Resolution 3086 - Immanuel Lutheran Home Project$800,000 FIRST MORTGAGE NURSING HOME REVENUE BONDS
(IMMANUEL LUTHERAN HOME PROJECT) SERIES 1976
Issuer: City of Kalispell, Montana
Governing body; City Council
Kind, date, -time and place of meeting: a reguiar meeting, held on
October 4 1976, at 700 o'clock P.M., in the, council chambers at
City Hall.
Members present: Councilmen Dale W. Williams; John C. Schwartz; Everit A-
Sliter; Francis T. 011�oyle; Lauren G. GTanmol, Howard G. Grainger; Forrest W. Daley;
Robert G. Allen
Members absent: None
Documents attached:
Minutes of said meeting (pages): 92 through 97
RESOLUTION NO. 3086
RESOLUTION AUTHORIZING A PROJECT UNDER TITLE
11, CHAPTER 41, REVISED CODES OF MONTANA 1947,
AS AMENDED, THE LEASING AND MORTGAGING THEREOF
AND THE ISSUANCE AND SALE OF $800,000 FIRST
MORTGAGE NURSING HOME BONDS (IMMANUEL LUTHERAN
HOME PROJECT) SERIES 1976; APPROVING THE DOCU-
MENTATION IN CONNECTION THEREWITH; AND AUTHORIZING
THE EXECUTION AND DELIVERY OF THE BONDS AND
DOCUMENTATION
I, the undersigned, being the duly qualified and acting
recording officer of the public corporation issuing the obligations
referred to in the title of this certificate, certify that the docu-
ments attached hereto, as described above, have been carefully
compared with the original records of said corporation in my legal
custody, from which they have been tran eribed; that said documents
of t
are a correct and complete transcrip f the minutes meeting
Minute s
of the governing body of said corp tio.., corr
Ya and Corr !t a d complete
tion'
copies of all resolutions and other actio/s taken nd o all docu-
, t/
ments approved by the qoverning/body at m t _,
Mee n a far as they
uly
h t Aaid g "'
relate to said obligations, a 'd t a meeinq/was uly held by
the governing body at the ire and p-l= nd wa/A at ended throughout
n 1,
by the members indicated vel pur t to ca nd notice of such
meeting given as requireZ�_c
I by law.
WITNESS my h�7nd officia y-a uc recording officer this
5fh day of October
11YA141-7 /Y/
George Beardslee, City Clerk
(SEAL) Name and Title
Councilman Lommzbsodv=w= EveritA. Sliterihtroduced the fLlowing
resolution.and moved its adoption!
RESOLUTION NO. 3086
RESOLUTION AUTHORIZING A PROJECT UNDER TITLE
11, CHAPTER 41, REVISED CODES OF MONTANA 1947,
AS AMENDED, THE LEASING AND MORTGAGING THEREOF
AND THE ISSUANCE AND SALE OF $860,000 FIRST
MORTGAGE NURSING HOME BONDS (IMMANUEL LUTHERAN
HOME PROJECT) SERIES 1976; APPROVING THE DOCUMEN-
TATION IN CONNECTION THEREWITH; AND AUTHORIZING
THE EXECUTION AND DELIVERY OF THE BONDS AND
DOCUMENTATION
BE IT RESOLVED by the City Council of the City of K41ispoW
Montana, as follows:
Section 1. Authorization and Recitals.
1.01. General Authority. The City is authorized by Title 11,
Chapter 41, Revised Codes of Montana 1947� as -amended (the Act), to
acquire by construction and purchase projects consisting of real
and personal properties suitable for use for long-term care facili-
ties, to issue revenue bonds for the piirpose of defraying the cost
of acquiring or improving such projects, and to lease such projects
to others upon such terms and conditions as the ' governing body of
the City shall deem advisable and as shall not conflict with the
provisions of the Act.
1.02. Proposed Project and Bonds. Representatives of D. A.
Davidson & Co., of Great Falis, Montana (the Underwriter) and
Immanuel Lutheran Horne (the Tenant), a Montana non-profit corpora-
tion, have proposed that the City, acting under and pursuant to
the Act, issue and sell to the Underwriter First Mortgage Nursing
Home Revenue Bonds (the Bonds) for the purpose of defraying a part
of the cost of acquiring and remodeling the existing long-term care
facility presently owned and operated by the Tenant in the City
(the Existing Facility) and constructing and equipping an addition
thereto (the Addition). Pursuant to the proposal, the Addition and
Existing Facility (collectively the Project) would be leased to the
Tenant upon net rentals sufficient to pay the principal of and
interest on the Bonds, fhe City would assign its interest in the
lease and the rentals therefrom and mortgage the Project to a trustee
as security for the Bcnds, the Tenant would be obligated to pay all
costs of remodeling, constructing and equipping the Project in excess
of Bond proceeds available therefor, the Tenant would have an option
to purchase the Project for a nominal consideration upon retirement
of all the Bonds, the Tenant would independently guarantee to the
trustee the payment of principal of and interest on the Bonds, and
the Bonds would be payable soleiy from the rentals and revenues
derived by the City from the Project.
1.03. Actions Previously Taken. On , 1976, this
Council called a hearing on the Project and the issuance of approxi-
mately $1,200,000 principal amount of Bonds as required by the Act.
The hearing was duly noticed and held on , 1976, at
which time all interested persons were given an opportunity to
appear and be heard. On , 1976, this council by
Resolution No. determined the Project and the issuance of
approximately $T-,200,000 principal amount of tond5 to be in the
public interest and authorized the execution of a letter of agree-
ment by and among the City, the Tenant and the Underwriter with
respect to the issuance and sale of the Bonds.
1.04. Project Cost. The Tenant has received bids and
awarded contracts for constructing the Addition and vemodeling the
Existing Facility. Based+,n such contracts and estimates of other
costs of the Project, the-14renant and underwriter have advised this
Council and this Council hereby finds that the estimated costs of
the Project at the present time are approximately as follows:
Cost of Construction, Re -modeling
and Equipping (including engineering
and architectural expenses) . . . . . . . . . 1% $830,000
Bond Discount . . . ... . . . . . . . . . . . $ 40,000
Initial Contribution to Reserve Fund . . . . $ 70,000
Legal, Administrative and Miscellaneous
Expenses . . . . . . . . . . . . . . . . . . $ 10,000
Total Cost $950,000
All costs of the Project in excess of the proceeds of the Bonds
available therefor will be paid by the Tenant.
1.05. Documentation. Forms for the following documents
'0_
relating to he Project have been prepared and submit-i-t-il +--
6 0,4
(a), Warranty Deed, dated as of October 1, 1976,
from the Tenant to the City covering the Existing
Facility;
(b) Lease (the Lease), dated as of October 1, 1976,
proposed to be made and entered into between the City and
the Tenant, providing for the acquisition, construction,
equipping and leasing of and setting forth proposed reci-
tals, covenants and agreements by the parties with respect
to the Project;
(c) Guaranty Agreement (the Guaranty), dated as of
October 1, 1976, proposed to be executed by the Tenant, as
Guarantor, pursuant to which the Guarantor unconditionally
guarantees the paymeftt of principal and interest on the Bonds;
(d) Mortgage and Indenture of Trust.(the Indenture),
dated as of October 1, 1976, proposed to be made and entered
into between the City and a state or national bank authorized
to act as trustee (the Trustee) and Approved by this Council,
the Underwriter and the Tenant,authorizing the issuance of
and establishing the terms and conditions of $800,000 First
Mortgage Nursing Home Revenue Bonds (Immanuel Lutheran Home
Project) Series 1976 (the Series 1976 Bonds), mortgaging the
Project, pledging the revenues therefrom and assigning the
City's interest in the Lease as and for the security of the
Series 1976 Bonds, and setting forth proposed recitals, coven-
ants and agreements by the parties with respect thereto&
Section 2.. f�indinqs_
It is hereby found, determined and declared that:
(a) the Project comprises real and personal properties
which shall be suitable for use as a long-term care facility as
contemplated by the Act;
(b) in authorizing the acquisition, construction and
equipment of the Project, and the financing thereof by the issu-
ance and sale of the Series 1976 Bonds and the leasing thereof to
the Tenant the City's purpose is and in its judgment the effect
thereof will be to promote the public welfare by encouraging the
provision of adequate health care and long-term care facilities
and services to residents of the City and surrounding area at
reasonable costs and upon equal terms, by improving employment
opportunities of present and future residents and by promoting
and stimulating economic activity within the City;
(c) the acquisition and construction of the Project,
the issuance and sale of the Series 1976 Bonds, the execution and
delivery of the Lease and the Indenture, and the performance of
all covenants and agreements of the City contained in the Lease
and the Indenture and of all other acts and things required under
the Constitution and laws of the State of Montana to make the
Lease, Indenture and Series 1976 Bonds valid and bindin4 obliga-
tions of the City in accordance with their terms, are authorized
by the Act;
(d) it is desirable that the Tenant be authorized, sub-
ject to the terms and conditions set forth in Article 3 of the
Lease, which terms and conditions the City determines to be neces-
sary, desirable and proper, to provide for the construction, acqui-
sition and equipment of the Project by such means as shall be
available to the Tenant and in the manner determined by the Tenant,
and with or without advertisement for bids as required for the con-
struction and acquisition of other municipal facilities;
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(e) it is desirable that the Series 1976 Bonds be issued
by the City upon the terms set forth in this Resolution and the
Indenture, under the provisions of which the City's interest in the
Lease and the rentals and other payments thereunder will be assigned
and pledged and the Project mortgaged to the Trustee as security
for the payment of principal, interest and redemption premiums on
the Bonds;
(f) the rentals charged in the Lease for the use of the
Project are sufficient (1) to pay the total principal of and interest
on the Series 1976,Bonds and the annual principal of and interest
when due on the Series 1976 Bonds in each of the years in which
said Bonds mature, (2) to pay the taxes on the Project, if any,
which Project during the term of the Lease shall be subject to
taxation to the same extent, in the same manner, and under the
same procedures as privately owned property in similar circumstances,
and to pay all other costs and expenses of the City in connection
with the Project and the issuance of the Series 1976 Bonds; and
the Lease also provides that the Tenant is required to pay all
expenses of the operation and maintenance of the Project including,
but without limitation, adequate insurance thereon and insurance
against all liability for injury to persons or property arising
from the operation thereof, and special assessments levied upon
or with respect to the leased premises and payable during the term
of the Lease and that upon retirement or discharge of the Series
1976 Bonds in accordance with their terms, the Tenant shall have
the option to purchase the Project for a nominal consideration;
(g) the balance in the Reserve Fund created by the
Indenture required to be established from proceeds of the Bonds
and payments made by the Tenant and thereafter maintained is
advisable and sufficient _'n connection with the Series 1976 Bonds
and no additional reserve is deemed necessary; and
(h) under the provisions of Section 11-4103, R.C.M. 1947,
and as provided in the Lease and Indenture and stated on the face
of the Series 1976 Bonds, the Series 1976 Bonds are limited obliga-
tions of the City payable solely from the rentals and other revenues
derived from the Project (except to the extent payable from proceeds
of the Series 1976 Bonds or the sale or condemnation of the Project
or insurance proceeds therefrom) and do not constitute a pecuniary
liability of the City or a charge against its general credit or
taxing powers.
Section 3. Authorization and Approval of the Project,
Lease, Indenture and Guaran .
The City is hereby authorized to acquire, provide for
construction and equipment of and mortgage the Project and pledge
and assign the rentals and revenues therefrom and its interest in
the Lease, all as provided in the Lease and Indenture. The forms
of Warranty Deed, Lease, Guaranty and Indenture referred to in
Section 1.05 are approved subject to such modifications as are
deemed appropriate and approved by the City Attorney and Mayor,
which approval shall be conclusively evidenced by execution of the
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Lease, Indenture and Series 1976 Bonds by the Mayor and City Clerk
and, where required, the City Treasurer. The Lease is �irected to
be executed in the name and on behalf -of the City by the Mayor and
City Clerk upon execution thereof by the Tenant. The Indenture is
directed to be executed in the name and on behalf of the'City by
the Mayor and City Clerk and delivered to the Trustee. Copies of
all of the documents shall be delivered, filed and recorded as
provided therein.
Section 4. The Series 1976 Bonds: Terms, Sale and
Execution.
4.01. In anticipation of the collection of revenues of the
Project, the City shall proceed forthwith to issue its First Mort-.
gage Nursing Home Revenue Bonds (Immanuel Lutheran Home Project)
Series 1976, dated as.of October 1, 1976, in the total principal
4.02. The Series 1976 Bonds shall be in the denomination of
*5,000 each (or, if issued in registered form, an integral multiple
thereof), and numbered consecutively from I to 1,160, inclusive,
and shall mature in order of serial numbers on October 1 in the
years and amounts set forth below:
Year
Amount
Year
Amount
1978
$20,000
1988
$40,000
1979
20,000
1989
40,000
1980
20,000
1990
45,000
1981
25,000
1991
45,000
1982
25,000
1992
50,000
1983
25,000
1993
55,000
1984
30,000
1994
60,000
1985
30,000
1995
65,000
1986
35,000
1996
65,000
1987
35,000
1997
70,000
The Series IR76 Bonds will bear interest at such rate or rates as
shall be agreed to by the Underwriter and the Tenant and approved
by this Council; provided that no such rate nor the net effective
interest rate shall exceed nine percent per annum. The interest
on each Series 1976 Bond shall be payable on April I and October 1,
commencing April 1, 1977, until the Bond is fully paid or discharged.
4.03. The Series 1976 Bonds maturing in the years 1987 and
thereafter shall be subject to redemption and prepayment, in inverse
order of serial numbers, on October 1, 1986, and any interest pay-
ment date thereafter, at their principal amount and accrued interest
plus the premiums, expressed as percentages or principal amount, set
forth in the following table for the designated redemption dates:
1�edemption Date
Premium
October
1,
1986
and
April
1,
1987
102
1/2%
October
1,
1987
and
April
1,
1988
102
%
October
1,
1988
and
April
1,
1989
101
1/2%
October
1,
1989
and
April
1,
1990
101
%
October
1,
1990
and
April
1,
1991
100
1/2%
October
1,
1991
and
thereafter
100
%
In addition, all Series 1976 Bonds shall be subject to redemption
at par and accrued interest on any interest payment date in the
event of damage to or destruction or condemnation of the Project
or upon the occurrence of certain events rendering the covenants
in the Lease impossible of performance and exercise by the Tenant
of its option to purchase the Project, all as more specifically
described in the Lease and Indenture.
1 4.04. The proposal of the Underwriter, to purchase the Series
1976 Bonds at a price of $760,000 plus accrued interest is hereby
found and determi to be reasona le and is hereby accQpted. The
Mayor, the City erk and City T,ieasu er are authorized and directed
to prepare and xec th S r"'es 1976 Bonds as prescribed herein an6
e 'er
in the Indent re a to d.ii r the to the Trustee, together with a
Zl�lv e
certified co y of this Resolitrion, he other documents required in tt
and s ch other Y/fertkf� ates, documents and instruments as
Indenture/
11 Z
may be appropr' te to ef ct t transaction herein contemplated.
Approyed:
ORKA E. RAPP, Mayor
The motion for the adoption of the foregoing resolution
was duly seconded by Member Robert G. Alle4 and upon vote being taken
thereon, the following voted in favor thereof: Councilmen Dale W.
Williams; John C. Schwartz; Everit A. Sliter; Francis T. OtBoyle; lauren G. Granmo;
Howara G. Grainger-, Porrest W. Daley; Robe3?� G. Allen
and the following voted against the same: NONE
whereupon said resolution was declared duly passed and adopted and
was signed by the Mayor and attested by the City Clerk., October 4,
1976.
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1, the undersigned, City C
a true copy of the Resolut
Montana at a regular meeti