HomeMy WebLinkAboutResolution 3906 Relating to $1,376,869 SID 684 Bonds
RESOLUTION NO. 3906
RESOLUTION RELATING TO $1,376,869 SPECrAL
IMPROVEMENT DISTRICT NO. 684 BONDS; FIXING THE
FORM AND DETAILS AND PROVIDING FOR THE
EXECUTION AND DELIVERY THEREOF AND SECURITY
THEREFOR
BE IT RESOLVED by the City Commission (the "Commission") of the City of
Bozeman, Montana (the "City"), as follows:
Section I. Recitals. It is hereby found, determined and declared as follows:
1.01. Resolution of Intention. By Resolution No. 3864 adopted October 17, 2005 (the
"Resolution of Intention"), this Commission declared its intention to create Special Improvement
District No. 684 (the "District"), for the purpose of making special improvements for the special
benefit of the District. The Resolution of Intention designated the numbcr of thc District,
described the boundaries thereof, stated whether the District was an extended district and stated
the general character of the improvements to be made (the "Improvements") and an approximate
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"). By the Resolution of Intention this
Commission also declared its intention to cause the cost and expense of making certain of the
improvcments specially benefiting the District to bc assessed against the properties included
within the boundaries thereof in accordance with one or more methods of assessment authorized
in Montana Code Annotated, Sections 7-12-4161 to 7-12-4165 and as set forth in the Resolution
of Intention. The Resolution of Intention determined that of the $6,635,000 estimated cost of
Improvements, $2,095,000 would be paid from Special Improvement District Bonds drawn
against the District.
In the Resolution of Intention, this Commission further found that it is in the public
interest, and in the best interest of the City and the District, to secure payment of principal of and
interest on the Bonds by the Special Improvement District Revolving Fund of the City (the
"Revolving Fund"), on the basis of the factors required to be considered under Section 7~ 12-
4225 of the Act. Those findings are hereby ratified and confirmed.
1.02. Notices. Notice of the passage of the Resolution of Intention was given by two
publications, with at least six days between publications, in a qualified newspaper of general
circulation in the county in which the City is located or, if no such newspaper is published, in a
qualified newspaper published in an adjacent county, as required by Montana Code Annotated,
Sections 7-12-4106(2) and 7-1-2121. Notice of the passage of the Resolution of Intention was
also mailed to all persons, firms or corporations or the agents thereof having real propelty 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 described the general character of
the Improvements, stated the estimated cost of the Improvements and the method or methods of
assessment of such costs against properties in the District, specified the time when and the place
where the Commission would hear and pass upon all protests made against the making of the
Improvements or the creation or extension of the District, referred to the Resolution of Intention
as being on file in the office of the City Clerk for a description of thc boundaries of the District,
all in accordance with the provisions of the Resolution of Intcntion, and included a statement
that, subject to the limitations of Scction 7-12~4222 of the Act, the gcncral fund of the City may
be used to provide loans to the rcvolving fund or a gcneral tax levy may bc imposcd on all
taxable property in the City to mcet thc financial requirements of the revolving fund.
1.03. Creation of District. At the time and place specified in the notice hcrcinabovc
describcd, this Commission met to hear, consider and pass upon all protests made against thc
making of the Improvements and the creation of the District, and, after consideration thereof, it
was determined and declared that insufficient protests against the crcation or extension of the
District or the proposed work had becn filed in thc timc and manncr provided by law by the
owners of the property to be assessed for thc Improvcmcnts in thc District. This Commission did
therefore by Resolution No. 3881, adoptcd Decembcr 19, 2005, crcate thc District and order the
proposcd Improvcmcnts as modified, which resulted in creation of a Special Improvement
District to fund $1,588,000 of the costs of the Improvements. In the resolution, the City
Commission also confirmed the findings it made with respect to the pledge of the Revolving
Fund in the Resolution of Intention.
1.04. Construction Contracts. Plans, spccifications, maps, profiles and surveys for
construction of the Improvcmcnts werc prcpared by thc cnginccrs acting for thc City, and were
thercupon cxamined and approved by this Commission. An advertisement for bids for
construction of the [mprovements was published in the official newspaper of the City in
accordance with the provisions of Montana Codc Annotated, Section 7-12-4141, after which the
bids theretofore receivcd wcrc opened and examined. Aftcr rcfcrring the bids to the engineers
for thc City it was determined that the lowest regular proposal for the furnishing of all work and
materials required for constructing the Improvements in accordance with the approved plans and
specifications was the following:
Portion of Contract
Price Related to
Work Related to Improvements Bidder Improvements
Road improvements, installation of Johnson- Wilson $4,310,068.69
signalization modifications and Constructors, Inc.,
improvements, storm drain, water, and Helena, Montana
sewer improvements, and street lighting
A contract for the construction of the Improvements was therefore awarded to said bidder,
subjcct to thc right of owners of property liable to bc asscssed for the costs thereof to elect to
take the work and enter into written contracts therefor in the manner provided by Montana Code
Annotated, Section 7-12-4147, which election the property owners failed to make, whereupon
the successful bidder cntcrcd into a written contract for construction of the Improvements upon
the bidder having executed and filed bonds satisfactory to this Commission and in thc form and
manner provided by Montana Code Annotated, Title 18, Chapter 2, Part 2, as amended.
2
1.05. Sale and Issuance of Bonds. For the purposc of financing a portion of the costs and
expenses of making the Improvements, which are to be assesscd against the property within the
District as provided in the Resolution of Intention, this Commission by Resolution No. 3893,
adopted February 27, 2006, called for the public sale of bonds in the total aggregatc amount of
$1,588,000 (the "Bonds"). Subsequently, the City received $211,131 in prepaid assessmcnts
from property owners in the District. Advertisements for bids for the purchase of the Bonds in
the amount of $1,376,869 were published in accordance with the provisions of Montana Code
Annotatcd, Scctions 7~12~4204, 7~7~4252 and 17~5-106. Pursuant to Resolution No. 3900,
adopted March 27, 2006, this Commission authorizcd thc City to enter into a contract with D. A
Davidson & Co. of Bozeman, Montana (the "Purchaser"), as the lowcst responsible bidder
pursuant to which the Purchaser agreed to purchase from the City the Bonds at a purchase price
of $1,354,839.10 plus interest accrued thereon from the date of original issuc of the Bonds, at the
rates of intercst set forth in Scction 2.01 hercof and upon the further terms set forth in this
resolution rcsulting in a net intcrest cost of 4.4020783% per annum and a net dollar interest cost
of $610, 173.95.
1.06. Costs. Costs of the Improvements in exccss of the costs to be assessed against the
District have or will be paid by the City from Strcet Impact Fces, Sewcr Impact Fees, and Water
Impact Fees, and prepayment of the amounts to be asscssed against property owners in the
District in the total amount of $4,291,151. It is currently estimated that the costs and expenses to
bc asscsscd against properties benefittcd by the Improvements, including costs of preparation of
plans, specifications, maps, profiles, engineering superintcndence and inspection, preparation of
assessment rolls, expenses of making the assessments, the cost of work and materials under the
construction contract and all other costs and expenses, including the deposit of procccds in the
Revolving Fund, are $1,376,869. Such amount will be levied and assessed upon the asscssable
rcal property within thc District on the bases described in the Resolution of Intention. This
Commission has jurisdiction and is required by law to levy and asscss such amount, to collect
such special assessments and credit the same to the special improvement district fund created for
the District, which fund is to be maintained on the official books 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.
1.07. Recitals. All acts, conditions and things required by the Constitution and laws of
the State of Montana, including Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42,
as amended, in ordcr to makc the Bonds valid and binding special obligations in accordance with
their terms and in accordance with the tcrms of this resolution have been done, do exist, have
happened and have been performed in regular and duc form, time and manner as so required.
Section 2. The Bonds.
2.0 I. Principal Amount, Maturities, Denominations, Date, Interest Rates. For the
purpose of paying a portion of the costs and expenses incurred in construction of the
Improvements, and in anticipation of the collection of special assessments to be levied therefor,
and in accordance with the proposal described in Section 1.06, the City shall forthwith issue and
delivcr to the Purchaser the Bonds payable solely from the Special Improvemcnt District No. 684
Fund (the "District Fund") and denominated "Special Improvcment District No. 684 Bonds."
3
The Bonds shall be dated, as originally issued, and be registcrcd as of April 15, 2006, shall each
be in the denomination of $5,000 or any integral multiple thcreof of single maturities, shall
mature on July 1 in the ycars and principal amounts sct forth below, and Bonds maturing in such
years and principal amounts shall bear intcrest from the date of original registration until paid or
duly callcd for rcdemption at the rates per annum set forth opposite such years and amounts,
respectively:
Principal Principal
Year Amount Rate Year Amount Rate
2007 $71,869 3.700% 2017 $70,000 4.35011()
2008 75,000 3.800 2018 70,000 4.400
2009 75,000 3.850 2019 70,000 4.450
2010 75,000 3.900 2020 70,000 4.500
2011 75,000 4.000 2021 70,000 4.550
2012 75,000 4.050 2022 70,000 4.600
2013 75,000 4.100 2023 70,000 4.600
2014 75,000 4.200 2024 70,000 4.600
2015 75,000 4.250 2025 70,000 4.600
2016 75,000 4.300
2.02. Interest Payment Dates. Interest on the Bonds shall be payable on each January 1
and July 1, commencing January 1,2007, to the owners of record thereof as such appear on the
bond registrar at the close of business on the fiftccnth day of the immediately preceding month,
whethcr or not such day is a business day. Upon the original delivery of thc Bonds to the
Purchaser and upon each subsequent transfer or exchange of a Bond pursuant to Scction 2.04, the
Registrar shall date each Bond as of the date of its authentication.
2.03. Method of Payment. The Bonds shall be issued only in fully registered form. The
interest on and, upon surrender thercof at the operations centcr of the Registrar (as hereinafter
defined), the principal of cach Bond, shall be payable by check or draft drawn on the Registrar.
2.04. Registration. The City hereby appoints its Finance Director to act as registrar,
transfer agent and paying agent (the "Registrar"). The City reserves the right to appoint a
successor bond rcgistrar, transfer agent or paying agcnt, as authorized by the Model Public
Obligations Registration Act of Montana, Montana Code Annotated, Title 17, Chaptcr 5, Part 11,
as amended (the "Registration Act"), but the City agrees to pay the reasonable and customary
charges of the Registrar for the services performed. This Section 2.04 shall establish a system of
registration for the Bonds as defined in the Registration Act.
The effect of rcgistration and the rights and duties of thc City and the Registrar with
rcspect thereto shall be as follows:
(a) Bond Register. The Registrar shall keep at its operations center a
bond registcr in which the Registrar shall provide for thc rcgistration of ownership of the
4
Bonds and the registration of transfers and exchanges of thc Bonds cntitled to bc
registered, transferred or cxchangcd.
(b) Transfcr. Upon surrender to the Registrar for transfer of any Bond
duly cndorsed by the registered owner thereof or accompanied by a written instrument of
transfer, in form satisfactory to the Registrar, duly executed by the registered owner
thereof or by an attorney duly authorized by the registered owner in writing, the Registrar
shall authenticate and deliver, in the name of the designated transferee or transferees, one
or more new Bonds of a like aggregate principal amount and maturity, as requested by
the transferor. Thc Registrar may, however, close thc books for registration of any
transfcr of any Bond or portion thereof selected or called for redemption. No transfer or
cxchangc of a Bond shaH affect its order of registration for purposes of redemption
pursuant to Section 2.05.
(c) Exchange. 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, intcrest rate and maturity, as requcsted by the
registered owner or the owner's attorncy duly authorizcd in writing.
(d) Cancellation. All Bonds surrendered upon any transfer or exchange
shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the
City.
(e) Impropcr or Unauthorizcd Transfer. When any Bond is prescnted to
the Registrar for transfer, the Registrar may refuse to transfer the samc until it is satisfied
that thc cndorsement on such Bond or separate instrument of transfer is valid and gcnuinc
and that the requested transfer is legally authorized. The Registrar shall incur no liability
for the refusal, in good faith, to Illake transfers which it, in its judgment, deems improper
or unauthorized.
(f) Persons Decmed Owncrs. The City and the Rcgistrar 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, whcther such 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 purposcs, and all such payments so made to any such rcgistercd owncr or
upon the owner's order shall be valid and effectual to satisfy and discharge the liability of
the City upon such Bond to the extent of the sum or sums so paid.
(g) Taxes, Fees and Charges. For every transfer of Bonds or exchange of
Bonds (except an exchange upon a partial redemption of a Bond), the Rcgistrar may
impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax,
fee or other governmental charge required to be paid with respect to such transfer or
exchange.
(h) Mutilated, Lost, Stolen or Destroyed Bonds. In case any Bond shall
become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond
5
of like amount, number, maturity date and tenor in exchange and substitution for and
upon canccllation of any such mutilated Bond or in lieu of and in substitution for any
such Bond destroyed, stolen or lost, upon thc paymcnt of thc rcasonable expenses and
charges of the Registrar in connection therewith; and, in the case of a Bond destroyed,
stolen or lost, upon filing with thc Rcgistrar of cvidcnce satisfactory to it that such Bond
was destroyed, stolen or lost, and of the ownership thercof, 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 obligccs. All Bonds so
surrcndered to the Registrar shall be cancelled by it and evidence of such cancellation
shall bc given to the City. If the rnutilated, destroyed, stolen or lost Bond has already
matured or such Bond has been called for redcmption in accordance with its terms, it
shall not be necessary to issue a ncw Bond prior to paymcnt.
2.05. Redemption.
(a) Mandatory Redemption. If on any intcrcst paymcnt datc thcrc will be a balance in
the District Fund after payment of the principal and interest duc on all Bonds drawn against it,
either from the prepaymcnt of special assessments levied in the District or from the transfcr of
surplus moncy from the Construction Account to the Principal Account as provided in Section
3.02 or otherwise, the Finance Director shall call for redemption on the interest payment date
outstanding Bonds, or portions thcrcof, in an amount which, together with thc intercst thereon to
the interest paymcnt date, will cqual the amount of such funds on deposit in the District Fund on
that datc. Thc redemption price shall equal the amount of the principal amount of the Bonds to
bc redeemed plus interest accrued to the date of redemption.
(b) Optional Redemption. The Bonds are subject to redemption, in whole or in part, at
the option of the City from sources of funds available therefor other than those described umier
Section 2.05(a) on any interest payment datc; provided, however, thc Bonds shall not be called
for redemption before January 1,2013, from the proceeds of refunding special improvement
district bonds or warrants. The redemption price shall equal the principal amount of the Bonds
to be redeemed plus interest accrued to the date of redemption.
(c) Selection of Bonds for Redemption; 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
delivcrcd to thc rcgistered owner without charge, representing the remaining principal amount
thereof outstanding.
(d) Notice and Effect of Redemption. The date of redemption and the principal amount
of the Bonds shall be fixed by the Finance Director, who shall give notice thereof to the Registrar
in sufficicnt timc for the Registrar to give notice, by first class mail, postage prepaid, or by other
means required by the securities depository, to the owner or owners 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
6
(30) days after the datc of mailing notice. On the date so fixed intcrest on the Bonds or portions
thereof so redeemed shall ccase.
2.06. Form. Thc Bonds shall be drawn in substantially the form set forth in Exhibit A
hercto, and by this reference made a part hereof, with such modifications as are permitted by the
Act.
2.07. Exccution, Registration and Delivery. The Bonds shall be prepared under the
direction of thc Finance Director and shall be executed on behalf of the City by the signatures of
the Mayor, City Manager, and the 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 imprintcd on any Bond. In case any officer whose signature or a facsimilc
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
exccution, no Bond shall be valid or obligatory for any purpose or entitled to any security or
bcnefit under this resolution unless a certificate of authentication and registration on such Bond
has been duly executed by the manual signature of an authorized representati ve of the Registrar.
Certificates of authentication and registration on different Bonds nced not be signed by the same
representativc. Thc executed certificate of authentication and registration on each Bond shall be
conclusive evidence that it has been authenticated and delivered under this resolution. The
Bonds shall be registered in order of thcir serial numbers by the Registrar, as attcsted by the
Certificate of Authentication, as of April 26, 2006. Whcn thc Bonds havc becn so cxccuted,
authenticated and registercd, they shall be delivered by the Registrar to the Purchascr upon
payment of the purchasc pricc in accordance with the contract of sale hcrctoforc madc and
executed. The Purchaser shall not be obligated to see to the application of the purchase price,
but from the proceeds of the Bonds the Finance Director shall credit forthwith $68,843.45 to the
Revolving Fund, as required by Section 7 ~ 12~4169(2) of the Act, any accmed interest to the
Interest Account in the District Fund, and the balance of such proceeds to the Construction
Account in the District Fund.
2.08. Securities Depository for the Bonds.
(a) For purposes of this Section 2.08, the following terms shall have the following
rneanmgs:
"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 rccords of such Participant, or such person's subrogce.
"Cede & Co." shall mean Cede & Co., thc nomince of DTC, and any successor
nominee of DTC with respect to the Bonds.
"DTC" shall mean The Depository Tmst Company of New York, New York.
"Participant" shall mcan any broker~dealer, bank or other financial institution for which
DTC holds the Bonds as securities depository.
7
"Representation Letter" shall mean the Blanket Issuer Letter of Representations from
the City to DTC, attached to this resolution as Exhibit B, which is hereby incorporated
by reference and made a part hereof.
(b) Thc Bonds shall be initially issued as separately authenticated fully registered Bonds,
and one Bond shall be issued in the principal amount of each stated maturity of the Bonds. Upon
initial issuance, the ownership of 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 thc Bonds rcgistcred in its name for the purposcs of payment
of the principal of or intcrcst on the Bonds, selecting the Bonds or portions thereof to be
rcdcemed, if 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 bc affcctcd by any noticc to thc contrary.
Neither the Registrar nor the City shall have any responsibility or obligation to any Participant,
any Person elaiming a beneficial ownership interest in thc Bonds undcr or through DTC or any
Participant, or any other Person which is not shown on the Bond rcgister as being a rcgistered
owner of any Bonds, with respect to thc accuracy of any records maintained by DTC or any
Participant, with rcspect 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 undcr this Resolution, with respcct to thc selection by
DTC or any Participant of any person to receive payment in the event of a pmtial redemption of
the Bonds, or with respect to any consent given or other action taken by DTC as registered owner
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 fully satisfy 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
paid. 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 noticc to the cffect that DTC has dctermincd to
substitute a new nominee in place of Cede & Co., the Bonds will he transferable to such ncw
nomince in accordance with paragraph (e) hereof.
(c) In the event the City determines that it is in the best interest of the Beneficial Owners
that they be able to obtain Bonds in the form of Bond certificates, the City may notify DTC and
thc Registrar, whereupon DTC shall notify the Participants of the availability through DTC of
Bonds in the form of certificates. In such event, the Bonds will be transferable in accordance
with paragraph (e) hereof. DTC may detcrminc to discontinuc providing its services with respect
to the Bonds at any time by giving notice to the City and the Rcgistrar and discharging its
responsibilities with respect thercto undcr applicable law. In such cvcnt the Bonds will be
transfcrable in accordance with paragraph (e) hereof.
(d) The Representation Letter sets forth certain matters with respect to, among other
things, notices, consents and approvals by registered owners of thc Bonds and Beneficial Owners
and payments on the Bonds. The Registrar shall have the same rights with respect to its aetions
thereunder as it has with respect to its actions under this resolution.
8
(e) In the event that any transfcr or exchange of Bonds is permitted under paragraph (b)
or (c) hereof, such transfcr or exchange shall be accomplished upon receipt by the Registrar of
the Bonds to bc transferred or exchanged and appropriate instruments of transfer to the permitted
transferec in accordance with the provisions of this resolution. In the event Bonds in the form of
certificates are issucd 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 Rcsolution shall also apply to all matters relating thereto, including, without limitation,
the printing of such Bonds in the form of Bond ccrtificates and the mcthod of paymcnt of
principal of and interest on such Bonds in the form of Bond certificates.
Section 3. District Fund; Assessments.
3.01. District Fund. There is hereby created and established the District Fund designated
as the "Spccial Improvement District No. 684 Fund," which shall be maintained by the Finance
Director on thc books and records of the City separate and apart from all other funds of the City.
Within the District Fund there shall be maintained three separate accounts, designated as the
"Construction Account," "Principal Account" and "Interest Account," respectively.
3.02. Construction Account. Therc shall be crcditcd to thc Construction Account ccrtain
proceeds of the sale of the Bonds as provided in the final sentence of Section 2,(n. Any earnings
on investment of money in the Construction Account shall be retained therein. All costs and
expenses of constructing the Improvements to be paid from proceeds of the Bonds shall be paid
from time to time as incurred and allowed from the Construction Account in accordance with the
provisions of applicable law, and money in the Construction Account shall be used for no other
purpose; provided that upon completion of the Improvements and after all claims and cxpcnses
with respect to the Improvcmcnts have bccn fully paid and satisficd, any moncy remaining in the
Construction Account shall be transferred to the Principal Account and used to redeem Bonds as
provided in Section 3.03.
3.03. Principal Account and Interest Account. Money in the Principal Account and thc
Interest Account shall be used only for payment of the principal of and interest on the Bonds as
such paymcnts become due or to redeem Bonds. From the proceeds of the Bonds, there shall be
dcpositcd in the Interest Account any interest on the Bonds accrued to the date of their delivery.
Interest income on funds in the Interest Account shall be retained therein and used as any other
funds therein.
Upon collection of the installment of principal and interest due on November 30 and May
31 of each fiscal year on the special assessments to be levied with rcspect to the Improvements,
the Finance Director shall credit to thc Intcrest Account so much of said special assessments as is
collected as interest paymcnt and the balance thereof to the Principal Account. Any installment
of any special asscssment paid prior to its due date with interest accrued thereon to the next
succeeding interest payment date shall be credited with respect to principal and interest payments
in the same manner as other assessments are credited to the District Fund. All money in the
Intcrest Account and the Principal Account 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; providcd that any moncy transferred to a Principal
9
Account from the Construction Account pursuant to Section 3.02 shall be applied to redeem
Bonds to the extent possible on the next interest payment datc for which notice of rcdemption
may properly be given pursuant to Section 2.05. Redemption of Bonds shall be as provided in
Scction 2.05, and interest shall be paid as accrued thereon to the date of redemption, in
accordance with the provisions of Section 7~ 12~4206 of the Act.
3.04. Loans from Revolving Fund. The Commission shall annually or more often if
necessary issue an order authorizing a loan or advanee from the Rcvolving Fund to the District
Fund in an amount sufficient to make good any deficiency then existing in the Interest Account
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 thcn existing in the Principal Account
in such order and in each case to the extent that money is available in the Revolving Fund. A
deficiency shall be dccmcd to cxist in thc Principal Account or thc Intcrcst Account if the money
on deposit therein on any December 15 or June 15 (excluding amounts in the Principal Account
representing prepaid special assessmcnts) is less than thc amount nccessary to pay Bonds due
(other than upon redemption), and interest on all Bonds payable, on the next succeeding intercst
payment date.
Pursuant to Ordinance No. 612, 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
authorizcd by Montana Code Annotated, Section 7 ~12~4222. In the event that the balancc on
hand in the Revolving Fund fifteen 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 balanec on hand in the Rcvolving Fund shall be
allocatcd to thc 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 accmed on such special improvement district bonds or warrants of the City has
been paid. On any date when aU accmed interest on special improvement district bonds and
warrants of the City payable from funds for which the City has covenanted to make loans from
thc 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
cxtent the special improvcment district funds arc deficient for such purpose, and, if money in the
Rcvolving 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
thc immediately preceding paragraph to provide funds for the Rcvolving Fund so long as any
Bonds are outstanding to thc extent required under the provisions of this Resolution and the Act,
even though such propelty tax levy may, under applicable law, require that property tax levies of
the City for other purposes be reduced correspondingly.
Section 4. Covenants. Thc City covcnants 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:
10
4.01. Compliance with Resolution. The City will hold the District Fund and the
Revolving Fund as trust funds, separate and apart from all of its othcr funds, and the City, its
officers and agents, will comply with all covenants and agrcemcnts containcd in this resolution.
The provisions hereinabove made with rcspcct to thc 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 thc Bonds and the sale of the Bonds as set forth in Section 1.06.
4.02. Construction of Improvements. The City will do all acts and things necessary to
enforce the provisions of the construction contracts and bonds refcrred to in Section 1.04 and to
ensure the completion of the Improvements for thc bcnefit of the District in accordance with thc
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 appropriatcd thcrcto.
4.03. Levy of Assessments. Thc City will do all acts and things necessary for thc final
and valid levy of spccial 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
Constitution of the United States, in an aggregate principal amount not less than $1,376,869.
Such special assessments shall bc levied on the basis or bascs prcscribed in the Resolution of
Intcntion, and shall be payable in substantially equal, semiannual installments over a period of 19
years, with intercst on the whole amount remaining unpaid at an annual rate equal to the sum of:
(i) the average annual interest rate borne by thc then-outstanding Bonds, plus (ii) one-half of one
perccnt (0.5OCfo) per annum, interest being payable with principal instalhnents. The assessments
to be levied will be payable on the 30th day of November in each of thc ycars 2006 through
2024, and on thc 31st day of May in the years 2007 through 2025, 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 January I, 2007 and each subsequent partial paymcnt shall includc
interest for six months on that payment and the then remaining balance of the special assessment.
The 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 Montana Code Annotated, Section 7~ 12~4191. No tax
deed issued with rcspect to any lot or parcel of land shall operate as payment of any installment
of the assessment thereon which is 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 15~18~214.
4.04. Reassessment. If at any time and for whatcver reason any spccial assessment or
tax herein agreed to be levied is held invalid, the City and this Commission, 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 work, with the same force and effect as if made at the time provided by
law, ordinancc or rcsolution relating thereto, and will reassess and re~levy the same with the
same force and effect as an originallevy thereof, as authorized in Montana Code Annotated,
Section 7-12AI86. 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.
11
If proceeds of the Bonds, including investment income thereon, are applied to the
redemption of such Bonds, as provided in Montana Code Annotated, Sections 7-12-4205 and 7 ~
12-4206, or if refunding bonds are issued and thc principal amount of the outstanding Bonds of
the District is decreased or increascd, thc City will rcducc or increasc, respectively, the
assessments levied in the District and then outstanding pro rata by the principal amount of such
prepayment or thc increment above or below the outstanding principal amount of bonds
represcnted hy the refunding bonds. The City and this Commission, its officers and employees
will reassess and re~levy such assessments, with the same effect as an original levy, in such
reduced or increased amounts in accordance with the provisions of Montana Code Annotated,
Sections 7-12-4176 through 7-12-4178.
4.05. Absence of Litigation. There is now no litigation pending or, to the best
knowledge of the City, threatened questioning the validity or regularity of the creation of the
District, the contracts for constnlction of thc Improvcmcnts or the undcrtaking and agreement of
the City to levy special assessments therefor and to make good any deficiency in the collcction
thereof through thc levy of taxes for and the making of advances from the Rcvolving Fund, or
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 matters. If any such
litigation should be initiated or threatcned, thc City will forthwith notify in writing the Purchaser,
and will furnish the Purchascr a copy of all documents, ineluding pleadings, in connection with
such litigation.
4.06. Waiver of Penalty and Interest. The City covenants not to waive the payment of
penalty or interest on delinquent assessments levied on property in the District for costs of the
Improvements, unless the City determines, by resolution of the City Commission, that such
waiver is in the best intercst of the owners of the outstanding Bonds.
Section 5. Tax Matters.
5.01. Use of Improvements. The Improvements will be owned and operated by the City
and available for use by mcmbers of thc general public on a substantially equal basis. The City
shall not entcr into any lease, use or other agreement with any non~governmcntal pcrson rclating
to the use of the Improvements or security for the payment of the Bonds which might cause thc
Bonds to be considered "private activity bonds" or "private loan bonds" within the meaning of
Section 141 of the Internal Revenue Code of 1986, as amended (the "Code").
5.02. General Covenant. The City covenants and agrees with the owners from time to
time of thc Bonds that it will not take or permit to be taken by any of its officers, employees or
agents any action that 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 thc Codc, including, 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 fedcral
income tax purposes under the Code and thc Regulations.
12
5.03. Arbitrage Certification. The Mayor, the Finance Director and the City Clerk, being
the officers of the City charged with the responsibility for issuing the Bonds pursuant to this
resolution, are authorized and directed to exccutc and delivcr to the Purchaser a certificate in
aecordance with the provisions of Section 148 of the Code, and Section 1.148-2(b) of the
Regulations, stating that on the basis of facts, cstimates and circumstances in existence on the
date of issue and delivcry of thc Bonds, it is reasonably expected that the procecds of thc Bonds
will be used in a manncr that would not cause the Bonds to be "arbitrage bonds" within the
meaning of Section 148 of the Code and the Regulations.
5.04. Arbitrage Rebatc. The City acknowledges that the Bonds are subjcct to the rebate
requiremcnts of Section 148( f) of the Code. 'fhe City covenants and agrees to retain such
rccords, make such determinations, file such reports and documents and pay such amounts at
such times as are required under said Section 148(1) and applicable Treasury Regulations to
preserve the exclusion of interest on the Bonds from gross income for federal income tax
purposes, unless the Bonds qualify for thc exception from the rcbate requircment undcr Section
148(f)( 4)(B) of the Code and no "gross procecds" of thc Bonds (othcr than amounts constituting
a "bona fide debt servicc fund") arise during or after the expenditure of the original procccds
thereof. In furtherance of the foregoing, the Mayor, the Finance Director and the City Clerk are
hereby authorized and directed to execute a Rebate Certificate, substantially in the form to be
prepared by Bond Counsel, and the City hcreby covenants and agrccs to observe and perform the
covenants and agreements contained therein, unless amendcd or terminated in accordancc with
the provisions thereof.
5.05. Qualified Tax~Exempt Obligations. Pursuant to Section 265(b)(3)(B)(ii) of the
Code, the City hereby designates the Bonds as a "qualified tax-exempt obligation" for purposes
of Section 265(b )(3) of the Code. The City hereby represents that it does not anticipate that
obligations bearing interest not includable in gross income for purposcs of federal income
taxation undcr Scction 103 of the Code (including refunding obligations as provided in Section
265(b)(3) of the Code and including "qualified 501 (c)(3) bonds" but excluding other "private
activity bonds," as defined in Sections 141(a) and 145(a) ofthc Code) will be issued by or on
behalf of the City and all "subordinate entities" of the City in 2006 in an amount greatcr than
$10,000,000.
5.06. Information Reporting. The City shall file with the Secretary of the Treasury, not
later than August 15,2006, a statement concerning the Bonds containing the information
required by Section 149(e) of the Code.
Section 6. Authentication of Transcript. Thc officcrs of thc City are hereby authorized
and directed to furnish to the Purchaser and to bond counsel celtified copies of all proccedings
relating to the issuance of the Bonds and such other certificates and affidavits as may be 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 herctoforc furnishcd, shall constitute
reprcsentations of the City as to the truth of the statements purpOlted to be shown thereby.
Section 7. Discharge.
13
7.01. Gcncral. When the liability of the City on all Bonds issued under and secured by
this rcsolution has been discharged as provided in this Section 7, all pledges, covenants and other
rights granted by this resolution to thc owners of such obligations shall cease.
7.02. Payment. The City may dischargc its liability with refercncc to any Bond or
installment of interest thereon which is duc on any datc by on or beforc that date dcpositing with
the Registrar funds sufficient, or, if a City officer is the Registrar, mailing to thc registcrcd owner
of such Bond a check or draft in a sum sufficicnt and providing procceds 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 nevertheless discharge its liability with reference thereto by depositing with
thc Registrar funds sufficient, or, if a City officer is the Registrar, by mailing to the registered
owner thereof a check or draft in a sum sufficient and providing proceeds available, for the
payment thereof in full with intcrcst accrued to the date of such deposit or mailing.
7.03. Prepayment. The City may also dischargcits obligations with respect to any Bonds
called for redemption on any date when they arc prcpayable according to thcir tcrms, by on or
before that date depositing with the Registrar funds sufficient, or, if a City officer is the
Registrar, mailing to the registered owner of such Bond a check or a draft in a sum sufficient and
providing proceeds available, for the payment of the principal, interest and redemption premium,
if any, which are then due; providcd that notice of such redemption has been duly given as
provided hcrein or irrevocably provided for.
7.04. Escrow. Thc City may also at any time discharge its liability in its entirety with
reference to the Bonds, subjcct to the provisions of law now or hereafter authorizing and
regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an
escrow agent for this purpose, cash or securities which are authorized by law to be so deposited,
bearing interest payable at such times and at such rates and maturing on such dates as shall be
requircd, without reinvestment, to provide funds sufficient to pay all principal 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 beforc the
designated redemption date.
Section 8. Continuing Disclosure.
(a) PUllJOSC and Beneficiaries. To provide for the public availability of certain
information relating to the Bonds and the security therefor and to permit participating
underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-
12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended (the "Rule"), because the aggregate principal amount of the Bonds and any
other securities required to be integrated with the Bonds is more than $10,000,000, the City will
covenant and agree, for the benefit of the rcgistered holdcrs or beneficial owners from time to
time of the outstanding Bonds, in the Bond Resolution, to provide annual rcports of spccificd
information and notice of the occurrence of certain events, if material, as hereinafter described
(the "Disclosure Covenants"). The City is the only "obligated person" in respect of the Bonds
within the meaning of the Rule for purposes of identifying the cntities in respect of which
14
continuing disclosure must be made. The City has complied in all material respects with any
undertaking previously entered into by it undcr thc Rule.
If the City fails to comply with any provisions of this Section 8, any person aggrieved
thereby, including the Owners of any Outstanding Bonds, may take whatever action at law or in
equity may appear necessary or appropriate to enforce performance and observance of any
agreement or covenant contained in this Section 8, including an action for a writ of mandamus or
specific performance. Direct, indircct, consequential and punitive damagcs shall not be
recoverable for any dcfauIt hcreundcr. Notwithstanding anything to the contrary containcd
herein, in no cvent shall a default under this Section 8 constitute a default under the Bonds or
under any other provision of this resolution.
As used in this Section 8, "Owner" or "Bondowner" means, in respect of a Bond, the
rcgistcred owner or owners thereof appearing in the bond register maintained by the Registrar or
any "Beneficial Owner" (as hereinafter defined) thereof, if such Beneficial Owner provides to
the Registrar evidence of such beneficial ownership in form and substance reasonably
satisfactory to the Registrar. As uscd hercin, "Beneficial Owner" means, in respcct of a Bond,
any pcrson or entity which (i) has the power, directly or indirectly, to votc or consent with
respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds
through nominees, depositories or other intcrmcdiaries), or (b) is trcatcd as the owner of the
Bond for federal income tax purposcs.
(b) Information To Be Disclosed. The City will provide, in the manner set forth in
subsection (c) hereof, cithcr directly or indirectly through an agent designatcd by thc City, thc
following information at the following times:
(1) on or before 270 days after the end of each fiscal year of the City, commencing with
the fiscal year ending June 30, 2006, the following financial information and operating data in
rcspect of the City (the "Disclosure Information"):
(A) the audited financial statements of the City for such fiscal year,
accompanied by the audit report and opinion of the accountant or government
auditor relating thereto, as permitted or required by the laws of the State of
Montana, containing the balance shccts as of the end of such fiscal year and a
statement of operations, changes in fund balances and cash flows for the fiscal
year then ended for required funds, prepared in accordance with generally
accepted accounting principles promulgated by the Financial Accounting
Standards Board as modified in accordance with the govcrnmental accounting
standards promulgated by the Governmental Accounting Standards Board or as
otherwise provided under Montana law, as in effect from time to time, or, if and
to the extent such financial statements have not been prepared in accordance with
such generally accepted accounting principles for reasons beyond the reasonable
control of the City, noting the discrepancies therefrom and the effect thereof, and
certified as to accuracy and completeness in all material respects by the Finance
Director; and
15
(B) To the extent not included in the financial statements referrcd to in
paragraph (A) hereof, the information of the type set forth below, which
information may be unauditcd, but is to be certified as to accuracy and
completeness in all matcrial respccts by the Finance Director to thc best of his or
hcr knowledgc, which certification may be based on the reliability of information
ohtained from third party sources:
(1) updated information for the then most recent completed fiscal
year in format similar to the table in the section captioned "Revolving
Fund" in the Official Statement of the City, dated March 27, 2006 (the
"Official Statement"), concerning the Rcvolving Fund Cash Balance and
outstanding bonds secured thereby;
(2) a description of any spccial improvcment district bonds issued
during the then most recent completed fiscal year;
(3) updated information for the then most recent completed fiscal
year in format similar to the table in the section captioned "Special
Assessment Billings and Collections" in the Official Statement;
(4) updated information for the then most recent completed fiscal
ycar in format similar to the table in the section captioncd "Statement of
Changes in Fund Balance of the Revolving Fund", in the Official
Statement;
(5) the market and taxable valuations of the City for the then
current fiscal year; and
(6) tax collection information for the then most recent completed
fiscal year in format similar to the table in the section captioned "Tax
Collcctions" in Appendix A to the Official Statement.
Notwithstanding the foregoing paragraph, if the audited financial statements are not
available by the date specified, the City shall provide on or before such date unaudited financial
statemcnts in the format rcquired for the audited financial statements as part of the Disclosure
Information and, within 10 days after the receipt thereof, the City shall provide thc audited
financial statements.
Any or all of the Disclosure Information may be incorporatcd by reference, if it is
updated as required hereby, from other documents, including official statements, which have
been submitted to each of the repositories hereinafter referred to under subsection (b) or the SEe.
If the document incorporated by referencc is a final official statement, it must be available from
the Municipal Sccurities Rulemaking Board. The City shall clearly identify in the Disclosure
Information each document so incorporated by reference.
If any part of the Disclosure Information can no longer be generated because the
operations of the District or the City have materially changcd or been discontinued, such
16
Disclosure Information need no longer bc provided if the City includes in the Disclosure
Information a statement to such effect; provided, however, if such operations have been replaced
by other City operations in rcspect of which data is not included in the Disclosure Information
and the City determines that certain specified data regarding such replacement operations would
be a Material Fact (as defined in paragraph (3) hereof), then, from and after such determination,
the Disclosure Information shall include such additional specified data regarding the replacement
operations.
If the Disclosurc Information is changed or this Section 8 is amended as permitted by this
paragraph (b)( 1) or suhsection (d), then the City shall include in thc next Disclosurc Information
to bc delivered hereunder, to the extent necessary, an explanation of the reasons for the
amendment and the effect of any change in thc type of financial information or operating data
provided. Such explanation shall include any change in the accounting principles pursuant to
which the financial statements constituting a portion of the Disclosure Information are prepared.
(2) In a timely manner, notice of the occurrence of any of the following events which is
a Material Fact (as hercinaftcr defined):
(A) Principal and interest payment delinquencies;
(B) Non~payment related defaults;
(C) Unscheduled draws on dcbt service reserves reflecting financial difficulties;
(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Advcrse tax opinions or events affecting the tax-exempt status of the security;
(G) Modifications to rights of security holders;
(H) Bond calls;
(I) Defeasances;
(J) Release, substitution, or sale of property securing repayment of the securities; and
(K) Rating changes.
As used herein, a "Material Fact" is a fact as to which a substantial likelihood exists that
a reasonably plUdent investor would attach importance thereto in deciding to buy, hold or sell a
Bond or, if not disclosed, would significantly alter the total information otherwise available to an
investor from the Official Statement, information disclosed hereunder or information generally
available to the public. Notwithstanding the foregoing sentencc, a "Material Fact" is also an
event that would be dcemed "material" for purposes of the purchase, holding or sale of a Bond
within the meaning of applicable federal securitics laws, as intcrprcted at the time of discovery of
the occurrence of the event.
(3) In a timcly manner, notice of the occurrence of any of the following events or
conditions:
(A) the failure of the City to provide the Disclosure Information required
under paragraph (b)( 1) at the time specified thereunder;
17
(B) the amendmcnt or supplcmcnting of this Section 8 pursuant to
subsection (d), together with a copy of such amendment or supplement and any
explanation provided by the City under subsection (d)(2);
(C) thc termination of the obligations of the City under this Section 8
pursuant to subsection (d); and
(D) any change in the fiscal year of the City.
(c) Manner of Disclosure. The City agrees to make available the information dcscribcd
in subsection (b) to the following entities by telecopy, overnight delivery, mail or other means, as
appropriate:
(l) the information described in paragraphs (l) of subsection (b), to any state
information depository thcn designated or operated by the Statc of Montana as contemplated by
the Rule (the "State Depository"), if any;
(2) the information described in paragraphs (2) and (3) of subscction (b), to the
Municipal Securities Rulemaking Board and to the State Depository, if any; and
(3) the information described in subsection (b), to any rating agency then maintaining a
rating of the Bonds and, at the expense of such Bondowner, to any Bondowner who requests in
writing such information, at the time of transmission undcr paragraphs (l) or (2) of this
subsection (c), as the case may bc, or, if such information is transmitted with a subsequent time
of relcase, at thc timc such information is to be releascd.
(d) Term; Amendments; Interpretation.
(l) The covenants of the City in this Section 8 shall remain in effect so long as any
Bonds arc Outstanding.
(2) This Section 8 (and the form and requirements of the Disclosure Information) may be
amended or supplemented by the City from time to time, without notice to (except as providcd in
paragraph (c)(3) hereoD or the consent of the Owners of any Bonds, by a resolution of this
Commission filed in the office of the recording officer of the City accompanied by an opinion of
Bond Counsel, who may rely on certificates of the City and othcrs and the opinion may be
subject to customary qualifications, to the effect that such amendment or supplement (A) is made
in connection with a change in circumstances that arises from a change in law or regulation or a
change in the identity, nature or status of the City, District or the District Fund and the Revolving
Fund of the City or the type of operations conducted by the City or the District, or (B) is required
by, or better complies with, the provisions of paragraph (b)(5) of the Rule, assuming that sllch
provisions apply to the Bonds.
If the Disclosure Information is so amended, the City agrees to provide,
contemporaneously with the effectiveness of such amendment, an explanation of the reasons for
the amendment and the effect, if any, of the change in the type of financial information or
operating data being provided hereunder.
18
(3) This Section X is entered into as a continuing disclosure undertaking to provide
continuing disclosure identical to that required by the continuing disclosure provisions of the
Rule and should be construed so the undertaking would satisfy the requirements of paragraph
(b)(5) of the Rule, assuming it was otherwise applicable to the Bonds.
(e) Further Limitation of Liability of City. In and to the extent the limitations of liability
contained in subsection (a) are not effective, anything contained in this Section 8 to the contrary
notwithstanding, in making the agreements, provisions and covcnants set forth in this Section 8,
the City has not obligated itself cxccpt with respcct to the asscssmcnts and the Revolving Fund.
None of thc agrccments or obligations of the City contained herein shall be construed to
constitute an indebtedness of the City within the meaning of any constitutional or statutory
provisions whatsoever or constitute a pledge of the general credit or taxing powers of the City.
Section 9. Repeals and Effective Date.
9.01. Repeal. All provisions of other resolutions and other actions and
proceedings of the City and this Commission that are in any way inconsistent with the terms and
provisions of this resolution are rcpcaled, amendcd and rescinded to the full extent necessary to
give full force and effcct to thc provisions of this resolution.
9.02. Effective Date. This resolution shall take effect immcdiately upon its
passage and adoption by this Commission.
PASSED by the City Commission of the City of Bozeman, Montana, this 17th
day of April, 2006.
ALLest: [L/l V ~P7/G~
(SEAL)
City Clerk
19
EXHIBIT A
[Face of the Bond]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF GALLATIN
CITY Of BOZEMAN
SPECIAL IMPROVEMENT
DISTRICT NO. 684 BOND
Interest at the rate per annum specified below
payable January 1, 2007 and
scmiannually thcrcafter
on the 1 st day of January and the 1 st day of July in each ycar
No. $
Date of Original
Rate Maturity Issue C U S IP
April 15, 2006
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
FOR VALUE RECEIVED, the City of Bozeman, Gallatin County, Montana, will pay to
thc 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. 3906 adopted April 17, 2006 (the "Resolution"), all subject to the
provisions hcreinafter described relating to the redemption of this Bond before maturity. This
Bond bears interest at the rate per annum specified above from the date of registration of this
Bond, as expressed hercin, or from such later date to which interest hcrcon has bccn paid or duly
providcd for, until the maturity date specified above or an earlier date on which this Bond shall
have becn duly called for rcdemption by the Finance Director. Interest on this Bond is payable
scmiannually, commencing January I, 2007, on the first day of 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 a business day) of the immediately
preccding month. Intcrcst on and, upon presentation and surrender hercof at thc operations
center of the bond registrar and paying agent hereinafter named, the principal of this Bond are
payable by check or draft of thc Financc Director of the City, as Bond Registrar, Transfer Agent
and Paying Agent, at its operations center in Bozeman, Montana, or its successor designated
A~l
under the Resolution (the "Registrar"). The principal of and interest on this Bond arc payable in
lawful money of the Unitcd States of America.
Notwithstanding any othcr provisions of this Bond, so long as this Bond is registered in
the name of Cede & Co., as nominee of The Dcpository Trust Company, or in the name of any
other nominee of The Dcpository Trust Company or other securities depository, the Registrar
shall pay all principal of and intercst on this Bond, and shall give all notices with respect to this
Bond, only to Cede & Co. or other nominee in accordance with the opcrational arrangements of
The Depository Trust Company or other securities depository as agreed to by the City.
This Bond is one of an issue in the aggregate principal amount of $1,376,869 (the
"Bonds"), all of like date of original issue and tenor, except as to serial number, denomination,
date, interest rate and maturity datc. The Bonds are issued pursuant to and in full conformity
with the Constitution and laws of the Statc of Montana thereunto enabling, including Montana
Codc Annotatcd, Title 7, Chapter 12, Parts 41 and 42, as amcndcd (the "Act"), to finance the
costs of certain local improvements (the "Improvements") for the special benefit of property
located in Special Improvement District No. 684 of the City (the "District"). The Bonds are
issuable only as fully registered bonds of single maturities in denominations of $5,000 or any
integral multiple thereof.
This Bond is payable from the collection of a special tax or assessment levied upon all
assessable rcal property within thc boundaries of the District, in an aggregate principal amount of
not less than $1,376,869, except as such amount may be redueed or incrcased in accordance with
provisions of Montana law. Such assessments constitute a lien against thc assessable real estate
within the District and are to be dcposited into the Special Improvement District No. 684 Fund of
the City (the "District Fund"). The Bonds are not gencral 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 improvemcnt 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 thc District
Fund, in amounts sufficient to makc good any deficiency in the District Fund to pay principal of
or interest on the Bonds, to the extent that funds arc available in the Revolving Fund, and to
provide funds for the Revolving Fund by annually making a tax levy or loan from its general
fund in an amount sufficient for that purpose, subject 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 of the City's then outstanding special improvement district bonds sccured
thereby and the durational limitations specified in the Act. While any property tax levy to be
made by the City to provide funds for the Revolving Fund is subject to levy limits under currcnt
law, the City has agreed in the Rcsolution to lcvy 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 $5,000 principal amounts selected by lot or other manner deemed fair
by the Registrar, on any interest payment date if, after paying all prineipal and interest then due
A-2
on the Bonds, there are funds to the credit of the District Fund, from the prepayment of
assessments levied in the District or from surplus procecds 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 are subjcct to rcdcmption, in whole or in part, at the option of the City
from sources of funds available therefor other than those described in thc preceding paragraph
rcgarding mandatory redemption and other than from any amounts on deposit in a Rescrve
Account (e.g., from proceeds of refunding bonds) on the terms of this paragraph. crhe Bonds
with stated maturities on or after July 1, 2013 are subjcct to redemption on January 1, 2013, and
any date thereafter, at the option of the City, in whole or in part, at a redemption price equal to
the principal amount thereof to be redeemed plus interest accrued to the redemption date, without
premium. The redemption pricc is cqual to thc principal amount of thc Bonds or portions thereof
to be redeemed plus intcrcst accmed thcrcon to thc datc of redemption. The date of redemption
and principal amount shall be fixed by the Finance Director, who shall give noticc thcrcof 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 owner or owners of such Bonds at
their addresses shown on the bond rcgistcr, of the Bonds or portions thereof to be redeemed and
the date on which payment will be madc, which datc shall not be less than thirty (30) days after
the date of mailing of notice, on which date so fixcd intcrest shall ccase. On the date so fixed
intcrcst on the Bonds or pOltions thereof so redeemed shall cease to accmc. 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.
As provided in the Resolution and subjcct to certain limitations sct 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 writing upon 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 authorizcd denominations. Upon such transfer or exchange, the City will cause a new
Bond or Bonds to be issued in the name of the transferee or registered owner, of the same
aggregate principal amount, bearing interest at the same rate and maturing on the same datc,
subject to reimbursement for any tax, fee or governmental charge required to be paid with
respect to such transfer or exchange.
The City and the Registrar may deem and treat the person in whosc namc this Bond
is registered as the absolute owner hereof, whether this Bond is overdue or not, for thc 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 IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all
things required to be done precedent to the issuance of this Bond have been properly done,
happcncd and been performcd in the manner prescribed by the laws of the State of Montana and
the resolutions and ordinances of the City of Bozeman, Montana, relating to thc issuance thereof;
and that the opinion attached hereto is a true copy of the legal opinion givcn by Bond Counsel
with reference to the Bonds, dated the date of original issuance and delivery of the Bonds.
A-3
This Bond shall not be valid or become obligatory for any purpose or be entitled to
any security or benefit under the Resolution until thc Certificate of Authentication and
Registration herein shall have bccn cxecuted by thc Registrar by thc manual signature of one of
its authorized rcpresentatives.
IN WITNESS WHEREOF, the City of Bozeman, Gallatin County, Montana, by its
City Commission, 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.
(Facsimile Signature)
Mayor
(Facsimile Signaturc)
City Manager
(Facsimile Seal) (Facsimile Signature)
City Clerk
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of thc Bonds delivered pursuant to the Rcsolution mentioned within.
FINANCE DIRECTOR
OF THE CITY OF BOZEMAN,
as Bond Registrar, Transfer Agent,
and Paying Agent
By
Authorized Signature
A-4
The following abbrcviations, whcn uscd in the inscription on the face of this Bond, shall
be construcd as though thcy werc written out in full according to applicable laws or regulations:
TEN COM -- as tenants UTMA. . . . . . . .Custodian. . . . . .
1Il common (Cust) (Minor)
TEN ENT ~~ as tenants
by the entireties
under Uniform Transfers
JT TEN -- as joint tenants to Minors Act . . . . . . . . . . . . . . . . . . . .
with right of (State)
survivorship and
not as tenants in
eomlllon
Additional abbreviations may also be used.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
the within Bond and all rights thereunder,
and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the hooks kept for
registration thereof, with full power of substitution in the premises.
Dated:
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER NOTICE: The signature to this
OF ASSIGNEE: assignment must correspond with
the name as it appears upon the
face of the within Bond in every
/ / particular, without alteration,
enlargement or any change whatsoever.
SIGNA TURE GUARANTEED
Signature(s) must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
thl: Bond Rl:gistrar, whil:h rl:4uirl:mcnts indudc
membership or participation in STAMP or such other
"signature guaranty program" as may be determined
by the Bond Registrar in addition to or in substitution
for STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
A~5
CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE
I, the undersigned, being the duly qualified and acting recording officer of the City of
Bozeman, Montana (the "City"), hereby certify that the attached resolution is a true copy of a
Resolution entitled: "RESOLUTION RELATING TO $1,376,869 SPECIAL IMPROVEMENT
DISTRICT NO. 684 BONDS; FIXING THE FORM AND DETAILS AND PROVIDING FOR
THE EXECUTION AND DELIVERY THEREOF AND SECURITY THEREFOR" (the
"Resolution"), on file in the original records of the City in my legal custody; that the Resolution
was duly adopted by the City Commission of the City at a regular meeting on April 17, 2006,
and that the mceting was duly held by the City Commission and was attended throughout by a
quorum, pursuant to call and notice of such meeting gi ven as required by law; and that the
Resolution has not as of the date hercof been amcnded or repealed.
I fUlther certify that, upon vote being taken on the Resolution at said meeting, the
following Commission Members voted in favor thereof: :J eft Ru (( I 5frve kirc hi! 0 (f
4Q. ((VI Tc,c qhSo..-., ;; e~ It f3~cku , Ttff kfqy~; votcd against thc samc: Afo l-J e
r " ; abstained from voting thereon: )J 0 V1 ~ ,
or were absent: ;1/0 "7 e
t..'L
WITNESS my hand and seal officially this -.JJday of April, 2006.
(SEAL) f2/J1 tL
City Clcrk