2005/03/21 Resolution 4990 - Calling for the Sale of Bonds - Airport ImprovementsCity of Kalispell
Charles A. xarball Office of City Attorney
City Attorney 312 First Avenue 'East
P.O, Box 1997
Kalispell, MT 59903-1997
MEMORANDUM
TO: Mayor Pamela B. Kennedy
and Kalispell City Council
Tel 406.758.7708
Fax 406,758,7771
charball@kiili-,pell.com
FROM: Charles Harball, City Attorney
James H, Patrick, City Manager
SUBJECT: Resolution 4990 to Authorize the Negotiated Sale of Up to
$2,000,000 of Tax Increment Urban Renewal Revenue
Bonds for the Kalispell City Airport Redevelopment Plan
MEETING DATE: Monday, March 21, 2005 Regular Council Meeting
BACKGROUND: On February 22, 2005 the Kalispell City Council adopted
Resolution 4978 calling for a public hearing on the proposed modification of the
Kalispell Urban Renewal Plan to approve a proposed project as an Urban Renewal
Project and to finance the Kalispell City Airport Redevelopment Plan through the
issuance of tax increment urban renewal bonds. The public hearing for the purpose
of taking public testimony took place March 7, 2005. Dorsey and Whitney, bond
counsel for the City, has reviewed the City's proposal and, in conference with D.A.
Davidson, recommends that the City negotiate for the sale of up to $2,000,000 of
twenty year tax increment urban renewal revenue bonds.
RECOMMENDATION: That Council consider and pass resolution 4990
authorizing the negotiated sale of bonds for the purpose of financing the Kalispell
City Airport Redevelopment Plan.
FISCAL EFFECTS: The City will be obligated for twenty years for the bonds
issued. Staff forecasts that it will have the necessary positive cash flow to pay the
bond obligation and the investment will ultimately increase the value of the airport
to the City,
Respectfully submitted,
Charles' arb.-, , City Attorney'James H. Patrick, City Manager
RESOLUTION NO. 4990
RESOLUTION RELATING TO UP TO $25000,000 URBAN RENEWAL AIRPORT TAX
INCREMENT REVENUE BONDS, SERIES 2005; AUTHORIZING THE ISSUANCE
AND PRIVATE NEGOTIATED SALE THEREOF FOR THE PURPOSE OF
FINANCING A PORTION OF THE COSTS OF AN AIRPORT URBAN RENEWAL
PROJECT SUBJECT TO RATIFICATION AND APPROVAL BY THE CITY
COUNCIL; AND DELEGATING CERTAIN DUTIES RELATED THERETO TO THE
MAYOR, CITY MANAGER AND FINANCE DIRECTOR.
BE IT RESOLVED by the City Council (the "Council") of the City of Kalispell,
Montana (the "City"), as follows:
Section 1. Recitals.
1.01. Under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts 42
and 43 (the "Act"), the City is authorized to create an urban renewal area. 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
area, issue its bonds to pay the costs of such projects and pledge to the repayment of the bonds
the tax increment and other revenues derived from projects undertaken within the urban renewal
area.
1.02. Pursuant to Ordinance No. 1242, adopted July 1, 1996, the City Council approved
and adopted the Kalispell City Airport/Athletic Complex Redevelopment Plan (the "Plan") and
created its City Airport/Athletic Complex Urban Renewal District (the "Airport Urban Renewal
District") as an urban renewal district under the Act.
1.03. The goals and objectives as stated in the Plan are:
1. to minimize hazards to navigation;
2. to develop the airport in accordance to any airport layout plan;
3. to increase development opportunities on nearby properties;
4. to promote compatible land use in and around the airport; and
5. to establish a funding mechanism for airport operations.
It has been proposed that to further the City's goals and objectives as stated in the Plan,
the City should finance certain improvements in the District, consisting of. the purchase of land
and improvements currently owned by Red Eagle Aviation; the northwest ramp and taxiways;
northwest utilities; an internal vehicle access road (16' wide); and the engineer's construction of
the automatic vehicle security gate (collectively, the "Project Improvements"). The estimated
cost of the Project Improvements is $1,700,000_
1.04. Pursuant to the Act and the procedures contained in the Plan, the City by
Resolution No. 4978, approved by the City Council on February 21., 2005, called for a public
hearing on the Project. A public hearing was held on March 7, 2005. Pursuant to Resolution No.
4989, adopted simultaneously herewith (the "Resolution"), the City designated and approved the
Project Improvements as an Urban Renewal Project. The Project Improvements may be
constructed by the City pursuant to the Plan and may be financed in whole or in part from
proceeds of Urban Renewal Airport Tax Increment Revenue Bonds.
1.05. The Council has investigated the facts necessary and hereby finds, determines and
declares it to be necessary and desirable for the City to offer for sale $2,000,000 of its Urban
Renewal Airport Tax Increment Revenue Bonds, Series 2005, for the purpose of financing the
above referenced Project, and paying certain costs incidental to the sale and issuance of the
Bonds and to establish the debt service reserve securing the Bonds.
1.06. The bonds shall not pledge the general credit of the municipality and shall be
payable solely from the tax increment revenues hereinafter described. The City Finance Director
has preliminarily determined that estimated tax increment to be received in the district, based on
the tax increment revenues received in the preceding fiscal years, will be sufficient to pay the
principal of and interest on the $2,000,000 in principal amount of Tax Increment Urban Renewal
Bonds payable over a term of 20 years.
Section 2. Declaration of Intention to Sell Bonds -Term of Bonds. Pursuant to the
authority described above and the Act, this Council declares its intention to issue and sell the
City of Kalispell Airport Urban Renewal District Tax Increment Bonds in an aggregate principal
amount not to exceed $2,000,000, for the purpose of providing funds to finance a portion of the
costs of the Project, and for funding certain costs incidental to the sale and payment of the
Bonds, including the establishing of a debt service reserve. The Bonds shall be dated as of the
date of original issue, shall be issued in one series designated Series 2005, and shall bear interest,
payable semiannually January 1 and July 1 of each year commencing January 1, 2006, payable
over a term not to exceed 20 years.
Section 3. Sale of Bonds; Bond Purchase Agreement. Pursuant to the Act, this Council
hereby determines that it would be in the best interests of the City to sell the Bonds at a private
negotiated sale to D.A. Davidson & Co., of Great Falls, Montana (the "Underwriter"), The City
Manager and City Finance Director along with the City Attorney and Dorsey & Whitney LLP,
the City's bond counsel, are hereby authorized and directed to work with the Underwriter to
establish the appropriate terms and conditions for the sale of the Bonds, and the City Manager
and Finance Director are hereby authorized to negotiate the purchase price, redemption features,
and interest rate on the Bonds and make recommendations to the City Council. Upon final
approval of the interest rate, purchase price, and other terms and conditions of the sale of the
Bonds, the City Manager and Finance Director shall be authorized to execute and deliver on
behalf of the City a Bond Purchase Agreement.
Section 4. Official Statement. The City Manager and City Finance Director with the
City Attorney and Dorsey & Whitney LLP, the City's bond counsel, are authorized to prepare on
behalf of the City an Official Statement, to be distributed by the Underwriter to prospective
purchasers of the Bonds. The Official Statement shall contain such information as shall be
advisable and necessary to describe accurately the City, the security for, and the terms and
conditions of, the Bonds. The City Manager and City Finance Director along with the City
Attorney are authorized on behalf of the Council to deem. the Official Statement near "final" as
of its date, in accordance with Rule 15c2-12(b)(1) under the Securities Exchange Act of 1934.
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The form of the Bonds and the final terms and conditions thereof shall be prescribed by a
subsequent resolution to be adopted by this Council.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL THIS 21 ST DAY OF MARCH, 2005.
ATTEST:
Theresa White
City Clerk
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Pamela B. Kennedy
Mayor