HomeMy WebLinkAboutResolution 3103 Refinancing of DNRC bonds
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RESOLUTION NO. ~
RESOLUTION RELATING TO A WATER SYSTEM
REVENUE BOND, SERIES 1991; AMENDING
AUTHORIZING RESOLUTION ADOPTED APRIL 15,
1991 AND BOND
BE IT RESOLVED by the City Commission of the City of Bozeman, Gallatin
County, Montana (the "Issuer"), as follows:
Section 1. Recitals.
1.01. Issuance of Bond. Pursuant to Resolution No. 2745, adopted by the
City Commission on April 10, 1989, as amended and supplemented by Resolution
Nos. 2749 and 2829, adopted by the Commission on May 22, 1989, and April 15, 1991,
respectively (as so amended and supplemented and heretofore otherwise amended
and supplemented, the "Original Resolution"), the Issuer authorized the issuance of
its $352,715 Water System Revenue Bond, Series 1991 (the "Original Bond") to
finance improvements consisting of the second phase of enclosure of all exposed
portions of the Lyman Creek Water System, including the construction of a cover
for the storage reservoir and extension of piping toward a future enclosed spring box
and related improvements (the "Project") as part of the municipal water system (the
"System") of the Issuer. The Original Bond was issued on May 15, 1991 and was
purchased and is currently held by the Department of Natural Resources and
Conservation of the State of Montana (the "DNRC"). There are no other bonds or
indebtedness of the Issuer that are outstanding and payable from revenues of the
System, except the Issuer's Water System Revenue Bond, Series 1989B and Water
System Revenue Refunding Bonds, Series 1995.
1.02. Issuance of DNRC Bonds. Pursuant to a General Resolution, adopted
September 30, 1985 and as thereafter amended (the "General Resolution"), and a
Supplemental Resolution thereto, the Board of Examiners of the State of Montana
(the "Board of Examiners") authorized the issuance by the State of Montana (the
"State"), of its Coal Severance Tax Bonds, Department of Natural Resources and
Conservation, Water Development Program, 1989 Series A, in the original principal
amount of $6,000,000 (the "Series 1989A Bonds"). The Series 1989A Bonds were
issued to provide funds to finance certain of the water development projects and
loans. The Bond was purchased by the DNRC from proceeds of the Series 1989A
Bonds.
1.03. Issuance of DNRC 1996 Refunding Bonds. The Board of Examiners
has authorized the issuance of $14,985,000 aggregate principal amount of State of
Montana, Coal Severance Tax Bonds, Department of Natural Resources and
Conservation, Renewable Resource Program, 1996 Refunding Series A (the "DNRC
1996 Refunding Bonds"), to provide funds, with other available funds, to refund the
Series 1989A Bonds. The purpose of the refunding is to permit the DNRC to reduce
the rate of interest, during the portion of the term of the loan when the interest rate
thereon is not subsidized by the State, on loans made by the DNRC from proceeds of
the Series 1989A Bonds and other State Bonds, including the loan evidenced by the
Original Bond.
1.04. Increase in Principal Amount and Reduction in Interest Rate on
Original Bond. It is proposed that debt service on the Original Bond be reduced, to
give effect to the savings effected by the DNRC 1996 Refunding Bonds (which
increased the principal amount of outstanding State Bonds but reduced the interest
rates thereon) by (i) increasing the outstanding principal amount of the Original
Bond from $293,415.02 to $323,304.45, effective from and after the date of issuance of
the DNRC 1996 Refunding Bonds, now expected to be February 14, 1996 (but of
which $23,297.15 will bear interest at the rate of 0.00% per annum to and including
May 22, 1996), and (ii) reducing the interest rate on the Original Bond from six and
eighty-seven hundredths percent (6.87%) per annum to four and ninety hundredths
percent (4.90%) per annum, from and after May 23, 1996.
Section 2. Amendment of the Resolution.
2.01. Authorization. The Issuer in Sections 8.02 and 8.03 of the Resolution
reserved the right to amend the Resolution upon notice to and with the consent of
the holders of all outstanding Bonds.
2.02. Consent of DNRC. The DNRC has agreed to the amendment of
certain provisions of the Resolution to revise the terms of the Bond in connection
with the issuance of the refunding bonds referred to in Section 1.03.
2.03. Amendment of Section 2.01. Pursuant to the authority cited in
Sections 2.01 and 2.02 of this resolution, Subsection (a) of Section 2.01 of Resolution
No. 2829 is hereby amended to read as follows:
"2.01. Terms. (a) The Series 1991 Bond shall be in the principal amount of
$352,715, shall be issued as a single, fully registered bond numbered R-l, shall be
dated as of the date of delivery to the DNRC, and shall bear interest from its date
until the date five years thereafter at the rate of four and eighty-seven hundredths
percent (4.87%) per annum, except as otherwise provided in this Section 2.01(a), and
thereafter at the rate of four and ninety hundredths percent (4.90%) per annum for
the remainder of the term of the Bond. The principal of and interest on the Series
1991 Bond shall be payable in semiannual installments beginning November 23,
1991 and continuing semiannually thereafter until the principal of and interest on
the Series 1991 Bond have been paid in full. Principal and interest in the amount of
$14,273.95 shall be paid on November 23, 1991; in the amount of $13,897.46 on each
May 23 and November 23 thereafter to and including November 23, 1995; on May
23, 1996, principal in the amount shown on Exhibit A to this resolution, as amended
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by Resolution No. Jl.O.3..,. and interest on the outstanding balance hereof shall be
payable on May 23, 1996, and principal and interest in the amount of $15,031.06 shall
be paid on the semiannual installment dates on each May 23 and November 23
thereafter, beginning November 23, 1996 and concluding May 23, 2011; provided that
the final semiannual installment shall be in such lesser or greater amount as is
necessary to pay the principal and interest then due. In connection with the
issuance of the First Amended and Restated Bond, the outstanding principal
amount of the Series 1991 Bond is being increased, effective as of the date of issuance
of the First Amended and Restated Bond, from $293,415.02 to $323,304.45, but such
additional amount will bear interest at the rate of 0.00% to and including May 22,
1996."
2.04. Amendment of Section 2.07.
Pursuant to the authority cited in
Sections 2.01 and 2.02 of this resolution, Section 2.07 of Resolution No. 2829 is
hereby amended to read as follows:
"2.07. Form. The Series 1991
Bond shall be in substantially the following
form, with such appropriate variations, omissions and insertions as are permitted
or required by the Resolution:
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF GALLA TIN
CITY OF BOZEMAN
FIRST AMENDED AND RESTATED
WATER SYSTEM REVENUE BOND
SERIES 1991
No. R-2 $323,304.45
FOR VALUE RECEIVED, the City
of Bozeman (the "City"), a duly organized
municipal corporation located in Gallatin County, Montana, acknowledges itself to
be specially indebted and hereby promises to pay to the Department of Natural
Resources and Conservation of the State of Montana, or its registered assigns, solely
from the Revenue Bond Account of its Water System Fund, the principal sum of
SIX HUNDRED FIFTEEN THOUSAND EIGHT HUNDRED EIGHTY NINE AND
15/100 DOLLARS ($323,304.45), plus interest thereon (i) from the date hereof to and
including May 22, 1996 on $300,007.30 thereof at the rate of four and eighty-seven
hundredths percent (4.87%) per annum and on $23,297.15 thereof at the rate of zero
percent (0.00%) per annum, and (ii) from and after May 23, 1996 on all of the
outstanding principal amount hereof at the rate of four and ninety hundredths
percent (4.90%) per annum per annum, until paid or discharged. Such principal and
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interest shall be paid in consecutive
semiannual installments on the 23rd day of
each May and November, commencing
on May 23, 1996, and concluding May 23,
2011, subject to prepayment as
set forth below. Principal in the amount shown on
Exhibit A hereto and interest
on the outstanding balance hereof shall be payable on
May 23, 1996, and principal and
interest in the amount of $15,031.06 shall be paid on
the semiannual installment dates
on each May 23 and November 23, beginning
November 23, 1996 and concluding
May 23, 2011. The final monthly installment
may be in such lesser or greater
amount as is necessary to pay the balance of
principal and interest then remaining
due. Such installment payments shall be
made to the registered holder
of this Bond, at its address as it appears on the Bond
register, in lawful money of
the United States of America.
This Bond constitutes a series in the principal amount of $352,715 (the
"Series 1991 Bond"), to construct
certain improvements to the Water System of the
City (the "System"), to make
a deposit to a reserve fund for the Bonds and to pay
costs of issuance of the Series
1991 Bond. The Series 1991 Bond is issued pursuant to
and in full conformity with the
Constitution and laws of the State of Montana
thereunto enabling, including
Montana Code Annotated, Title 7, Chapter 7, Parts 44
and 45, as amended, and ordinances
and resolutions duly adopted by the City
Commission. The Series 1991 Bond
is issuable only as a single, fully registered bond.
Reference is made to Resolution No. 2745, adopted by the City Commission
on April 10, 1989, as amended
and supplemented by Resolution Nos. 2749, 2829,3092
and 3103, duly adopted by the
City Commission on May 22, 1989, April 15, 1991,
November 20, 1995, and Feb. 5
, 1996, respectively (as so amended and
; supplemented, the "Resolution"),
for a more complete statement of the terms and
conditions upon which the Series
1991 Bond and the City's Series 1989B Bond and
Series 1995 Bonds have been issued,
the net revenues of the System pledged and
appropriated for the payment
and security thereof, the conditions upon which
additional bonds may be issued
under the Resolution and made payable from such
net revenues on a parity with
the Series 1991 Bond, the Series 1989B Bond and the
Series 1995 Bonds and any Bonds
that may be issued on a parity therewith under the
Resolution (collectively, the
"Bonds") or otherwise, the conditions upon which the
Resolution may be amended, the
rights, duties and obligations of the City, and the
rights of the owners of the Series
1991 Bond.
The City may at any time prepay all or any part of the principal of the Series
1991 Bond with the approval of
the Bondholder and only after request to prepay has
been made in writing to the Bondholder
thirty days prior to such prepayment. Any
prepayment shall be identified
as such, shall be applied first to accrued interest and
then to unpaid principal in inverse
order of installments, and shall not extend or
postpone the due date of any
subsequent installment payment on the Series 1991
Bond.
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The Bonds, including interest and any premium for the redemption
thereof, are payable solely from the net revenues pledged for the payment thereof
and do not constitute a debt of the City within the meaning of any constitutional or
statutory limitation or provision.
The City may deem and treat the person in whose name this Series 1991
Bond is registered as the absolute owner hereof, whether this Series 1991 Bond is
overdue or not, for the purpose of receiving payment and for all other purposes,
and the City shall not be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that
the City has duly authorized and will forthwith undertake the improvements to the
System hereinabove described, has fixed and established and will collect reasonable
rates and charges for the services and facilities afforded by the System, subject to any
required approval by or regulation of the Public Service Commission of the State of
Montana, and has created a special Water System Fund into which the gross
revenues of the System, including all additions thereto and replacements and
improvements thereof, will be paid, and a separate and special Revenue Bond
Account in that fund, into which will be paid each month, from and as a first and
prior lien on the net revenues of the System then on hand an amount equal to not
less than the sum of one-sixth of the interest due within the next six months and
one-twelfth of the principal due within the next twelve months with respect to all
outstanding Bonds payable from that account, and into which shall be paid
additional net revenues sufficient to maintain a reserve therein equal to, as of the
date of calculation, the lesser of (i) 10% of the original principal amount of all series
of Bonds then outstanding or (ii) an amount equal to the maximum principal and
interest payable on all outstanding Bonds in the current or any future fiscal year
(giving effect to any mandatory sinking fund redemption); that the Revenue Bond
Account will be used only to pay the principal of, premium, if any, and interest on
the Bonds issued pursuant to the authority herein recited; that the rates and charges
for the System will from time to time be made and kept sufficient, subject to
regulation of the Montana Public Service Commission, to provide gross income and
revenues adequate to pay promptly the reasonable and current expenses of operating
and maintaining the System and to produce in each fiscal year net revenues in
excess of such current expenses equal to 125% of the maximum amount of principal
and interest payable from the Revenue Bond Account in any subsequent fiscal year;
that additional Bonds and refunding Bonds may be issued and made payable from
the Revenue Bond Account on a parity with the Series 1991 Bonds, the Series 1989B
Bond and the Series 1995 Bonds upon certain conditions set forth in the Resolution
but no obligation will be otherwise incurred and made payable from the net
revenues of the System, whether or not such obligation shall also constitute a
general obligation and indebtedness of the City, unless the lien thereof shall be
expressly made subordinate to the lien of the Series 1991 Bonds, the Series 1989B
Bond and the Series 1995 Bonds and other parity Bonds on such net revenues; that
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all provisions for the security
of this Series 1991 Bond set forth in the Resolution
will be punctually and faithfully
performed as therein stipulated; that all acts,
conditions and things required
by the Constitution and laws of the State of Montana
and the ordinances and resolutions
of the City to be done, to exist, to happen and to
be performed in order to make
this Series 1991 Bond a valid and binding special
obligation of the City according
to its terms have been done, do exist, have happened
and have been performed as so
required; and that this Series 1991 Bond and the
premium, if any, and interest
hereon are payable solely from the net revenues of the
System pledged and appropriated
to the Revenue Bond Account and do not
constitute a debt of the City
within the meaning of any constitutional or statutory
limitation or provision and the
issuance of the Series 1991 Bond does not cause
either the general or the special
indebtedness of the City to exceed any constitutional
or statutory limitation.
IN WITNESS WHEREOF, the City
of Bozeman, Gallatin County, State of
Montana, by its City Commission,
has caused this First Amended and Restated Bond
to be executed by the signatures
of the Mayor, the City Manager and the Director of
Finance, and has caused the official
seal of the City to be affixed hereto, and has
caused this First Amended and
Restated Bond to be dated as of the _ day of
February, 1996.
City Manager
Mayor Finance Director
(Seal)
REG ISTRA TION OF TRANSFER
This Bond shall be fully registered
as to both principal and interest. No
transfer of this Bond shall be
valid unless and until (1) the registered holder of the
Bond, or his duly authorized
attorney or legal representative, executes the form of
assignment appearing on this
Bond, and (2) the Director of Finance, as bond
registrar, has duly noted the
transfer on the Bond and recorded the transfer on the
Director of Finance's registration
books. The City shall be entitled to deem and treat
the person in whose name this
Bond is registered as absolute owner thereof for all
purposes, notwithstanding any
notice to the contrary. Payments on account of the
Bond shall be made only to the
bidder of the registered holder thereof, and all such
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payments shall be valid and effectual to satisfy and discharge the City's liability upon
the Bond to the extent of the sum or sums so paid.
ASSIGNMENT(S)
1. For value received, this Bond is hereby transferred and assigned by the
undersigned holder, without recourse, to
on this _ day of ,-
By:
(authorized signature)
For:
(Holder)
2. For value received, this Bond is hereby transferred and assigned by the
undersigned holder, without recourse, to
on this _ day of ,
-
By:
(authorized signature)
For:
(Holder)
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THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The Director of Finance of the City of Bozeman, Gallatin County, Montana,
acting as Bond Registrar, has transferred, on the books of the City, on the date last
noted below, ownership of the principal amount of and accrued interest on this
Bond, except the amounts of principal and interest theretofore paid:
Name of New
Signature of
Date of Transfer Registered Holder
Bond Registrar
II
Section 3. Preparation and Delivery of First Amended and Restated Bond.
The Bond as amended and restated pursuant to Section 2.04 of this resolution (the
IIFirst Amended and Restated Bond") shall be prepared under the direction of the
Finance Director and shall be executed on behalf of the Issuer by the signature of the
Mayor and countersigned by the City Manager and the Finance Director and sealed
with the official corporate seal of the Issuer. When the First Amended and Restated
Bond has been executed, the Finance Director shall cause it to be dated as of the date
of delivery and delivered to the DNRC, as purchaser thereof, upon surrender of the
Original Bond.
Section 4. Tax Matters.
4.01. General Covenant. The Issuer covenants and agrees with the owners
from time to time of the First Amended and Restated Bond that it will not take or
permit to be taken by any of its officers, employees or agents any action which would
cause the interest on the First Amended and Restated Bond to become includable in
gross income for federal income tax purposes under the Internal Revenue Code of
1986, as amended (the "Code"), and applicable Treasury Regulations (the
"Regulations"), and covenants to take any and all actions within its powers to
ensure that the interest on the First Amended and Restated Bond will not become
includable in gross income for federal income tax purposes under the Code and the
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Regulations. The Project and the System are each owned and maintained by the
Issuer and available for use by members of the general public on a substantially
equal basis. The Issuer agrees not to enter into any lease, use or other agreement
with any non-governmental person relating to the use of the Project or the System
or security for the payment of the First Amended and Restated Bond which might
cause the First Amended and Restated Bond to be considered a "private activity
bond" or a "private loan bond" within the meaning of Section 141 of the Code.
4.02. Arbitrage Rebate. The City acknowledges that the First Amended and
Restated Bond is subject to the rebate requirements of Section 148(f) of the Code.
The City covenants and agrees to retain such records, make such determinations,
file such reports and documents and pay such amounts at such times as are required
under said Section 148(f) and applicable Treasury Regulations to preserve the
exclusion of interest on the Series 1995 Bonds from gross income for federal income
tax purposes. In furtherance of the foregoing, the Director of Finance is hereby
authorized and directed to execute a Rebate Certificate, substantially in the form of
the Rebate Certificate currently on file in the office of the Clerk of the Commission,
and the City hereby covenants and agrees to observe and perform the covenants and
agreements contained therein, unless amended or terminated in accordance with
the provisions thereof.
4.03. Certification. The Mayor, the City Manager and the Finance Director,
being the officers of the Issuer charged with the responsibility for issuing the First
Amended and Restated Bond pursuant to this resolution, are authorized and
directed to execute and deliver to the DNRC, certifications in order to satisfy the
provisions of Sections 1.148-2(b) of the Treasury Regulations. Such certifications
shall state the facts, estimates and circumstances in existence on the date of issue and
delivery of the First Amended and Restated Bond that make it reasonable to expect
that the proceeds of the First Amended and Restated Bond will be used in a manner
that would not cause the First Amended and Restated Bond to be an arbitrage bond
within the meaning of Section 148 of the Code and the Treasury Regulations
promulgated thereunder, and the certification shall further state that to the best of
the knowledge and belief of the certifying officers there are no other facts, estimates
or circumstances that would materially change such expectation.
4.04. Information Reporting. The Issuer shall file with the Secretary of the
Treasury, not later than May IS, 1996, a statement concerning the First Amended
and Restated Bond containing the information required by Section 149(e) of the
Code.
Section 5. Program Covenant. The Issuer agrees that neither it nor any
"related person" to the Issuer (within the meaning of Section 147(a)(2) of the Code)
shalt whether pursuant to a formal or informal arrangement, acquire bonds issued
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by the State under the General Resolution in an amount related to the amount of
the First Amended and Restated Bond.
Section 6. Certification and Effective Date.
6.01. Certification. The officers of the Issuer are authorized and directed to
prepare and furnish to the DNRC and to the attorneys rendering an opinion as to
the legality of the First Amended and Restated Bond, certified copies of all
ordinances, resolutions and records and such other certificates, affidavits and other
instruments as may be required to evidence the validity or marketability of the First
Amended and Restated Bond and all such certified copies, certificates and affidavits
shall constitute representations of the Issuer as to the truth of all statements of fact
contained therein.
6.02. Effective Date. This Resolution shall be in full force and effect from
and after its passage.
(,?~ !:-~
Mayor
Mest: (?J: ,1 ~
Clerk of the Commission
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\
Exhibit A
1996A REFUNDING
02/14/96
RUN 01-16-1996 Resource Development Bureau
Amortization Schedule
BOZEMAN (LYMAN II)
(WDL~91-3149)
AMOUNT LOANED: $323,304.45
INTEREST RATE:
4.87%
,PAYMENTS PER YEAR: 2
NUMBER OF YEARS:
15.50
INITIAL INTEREST DAYS: 0.00
CLOSING DATE: 02/14/1996
DATE DUE PAYMENT
INTEREST PRINCIPAL
BALANCE
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-------
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300,007.30
5/23/1996 13,897.46
7,305.18 6,592.28
293,415.02
INTEREST RATE CHANGES TO 4.9% FOR THE REMAINDER OF THE TERM;
DATE DUE PAYMENT
INTEREST PRINCIPAL
BALANCE
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-------- ---------
-------
-------- -------
-------- ---------
-------
316,712.17
11/23/1996 15,031.06
7,759.45 7,271.61
309,440.56
5/23/1997 15,031.06
7,581.29 7,449.77
301,990.79
11/23/1997 15,031. 06
7,398.77 7,632.29
294,358.50
5/23/1998 15,031. 06
7,211.78 7,819.28
286,539.22
11/23/1998 15,031. 06
7,020.21 8,010.85
278,528.37
5/23/1999 15,031.06
6,823.95 8,207.11
270,321.26
11/23/1999 15,031.06
6,622.87 8,408.19
261,913.07
5/23/2000 15,031. 06
6,416.87 . 8,614.19
253,298.88
11/23/2000 15,031. 06
6,205.82 8,825.24
244,473.64
5/23/2001 15,031.06
5,989.60 9,041.46
235,432.18
11/23/2001 15,031. 06
5,768.p9 9,262.97
226,169.21
5/23/2002 15,031. 06
5,541.15 9,489.91
216,679.30
11/23/2002 15,031. 06
5,308.64 9,722.42
206,956.88
5/23/2003 15,031.06
5,070.44 9,960.62
196,996.26
11/23/2003 15,031. 06
4,826.41 10,204.65
186,791.61
5/23/2004 15,031. 06
4,576.39 10,454.67
176,336.94
11/23/2004 15,031. 06
4,320.26 10,710.80
165,626.14
5/23/2005 15,031. 06
4,057.84 10,973.22
154,652.92
11/23/2005 15,031. 06
3,789.00 11,242.06
143,410.86
5/23/2006 15,031. 06
3,513.57 11,517.49
131,893.37
11/23/2006 15,031.06
3,231.39 11,799.67
120,093.70
5/23/2007 15,031.06
2,942.30 12,088.76
108,004.94
11/23/2007 15,031. 06
2,646.12 12,384.94
95,620.00
5/23/2008 15,031. 06
2,342.69 12,688.37
82,931.63
11/23/2008 15,031. 06
2,031.82 12,999.24
69,932.39
5/23/2009 15,031. 06
1,713.34 13,317.72
56,614.67
11/23/2009 15,031. 06
1,387.06 13,644.00
42,970.67
5/23/2010 15,031. 06
1,052.78 13,978.28
28,992.39
11/23/2010 15,031. 06
710.31 14,320.75 14,671.64
5/23/2011 15,031.10
359.46 14,671.64 0.00
A 7.94% PREMIUM HAS BEEN ADDED TO THE PRINCIPAL BALANCE.
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,
CERTIFICA TE AS TO RESOLUTION
I, the undersigned, being the
duly qualified and acting recording officer of
the City of Bozeman, Montana
(the "City"), hereby certify that the attached
resolution is a true copy of
Resolution No.3102, entitled: "RESOLUTION
RELATING TO A WATER SYSTEM REVENUE
BOND, SERIES 1989B; AMENDING
AUTHORIZING RESOLUTION ADOPTED
MAY 22, 1989 AND BOND" (the
"Resolution"), on file in the
original records of the City in my legal custody; that the
Resolution was duly adopted by
the City Commission of the City at a meeting on
Feb. fa.JUlfi.~Y L 1996, and that
the meeting was duly held by the City Commission and
was attended throughout by a
quorum, pursuant to call and notice of such meeting
given as required by law; and
that the Resolution has not as of the date hereof been
amended or repealed.
. ~~~ary
WTINESS my hand officially thIS
i...- day o. . ctry',1996.
~oI~
Clerk of the Commission
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