HomeMy WebLinkAboutResolution 3783 Bond sale for SID 683, final resolution
COMMISSION RESOLUTION NO. 3783
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA,
RELATING TO $1,372,000 SPECIAL IMPROVEMENT DISTRICT NO. 683 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 1. Recitals. It is hereby found, determined and declared as follows:
1.01. Resolution of Intention. By Commission Resolution No. 3751, adopted
November 22, 2005 (the "Resolution of Intention"), this Commission declared its intention
to create Special Improvement District No. 683 (the "District"), for the purpose of making
special improvements for the special benefit of the District. The Resolution 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 (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
improvements specially benefiting the 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 7-12-4165
and as set forth in the Resolution of Intention. The Resolution of Intention determined that
of the $4,022,830 estimated cost of Improvements, $2,196,000 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 property within the District listed in their names upon the last
completed assessment roll for state, county and school district taxes, at their last known
addresses. The notice 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 Clerk of the Commission for a description of
the boundaries of the District, all in accordance with the provisions of the 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.
1.03. Creation of District. At the time and place specified in the notice
hereinabove described, this Commission met to hear, consider and pass upon all protests
made against the making of the Improvements and the creation of the District, and, after
consideration thereof, it was determined and declared that insufficient protests against the
creation or extension of the District or the proposed work had been filed in the time and
_.. ___._n.
manner provided by law by the owners of the property to be assessed for the
Improvements in the District. Based on the information provided at the public hearing and
other matters relative to the District, the Commission on December 20, 2004 determined
with respect to the District: (i) it was necessary to contribute additional City funds to the
costs of the Improvements, (ii) the properties included in the Ferguson Meadow
subdivision should be excluded from the District, and (iii) a separate Reserve Account was
not necessary for the District. This Commission did therefore by Commission Resolution
No. 3766, adopted January 18, 2005, create the District and order the proposed
Improvements as modified, which resulted in creation of a Special Improvement District
to fund $1,372,000 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, specifications, maps, profiles and surveys
for construction of the Improvements were prepared by the engineers acting for the City,
and were thereupon examined and approved by this Commission. An advertisement for
bids for construction of the Improvements was 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 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
Right-of-way acquisition, road JTL Group Inc. $3,544,056.30
improvements, storm drainage, sanitary Belgrade, Montana
sewer, water, engineering and inspection
A contract for the construction of the Improvements was therefore awarded to said bidder,
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 successful bidder entered into a written contract for construction
of the Improvements upon the bidder 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. Costs of the Improvements in excess of the costs to be assessed
against the District have or will be paid by the City from Street Impact Fees, Sewer Impact
Fees, and Water Impact Fees, and its Series 1995 General Obligation bonds, issued for
the purpose of implementing a series of transportation projects in the total amount of
$2,803,400. It is currently estimated that the costs and expenses to be assessed against
properties benefitted by the Improvements, 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 contract and all other costs and expenses, including the deposit
of proceeds in the Revolving Fund, are $1,372,000. Such amount will be levied and
assessed upon the assessable real property within the District on the bases described in
the Resolution of Intention. This Commission has jurisdiction and is required by law to
levy and assess 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.
1.06. 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 the District as provided in the Resolution of Intention, this Commission by
- 2 -
---..---.-......-.-...-...
Commission Resolution No. 3773, adopted February 7,2005, called for the public sale
of bonds in the total aggregate amount of $1 ,372,000 (the "Bonds"). Advertisements for
bids for the purchase of the Bonds were published in accordance with the provisions of
Montana Code Annotated, Sections 7-12-4204, 7-7-4252 and 17-5-106. Pursuant to
Commission Resolution No. 3781, adopted March 7, 2005, 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 $1,351,420 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 net interest cost of 4.09605% per annum and a net dollar interest cost of
$575,391.85.
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 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 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 deliver to the Purchaser the Bonds payable solely from the Special
Improvement District No. 683 Fund (the "District Fund") and denominated "Special
Improvement District No. 683 Bonds." The Bonds shall be dated, as originally issued, and
be registered as of March 15, 2005, shall each be in the denomination of $5,000 or any
integral multiple thereof of single maturities, 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 $62,000 2.550% 2016 $ 75,000 3.950%
2007 70,000 2.750 2017 75,000 4.000
2008 75,000 2.900 2018 70,000 4.050
2009 75,000 3.000 2019 70,000 4.100
2010 75,000 3.150 2020 70,000 4.150
2011 75,000 3.300 2021 70,000 4.200
2012 75,000 3.450 2022 70,000 4.250
2013 75,000 3.650 2023 70,000 4.300
2014 75,000 3.750 2024 70,000 4.300
2015 75,000 3.850
2.02. Interest Pavment 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 registrar 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.
- 3 -
.---.--------- ..-....--.-..---..-.-.-..-
2.03. Method of Pavment. The Bonds shall be issued only in fully registered
form. The interest on and, upon surrender thereof at the operations center of the
Registrar (as hereinafter defined), the principal of each Bond, shall be payable by check
or draft drawn on the Registrar.
2.04. Reqistration. 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 registrar, transfer agent or paying agent, as authorized by
the Model Public Obligations Registration Act of Montana, Montana Code Annotated, Title
17, Chapter 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 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 operations
center 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 2.05.
(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 cancelled by the Registrar and thereafter
disposed of as directed by the City.
(e) Improper 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
- 4 -
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 Charaes. 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 Destroved 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
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
cancelled by it and evidence of such cancellation shall be given to the
City. Ifthe 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. Redemption.
(a) Mandatorv Redemption. If on any interest payment date
there will be a balance in the District Fund after payment of the principal
and interest due on all Bonds drawn against it, either from the
prepayment of special assessments levied in the District or from the
transfer of surplus money 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 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 District Fund on that 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 Section
2.05(a) on any interest payment date; provided, however, the Bonds
shall not be called for redemption before January 1, 2012, 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
- 5 -
-.. ---- ..----....-----.- ..--
----.-.---.-......--..- -
Registrar by lot or other manner it deems fair. Upon partial redemption
of a Bond, a new Bond or Bonds will be delivered to the registered owner
without charge, representing the remaining principal amount thereof
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 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.
2.06. 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.
2.07. Execution. Reaistration and Delivery. The Bonds shall be prepared under
the direction of the Finance Director and shall be executed on behalf of the City by the
signatures of the Mayor, City Manager, and the Clerk of the Commission; provided that
the signatures and the corporate seal may be printed, engraved or lithographed facsimiles
of the originals. The seal of the City need not be impressed or imprinted on any Bond.
In 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 and registration on such Bond has been
duly executed by the manual signature of an authorized representative of the Registrar.
Certificates of authentication and registration on different Bonds need not be signed by
the same representative. The 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 their serial numbers by
the Registrar, as attested by the Certificate of Authentication, as of March 31, 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 proceeds of
the Bonds the Finance Director shall credit forthwith $68,600 to the Revolving Fund, as
required by Section 7-12-4169(2) of the Act, any accrued 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 Depositorv for the Bonds.
(a) For purposes of this Section 2.08, 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.
- 6-
"OTC" shall mean The Depository Trust Company of New York,
New York.
"Participant" shall mean any broker-dealer, bank or other financial
institution for which OTC holds the Bonds as securities depository.
"Representation Letter" shall mean the Blanket Issuer Letter of
Representations from the City to OTC, 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 OTC. The Registrar
and the City may treat OTC (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 OTC 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 OTC or any Participant, with
respect to the payment by OTC or any Participant of any amount with
respect to the principal of or interest on the Bonds, with respect to any
notice which is permitted or required to be given to owners of Bonds
under this Resolution, with respect to the selection by OTC 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 OTC as registered owner of the Bonds. So long as any
Bond is registered in the name of Cede & Co., as nominee of OTC, 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 OTC 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 OTC to the Registrar of written notice to the effect that OTC
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 OTC and the Registrar, whereupon
OTC shall notify the Participants of the availability through OTC of Bonds
in the form of certificates. In such event, the Bonds will be transferable
in accordance with paragraph (e) hereof. OTC 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
- 7 -
-------- - -----
.__.__.._n.........._.
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. District Fund: Assessments.
3.01. District Fund. There is hereby created and established the District Fund
designated as the "Special Improvement District No. 683 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 District Fund there shall be maintained
three separate accounts, designated as the "Construction Account," "Principal Account"
and "Interest Account," respectively.
3.02. Construction Account. There shall be credited to the Construction Account
certain proceeds of the sale of the Bonds as provided in the final sentence of Section
2.07. 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 expenses with respect to the
Improvements have been fully paid and satisfied, any money 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 the Interest Account 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 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 respect to
the Improvements, the Finance Director shall credit to the Interest Account so much of
said special assessments as is collected as interest payment and the balance thereof to
the Principal Account. 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 Fund. All money in the Interest Account and the
- 8-
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; provided that any money transferred to a Principal 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 date for which notice of redemption
may properly be given pursuant to Section 2.05. Redemption of Bonds shall be as
provided in Section 2.05, and interest shall be paid as accrued thereon to the date of
redemption, in accordance with the provisions of Section 7-12-4206 of the Act.
3.04. Loans from Revolvina Fund. The Commission shall annually or more often
if necessary issue an order authorizing a loan or advance from the Revolving Fund to the
District Fund in an amount sufficient to 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
then 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 deemed to exist in the
Principal Account or the Interest Account if the money on deposit therein on any
December 15 or June 15 (excluding amounts in the Principal Account 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 levying such tax or making such loan from the General
Fund 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 has covenanted 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 ofthe City has been paid. On any
date when all accrued interest on special improvement district bonds and warrants of the
City payable from funds for which the City has covenanted to make loans from the
Revolving Fund has been paid, any balance remaining in the Revolving Fund shall be lent
or advanced to the special improvement district funds for payment and redemption of
bonds to the extent the special improvement district funds are deficient for such purpose,
and, if money in the Revolving Fund is insufficient therefor, pro rata, in an amount
proportionate to the amount of such deficiency.
The City hereby determines, covenants and agrees to levy the property tax
described in the immediately preceding paragraph to provide funds for the Revolving
Fund so long as 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, 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. ComDliance with Resolution. The City will hold the District 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 District Fund and the
Revolving Fund are in accordance with the undertaking and agreement of the City made
in connection with the public offering of the Bonds and the sale of the Bonds as set forth
in Section 1.06.
- 9-
4.02. Construction of ImDrovements. 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
District in accordance with the plans and specifications and within the time therein
provided, and will pay all costs thereof promptly as incurred and allowed, out of the
District Fund and within the amount of the proceeds of the Bonds appropriated thereto.
4.03. Levv of Assessments. The City will do all acts and things necessary for the
final and valid levy of special assessments upon all assessable real property within the
boundaries of the District in accordance with the Constitution and laws of the State of
Montana and the Constitution of the United States, in an aggregate principal amount not
less than $1,372,000. Such special assessments shall be levied on the basis or bases
prescribed in the Resolution of Intention, and shall be payable in substantially equal,
semiannual installments over a period of 19 years, with interest on the whole amount
remaining unpaid at an annual rate equal to the sum of: (i) the average annual interest
rate borne by the then-outstanding Bonds, plus (ii) one-half of one percent (0.50%) per
annum, interest being payable with principal installments. 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 and each subsequent partial
payment shall include 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
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 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 District is decreased or increased, the City will reduce or
increase, respectively, the assessments levied in the District 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 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 construction of the Improvements or the undertaking and
agreement of the City to levy special assessments therefor and to make good any
- 10 -
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 Penaltv 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 interest 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 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 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 the
Code, 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 federal income tax purposes under
the Code and the Regulations.
5.03. Arbitrage Certification. The Mayor, 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-Exempt Obliaations. Pursuant to Section 265(b)(3)(B)(ii) of
the Code, the City hereby designates the Series 2004 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 purposes of federal income taxation under Section 103 of the Code (including
refunding obligations as provided in Section 265(b )(3) ofthe Code and including "qualified
501(c)(3) bonds" but excluding other "private activity bonds," as defined in Sections
141(a) and 145(a) of the Code) will be issued by or on behalf of the City and all
"subordinate entities" of the City in 2004 in an amount greater than $10,000,000.
5.05. Information Reporting. The City shall file with the Secretary of the
Treasury, not later than May 15, 2005, a statement concerning the Bonds containing the
information required by Section 149(e) of the Code.
Section 6. Authentication of Transcript. 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
- 11 -
.-..----
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. Preoavment. 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.
Section 8. Continuina Disclosure.
(a) Puroose and Beneficiaries. Although the original purchaser and other
participating underwriters in the primary offering of the Bonds need not comply with
amendments to Rule 15c2-12 promulgated by the Securities and Exchange Commission
(the "SEC") under the Securities Exchange Act of 1934 (17 C.F.R. 924O.15c2-12),
relating to continuing disclosure (as in effect and interpreted from 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
- 12 -
---------.-....------....--.--...-.-
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 March 7,
2005 (the "Official Statement"), concerning the Revolving Fund Cash
Balance and outstanding bonds secured thereby;
- 13 -
--------------
(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 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 District 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;
(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
-14-
(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 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 in paragraph (c)(3) hereof) or the consent of the Owners of any Bonds, by a
- 15 -
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, 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 such 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.
(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. 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 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 the City of Bozeman, Montana, at a regular
session thereof held on the 21 st day of March 20~
~~
ATTEST: A REW L. C TRARO, Mayor
~zAp
R IN L. SULLIVAN n--/
Clerk of the Commission APP7AS TO FORM:
~{f;I/d~
City Attorn~
- 16-
.-..-..--...-....-
.. ....---...---.-. -..--.--------
EXHIBIT A
[Face of the Bond]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF GALLATIN
CITY OF BOZEMAN
SPECIAL IMPROVEMENT
DISTRICT NO. 683 BOND
Interest at the rate per annum specified below
payable January 1, 2006 and
semiannually thereafter
on the 1 st day of January and the 1 st day of July in each year
No. $
Date of Original
Rate Maturity Issue CUSIP
March 15, 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
Commission Resolution No. 3783 adopted March 21 , 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
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 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.
This Bond is one of an issue in the aggregate principal amount of $1 ,372,000 (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
A-1
--.-------.
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 Special Improvement District No. 683 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
real property within the boundaries of the District, in an aggregate principal amount of not less than
$1,372,000, except as such amount may be reduced or increased in accordance with provisions of
Montana law. Such assessments constitute a lien against the assessable real estate within the District
and are to be deposited into the Special Improvement District No. 683 Fund of the City (the "District
Fund"). 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 District Fund, in amounts sufficient to
make good any deficiency in the District 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 of the 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 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 District Fund, from the prepayment of assessments levied in the District or from
surplus proceeds of the Bonds not required to pay costs ofthe Improvements, for the redemption thereof,
and in the manner provided for the redemption of the same.
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 in the preceding paragraph regarding 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, 2012 are subject to redemption on January 1, 2011, 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
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 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 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
A-2
.-..,.--....-.---.-
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 and Registration herein shall have
been executed by the Registrar by the manual signature of one of its authorized representatives.
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 Clerk
of the Commission, and by a facsimile of the official seal of the City.
(Facsimile Signature)
Mayor
(Facsimile Signature)
City Manager
(Facsimile Seal) (Facsimile Signature)
Clerk of the Commission
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds delivered pursuant to the Resolution mentioned within.
FINANCE DIRECTOR
OF THE CITY OF BOZEMAN,
as Bond Registrar, Transfer Agent,
and Paying Agent
By
Authorized Signature
A-3
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
JT TEN -- as joint tenants to Minors Act. . . . . . . . . . . . . . . . . . . .
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 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.
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
tor STAMP, all in accordance with the Securities
Exchange Act ot 1934, as amended.
A-4