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HomeMy WebLinkAboutResolution 3055 Authorizing $5 million GO bond issues and terms COMMISSION RESOLUTION NO. 3055 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, RELATING TO $5,000,000 GENERAL OBLIGATION BONDS, SERIES 1995; DETERMINING THE FORM AND DETAILS, AUTHORIZING THE EXECUTION AND DELIVERY AND LEVYING TAXES FOR THE PA YMENT THEREOF NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, as follows: Section 1. Authorization and Sale: Recitals. 1.01 Authorization and Sale. At an election duly called and held November 8, 1994, the electors of the City authorized the issuance and sale of $5,000,000 general obligation bonds (the "Bonds") of the City for the purpose of financing the implementation of a series of transportation projects contained in the Bozeman Urban Transportation Plan 1993 Update and paying costs associated with the sale and issuance of the Bonds (the "Project"). On March 20, 1995, the City authorized and provided for the issuance and sale of its general obligation bonds in the amount of $5,000,000 to fund the authorized Project. Pursuant to such authorization, this Commission at a public sale duly noticed and held on April 4, 1995, awarded the sale of the Bonds to D.A. Davidson & Co., of Great Falls, Montana, as account manager on behalf of D.A. Davidson & Co., of Great Falls, Montana, and American Bank Bozeman, of Bozeman, Montana, on a bid to purchase the Bonds at a price equal to the principal amount thereof and accrued interest to the date of delivery, the Bonds to bear interest at the rates designated by the Purchaser in such bid and as set forth in Section 2.01 of this resolution, which rates result in a true interest rate of 5.53389%. The rates of interest designated by the Purchaser result in a total dollar interest cost of $3,335,799.31. It is hereby found, determined and declared that the interest rates designated by the Purchaser and set forth in Section 2.01 are consistent with the Purchaser's bide accepted by this Commission on April 4, 1995 and are hereby approved. It is now desirable, proper and in the best interest of the City that the form and details of the Bonds be set forth and prescribed in the official proceedings of this Commission. 1.02 Recitals. All acts, conditions and things required by the Constitution and laws of the State of Montana, including Montana Code Annotated, Title 7, Chapter 7, Part 42, as amended, in order to make the Bonds valid and binding general 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. The indebtedness evidenced by the Bonds plus any outstanding general obligation bonds of the City does not exceed 28 % of the taxable value of the property subject to taxation by the City ascertained by the last completed assessment for state, county and school taxes previous to this date. The City has full power and authority to issue the Bonds. Section 2. Bond Terms. Execution and Deliverv. 2.01. Term of Bonds. The Bonds shall be designated "General Obligation Bonds, Series 1995." The Bonds shall be in the denomination of $5,000 each or any integral multiple thereof. The Bonds shall mature on July 1 in the years and amounts listed below, and Bonds maturing in such years and amounts shall bear interest from date of original issue until paid or duly called for redemption at the rates shown opposite such years and amounts, as follows: Year Amount Rate Year Amount Rate 1996 $ 85,000 7.00% 2006 $270,000 5.30% 1997 155,000 7.00 2007 285,000 5.40 1998 170,000 7.00 2008 300,000 5.50 1999 180,000 6.50 2009 320,000 5.50 2000 195,000 5.50 2010 335,000 5.60 2001 205,000 4.80 2011 355,000 5.60 2002 215,000 4.90 2012 380,000 5.70 2003 230,000 5.00 2013 400,000 5.70 2004 240,000 5.10 2014 425,000 5.75 2005 255,000 5.20 2.02. Reaistered Form. Interest Payment Dates. The Bonds shall be issuable only in fully registered form, and the ownership of the Bonds shall be transferred only upon the bond register of the City hereinafter described. The interest on the Bonds shall be payable on January 1 and July 1 in each year, commencing January 1, 1996. Interest on the Bonds shall be payable to the owners of record thereof as such appear on the bond register as of the close of business on the fifteenth day of the month immediately preceding each interest payment date, whether or not such day is a business day. Interest on, and upon presentation and surrender thereof, the principal of each - 2 - _n______ Bond, and, upon presentation and surrender thereof, shall be payable by check or draft issued by the Registrar described herein. 20.3. Dated Date. Each Bond shall be originally dated as of April 15, 1995, and upon authentication of any Bond the Bond Registrar, Transfer Agent and Paying Agent shall indicate thereon the date of such authentication. 2.04. Reaistration. The City shall appoint, and shall maintain, a bond registrar, transfer agent and paying agent (the Registrar). The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Reaister. The Registrar shall keep at its principal office a bond register in which the Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. 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 the case may be, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until such interest payment date. (c) Exchanae of Bonds. 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 in writing. (d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be promptly canceled by the Registrar and thereafter disposed of as directed by the City. (e) ImDrODer or Unauthorized Transfer. When any Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be - 3 - 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 or exchange of Bonds, 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 lost, stolen or destroyed, 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 lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond lost, stolen or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Bond was lost, stolen or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of 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 canceled by it and evidence of such cancellation shall be given to the City. If the mutilated, lost, stolen or destroyed 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. Accointment of Initial Registrar. The City hereby appoints Norwest Bank Montana, N.A., in Billings, Montana, 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 II, as amended (the "Registration Act"), but the City agrees to pay the reasonable and customary charges of the Registrar for the services performed. 2.06. Octional Redemction. Bonds maturing in the years 1996 through 2004 shall not be subject to redemption prior to maturity, but Bonds maturing in the years 2005 through 2014 shall each be subject to redemption and prepayment within a maturity in $5,000 principal amounts selected by the Registrar by lot or any other manner deemed fair, at the option of the City on January 1, 2005, and any business day thereafter, at a price equal to the principal amount thereof and interest accrued to the redemption date. The Clerk of the Commission shall cause notice of redemption to be published as required by law, and, at least thirty days prior to the designated redemption date, shall cause notice of redemption to be mailed, by certified mail, to the Registrar and to the registered owners of each Bond to be redeemed at their addresses as they appear on the bond register described in Section 2.04, but no defect in or failure to - 4 - give such mailed notice shall affect the validity of proceedings for the redemption of any Bond not affected by such defect or failure. The notice of redemption shall specify the redemption date, redemption price, the numbers, interest rates and CUSIP numbers of the Bonds to be redeemed and the place at which the Bonds are to be surrendered for payment, which is the principal office of the Registrar. Official notice of redemption having been given as aforesaid, the Bonds or portions thereof so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified and from and after such date (unless the Issuer shall default in the payment of the redemption price) such Bonds or portions thereof shall cease to bear interest. In addition to the notice prescribed by the preceding paragraph, the Clerk of the Commission shall also give, or cause to be given, notice of the redemption of any Bond or Bonds or portions thereof at least 35 days before the redemption date by certified mail or telecopy tot he Purchaser and all registered securities depositories then in the business of holding substantial amounts of obligations of the character of the Bonds (such depositories now being The Depository Trust Company, of Garden City, New York; Midwest Securities Trust Company, of Chicago, Illinois; Pacific Securities Depository Trust Company, of San Francisco, California; and Philadelphia Depository Trust Company, of Philadelphia, Pennsylvania) and one or more national information services that disseminate information regarding municipal bond redemptions; provided that any defect in or any failure to give any notice of redemption prescribed by this paragraph shall not affect the validity of the proceedings for the redemption of any Bond or portion thereof. 2.07. Execution and Deliverv. The Bonds shall be forthwith prepared for execution under the direction of the Clerk of the Commission and the Purchaser, and shall be executed on behalf of the City by the signatures of the Mayor, the City Manager and the Clerk of the Commission, and shall be sealed with the official seal of the City, provided that said signatures and the seal may be printed, engraved or lithographed facsimiles thereof. in case any officer whose signature or a facsimile of who signature shall appear on the Bonds shall cease to be such officer before the delivery thereof, 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. When the Bonds have been so executed by said City officers, they shall be registered by the Clerk of Commission in accordance with Montana Code Annotated, Section 7-7-4257. - 5 - Notwithstanding such execution, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless and until a certificate of authentication on such Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. When the Bonds have been fully executed and authenticated, they shall be delivered by the Clerk of the Commission to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser shall not be obligated to see to the application of the purchase price. 20.8 Securities DeDositorv for Series 1995 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. "DTC" shall mean The Depository Trust Company of New York, New York. "Participant" shall mean nay broker-dealer, bank or other financial institution for which DTC holds Bonds as securities depository. "Representation letter" shall mean the Representation letter from the City and the Registrar to DTC with respect to the Bonds, substantially in the form to be attached to this resolution as Exhibit A. which is hereby incorporated herein by reference and made a part hereof. (b) The Bonds shall be initially issued as separately authenticated fully registered Bonds, and one Bond shall be issued in the principal amount of each stated maturity of the Bonds. Upon initial issuance, the ownership of such Bonds shall be registered in the Bond register in the name of Cede & Co., as nominee of DTC. The Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, if any, giving any notice permitted or required to be given to registered owners of Bonds under the Resolution or this Supplemental Resolution, registering the transfer of Bonds, and for all other purposes whatsoever; and neither the Registrar nor the City shall be affected by any notice to the contrary. Neither the Registrar nor the City shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other Person which is not shown on the Bond register as being a registered owner of any Bonds, with respect to the - 6 - ...... ---- accuracy of any records maintained by DTC or any Participant, with respect to the payment by DTC or any Participant of any amount with respect to the principal of or interest on the Bonds, with respect to any notice which is permitted or required to be given to owners of Bonds under the Resolution or this Supplemental Resolution, with respect to the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds, or with respect to any consent given or other action taken by DTC as registered owner of the Bonds. So long as any Bond is registered in the name of Cede & Co., as nominee of DTC, the Registrar shall pay all principal of and interest on such Bond, and shall give all notices with respect to such Bond, only to Cede & Co. in accordance with the Representation Letter, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and interest on the Bonds to the extent of the sum or sums so paid. No Person other than DTC shall receive an authenticated Bond for each separate stated maturity evidencing the obligation of the City to make payments of principal and interest. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the Bonds will be transferable to such new nominee in accordance with paragraph (e) hereof. (c) In the event the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bonds in the form of Bond certificates, the City may notify DTC and the Registrar, whereupon DTC shall notify the Participants of the availability through DTC of Bonds in the form of certificates. In such event, the Bonds will be transferable in accordance with paragraph (e) hereof. DTC may determine to discontinue providing it s services with respect to the Bonds at any time by giving notice to the City and the Registrar and discharging it s responsibilities with respect thereto under applicable law. In such event the Bonds will be transferable in accordance with paragraph (e) hereof. (d) The execution and delivery of the Representation Letter to DTC by the City Manager in the form attached as Exhibit A with such changes, omissions, insertions and revisions as the Clerk of the Commission and the City Attorney shall deem advisable, is hereby authorized, and execution of the Representation Letter by the City Manager shall be conclusive evidence of such approval. The Representation Letter shall set 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 forms 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. - 7 - Section 3. Form of Bonds. ODinion. 3.01. Form. The bonds shall be issued in substantially the followina form: (Face of the Bonds) UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN GENERAL OBLIGATION BOND, SERIES 1995 No. $ Maturitv Date of ~ Q& Original Issue CUSIP April 15, 1995 REGISTERED OWNER: SEE REVERSE FOR CERTAIN DEFINITIONS PRINCIPAL AMOUNT: DOLLARS The City of Bozeman, Gallatin County, State of Montana (the City), acknowledges itself to be indebted and for value received hereby promises to pay to the registered owner named above, or registered assigns, the principal amount specified above on the maturity date specified above or, if this Bond is prepayable as stated herein, on any date prior thereto on which this Bond shall have been duly called for redemption, and to pay interest on said principal amount to the registered owner hereof from April 15, 1995 or from such later date to which interest has been paid or duly provided for until this Bond is paid or, if this Bond is prepayable, until it has been duly called for redemption, at the rate specified above. Principal of this Bond is payable upon presentation and surrender hereof to Norwest Bank Montana, N.A., as Bond Registrar, Transfer Agent and Paying Agent, at its operations center in Minneapolis, Minnesota, or its successor designated under the Resolution described herein (the Registrar). Interest on this Bond is payable semiannually on each January 1 and July, commencing on January 1, 1996, by check or draft mailed by the Registrar to the person in whose name this Bond is registered as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month, at his address as it appears on the bond register maintained by the Registrar. The principal of and interest on this Bond are payable in lawful money of the United State of America. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith, credit and taxing powers of the City have been and are hereby irrevocably pledged. Additional provisions of this Bond are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth hereon. 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 hereon shall have been executed by the Registrar by the manual signature of one of its authorized re p rese ntatives. IN WITNESS WHEREOF, the City of Bozeman, Gallatin County, State of Montana, by it City Commission, has caused this Bond to be executed by the facsimile signatures of the Mayor, the City Manager and the Clerk of the Commission, and by a facsimile of the official seal of the City. - 8 - Date of Authentication: Attest: (Facsimile Signature) (Facsimile Signature) Mayor City Manager (Facsimile Seal) (Facsimile Signature) Clerk of the Commission CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. NORWEST BANK MONTANA, N.A. as Bond Registrar, Transfer Agent, and Paying Agent By Authorized Signature (Reverse of the Bonds) This Bond is one of an issue in the total principal amount of $5,000,000, all of like date of original issue and tenor except as to serial number, denomination, maturity date, interest rate and redemption privilege, all authorized by the favorable vote of more than the requisite majority of the qualified electors of the City voting on the question of the issuance thereof at an election duly held, for the City for the purpose of financing the implementation of a series of transportation projects contained in the Bozeman Urban Transportation Plan 1993 Update and paying costs associated with the sale and issuance of Bonds, all pursuant to resolutions duly adopted by the City Commission, including a resolution adopted on April 17, 1995 (the Resolution), and in full conformity with the Constitution and laws of the State of Montana thereunto enabling. The Bonds are issuable only as fully registered Bonds of single maturities, in denominations of $5,000 or any integral multiple thereof. Bonds of this issue maturing in the years 1996 through 2004 are payable on their respective stated maturity dates without option of prior payment, but Bonds having stated maturity dates in the years 2005 through 2014 are each subject to redemption and prepayment at the option of the City, in $5,000 principal amounts selected by lot or any other manner deemed fair within a maturity on January 1, 2005, and any business day thereafter, at a price equal to the principal amount thereof to be redeemed plus interest accrued to the redemption date. Notice of the call for redemption of any Bond prior to its stated maturity date will be mailed, at least thirty days before said redemption date, to the Registrar and to the registered owner thereof. 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 in 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 any such transfer or exchange, the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Bond - 9 - ...--...-.. .-.- 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 acts, conditions and things required by the Constitution and laws of the State of Montana to be done, to exist, to happen and to be performed precedent to and in the issuance of this Bond, in order to make it a valid and binding general obligation of the City according to its terms, have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required; that the City Commission will annually levy an ad valorem tax on all of the taxable property in the City sufficient to pay the interest hereon when it falls due and also to pay and discharge the principal of this Bond at maturity; and that this Bond, together with all other indebtedness of the City outstanding on the date of original issue hereof and on the date of the delivery of the Bonds of this issue to the original purchaser thereof, does not exceed any constitutional or statutory limitation of indebtedness. 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 and regulations: TEN COM -- as tenants UNIF GIFT MIN ACT Custodian - in common (Cust) (Minor) TEN ENT-- as tenants by the entireties under Uniform Gifts to JT TEN -- As joint tenants Minors with right of survivorship and Act not as tenants in (State) common Additional abbreviations may also be used. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within Bonds 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 OR ASSIGNEE assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. - 10 - Signature Guarantee: Signature(s) must be guaranteed by a member of the Medallion Signature Program 30.2. Leaal ODinion. A copy of the text of the legal opinion of Bond Counsel shall be printed on the reverse side of each of the Bonds and identified by a certificate in the following form: We certify that the above is a full, true and correct copy of the legal opinion rendered by Bond Counsel on the issue of Bonds of the City of Bozeman, Gallatin County, Montana, which includes the within Bond, dated as of the date of delivery of and payment for the Bonds. (Facsimile Signature) (Facsimile Signature) (Facsimile Signature) Mayor City Manager Clerk of the Commission Section 4. Securitv Provisions. 4.01. Construction Account; Use of Proceeds. There is hereby created a special account to be designated as the "1995 Construction Account" (the "Construction Account"), to be held and administered by the Director of Finance of the Commission separate and apart from all other funds of the City. The City appropriates to the Construction Account (a) the proceeds of the sale of the Bonds in the amount of $5,000,000 and (b) all income derived from the investment of amounts on hand in the Construction Account. The Construction Account shall be used solely to defray expenses of the Project, including but not limited to the transfer to the Debt Service Account described in Section 4.02 of amounts sufficient for the payment of interest and principal, if any, due upon the Bonds prior to the completion and payment of all costs of the Project. Upon completion and payment of all costs of the Project, any remaining proceeds of Bonds in the Construction Account shall be credited and paid to the Debt Service Account. 4.02. Debt Service Account. So long as any of the Bonds are outstanding and any principal thereof or interest thereon unpaid, the Director of Finance shall maintain a separate and special 1995 Debt Service Account ( the "Debt Service Account") to be used for no purpose other than the payment of the principal of and interest on the Bonds. The City irrevocably appropriates to the Debt Service Account: (a) any proceeds of the Bonds in excess of $5,000,000, (b) all funds to be credited and paid thereto in accordance with the provisions of Section 4.01, (c) any taxes levied in accordance with this resolution, (d) all income derived from the investment of amounts on hand in the Debt Service Account, and (e) such other money as shall be received and appropriated to the Debt Service Account from time to time. Section 5. Tax Levies. The full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged to the payment of the Bonds and interest due thereon, and the City shall cause taxes to be levied annually on all taxable property in the City sufficient to pay the interest on the Bonds when it falls due and to pay and discharge the principal at maturity of each and all of the Bonds as they respectively become due. Section 6. Arbitraae and Certification of Proceedings. 6.01. Certification. The Mayor, Clerk of the Commission and Director of Finance, being among the officers of the City charged with the responsibility for issuing the Bonds, are authorized and - 11 - directed to execute and deliver to the Purchaser a certification in accordance with the provisions of Section 148 of the Code and the Treasury Regulations, Section 1.148-2(b), stating the facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds which make it reasonable to expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and applicable Treasury Regulations. The certification shall further state that to the best of the knowledge and belief of the certifying officers no other facts, estimates or circumstances exist which would materially change this expectation. 6.02. Covenant. The City covenants and agrees with the holders 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 subject to taxation under the provisions of the Code and the Treasury Regulations applicable thereunder, and covenants and agrees that it will take or cause its officers, employees or agents to take any action within its or their powers to prevent the interest on the Bonds from becoming includable in gross income for purposes of federal income taxation under the Code and applicable Treasury Regulations. 6.03. Arbitrage Rebate. The City acknowledges that the Bonds are 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 Bonds from gross income for federal income tax purposes, unless the Bonds qualify for the exception from the rebate requirement under Section 148(f)(4)(B) of the Code and no "gross proceeds" of the Bonds (other than amounts constituting a "bona fide debt service fund") arise during or after the expenditure of the original proceeds thereof. 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. 6.04. Information ReDorting. The City shall file with the Secretary of the Treasury, not later than August 15, 1995, a statement concerning the Bonds containing the information required by Section 149(e) of the Code. Section 7. Defeasance. 7.01. General. When the liability of the City on all Bonds issued under and secured by this Resolution and all interest thereon has been discharged as provided in this section, all pledges, covenants and other rights granted by this Resolution to the Holders of such Bonds shall cease. 7.02. Maturitv. The City may discharge its liability with reference to all Bonds and interest thereon which are due on any date by depositing with the Registrar for such Bonds on or before the date a sum sufficient for the payment thereof in full; or if any Bond or interest thereon shall not be paid when due, the City may nevertheless discharge it liability with reference thereto by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. 7.03. RedemDtion. The City may also discharge its liability with reference to any prepayable Bonds which are called for redemption on any date in accordance with their terms, by depositing - 12 - ------- .. .------ -- ""~""'!;''''"","'' - ~ with the Registrar on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due thereon, provided that notice of such redemption has been duly given as provided in this Resolution. 7.04. Escrow. The City may also at any time discharge its liability in its entirety with reference to any 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 general obligations of the United States or securities of United States agencies 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, interest and redemption premiums, if any, to become due on such Bonds at their Stated Maturities or, if such Bonds are prepayable and notice of redemption thereof has been given or irrevocably provided for, to such earlier Redemption Date. Section 8. Desianation as Qualified Tax-ExemDt Obliaations. Pursuant to Section 265(b)(3)(B)(ii) of the Code, the City hereby designates the Bonds as "qualified tax-exempt obligations" for the purposes of Section 265(B)(3) of the Code. The City has not designated any bonds in 1995 under Section 265(b)(3) other than the Bonds. The City hereby represents that it does not anticipate that the City and all "subordinate entities" of the City will issue in 1995 obligations bearing interest exempt from federal income taxation under Section 103 of the Code (including "qualified 502(c)(3) bonds" but excluding other "private activity bonds," as defined in Sections 141 (a) and 145(a) of the Code) in an amount greater than $10,000,000. PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 17th day of April 1995. JOHN VINCENT, Mayor ATTEST: ~.{~ Clerk of the Commission APPROVED AS TO FORM: - 13 - "EXHIBIT A" BLANKET ISSUER LETTER OF REPRESENT A TIONS (To be Completed by Issuer) CITY OF BOZEMAN. MONTANA (Name of Issuer) Ami! 17. 1995 (Date) Attention: Underwriting Department -- Eligibility The Depository Trust Company 55 Water Street; 50th Floor New Yark, NY 10041-0099 Ladies and Gentlemen: This letter sets forth our understanding with respect to all issues (the "Securities") that Issuer shall request be made eligible for deposit by The Depository Trust Company ("DTC"). To induce DTC to accept the Securities as eligible for deposit at DTC, and to act in accordance with DTC's Rules with respect to the Securities, Issuer represents to DTC that Issuer will comply with the requirements stated in DTC's Operational Arrangements, as they may be amended from time to time. Note: Very truly yours, Schedule A contains statements that DTC believes accurately describe DTC, the method of effecting book-entry transfers CITY OF BOZEMAN. MONTANA of securities distributed through DTC, (Issuer) and certain related matters. By: (Authorized Officer's Signature) James E. Wysocki Received and Accepted: City Manager City of Bozeman P.O, Box 640 THE DEPOSITORY TRUST COMPANY Bozeman, Montana 59715 (406) 582-2300 By: - 14 - --. ~- ~'--'._-_. --'~ - -~ -.. . .- SCHEDULE A SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONL Y ISSUANCE (Prepared by DTC - bracketed material may be applicable only to certain issues) 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered Security certificate will be issued for (each issue of) the Securities, (each) in the aggregate principal amount of such issue, and will be deposited with DTC. (If, however, the aggregate principal amount of (any) issue exceeds $200 million, one certificate will be issued with respect to each $200 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount of such issue.) 2. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 1 7 A of the Securities Exchange Act of 1934. DTC holds securities that it s participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Securities with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which mayor may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. - 15 - - -----..-- 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. (6. Redemption notices shall be sent to Cede & Co. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.) 7. Neither DTC nor Cede & Co. will consent or vote with respect to Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Principal and interest payments on the Securities will be made to DTC. DTC's practice is to credit Direct Participants' accounts on payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Issuer or the Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. (9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the (Tender/Remarketing) Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the (Tender/Remarketing) Agent. The requirement for physical delivery of Securities in connection with a demand for purchase or a mandatory purchase will be deemed salified when the ownership rights in the Securities are transferred by Direct Participants on DTC's records.) 10. DTC may discontinue providing it services as securities depository with respect to the Securities at any time by giving reasonable notice to the Issuer or the Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Security certificates are required to be printed and delivered. 11. The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered. 12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. - 16 - -"'-