss ed pursuant to Section 7.04.
Bonds shall mean all Bonds issued pursuant to this Resolution, including the Series 2005
Bonds and any Additional Bonds.
:fond Account shall mean the account so designated Ln the Tax Increment Debt Service
Fund.
Boyd shall an any firm of nationally ally recognized bond counsel experienced i
matters relating to tax-exempt financing, selected by the City.
Bondowner shall mean the owner of a Bond.
'Bond shall mean the register maintained for the purpose of re9isterig the
ownership. transfer and exchange of the Bonds of any series.
Bond Re istrar shall mean the Person, if any, appointed by the City to maintain the Bond
Register for a series of Bonds.
Tres shall mean, with respect to the Bonds of any series, any day other t o a
Saturday, Sunday or other day on which the Paying Agent and Bond Registrar for such series of
Bonds is not open for business.
City shall mean the City of Kalispell, Montana., or its successors.
Citv .resolution shall mean a resolution, ordinance or other appropriate enactment by the
Council certified by the City Clerk to have been duly adopted and to be in full force and effect.
Code shall mean the Internal Revenue Code of 1986, as amended.
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 thereof.
Financial Consultant shall mean an Independent Person selected by the City, qualified to
study urban renewal al 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.
Government .iati s. a.11 mea.(a)direct general obligations of, or obligations the
prompt payment of the principal of and the interest on which is fully and unconditionally
guaranteed by, the United States of America, obligations the payment of the principal of,
premium, if any, and interest on which is fully guaranteed as a full faith and credit obligation of
the United Mates of America, and c certificates or other evidence of ownership in principal to
be pald or interest to accrue on a pool of obligations of the type described In the foregoing clause
(a) b , which obligations are held by a custodian, odian, any obligations described in the foregoing
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clause a or b may be issued or held in boob -entry form on the books of the Department of
Treasury of the United States of America.
independent shall mean, when used with respect to any specified :Person, such a Verson
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 erson'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 that the signer is Independent within the
meaning hereof.
Interest Account shall mean the sbacot so designated in the Bond Account.
ffiterest Pan t Date shall mean the Stated Maturity of an installment of interest on any
of the Bonds.
Maturity 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.
Ordinance shall meaD by ordinance No. 1242, adopted by the Council on .duly 17, 1996,
as amended by ordinance No. 1_260, adopted by the Council on March 1, 1.997, as such may be
further amended or supplemented in accordance with this Resolution.
Orlainal Purchaser shall mean, with respect to any series of Bonds, the Verson who
purchases such series of Bonds from the City when first issued. The original Purchaser of the
Series 2005 Bonds is D.A. Davidson & Co., of Great Falls, Montana.
utstandi 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 1 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;
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provided, however, ever, that in determining whether the owners of the requisite principal. amount of
Outstanding Bonds have given any request, demand, a t .ori atio , direction, notice, consent or
waiver hereunder,, Bonds owned by the City shall be disregarded and deemed not to be
Outstanding.
Owner shall mean, with respect to any Bond, the Person In whose name such Bond is
registered in the Bond Register.
Pqrity Don.d.s shall mean the Ser es 2 0 Bonds and all Additional Parity Bonds.
Paviniz e t shall Wean the Person designated by or pursuant to this Resolution to
receive and disburse the principal of, premium, if any, and interest on the Bonds of a series on
behalf of the City.
Person shall mean any individual, corporation, Partnership, joint venture, limited liability
company, limited liability partnership, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Plan shall mean the City of Kalispell AirportAthletic Complex Redevelopment .Plan
adopted by the Council on July 17, 1996, as amended on March 17, 1997,including all further
amendments thereof.
Principal and Interest Requirements shall mean, with respect to aiiy 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 Terra Bond is to be paid on the Sinking;
Fund Payment Dates according to the mandatory redemption requirements established for such
Terms. Bond by the applicable section of this Resolution or any Supplemental Resolution.
Principal Payment Date shall. mean the Stated Maturity of principal of any Serial fond
and the Sinking Fund Payment Date for any Term Bond.
Project sb 1.1 mean any urban renewal project undertaken under the Act, the costs of
which are to be paid, in whole or in part, from the proceeds of Bonds.
Qualified Investments shall mean the investments ents described as such in Section 8.06.
Redemption Date when -used with respect to any Bond to be redeemed shall mean the
date on which it is to be redeemed.
ed m tior Price when used with respect to any Bond to be redeemed shall mean the
price at which it is to he redeemed.
Reserve Account shall mean the account so designated in the Tax Increment Debt Service
Fund.
Reserve Requirement shall mean, as of the date of calculation, an amount equal to the
lesser of: the maximum Principal and Interest Requirements on Outstanding Parity :Bonds for
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the then current or any future calendar year, or 2 ten percent 0 of the aggregate original
principal amount of all series of Parity Bonds any Bond of which is then outstanding.
Serial Bonds stall mean Bonds which are not Term Bonds.
Series 2005 Bonds shall inean the Series 2 0 A Bonds and the Series 2005E Bonds.
Series 2005A Bonds shall mean the City's Tax Increment Urban Renewal Revenue
Bonds, Series 200 A (Non-AMT), issued in the original aggregate principal amount of
L,000.
Series 200 B Bonds shall mean the City"s Tax Increment Urban Renewal Revenue
Bonds, Series 2005B (AM , issued in the original aggregate principal amount of $555,000.
Sinkiniy Fund Account shall .mean the subaccount so designated in the Bond Account.
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Sin ink nd Pament Date shall mean a slate set forth in any applicable provision of this
Resolution or a Supplemental Resolution for the making of a mandatory .datory principal payment for
the redemption of a Term Bond.
Mated MaturityMaturfty when used with respect to any Bond or any installment of interest thereon
shall mean the date specified in such Bond as the fixed date on which principal of such Bond or
such installment of interest is due and payable.
Supplemental Resolution shall mean any resolution supplemental to this Resolution
adopted pursuant to Section 10.
Taxes shall mean all taxes levied on an ad valorem basis by a Taxing Body against
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taxable real and personal property located within the Urban Renewal Area and shall include all
payments in lieu of taxes received by the City with respect to property within the Urban Renewal
Area.
Tax Increment shall mean the amount received by the City pursuant to the Act and the
Plan from the extension of levies of Taxes (expressed in mills), against the incremental taxable
value, as defined in the Apt, of all taxable property within the Urban Renewal Area, and shall
include any payments in lieu of Taxes attributable to the incremental taxable value and all
payments received by the City designated as replacement revenues for lost Tax Increment., ent, as
provided in Section 9.13.
8.01. .
8.01,
8.01.
Tax Increment Ca ital Projeet Fund shall mean the fund established pursuant to Section.
Tax Increment Debt Service Fund shall mean the fund established pursuant to Section
Tax Increment Development Fund shall mean the fund established pursuant to Section
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TaxiTaxiniz Bow shall mean the City; the County of Flathead, Montana, .high School District
No. 5, Flathead County, Montana; School District No. 5, Flathead County, Montana; Flathead
Valley Community College; the State of Montana; ad any other political subdivision r
governmental unit which may hereafter levy Taxes against property within the Urban. Renewal
Area.
Term...Bond shall mean any Bond for the payment of the principal of which mandatory
ayMe is 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.
2005 Project shall mean the Projects described in Section , 4.
Urban Renewal Area shall mean the City of Kalispell Airport/Athletic Complex Urban
Renewal District created and established pursuant to the Act and the Ordnance, as such area
may be enlarged or reduced in accordance with the Act and this Resolution.
1.02. Authorization. Under the provisions of the Act, the City is authorized to create
urban renewal areas, prepare and adopt a redevelopment plan therefor and amendments thereto,
undertake urban renewal projects therein, provide for the segregation and collection of tax
increment with respect to 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 it in the urban
renewal. area.
1.03. Prior C. t A -tio s. Pursuant to the Act, the City has deter lned that blighted
property is located within the Urban Renewal Area, and that the re..ab litatioq, redevelopment or
a combination thereof is necessary for the public health, safety, morals o - welfare of the residents
of the City, and the Council has adopted the Plan which provides for the segregation and
collection of Tax Increment with respect to the Urban Renewal Area. The Urban Renewal Area
and the Plan providing for the segregation and collection of the Tax Increment ent 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. The _2005 Project. Pursuant to the Act, the City has designated and approved the
following Projects as urban renewal projects (the 2005 Project) and has given notice and
conducted public hearings with respect thereto: the purchase of lard and improvements currently
owned by .fed .eagle Aviation, the construction of the northwest ramp and taxiways, the
construction of an internal vehicle access road feet wide), and the purchase and installation
of an automatic vehicle security gate.
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1..0. Estimated Costs of Zoo P. The total cost of the 2005 project , including
costs incidental to the issuance and sale of the Series 2005 Bonds, allocable between the Series
005A Bonds and the Series 200 B Bonds, is as follows:
'dotal
Series 2A
,5c} of Funds
Principal amount t of Series 2005 A. Bonds $1. ,4455000.0
Uses of Funds
Underwriter's Discount $ 23,373.75
Cost of Issuance 25 637.50
Deposit to Debt Service Reserve .Fund 133,57 .19
Deposit to Project Construction Fund 1.,2,000.00
Contingency 41 .5
Total $1,445 A0.00
Series 2005E
Sources of Funds
.Principal amount .t of Series 2 0 B .fonds 5 , 00.00
Other available funds of the City 54,000.00
Total 09 N0.00
Uses of.nds
U derwriter" s Discount $ 7,932.50
Cost of Issuance K062-50
Deposit to Debt Service Reserve Fund 51,302.81.
Deposit to Project Construction Fund
from Bond Proceeds 0,000.00
Payment of other Project Costs 254,000.00
Contingency mm 5,7 2-19
80%000.00
L0 . Authorization and Sale of Merles 2005 Bonds. This Council has determined b
Resolution No. 4990, adopted on April 4,, 200 (the "'Initial Resolution"'), tt at 1t is in the best
interests of the City that the City issue its .Bonds (the Series 2005 Bonds), as authorized by
Section 7-1 -4301.(1.) of the Act and this Resolution, in order to pay a portion of the costs of
the 2005 Project, to fund a deposit to the Reserve Account and to pay costs of issuance of the
Series 2005 Bonds, and for the City to sell by negotiated sale to D. A. Davidson & Co., of Great
Pails, Montana (the original Purchaser thereof), the Series 2005 Bonds, pursuant to Montana
Code Annotated, Section 7-1. -4322 2) a). The City and the original Purchaser of the S r e
2005 Bonds have entered into a Bond Purchase Agreement, dated August 23, 2005, relating to
the sale of the Series 2005 Bonds, the Series 2005 Bonds of each series to bear interest at the
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rates and mature on the dates and in the amounts and contain the further terms and conditions set
forth Hi this Resolution, To the extent any terms of the Series 2005 Bonds as prescribed herein
or in the Bond Purchase Agreement conflict, the provisions of this Resolution shall govern. The
execution and delivery of the Bond Purchase Agreement by officers of the City and the sale and
ssuance of the Series 2005 Bonds, as therein contemplated, are hereby ratified and confirmed.
1.07. Estimate of Tax Increment. It is estimated that the Tax Increment to be received i
each of the 'Fiscal Years the Series 2005 Bonds will be outstanding din will be at least $2 1,o 0,
based on the following assumptions:
(a) The amount of tax increment due for fiscal year Jane 30, 200 s
$2 ,I93.
(b) The amount of 2005 Tax Increment collected as of this date is $281,0 0.
(c) Based on current construction activity in the District, the annual 'fax
Increment payments are anticipated .pated to increase.
(d) Neither the $28 ,1 3 nor the $281,0o include amounts payable under
certain developer contracts.
1..08. Findings and Determinations,, It is hereby found, determined and declared by this
Council as follows;
(a) the conditions precedent to the issuance of the Series 2005 Bonds under the
Act and this Resolution have or shall be met prior to the issuance of the Series 2005
_Bonds;
(b) the estimated Tax Increment to be received by the City, as set forth in
Section 1.0 ', and pledged to the payment of the Series 2005 Bonds will be sufficient t
pay the principal thereof and interest thereon when due; and
(c) it is in the best interests of the City to issue and sell the Series 2005 Bonds
to provided funds to pay costs of the 2005 Project as provided in this Resolution,
Section 2. The Bonds,
2.01. General Title. The general title of the Bonds of all series shall be "Tax Increment
Urban Renewal Revenue Bonds,"' with appropriate additions .for Subordinate Bonds and to
distinguish Bonds of each series from Bonds of each other series.
2.02. General Limitat .o .s• Issu able in Series. The aggregate principal amount of Bonds
that may be authenticated and delivered and Outstanding under this Resolution is not limited,
except as ro Tided in Section and except as may be limited b law.
The Bonds may be issued in series as from time to time authorized by the Council.
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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 derived by the City from projects or
other sources which may be pledged 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, premiums, 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 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 :bate 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 e.xt succeeding; Business Day, with the same force and effect as it .m de on such Stated
Maturity, Redemption .late 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 2005 Bonds,
which are created by Section shall be created by a Supplemental Resolution. The Bonds of
each series (other than the Series 2005 Bonds, as to which specific provision is made in Section
5) 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., and may be
redeemable at such price or prices and upon such tens (ire addition to the prices and tens
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 a alo o s fund;
B. limiting the aggregate principal amount of the Bonds of that series or of all.
Additional Bonds thereafter issued;
C. exchanging Bonds of that series, at the option of the Owners thereof, for
other Bonds of the sane series of the same aggregate principal amount nt of a different
authorized kind and/or authorized denomination or denominations; or
D. the issuance of Bonds not registered as to principal or interest 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 a
Supplemental Resolution between interest rates, Stated Maturities and redemption provisions.
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2.0. Form and Denominations. The form of the Bonds (other than the Series 2005
Bonds, as to which specific provisos are made in Section 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.
The Bonds of any series shall be lssuable 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 i
the provisions of the Supplemental Resolution creating such series (other than. the Series Zoo
Bonds, as to which specific provisions are made in Section ). In the absence of any such
provision with respect to the Bonds of any particular series, Bonds shall be in the denomination
of $ ,000 or any integral multiple thereof, of a single maturity.
2.0, Execution, -Authentication and Deliver . 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. Teworary 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 bearer or registered for., 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
without 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 cancellation of any one or more temporary Bonds 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 a
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.
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Section I official Statement. The Series 2005 Bonds will be offered for sale by the
Original Purchaser thereof by means of an official Statement,, substantially in the form of the
Preliminary official Statement, dated August 23, 2005, which has been presented to this Council
(the "Official Statement"). Pursuant to the l itiai Resolution, this Council authorized the Mayor
or the Finance Director to approve the official Statement. .t. Execution of the official Statement
y an appropriate officer of the City shall be conclusive sive as to the approval thereof by this
Council_ The City hereby consents to the distribution of the official Statement t to prospective
purchasers f the Series 2005 Bonds and this Council hereby authorizes and directs the Mayor,
the City Clerk and the Finance Director to execute such certificates relating to the accuracy and
completeness of the official Statement as may be appropriate. The determination of the Mayor
and the Finance Director that the Preliminary official Statement was "final"" as of its cute for
.purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 is hereby ratified and
confirmed.
Section 4. Forms of Series 2005 Bonds. The Series 2005A Bonds shall be i
substantially the form set forth in Exhibit :B hereto (which is hereby incorporated herein and
. made a part hereof), with such appropriate variations, omissions and insertions as are permitted
or required by this Resolution. The Series 2005B Bonds shall be in substantially the form set
forth in Exhibit C hereto (which is hereby incorporated herein and made a part hercoo., with such
appropriate variations, omissions and insertions as are permitted or required by this Resolution
Section 5. The. Series 2005 Bonds.
.01.. Denomination, Maturities Payment and Date of Series 2005 Bonds. The Series
2005A Bonds to be issued hereunder , in the aggregate principal amount of $1,445,000 shall he
denominated 4"Tax Increment Urban Renewal Revenue Bonds, Series 2005 A (Non-AMT),"' shall
e issued as fully registered bonds of single Stated Maturities in any denomination which is an
integral multiple of $5,000. The Stated Maturities of the Series 2005A Bonds shall be on July 1
n the years 2011 to 2020, inclusive. The Series 2005A. Bonds shall bear interest from
September 15, 2005 until paid or discharged at the annual rates set forth opposite the Stated
Maturity of each Series 2005 . Bond, as follows:
Stated
Stated
Maturity
Principal
Interest
Maturity
Principal
Interest
(July.....!)Amount
Rate
ffiuly 1
Amount
Rate
2011.
12000
3. 0
2016
$1.457000
4.20°
2012
125,000
3.90
01 '7
1501000
4.25
3
130,000
4.00
201.8
16000
4.30
2014
135,000
4.05
201.9
165,000
4.3
2015
140,000
4.15
2020
175,000
4.40
Interest shall be calculated on the basis of a year of 360 clays composed of twelve 3 l-day
rnontbs.
The Series 2005B Bonds to be issued hereunder, in the aggregate principal amount n.t o
$555.,000 shall he denominated "'Tax increment Urban Renewal Revenue Bonds, Serles 20 B
(AMT), " shall be issued as fully registered bonds of single Stated Maturities in an
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denomination which is an integral multiple of $5,000. The Stated Maturities of the Series 2005
Bonds shall be on July 1 in the years 2006 to Zo o, inclusive. The Series 2005B Bonds shall
bear interest from September 15, 2005 until paid or discharged at the annual rates set forth
opposite the Stated Maturity of each Series 200 B Bond, as follows:
Stated
Maturity
Principal
Interest
QUIV 1)Amount
Rate.
2006
$105,000
3.55
2007
10500
3.65
2008
11000
3.75
5
2009
115,000
3.8
2010
120NO
3.95
Interest shall be calculated on the basis of a year of 360 days composed of twelve 30Tda
months.
The Series 2005 Bonds shall be issnable only in fully registered form., and the ownership
of the Series 2005 .Bonds shall be transferred only upon the Bond Register of the City hereinafter
described. Principal of and interest on the Series 2005 Bonds are payable in lawful money of the
United States of America. Principal and premium, if any, shall be payable by check or draft
drawn on the Paying Agent hereinafter described upon presentation and surrender of the Series
2005 Bonds at .maturity or upon redemption at the principal office of the Paying Agent. Interest
on the Series 2005 Bonds shall be payable on January I and July I in each year, commencing
January 1, 2006, by check or draft of the Paying Agent mailed to the owners of record hereof as
such appear in the Bond Register as of the close of business on the fifteenth day of the
immediately preceding; month, whether or not such day is a Business Day.
.each Series 2005 Bond shall bear an original issue date as of September -15, 2005. Upon
delivery of the Series 2005 Bonds to the original Purchaser thereof pursuant to Section 5.05 or
upon the delivery of Series 2005 Bonds upon a transfer or exchange pursuant to Section 5.02, the
Registrar shall date each such Series 2005 Bond so delivered as of the date of its authentication.
5.02. System of Registration. The City shall appoint, and shall maintain, a bond
registrar, transfer agent and paying; agent for the Series 2005 Bonds (the Bond Registrar). This
Section 5.02 shall establish a system of registration .for the Series 2005 Bonds as defined in the
Model Public obligations Registration Act of Montana, and shall govern in the event provisions
of the .resolution relating to registration, transfer or exchange of Series 2005 Bonds are
.nconsist nt herewith, except as otherwise provided in Section 5.07. The effect of registration
and the rights and duties of the City and the :Bond Registrar with respect thereto shall be as
follows:
(a) Bond Register. The Bond Registrar shall keep at its principal office bond
register in which the Bond Registrar shall provide for the registration of ownership of
Series 2005 -Bonds and the re istr tlon of transfers and exchanges thereof.
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(b) Transfer. Upon surrender for transfer of any Series 2005 Bond duly
endorsed y the registered owner thereof or accompanied by a written instrument of
transfer n form satisfactory Registrar, duly executed the registered
owner thereof or by an attorney duly authorized by the registered owner in writing, the
Bond Registrar shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Series 2005 .fonds of the same series and a like
aggregate principal amount, interest rate and maturity as requested by the transferor.
The Bond Registrar may, however, close the books for registration of the transfer of
any Series 2005 Bond or portion thereof selected or called for redemption.
(c) Excha . Whenever any Series 2005 Bond is surrendered by the
registered owner for exchange, the Bond Registrar shall authenticate and deliver one or
more new Series 2005 Bonds of the same series and a life aggregate principal amount,
interest rate and maturity, as requested by the registered owner or the own ,rTM s attorney
n writing,
(d) Cancellation. All Series 2005 Bonds surrendered upon any transfer or
exchange shall be promptly cancelled by the Bond Registrar and thereafter disposed of
as directed by the City.
(e) Imor Unauthorized Transfer. When any Series 2.005 .fond is
presented to the Bond Registrar for transfer, the ,fond Registrar may refuse to transfer
the same until it is satisfied that the endorsement on such Series 2005 Bond or separate
instrument of transfer is legally authorized. The Bond Registrar shall incur no liability
for the refusal, in good faith, to make transfers which it, in its judgment, deems
j.m ro er or unauthorized.
(f) Persons Peened owners. The City and the Bond Registrar may treat the
.person in whose name any Series 2005 Bond is at any time registered M the Bond
Register as the absolute owner of such Series 2005 Bond, wbether such Series 2005
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 such Series 2005 .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 2005 .fond to the extent of the sum or sums so paid.
(g) Fees _and Charges. For every transfer or exchange of Series 2005
Bonds (except upon a partial redemption of a Series Zoo Bond pursuant to Section
5.04), the Bond Registrar may impose a charge upon the owner thereof sufficient to
reimburse the Bond Registrar for any tax, fee or other governmental charge required to
e paid with respect to such transfer or exchange.
(h) Mutilated. Lost Stolen or I estro ed Series 2005 Bonds. In case any Series
2005 Bond shall become mutilated or be lost, stolen or destroyed, the Bond registrar
shall deliver a new Series 2005 Bond of the same series and of like amount,, number,
maturity date and tenor in exchange and substitution for and upon cancellation of any
such mutilated Series 2005 Bond or in lien of and In substitution for any such Series
.3
2005 Bond lost, stolen or destroyed, upon the payment of the reasonable expenses and
charges of the Bond Registrar is connection therewith; and, in the case of a Series oo
Bond lost, stolen or destroyed, upon filing with the Bond Registrar of evidence
satisfactory to it that such Series 2005 Bond was lost, stolen or destroyed, and of the
ownership thereof, and upon furnishing to the Bond Registrar of an appropriate bond or
indemnity in form, substance and amount satisfactory to it, in which both the City and
the Bond. Registrar shall be named as obligees. All Series Zoo :Bonds so surrendered
to the Bond 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 2005 Bond has
already matured or such Series 2005 Bond has been called for redemption i
accordance with its terms, it shall not be necessary to issue a new v Series 2005 Bond
prior to payment.
5.03. Initial Bond Registrar and Paying nt. The City hereby appoints U.S. Bank
National Association, of Seattle, Washington, as the initial Bond Registrar for the Series oo
Bonds. The City reserves the right to appoint a successor Bond Registrar or Paying Agent, and
the City agrees to pay the reasonable and customary charges of the Bond Registrar and the
Paying Agent for the services performed. Upon merger or consolidation of a bank or trust
company that is acting as the Bond Registrar or the Paying Agent, if the resulting corporation is
bank or trust company authorized by law to conduct such business, such corporation shall be
authorized to act as successor Bond Registrar or Paying .Agent, as the case may be. The City
reserves the right to remove any Bond Registrar or haying Agent upon o days' notice and upon
the appointment of a successor Bond Registrar or . aying Agent, in which event the predecessor
Bond Registrar or Paying Agent shall deliver all cash and Series 2005 Bonds in its possession. a
Bond Registrar or Paying Agent to the successor Bond Registrar or Paying Agent and shall
deliver the Bond Register to the successor Bond Registrar. On or before each principal or
interest due date, without further order of this Council, the Finance Director shall transmit to the
Bond Registrar, solely from money in the Bond Account of the Tax Increment Fund available
therefor, money sufficient for the payment of all principal, premium, if any, and interest then due
on the Series 2005 Bonds.
5.04. Redemption.
(a) -ORederr Lion of Series 2005A Bonds. The Series 2005A Bonds with Stated
Maturities in the years 2011 through 2012 shall not be subject to redemption. Series 2005A
Bonds with Stated Maturities in 2013 and later years shall each be subject to redemption at the
option of the City, in whole or in dart, and if 1n dart from such stated Maturities and in such
principal amounts as the City shall designate (provided that Series 2005 Bonds may be redeemed
from each Stated Maturity thereof only in principal amounts that are integral multi les o
$5,000) and, within a Stated Maturity, in $51,000 principal amounts is selected by the Bond
Registrar by lot or other manner .it deems fair, on January 1, 2013, and any date thereafter, at a
redemption price equal to the principal amount of Series 20 5 . Bonds to be redeemed with
interest accrued to the date of redemption without premium.
(b) ORederr tq.o o Series 200 B Bonds. The Series 2005B Bonds are not
subject to redemption prior to their stated maturities.
1.4
(c) Notice of Redemplijon. The Finance .Director shall cause notice of redemption,
stating the series, the amount, the serial numbers, the maturities, the CUSIP numbers and the
interest rates of the Series 2005 Bonds or portions thereof called for redemption, to be mailed to
the Bond Registrar, the.Paying Agent and to the registered owner of each Series 25 Bond to be
redeemed at his address shown in the Bond Register not less than 30 days before the redemption
date therefor; provided that any defect in or failure to give such mailed notice shall not affect the
validity of Proceedings for the redemption of any Series 2005 Bond not affected thereby. Notice
of the call of any Series 2005 Bond for redemption having been mailed as herein provided, and
funds sufficient for the payment thereof with accrued interest having been deposited with the
Paying Agent on or before the redemption date, interest on such Series 2005 Bond shall cease to
accrue on said date and the owner shall have no further rights with respect thereto or under the
Resolution except to receive the redemption price so deposited.
In addition to the notice prescribed by the preceding paragraph, the Finance Director shall
also give, or cause the Bond Registrar to give, notice of the redemption of any Series 2005 .fond
or Bonds or portions thereof at least 35 days before the redemption date by certified mail,
telecopy or express delivery service to the original Purchaser of the Series 2005 Bonds and all
registered securities depositories then in the business of holding substantial amounts of
obligations of the character of the Series 2005 Bonds (such depositories now being The
Depository Trust Company, of New York., New York) and the one or more national information
services that dis erninate information regarding municipal bond redemptions; provided that any
defect in or, any failure to give any notice of redemption prescribed by this paragraph shall not
affect the validity of the proceedings for the redemption of any Series 2005 Bond or portion
thereof.
5.05. Execution and Deliver . The Series 2005 Bonds shall be forthwith prepared for
execution under the direction of the City Clerk, at the expense of the City, and shall be executed
on behalf of the City by the signatures of the .mayor, the City Clerk and the Finance Director;
provided that said signatures may be printed, engraved or lithographed facsimiles thereof. The
seal of the City reed not be imprinted on or affixed to any Series 2005 Bond. In case any officer
whose signature or a facsimile of whose signature shall appear on the Series 2005 Bonds shall
cease to be such officer before the delivery of any Series 2005 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 execuhon,, no Series 2005 Bond shall be
valid or obligatory for any purpose or be entitled to any security or benefit under the Resolution
unless and until a certificate of authentication on such Series 2005 Bond has been duly executed
by the manual signature of an authorized representative of the Bond Registrar. Certificates of
authentication on each Series 2005 .fond need not be signed by the same representative. The
executed certificate of authentication on each Series 2005 Bond shall be conclusive evidence that
it has been authenticated and delivered under the Resolution and in accordance with the
provisions s hereof. when the Series 2005 Bonds have been fully executed and authenticated,
they shall be delivered by the Bond Registrar to the original Purchaser thereof upon payment of
the purchase price in accordance with the contract of sale heretofore made and executed, and the
Original Purchaser thereof shall not be obligated to see to the application of the purchase price.
5.06. Transcript Certificatio . The officers of the City are directed to furnish to the
Original Purchaser of the Series 2005 Bonds and to Bond Counsel certified copies of all
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proceedings and information in their official records relevant to the authorization, sale and
issuance of the Series 2005 Bonds, and such certificates and affidavits as to other .matters
appearing; in their official records or otherwise known to them as may be reasonably required t
evidence the validity and security of the Series 25 .fonds, and all such certified copies,
certificates and affidavits, including. any heretofore f rn shed, shall constitute representations and
recitals of the City as to the correctness of all facts stated therein and the completion of all
.proceed.ns stated therein to have been tale.
5.07. Securities epsitor.
_...�...Y...... .Y,..................
(a) For purposes of this Section 5.07, the following terms shall have the following
meanings:
"Beneficial Owner" shall mean, whenever used with respect to a Series 2005
Bond, the Person in whose name such Series 2005 Bond is recorded as the beneficial
owner of such Series 2005 Bond by a Participant on the records of such Participant, or
such erson's s brogee.
64C & Co."" shall mean CEDE & Co., the nominee of f TC, and a. v
successor nominee of DTC with respect to the Series 2005 Bonds.
"TC" shall mean The Depository Trust Company, ofNew York,. New York.
"Participant" shall mean any broker -dealer, bank or other financial institution
for which DTC holds Series 2005 Bonds as securities depository,
" eprese tati on Letter" shall mean the BIa ket l ssuer Letter of Re resenta i on
executed by the City to DTC pursuant to which the City agrees to comply with DTCs
Operational Arrangements.
(b) The Series 2005 Bonds of each series shall be initially issued as separately
authenticated fully registered bonds, and one Series 2005 Bond shall be issued in the principal
amount of each Stated Maturity of the Series 2005 Bonds. Upon initial issuance, the ownership
of such Series 2005 Bonds shall be registered in the Bond Register in the name ofCede & Co.,
as nominee of .ETC. The Bona Registrar, Paying Agent and the City may treat DTC r its
nominee as the sole and exclusive owner of the Series 2005 Bonds registered in its name for the
purposes of payment ent of the principal of or interest on the Series 2005 Bonds, selecting the Series
2005 Bonds or portions thereof to be redeemed, if any, oriving any notice permitted or required to
be given to registered owners of Series 2005 Bonds -under this resolution, registering the transfer
of Series 2005 Bonds, and for all other purposes whatsoever; and neither the :Bond Registrar,
Paying Agent nor the City shall. be affected by any notice to the contrary. Neither the .Bond
Recylstrar, Paying Agent nor the City shall have any responsibility or obligation to any
Participant, any Verson claiming a beneficial ownership interest in the Series 2005 Bonds under
or through DTC or any Participant, or any other Person which is not shorn on the Bond Register
as being a registered owner of any Series 2005 Bonds, with respect to the accuracy of any
records maintained by DTC or any Participant, with respect to the payment by DTC or any
Participant of any amount with respect to the principal of or interest on the Series 2005 Bonds,
with respect to any notice which is permitted or required to be given to owners of Series Zoo
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Bonds under this resolution, with respect to the selection by .ETC or any Participant of any
Person to receive payment in the event of a partial redemption of the Series 2005 Bonds, or with
respect to any consent given or otter action taken by DTC as registered owner of the Series Zoo
Bonds. So long as any Series 2005 Bond is registered in the iname of Cede & Co., as nominee of
I TC, the Paying Agent stall pay all principal of and interest on such. Series 2005 Bond, and
shall give all notices with respect to such Series 2005 Bond, only to Cede & Co. in accordance
with DTCs operational Arrangements, and all such payments shall be valid and effective to
fully satisfy and discharge the City's obligations with respect to the principal of and interest on
the Series 2005 Bonds to the extent of the sum or sums so paid. No Person other than DTC shall
receive an authenticated Series 2005 Bond for each separate stated maturity evidencing the
obligation of the City to make payments of principal and interest. Upon delivery by DTC to the
Bond Registrar of written notice to the; effect that DTC has determined to substitute a new
nominee in place of Cede & Co., the Series 2005 Bonds will be transferable to such new
nominee in accordance with paragraph d hereof,
(c) In the event the City determines that it is in the best interest of the Beneficial Owners
that they be able to obtain Series 2005 Bonds 1n the form of bond certificates, the City may
notify DTC and the Bond Registrar and Paying Agent, whereupon ITC shall notify the
Participants of the availability through DTC of Series 2005 Bonds in the form of certificates. In
such event,, the Series 2005 Bonds will be transferable in accordance with paragraph d hereof.
TC may determine to discontinue providing its services with respect to the Series 2005 Bonds
at any time by giving notice to the City, the Paying Agent and the Bond Registrar and
discharging; its responsibilities with respect thereto under applicable later. In such event the
Series 2005 Bonds will be transferable in accordance with paragraph d hereof.
(d) In the event that any transfer or exchange of Series 2005 Bonds is permitted under
paragraph or c hereof, such transfer or exchange shall be accomplished upon receipt by the
Bond Registrar of the Series 2005 Bonds to be transferred or exchanged and appropriate
instruments of transfer to the permitted transferee in accordance with the provisions of this
resolution. In the evert Series 2005 Bonds in the form of certificates are issued to owners other
than Cede & Co., its successor as nominee .for DTC as owner of all the Series 2005 Bonds, or
another securities depository as owner of all the Series 2005 Bonds, the provisions of this
resolution shall also apply to all matters relating thereto, including, without limitation, the
printing of such Series 2005 Bonds in the .form of bond certificates and the method of payment
of principal of and interest on such Series 2005 Bonds in the form of bond certificates.
Section 6. A lication of Proceeds. The City shall deposit the proceeds of the sale of the
Series 2005 Bonds (including accrued interest thereon from the date from which interest is to be
paid thereon to the date of delivery to theoriginal 'urclaser tlereof as follows:
(a) Deposit to the credit of the Interest Account in the Tax Increment Fund the
amount of interest accrued on the Series 2005 Bonds from September 1.5, 2005 to the
date of delivery thereof;
(b) Deposit a sufficient amount to the Reserve Account as to cause the balance
therein to equal the Reserve Requirement in respect of the Series 2005 :Fonds; and
17
(c) Deposit the balance of the proceeds of the Series 2005 Bonds in the
Construction Account in the Tax Increment Fund to be used to pay costs of the Zoo
Project and to pay costs of issuance of the Series 2005 Bonds.
Section 7. Additional Bonds.
7.01. General Provisions. addition to the Series 2005 Bonds, whose issuance and
delivery is provided for in Section 5, Additional Bonds may at any time and from time to time be
issued, sold and delivered by the City but only -upon compliance ce with the conditions of, Sections
.off, �, or .04�, �hiehe er may be applicable, and upon_ filing with the City Clerk 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 Mayor and the Finance Director stating that
upon the issuance of the Additional Bonds, no default hereunder has occurred and is
continulng which would not be eared upon the issuance of the Additional Bonds and
application of the proceeds thereof.
C. Are 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 s precedent specified in this Section;
(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 retitled to the benefits of and secured by this Resolution, -
and
(3) the issuance of such .Additional Bonds will not affect the tax-exempt
nature for federal income tax purposes of the Bonds then outstanding.
No Additional 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 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 b
the Supplemental Resolution authorizing their issuance. All Additional Bonds issued pursuant to
Sections 7.02 and 7.03 shall be payable and secured ratably and equally and on a parity with the
Series 2005 Bonds and any Additional Parity Bonds theretofore issued, entitled to the same
benefits and security of this Resolution.
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When and if the City has established that all of the conditions precedent to the issuance of
a series of Additional .fonds have beein satisfied the City may, after authorizing the issuance of
such series of Additional Bonds but In lieu of issuing such series of Additional Bonds, issue
series of special obligations, denominated as '"Bond Anticipation Notes,'' which shall have a
Stated Maturity not more than two years from their date of original issue and which shall be
secured on a parity with all outstanding Parity Bonds except that at their Stated Maturity they
shall be paid as to principal from the proceeds of the series of Additional Bonds in anticipation
of which they were issued or, if for any reason the City has been unable to sell and issue that
series of Additional Bonds then Bonds of such series of Additional Bonds shall be issued to the
Owners of the Bond Anticipation Notes, in exchange therefor, on a par -for -bar basis, bearing
interest at a rate no greater than that at which the Additional Bonds were initially qualified to be
issued.
.02. Additional Parity Bonds To Pay the Cost of Projects. Additional Parity Bonds may
be issued under this Section 7.02, at one time or from time to time,, subject to the conditions
provided in Section 7.01 and this Section 7.02, 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 7.02, the City shall
adopt a Supplemental Resolution authorizing the issuance of such series of Additional 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 7,2,, there shall be filed with the City Clerk:
(a) A certificate executed by the Mayor and the Finance Director stating: i
the estimated cost of the Projects being financed thereby, including an allowance for
contingencies and all fees, expenses and financing costs, li the amount, if any, which
will be .reul red to be deposited to the credit of the Reserve Account 1n connection with
the j.ssuance of the Additional Parity Bonds, i i 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 "fax Increment pledged thereto, the amount of Tax
Increment received by the City in the last completed Fiscal Year, v the amount of the
maxim -um Principal and Interest Requirements on the outstanding .fonds and the
Additional Parity Bonds proposed to be issued for any future .Fiscal Year during the
terra of the outstanding Parity .fonds, 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
(b) a certificate executed by the Mayor and the Finance Director stating; that.
(i) the Tax Increment received by the City in the last completed Fiscal
Year was equal to at least 130 f the maximum Principal and Interest
Requirements for any future calendar year (during the term of the outstanding
Parity Bonds) with respect to outstanding Bonds and the Additional Parity
Bonds proposed to be issued; and
(ii)the Tax Increment received by the City in the last completed Fiscal
Year, adjusted as provided in this Section .02 b ii), was, and the Tax
Increment estimated to be received in the next succeeding three Fiscal Years,
adjusted as provided in Section -02 c , is estimated to be, equal to at least
140% of the maximum Principal and Interest Requirements for any future
calendar year (during the tern of the Outstanding Parity Bonds) with respect to
the outstanding Bonds and the Additional Parity Bonds proposed to be issued.
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 Urban Renewal Area before
the date of issuance of the Additional Bonds and the taxable values of which as
so completed are not included in the "actual taxable value" of the Urban
Renewal .Area (within the meaning of the .Act).
The Council shall approve and confinn the findings s and estimates set forth in the above -
described certificates in the Supplemental Resolution authorizing the issuance of the Additional
Bonds.
For purposes of the foregoing paragraph b , in estimating the Tax Increment en.t to be
received in any future .fiscal Year, the Mayor and the Finance Director shall assure that: 1
o% of the "faxes levied in the Urban Renewal Area 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 Mayor and Finance Director 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 ent 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, n 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 Mayor and Finance Director reasonably believe
the improvement will be completed within the period for which the estimate is to be made; or
(D) to be completed later than the end of the second full Fiscal Year following the
issuance of the Additional Bonds. In estimating the Tax Increment to be derived from future
development, the City shall assure the taxable value of the development upon completion to be
-2/3% of the estimated taxable valuation.
20
7.03. ,additional Parity Bonds for of ndinftr oses. Additional Parity Bonds may be
issued at any time or from time to time, subject to the conditions hereinafter stated in this Section
7,03, for the purpose of providing funds, with any other funds available and committed therefor,
for paying at., or redeeming prior to, heir stated mat rities 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 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 Bonds under this Section 7.03 there
shall be filed with. the City Clerk 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,
The City shall not deliver any Additional Bonds under this Section. 7.03 unless there shall
be filed with the City Clerk.
(i) a report of an Independent Accountant to the effect that a.) the proceeds
(excluding accrued interest but including any premium) of the Additional 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 t
pay the principal of andredemption premium, if any, on the Outstanding Bonds to be
refunded and the interest which wi.il become due and payable on and prior to the
Redemption Date or Stated Maturities of the Bonds to be refunded, orb from such
proceeds there shall be deposited in trust, Dove mer t obligations which do not permit
the redemption hereof 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-,
(1h) 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
Oii) if Additional Parity Bonds are issued to refund outstanding Bonds issued
pursuant to Section 7.04, the conditions for the issuance of Additional Parity Bonds
pursuant to Section 7.02 be satisfied.
,04. Subordinate Bonds, Except as provided in Sections 7.01 to 7.03, 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 Bond Account and 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 2005 Bonds and all Additional Parity Bonds issued and to be issued
under and secured by this Resolution in accordance with Sections 7.01 to 7.03. In the evert o
the issuance of any such d ltlona.l Bonds or obligations, the principal, interest and redemption
21
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 wherever needed to meet the current
requirements of the Bond Account and Reserve .Account set forth it Sections 8.04 and 8.05.
Section 8. The Tax Increment Ends.
.01. .fond .proceeds and Tax Increment Pledged and Appropriated. 'he City .hereby
establishes on its books and records three funds designated as the Tax Increment Capital Project
Fund, the Tax Increment Debt Service Fund and the Tax Increment Development Fund
(collectively, the Tax Increment Funds). The Tax Increment Funds shall be maintained as
separate and special bookkeeping accounts on the official books and records 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.. ,All proceeds of Bonds and all other funds hereafter
received or appropriated for purposes of the Projects are appropriated to the Tax Increment
Funds. All Tax Increment is irrevocably pledged and appropriated and shall be credited as
received to the Tax Increment Debt Service Fund. The Parity Bonds shalt 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
'fax Increment Funds in the manner and to the extent provided in this Section 8. The City shall.
not issue any obligation or security superior to or on a parity with the Series 2005 Bonds,
payable or secured, in whole or in part, from or by the Tax Increment other than. ,Additional
Bonds issued pursuant to Section 7., until all of the Series 2005 Bonds have been paid or
discharged as provided herein. The 'fax Increment Funds shall be subdivided into separate
accounts as designated and described in Sections 8.03 to 8.06.
8.02. Tax Increment.Rece ts. All Tax Increment received by the City and credited to
the Tax Increment Debt Service Fund, as required in Section 8.01, shall be credited as received
as follows: a first, to the ..Interest Account, until the balance on hand in the Interest Account is
at least equal to all interest on Bonds due and payable from the Interest Account within the next
six full calendar months; b second, alter any credit to the Interest Account required by the
.preceding clause, to the Sinking Fund Account, until the balance on hand in the Sinking Fund
Account is at least equal to all principal of and premium, if any, on Bonds due and payable from
the Sinking Fund Account (including amounts nts due and payable on a Sinking Fred Payment
.date) within the next twelve full calendar months; (c) third, after any credit to the Interest
Account or the Sinking Fund Account .required by the preceding; clauses, to the Reserve Account
nr t�l the bat a ce on hand in the Reserve Account is equal to the eq *red Reserve; and (d)
fourth, after any credit to the Interest Account, the Sinking Fund Account or the Reserve
.Account required by the preceding clauses, to the Tax . ncreme .t Development men t Fund.
8.03. Construction .Account. For each Project there shall be a separate Construction
Account within the Tax Increment Capital Project Fund, to be used only to pay allowed costs as
incurred, 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, inspect .on, s� ery .sio ., 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 Interest Account is not
22
sufficient for payment of such interest, reimbursement t of any advances blade from other City
funds,, and all other expenses incurred in connection with the acquisition, construction and
financing of the Project. To the Construction Account shall be credited as received all proceeds
of Bonds issued to finance such Project, except amounts otherwise appropriated in Section .0
or in a Supplemental Resolution or received from Additional Bonds issued to refund Outstanding
Bonds pursuant to Section . 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 Tax Increment Development Fund. Money in the
Construction Acount shall be transferred as needed to the Interest Account to pay interest on
Bonds payable therefrom to the extent moneys therein are insufficient.
8.04. Bold Account.
(a) General. The Bond Account is hereby established as a speci
�al account within the Tax
Increment Debt Service Fuld. There are hereby established within the Bond Account two
separate subaccou ts, designated as the Interest Account and the Sinking in Fund Account.
(b) Interest Account. 'Where shall be credited to the Interest Account the following
amounts: 1) the amount specified in clause a of Section .01; ii any amount specified in any
Supplemental Resolution to be credited to the Interest .Account.; and iii from the Tax Increment
as received by the City, the amount specified in clause a of Section 8.02.
On or before each Interest Payment Date, the City shall withdraw from the Interest
Account an amount sufficient to pay the interest coming due on the Bolds on such Interest
Pav ent Date, and shall use such amount to pay* or shape provision with the Paying ..gent for
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the payment of, interest on the Bonds on such Interest Payment Date.
If on any .Interest Payment .Date the balance in the Interest Account is not sufficient to
Pay the total amount of interest due on such Interest Payment Date, the City shall transfer any
money then on hand in the Tax Increment Development Fund, Construction Account, Reserve
Account or Sinking Fund Account, in the order listed and in an amount equal to such deficiency,
to the :Interest Account.
All income derived from the investment of amounts in the Interest Account shall be
credited as received to the Interest Account.
(c) Sinking i Fund Account. There shall be credited to the Sinking Fund Account the
following amounts: (0 any amount specified in a Supplemental Resolution to be credited to the
Sinking Fund Account; and (ii) from. the Tax Increment as received by the City, the amount
nt
specified .in clause b of Section 8.02.
Amounts on hand in the Sinking Fund Account shall be used on any Interest Payment
Date to make up a deficiency in the Interest .Account, if and to the extent required by the third
subparagraph of paragraph b of this Section..
n or before each Principal Payment Date, the City shall witbdraw from the Sinking
Fund Account an amount sufficient to pay the principal due on the Parity Bonds on such
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Principal Payment Date, and shall use such amount to pay, or make provision with the Paying
Agent for the payment of, principal of the Parity Bonds on such Principal Payment Date, whether
Stated Maturity or a Sinking Fund Payment Date.
If on any Principal Payment Date the balance in the Sinking Fund Account is not
sufficient to pay the total amount of principal due on such Principal .Payment Date, the City shall
transfer any money then on hand in the Tax Increment Development Fund, Construction Account
or Reserve Account in the order listed and 1n an amount equal to such deficiency, to the Sinking
Fund Account.
8.05. Reserve Account. The Reserve .Account 1s hereby established as a special account
within the ax 'increment Debt Service Fund. There shall be credited to the Reserve Account the
following amounts: i) $184,875.00 from proceeds of the Series 2005 Bonds, as provided in
Section ; (10 from the Tax Increment as received by the City, the amount specified in clause c
of Section .o ; and ii .y amount specified in any Supplemental Resolution to be credited t
the Reserve Account.
If on any Interest Payment Date or on any Principal Payment Date there shall exist, after
the other transfers required by Sections .o a and b , a deficiency in the Interest Account or
Sinking Fund Account, the City shall transfer from the Reserve Account to such account an
amount equal to such deficiency.
All incon e derived from the investment of amounts in the Reserve Account shall be
credited as received to the Reserve Account until such time as the balance in the Reserve
Account is equal to the Reserve Requirement, and thereafter all such investment income as
received shall be transferred to the Sinking Pond Account.
Money in the Reserve Account shall be used only to pay when due principal of, premium)
if any, and interest on Parity Bonds when the balance on land in the Bond Account is
insufficient therefor; provided that on any date when the balance then on hand in the Bond
Account allocable to a series of Bonds, plus the balance then on hand in the Reserve Account
allocable to the series of Bonds, is suffic.eat with other money available for the purpose to pay or
discharge all outstanding Bonds of that series and the interest accrued thereon in full, and the
balance thereafter on hand in the Reserve Account will be at least equal to the Reserve
Requirement for all outstanding .Bonds not to be discharged, it may be used for that purpose. In
addition., amounts on hand in the Reserve Account may be used to make any arbitrage rebate
payments due -under Section I8f of the Code in respect of any Parity Bonds if ava.lable
mounts on band in the Tax Increment Development Fund are Insufficient therefor.
If at any time (Including, but not limited to, any Principal Payment Date and any
Redemption Date), the balance in the Reserve Account exceeds the Reserve Requirement, the
City shall transfer such excess to the Bond Account.
.06# Tax Increment Development Fund. There shall be credited to the Tax Increment
Development Fund any and all 'Pay. Increment remaining after the required credits to the Bond
,Account and Reserve Account, any investment income and other moneys in any of the accounts
within the Tax Increment Ponds in excess of the requirements of said accounts and which the
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City determines in its discretion to transfer to the Tax Increment Development Fund. Money
from time to time on hard in the Tax Increment ent Development Fund shall be transferred to the
Bond Account and Reserve Account as provided by Sections 8.04 and 8.0and in addition may
be used for any of the following purposes and not otherwise:
(a) to be transferred to the Construction ctio Account to pay costs authorized to be
paid therefrom;
(b) to pay costs incurred 'in connection with Projects within the Urban Renewal
Area as authorized by the Act;
(c) to male arbitrage rebate payments owing in respect of Bonds under Section
18f of the Code;
(d) to redeem or discharge Bonds prior to their Stated Maturities in accordance
with the provisions of this Resolution or any Supplemental Resolution;
(e) to purchase Bonds on the open market; and
(f) to pay other Taxing Bodies a portion of the annual Tax Increment received
by the City, pursuant to an agreement with respect thereto as authorized by the .Act;
provided, however, no such agreement shall require or permit the City to remit to any
other Taxing Bodies any portion of the annual Tax Increment .received in a Fiscal Year
and on deposit in the Tax Increment Development Fund unless (1) the balance in the
Reserve Account as of the date of the remittance is not less than the Deserve
Requirement'; and 2 there is no default under the provisions of this Resolution as
evidenced by a certificate of the City Finance Officer filed with the City Clerk as of the
date of remittance.
.o. Investments. The Finance Director 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 7-6-20 , as
amended, 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 as provided below,
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 Tax Increment Development .d shalt be invested in Qualified Investments
maturing not later than five years from the date of investment. Income from the investment of
the moneys in the various accounts shall be credited thereto. Subject to the provisions of law
now or hereafter controlling .investment of such funds, money on hand in any of the accounts o
the Tax Increment Funds may be invested in any of the followiner Qualified Investments, but no
others:
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(a) direct obligations of or obligations guaranteed by the United States o
America;
(b) bank time deposits or certificates of deposit secured by obligations and
securities described in clause a above.
Section 9. other Covenants of City.
9.01. ;punctual Pa rent. The City will punctually pay or cause to be paid the principal
and interest to become due in respect to all the .fonds, in strict conformity with the terms of the
Bonds and of this Resolution,, and it will faithfully observe and perform all of the 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.
9.02. Accumulation of Claims 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 a.p,prove ax such arran eme is b 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 fonds then outstanding
and of all claims for interest which shall not have been so extended or funded.
9.03. 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 Bonds.
9.04. Mang ev ent and Operation of Properties. The City will manage and operate or
cause to be managed and operated all Projects owned by the City in a sound and businesslike
manner, and will keep such Projects insured at all times in conformity with sound business
practice,
9.05. 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 Owners 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 City Clerk annually, within one hundred eighty
(1.80)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 shoving 1 the actual
taxable value., the base taxable value and the incremental taxable value (each as defined in the
26
Act) of the Urban Renewal Area; (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; all disbursements from the Tax Increment Funds; 5 the financial conditions of
the Protects; and (6)the balances i 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.
9.06. Crn letiojects. The City will commence, and will continue to completion,
with all practicable dispatch all Projects undertaken in the Urban Renewal Area in conformity
with the Urban Renewal Plan and the Act.
9.07. Taxation off eased Property. other than a Project owned and operated as a public
improvement or facility, whenever the City leases real. property in the Urban Renewal Area t
any Person other than a governmental entity, the property shall to the extent authorized by law be
assessed and taxed in the same manner asprivately-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 Faxes for such year become
payable to the Faxing Bodies and in any evert prior to the delinquency date of such Taxes
established by later. All such payments to the City shall be treated as Tax Increment and shall be
deposited by the City in the Tax Increment Funds.
.o .Disposition of Pro ert . The City will not authorize the disposition of any lard or
real property in the Urban Renewal Area 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 Urban
Renewal .area, except as provided in this Section 9.08. 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 in .cial 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 inot greater than those for the current Fiscal
"Fear) below 200 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
ondown.ers will not be materially impaired by said proposed disposition, the City may make the
proposed disposition..
9.09. 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 owners of the Bonds of the rights and benefits provided in this
Resolution..
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9. 0, Amendment of Plan or ordinance. Except to authorize additional Projects, the
City will not amend or modify the Plan or the Ordinance or reduce the size of the Urban. Renewal
val
Area if an effect thereof will be to materially and adversely affect the security of the Outstanding
Bonds; provided, however, the City may reduce the size of the Urban Renewal Area if a report as
provided in Section 9.08 is received from the Financial Consultant regarding the reduction in
size of the Urban Renewal Area.
9. 11. A.d'ustme t of Tax incremental Base. The City shall not adjust the tax incremental
base of the Urban Renewal Area pursuant to Section 7-15-4287 of the Act so long as any Fonds
are outstanding.
9.12. Federal Tax Exemption. The City will not use the proceeds of any Bonds or use or
permit the use of any Project financed from the Proceeds of the 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.
9..E_3. Pledge of Replacement Revenues. In the event the Constitution or laws of the
State of Montana are amended to abolish or substantially reduce or eliminate real or personal
property taxation and State law then or thereafter provides to the City an alternate or
supplemental ental source or sources of revenue specifically to replace or supplement reduced or
eliminated Tax Increment, then the City pledges, and covenants to appropriate annually, subject
to the limitations of then applicable law, to the Bond Fund from such alternate or supplemental
revenues an amount that ill vita money on hand ire the Bond Fund or available and to be
transferred to the Bond .fund during such Fiscal Year, be sufficient to pay the principal of,
premium, if any, and interest on the outstanding Bands payable in that Fiscal Year.
9.14. Bondowner Rim. No owner of any 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 owners of not less than % in aggregate principal amount of all. Bonds
which are at the time Outstanding; but the owners of this amount of such Bonds may, either at
law or in equity, by suit, action or other proceedings, Protect and enforce the rights of all owners
of such 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 owner of a majority in principal
amount of such Outstanding Bonds shall .have the right to direct the time, method and Place of
conducting any Proceedings for any remedy available to the owners 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
Owner 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 revenues pledged thereto as provided by this Resolution
and the Act.
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Section 1.0. Sl emental esol tions.
1.0.0. 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 ma.kin9 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 owners of Bonds issued hereunder, or for the purpose of adding to the covenants
and agreements herein contained, or to the Tax .increment 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 ce of a series of Additional Bonds, as provided in and subject to the conditions and
requirements of Section. 7. Any such Supplemental resolution may be adopted by resolution,
without the consent of the owner of any of the .Bonds issued hereunder.
1.0.02. Consent of B ndo vners. With the consent of the Owners of Outstanding Parity
Bonds as provided in Section 10.03 and, if any Series 2005 Bonds are outstanding if it is not the
subject of bankruptcy, insolvency or reorganization proceedings), 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 owners 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 revenues or income
appropriated to the Tax Increment .ids, or would reduce the percentage in principal amount of
such Bonds required to authorize e or consent to any such Supplemental Resolution.
10.03. Notice. .notice of a Supplemental resolution to be adopted pursuant to Section
1.0.02 shall be mailed by first-class mail,, postage prepaid, to the owners 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 City Clergy., signed by the owners of not less than to -
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 owners
in person or by agent duly appointed in writing, and shall become effective when delivered to the
City Clerk. Any consent by the owner of any Bond shall bind that owner and every future
Owner of the same Bond with respect to any Supplemental resolution adopted by the City
pursuant to such consent; provided than any owner may revoke his consent with reference to any
Bond by written notice received by the City Clerk before the Supplemental Resolution has
become effective. In the event that unrevo ed consents of the owners of the required amount of
.Bonds have not been received by the City Clerk 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.
29
1_0.04. 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
bearer, shall be -sufficient for any purpose of this Resolution and shall be conclusive in favor o
the City if made in the manner .er provided in this Section 10.04. The fact aind 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 rotary 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 .warner which the City may deem sufficient; but the City may nevertheless, it its
discretion, require further proof in uses where it deems further proof desirable. The ownership
of any registered Bonds shall be proved by the .fond Register.
Section 11. Defeasance.
1.0. 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 it this section, all
pledges, covenatits and other rights granted by this Resolution to the owners of such Bonds shall
cease.
1...02. Ma it 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 it 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.
1. 1.03. Redemption. The City may also discharge its liability with reference to any
Bonds which are called for redemption or 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.
tion.
11.04. 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 reg .lati g 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 Government obligations which are authorized by law
to be so deposited, bearing interest payable at such times and at such rates and maturing or 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 giver the redemption notice required therefor or giver 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 ..2. Tax Covenants.
12.01.. Use of 2005 Proj'ect. The 2005 Project financed with proceeds of the Series 2005
Bonds will be owned and maintained by the City and available for use by members of the
30
eneral public on a substantially equal basis, except for those portions of the 2005 Rroject that
constituted the clearance and subsequent sale of land for private redevelopment and that are
financed with proceeds of the Series 2005B Bonds. The City shall not enter into any lease, use
or other agreement with any non -governmental .person relating; to the use of the 2005 Project or
security for the payment of the Series 2005 Bonds which night cause the Series 2005 . Bonds to
be considered "'private activity bonds" or "'private loan bonds"' within the meaning of Section 141
f the Code.
2.02• General Covenant. TheCity covenants and agrees with the owners from time to
time of the Series 2005 .Bonds that it will not take or permit to be taken by any of its officers,
employees or agents any action which would cause the interest on the Series Zoo Bonds to
become includable in gross income for federal income tax purposes under the Code and
applicable Treasury Regulattons promulgated thereunder (the "Regulations"'), ai-id covenants to
take any and all actions within its powers to ensure that the interest on the Series 2005 Bonds
will not become includable in gross income for federal income tax purposes under the Code and
the Regulations.
1.2.03. .arbitrage Certification. The .Mayor, the City Clerk and the Finance Director,
being the officers of the City charged with the responsibility for issuing; the Series 2005 Bonds
pursuant to this resolution, are authorized and directed to execute and deliver to the original
Purchaser a certificate in accordance with the provisions of Section 148 of the Code, and Sectiorn
1.14-2b) of the .regulations, stating that on the basis of facts, estimates and circumstances in
existence on the date of issue and delivery of the Series 2005 Bonds, it is reasonably expected
that the proceeds of the Series 2005 Bonds will be used in a manner that would not cause the
Series 2 005 Bonds to be "arb 1t.ra. e bonds" within the meaning of Section 1. 4 8 of the Code and
the Regulations.
12.04. Arbitrage Rebate. The City acknowledges that the Series 2005 Bonds are subject
to the rebate requirements of Section 1.4 f of the Code. The City covenants and agrees to retain
such records, .make such determinations, file such reports and documents and pay such amounts
at such times as are required under said Section 1.4 f) and applicable Treasury Regulations t
preserve the exclusion of interest on the Bonds from gross income for federal income tax
purposes, unless the Bonds qualify for the exception from the rebate requirement under Section
l 4 f)of the Code and no `gross proceeds' of the Bonds (other than amounts constituting
a "bona fide debt service fnd") arise during or after the expenditure of the original proceeds
thereof In furtherance of the foregoing, the Finance .director is hereby authorized and directed
to execute a Rebate Certificate, substantially in the form of the Rebate Certificate prepared by
Bond Counsel and the City hereby covenants and agrees to observe and perform the covenants
and agreements contained therein, unless amended or terminated in accordance with the
provisions thereof.
12.05. Designation of Qualified Tax-ExeMt obli ations. Pursuant to Section
(b)(3)(B)(ii of the Code, the City hereby designates the Series 2005A Bonds as "quallfied
tax-exempt obligations" for purposes of Section : b of the Code. The City hereby
represents that it does not anticipate that obligations bearing interest not includable in gross
income for purposes of federal income taxation under Section 1.03 of the Code (including
refunding obligations as provided in Section 25b)3 of the Code and including "'qualified
50 1 (c)(3) bonds"but excluding other ``private activity bonds,"as d of ned in Sections 1 1 a are
1 a of the Code) vl I i be issued by or on behalf of the City and all `subordinate entitles" of the
City in 2005 in an amount greater than $10,000,000.
2.06. Infonnation Reportin, The City shall file with the Secretary of the Treasury, not
later than November 15, 2005, a statement concerning the Series 2005 Bonds containing the
information required by Section 1 9 e of the Code.
Section 13. Continuinja Disclosure.
13.01. Purpose and Beneficiaries. To provide for the public availability of certain
information relating to the Series 2005 Bonds and the security therefor and to permit the original
Purchaser and other participating underwriters in the primary offering of the Series 2005 Bonds
to comply with amendments to Rule 15c2 -12 promulgated by the Securities and Exchange
Commission (the"SEC") under the Securities Exchange Act of 193 C.F.R. § 2 o. l 5e -12),
relating; to continuing disclosure as in effect and interpreted from time to time, the ""Rule"),
which will enhance the .marketability of the Series 2005 Bonds, the City hereby makes the
following covenants and agreements for the benefit of the owners (as hereinafter defined) from
time to time of the outstanding Series 2005 Bonds. The 'fax Increment Fund of the City and the
City are the only '`obligated persons' in respect of the Series 2005 Bonds within the meaning of
the Rule for purposes of identifying the entities in respect of which continuing disclosure must
he made. The City .has complied in all material respects with any undertaking previously entered
into by it under the Rule.
If the City fails to comply with any provisions of this Section 13, any Person aggrieved
thereby, including the owners of any outstanding Bonds, may take whatever action at law or in
equity may appear .necessary or appropriate to enforce performance and observance of any
agreement or covenant contained in this Section 13, including an action for a writ of mandamus
or specific performance. Direct, indirect, consequ ential and punitive damages shall not he
recoverable for any default hereunder. Notwithstandincr anything to the contrary contained.
herein, in no event shall a default under this Section 13 constitute a default under the Series Zoo
Bonds or under any other provision of this Resolution.
s used in this Section 1 , "O ne.r" or " and wne " means, in respect of a Series Zoo
Bond, the registered owner or owners thereof appearing in the bond register maintained by the
Bond Registrar or any "Beneficial Owner" (as hereinafter defined) thereof, if such Beneficial
Owner provides to the Bond Registrar evidence of such beneficial ownership in form and
substance reasonably satisfactory to the Bond Registrar. As used herein, -Beneficial Owner"'
means, in respect of a Series 2005 Bond, any Person which (1) has the power, directly or
indirectly, to vote or consent with respect to, or to dispose of ownership of, such Series 2005
Bond (including Persons or entities holding Series 2005 Bonds through nominees, depositories
or other intermediaries), or is treated as the owner of the Series 2005 Bond for federal income
tax purposes.
3.02. Information atio 'o Be Disclosed. losed. The City will provide, in the manner set forth in
subsection hereof, either directly or indirectly through an agent designated by the City, the
following information at the following times
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(1) on or before 270 days after the end of each Fiscal Year, commencing with the Fiscal
Year ended June 30, Zoo, the following financial information and operating data 1n relating to
the Urban Renewal Area and the City for the preceding Fiscal Year of the City as hereinafter
specified (the "Disclosure In onnation-").
below):
):
The Disclosure Information comprises the following (subject to modification as described
(A) the financial statements of the City for such Fiscal Year,
accompanied by the complete audit report and op.nion of an independent
certified public accountant or state legislative auditor relating thereto,
including the financial statements of the Tax Increment Fund of the City, as
permitted or .required by the laws of the State of Montana, containing balance
sheets as of the end of such Fiscal Year and a statement of operations, changes
in fund balances and cash flogs for the Fiscal Year then ended, shoving In
comparative form such figures for the preceding Fiscal Year of the City
prepared in accordance with generally accepted accounting principles
promulgated by the Financial Accounting Standards Board as modified in
accordance with the governmental accounting standards promulgated by the
Governmental ental Accounting Standards Board or as otherwise provided under
Montana lave, as in effect from time to time, or, if and to the extent such
financial statements have not been prepared in accordance with such generally
accepted accounting .principles for reasons beyond the reasonable control. of
the City, noting the discrepancies therefrom and the effect thereof, and
certified as to accuracy and completeness in all material respects by the
Finance Director; and
(B) To the extent not included in the financial statements referred to
in paragraph A hereof, the information .for such Fiscal Year or for the period
most recently available of the type identified below contained in the official
Statement, which information may be unaudited, but shall be certified as to
accuracy and completeness in all material respects by the Finance Director to
the best of his or her knowledge, which certification may be based on the
reliability of information obtained from governmental of other third -party
sources:
1. Information, for such Fiscal Year, relating to Tax Increment
revenue, investment earnings, debt service and debt service coverage and
incremental taxable value, amount of Tax Increment resulting from property
tax levy and Tax Increment actually received of the type contained under the
captions "The Series 2005 Bonds Pro .forma Debt Service Coverage on
Series 2005 Bonds," "The Urban Renewal Area -Property Tax Levies in the
Urban Renewal A.rea,""—Ma or Taxpayers in the Urban Renewal Area,""
Comparison of Taxable Value of Urban Renewal Area to City,"' and" —
Financial Statement Regarding Tax Increment Fund"' in the official
Statement.
33
2. Information", as of January 1 for the current tax year, relating to the
appraised value and taxable value of taxable property in the Urban Renewal
Area.
3. Identification of the ten taxpayers in the Urban Renewal Area with
the largest taxable value of property by name, type of property and taxable
value.
. Information regarding the mill levies of all Taxing Bodies levying
property taxes in the Urban Renewal ,area of the type contained in the table
under the caption `"The Urban Renewal Area —Property Tax Bevies in the
Urban Renewal Area's in the official Statement.
5. Information., as of the most recent date available, regarding
employment in the City, the State of Montana and the United States of the
type contained in the table under the caption "The City Employment and
Employee Relations"' in the Official Statement.
. Information, as of the end of the most recent Fiscal Year, regarding
the direct debt of the City, including; debt evidenced by special improvement
district bonds, overlapping general obligation debt and debt ratios of the type
contained under the captions "The City —Financial ncia.l Summary" and'" —The
City Summary of outstanding General obligation Direct and overlapping
Debt"' in the official Statement.
Notwithstanding the foregoing paragraph, if the audited financial statements from which
such extracts are to be taken are not available by the date specified, the City shall provide on or
before such date extracts from unaudited financial statements in the format required for the
audited financial statements as part of the Disclosure Information and, within 10 days after the
receipt thereof, the City shall provide the audited financial statements.
Any or all of the Disclosure Information may be incorporated by reference, if it is
updated as required hereby, from other documents, including official statements, which have
been submitted to each of the repositories hereinafter referred to under subsection b) or the SEC.
If the document incorporated by reference is a final official statement, it must also be available
from the Municipal Securities Rulemaking Board. The City shall clearly identify in the
Disclosure Information each document so incorporated by reference.
f any part of the Disclosure Information can no longer be generated because the
operations of the City have materially changed or been discontinued, such Disclosure
Information need no longer be provided if the City includes in the Disclosure Information a
statement to such effect; provided, .however, if such operations .have been replaced by other City
operations in respect of which data is not included in the Disclosure Information and the City
determines that certain specified data regarding such replacement operations would be a Material
Fact as defined in paragraph 2 hereof), then, from and after such determination, the Disclosure
Information shall include such additional specified data regarding the replacement operations.
34
If the Disclosure information is changed or this Section 13.02 is amended in accordance
with its terns, then the City shall include in the next Disclosure Information to be delivered
hereunder, to the extent necessary, an explanation of the reasons for the amendment and the
effect of any change in the type of financial information or operating data provided.
(2) In a timely manner, notice of the occurrence of any of the following events which is a
Material .fact (as hereinafter defined):
and
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(C) Unscheduled draws on debt service reserves reflecting financial difficulties;
(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or tier failure to perform;
(F) Adverse tax opinions or events affecting; the tax-exempt status of the security;
(G) Modifications to rights of security holders;
(H) Bond calls;
(1)
Q) Release, substitution, or sale of property securing repayment of the securities;
(K) Rating changes.
As used herein, a "Material Fa.et" is a fact as to which a substantial likelihood exists that
a reasonably prudent investor would attach importance thereto in deciding to buy, bold or sell a
Series 2005 Bond or,., if not disclosed, would significantly alter the total information otherwise
available to an investor from the official Statement information disclosed hereunder or
information generally available to the public. Notwithstanding the foregoing sentence, a
"Material Fact" is also an event that would be deemed "material" for purposes of the purchase,
holding or sale of a Series 2005 Bond within the meaning of applicable federal securities lags, as
interpreted at the time of discovery of the occurrence of the event.
(3) In a timely manner, notice of the occurrence of any of the following everts or
conditions:
(A) the failure of the City to provide the Disclosure information at the time
special under "Annual Information"' above;
B the amendment or supplementing of the Disclosure Covenants
pursuant to the Resolution, together with a copy of such amendment or
supplement and any explanation provided by the City under the Disclosure
Covenants;
(C) the termination of the obligations of the City under the Disclosure
Covenants pursuant to theResolution; and
(D) any change 1n the Fiscal Year of the City.
35
13.03. Manner of Disclosure. The City agrees to make available the i for .at .on
described in Section 13.02 to the following entities by teleco y, overnight delivery, mail or other
.means, as appropriate:
(1) the information described in paragratph 1. of Section 13.02, to each then nationally
recognized municipal securities information repository under the Rule and to any state
information depository then designated or operated by the State of Fontana as contemplated by
the Rule (the :'State .depository"'), if any;
(2) the information described in paragraphs ) and 3) Section 13.02, to the Municipal
Securities Rulemaking Board and to the State .Depository, if any.
In addition, any filing under this Section 1.3 may be made solely by transmitting such
filing to the `texas Municipal Advisory Council "MAC" as provided at
htt www.disclos re sa.or , unless the United States Securities and Exchange Commission has
withdrawn the interpretative advice In its letter to MAC dated September 7, 2004.
Term; Amendments; Interpretation.
(1) The covenants of the City in this Section 13 shall remain in effect so long as any
Series 2005 Bonds are outstanding. Notwithstanding the preceding sentence, however, the
obligations of the City under this Section 1.3 shall terminate and be without further effect as of
any date on which the City files in the office of the City Clerk an opinion of Bond Counsel to the
effect that because of legislative action or final judicial or administrative actions or proceedings,
the failure of the City to comply with the requirements of this Section 1.3 will not cause
participating underwriters in the primary offering of the Series 2005 Bonds to be in violation of
the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended,
or any statutes or laws sccessory thereto or amendatory thereof.
(2) This Section 13 (and the form and requirements of the Disclosure Information) may
be amended orsupplemented by the pity from time to t men Without notice to(except as
provided in paragraph .1.3.02(3) hereof) or the consent of the owners of any Series 005 Bonds,
by a resolution of the City Council filed in the office of the City Clerk accompanied by an
opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion
may be subject to customary qualifications, to the effect that: i such amendment or supplement
(a) is .made 1n connection with a change in circumstances that arises from a change in law or
regulation or a change in the identity., nature or status of the City, the Urban Renewal Area or the
Tax Increment Fund or the type of operations conducted by the City or the Urban Renewal Area,
or b is required by, or better complies with, the provisions of paragraph b5 of the Rule; ii
this Section 13 as so amended or supplemented would have complied with the requirements of
paragraph b of the Rule at the time of the primary offering of the Series 2005 Bonds, giving;
effect to any change in circumstances applicable under clause i)(a) and assumin that the Rule
as in effect and interpreted at the time of the amendment or supplement was in effect at the time
of the primary offering; and iir) such amendment or supplement does not materially impair the
interests of the Bondowners under the Rule.
3€
If the Disclosure Information is so amended, the City agrees to provide,
contemporaneously with the effectiveness of such amendment, an explanation of the reasons for
the amendment and the effect, if any, of the change in the type of financial information or
operating data being provided hereunder.
(3) This Section 13 is entered into to comply with the continuing; disclosure provisions of
the Rule and should be construed so as to satisfy the requirements of paragraph of the
Rule.
1.3.05. Further Limitation of Liability of Cit . n and to the extent the limitations of
liability contained in Section 13.01 are not effectivel anything contained in this Section 1.3 to the
contrary notwithstanding, in making the agreements, provisions and covenants set forth in this
Section 1, the City has not obligated .itself except with respect to the Tax Increment and other
amounts specifically pledged -under this Resolution. None of the agreements or obligations of
the City contained herein shall be construed to constitute an indebtedness of the City within the
meaning of any constitutional or statutory provisions whatsoever or constitute a pledge of the
general credit or taxing powers of the City.
Section 14. Repeal. All provisions of ordinances, resolutions and other actions and
proceedings of the City which are in any way inconsistent with the tees and provisions of this
Resolution are repealed, amended and rescinded to the full extent necessary to dive full .force and
effect to the provisions of this Resolution.
Section 15. Effective Date. This Resolution shall. be in full force and effect from and
after its final passage and approval according to law.
PASSED SSE AND APPROVED y the City Council of the City of Kalispell, Montana, this
6th day of September, 2005.
Attest:
City Clerk
37
No.
EXHIBIT A
FORM OF SERIEs 200 A BONDS
UNITED STATES OF AMERICA
STATE of M NTANA
COUNTY of FLATHEAD
CITY OF KALISPELL
TAX INCREMENT URBAN RENEWAL BOND
SERIES 2005A (Non-AMT)
Interest Stated Date of
Rate Maturity Orl2al Issue CISI.
% July 1, September 15, 2005
REGISTEREDOWNER:
PRINCIPAL ,AMOUNT:
FOR VALUE RECEIVED, THE CITY' of KA I SPELL (the"City"'), a duly organized
municipal corporation located in Flathead County, Montana, acknowledges Itself to be specially
indebted and hereby promises to pay to the registered owner specified above or registered
assigns, solely from the 'ax Increment received by the City from its Urban Renewal Area (as
hereinafter defined) which has been pledged and appropriated for the payment hereof as stated
below, the principal amount specified above on the maturity date specified above, or, if this
Bond is prepayable as stated below, on an earlier date on which it shall have been duly called for
redemption, with interest thereon from the date of original issue hereof, or such later date to
which interest hereon has been paid or duly provided for, until the principal amount is paid or
until this Bond, if prepayable, has been duly called for redemption, at the annual rate specified
above. Interest hereon is payable semiannually on January 1. and July 1 in each year,
commencing January 1., 2006, by check or draft drawn on U.S. Bank National Association, in
Seattle, Washington, as Bond Registrar, Transfer Agent and Paying Agent, or its successor
designated under the Resolution described herein(the "`Bond Registrar"), mailed to the
registered owner of this Bond as such appears of record in the bond register as of the close of
business on the I5th day (whether or -not a business day) of the immediately preceding month.
The principal of this .fond is payable upon presentation and surrender .hereof at maturity or
earlier redemption at the principal office of the Bond Registrar. Such principal and interest are
payable in lawful money of the United States of America.
A-.
Notwithstanding any other provisions of this Bond, so long as this Bond 's registered in
the name of Cede & Co., as nominee of The Depository Trust Company, y, or in the name of any
other nominee of The Depository Trust Company or other securities depository, the Registrar
shall pay all principal or and interest on this Bond, and shall give all notices with respect to this
Bond, only to Cede & Co. or other nominee in accordance with the operational arrangements of
The Depository Trust Company or other securities depository as agreed to by the City.
This Bond is one of a duly authorized issue of Bonds of the City designated as `"Tax
Increment Urban Renewal Revenue Bonds'" (collectively, the "Bon.ds") issued and to be issued
in one or more series under, and all equally and ratably secured by Resolution No. 5051, adopted
by the City Council on September 6, 2005 as amended or supplemented in accordance with the
provisions thereof, 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, the
respective rights thereunder of the owners of the Bonds and the City and the terms upon which
the Bonds are to be issued and delivered. As provided in the Resolution, the Bonds are issuable
in series which may vary as in the Resolution provided or permitted. This Bond is one of the
series specified in its title, issued in the aggregate principal amount of $1,445,000 (the ""Series
00 A Bonds"), all of like date of original issue and tenor except as to serial nurn.beir,
denomination, date, interest .rate, maturity date and redemption privilege. The Series 200 A
Bonds are issued by the City simultaneously with the City" s Tax Increment Urban Renewal
Revenue Bonds, Series 200 B (AMT), in the aggregate principal amount o $555,000 (the
"Series 200 B Bonds") for the pose of financing a portion of the cost of construction of urban
renewal projects within the City of Kalispell Airport/Athletic Complex Urban Renewal District
(the "Urban Renewal Area'') of the City} thereby assisting a tiv .ties in the public interest and for
the public welfare of the City.
The Series 2005A Bonds and the Series 2005B Bonds collectively, the ":Series Zoo
Bonds"" are 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
mended (the "'Act"'), and pursuant to the Resolution. The Bonds are payable solely and ratably
from. Tax Increment received by the City and resulting from the extension of ad valorem taxes
levied by certain Taxing Bodies against the incremental taxable value of properties within the
Urban Renewal Area pursuant to the Act, except that under certain conditions as described in the
.resolution, the Bonds may be payable from replacement revenues, if any, provided in the event
of the abolition or substantial elimination of property taxation in Montana.
The Bonds are not general obligations of the City and the City's general credit and taxing
powers are not pledged to the payment of the Bonds or the interest thereon. The Bonds shall not
constitute an indebtedness of the City within the meaning of any constitutional or statutory
limitations.
Series 200 A Bonds maturing in the years 201.1. through 2012 are not subject to
redemption, but Series 200 A Bonds having stated maturities in 201.3 and later years are subject
to redemption at the option of the City and in whole or in part, and it in part from such stated
maturities and in such principal amounts as the City may designate and, within a stated maturity,
in $5,000 principal amounts selected by lot or other manner deemed fair, on January 1, 2013, and
A-2
any date thereafter, at a redemption price equal to the principal amount to be redeemed with
interest accrued to the date of redemption without premium.
Notice of redemption will be railed at least 30 days before the redemption date to the
registered owner of each Series 2005A Bond to he redeemed; provided that any defect in or
failure to give such mailed notice shall not affect the validity of proceedings for the redemption
of any Series 2005A. Bond not affected thereby. All Series 2005A Bonds or portions thereof so
called for redemption will cease to bear interest on the specified redemption date, provided funds
for their redemption have been duly deposited and, except for the purpose of payment, shall no
longer be secured by the resolution and shall not he deemed outstanding; under the Resolution.
Upon partial redemption of any Series 2005A Bond, one or more new Series 2005A Bond or
.Bonds will be delivered to the registered owner without charge, representing the remaining
.principal amount not so redeemed.
If provision is made for the payment of principal of and interest on this Series 2005A
Bond in accordance with the resolution, this Series 2005A 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 Bondowners 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 13ond 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 to 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 Series 2005A 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 Series 2005A Bond is transferable upon the books of the City at the principal
office of the Bond Registrar, 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 Bond Registrar, duly executed by the registered owner or his attorney; and
may also be surrendered in exchange for Series 2005A Bonds of other authorized denominations.
Upon such transfer or exchange, the City will cause a new Series 2005A Bond or Bonds 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 or exchange.
A-3
The City, the Bond Registrar and Paying Agent may deem and treat the Person in whose
name this Series 2005A Bond is registered as the absolute owner hereof, whether this Series
2005A Bond is overdue or not, for the purpose of receiving payment and for all other purposes,
and neither the City, the Bond Registrar nor the Paying Agent shall be affected by any notice to
the contrary.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things
required by the Constitution and laws of the State of Montana and ordinances and resolutions of
the City to be done, to exist, to happen and to be performed in order to make this Series Zoo
Bond a valid and binding special, limited obligation of the City in accordance ce with its terms have
been done, do exist, have happened and have been performed as so .required; that this Series
00 A 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 owners from time to time of all .fonds issued
thereunder, including covenants that it will pledge, appropriate and credit the Tax Increment
derived from the Urban Renewal .Area to the Tax Increment Debt Service Fund of the City; that
additional. bonds may be issued and made payable from the TaxIncrement Debt Service Fund on
a parity with the Series 2005 Bonds 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 2005 Bonds 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 2005 Bonds does not cause the obligations of the City to exceed any constitutional
or statutory limitation.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Resolution until the Certificate of Authentication hereon shall have
been executed by the Bond Registrar by the manual signature of are authorized representative.
A-
1N WITNESS WHEREOF, the City of Kalispell, Montana, by its City Council, has
caused this Bond to be executed by the facsimile signatures of the Mayor, the City Clerk and
Finance .director and has caused this Bond to be dated as of the date set fort. below.
Dated
(Facsimile Signature)
Mayor
(Facsimile Signature)
Finance Director
CITY of KALISPELL, MONTANA
(Facsimile Signature)
City Clerk
CERTIFICATE of AUTHENTICATION
This Bond 1s one of the Tax Increment Urban Renewal Revenue Bonds, Series 2005A
(Nora -AMA) delivered pursuant to the Resolution mentioned within.
U.S. Bank National Association,
s Bond Registrar, 'transfer
Agent and raying Agent
y
Authorized Representative
The following abbreviations, when used in the inscription on the face of this Bond, shall
e construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common UTMA ............as Custodian for . ............ .
(Cost) (Minor)
TEN ENT -- as tenants by ent .ret .es under Uniform Transfers to Minors Act .........
(State)
JT TEN -- as joint tenants with right of survivorship and not as tenants in common
.Additional abbreviations may also be used though not in the above list.
A-
ASSIGNMENT
FOR VALUED RECEIVED the undersigned hereby sells, assigns and transfers ers unto
the within Bond and all rights thereunder, and
hereby irrevocably constitutes and appoints attorney to transfer
the within Bond on the books kept for registration thereof, with full poorer of substitution in the
premises.
Date:
PLEASEINSERT SOCIAL SECURITY
R OTHER IDENTIFYING NUMBED..
OF ASSIGNEE:
SIGNATURE GUARANTEE:
NOTICE: The signature to this Agreement
rust correspond with the name as it appears
upon the face of the within Bond in every
particular, ular, without alteration or enlargement
or any charge whatsoever.
Signatures must be pzuaranteed by an "eligible
guarantor institution'' meeting the requirements
of the Bond Registrar, which requirements include
membership or participation in the Securities
Transfer Association Medallion Program (STAMP)
or such other '"signature guaranty program"
determined to be acceptable by the Bond Registrar
in addition to or in substitution for SWAMP, all
in accordance With the Securities Exchange
.act o. 3, as amended.
A-
EXHIBIT
FORM of SERIES 2005B BONDS
UNITED STATES of AMERICA
STATE OF MONTANA.
COUNTY of FLATHEAD
CITY OF KALISPELL
TAX INCREMENT URBAN RENEWAL BOND
SERIES 2005B (AMT)
No.
Interest Stated Bate of
Rate M Original Issue CUSI
% July I., September 1.5, 2005
REGISTERED OWNER:
PRINCIPAL .AMOUNT:
FOR VALUE RECEIVED, THE CITY OF KA S ELL (the ""City""), a duly organized
municipal corporation located in Flathead County, Montana, acknowledges itself to be specially
indebted and hereby promises to pay to the registered owner specified ed above or registered
assigns, solely from. the Tax Increment received by the City from its Urban .renewal Area as
hereinafter defined) which has been pledged and appropriated for the payment hereof as stated
below, the principal amount specified above on the maturity date specified above, or, If this
Bond is prepayable as stated below, on an earlier date on which it shall have been duly called for
redemption, with interest thereon from the date of original. issue hereof, or such later date to
hieh interest hereon has been paid or duly provided for, until the principal amount is paid or
until this Bond, if prepayable, .has been duly called for redemption, at the annual rate specified
above. Interest hereon is payable semiannually on January I and July I in each year,
commencing January 1, 2006, by cheek or draft drawn on U.S. Bank National Association in
Seattle, Washington, as Bond Registrar, Transfer Agent and Paying Agent, or its successor
designated under the Resolution described herein (the "Bond Registrar"'), mailed to the
registered owner of this Bond as such appears of record in the bond register as of the close of
business on the 1th day (whether or not a business day) of the immediately .reeding month.
The principal of this Bond is payable upon presentation and surrender hereof at maturity or
earlier redemption at the principal office of the Bond .registrar. Such principal and interest are
payable in lawful. money of the United States of Arneriea.
Notwithstanding any other provisions of this Bond, so long; as this Bond is registered 1n
the name of Cede & Co., as nominee of The Depository Trust Company, or in the name of any
other nominee of The Depository 'fist Company or other securities depository, the Registrar
shall pay all principal of and interest on this Bond, and shall give all notices with respect to this
Bond, only to Cede & Co, or other nominee in accordance with the operational arrangements of
The Depository Trust Company or other securities depository as agreed to by the City.
,his Bond is one of a duly authorized issue of Bonds of the Cite designated as "Tax
Increment Urban Renewal Revenue Bonds" (collectively, the `�- onds"), issued and to be issued
in one or more series under, and all equally and ratably secured by Resolution No. 505 1., adopted
by the City Council on September 6, 200 (as amended o.r supple rented in accordance with the
provisions thereof, 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,, the
respective rights thereunder of the Owners of the Bonds and the City and the terms upon which
the Bonds are to be issued and delivered. As provided in the Resolution, the Bonds are issale
in series which may vary as in the Resolution provided or permitted. This Bond is one of the
series specified in its title, issued in the aggregate principal amount o 5,000 (the "Series
2005B Bonds"), all of like date of original issue and tenor except as to serial number.
denomination', date, interest rate, maturity date and redemption privilege. The Series 2005
Bonds are issued by the City simultaneously with the C it ' s Tax Increment Turban. Renewal
Revenue Bonds, Series 2005A (Non-AMT), in the aggregate principal amount of $1,445,000 (the
'`Series 2005A Bonds") for the purpose of financing a p rfl_on of the cost of construction of urban
renew -al projects within the City of Kalispell Airport/Athletic Complex Urban Renewal District
(the '"Urban Renewal Area'') of the City, thereby assist.ing activities in the public interest and for
the public welfare of the City.
The Series 2005B Bonds and the Series 2005A Bonds (collectively, the "Series Zoo
Bonds'~) are 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, Farts 42 and 43, as
amended the `Act"), and pursuant to the Resolution, The ,fonds are payable .solely and ratably
from Tax Increment received by the City and resulting from the extension of ad valorem taxes
levied by certain Taxing Bodies against the incremental taxable value of properties within the
Urban .general ,Area pursuant to the Act,, except that ender certain conditions as described in the
Resolution, the Bonds may be payable from replacement revenues, if any, provided in the event
of the abolition or substantial elimination of property taxation in Montana.
The Bonds are not general obligations of the City and the City's general credit and taxing
powers are not pledged to the payment of the Bonds or the interest thereon., The Bonds shall not
constitute an indebtedness of the City within the meaning of any constitutional or statutory
limitations.
The Series 200 B Bonds are not subject to redemption prior to their stated maturities.
If provision is made for the payment of principal of and interest on this Series Zoo
Bond in accordance with the Resolution, this Series 2005B 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.
B-2
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
.fonds at any time without the consent of any Bondowners 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 Bona.
The owner of this Bond shall have no right to enforce the provisions of theResolution',
or to 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 Series 2005B Bond is a negotiable investment security as provided in the Montana
'l nifor n Commercial Code, .As provided in the Resolution and subject to certain limitations set
forth therein, this Series 2005B .fond is transferable -upon the books of the City at the principal
office of the Bond Registrar, 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 Bond Registrar, duly executed by the registered owner or his attorney; and
may also be surrendered in exchange for Series 2005B Bonds of other authorized denominations,
Upon such transfer or exchange, the City will cause a new Series 2005B Bond or Bonds to be
issued in the name of the transferee or registered owner, of the sane 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 or exchange,
The City, the Bond Registrar and Paying Agent may deem and treat the Person in whose
mine this Series 2005B Bond is registered as the absolute owner hereof, whether this Series
2005B Bond is overdue or not, for the purpose of receiving payment and for all other purposes,
and neither the City, the Bond Registrar .nor the Paying Agent shall be affected by any notice to
the contrary.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things
required by the Constitution and laws of the State of Montana and ordinances and resolutions of
the City to be done, to exist, to happen and to be performed in order to make this Series 2005B
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 Series
2005E :fond 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 owners from time to time of all Bonds issued
thereunder, including covenants that it will pledge, appropriate and credit the Tax Increment
derived from. the Urban Renewal .area to the Tax Increment Debt Service Fund of the City; that
additional bonds may be Issued and made payable from the Tax Increment Debt Service Fund on
a parity with the Series 200,50 Bonds upon certain conditions set forth in the Resolution, but no
B-3
obligation will be otherwise incurred and made payable from. the Tax Increment, mess the lien
thereof shall be expressly made subordinate to the Ileti of the Series Zoo 'Bonds 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 2005 Bonds does not cause the obligations of the City to exceed any constitutional
or statutory lir.ltatiorl.
This Bond shall not be valid or become obligatory a.tory for any purpose or be entitled to any
security or benefit under the Resolution until the Certificate of Authentication hereon shall have
been executed by the :fond Registrar by the manual signature of an authorized representative.
IN WITNESS WHEREOF, the City of Kalispell, Montana, by its City Council, has
caused this Bond to he executed by the facsimile signatures of the Mayor, the City Clerk and
Finance Director and has caused this Bond to he dated as of the date set forth below.
CITY of KAISPELL, MONT N
(Facsimile Signature) (Facsimile Signature)
Mayor City Clerk
(Facsimile S'19 nature
Finance Director
ONE
Dated:
CERTIFICATE OF AUTI' CA'ON
This Bond is one of the Tax Increment t Urban Renewal Revenue Bonds, Series 2005
AM delivered pursuant to the Resolution mentioned within.
U.S. Bank rational Association,
as Bond Registrar, Transfer
Agent and Paying Agent
Authorized Representative
The following abbreviations, when used in the inscription on the face of this Bond, shall
be construed as though they were written out in full according to applicable laws or regulations:
E'EN COM - - as tenants in common UTMA ............as Custodian for ....... . .... .
(Cost)(Minor)
N ENT -- as tenants by entireties Under Uniform Transfers to Minors Act......... .
(State)
IT TEN -- as Joint tenants with right of survivorship and not as tenants in common
Additional abbreviations .may also be used though not in the above list.
ASSIGNMENT
FOR VALUED RECEIVED the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder, and
hereby irrevocably constitutes and appoints attorney to transfer
the within .fond on the books kept for registration thereof, with full power of substitution in the
premises.
Date:
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE:
SIGNATURE GUARANTEE:
Signatures must be guaranteed. by a "eligible
guarantor institution*' meeting the requirements
of the Bond Registrar, which requirements ents include
membership or participation in the Securities
Transfer Association Medallion .Program (STAMP)
or such other "signature guaranty program"'
detennined to be acceptable by the Bond .registrar
in addition to or 1r substitution for STAMP, all
in accordance with the Securities Exchange
Act of 1934, as amended.
NOTICE: The signature to this Agreement
must correspond with the name as it appears
upon the face of the within Bond in every
particular, without alteration or enlargement
or any change whatsoever.