Resolution 5123 - Fixing the Form and Details of Bonds - SID 344 - Old School StationRESOLUTION No, 5123
RESOLUTION RELATING NG TO SPECIAL IMPROVEMENT DISTRICT NO, 344
BONDS I
,, SERIES 2006s, FIXING THE FORM AND DETAILS AND PROVIDING FOR
THE EXECUTION AND DELIVERY THEREOF AND SECURITY THEREFOR
E IT RESOLVED by the City Council (the "City Council") of the City of Kalispell,
Montana (the "'City" ), as follows:
Section 1. Fecitals. It is hereby found, determined and declared as follows:
1.01. Estahlishmew of Special ernmvernent District No. 344.
(a) Intent Resolution. By Resolution No. 503, adopted October 3, 2005
(the "Intent Resolution"'), this City Council declared its intention to create Special
Improvement District No.3 (the ""District"')for the purpose of making public
improvements for the special benefit of the District. The Intent Resolution designated the
number of the District, described the boundaries t. creof, stated the general character o
the public improvements (the "Improvements") to be made in the District and specially
benefiting property located therein, and an estimate of the costs thereof, in accordance
with the provisions of Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as
amended (the "Act""). Pursuant to the Intent Resolution, this City Council also declared
its intention to cause the cost and expense of making the h prov rents to be assessed
against the properties included within the boundaries thereof in accordance with one or
more methods of assessment authorized in Sections -2- to 7-12-4165 of the; Act.
Capitalized terns used herein without definition shall have the meanings given there in
the Intent Resolution;
n the Intent Resolution, this City Council further found that it is in the public
interest, and in the best interest of the City and the District, to i secure payment of
principal of and interest on the Bonds by the Revolving Fund defined herein) of the
City, on the basis of the factors required to be considered under Section 7-12-4225 of the
Act, and (ji) establish a reserve account (the "`ReserveAccount") securing the Bonds in
the District Fund (as defined herein). Those prior findings are hereby ratified and
confirmed. This City Council, in the Intent Resolution, also declared its intention to
reimburse the City for costs paid before issuance of the Bonds, as required by Section
1.150-2 of the income Tax Relations promulgated under the Internal Revenue Code of
1986, as amended (the "'Code"").
N Notices. The City gave notice of the passage of the Intent Resolution as
required by Montana law , including Section -12- 1 (2) of the Act and Montana Code
Annotated, Section 7-1-2121,, by publication on October 18, 2005, October 25, 2005 and
November 1, 2005, in the Daily Inter Lake, a qualified newspaper of general circulation
in the City and Flathead County. .notice of the passage of the Intent Resolution was also
mailed to all persons, firms or corporations or the agents thereof owning real property
within the District listed in their names upon the last completed assessment roll for state,
county and school district taxes, at their last known addresses. The notice of passage of
the Intent Resolution, in accordance with the provisions thereof, stated the following: (i)
the general character of the Improvements; Hthe estimated cost of the Improvements;
(iii)the .method or methods of assessment of such costs against properties in the District;
Ov) the time when and the place where the City Council would hear and pass upon all
protests rude against the making of the Improvements or the creation of the District; v
referred to the Intent Resolution as being on rile in the office of the City Clerk for a
description of the boundaries of the .district; and v included a statement that, subject to
the limitations of Section 7-12- of the .Act, the general fund of the City may be used
to provide loans to the Revolving Fund or a general tax levy may be imposed on all
taxable property in the City to meet the financial requirements of the Revolving Fund.
(c) Formation of the District. At a regularly scheduled meeting on November 7,
Zoo , this City Council met to hear, consider and pass upon all pretests made against the
making of the Improvements and the creation of the District, ,Auer the public hearing
and deliberation, this City Council, pursuant to Resolution No. 5074, determined and
declared that insufficient protests against the creation of the District or the proposed work
had been filed in the time and manner provided by law by the owners of the property to
be assessed for the Improvements in the District. By Resolution No. 5074, in accordance
with the Intent Resolution, this City Council created the District and ordered the proposed
.improvements. This City Council, in Resolution No. 5074, also confirmed the findings it
previously made in the Intent Resolution with respect to the pledge of the Revolving
Fund and the establishment of the Reserve Account. The boundaries of the District havc
not been amended or altered since the passage of Resolution No. 5074.
1.02. Establishment of Tax Increment Districts Within the District. .pursuant to pursuant
to Montana Code Annotated, Title 7, Chapter 15, Part 42, as amended (the " IF Act"'), the City
has the power to establish tax increment districts for various purposes, including, but not limited
to the payment of costs of the Improvements and pledging tax increment to the payment o
special assessment bonds, such as the Bonds as defined herein).
(a) The Industrial TIF District. By Resolution No. Soo, adopted
October 17, 2005 (the "Industrial TIF Intent Resolution"), this City Council declared its
intention to establish an industrial tax increment district (the ".Industrial District") at Old
School Station (within the District) and call for a public hearing on the establishment or
the Industrial District, The Industrial TIF Intent Resolution designated the name of the
Industr*al District, described the respective boundaries thereof, and stated the reasons for
establishment of the Industrial District. By the Industrial TIF Intent Resolution, this City
Council also declared its intention to establish the Industrial TIF District for the purpose
of providing a financial mechanism to provide the necessary infrastructure support to
encourage the growth of secondary, value -adding industries in the City. Pursuant to the
Industrial TIF Intent Resolution, this City Council also preliminarily made the findings
required by Section " -14 299 I. of the TIF ,Act for the formation of an industrial tag
increment district such as the Industrial District.
fib) The TechnolqZy TIF District. By Resolution No. 5071, adopted October 17,
05 (the "Technology ology I Intent Resolution"), this City Council declared its intention to
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establish. a. technology tax increment ent district (the "Technology District's) at old School
Station (within the District) and call for a public hearing on the establishment ent of the
Technology District. The Technology TIF Intent Resolution designated the name of the
Technology District, described the boundaries thereof, and stated the reasons for
establishment of the Technology District. By the Technology I Intent Resolution, this
City Council also declared its intention to establish the Technology Distha for the
purpose of assisting in financing necessary industrial 'Infrastructure to encourage the
location and retention of technology development n.t projects in the City* Pursuant to the
Technology TIF Intent Resolution, this City Council also preliminarily made the findings
required by Section -5-42 of the TIF Act for the formation of a technology tax
increment district such as the Industrial District. {
(c) Public Hearings -on the Creation or the Industrial District and the
echnology District. This City Council, at is November 7, 2005 meeting, held public
hearings with respect to the creation of the Industrial District and the Technology
District, Notices of the public hearings with respect to both the Industrial District and the
Technology District were published in the Daily Inter .fake, a qualified newspaper o
general' circulation in the county in which the City is located, on October 25, 2005 and
November 1, 2005, as required by Montana law and the TIP .act. The notices of public
hearings for the Industrial District and the Technology District stated, respectively, that
the proposed ordinance for the creation of each tax increment district could be obtained
by contacting the City Clerk.
(d) of Tax Increment Districts. At a regularly scheduled meeting on
November 71, 2005, this City Council met and held public hearings with respect the
formation of both the Industrial District and the Technology District. After the public
hearing and deliberation with respect to the Industrial District, this City Council, pursuant
to ordinance No. 1557, established the Industrial District and set January 1, 2005 as the
base taxable year for the Industrial District. .Ater the public hearing and deliberation
with respect to the Technology District, this City Council, pursuant to ordinance No.
1558, established the Technology District and set January 1, 2005 as the base taxable
year for the Technology District, In ordinance No. 1557, this City Council confirmed
the preliminary findings established in the Industrial TIF Intent Resolution with respect to
the requirements of Section -1-421 of the 'I" Act. pursuant to Ordinance No.
15581, this City Council confirmed the preliminary fi-ndings established in the Technology
'CIF latent Resolution with respect to the requirements of Section - -42 of the TIF
Act. The boundaries of the Industrial TIF District and the Technology TIF District,
respectively, have not been amended or altered since the passage of Ordinance Nos. 1557
and 155 8.
(e) Pled of Tax Increments to the Bonds Generally. The Technology District
and the Industrial District are both looted within the boundaries of the District.
Pursuant to Section 7-1 -4290 of the TIF Act, the City may pledge tax 'increment
derived from an industrial tax increment district (such as the IDd stria District) or a
technology tax increment district (such as the Technology District) to the payment of
special assessment bonds (such as the Bonds) issued to pay industrial district are
technology district costs described iin Sections 7- 5-42 and 7-15-4289 of the TIF Act,
Pursuant to Section 7-15-4288 of the TIC' Act, eligible costs to be paid by the City with
tax increments include public improvements (such as the Improvements) authorized to
be made pursuant to the SID Act. Certain tax increment revenues derived from the
Technology District and the Industrial District will be available, to the extent provided
herein, for the payment of and pledged to the cost of the Improvcmerits or paying on the
Bonds (as more fully described herein. in Section 3.03).
. 1.03. Construction Contracts and Related Costs* Plans, specifications, maps, profiles and
surveys for construction of the Improvements were prepared by the engineers acting for the City,
and were thereupon examined and approved by this City Council, Am advertisement for bids for
construction of the Improvements was published 'in the Daily Inter Lake, the official newspaper
of the City, 1n accordance with the provisions of Section-12-4141 of the Act, after which the
bids theretofore received were opened and examined. .after reviewing the bids in discussion
with the engineers for the City, it was determined that the lowest regular proposal for the
furnishing of work and materials required for constructing the Improvements in accordance with
the approved plans and specifications was the following:
Work
Bdder-
Public Water Supply Improvements O'Keefe Drilling, Butte, Montana.
Infrastructure Improvements (streets, Schellin er Construction, Kalispell,
curb, gutter and sidewalk, storm Montana
drain, water, sewer and dry
utilities)
Contract
Price
99793 . 0
2J75,273.80
Contracts for the construction of the Improvements was therefore awarded to said bidders,
subject to the right of owners of property liable to be assessed for the costs thereof to elect to
take the work and eater into written contracts therefor in the manner provided by Section 7-12-
4147 of the Act, which election the property owners faired to make. Thereafter, the City and the
successful bidders entered into written contracts for construction of the Improvements upon the
bidders having executed and filed bonds satisfactory to this City Council and in the form and
manner provided by Montana Code Annotated, Title 1, Chapter 2, Part 2, as amended.
n addition to the above contracts for construction, the construction and equipping of a
water treatment building forming a part of the Improvements will require work arrd materials of
are ind pe de t contractor, the total direct costs of which are estimated to be $ 00,000.
1.04. Costs, It is currently estimated that the total costs and expenses of the
Improvements are $4, 2o,000 and that the casts and expenses to be assessed against properties
benefited by the Improvements, including costs of preparation of plans, specifications, reaps,
profiles, engineering superintendence and inspection, preparation of assessment rolls, expenses
of making the special assessments, the cost of work and materials under the construction contract
and all other costs and expenses, including the deposits of proceeds in the Revolving Fund and in
the Reserve Account in the restrict Fund, are 4,520,000. Such amount will be levied and
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assessed upon the assessable real property within the District on the basis described in the latent
Resolution, and the City will not contribute funds to the construction of the Improvements, other
than from proceeds of the Bonds,
This City Council has jurisdiction and is required by law to levy and assess $4, 20,000,
together with interest thereon, to collect such special assessments and credit the same to the
special improvement district fund created for the District (the District Fund created pursuant to
Section 3.01 hereof), which fund is to be maintained on the official hooks and records of the City
separate from all other City funds, for the payment of principal and interest when due on the
bonds herein authorized.
.05. Sale and Issuance of Bonds. Advertisements for bids for the purchase of the
Bonds were published in accordance with the provisions of Sections 7-12-42 , - - 252 of the
Act and Montana Code Annotated, Section 17-5 -10 , as amendvA After a public sale conducted
in accordance with applicable statutory provisions and pursuant to Resolution No. 5120, adopted
by the City Council on June 13, 2006, thi's City Council authorized the City to enter into a
purchase contract or bid form with D.A. Davidson & Co., of Great Falls, Montana (the
"Purchaser"), as the lowest responsible bidder (representing the lowest true interest cost Q
pursuant to which the Purchaser agreed to purchase from the City the Bonds at a purchase price
of 4,42 , 00.00, plus accrued interest, at the rates of interest and prices set forth in Section 2.01.
hereof'. The bid of the Purchaser represents a true interest cost of 4. 1558 and a total net
dollar interest cost of $2,2 4,352.83.
1.0Recitals. All acts, conditions and things required by the Constitution and laws of
the State of Montana, including the Act, as amended, in order to make the Bonds valid and
binding special obligations in accordance with their tens and in accordance with the tens of
this resolution have been done, do exist, have happened and have been performed in regular and
due form, time and manner as so required.
Section 2. Description of the Bonds,
2.01, P inci al Amount, Maturities, enorrrinations mate Interest Rates. For the
purpose of paying the costs and expenses incurred in construction of the Improvements, and i
anticipation of the collection of special assessments ents to be levied therefor, and in accordance with
the proposal described in Section 1.05, the City shall forthwith issue and sell the Bonds to the
Purchaser. The Bonds are payable solely from amounts deposited in Special Improvement
District No. 344 Fund (the "DistrictFund") the accounts and subaccouns establishers
therein. The Bonds small be denominated '"Special Improvement District No. 344 Bonds, Series
2006 The Bonds shall be dated, as originally issued, and be registered as of June 15, 2006,
shall each be in the denomination of $ ,coo or any integral multiple thereof of single maturities,
shall mature on July I in the years and principal amounts set forth below, and Bonds maturing in
such years and principal amounts shall bear interest from the date of original registration Until
paid or duly called for redemption at the rates per aninum set forth opposite such years and
amounts, respectively:
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Maturity
Principal
Interest
Bond
Year
Amount
Rate
Yield
Price
Zoo'
$225,00
3. 00%
3.700%
$225,000
0
2008
225 , o00
3.800
. 00
2253,000
2009
2257000
3.850
3.850
2257000
Zoo
225,7000
3.950
3.950
225.7000
2011
2251000
4.000
4.000
225,000
2012
225 A0
4.000
4.100
225 M00
2013
225POO
4,200
4.200
2259000
2014
225po
4.300
4.300
225,000
2015
2257000
4.400
4.400
225,00
2016
22 ,000
4.500
4.500
225,000
2017
22500
4.600
4.600
225,000
2018
225,000
4.700
4.700
2257000
2019
225 po
4.800
4.800
225,000
2020
2251000
4.900
4,900
225,000
2021
22 ,000
5.000
5.000
22500
2022
22500
5.050
5.050
225,000
2023
2305000
5.100
5.100
2309000
2024
230,000
5.100
5.100
230,000
2025
2305,000
5.100
5.100
230,000
2026
2309000
5.100
5.100
2303000
.principal of and interest on the Bonds are payable in lawful money of the United States o
America. Upon the original delivery of the Roads or upon transfer or exchange of Bonds, the
Registrar as hereinafter defined) shall date each Bond so delivered as of the date of its
a tbex t cation,
.02. Pint .dates. Interest on the Bonds shall be payable on each January 1 and
July 1, commencing January ary , 200 (each a "Payment Date"), , to the owners of record thereof as
such appear on the bond registrar at the close of business on the fifteenth 15THday of the
immediately preceding month, whether or not such day is a business day. Upon the on i a
delivery of the Bonds to the 'rchaser and upon each subsequent transfer or exchange of a Bond
pursuant to Section 2.04, the Registrar shall date each Bond as of the date of its authentication.
2.03. Method of Pavment. The Boinds shall be issued only in fully registered form. The
interest on and, upon surrender thereof at the operations center of the Registrar as hereinafter
defined), the principal of each Road, shall be payable by check or draft drawn on the Registrar.
2.04. Registration. The City hereby appoints U.S.. Bank National Association, of Seattle,
Washington, to act as bond registrar, transfer agent and paying agent (the "'Registrar"). The City
reserves the right to appoint a successor bond registrar, transfer agent or paying agent, as
authorized by the Model Public obligations Registration Act of Montana (the "Bond
Registration Act"). The City agrees to pay the reasonable and customary charges of the Registrar
for services performed with respect to the Bonds. This Section 2.0shall establish a system o
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registration for the Bonds as defined by the Bond Registration Act. The effect of registration and
the rights and duties of the City and the Registrar with respect thereto shall be as follows:
(a) Boni erg The Registrar- shall keep at its operations center a Bond
register in which the Registrar shall provide for the registration of ownership of Bonds
and the registration of transfers and exchanges of Bonds entitled to be registered,
transferred or exchanged.
(b) Transfer. Upon surrender for transfer of any Bond duly endorsed by the
registered owner thereof or accompanied by a written 'instrument of transfer, in form
satisfactory to the .registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, the Registrar shall
authenticate and delivers in the name of the desiated transferee or transferees, one or
.ore new Bonds of a like aggregate principal amount and maturity, as requested by the
transferor. The Registrar may, however, close the books for registration of the transfer of
any Bond to be selected or called for redemption.. No transfer or exchange of a Bond
shall affect its order of registration for purposes of redemption pursuant to Section 2.05
hereof,
(c) Exchan2e of Bonds. Whenever any Bond is surrendered by the registered
owner for exchange, the Registrar shall authenticate and deliver one or more new Bonds
of a like aggregate principal amount and maturity, as requested by the registered owner or
the owner's attorney duly authorized in writing.
(d) Cancellation. All Boards surrendered upon any transfer or exchange shall
be promptly canceled by the Registrar and thereafter disposed of as directed by the City.
(e) mro er or Unauthorized Transfer. When any Bond is presented to the
Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that
the endorsement on such Bond or separate instrument of transfer is valid and genuine and
that the requested transfer is legally authorized. The Registrar shall incur .no liability for
the refusal, in good faith, to make transfers which it, in its judgrnent, deers improper or
unauthorized,
(f) Persons Deemed owners} The City and the Registrar may treat the person
in whose name any Bond is at any time registered in the bond register as the absolute
owner of such Bond, whether s eb Bond shall be overdue or not,, for the purpose of
receiving payment of, or on account of, the principal of and interest on such Bond and for
all other purposes, and all such payments so made to any such r91
stered owner or upon
the owner's order shall be valid and effectual to satisfy and discharge the liability upon
such Bond to the extent of the sum or sums so paid.
(g) Faxes Fees and Cbarcres. For every transfer of Bods or exchange of
Bonds (except for an exchange upon the partial redemption of any Bond pursuant to
Section 2.05 hereof), the Registrar may impose a charge upon the owner thereof
sufficient to reimburse the Registrar for any tag., fee or other governmental charge
required to be paid with respect to such transfer or exchange.
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(h) Mutilated Lost Stolen or Destroyed Bonds} In case any Bond shall
become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond
of like amount, number, maturity date and tenor in exchange and substitution for and
upon oneation of any such mutilated .fond or ire lieu of and in substitution for any
such Bond destroyed, stolen or lost, upon the payment of the reasornable expenses and
charges of the Registrar in connection therewith and, in the ease of a Bond destroyed,
stolen or lost,, upon filing with the Registrar of evidence satisfactory to it that such Bond
was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the
Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to
it, in which both. the City and the Registrar shall be named as obligees. All Bonds so
surrendered to the Registrar shall be canceled by it and evidence of such cancellation
shall be given to the City. If the mutilated, destroyed, stolen or lost Bond has already
natured or such Bond has been called for redem tion in accordance with its terms, it
shall not be necessary to issue a new Bond prior to payment.
2.05. r edern tion.
(a) Mandatory Redemption. If on any Payment Date there will be a balance
in the District Fund after payment of the principal and interest due on all Bonds drawn
against it, either from the prepayment of special assessments levied in the District or from
the trasfer of surplus money from the Construction Fund to the Debt Service Fund as
provided in Section 3.02 or otherwise, the City Finance Director shall call for redemption
on the Payment Date outstanding Bonds, or portions thereof, in an amount which,
together with the interest thereon to the Payment Date, will equal the amount of such
funds on deposit in the District Fund on that date. The redemption price shall equal the
amount of the principal amount of the Bonds to be redeemed talus interest accrued to the
date of redemption. Tax Increments as defined herein) shah not be applied to
redemption of the Bonds pursuant to this Section 2.05(a).
(b) Optional Redemption.. The Bonds with stated maturities on or after
July 11 2014 are subject to redemption, in whole or in part, on July 1, 2013, and any date
thereafter, at the option of the City, in whole or in part, from sources of funds (including
Tax Increments) available therefor other than those described in Subsection a of this
Section 2, 5, at a redemption price equal to the principal amount thereof to be redeemed
plus interest accrued to the redemption date, without premium. However, the Bonds shall
not be called for redemption i from amounts on deposit in the Reserve account or ii
before July 1, 2013, from the proceeds of refunding special improvement district bonds
or warrants.
(c) Selection of Bonds for edem txon.• Partial Redemption. If less than all of
the Bonds are to be redeemed, Bonds shall be redeemed in order of the stated maturities
thereof. If less than all Bonds of a stated maturity are to be redeemed, the Bonds of such
maturity shall be selected for redemption in $5,000 principal amounts selected by the
Registrar by lot or other manner it deems fair. Upon partial redemption of a Bond, a new
Bond or Bonds will be delivered to the registered owner without charge, representing the
remaining; principal amount thereof outstand in .
on
(d) Notice and Effect of Redemption. The date of redemption and the
principal amount of the Bonds shall be fixed by the City Finance Director, who shall give
notice thereof to the Registrar in sufficient t time for the Registrar to give notice, by first
class mail, postage prepaid, or by other rears required by the securities depository, to
the owner or o v ers of such Bonds at their addresses appearing in the bond register, of
the numbers of the Bonds or portions thereof to be redeemed and the date on which
payment will be made, which date shall be not less than thirty 3 days after the date of
mailing ling notice. On the date so fixed interest on the Bonds or portions -thereof so
redeemed shall cease*
2.06. Form. The Bonds ds shall be drawn in substantially the form set forth in Exhibit A
hereto and by this reference made a part hereof, with such modifications as are permitted by the
Act.
2.07. Execution, -Registration and Delivery. The Bonds shall be prepared under the
direction of the City Clerk and shall be executed on behalf of the City by the signatures of the
y
Ma or and City Clerk, provided that the signatures and the corporate seal may be printed,
engraved or lithographed facsimiles of the originals. The seal of the City need not be impressed
or imprinted on any Bond. In ease any officer whose signature or a facsimile of whose signature
shall appear on the Bonds shall cease to be such officer before the delivery of any Bond, such
signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if
such officer had remained in office until delivery. Notwithstanding such execution, no Boind
shall be valid or obligatory for any purpose or entitled to any security or benefit under this
resolution unless a certificate of authentication and registration on such 13ond has been duly
executed by the manual signature of an authorized representative of the Registrar. Certificates of
authentication and registration on different Bonds reed not be signed by the same representative.
The executed certificate of authentication and registration on each fond shall be conclusive
evidence that it has beein authenticated and delivered under this resolution. The Bonds shall be
registered in order of their serial numbers by the Registrar, as attested by the Certificate of
Authentication, as of June 15, 2006. when the Bonds have been so executed, authenticated and
registered, they shall be delivered by the Registrar to the Purchaser upon payment of the
purchase price in accordance with the contract of sale heretofore made and executed.
2*0. Application of Bond Proceeds. The Purchaser shall not be obligated to see to the
application of the purchase price of the Bonds. The City Finance Director or her designee) shall
credit the proceeds of the Bonds (taking into account the Purchaser's discount o $90, 00.00) as
follows:
(a) $22 ,000.00 to the Revolving Fund, as required by Section -12- 1 9(2)
of the Act;
(b) $226,000.00 to Reserve .Account in the District Fund, as authorized by
Section -12 - 9(3) of the Act;
(c) $7,936.54 representing accrued interest to the Debt Service Fund in the
District Fund;
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(d) $40,000-00 the General Fund of the City for the City's administration fee
with respect to the District; and
(e) $3, 3 7, 00.0o to the Construction Fund in the District Fund for the cost o
the Improvements and the payment of costs of issuance for the Bonds.
2.09. Securities Devository.for. the Bonds.
(a) Definitions. For purposes of this Section 2.0, the following terms shall have
the following .meanings;
"Beneficial owner" shall mean, whenever used with respect to a Bond, the person
in whose name such Bond is recorded as the beneficial owner of such Bond by a
Participant on the records of such Participant, or such person's s bro ee.
"Cede & Co." shall mean Cede & Co., the nominee of DTC, and any successor
nominee of DTC with respect to the Bonds*
"- 'C" shall mean The Depository y Trust Company of New York, New York.
"Participant" shall mean any broker -dealer; bank or other financial institution for
which DTC holds the Bonds as securities depository.
"Representation Letter" shall mean the Blanket Issuer Letter~ of Representations
from the City to DTC, which is hereby incorporated by reference and made a part
hereof.
(b) Book -Entry only System. The Bonds shall be initially issued as separately
authenticated fairy registered Bonds, and one Bond shall be issued in the principal
amount of each stated maturity of the Bonds. Upon initial issuance, the ownership o
such Bonds shall be registered in the Bond register in the name of Cede & Co., as
nominee of DTC. The Registrar and the City may treat DTC or its nominee) as the sole
and exclusive owner of the Bonds registered in its name for the purposes of payment o
the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be
redeemed, 14f any, giving any notice permitted or required to be given to registered owners
of Bonds under this Resolution, registering the transfer of Bonds, and for all other
purposes whatsoever; and neither the Registrar nor the City shall be affected by any
notice to the contrary. Neither the Registrar nor the City shall have any responsibility or
obligation to any participant, any Person claiming a beneficial ownership interest in the
Bonds under or through DTC or any Participant, or any other Person which is not shown
on the Bond register as being a registered owner of any 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 Bonds, with respect to any notice which is permitted or required to be
given to owners of Bonds under this Resolution, with respect to the election or
ME
any Faroe'iant of any person to receive payment 1n the event of a partial redemption o
the Bonds, or with respect to any consent given or other action taken by DTC as
registered owner er of the Bonds. So long as any Bond is registered in the name of Cede
Co., as nominee of DTC, the registrar shall pay all principal of and interest on such
Bond, and shall give all notices with respect to such Bond, only to Cede & Co. in
accordance with the Representation Letter,, and all such payments shall be valid and
effective to fatly satis�� and discharge the City's obligations with respect to the principal
of and interest on the Bonds to the extent of the sum or sums so al"d. No Person other
than DTC shall receive an authenticated 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 registrar of written notice to the effect that DC has ,determined
to substitute a new nominee in place of Cede & Co.; the Bonds will be transferable to
such new nominee in accordance with paragraph e) hereof.
(c) Book -Entry S stem. In the event the City determines that it is
in the best interest of the Beneficial Owners that they be able to obtain Bonds in the fora
of Bond certificates, the City may notify DTC and the registrar, whereupon DTC shall
notify the Participants of the availability through C of Bonds in the form of
certificates. In such event,, the Bonds will be transferable in accordance with paragraph
(e) hereof. DTC may determine to discontinue providing its services with respect to the
Bonds at any time by giving notice to the City and the Registrar and discharging its
responsibilities with respect thereto under applicable law. In such event the Bonds will
e transferable in accordance with paragraph e) bereo .
(d) Blanket Letter of Re resntatons. The Representation Letter sets forth
certain matters with respect to, among other things, notices, consents and approvals by
registered owners of the Bonds and Beneficial Owners and payments on the Bonds. The
Registrar shall have the sane rights with respect to its actions thereunder as it has with,
respect to its actions under this resolution.
(e) Transfer of Roads. In the evert that any transfer or exchange of Bonds is
permitted under paragraph b or ) hereof, such transfer or exchange shall be
accomplished upon receipt by the Registrar of the .fonds to be transferred or exchanged
and appropriate instruments of transfer to the permitted transferee in accordance with the
provisions of this resolution. In the event Bonds in the form of cert-ificates are issued to
owners other than Cede & Co., its successor as nominee for DTC as owner of all the
Bonds, or another securities depository as owner of all the Bonds, the provisions of this
.resolution shall also apply to all matters relating thereto, including, without limitation,
the printing of such Bonds in the form of Bond certificates and the method of payment of
Principal of and interest on such Bonds in the form of Bond certificates.
Section 3. District Tend; Accounts Created Therein• Special Assessments• and
Application of Tax Increments.
3.01. District Fund. Where is hereby created and established a fund designated as the
"Special Improvement District No. 344 Fund," (the "DistrictFund") which shall be maintained
11
by the City Finance Director on the books and records of the City separate and apart from all
other funds of the City. Within the District Fund there shall be created and maintained three
separate accounts, designated as the "Construction Fund," "Debt Service Fund' and "'Reserve
Account," respectively.
3.02. Construction Fund. There shall be credited to the Construction Fund certain
proceeds of the sale of the Bonds as provided in Section 2.08. Any earnings on investment of
money in the Construction Fund shall be retained therein. All costs and expenses of constructing;
the hn rovements to be paid from proceeds of the Bonds shall be paid frorn time to time as
incurred and allowed from the Construction Fund in accordance with the provisions of applicable
law, and mon y in the Construction Fund shall be used for no other purpose; provided that upon
completion of the Improvements and after all claims and expenses with respect to the
Improvements have been fully paid and satisfied, any amount of money remaining in the
Construction Fund shall be transferred to the Debt Service Fund and used to redeern Bonds as
provided in Sections 2.05 and 3.03(b).
3.03. Debt Service Fund. (a) Debt Service Fund Gen er ll Money in the Debt Service
Fund shall be used only for i) payment of the principal of and interest on the Bonds as such
payments become due or (il*) to redeem Bonds.
(b) eDOSitS to Debt Service Fund. From the proceeds of the Bonds, there shall be
deposited in the Debt Service Fund the amounts set forth in Section 2.08 hereof. Interest
income on money in the Debt Service Fund shall be retained therein and used as any other funds
therein. Any installment of a special assessment paid prior to its due date with interest accrued
thereon to the next succeeding Payment rate shall be credited with respect to principal and
interest payments in the same manner as other special assessments are credited to District Fund.
All money in the Debt Service Fund shall be used first to pay interest due, and any remaining
money shall be used to pay Bonds then due and, if money is available, to redeem Bonds in
accordance with Section 2.05 a ; provided that any money transferred to the Debt Service Fund
from the Construction Fund pursuant to Section 3.02 shall be applied to redeem .fonds to the
extent possible sibl on the next Payment Date for which notice of redemption may properly be given
Pursuant to Section 2.05(a). .Provided, however, that 'fax Increments are not available to redeem
Bonds pursuant to Section 2.05(a). Redemption of Bonds shall be as provided in Section 2#05,
and interest shall be paid as accrued thereon to the date of redemption, in accordance with the
provisions of Section 7-2-20of the Act.
(c) AV cation of Tax Increments as Security for the Bonds. i Tax Increments (the
"Tax Increments") derived from the Industrial District and the Technology District shall be
pledged, to the extent provided herein, by the City as security for the Bonds. Tax Increments
derived from the Industrial District or the Technology District shall only be utilized by the City
to act as security for BODds allocable to the cost of hnrovements within the applicable tax
increment district.
(ii)In the event that a property owner -is delinquent in the payment of special
assessments and the City has not received payment of any special assessments allocable to such
parcel by the date that is fifteen 15 days prior to any January 1 or ,duly 1, commencing January
L 2007 (each a "Payment ate") the City Finance Director is hereby authorized to transfer, after
12
transfers from the Debt Service Reserve Account, but prior to transfers from the Revolving Fund,
any Tax Increments (but only to the extent of such delinquent special assessment payment, to the
extent that such funds are on hand in the operating account for each tax increment district and are
not pledged by the City to other purposes) derived from the tax increment district in which the
property is located, and then on deposit with the City, to the Debt Service Fund for the pro-rata
portion of the payment allocable the delinquent property that is due and owing On the Bonds on
the next Payment rate. A. transfer of Tax Increments described in the immediately preceding
sentence shall not extinguish the lien of any special assessments due with respect to a parcel of
property and such transfer does not decrease the amount of special assessments due with respect
to any parcel of property.
n the event that a property owner pays delinquent special assessments, after the
application of Tax Increments pursuant to Section .oc(ii) above, to the payment of regularly
scheduled debt service on the Bonds, the City Finance Director is hereby authorized to transfer
an amount equal to such prior payments of Tax Increments for such parcel to the applicable
operating account for the tax increment fund in which such parcel is located. Any payment of
delinquent special assessments, after the application of Tax Incr emen.t pursuant to Section
3 .o(c)ii above, to a payment of debt service on the Bonds shall rrot be applied to the
mandatory redemption of the Bonds pursuant to Section 2.05(a). In the event that delinquent
special assessments are paid after either the Industrial District or the Technology District is
terminated and the Bonds are not outstanding, the City shall transfer such funds to the Revolving;
Fund.
3.04. Reserve Account. Money in Reserve Account shall be applied on any Payment
Date to payment of principal of and interest on the Bonds at the stated maturity thereof if funds
on hand in the Debt Service Fund, prior to the application of Tax Increments pursuant to Section
3.03(c). Funds in Reserve Account must be used for such purpose before a loan is made by the
Revolving Fund therefor, If money is on hand in Reserve Account and all Bonds have been paid
or discharged as provided in Section 7, such money shall be transferred to the Revolving; Fund,
as required by Section 7-12- 1 9 3 .
3.05. Loans from RevolvinR Fund. The City Council shall annually or more often if
necessary issue an order authorizing a loan or advance from the Revolving Fund to the District
Fund in an amount sufficient to replenish any deficiency then existing in the Debt Service Fund
and shall issue an order authorizing a loan or advance from. the Revolving Fund to the District
Fund in an amount sufficient to make good any deficiency then existing in the Debt Service Fund
in such order to the extent that money is available in the Revolving Fund. Provided, however,
that at the time any such loan or advance is to be made, Reserve Account shall have been or shall
remain depleted on the next Payment ent rate. A deficiency shall be deemed to exist in the Debt
Service Fund if the money on deposit therein, together with any funds on deposit in Reserve
Account, on any June 15 or December 15 (excluding amounts in the Debt Service Fund
representing prepaid special assessments) is less than the amount necessary to pay .fonds due
(other than upon redemption), and interest on all Bonds payable, on the next succeeding Payment
Date.
Pursuant to Ordinance No. 759, the City has undertaken and agreed to provide funds for
the Revolving Fund by levying; such tax or making such loan from the General Fund as
13
authorized by Section 742-4222 of the Act. In the event that the balance on hand in the
Revolving Fund fifteen 5 days prior to any date when interest is due on special improvement
district bonds or warrants of the City is not sufficient to make good all deficiencies then existing
in the special improvement district funds for which the City has covenanted to make loans from
the Revolving Fund, the balance on hand in the Revolving Fund shall he allocated to the funds of
the special improvement districts in which such deficiencies then exist in proportion to the
amounts of the deficiencies on the respective dates of receipt of such money, until all interest
accrued on such special improvement district bonds or warrants of the City has been paid. on
any date when all accrued interest on special improvement district bonds and warrants of the
City payable from funds for which the City has covenanted to make loans from the Revolving
Fund has been paid, any balance remaining in the Revolving Fund shall be lent or advanced to
the special improvement district funds for payment and redemption of bonds to the extent the
special improvement district funds are deficient for such purpose, and, if money in the Revolving
Fund is insufficient therefor, pro rata, in an amount proportionate to the amount of such
deficiency.
The City hereby determines, covenants and agrees to levy the property tax described in
the immediately preceding; paragraph to provide funds for the Revolving; Fund so long as are
Bonds are outstanding to the extent required under the provisions of this Resolution and the .act,
even though such property tax levy may, under applicable law (including SB 184, adopted by the
Montana Legislature in 1 or provisions of the home rule charter of the City, require that
property tax levies of the City for other purposes be reduced correspondingly. In addition, the
City hereby covenants to comply with the requirements of the Code and the Regulations in order
that the debt Service Reserve ,account and the Revolving; Fund comply and continue to qualify
as "reasonably required'' debt service reserve fund(s) for the Bonds.
Section 4. Covenants, The City covenants and agrees with the owners from time to time
of each of the Bonds that until all the Bonds and interest thereon are fully paid.
4.01. Compliance with Resolution. The City will hold the District Fund and the
Revolving; Fund as trust funds, separate and mart from all of its other funds, and the City, its
officers -and agents, will comply with all covenants and agreements contained in this resolution.
The provisions .herei above made with respect to the District Fund and the Revolving Fund are
in accordance with the undertaking and agreement of the City .made in connection with the
public offering of the Bonds and the sale of the Bonds as set forth in Section 1.05.
4.02. Construction of ...Improvements. The City will do all acts and things necessary to
enforce the provisions of the construction contracts and bonds referred to -in section 1.03 and to
ensure the completion of the Improvements for the benefit of the District in accordance with the
plans and specifications and within the time therein provided, and will pay all costs thereof
promptly as incurred and allowed, out of the District Fund and within the amount of the proceeds
of the Bonds appropriated thereto.
4.03. Lew of Assessments. The City will do all acts and things necessary for the final
and valid levy of special assessments upon all assessable real property within the boundaries of
the District in accordance with the Constitution and laws of the state of Montana and the
4
Constitution of the United States, in an aggregate principal amount not less than $4,520,000.
The special assessments shall be levied on the basi's set forth in the Intent Resolution; and shall
be payable in equal, semiannual installments over a period of twenty (20) gears, with interest on
the whole amount remaining -unpaid at an annual rate equal to the sum of: i the average annual
interest rate borne by the Bonds, plus ii one-half of one percent 0.50) per ann m., interest
being payable with principal installments. The special assessments to be levied will be parable
on the 30th day of November in each of the gears 2006 through 2025, and on the 3 st day of
May in the years 2007 through 2026, inclusive, if not theretofore paid, and shall become
delinquent on such date unless paid in full. The first partial payment of each assessment shall
include interest on the entire assessment from the date of original registration of the Bonds to
Janury 1, 2007 and each subsequent parti l payment shall include interest for six , o the o
that payment and the then remaining balance of the special assessment. The special assessments
shall constitute a lien upon and against the property against which they are made and levied,
which lien may be extinguished only by payment of the assessment with all penalties, cost and
interest as provided in Section 7-12-4191 of the Act. No tax deed issued with respect to any lot
or parcel of land shall operate as payment of any installment of the assessment thereon which i
payable after the execution of such deed, and any tax deed so issued shall convey title subject
only to the lien of said future installments, as provided in Montana Code Annotated, Section 5-
1 -214.
4.04. Reassessment. If at any time and for whatever reason any special assessment or
tax herein agreed to be levied is held invalid, the City and this City Council, its officers and
employees, will take all steps necessary to correct the same and to reassess and .re -levy the same,
including the ordering of wort, with the sa-me force and effect as if wade at the time provided by
law, ordinance or resolution relating thereto, and will reassess and re -levy the same- with the
same force and effect as an original levy thereof, as authorized in Section 7-12-4186 of the Act.
Any special assessment, or reassessment or re -levy shall, so far as is practicable, be levied and
collected as it would have been if the first levy had been enforced including the levy and
collection of any interest accrued on the first levy.
f proceeds of the Bonds, including investment income thereon are applied to the
redemption of such Roads, as provided in Sections-12#4205 and7-12-4206 of the .Act, or i
refunding bonds are issued and the principal amount of the outstanding Bonds of the District is
decreased or increased, the City will reduce or increase, respectively, the special assessments
levied in the District and then outstanding pro rata by the principal amount of such prepayment
or the amount above or below the outstanding principal amount of bonds represented by the
refunding bonds. The City and this City Council, its officers and employees will reassess and re -
levy such special assessments, with the same effect as are original levy, in such reduced or
increased amounts in accordance with the provisions of Sections7-12-4176 through 7-12 -417
of the .Act.
4.05. Tax Increments. The Tax Increments are pledged as security for the Bonds as set
Forth in Section 3.03(c). The City will collect aind account for the Tax Increments as required b
the TIF .Act. The City acknowledges that certain Tax Increments are pledged to the payment of
the Bonds and the City covenants to maintain the existence of the Industrial District and the
Technology District as required by the TIF Act and Montana law.
.0 . Absence of Litigation. There -is now no litigation pending or, to the best
knowledge of the City, threatening or questioning; the validity or regularity of the creation of the
District, the Industrial District, or the Technology District; the contracts for construction of the
Improvements or the -undertaking and agreement of the City to levy special assessments therefor
and to make good any deficiency in the collection thereof through the levy of taxes for and the
making .g of advances from the Revolving Fund; the pledge of the Tax Increments is as security for
the Bonds; the right and power of the City to issue the Bonds; or in any manner questioning the
existence of any condition precedent to the exercise of the City' s powers in these ratters. If any
such litigation should be initiated or threatened, the City will forthwith notify in writing the
Purchaser, and will furnish the Purchaser a copy of all documents, including pleadings, in
connection with such litigation.
.07. Waiver of Penalty and Interest. The City covenants not to waive the payment of
penalty or interest on delinquent special assessments levied on property in the District for costs
of the Improvements, unless the City determines, by resolution of the City Council, that such
waiver is in the best 'interest of the owners of the outstanding; Bonds.
Section 5. 'a. Matters.
5.01. Use of lrn rovements. The Improvements will be owned and operated by the City
and available for use by members of the general public on a substantially equal basis. The City
shall not enter into any lease, use or other agreement with any non -governmental Jerson relating
to the use of the Improvements or security for the paymer t of the Bonds which might cause the
Bonds to be considered "private activity bonds"' or "private loan bonds" It it the meaning o
Section 141 of the Code.
.02. General Covenant. The City covenants and agrees with the owners from time to
time of the 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 Bonds to become includable in gross
income for federal income tax purposes under the Code and applicable Treasury Regulations
applicable to the Bonds and promulgated under the Code, iincluding, without limitation, Treasury
Regulations(the "Regulations"), and covenants to take any and all actions within its powers to
ensure that the interest on the Bonds will not become includable in gross income for federal
income tax purposes under the Code and the Regulations.
.03. Arbitra e Certification. The Mayor, the City Manager and the City Finance
Director, being the officers of the City charged with the responsibility for issuing the Bonds
pursuant to this resolution, are authorized and directed to execute and deliver to the Purchaser a
certificate in accordance with the provisions of Section 148 of the Code and the Regulations,
stating that on the basis of facts, estimates and circumstances in existence on the date of issue
and delivery of the Bonds, it is reasonably expected that the proceeds of the Bonds will be used
in a manner that would not cause the Bonds to be "arbitrage bonds" within the meaning o
Section 148 of the Code and the Regulations.
5.04. In order to qualify the Bonds as "qualified -tax-
exempt obligations" s" within the meaning of Section 2 b of the Code, the City makes the
following factual statements and representations:
a) the Bonds are not "private activity bonds" as defined Section 141 of the
Code;
(b) the City designates the Bonds as "qualified tax-exempt obligations" for
purposes of Section 2 5 b 3 of the Code;
(c) the reasonably anticipated amount of tax-exempt obligations (other than
private activity bonds that are not qualified 50c3 bonds) which will be issued by the
City(and all subordinate entities of the City) during calendar year 2006 will not exceed
10,0o,000; and
not more than $10,000,000 of obligations issued by the City during
calendar year 2005 have been designated for purposes of Section 2 5(b)(3) of the Code.
Section 6. Authentication of Trans . The officers of the City are hereby authorized
and directed to furnish to the Purchaser and to bond counsel certified copies of all proceedings
relating to the issuance of the Bonds and such other certificates and affidavits as maybe required
to show the right, power and authority of the City to issue the Bonds, and all statements
contained in and shown by such instruments, including any heretofore furnished, shall constitute
rerese.tatos of the City as to the truth of the statements purported to be shorn thereby.
Section 7. Discharge,
7.01. bra. when the liability of the pity on all Bonds issued under and secured b
this resolution has been discharged as provided in this Section 7, all pledges, covenants and other
rights granted by this resolution to the owners of such obligations shall cease.
7.02. Payment. The City may discharge 'ts liability with reference to any Bond or
installment of interest thereon which is due on any date by on or before that date depositing with
the Registrar funds sufficient, r, if a City officer s the Re ist ar, mailingto the re sterec] owner
of such Bond a check or draft in a sum sufficient and providing ; proceeds available, for the
payment thereof ire -Mull, or if any Bond or installment of interest thereon shall not be paid when
due, the City may nevertheless discharge its liability with reference thereto by depositing with
the Registrar funds sufficient, or, if a City officer is the Registrar, by mailin.g to the registered
owner thereof a check or draft in a sum sufficient and providing proceeds available, for the
payment thereof in fUllwith interest accrued to the date of such deposit or mailing.
.03. Prepayment. The City may discharge its liability With respect to any Bond, or
installment of interest thereon which is due on any date, by depositing with the Registrar on or
before that date a sum sufficient and providing proceeds available for the payment thereof in full,
or if any Bond or installment of interest thereon shall not be paid when due, the city may, r, or, if a
City officer is the .registrar, mailing to the registered owner of s cb Bond a. check or a draft in a
17
sure sufficient and providing proceeds available, for the payment of the principal, interest and
redemption premium, if any, which are then due; provided that a proper notice of such
redemption has been duly given as provided herein or irrevocably provided for.
7.04. Escrow. The City may also at any time discharge its liability in its entirety with
reference to the Bonds, subject to the provisions of law now or hereafter authorizing and
regulating such action, by depositing irrevocably in escrow, with a bank qualified by laver as an
escrow agent for this purpose, cash or securities which are authorized by lave to be so deposited,
bearing interest payable at such times and at such rates and maturing on such dates as shall be
required, without reinvestment, to provide funds sufficient to pay all princi al and interest to
become due on all Bonds on or before maturity or, if any Bond has been duly called for
redemption or notice of such redemption has been irrevocably provided for, on or before the
designated redemption date.
7.05. Irrevocable Deposits, If an officer of the City is the Registrar, any deposit made
under this Section 7 with the Registrar shall be irrevocable and held for the benefit of the owners
of the Bonds in respect of which such deposits have been made.
Section 8. Continuing Disclosure.
8.01. CAY Compliance with Provisions of Contin in Disclosure Undertaking. The City
hereby covenants and agrees that it will comply with and carry out all of- the provisions of the
Continuing Disclosure Undertaking. Notwithstanding standin any other provision of this resolution,
failure of the City to comply with the Continuing Disclosure Undertaking is not to be considered
an event of default with respect to the Bonds; however, any Bondholder may take such actions as
may be necessary and appropriate, including seeking mandate or specific performance by court
order, to cause the City to comply with its obligations -under this section.
.02, Execution of Continuing.Disclosure Under ta kin "Continuing Disclosure
Undertaking"' means that certain Continuing Disclosure Undertaking executed by the Mayor,
City Finance Director and City Clerk and dated the date of issuance and deliverer of the Bonds, as
originally executed and as it may be amended from time to time in accordance with the terms
thereof.
Section 9. Reveals and Effective rate.
}
.01. - Reveal. All provisions of other resolutions and other actions and proceedings of the
City and this City Council that are in any way inconsistent with the terms and provisions of this
resolution are repealed, amended and rescinded to the full extent necessary- to give fall force and
effect to the provisions of this resolution.
.02. Effective rate, This resolution shall tale effect immediately upon its passage
and adoption by this City Council.
I
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
ATTEST:
Theresa White
City Clerk
19
No.
EXHIBIT A
[Face of the Bond
UNITED STATES of AMER1CA
STATE of MON ANA
COUNTY OF FLATHEAD
CITY of KALISPELL
SPECIAL M Ro EMEN ISTRIC NO. 344 BOND
SERIES Zoo
ill
Rate Maturity rate of original CSP
Issue
% Jury 1, 20 June 15, 2006 48342N
REGISTERED OWNER: CEDE & Co.
PRINCIPAL: AMOUNT:
DOLLARS
FOR VALUE RECEIVED, the City. of Kalispell, Flathead County, Montana (the,
;<cit.�',, will pay to the registered owner identified above, or registered assigns, on the maturity
date specified above the principal amount specified above, solely from the revenues hereinafter
specified, as authorized by Resolution No. 5111, adopted on April 3, 2006 (the '.'.Authorizing
Resolution"), and Resolution No. ', adopted on June , 200 (the "Bond Resolution's), all
sub ect to the provisions hereinafter described relating to the redemption of this Bond before
maturity Th*s Bond bears interest at the rate per annum specified above from the date o
registration of this Bond, as expressed herein, or from such later date to which interest hereon
has been paid or duly provided for, until the maturity date specified above or an earlier date on
which this Bond shall have been dryly called for redemption by the City Finance Director.
Interest on this Bond is payable semiannually, commencing January 1, 2007, on the first day o
January and the first day of July in each year, to the owner of record of this Bond appearing as
such in the bond register as of the close of business on the 15th day (whether or not such is
business day) of the immediately preceding month. Interest on and, upon presentation and
surrender hereof at the operations center of U.S. Bank National Association in Seattle,
Washington, as bond registrar and paying agent (the "Registrar"), "), the principal of this Bond are
payable by check or draft of the Registrar, or its successor. The principal of and interest on this
.fond are payable in lawful money of the United States of America*
A-
Notwithstanding any other provisions of this Bond, so long as this Bond is registered in
the name of Cede & Co., as nominee of The Depository Trust Company " C" , or in the name
of any other nominee of 1C 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 DTC or other securities
depository as agreed to by the City.
This Bond is one of an issue in the aggregate principal amo t of $4,520,000 (the
"Bonds"), all of like date of original issue and tenor, except as to serial number, denomination,
date, interest rate and maturity date, The Bonds are issued pursuant to and in full conformity
with the Constitution and laws of the State of Montana therento enabling, including Montana
Code Annotated, Title 7, Chapter 12, parts 41 and 42, as amended (the "Act"), to finance the
costs of certain local improvements (the "Improvements") for the special benefit of property
located in Special Improvement District No. 344 of the City (the "'District"). The Bonds are
iss able only as fully registered bonds of single maturities in denominatiolas of $5,,000 or any
integral multiple thereof.
This Bond is payable from the collection of a special tax or special assessments levied
upon all assessable real property within the boundaries of the District, in an aggregate principal
amount of not less than $4,520
,,000, except as such amount nt .may be reduced or increased in
accordance with provisions of Montana law. Such special assessments constitute a lien against
the assessable real estate within the District and are to be deposited into the Special Improvement
District No. 344 Fund of the City (the "District Fund").
.
The City has also established are industrial tax increment district (the "Industrial District")
and a technology ta.x increment district (the "Technology District") within the boundaries of the
District. The City has pledged certain tax increment revenues derived from the Industrial
District and the Technology District to the payment of the Bonds, ds, as more fully described in the
Bond Resolution.
The City has established in the District Fund, and funded with certain proceeds of the
Bonds, a Reserve Account (the "'Reserve Account"'), from which money is to be applied to pay
principal of and interest on the Bonds in the event collections of special assessments are
insufficient therefor. The City does not have any obligation to replenish the .deserve Account if
finds are withdrawn therefrom, The Bonds are special, limited obligations of the City payable
solely from the revenues pledged under the Resolution and the Bonds are not general obligations
of the City.
The City has also validly established a Special Improvement District Revolving Fund
(the"Revolving Fund") to secure the payment of certain of its special irnprovement district
bonds, including the Bonds. The City has also agreed, to the extent permitted by the .act, to
issue orders annually authorizing loans or advances from the Revolving Fund to District Fund, in
amounts sufficient to make good any deficiency in the District Fund to pay principal of or
interest on the Bonds after depletion of the Reserve Account, to the extent that funds are
available in the Revolving Fund, and to provide funds for the Revolving Fund by annually
making a tax levy or lean from its general fund in an amount sufficient for that purpose, subject
A-2
4.
to the limitation that no such tax levy or loan may in any year cause the balance in the Revolving
Fund to exceed five percent of the principal amount ofthe City'City's then outstanding special
improvement district bornds secured thereby and the d ratio al limitations specified in the Act.
While any property tax levy to be made by the City to provide funds for the Revolving Fund 's
subject to levy limits under current law, the City has agreed in the resolution to levy property
taxes to provide funds for the Revolving Fund to the extent described in this paragraph and, if
necessary, to reduce other property tax levies correspondingly to meet applicable levy limits.
The Bonds are subject to mandatory redemption in order of stated maturities and within
a stated maturity in $ ,coo principal amounts n.ts selected by lot or other manner deemed fair by the
Registrar on any Payment Date if, after paying all principal and interest then due on the Bonds,
there are funds to the credit of the District Fund, from the prepayment of special assessments
levied 'in the District or from surplus proceeds of the Bonds not required to pay costs of the
Improvements, , for the redemption thereof, and in the manner provided for the redemption of the
same, The Bonds maturing on or after July 1, 2014 are subject to redemption, at the option o
the City, from other sources of funds available therefor on July 1, 2013 or any date thereafter;
provided, however, that the City hereby agrees not to redeem the Bonds from i amounts on
deposit in the reserve Account in the District Fund or ii the proceeds of refunding special
improvement district bonds prior to July 1, 2013. The redemption price is equal to the principal
amount nt of the Bonds or portions thereof to be redeemed plus interest accrued thereon to the date
of redemption. The date of redemption of Bonds and principal amount of Bonds to be redeemed
shall be fixed by the City Finance Director, who sail give notice thereof to the Registrar in
sufficient time for the Registrar to give notice, by first class mail, postage prepaid, or by other
means required by the securities depository,, to the o r r or owners of such Bonds at their
addresses shown on the Bond register, of the Bonds or portions thereof to be redeemed and the
date on which payment will be made, which date shall not be less than thirty (30) days after the
date of mailing of notice, on which date so fixed interest shall cease. on the date so fixed
interest on the Bonds or portions thereof so redeemed shall cease to accrue. Upon partial
redemption of any Bond, a new Bond or Bonds will be delivered to the registered owner without
charge, representing the remaining principal amount outstanding.
The Bonds have been designated by the City as a "qualified tax-exempt obligation"
pursuant to Section 25 of the Internal Revenue Code of 1986, as amended.
s provided in the o d Resolution and subject to certain limitations set forth therein,
this Bond is transferable upon the books of the City at the operations center of the Registrar, by
the registered owner hereof in person or by his attorney duly authorized in writingupon
surrender hereof together with a written instrument of transfer satisfactory to the .registrar, duly
executed by the registered owner or his attorney, and may also be surrendered in exchange for
Bonds of other authorized denominations. Upon sncb transfer or exchange, the City will cause a
new Road or Bonds to be issued in the name of the transferee or registered owner, of the same
aggregate principal amount, nt, bearing interest at the same rate and maturing on the same date,
subject to reimbursement rsement for any tax, fee or governmental charge required to be paid with
respect to such transfer or exchange.
I� C
The City and the Registrar may deem and treat the person in whose name this Bond is
registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of
receiving Payment and for all other purposes, and neither the City nor the Registrar shall be
affected by any notice to the contrary.
IT S HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all
things required to be done precedent to the issuance of this Bond have been properly done,
happened and been performed in the manner prescribed by the laws of the State of Montana and
the resol Lions and ordinances of the City of Kalispell, Montana, relating to the issuance thereof;
and that the opinion attached hereto is a true copy of the legal opinion given by Bond Counsel
with reference to the Bonds, dated the date of original issuance and delivery of the Bonds.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
security or beinefit under the Bond Resolution until the Certificate of Authentication and
Registration herein shall have been executed by the Registrar by the manual signature of one o
its authorized representatives.
(The remainder of this page is intentionally left blares.)
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N WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana, by its City
Council, has caused this Bond to be executed by the facsimile signatures of the Mayor and the
City Clerk, and by a facsimile of the official seal of the City,
(SEAL)
CITY OF KAL SPE L, MoN ANA
By acsim0
ile signature)
Mayor
By._-(f
_ac� atur
City Clerk
CERTIFICATE of AUTHENTICATION
This is one of the Bonds delivered pursuant to the Bond Resolution mentioned wl"t it .
U.S. BANK NATIONAL ASSOCIAION,
s Bond Registrar, Transfer Agent, and Paying;
.,agent
B.
Authorized Signer
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
and hereby irrevocably
constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power o
substitution in the premises.
Dated:
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OFASSIGNEE
SIGNATURE GUARANTEED
Signature(s) must be guaranteed by an
r.r.efi ible guarantor institution meeting the
requirements of the Bond Registrar, istrar, which
requirements include membership s r
participation in SWAMP oir such other
signature guaranty ro rarn'� s may be
determined by the Bond Registrar in
addition to or in substitution. for STAMP, all
in accordance with the Securities Exchange
Act of 13 , as amended.
KA22 -1 W
211v
NOTICE: The siguature to this assignment must
o-rrespond with the name as it appears on the face
of the Bond in every particular, without alteration,
enlargement or any change whatsoever.
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