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HomeMy WebLinkAboutResolution 2950 Reissuance of (IDR) bonds for MSU Foundation -'"- COMMISSION RESOLUTION NO. 2950 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONT ANA, RELATING TO THE PROPOSED ISSUANCE BY THE CITY OF BOZEMAN, MONTANA, OF ITS LIMITED OBLIGATION FIRST MORTGAGE REVENUE BONDS FOR THE MONTANA STATE UNIVERSITY FOUNDATION, INC. PROJECT TO PROVIDE PERMANENT FINANCING FOR ADMINISTRATIVE, EOUCA TIONAL AND RELATED FACILITIES CONSTRUCTED AND ACQUIRED BY THE FOUNDATION AND WHICH ARE LOCATED CONTIGUOUS TO THE CAMPUS OF MONTANA STATE UNIVERSITY AND WITHIN THE CORPORATE LIMITS OF THE CITY OF BOZEMAN, MONT ANA; DIRECTING THE PREPARATION OF FINANCING DOCUMENTS AND INSTRUMENTS RELATED THERETO AND WHICH WILL BE REQUIRED FOR SUCH FINANCING; AND PROVIDING FOR A NOTICE OF AND A PUBLIC HEARING TO BE HELD IN CONNECTION WITH AND RELATING TO THE PROPOSED FINANCING DESCRIBED HEREIN. WHEREAS, the City of Bozeman, Montana (the "City"), is authorized by the provisions of Part 1, Chapter 5, Title 90, Montana Code Annotated (the "Act") to issue limited obligation bonds for the purpose of defraying the costs of acquiring, constructing and equipping a project, as defined in the Act; and WHEREAS, the Montana State University Foundation, Inc., a non-profit corporation duly created and formed for educational and related purposes and duly qualified to engage in and to carry out its purposes and powers under the laws of the State of Montana, (the "Foundation") has heretofore provided for the acquisition and construction of administrative, education and related facilities (the "Project") which is located contiguous to and is treated as a part of the campus of Montana State University (the "University") and which is located within the corporate boundaries of the City, and such project constitutes a "project" within the meaning of the Act; and WHEREAS, the Foundation has requested the City to issue and sell its limited obligation first mortgage revenue bonds pursuant to the provisions of the Act (the "Bonds") for the purpose of providing permanent financing for the Project; and WHEREAS, pursuant to Section 90-5-104 of the Act and as directed by the provisions of this resolution, the City Commission has determined to and shall provide for the holding of a public hearing on the proposal to issue the Bonds for the Project and for the giving of a notice of public hearing with respect thereto, said notice to be published in a newspaper of general circulation in the City once each week for three consecutive weeks prior to the date established for the hearing, as herein provided for; and WHEREAS, the purpose of such public hearing, as provided for and contemplated by the Act, is to determine, based on information and the facts presented at said hearing, that the financing of the acquisition and construction of the Project is in the public interest of the City and to afford all interested persons the opportunity to express their views with respect thereto; and WHEREAS, section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), also requires that the City Commission of the City hold a public hearing, upon notice which is required by the provisions of said section 147(f) to be published one time, not less than two weeks prior to the date established for the hearing, in a newspaper of general circulation printed and published in said City, which public hearing shall be held in conjunction with and the requirement for notice and the holding thereof to also be satisfied by the pUblic hearing requirements of the Act and all as provided for and authorized herein; and WHEREAS, if after the holding of the public hearing described herein, the City determines to proceed with the issuance of the Bonds described herein, the City shall then provide for the issuance of the Bonds by a separate resolution to be adopted by the City Commission prior to the date of issuance of the Bonds, pursuant to which the City will consider and approve the final details of the Bonds and will authorize all acts and the execution of all documents and instruments required to be delivered in connection with the issuance thereof; NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana: Section 1. The City Commission of the City of Bozeman, Montana, finds, intends and declares that, based on facts and information presented to the City at and prior to this meeting of the City Commission, the City Commission provide for a public hearing to be held on and relating to the proposal to issue limited obligation first mortgage revenue bonds of the City in order to provide for the permanent financing of the Project for the Foundation, and pursuant to and in conformity with the requirements of section 90-5-104 of the Act and section 147(f) of the Code, the City Commission will hold a public hearing, upon published notice as required by law and as specifically provided for herein, at a regular session of the City Commission to be held on February 7,1994, commencing at the hour of 7:00 o'clock p.m., or as soon thereafter as the matter may be heard, in connection with and upon the proposed issuance of the Bonds by the City, and the proposed use of the proceeds of the Bonds to provide permanent financing for the Project. The notice of said public hearing shall - 2 - be published three times and at least once each week for the three consecutive weeks prior to the date established herein for the public hearing, said publication to be in a newspaper of general circulation printed and published in said City and said notice of public hearing to be in substantially the following form: NOTICE OF PUBLIC HEARING BEFORE THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONT ANA IN RE: THE ISSUANCE OF LIMITED OBLIGATION FIRST MORTGAGE REVENUE BONDS TO PROVIDE PERMANENT FINANCING FOR ADMINISTRATIVE, EDUCATIONAL AND RELATED FACILITIES FOR THE MONTANA STATE UNIVERSITY FOUNDATION, INC. NOTICE IS HEREBY GIVEN that the City Commission (the "City Commission") of the City of Bozeman, Montana (the "City") at its regular session on Monday, February 7, 1994, will hold a public hearing as required by section 90-50-104, Montana Code Annotated and by section 147(f) of the Internal Revenue Code of 1986, as amended, with respect to the proposed issuance by the City of its City of Bozeman, Montana, Limited Obligation First Mortgage Revenue Bonds (Montana State University Foundation, Inc. Project), Series 1994 (the "Bonds") in the aggregate principal amount of $1,100,000. The purpose of the proposed issuance of the Bonds is to provide permanent financing for the acquisition and construction of administrative, educational and related facilities for the Montana State University Foundation, Inc., a Montana non-profit corporation, consisting of a building and facility of approximately 15,356 square feet, together with all necessary appurtenances (the "Project"). The proceeds of the Bonds will be loaned to the Montana University Foundation, Inc., a Montana non-profit corporation (the "Foundation") and the Project will be used by the Foundation for administrative, educational and related purposes. The address of the Foundation is 1501 South 11 th Avenue, Bozeman, Montana, and the location of the Project is at 1501 South 11 th Avenue, Bozeman, Montana. The public hearing will be held and will commence at 7:00 o'clock p.m., or as soon thereafter as the matter may be heard, in the Chambers of the City Commission located in the City of Bozeman, Montana City Hall located at 411 East Main Street, Bozeman Montana. The hearing will be open to the public and is being held to provide the opportunity for interested parties to express their views, both orally and in writing, on the proposed issuance of the Bonds, the location and nature of the proposed facility to be financed, and the loan of the proceeds of the Bonds to, and the use of the Project by, the Foundation. Interested parties desiring to do so may also submit written comments or questions concerning any of these matters prior to the time of the public hearing addressed to: Robin L. Sullivan, Clerk of Commission, 411 East Main, Bozeman, Montana 59715. Section 2. If after the public hearing, the City Commission shall determine to proceed with the issuance of the Bonds, subject to the terms and conditions of the Memorandum of Agreement (attached hereto as annex A and by this reference made a part hereof), the City will provide for the issuance of the Bonds in accordance with the express provisions of the Act in a principal amount necessary to provide for the permanent financing of costs of acquisition and construction of the Project, together with costs incident to the authorization, issuance and sale of the Bonds, which Bonds shall not in any event exceed the aggregate principal amount of $1,100,000.00. - 3 - . .... -..-.-.-.-.. ------ Section 3. If the City Commission shall, after the public hearing provided for herein, determine to proceed with the issuance of the Bonds, the City Commission shall provide for the Bonds to bear such interest rate or rates, be in such denominations, bear such date, mature at such date or dates, be in such form, carry such registration privileges, be executed in such manner, be payable at such place and be subject to such terms of redemption consistent with the Act and as shall finally be approved and provided in a subsequent resolution of the City Commission of the City adopted and passed prior to the issuance of the Bonds. Any trust indenture, loan agreement, mortgage and other security agreements and bond offering documents (hereinafter collectively referred to as the "Financing Agreements") and all other documents relating to or required for the financing of the Project and the Bonds will be approved and authorized in final form by the City prior to the date of issuance of the Bonds. The City Commission hereby directs that such Financing Documents be prepared and delivered to the City so as to be available for review and consideration by the City Commission and interested persons at the public hearing provided for herein. Section 4. The proceeds of the Bonds will be used only for the purpose of providing permanent financing for the acquisition and construction of the Project as the same shall be fully described in the Financing Documents. Section 5. Prior to the date of issuance of the Bonds and if the City shall determine to proceed with the issuance of the Bonds, the City will enter into mutually agreeable Financing Agreements with the Foundation for the permanent financing of the Project, all as more fully described in the Memorandum of Agreement. Section 6. The Memorandum of Agreement between the City and the Foundation in the form attached hereto is approved and the City Manager of the City and the Clerk of the City are hereby authorized and directed to execute such Memorandum of Agreement on behalf of the City. Section 7. The entire cost of providing permanent financing for the Project will be paid out of the proceeds from the sale of the Bonds, and none of the Bonds will be general obligations of the City nor shall any of the Bonds including interest or premium thereon constitute the debt or indebtedness of the City within the meaning of any provision or limitation of the Constitution or statutes of the State of Montana nor give rise to a pecuniary liability of the City or a charge against its general credit, its general or special funds or its - 4 - --- ~ - - ..... ___n .._._. taxing powers but the Bonds shall be secured and payable solely by a pledge of the revenues and amounts payable by the Foundation under and pursuant to the Financing Agreements. Section 8. Nothing contained in this Resolution or said Memorandum of Agreement shall constitute a debt or indebtedness of the City within the meaning of the Constitution or statutes of the State of Montana nor give rise to a pecuniary liability of the City or a charge against its general credit, its general or special funds or its taxing powers. PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 18th day of January 1994. ~ ~ul JO N VINC ,Ma r \ ATTEST: ()~oI~ ROBIN L. SULLIVAN Clerk of the Commission APPROVED AS TO FORM: - 5 - ---- --_. STATE OF MONTANA ) COUNTY OF GALLA TIN ) ss CITY OF BOZEMAN ) The City Commission of the City of Bozeman, Montana duly met in lawful and regular session in the Chambers of the City Commission located in the City of Bozeman, Montana Municipal Building, 411 East Main, Bozeman, Montana, at the hour of 3:30 o'clock p.m., on the 18th day of January 1994. Present: Mavor Vincent Commissioner Youngman Commissioner Stiff Commissioner Stueck Commissioner Frost Absent: NONE Thereupon, Commissioner Youngman introduced and there was considered in full the following Resolution: The question being upon the passage and adoption of this Resolution, the roll was called with the following result: Those voting Aye: Commissioner Youngman Commissioner Stiff Commissioner Stueck Commissioner Frost Mayor Vincent Those voting Nay: NONE Those Absent: NONE The presiding officer thereupon declared that a majority of all the members of the Governing Body elected and present having voted in favor thereof, the said motion was carried and this Resolution duly passed and adopted. - 6 - ---..- ANNEX A MEMORANDUM OF AGREEMENT This Memorandum of Agreement is between the City of Bozeman, Montana (the "City" or the "Issuer"), and the Montana State University Foundation, Inc., a Montana non-profit corporation (the "Foundation). 1. Preliminarv Statement. Among the matters of mutual interest and inducement which have resulted in the execution of this Agreement are the following: (a) Bozeman, Montana, is a City in the State of Montana, is a duly incorporated municipal corporation and pOlitical subdivision of the State of Montana and is authorized and empowered by Part 1, Chapter 5, Title 90, Montana Code Annotated (the" Act") to issue limited obligation first mortgage revenue bonds for the purpose of defraying the costs of constructing and acquiring a project, as defined in the Act, and to enter into agreements with respect to the financing of a project, upon such terms and conditions as the City Commission, as the governing Body (the "Governing Body") of the Issuer, deems advisable. (b) The Foundation proposes to construct, operate and maintain a new facility (the "Project") which will be used for administrative, educational and related purposes by the Foundation and by Montana State University (the "University") and it is proposed to provide permanent financing for the Project by the issuance of limited obligation first mortgage revenue bonds pursuant to and under the authority of the Act. (c) The Issuer has indicated its willingness to commence proceedings for the issuance of its limited obligation first mortgage revenue bonds (the "Bonds") as provided for and authorized by the Act to provide permanent financing for the Project, and has advised the Foundation that subject to due compliance with all requirements of law, including providing public notice of and holding a hearing related to the issuance of the Bonds as required by law and upon the obtaining of all necessary consents and approvals therefor, including required approvals of the City Attorney, and to the happening of all acts, conditions, and things required precedent to such financing, the Issuer, pursuant to the Act, will consider undertaking the proposed issuance of the Bonds in a principal amount sufficient to provide for the permanent financing for the Project, together with the costs and expenses of issuance and sale of the Bonds, which Bonds shall not in any event exceed the aggregate principal amount of $1,100,000.00. (d) From information which has been presented to the Issuer, it appears to the Issuer that providing permanent financing for the costs of construction and acquisition of the Project and the entering into of agreements relating to such financing (such as a trust indenture, a mortgage and other security agreements, a loan agreement and other necessary documents, and hereinafter collectively referred to as the "Financing Agreements"), with the Foundation with respect to the Project, will be in the public interest of the Issuer and, therefor the Issuer has determined to proceed with the holding of a public hearing on the question of whether such Project and the proposed permanent financing thereof by the issuance of the Issuer's limited obligation first A-1 -.......--.----- . --------- .. --.-- -----.-..---.- ---.... mortgage revenue bonds should be undertaken by the Issuer, such hearing to be held for the purpose of enabling the Governing Body to gather and consider facts and information which would support a determination that such Project and the proposed permanent financing thereof is in the public interest. 2. Undertakinas bv the Issuer. Subject to the foregoing Paragraph 1, the Issuer agrees as follows: (a) If after holding a public hearing thereon, the Issuer determines that the Project and the financing thereof will be in the public interest, the Issuer will undertake the issuance of the Bonds pursuant to the terms of the Act in a principal amount sufficient to provide permanent financing for the Project, together with costs incident to the authorization, sale and issuance of the Bonds, which Bonds shall not in any event exceed the aggregate principal amount of $1,100,000.00. (b) If the City Commission shall make such affirmative determination, it will adopt or cause to be adopted such proceedings and authorize the execution and delivery of such documents as may be reasonably necessary or advisable for the authorization, issuance and sale of the Bonds, the permanent financing of the Project, and the execution of the Financing Agreements with the Foundation and of other documents relating to the Project and the Bonds as shall be provided for and authorized by the Act and as shall be mutually satisfactory and acceptable to the Issuer and the Foundation. (c) As a condition to the issuance of the Bonds, the Financing Agreements shall expressly provide that the aggregate sums to be paid by the Foundation under the Financing Agreements shall be required to be sufficient in amount at all times to pay the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. (d) It will take or cause to be taken such other acts and adopt such further proceedings as reasonably may be required by law to implement the aforesaid undertakings and conditions and as it may deem appropriate in pursuance thereof. (e) As a condition to the issuance of the Bonds, the Bonds shall expressly provide that they shall be payable solely out of the revenues and amounts payable by the Foundation pursuant to the provisions of the Financing Agreements, that they shall never constitute the debt or indebtedness of the Issuer within the meaning of any provision or limitation of the Constitution or statutes of the State of Montana and that they shall not constitute or give rise to a liability, pecuniary or otherwise, of the Issuer nor a charge against its general credit, its general funds or special funds or its taxing powers. (f) In authorizing the issuance of the Bonds pursuant to this Agreement, the Issuer will make no warranty, either expressed or implied, that the proceeds of the Bonds will be sufficient to pay all costs of the Project or that the Project is sufficient or adequate for the purposes and uses intended by the Foundation and the University. 3. Undertakings on the Part of the Foundation. Subject to the foregoing Paragraph 1, the Foundation agrees as follows: A-2 - - --.-.. -...--. - ,,------.-- ...-. (a) It shall be the sole responsibility of the Foundation to provide for the construction, acquisition, completion, operation, maintenance and use of the Project. (b) Prior to the delivery of any Bonds, the Foundation will enter into the Financing Agreements with the Issuer under the terms of which the Foundation will obligate itself to complete the acquisition and construction of the Project and, to the extent not payable out of proceeds of the Bonds, to pay all costs of such acquisition, construction and completion and, in addition thereto, to pay to the Issuer sums sufficient in the aggregate to payor reimburse the Issuer for: all expenses incurred by it in connection with the authorization, issuance and sale of the Bonds, all amounts required for payment of the principal of and interest and premium, if any, on the Bonds as and when the same shall become due and payable; all fees and expenses of any trustee for the benefit of the holders of the Bonds incurred under any trust indenture. loan agreement and/or mortgage; all utility charges, taxes, payments in lieu of taxes, assessments (if such taxes and assessments shall in fact be payable with respect to the Project), casualty and liability insurance premiums for the Project; and any other expenses or charges relating to the ownership, use, operation, maintenance, occupancy and upkeep of the Project. Said Financing Agreements shall contain such other provisions as may be required by law and such other provisions as shall be mutually acceptable to the Issuer and the Foundation. (c) It will take such further action and adopt such further proceedings as may be required to implement the aforesaid undertakings of the Foundation or as it may deem appropriate in pursuance thereof. 4. General Provisions. (a) All agreements of the Issuer under paragraph 2 hereof and of the Foundation under paragraph 3 hereof are subject to the condition that on or before one year from the date of this Agreement (or on or before such other date as shall be mutually satisfactory to the Issuer and the Foundation) the Issuer and the Foundation shall have agreed to mutually acceptable terms for the Bonds and of the issuance, sale and delivery thereof, and to mutually acceptable terms and conditions of any Financing Agreements and other documents referred to in paragraphs 2 and 3 and the proceedings referred to in paragraphs 2 and 3 hereof. (b) Prior to the issuance of the Bonds, there shall be a reasonable showing to the Issuer that the Foundation is capable of carrying out its financial obligations under the Financing Agreements. (c) If the events set forth in (a) of this paragraph do not take place within the time set forth therein or any extension thereof and the Bonds are not issued and sold within such time, the Foundation agrees that it will reimburse the Issuer for all reasonable and necessary direct out-of-pocket expenses which the Issuer may incur arising from the execution of this Agreement and the performance of the agreements of the Issuer hereunder and this Agreement shall thereupon terminate. 5. Indemnification. The Foundation agrees that it will at all times indemnify and hold harmless the Issuer against any and all claims, losses, costs, damages, expenses and liabilities of whatsoever nature (including, but not limited to, attorneys' fees, litigation and A-3 _ ...- .-...- . m_.._ court costs, amounts paid in settlement and amounts paid to discharge judgments) directly or indirectly resulting from, arising out of or relating to the authorization for, issuance, offering, sale or delivery of the Bonds or the design, construction, installment, operation, use, occupancy, maintenance or ownership of the Project or any part thereof. In case any action shall be brought against the Issuer, in respect of which indemnity may be sought against the Foundation, the Issuer shall promptly notify the Foundation in writing and the Foundation shall have the right to assume the investigation and defense thereof including the employment of counsel and the payment of all expenses. The Issuer shall have the right to employ separate counsel in any such action and participate in the investigation and defense thereof, but the reasonable fees and expenses of such counsel shall be paid by the Issuer unless the employment of such counsel has been authorized and agreed to by the Foundation which authorization and agreement will not be unreasonably withheld by the Foundation. The Foundation shall not be liable for any settlement of any such action without its consent but, if any such action is settled with the consent of the Foundation or if there be final judgment for the plaintiff of any such action, the Foundation agrees to indemnify and hold harmless the Issuer from and against any loss by reason of such settlement or judgment. The provisions of this paragraph shall survive the expiration or termination of this Agreement. 6. No Assianment. The Foundation shall not, without the written consent of the Issuer, transfer or assign this Agreement or transfer or assign any or all of its rights and delegate any or all of its duties hereunder to any subsidiary or affiliate currently existing or hereafter created, and no such transfer, assignment or delegation shall, without the written consent and approval of the Issuer, relieve the Foundation of its liability for indemnification under paragraph 5 hereof and for reimbursement of expenses under paragraph 4 hereof. IN WITNESS WHEREOF, the parties have entered into this Agreement by their duly authorized officers on this 18th day of January 1994. CITY OF BOZEMAN, STATE OF MONTANA By City Manager (S E A L) ATTEST: Clerk of Commission A-4 MONTANA STATE UNIVERSITY FOUNDATION, INC. By Authorized Officer (S E A L) ATTEST: Authorized Officer A-5 -..-....-.- ._._._--~.._._.- ..-..- -- .- .-. .-.- ,. --.-....- ..... --. .." NOTICE OF PUBLIC HEARING BEFORE THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONT ANA IN RE: ISSUANCE OF LIMITED OBLIGATION FIRST MORTGAGE REVENUE BONDS TO PROVIDE PERMANENT FINANCING FOR ADMINISTRATIVE, EDUCATIONAL AND RELATED FACILITIES FOR THE MONTANA STATE UNIVERSITY FOUNDATION, INC. NOTICE IS HEREBY GIVEN that the City Commission (the "City Commission") of the City of Bozeman, Montana (the "City") at its regular session on Monday, February 7, 1994, will hold a public hearing as required by Section 90-5-104, Montana Code Annotated, and by Section 147(f) of the Internal Revenue Code of 1986, as amended, with respect to the proposed issuance by the City of its City of Bozeman, Montana, Limited Obligation First Mortgage Revenue Bonds (Montana State University Foundation, Inc. Project), Series 1994 (the "Bonds") in the aggregate principal amount of $1,100,000. The purpose of the proposed issuance of the Bonds is to provide permanent financing for the acquisition and construction of administrative, educational and related facilities for the Montana State University Foundation, Inc., a Montana non-profit corporation, consisting of a building and facility of approximately 15,356 square feet, together with all necessary appurtenances (the "Project"). The proceeds of the Bonds will be loaned to the Montana University Foundation, Inc., a Montana non-profit corporation (the "Foundation") and the Project will be used by the Foundation for administrative, educational and related purposes. The address of the Foundation is 1501 South 11th Avenue, Bozeman, Montana, and the location of the Project is at 1501 South 11th Avenue, Bozeman, Montana. The public hearing will be held at 7:00 o'clock p.m., or as soon thereafter as the . matter may be heard, in the Commission Room located in the City Hall, 411 East Main , Street, Bozeman, Montana. The hearing will be open to the public and is being held to provide the opportunity for interested parties to express their views, both orally and in writing, on the proposed issuance of the Bonds, the location and nature of the proposed facility to be financed, and the loan of the proceeds of the Bonds to, and the use of the Project by, the Foundation. Interested parties desiring to do so may also submit written comments or questions concerning any of these matters prior to the time of the public hearing addressed to: Robin L. Sullivan, Clerk of the Commission, 411 East Main Street, Bozeman, Montana 59715. ROBIN L. SULLIVAN Clerk of the Commission .... Legal Ad i Publish: Friday, January 21, 1994 Wednesday, January 26, 1994 Sunday, January 30, 1994 ..-...--....-.