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HomeMy WebLinkAboutResolution 3302 Calling for sale of bonds for 1998 sidewalk programs COMMISSION RESOLUTION NO. 3302 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, RELATING TO $112,000 SPECIAL SIDEWALK, CURB, GUTTER AND ALLEY APPROACH BONDS, SERIES 1999; AUTHORIZING THE ISSUANCE AND CALLING FOR THE PUBLIC SALE THEREOF AND MAKING FINDINGS WITH RESPECT TO AND AUTHORIZING THE PLEDGE OF THE REVOL VING FUND TO THE SECURITY THEREOF. BE IT RESOLVED by the City Commission of the City of Bozeman, Montana (the "City"), as follows: Section 1. Recitals. (a) The City is authorized pursuant to Section 7-14-4109, M.C.A. to order the construction or reconstruction of sidewalks, curbs or gutters in front of any lot or parcel of land and may order alley approaches constructed or replaced adjacent to any lot or parcel of land within the City. By Resolution Nos. 3230 and 3238, adopted March 16, 1998 and May 18, 1998, respectively, the Commission set forth its intention and after notice and public hearing and by Resolution Nos. 3237 and 3245, adopted May 18, 1998 and June 15, 1998, respectively, ordered in certain sidewalks, curbs, gutters and alley approaches which were described in the respective resolutions (the "Orders"). The Orders were duly entered in the minutes of the Commission and set forth the names of the streets along which sidewalks, curbs or gutters are to be constructed or along which the alley approaches are to be constructed or replaced (the "Project"). As provided in the Orders and in accordance with Section 7-14-4109, M.C.A., written notice of the Orders was given to the owners or agents of owners of lots or parcels of land against which the costs of the proposed improvements were to be assessed. Upon the expiration of the 30-day notice period in the Orders, the City determined which of the proposed improvements have been or will be constructed by the owners of the adjacent property and which of the proposed improvements will be constructed by the City. The improvements to be constructed by the City (the "Improvements") are described in Exhibit A attached hereto. The total estimated costs of the Improvements to be constructed by the City are $155,861.40, including such incidental costs and a deposit to the City's Special Improvement District Revolving Fund created pursuant to Section 7-12-4221, M.C.A. (the "Revolving Fund"). The City is authorized to pay the costs of constructing the Improvements by the issuance of special warrants (the Special Sidewalk, Curb, Gutter and Alley Approach Warrants) drawn against a fund to be known as the Special Sidewalk, Curb, Gutter and Alley Approach Fund and to secure such warrants by the Revolving Fund. All of the costs of the Improvements are to be paid from the proceeds of Special Sidewalk, Curb, Gutter and Alley Approach Warrants, Series 1 999, hereinafter referred to as Special Sidewalk, Curb, Gutter and Alley Approach Bonds (the "Bonds"), which are to be payable primarily from special assessments to be levied against property which will be specially benefitted by the Improvements in an amount not less than $ 1 1 2,000. (b) It is necessary that the Bonds be issued and sold in an aggregate principal amount of $ 1 1 2,000 to finance the costs of the Improvements, including incidental costs, described in Subsection (a). The costs of the Improvements are currently estimated, as follows: Engineering $ 4,000.00 New Private Sidewalk Construction 82,575.80 New City Sidewalk Construction 3,040.00 Pedestrian Ramps 16,569.60 Private Sidewalk Repairs 23,654.00 City Sidewalk Repairs 600.00 Contingency 13,212.00 Administration 3,360.00 Resolution and Advertisements 750.00 Revolving Fund Deposit 5,600.00 Costs of Issuance 2.500.00 Total $ 155,861.40 Costs in excess of bond proceeds will be paid from City funds available therefor in the approximate amount of $43,861.40. Section 2. Findings and Determination to Pledge the Revolving Fund. The City is authorized to secure payment of principal of and interest on the Bonds by the Revolving Fund and is authorized to enter into the undertakings and agreements authorized in the Act in respect of the Bonds, based on the factors required to be considered under Section 7-12-4225(4) of the Act. Section 3. Method of Financing: Pledge of Revolving Fund: Findings and Determinations. The City will issue Sidewalk, Curb, Gutter and Alley Approach Bonds in an aggregate principal amount not to exceed $112,000 in order to finance the costs of the Improvements. Principal of and interest on the Bonds will be paid from special assessments levied against the property in the Project. This Commission further finds it is in the public interest, and in the best interest of the City and the Project, to secure payment of principal of and interest on the Bonds by the Revolving Fund and hereby authorizes the City to enter into the undertakings and agreements authorized in Section 7-12-4225 in respect to the Bonds. In determining to authorize such undertakings and agreements, this Commission has taken into consideration the following factors: (a) Estimated Market Value of Parcels. The special assessments to be levied against each lot, parcel, or tract for the Improvements is insignificant in comparison to the market value of such lot, parcel, or tract in the Project area. (b) Diversity of ProDertv Ownership. Substantially all of the lots, parcels, or tracts in the Project area are under separate ownership. Given the diversity of ownership, it is unlikely that financial difficulties would arise that would require a loan to be made from the Revolving Fund. (c) ComDarison of Special Assessments. PrODerty Taxes and Market Value. Given the amount of the proposed assessment for the Improvements and the amount of other special assessments and property taxes levied against the various parcels in the Project area and the respective market value of the parcels, if the City had to enforce the assessment lien against the properties for the Improvements there would be more than sufficient value in the property to secure the obligation to the City. (d) Delinquencies. The tax delinquency rate for properties in the Project area is no greater than the delinquency rate of the City at large, and therefore, no unusual need for loans from the Revolving Fund would be expected. (e) The Public Benefit of the ImDrovements. Based on current City Subdivision and Site Development Ordinances, and under City Commission policies, the cost of installation of new curb, gutter, sidewalk, and drive approaches is to be borne by adjoining property owners. The availability of good curb, gutters and sidewalks does have general benefit, however, to the community at large as well as special benefit to the property owners to be assessed, and therefore, the use of the Revolving Fund to secure the Bonds is in the public interest. - 2 - -- Section 4. Public Hearing. The Clerk of the Commission is hereby directed to publish notice of the public hearing, which hearing will be held Monday, July 26, 1999, at 3:00 p.m., in the Commission Room, Municipal Building, 411 East Main Street, Bozeman, Montana, at which the City Commission will conduct a public hearing concerning the Project and all interested parties will be allowed to testify. The City Commission will also consider all written comments submitted to the Clerk of the Commission prior to the hearing or submitted to the Commission during the hearing. Section 5. Terms of the Bonds. This Commission hereby authorizes the issuance and sale of the Bonds, to be denominated "Special Sidewalk, Curb, Gutter and Alley Approach Bonds, Series 1999," of the City in the aggregate principal amount of $112,000 for the purpose of financing the Improvements. The Bonds shall be dated, as originally issued, as of August 1, 1999, and shall bear interest payable semiannually on January 1 and July 1 of each year, commencing January 1, 2000, at a rate or rates designated by the successful bidder at public sale and approved by this Commission. If issued as serial bonds, the Bonds shall mature on July 1 in each of the following years and amounts: Year Amount 2000 $17,000 2001 20,000 2002 25,000 2003 25,000 2004 25,000 If issued as amortization bonds, the Bonds will be issued as a single bond or divided into several bonds, as the Commission may determine at the time of the sale, and the principal of and interest on the Bonds shall be payable semiannually in equal payments on each January 1 and July 1, commencing January 1, 2000, and concluding July 1, 2004, unless the Bonds are earlier redeemed. Serial bonds shall be in the denomination of $5,000 each or any integral multiple thereof of single maturities; provided that one Bond with a stated maturity in 2000 shall be in the principal amount of $7,000. Amortization bonds are preferred. The Bonds shall be issuable only as fully registered bonds and shall be executed by the manual or facsimile signatures of the Mayor, City Manager and the Clerk of the Commission. The Bonds shall be secured by the Revolving Fund. Section 6. Public Sale. The Bonds shall be sold at a public competitive sale which is hereby called and shall be held at a regular meeting of this Commission on July 26, 1999, - 3 - - at 3:00 p.m. The City will receive sealed bids for the Bonds in accordance with the notice of sale hereinafter prescribed. The Clerk of the Commission is hereby authorized and directed to cause notice of the sale to be published, as required by Montana Code Annotated, Sections 7-12-4204, 7-7-4252 and 17-5-106, in the Bozeman Daily Chronicle, once each week for two successive weeks preceding the week which contains the date of sale. The notice of sale shall be published and mailed in substantially the form set forth as Exhibit B to this resolution (which is hereby incorporated herein and made a part hereof) and this Commission hereby adopts the terms and conditions set forth in such notice of sale as the terms and conditions of the sale of the Bonds. Section 7. Continuina Disclosure: ExemDtion. Bidders and other participating underwriters in the primary offering of the Bonds need not comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), 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. Consequently, the City will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Bonds. PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, this 6th day of July, 1999. MARC'~G~if:~:;;~ Tempore ATTEST: e~ ;j ~/'A~ ROBIN L. SULLIVAN Clerk of the Commission APPROV~9,~S TO FORM: .". j " , / ,,<7 ",,/ Il /'1 </2iu / ,1/)/AJi{AA- PAUL J. t.u,wf' \ City Attoui'ey - 4 - ..-. -....-.. -.- EXHIBIT A THE IMPROVEMENTS Description The Bonds are being issued to pay a portion of the costs of engineering, reconstructing and installing certain local improvements to benefit certain properties in the City described above consisting of various sidewalk, curb, gutter and alley approach improvements consisting of the 1998A Sidewalk Program and the 1998B Sidewalk Program (the "Improvements") as shown below. 1998A SIDEWALK PROGRAM The City Commission has ordered in the installation of sidewalks along both sides of the following streets: . South Black Avenue between East Lincoln Street and South Rouse Avenue . Carol Place between Kagy Boulevard and South Black Avenue . South Tracy Avenue between East Mason Street and Kagy Boulevard . Mason Street between South Willson Avenue and South Rouse Avenue . South Rouse Avenue between East Garfield Street and South Black Street . Hoffman Drive between South Tracy Avenue and South Rouse Avenue . Accola Street between South Black Avenue and South Rouse Avenue . East Garfield Street a distance of one-half block east and west of South Rouse Avenue . East Lincoln Street a distance of one-half block east and west of South Rouse Avenue 1998B SIDEWALK PROGRAM The City Commission has ordered in the installation of sidewalks along both sides of the following streets: . Ravalli Street from Fowler Avenue to the west line of Valley Creek Subdivision, Phase I . Golden Valley Drive from Prairie Avenue to Ravalli Street . Prairie Avenue from Ravalli Street to the south line of Valley Creek Subdivision, Phase I . Powder River Avenue from Ravalli Street to Golden Valley Drive . Treasure Avenue from Ravalli Street to Golden Valley Drive . Stillwater Avenue from Ravalli Street To Golden Valley Drive . North 24th Avenue from West Babcock Street to West Beall Street . West Mendenhall Street from North 24th Avenue to the west line of West Babcock Subdivision . Hunters Way from West Babcock Street to the north line of Westgate Subdivision . West Mendenhall Street from the east line of Westgate Subdivision to the west line of Westgate Subdivision . Gena Circle from Hunters Way to its easterly terminus . Sweetgrass Avenue from Beaverhead Street to its southerly terminus . Beaverhead Street from Sweetgrass Avenue to the east line of Cascade Subdivision, Phase I . Cascade Street from Fowler Avenue to the east line of Cascade Subdivision, Phase I . Broadwater Street from Sweetgrass Avenue to the east line of Cascade Subdivision, Phase I . Boylan Road from its northerly intersection with Story Mill Road to its southerly intersection with Story Mill Road . Birdie Drive from Boylan Road to Bridger Drive . Par Court from Boylan Road to its southerly terminus . North 25th Avenue from West Babcock Street to the north line of Brookside Subdivision A-1 --- _un . Virginia Way from West Babcock Street to Donna Avenue . Marilyn Court from Virginia Way to its easterly terminus . Donna Avenue from the east line of Babcock Meadows Subdivision, Phase I, to the west line of Babcock Meadows Subdivision, Phase I . Hunters Way from Durston Road to the south line of Greenway Subdivision . Dove Court from Hunters Way to its easterly terminus . Grouse Court from Hunters Way to its easterly terminus . West Villard Street from the east line of Greenway Subdivision to the west line of Greenway Subdivision . Greenway Avenue from Durston Road to West Villard Street . Greenway Court from West Villard Street to its terminus . Durston Road (south side only) from the east line of Greenway Subdivision to the west line of Greenway Subdivision A-2 -- ---- EXHIBIT B NOTICE OF BOND SALE $112,000 SPECIAL SIDEWALK, CURB, GUTTER AND ALLEY APPROACH BONDS, SERIES 1999 CITY OF BOZEMAN, MONT ANA NOTICE IS HEREBY GIVEN that the City of Bozeman, Montana (the IICity"), will sell to the highest and best bidder for cash, as evidenced by sealed bids, the above-described Bonds drawn against the Special Sidewalk, Curb, Gutter and Alley Approach Fund in the principal amount of $112,000. Sealed bids for the purchase of the Bonds will be received until 10:00 a.m., M.T., on Monday, July 26, 1999, at the office of the Clerk of the Commission in the Municipal Building, 411 East Main Street, Bozeman, Montana, at which time the bids will be opened and tabulated. The City Commission of the City will meet at 3:00 P.M. on the same day in the Commission Room in the Municipal Building to consider the bids and the award of sale of the Bonds. PUrDose and Security The Bonds will be issued for the purpose of financing the engineering, construction, installation, inspection and administration of sidewalk improvements along particular streets within the City of Bozeman, Montana, pursuant to the City's 1998A and 19988 Sidewalk Construction Programs and in accordance with the provisions of Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as amended (the II Act"). The Bonds will be special, limited obligations of the City and do not constitute general obligations of the City. The Bonds are payable primarily from the collection of a special tax or assessment which is a lien against the assessable real property benefitted by the Improvements to be undertaken therein or therefor. The special assessments are payable in equal, semiannual installments over a 5-year term, with unpaid installments of the special assessments bearing interest at a rate equal, from time to time, to the sum of (i) the average rate of interest borne by the then outstanding Bonds, plus (ii) one-half of one percent (0.50%) per annum. The Bonds are further secured by the Special Improvement District Revolving Fund of the City (the IIRevolving Fund"). The City will agree to make a loan from the Revolving Fund to the Special Sidewalk, Curb, Gutter and Alley Approach Fund (the IIFund") to make good any deficiency then existing in the principal and interest accounts therein and to provide funds for the Revolving Fund by levying a tax or making a loan from the City's general fund to the extent and for the period authorized by the Act. Date and TVDe The Bonds will be dated, as originally issued, as of August 1, 1999, and will be issued as negotiable investment securities in registered form as to both principal and interest. Maturities and Form If issued as serial bonds, the Bonds shall mature, subject to redemption, on July 1 in the following years and amounts: Year Amount 2000 $17,000 2001 20,000 2002 25,000 2003 25,000 2004 25,000 B-1 - .. ..- If issued as amortization bonds, the Bonds will be issued as a single bond or divided into several bonds, as the Commission may determine, and the principal of the Bonds shall be payable semiannually on each January 1 and July 1, commencing January 1, 2000, and continuing through July 1, 2004, subject to prior redemption. Serial bonds shall be in the denomination of $5,000 each or any integral multiple thereof of single maturities; provided that one Bond with a stated maturity in 2000 shall be in the principal amount of $7,000. Amortization bonds shall be preferred. Redemotion Mandatorv Redemotion. If on any interest payment date there will be a balance in the Fund after payment of the principal and interest due on all Bonds drawn against it, either from the prepayment of special assessments levied for the Improvements or from the transfer of surplus money from the Construction Account to the Principal Account, 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 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. Ootional Redemotion. 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" on any interest payment date; provided, however, the Bonds shall not be called for redemption before July 1, 2001, from the proceeds of refunding special sidewalk, curb gutter and alley approach 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. Selection of Bonds for Redemotion. 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, except that the Bond with the stated maturity in 2000 and in the principal amount of $7,000 shall be redeemed before other Bonds of such stated maturity. Interest Pavment Dates. Rates Interest will be payable each January 1 and July 1, commencing January 1, 2000, to the registered owners of the Bonds as such appear in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. All Bonds of the same stated maturity must bear interest from date of original issue until paid at a single, uniform rate. Each rate must be expressed in an integral multiple of 1/8 or 5/100 of 1 %. No supplemental or UB" coupons or additional interest certificates are permitted. Interest will be calculated on the basis of a 360-day year consisting of twelve 30- day months. Bond Reaistrar. Transfer Aaent and Paving Agent The Administrative Services Director of the City will act as bond registrar, transfer agent and paying agent (the URegistrar"). The bond register will be kept, transfers of ownership will be effected and principal of and interest on the Bonds will be paid by the Registrar. The City will pay the charges of the Registrar for such services. The City reserves the right to appoint a suitable bank or trust company as a successor Registrar. Deliverv Within 45 days after the sale, the City will deliver to the Registrar the printed Bonds ready for completion and authentication. The original purchaser of the Bonds must notify the Registrar, at least five business days before issuance of the Bonds, of the persons in whose names the Bonds will be initially registered and the denominations of the Bonds to be originally issued. If notification is not received by that date, the Bonds will be registered in the name of the original purchaser and, if serial bonds, will be issued in denominations corresponding to the principal maturities of the Bonds. On the day of closing, the City will B-2 ..----------- -----.- ...-- ----- - furnish to the purchaser the opinion of Bond Counsel hereinafter described, an arbitrage certification and a certificate stating that no litigation in any manner questioning the validity of the Bonds is then pending or, to the knowledge of officers of the City, threatened. Payment for the Bonds must be received by the City in immediately available funds at its designated depository on the day of closing. The successful bidder shall submit to the Clerk of the Commission not earlier than 48 hours after the award of sale and not later than the day of closing a certificate, in form satisfactory to Bond Counsel, as to the initial reoffering price of each stated maturity of the Bonds and stating that at least ten percent of the principal amount of such Bonds of each stated maturity has been sold at such respective prices. Qualified Tax-Exemot Obliaations The Bonds will be designated by the City as "'qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "'Code"), and financial institutions described in Section 265(b)(5) of the Code may treat the Bonds for purposes of Sections 265(b)(2) and 291 (e)(1 )(B) of the Code as if they were acquired on August 7, 1986. Leaal Oeinion An opinion as to the validity of the Bonds and the exclusion of the interest thereon from gross income for federal income tax purposes and Montana individual income tax purposes will be furnished by Dorsey & Whitney LLP, of Missoula, Montana, and Minneapolis, Minnesota, as Bond Counsel. The legal opinion will be delivered at closing. The legal opinion will state that the Bonds are valid and binding special, limited obligations of the City enforceable in accordance with their terms, except to the extent to which enforceability thereof may be limited by the exercise of judicial discretion or by state or federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights. Tyee of Bid and Good Faith Deoosit Sealed bids for not less than par ($112,000) and accrued interest on the principal sum of $112,000 must be mailed or delivered to the undersigned and must be received at the office of the Clerk of the Commission prior to the time stated above. Bidders must bid for all or none of the Bonds. Each bid must be unconditional. Except for a bid by or on behalf of the Board of Investments of the State of Montana, a good faith deposit (the "'Deposit") in the form of money, cashier's check, certified check, bank money order, or bank draft drawn and issued by a federally chartered or state chartered bank insured by the federal deposit insurance corporation or a financial surety bond in the sum of $2,240 payable to the order of the City is required for a bid to be considered. If money, cashier's check, certified check, bank money order, or bank draft is used, it must accompany the bid and be delivered to the Clerk of the Commission. If a financial surety bond is used, it must be from an insurance company licensed and qualified to issue such a bond in the State of Montana and such bond must be submitted to the Clerk of the Commission, or the City's financial advisor prior to the opening of the bids. The financial surety bond must identify each bidder whose Deposit is guaranteed by such financial surety bond. If the Bonds are awarded to a bidder utilizing a financial surety bond, then that purchaser is required to submit its Deposit to the City in the form of a cashier's check (or wire transfer such amount as instructed by the City or its financial advisor) not later than 1 :00 p.m., M.T., on the next business day following the award. If such Deposit is not received by that time, the financial surety bond may be drawn by the City to satisfy the Deposit requirement. No interest on the Deposit will accrue to the purchaser. The Deposit will be applied to the purchase price of the Bonds. In the event the purchaser fails to honor its accepted bid, the Deposit will be retained by the City as liquidated damages. The Deposit of the unsuccessful bidders will be returned immediately on award of the Bonds to the purchaser or after rejection of all bids. Instructions for wiring the Deposit may be obtained from the City's Administrative Services Director, City of Bozeman, P. O. Box 640, Bozeman, Montana 59771, (406) 582-2325. B-3 ------ ...-. ----- Award The bid authorizing the lowest true interest cost (calculated from dated date), will be deemed the most favorable. In the event that two or more bids state the lowest true interest cost, the sale of the Bonds will be awarded by lot. No oral bid will be considered. The City reserves the rights to reject any and all bids, to waive informalities in any bid and to adjourn the sale. CUSIP Numbers The City will assume no fee or obligation for the assignment or printing of CUSIP numbers on the Bonds or for the correctness of any numbers printed thereon, but will permit such numbers to be assigned and printed at the expense of the purchaser, if the original purchaser waives any delay in delivery occasioned thereby. Continuina Disclosure: ExemDtion Bidders and other participating underwriters in the primary offering of the Bonds need not comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), 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. Consequently, the City will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Bonds. Information for bidders and bidding forms and instructions for submitting bids by facsimile may be obtained from the undersigned. Dated: July 6, 1999. BY ORDER OF THE CITY COMMISSION Robin L. Sullivan Clerk of the Commission City of Bozeman, Montana Publish: July 11, 1999 July 18, 1999 B-4 . --- -..---. EXHIBIT B REVISED NOTICE OF BOND SALE $112,000 SPECIAL SIDEWALK, CURB, GUTTER AND ALLEY APPROACH BONDS, SERIES 1999 CITY OF BOZEMAN, MONT ANA NOTICE IS HEREBY GIVEN that the City of Bozeman, Montana (the "City"), will sell to the highest and best bidder for cash, as evidenced by sealed bids, the above-described Bonds drawn against the Special Sidewalk, Curb, Gutter and Alley Approach Fund in the principal amount of $112,000. Sealed bids for the purchase of the Bonds will be received until 1 0:00 a.m., M.T., on Monday, July 26, 1999, at the office of the Clerk of the Commission in the Municipal Building, 411 East Main Street, Bozeman, Montana, at which time the bids will be opened and tabulated. The City Commission of the City will meet at 3:00 P.M. on the same day in the Commission Room in the Municipal Building to consider the bids and the award of sale of the Bonds. Puroose and Securitv The Bonds will be issued for the purpose of financing the engineering, construction, installation, inspection and administration of sidewalk improvements along particular streets within the City of Bozeman, Montana, pursuant to the City's 1998A and 1998B Sidewalk Construction Programs and in accordance with the provisions of Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as amended (the" Act"). The Bonds will be special, limited obligations of the City and do not constitute general obligations of the City. The Bonds are payable primarily from the collection of a special tax or assessment which is a lien against the assessable real property benefitted by the Improvements to be undertaken therein or therefor. The special assessments are payable in equal, semiannual installments over a 5-year term, with unpaid installments of the special assessments bearing interest at a rate equal, from time to time, to the sum of (i) the average rate of interest borne by the then outstanding Bonds, plus (ii) one-half of one percent (0.50%) per annum. The Bonds are further secured by the Special Improvement District Revolving Fund of the City (the "Revolving Fund"). The City will agree to make a loan from the Revolving Fund to the Special Sidewalk, Curb, Gutter and Alley Approach Fund (the "Fund") to make good any deficiency then existing in the principal and interest accounts therein and to provide funds for the Revolving Fund by levying a tax or making a loan from the City's general fund to the extent and for the period authorized by the Act. Date and TVDe The Bonds will be dated, as originally issued, as of August 1, 1999, and will be issued as negotiable investment securities in registered form as to both principal and interest. Maturities and Form If issued as serial bonds, the Bonds shall mature, subject to redemption, on July 1 in the following years and amounts: Year Amount 2000 $1 7,000 2001 20,000 2002 25,000 2003 25,000 2004 25,000 B-1 If issued as amortization bonds, the Bonds will be issued as a single bond or divided into several bonds, as the Commission may determine, and the principal of the Bonds shall be payable semiannually on each January 1 and July 1, commencing January 1, 2000, and continuing through July 1, 2004, subject to prior redemption. Serial bonds shall be in the denomination of $5,000 each or any integral multiple thereof of single maturities; provided that one Bond with a stated maturity in 2000 shall be in the principal amount of $7,000. Amortization bonds shall be preferred. Redemction Mandatory Redemction. If on any interest payment date there will be a balance in the Fund after payment of the principal and interest due on all Bonds drawn against it, either from the prepayment of special assessments levied for the Improvements or from the transfer of surplus money from the Construction Account to the Principal Account, 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 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. Optional Redemction. 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 IIMandatory Redemption" on any interest payment date; provided, however, the Bonds shall not be called for redemption before July 1, 2001, from the proceeds of refunding special sidewalk, curb gutter and alley approach 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. Selection of Bonds for Redemotion. 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, except that the Bond with the stated maturity in 2000 and in the principal amount of $7,000 shall be redeemed before other Bonds of such stated maturity. Interest Pavment Dates. Rates Interest will be payable each January 1 and July 1, commencing January 1, 2000, to the registered owners of the Bonds as such appear in the bond register as of the close of business on the 15th day (whether or not a business dayl of the immediately preceding month. All Bonds of the same stated maturity must bear interest from date of original issue until paid at a single, uniform rate. Each rate must be expressed in an integral multiple of 1/8 or 5/100 of 1 %. No supplemental or liB" coupons or additional interest certificates are permitted. Interest will be calculated on the basis of a 360-day year consisting oftwelve 30- day months. Bond Registrar. Transfer Agent and Pavim;J Aaent The Administrative Services Director of the City will act as bond registrar, transfer agent and paying agent (the IIRegistrar"l. The bond register will be kept, transfers of ownership will be effected and principal of and interest on the Bonds will be paid by the Registrar. The City will pay the charges of the Registrar for such services. The City reserves the right to appoint a suitable bank or trust company as a successor Registrar. Deliverv Within 45 days after the sale, the City will deliver to the Registrar the printed Bonds ready for completion and authentication. The original purchaser of the Bonds must notify the Registrar, at least five business days before issuance of the Bonds, of the persons in whose names the Bonds will be initially registered and the denominations of the Bonds to be originally issued. If notification is not received by that date, the Bonds will be registered in the name of the original purchaser and, if serial bonds, will be issued in denominations corresponding to the principal maturities of the Bonds. On the day of closing, the City will B-2 .---..---...--.-.-.-.----.------..--- . -..- -.... .--..--. ----... furnish to the purchaser the opinion of Bond Counsel hereinafter described, an arbitrage certification and a certificate stating that no litigation in any manner questioning the validity of the Bonds is then pending or, to the knowledge of officers of the City, threatened. Payment for the Bonds must be received by the City in immediately available funds at its designated depository on the day of closing. The successful bidder shall submit to the Clerk of the Commission not earlier than 48 hours after the award of sale and not later than the day of closing a certificate, in form satisfactory to Bond Counsel, as to the initial reoffering price of each stated maturity of the Bonds and stating that at least ten percent of the principal amount of such Bonds of each stated maturity has been sold at such respective prices. Qualified Tax-Exemot Obligations The Bonds will be designated by the City as uqualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the uCode"), and financial institutions described in Section 265(b)(5) of the Code may treat the Bonds for purposes of Sections 265(b)(2) and 291 (e)( 1 )(B) of the Code as if they were acquired on August 7, 1986. Legal Ooinion An opinion as to the validity of the Bonds and the exclusion of the interest thereon from gross income for federal income tax purposes and Montana individual income tax purposes will be furnished by Dorsey & Whitney LLP, of Missoula, Montana, and Minneapolis, Minnesota, as Bond Counsel. The legal opinion will be delivered at closing. The legal opinion will state that the Bonds are valid and binding special, limited obligations of the City enforceable in accordance with their terms, except to the extent to which enforceability thereof may be limited by the exercise of judicial discretion or by state or federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights. Tvoe of Bid and Good Faith Deoosit Sealed bids for not less than $108,640 (up to 3 percent discount) and accrued interest on the principal sum of $112,000 must be mailed or delivered to the undersigned and must be received at the office of the Clerk of the Commission prior to the time stated above. Bidders must bid for all or none of the Bonds. Each bid must be unconditional. Except for a bid by or on behalf of the Board of Investments of the State of Montana, a good faith deposit (the uDeposit") in the form of money, cashier's check, certified check, bank money order, or bank draft drawn and issued by a federally chartered or state chartered bank insured by the federal deposit insurance corporation or a financial surety bond in the sum of $2,240 payable to the order of the City is required for a bid to be considered. If money, cashier's check, certified check, bank money order, or bank draft is used, it must accompany the bid and be delivered to the Clerk of the Commission. If a financial surety bond is used, it must be from an insurance company licensed and qualified to issue such a bond in the State of Montana and such bond must be submitted to the Clerk of the Commission, or the City's financial advisor prior to the opening of the bids. The financial surety bond must identify each bidder whose Deposit is guaranteed by such financial surety bond. If the Bonds are awarded to a bidder utilizing a financial surety bond, then that purchaser is required to submit its Deposit to the City in the form of a cashier's check (or wire transfer such amount as instructed by the City or its financial advisor) not later than 1 :00 p.m., M.T., on the next business day following the award. If such Deposit is not received by that time, the financial surety bond may be drawn by the City to satisfy the Deposit requirement. No interest on the Deposit will accrue to the purchaser. The Deposit will be applied to the purchase price of the Bonds. In the event the purchaser fails to honor its accepted bid, the Deposit will be retained by the City as liquidated damages. The Deposit of the unsuccessful bidders will be returned immediately on award of the Bonds to the purchaser or after rejection of all bids. Instructions for wiring the Deposit may be obtained from the City's Administrative Services Director, City of Bozeman, P. O. Box 640, Bozeman, Montana 59771, (406) 582-2325. B-3 Award The bid authorizing the lowest true interest cost (calculated from dated date), will be deemed the most favorable. In the event that two or more bids state the lowest true interest cost, the sale of the Bonds will be awarded by lot. No oral bid will be considered. The City reserves the rights to reject any and all bids, to waive informalities in any bid and to adjourn the sale. CUSIP Numbers The City will assume no fee or obligation for the assignment or printing of CUSIP numbers on the Bonds or for the correctness of any numbers printed thereon, but will permit such numbers to be assigned and printed at the expense of the purchaser, if the original purchaser waives any delay in delivery occasioned thereby. Continuina Disclosure: ExemDtion Bidders and other participating underwriters in the primary offering of the Bonds need not comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), 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. Consequently, the City will not enter into any undertaking to provide continuing disclosure of any kind with respect to the Bonds. Information for bidders and bidding forms and instructions for submitting bids by facsimile may be obtained from the undersigned. Dated: July 16, 1999. BY ORDER OF THE CITY COMMISSION Robin L. Sullivan Clerk of the Commission City of Bozeman, Montana Publish: July 18, 1999 8-4 -- --