HomeMy WebLinkAboutResolution 3792 Bond sale for pooled SID bonds, final
COMMISSION RESOLUTION NO. 3792
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
BOZEMAN, MONTANA, RELATING TO $3,001,000 POOLED SPECIAL
IMPROVEMENT DISTRICT BONDS, SERIES 2005 (SPECIAL
IMPROVEMENT DISTRICT NOS. 675, 676, 677, AND 678); 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 1. Recitals. It is hereby found, determined and declared as follows:
1.01. Resolutions of Intention. By Resolution Nos. 3672, 3674, 3676, and 3678 duly adopted by
the Commission on April 19, 2004 (collectively, the "Resolutions of Intention"), this Commission declared
its intention to create Special Improvement District Nos. 675 ("SID No. 675"), 676 ("SID No. 676"), 677
("SID No. 677"), and 678 ("SID No. 678") (collectively, the "Districts"), for the purpose of financing costs
of certain public improvements of special benefit to the properties within the Districts. Each of the
Resolutions of Intention designated the number of the District, described the boundaries thereof, stated
whether the District was an extended district and stated the general character of the improvements to
be made (collectively, 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 each Resolution of Intention this Commission also declared its intention to
cause the cost and expense of making the Improvements specially benefiting a District to be 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 7-12-4165and assetforth
in each Resolution of Intention.
In the Resolutions of Intention, this Commission further found that it is in the public interest, and
in the best interest of the City and the Districts, 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 factors required to be considered under Section 7-12-4225 of the Act. Those findings are hereby
ratified and confirmed.
1.02. Notices. Notices of the passage of each of the Resolutions of Intention were given by two
publications, with at least six days between publications, in the Bozeman Daily Chronicle, a weekly
newspaper of general circulation published within the City. Notices of the passage of each of the
Resolutions of Intention were also mailed the same day the notice was first published to all persons, firms
or corporations or the agents thereof having real property within each District, listed in their names upon
the last completed assessment roll for state, county and school district taxes, at their last known
addresses. The notices for each District 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 each 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 such
District, and referred to the appropriate Resolutions of Intention as being on file in the office of the City
Clerk for a description of the boundaries of the District, all in accordance with the provisions of each
Resolution of Intention, and included a statement that, subject to the limitations of Section 7-12-4222 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. In each Resolution of Intention, the Commission 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
Regulations promulgated under the Internal Revenue Code.
1.03. Creation of Districts. At the times and places specified in the notices hereinabove
described, this Commission met to hear, consider and pass upon all protests made against the making
of the Improvements and the creation of each of the Districts, and, after consideration thereof, it was
determined and declared that insufficient protests against the creation or extension of each of the
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Districts 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 respective Districts, and this Commission did
therefore by Resolution Nos. 3756, 3757, 3758, and 3759, adopted December 20, 2004, create the
Districts, order the proposed Improvements in each District in accordance with the applicable Resolution
of Intention, and confirm the findings it made with respect to the pledge of the Revolving Fund in the
Resolutions of Intention.
1.04. Construction Contracts. The City will cause or has caused to be constructed certain
Improvements as described in the Resolutions of Intention. Plans, specifications, maps, profiles and
surveys for construction of the Improvements to be constructed to benefit each District were prepared
by the engineers acting for the City or by City engineers, and were thereupon examined and approved
by this Commission. Advertisements for bids for construction of the Improvements were published in the
official newspaper of the City in accordance with the provisions of Montana Code Annotated, Section 7-
12-4141, after which the bids theretofore received were opened and examined. After referring the bids
to the engineers for the City it was determined that the lowest regular proposals for the furnishing of all
work and materials required for constructing the Improvements in accordance with the approved plans
and specifications were the following:
SID No. 675:
Work Bidder Contract Price
Design, engineering, construction and JTL Group, Inc. $1,144,657
installation of the following: on North Belgrade, Montana
19th Avenue, north of Baxter Lane to the
Valley Center Road intersection, widening the
existing three land roadway to five lanes, including
left turn lanes a the intersections, installation of new
drainage culverts and ditches, street lighting, and
a raised center median. At its intersection with
Valley Center Road, the south lane of the intersection
will consist of six lanes, including two left turn
lanes, two through lanes for northbound traffic,
and two through lanes for southbound traffic, all
related improvements, including new signing,
pavement markings, and traffic control;
all of which include engineering design, construction,
inspection, and engineering certification of asphalt
cement paving, gravel base courses and subgrade
preparation, storm drainage and all necessary permits
and appurtenances to complete the road widening.
SID No. 676:
Work Bidder Contract Price
Design, engineering, construction and JTL Group, Inc. $1,067,343
installation of the following: on Valley Belgrade, Montana
Center Road, from its intersection with
North 19th Avenue to immediately west of
its intersection with North 27th Avenue,
widening the existing two lane roadway;
installation of new drainage culverts and
ditches; street lighting; a raised center median,
landscaped and with an underground irrigation
system, with access breaks for adjacent properties;
and all related improvements, including new
signing, pavement markings, and traffic control;
all of which include engineering design, construction,
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inspection, and engineering certification of asphalt
cement paving, gravel base courses and subgrade
preparation, storm drainage and all necessary permits
and appurtenances to complete the road widening.
SID No. 677:
Work Bidder Contract Price
Design, engineering, construction and JTL Group, Inc. $94,640
installation of traffic signal improvements Belgrade, Montana
at the intersection of North 19th Avenue and
Valley Center Road, including replacement of
the existing traffic signal with installation of
new signal poles and foundations, mast arms,
cabinet, controller, luminaries, signal heads,
pedestrian heads and push buttons, loop detectors,
and traffic control.
SID No. 678:
Work Bidder Contract Price
Design, engineering, construction JTL Group, Inc. $210,846
and installation of a new traffic signal Belgrade, Montana
at the intersection of North 19th Avenue
and Cattail Street (aka Deadman's Gulch)
including installation of new signal poles
and foundations, mast arms, cabinet, controller,
luminaries, signal heads, pedestrian heads and
push buttons, loop detectors, and traffic control.
Contracts for the construction of the Improvements were 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 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 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 Commission and in the form and manner provided
by Montana Code Annotated, Title 18, Chapter 2, Part 2, as amended.
1.05. Costs. It is currently estimated that the costs and expenses connected with and incidental
to the formation of the Districts to the City to be assessed against properties in the Districts, including
costs of preparation of plans, specifications, maps, profiles, engineering superintendence and inspection,
preparation of assessment rolls, expenses of making the assessments, the cost of work and materials
under the construction contracts and all other costs and expenses, including the deposit of proceeds in
the Revolving Fund and District Reserves is $1,361,000 for SID No. 675; $1,276,000 for SID No. 676;
$114,000 for SID No. 677; and $250,000 for SID No. 678, for a total of $3,001 ,000. Such amounts will
be levied and assessed upon the assessable real property within each of the Districts on the basis
described in each of the Resolutions of Intention. This Commission has jurisdiction and is required by
law to levy and assess such amounts, to collect such special assessments and credit the same to the
special improvement district funds created for each District, which funds are to be maintained on the
official books and records of the City separate from all other City funds, within the 2005 Pooled Special
Improvement District Sinking Fund (the "Sinking Fund") for the payment of principal and interest when
due on the bonds herein authorized. Costs of the Improvements in excess of the amounts of the Bonds
are to be paid from other available funds of the City and contributions made by property owners in the
District.
1.06. Sale and Issuance of Bonds. For the purpose of financing a portion of the costs and
expenses of making the Improvements, which are to be assessed against the property within each
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District as provided in the Resolutions of Intention, this Commission, pursuant to Resolution Nos. 3672,
3674, 3676, and 3678, adopted April 19, 2004, determined that the issuance and sale of bonds in a
pooled single offering was in the best interests of the City and the Districts and would facilitate the sale
of the bonds at lower interest rates. This Commission then called for the public sale of bonds in the total
aggregate amount of $3,001,000. This Commission authorized the City to enter into a contract with D.A.
Davidson & Co., of Great Falls, Montana (the "Purchaser"), as the lowest responsible bidder pursuant
to which the Purchaser agreed to purchase from the City the Bonds at a purchase price of $2,952,984,
plus interest accrued thereon from the date of original issue of the Bonds, at the rates of interest set forth
in Section 2.01 hereof and upon the further terms set forth in this resolution resulting in a true cost of
4.6406% per annum, a total interest cost of $1,358,336.25 and a net dollar interest cost of
$1,406,652.25.
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, and
the home rule charter of the City, in order to make the Bonds valid and binding special obligations in
accordance with their terms and in accordance with the terms 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. The Bonds.
2.01. Principal Amount. Maturities. Denominations, Date. Interest Rates. For the purpose of
paying 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 deliver to the Purchaser the Bonds payable solely from
the Sinking Fund and denominated "Pooled Special Improvement District Bonds, Series 2005 (Special
Improvement District Nos. 675, 676, 677, and 678)." The Bonds shall be dated, as originally issued, and
be registered as of April 15, 2005, shall each be in the denomination of $5,000 each or any integral
multiple thereof of single maturities, except that one bond maturing in 2006 shall be in the principal
amount of $6,000, shall mature on July 1 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 annum set forth opposite such years and amounts,
respectively:
Principal Principal
Year Amount Rate Year Amount Rate
2006 $156,000 3.00% 2016 $160,000 4.400%
2007 155,000 3.150% 2017 160,000 4.500%
2008 160,000 3.350% 2018 160,000 4.550%
2009 160,000 3.500% 2019 155,000 4.600%
2010 160,000 3.750% 2020 155,000 4.700%
2011 160,000 3.900% 2021 155,000 4.800%
2012 160,000 4.000% 2022 155,000 4.800%
2013 160,000 4.150% 2023 155,000 4.800%
2014 160,000 4.250% 2024 155,000 4.800%
2015 160,000 4.350%
2.02. Interest Payment Dates. Interest on the Bonds shall be payable on each January 1 and
July 1, commencing January 1, 2006, to the owners of record thereof as such appear on the bond
register at the close of business on the fifteenth day of the immediately preceding month, whether or not
such day is a business day. Upon the original delivery of the Bonds to the Purchaser 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 Payment. The Bonds shall be issued only in fully registered form. The interest
on and, upon surrender thereof at the principal office of the Registrar (as hereinafter defined), the
principal of each Bond, shall be payable by check or draft drawn on the Registrar.
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2.04. Reqistration. The City shall appoint, and shall maintain, a bond registrar, transfer agent
and paying agent for the Bonds (the "Registrar"). This Section 2.04 shall establish a system of
registration for the Bonds as defined in the Model Public Obligations Registration Act of Montana.
The effect of registration and the rights and duties of the City and the Registrar with respect
thereto shall be as follows:
(a) Bond Reqister. The Registrar shall keep at its principal office a bond register
in which the Registrar shall provide for the registration of ownership of the Bonds and the
registration of transfers and exchanges of the Bonds entitled to be registered, transferred
or exchanged.
(b) Transfer. Upon surrender to the Registrar 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 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. The Registrar may, however, close the books for registration of any
transfer of any Bond or portion thereof 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 2.06.
(c) Exchanqe. 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, interest rate and maturity, as requested by the registered
owner or the owner's attorney duly authorized in writing.
(d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be
promptly canceled by the Registrar and thereafter disposed of as directed by the City.
(e) ImDroDer 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 judgment, deems 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 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
purposes, and all such payments so made to any such registered owner or upon the
owner's order shall be valid and effectual to satisfy and discharge the liability of the City
upon such Bond to the extent of the sum or sums so paid.
(g) Taxes. Fees and Charqes. For every transfer of Bonds or exchange of Bonds
(except an exchange upon a partial redemption of a Bond), the Registrar 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 of like
amount, number, maturity date and tenor in exchange and substitution for and upon
cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond
destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of
the Registrar in connection therewith; and, in the case 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
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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 matured or such
Bond has been called for redemption in accordance with its terms, it shall not be
necessary to issue a new Bond prior to payment.
2.05. Initial Registrar. The City Finance Director will act as the initial Registrar for the Bonds.
The City reserves the right to appoint a successor Registrar, and the City agrees to pay the reasonable
and customary charges of the Registrar for the services performed. Upon merger or consolidation of a
bank or trust company that is acting as the Registrar, if the resulting corporation is a bank or trust
company authorized by law to conduct such business, such corporation shall be authorized to act as
successor Registrar. The City reserves the right to remove any Registrar upon 30 days' notice and upon
the appointment of a successor Registrar, in which event the predecessor Registrar shall deliver all cash
and Bonds in its possession as Registrar to the successor Registrar and shall deliver the bond register
to the successor Registrar. On or before each principal or interest due date, without further order of this
Commission, the Finance Director shall transmit to the Registrar, solely from money in the District Fund
available therefor, moneys sufficient for the payment of all principal, premium, if any, and interest then
due on the Bonds.
2.06. Redemption.
(a) Mandatorv Redemption. If on any interest payment date there will be a
balance in the Sinking 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 Districts
or from the transfer of surplus money from the Construction Subaccount to the Principal
Subaccount, then outstanding Bonds, or portions thereof, in an amount which, together
with the interest thereon to the interest payment date, will equal the amount of such funds
on deposit in the Sinking Fund on that date are subject to mandatory redemption on that
interest payment date. The redemption price shall equal the amount of the principal
amount of the Bonds to be 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 under "Mandatory Redemption" and other than from any amounts on deposit
in a Reserve Account (e.g., from proceeds of refunding bonds) on the terms of this
paragraph. The Bonds with stated maturities on or after January 1, 2013 will be subject
to redemption on January 1, 2012, 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.
(c) Selection of Bonds for 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.
(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 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 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 (30) days after the date of mailing notice.
On the date so fixed interest on the Bonds or portions thereof so redeemed shall cease.
2.07. Form. The Bonds 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.
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2.08. Execution, ReQistration and Deliverv. The Bonds shall be prepared under the direction of
the Clerk of the Commission and shall be executed on behalf of the City by the signatures of the Mayor,
the Finance Director, and the Clerk of the Commission and sealed with the official seal of the City;
provided that the signatures and the corporate seal may be printed, engraved or lithographed facsimiles
of the originals. In case 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 Bond shall be valid or obligatory for any purpose or
entitled to any security or benefit under this resolution unless a certificate of authentication on such Bond
has been duly executed by the manual signature of an authorized representative of the Registrar.
Certificates of authentication on different Bonds need not be signed by the same representative. The
executed certificate of authentication 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 their serial
numbers by the Registrar, as of April 15, 2005. 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. The Purchaser shall not
be obligated to see to the application of the purchase price, but from the net proceeds of the Bonds the
Finance Director shall credit forthwith $68,050 for SID No. 675, $63,800 for SID No. 676, $5,700 for SID
No. 677, and $12,500 for SID 678 to the Revolving Fund, as required by Section 7-12-4169(2) oftheAct,
and $68,050, $63,800, $5,700 and $12,500, respectively to the District Reserve Subacconts established
under Section 3.01 and used as provided in Section 3.04. Any accrued interest to the Interest
Subaccount in the Sinking Fund, and the balance of such proceeds to the Construction Subaccount in
the respective District Accounts, in proportion to the principal amounts of the Bonds allocable to each
of the Districts, as set forth in Section 1.05, to be used solely for the purposes described in Section 3.02.
2.09. Securities Depository for the Bonds.
(a) For purposes of this Section 2.09, 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 subrogee.
"Cede & Co." shall mean Cede & Co., the nominee of DTC, and any successor nominee
of DTC with respect to the Bonds.
"DTC" shall mean The Depository 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, attached to this resolution as Exhibit B (which is hereby incorporated by
reference and made a part hereof.
(b) The 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 the Bonds
registered in its name for the purposes of payment of the principal of or interest on the
Bonds, selecting the Bonds or portions thereof to be redeemed, 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 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
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respect to the selection by DTC or any Participant of any person to receive payment in the
event of a partial 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 notice to the effect that DTC 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) 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 the 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 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 be transferable 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 the Bonds and
Beneficial Owners and payments on the Bonds. The Registrar shall have the same rights
with respect to its actions thereunder as it has with respect to its actions under this
resolution.
(e) In the event that any transfer or exchange of Bonds is permitted under
paragraph (b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt
by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments
of transfer to the permitted transferee in accordance with the provisions of this resolution.
In the event Bonds in the form of certificates are issued to owners other than Cede & Co.,
its successor as nominee for DTC as owner of all the 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. Sinkina Fund: Assessments.
3.01. Sinkina Fund. There is hereby created and established a Sinking Fund designated as the
"2005 Pooled Special Improvement District Sinking Fund," which shall be maintained by the Finance
Director on the books and records of the City separate and apart from all other funds of the City. Within
the Sinking Fund there shall be maintained separate accounts for each of the Districts, designated
accordingly (collectively, the "District Accounts"). Within each District Account there shall be maintained
four separate subaccounts, designated as the "Construction Subaccount," "Principal Subaccount"
"Interest Subaccount," and District Reserve Subaccount Account, respectively.
3.02. Construction Subaccounts. There shall be credited to the Construction Subaccount in the
District Accounts the proceeds of the sale of the Bonds attributable to the respective District as provided
in Section 1.05. Any earnings on investment of money in a Construction Subaccount shall be retained
therein. All costs and expenses of constructing the Improvements to be paid from proceeds of the Bonds
in and for the benefit of a District shall be paid from time to time as incurred and allowed from the
Construction Subaccount in the respective District Account in accordance with the provisions of
applicable law, and money in the Construction Subaccount shall be used for no other purpose; provided
that upon completion of the Improvements and after all claims and expenses with respect to the
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Improvements have been fully paid and satisfied, any money remaining in said Construction Subaccount
shall be transferred to the Principal Subaccount in the District Account for the District and used to redeem
Bonds as provided in Section 3.03.
3.03. PrinciDal Subaccounts and Interest Subaccounts. Money in the Principal Subaccounts and
the Interest Subaccounts shall be used only for payment of the principal of and interest on the Bonds as
such payments become due or to redeem Bonds. From the proceeds of the Bonds, there shall be
deposited in the Interest Subaccounts any interest on the Bonds accrued to the date of their delivery, pro
rata, in proportion to the principal amount of Bonds issued for such District as set forth in Section 1.05.
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 respect to the Improvements in each of the
Districts, the Finance Director shall credit to the Interest Subaccount in the respective District Account
so much of said special assessments as is collected as interest payment and the balance thereof to the
respective Principal Subaccount. Any installment of any special assessment 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
Account. All money in the Interest Subaccount and the Principal Subaccount 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 2.06; provided that any money transferred to a Principal
Subaccount from the Construction Subaccount pursuant to Section 3.02 shall be applied to redeem
Bonds to the extent possible on the next interest payment date for which notice of redemption may
properly be given pursuant to Section 2.06. Redemption of Bonds shall be as provided in Section 2.06,
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. District Reserve Subaccounts Accounts. Money in the District Reserve Subaccounts shall
be applied on any interest payment date to payment of principal of and interest on the Bonds at the
stated maturity thereof if funds on hand in the Principal Subaccounts and the Interest Subaccounts are
insufficient therefor. Funds in the District Reserve Subaccounts Account must be used for such purpose
before a loan is made by the Revolving Fund therefor. If money is on hand in the District Reserve
Subaccounts 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 7-12-4169(3).
3.05. Loans from Revolving Fund. The Commission shall annually or more often if necessary
after exhausting the amounts on hand in the District Reserve Subaccounts issue an order authorizing
a loan or advance from the Revolving Fund to each of the District Accounts in an amount sufficient to
make good any deficiency then existing in the Interest Subaccount in the District Account, and shall issue
an order authorizing a loan or advance from the Revolving Fund to each of the District Accounts in an
amount sufficient to make good any deficiency then existing in the Principal Subaccount of the District
Account, in such order and in each case to the extent that money is available in the Revolving Fund. A
deficiency shall be deemed to exist in a Principal Subaccount or an Interest Subaccount in a District
Account if the money on deposit therein on any December 15 or June 15 (excluding amounts in the
Principal Subaccount representing prepaid special assessments) is less than the amount necessary to
pay Bonds due (other than upon redemption), and interest on all Bonds payable, on the next succeeding
interest payment date.
Pursuant to Ordinance No. 612, the City has undertaken and agreed to provide funds for the
Revolving Fund by annually levying such tax or making such loan from the general fund of the City as
authorized by Montana Code Annotated, Section 7-12-4222. In the event that the balance 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 covenants to make loans from the Revolving Fund, the
balance on hand in the Revolving Fund shall be 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 and to the extent of amounts available in the Revolving
Fund. 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
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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 any 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 or provisions of the home rule charter of the City, require that
property tax levies of the City for other purposes be reduced correspondingly.
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 Sinking Fund and the Revolving Fund
as trust funds, separate and apart 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 hereinabove
made with respect to the Sinking 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 1.06.
4.02. Construction of Improvements. The City will do all acts and things necessary to enforce
the provisions of the construction contracts and bonds referred to in Section 1.04 and to ensure the
completion of the Improvements for the benefit of the Districts 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 Accounts and within the amount of the proceeds of the Bonds appropriated
thereto.
4.03. Levy 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 Districts 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 the following amounts for each of the Districts:
District No. Principal Amount
675 $1,361,000
676 $1,276,000
677 $ 114,000
678 $ 250,000
Such special assessments shall be levied on the basis or bases prescribed in the Resolutions of
Intention, and shall be payable in substantially equal semiannual installments of principal and interest
over a period of 19 years, at an annual rate equal to the sum of: (i) the average annual interest rate borne
by the then-outstanding Bonds, plus (ii) one-half of one percent (0.50%) per annum. The assessments
to be levied will be payable on the 30th day of November in each of the years 2005 through 2023, and
on the 31 st day of May in the years 2006 through 2024, 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
1, 2006. 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
respect 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 whatever reason any special 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-Ievy the same, including the ordering
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of work, with the same force and effect as if made at the time provided by law, ordinance or resolution
relating thereto, and will reassess and re-Ievy the same with the same force and effect as an original levy
thereof, as authorized in Montana Code Annotated, Section 7-12-4186. Any special assessment, or
reassessment or re-Ievy 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.
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 the principal amount of the outstanding Bonds of the Districts is decreased or
increased, the City will reduce or increase, respectively, the assessments levied in the respective
Districts and then outstanding pro rata by the principal amount of such prepayment or the increment
above or below the outstanding principal amount of bonds represented by the refunding bonds. The City
and this Commission, its officers and employees will reassess and re-Ievy 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 Litiaation. 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 Districts, 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 of advances from the Revolving 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 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.
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 Districts for costs of the Improvements,
unless the City determines, by resolution of the City Commission, that such waiver is in the best interest
of the owners of the outstanding Bonds.
Section 5. Tax Matters.
5.01. Use of ImDrovements. 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 person relating to the use of
the Improvements or security for the payment of the Bonds which might cause the 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
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 (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.
5.03. Arbitraae Certification. The Mayor, the Finance Director, the Finance Director and the Clerk
of the Commission, 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 Section 1.148-2(b) of 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 of Section 148
of the Code and the Regulations.
5.04. Qualified Tax-ExemDt Obliaations. Pursuant to Section 265(b)(3)(B)(ii) of the Code, the
City hereby designates the Series 2003 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
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bearing interest not includable in gross income for purposes of federal income taxation under Section
103 of the Code (including refunding obligations as provided in Section 26S(b)(3) of the Code and
including "qualified S01 (c)(3) bonds" but excluding other "private activity bonds," as defined in Sections
141(a) and 14S(a) of the Code) will be issued by or on behalf of the City and all "subordinate entities" of
the City in 200S in an amount greater than $10,000,000.
5.05. Information ReDortina. The City shall file with the Secretary of the Treasury, not later than
August 1S, 200S, a statement concerning the Bonds containing the information required by Section
149(e) of the Code.
Section 6. Authentication of TranscriDt. 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 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 heretofore furnished, shall constitute representations of the City as to the truth
of the statements purported to be shown thereby.
Section 7. Discharae.
7.01. General. When the liability of the City on all Bonds issued under and secured by 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. Pavment. The City may discharge its 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, or, if a City officer is the Registrar, mailing to the registered owner of such Bond a check or
draft in 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 nevertheless discharge its
liability with reference thereto by depositing with the 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 interest accrued to the date of such deposit or
mailing.
7.03. PreDavment. The City may also discharge its obligations with respect to any Bonds called
for redemption on any date when they are prepayable according to their terms, 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; provided that
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 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 required, 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 before the designated redemption date.
7.0S. Irrevocable DeDosits. 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 Bonds in
respect of which such deposits have been made.
Section 8. Continuina Disclosure.
(a) Purpose and Beneficiaries. Although the original purchaser and other participating
underwriters in the primary offering of the Bonds need not comply with amendments to Rule 1Sc2-12
promulgated by the Securities and Exchange Commission (the "SEC") under the Securities Exchange
Act of 1934 (17 C.F.R. ~ 240.1Sc2-12), relating to continuing disclosure (as in effect and interpreted from
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time to time, the "Rule"), in respect of the primary offering of the Bonds, because the aggregate principal
amount of the Bonds and any other securities required to be integrated with the Bonds is less than
$1,000,000, to enhance the marketability of the Bonds, the City nevertheless hereby makes the following
covenants and agreements for the benefit of the Owners (as hereinafter defined) from time to time of the
Outstanding Bonds. The District and the Revolving Fund of the City are the only "obligated persons" in
respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of
which continuing disclosure must be made.
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,
indirect, consequential and punitive damages shall not be recoverable for any default hereunder.
Notwithstanding anything to the contrary contained herein, in no event 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 registered
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 used
herein, "Beneficial Owner" means, in respect of a Bond, any person or entity which (i) has the power,
directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond
(including persons or entities holding Bonds through nominees, depositories or other intermediaries),
or (b) is treated as the owner of the Bond for federal income tax purposes.
(b) Information To Be Disclosed. The City will provide, in the manner set forth in subsection
(c) hereof, either directly or indirectly through an agent designated by the City, the 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, 2005 the following financial information and operating data
in respect 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 sheets 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 governmental 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
(B) To the extent not included in the financial statements referred to in
paragraph (A) hereof, the information of the type set forth below, which information
may be unaudited, but is to be certified as to accuracy and completeness in all
material respects by the Finance Director to the best of his or her knowledge,
which certification may be based on the reliability of information obtained from
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 April 20, 2005 (the "Official Statement"),
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concerning the Revolving Fund Cash Balance and outstanding bonds secured
thereby;
2. a description of any special improvement 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 District Billings and
Collections" in the Official Statement;
4. updated information for the then most recent completed fiscal year in format
similar to the table in the section captioned "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 Collections" 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 statements in the format required for the audited financial statements as part of
the Disclosure Information and, within 10 days after the receipt thereof, the City shall
provide the audited financial statements.
Any or all of the Disclosure Information may be incorporated by reference, if it is
updated as required hereby, from other documents, including official statements, which
have been submitted to each of the repositories hereinafter referred to under
subsection (b) or the SEC. If the document incorporated by reference is a final official
statement, it must be available from the Municipal Securities 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 Districts or the City have materially changed or been
discontinued, such Disclosure Information need no longer be provided if the City
includes in the Disclosure Information a statement to such effect; provided, however, if
such operations have been replaced by other City operations in respect of which data
is not included in the Disclosure Information and the City determines that certain
specified data regarding such replacement operations would be a Material Fact (as
defined in paragraph (3) hereof), then, from and after such determination, the
Disclosure Information shall include such additional specified data regarding the
replacement operations.
If the Disclosure Information is changed or this Section 8 is amended as permitted
by this paragraph (b)(1) or subsection (d), then the City shall include in the next Disclosure
Information to be delivered hereunder, to the extent necessary, an explanation of the
reasons for the amendment and the effect of any change in the type of financial
information or operating data provided. 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 hereinafter defined):
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(C) Unscheduled draws on debt service reserves reflecting financial difficulties;
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(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Adverse tax opinions or events affecting the tax-exempt status of the security;
(G) Modifications to rights of security holders;
(H) Bond calls;
(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 prudent 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
sentence, a "Material Fact" is also an event that would be deemed "material" for purposes
of the purchase, holding or sale of a Bond within the meaning of applicable federal
securities laws, as interpreted at the time of discovery of the occurrence of the event.
(3) In a timely manner, notice of the occurrence of any of the following events or
conditions:
(A) the failure of the City to provide the Disclosure Information required
under paragraph (b)( 1) at the time specified thereunder;
(B) the amendment or supplementing 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) the 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 described in
subsection (b) to the following entities by telecopy, overnight delivery, mail or other means, as
appropriate:
(1) the information described in paragraphs (1) of subsection (b), to each then nationally
recognized municipal securities information repository under the Rule and to any state information
depository then designated or operated by the State of Montana as contemplated by the Rule (the
"State Depository"), if any;
(2) the information described in paragraphs (2) and (3) of subsection (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 under paragraphs (1 ) or (2) of this subsection
(c), as the case may be, or, if such information is transmitted with a subsequent time of release,
at the time such information is to be released.
(d) Term: Amendments: Interpretation.
(1) The covenants of the City in this Section 8 shall remain in effect so long as any Bonds
are 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 provided
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in paragraph (c)(3) hereof) 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 others 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, Districts or the Sinking Fund and the Revolving
Fund of the City or the type of operations conducted by the City or the Districts, or (B) is required
by, or better complies with, the provisions of paragraph (b)(5) of the Rule, assuming that such
provisions apply to the Bonds.
If the Disclosure Information is so amended,
the City ag rees to provide,
contemporaneously with the effectiveness of such amendment, an explanation of the reasons for
the amendment and the effect, if any, of the change in the type of financial information or
operating data being provided hereunder.
(3) This Section 8 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 Liabilitv of Citv. 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 covenants set forth in this Section 8, the City has not obligated
itself except with respect to the assessments and the Revolving Fund. None of the agreements or
obligations of the City contained herein shall be construed to constitute an indebtedness of the City within
the meaning of any constitutional or statutory provisions whatsoever or constitute a pledge of the general
credit or taxing powers of the City.
Section 9. ReDeals and Effective Date.
9.01. ReDeal. 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
repealed, amended and rescinded to the full extent necessary to give full force and effect to the
provisions of this resolution.
9.02. Effective Date. This resolution shall take effect immediately upon its passage and adoption
by this Commission.
PASSED AND ADOPTED by the City Commission of t e City of Bozeman, Montana, this 2nd day
of May, 2005.
ATTEST:
elic.~~
Clerk of the Commission
APPROVED AS TO FORM:
~~~It . k"-~(j(1'1 ~r
PAUL J. LUW --.
City Attorney
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EXHIBIT A
UNITED STATES OF AMERICA
STATE OF MONTANA
GALLATIN COUNTY
CITY OF BOZEMAN
POOLED SPECIAL IMPROVEMENT DISTRICT BONDS, SERIES 2005
(Special Improvement District Nos. 675, 676, 677, and 678)
Interest at the rate per annum specified below,
payable on the 151 day of January and the 151 day of July
in each year, commencing January 1, 2006.
No. R- $
Date of Original
Rate Maturity Issue CUSIP
% May 1, 2005
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
FOR VALUE RECEIVED, the City of Bozeman, Gallatin County, Montana, 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. , adopted May 2, 2005 (the "Resolution"), all sUbject to the provisions
hereinafter 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 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 duly called for redemption by the
Finance Director. Interest on this Bond is payable semiannually, commencing January 1, 2006, on the
1 st day of January and the 1 st 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 preceding month. Interest on and, upon presentation and surrender
hereof at the operations center of the bond registrar and paying agent hereinafter named, the principal
of this Bond are payable by check or draft of the Finance Director of the City, as Bond Registrar, Transfer
Agent and Paying Agent, at its operations center in Bozeman, Montana, or its successor designated
under the Resolution (the "Registrar"). The principal of and interest on this Bond are payable in lawful
money of the United States of America.
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, or in the name of any other nominee of
The Depository Trust Company or other securities depository, the Registrar shall pay all principal of and
interest on this Bond, and shall give all notices with respect to this Bond, only to Cede & Co. or other
nominee in accordance with the operational arrangements of The Depository Trust Company or other
securities depository as agreed to by the City.
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This Bond is one of an issue in the aggregate principal amount of $3,001 ,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 thereunto 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 the following Special Improvement Districts
of the City: Special Improvement District Nos. 675, 676, 677, and 678 (collectively, the "Districts"). The
Bonds are issuable only as fully registered bonds of single maturities in denominations of $5,000 or any
integral multiple thereof, except that one bond maturing in 2006 shall be in the principal amount of
$6,000.
This Bond is payable from the collection of a special tax or assessment levied upon all assessable
real property within the boundaries of the Districts, in an aggregate principal amount of not less than
$1,361,000 for Special Improvement District No. 675, $1,276,000 for Special Improvement District No.
676, $114,000 for Special Improvement District No. 677, and $250,000 for Special Improvement District
No. 678, are $3,001,000, except as such amounts may be reduced or increased in accordance with
provisions of Montana law. Such assessments constitute a lien against the assessable real estate within
the Districts, 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 improvement 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 the 2005 Pooled Special Improvement District
Sinking Fund of the City (in which the district fund for each of the special improvement districts described
in the title hereof constitutes an account) (the "Sinking Fund"), in amounts sufficient to make good any
deficiency in the Sinking Fund to pay principal of or interest on the Bonds, 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 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 ofthe City's then outstanding special improvement district bonds secured thereby
and the durationallimitations 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 current law, the City has agreed in
the Bond 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 $5,000 principal amounts selected by lot or other manner deemed fair by the Registrar, on
any interest payment date if, after paying all principal and interest then due on the Bonds, there are funds
to the credit of the Sinking Fund, from the prepayment of 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. In addition, the Bonds with stated maturities
on or after July 1, 2013 will be subject to redemption on July 1, 2012, 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 price is equal
to the principal amount of the Bonds or portions thereof to be redeemed plus interest accrued thereon
to the date of redemption. The date of redemption and principal amount shall be fixed by the Finance
Director, who shall 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 owner
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
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the remaining principal amount outstanding.
As provided in the Resolution and subject to certain limitations set forth therein, this Bond is
transferable upon the books of the City at the principal office 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 authorized 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 date, 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 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 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, happened and been performed
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 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 benefit under the Resolution until the Certificate of Authentication herein shall have been executed
by the Registrar by the manual signature of one of its authorized representatives.
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IN WITNESS WHEREOF, the City of Bozeman, Gallatin County, Montana, by its City
Commission, has caused this Bond and the certificate on the reverse hereof to be executed by the
facsimile signatures of the Mayor, the Finance Director and the Clerk of the Commission, and by a
printed facsimile of the official seal of the City.
CITY OF BOZEMAN, MONTANA
(Facsimile Signature)
MAYOR
(Facsimile Signature)
(Facsimile Seal) FINANCE DIRECTOR
(Facsimile Signature)
CLERK OF THE COMMISSION
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned herein.
FINANCE DIRECTOR,
CITY OF BOZEMAN
as Bond Registrar, Transfer Agent, and
Paying Agent
By
Authorized Signature
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The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants UTMA......... ..Custodian....... ... .....
in common (Cust) (Minor)
TEN ENT - as tenants
by the entireties
under Uniform Transfers to Minors
JT TEN - as joint tenantsAct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
with right of (State)
survivorship and
not as tenants in
common
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 books kept for registration thereof, with full power of substitution in the premises.
Dated: - -
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE: NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Bond in every
particular, without alteration, enlargement
I I or any change whatsoever.
SIGNATURE GUARANTEED
Signature(s) must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Bond Registrar,
which requirements include 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.
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EXHIBIT B
FORM OF DTC LETTER
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