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HomeMy WebLinkAboutResolution 2893 Prescribing terms, etc. for pooled SID bonds --- .~, -~-~.- . - ---. COMMISSION RESOLUTION NO. 2893 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, RELATING TO $445,000 POOLED SPECIAL IMPROVEMENT DISTRICT REFUNDING BONDS, SERIES 1992 (SPECIAL IMPROVEMENT DISTRICT NOS. 591, 598, 607, 613, 615, 632 AND 646); PRESCRIBING THE FORM AND TERMS THE COVENANTS OF THE CITY FOR THE PAYMENT THEREOF NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana: Section 1. Recitals. Special Original Principal Outstanding Principal Improvement Amount of Amount of District No. Bonds Bonds 591 $440,000 $108,000 598 150,000 44,000 607 170,000 46,000 613 190,000 51,000 615 300,000 105,000 632 80,500 36,000 646 170,000 t)5.000 ,i455.000 1.01. All of the improvements financed from the proceeds of the Outstanding Bonds have been completed and all proceeds of the Outstanding Bonds and investment income thereon to be applied to costs of the improvements have been so applied or have been applied to the partial redemption of the Outstanding Bonds drawn on the respective Districts, except for $17,655.08 on deposit in the Special Improvement District Revolving Fund of the City deposited from proceeds of the bonds of District Nos. 615, 632 and 646. 1.02. Authorization. Montana Code Annotated, Section 7-12-4194 authorizes the issuance of special improvement district bonds under the Act to provide money needed to pay principal of and interest on outstanding bonds if the rate of interest on the bonds is not less than one-half of one percent (.50%) a year less than the rate of interest on the bonds to be refunded. Section 7-12-4193 authorizes the pooling of bonds of more than one special district if the pooling is in the best interest of the city and the respective districts and will facilitate the sale of the bonds under more advantageous terms or with lower interest rates and if the pooled bonds are secured by the special improvement district revolving fund of the City. 1.03. Pooling and Issuance of Refunding Bonds. By Resolution No. 2891, adopted on October 12, 1992, this Commission determined that it is in the best interests of the City and the owners of property in the Districts for the City to sell its pooled special improvement district refunding bonds, pursuant to Montana Code Annotated, Sections 7.12- 4193 and 7-12-4194, in order to refund the Outstanding Bonds in advance of their stated maturities. Such bonds shall be denominated "Pooled Special Improvement District Refunding Bonds, Series 1992 (Speciallmprovement District Nos. 591, 598, 607,613, 615, 632 and 646)" (the "Bonds"), and shall be issued in the aggregate principal amount of $445,000. The Commission also found that the pooling into a single refunding bond issue of the bond issues required to refund each issue of the Outstanding Bonds is in the best interest of the City and each of the Districts and will facilitate that sale of the Bonds because the size of the issue will attract more interest in the marketplace and thus help lower interest rates on the Bonds, and because a single refunding issue will reduce the costs and expenses of the refunding. Because the Bonds will be issued in a principal amount not greater than the outstanding principal amount of the Outstanding Bonds, no public hearing is required to establish the desirabiltiy of issuing the Bonds to refund the Outstanding Bonds. 1.04. Sale of Bonds. Pursuant to Montana Code Annotated, Sections 7-12- 4194(3) and 7-12-4204(1), as amended, this Commission authorized the sale of the Bonds at a private negotiated sale to D.A. Davidson & Co., of Great Falls, Montana (the "Purchaser"), and as authorized by Resolution No. 2891, the Administrative Services Director has executed and delivered a Bond Purchase Agreement, dated October 21, 1992, with the Purchaser, providing for the issuance and sale of the Bonds upon the terms and further conditions contained in this resolution, at a pruchase price equal to the princiapal amount thereof, plus interst accrued to the date and delivery of the Bonds. The execution and delivery of the Bond Purchase Agreement is hereby ratified and confirmed. 1.05. Interest and Debt Service Savings. It is hereby determined and declared that the average annual rate of interest on the Bonds as set forth in Section 2.01 is 6.572% which is at least one-half of one percent less than the raverage annual rate of interest on each issue of the Outstanding Bonds. Thus, the City has authority under the Act to issue the Bonds upon the terms and conditions set forth in this resolution. The reason for issuing the Bonds is to achieve debt service savings for each of the Districts, estimated in the aggregate at $62,138 or computed on a present value basis (using 6.77% property therein by reducing the total cost of the improvements financed therein and will benefit the City by reducing the liability of the special Improvement District Revolving Fund of the City with respect to the Outstanding Bonds. - 2 - 1.06. Official Statement. The Bonds and the Certificates (as hereinafter defined) will be offered for sale by the Purchaser by means of an Official Statement, a form of which has been presented to this Commission (the "Official Statement"). This Commission hereby approves the Official Statement and authorizes it to be executed on behalf of the City by the City Manager or in his absence or disability, the acting City Manager is substantially the form presented to this Commission, with such additions, deletions and modifications as the City Manager and the City Attorney may approve. Execution of the Official Statement by the appropriate officer of the City shall be conclusive as to the approval thereof by this Commission. The City hereby authorizes the distribution of the Official Statement and ratifies the distribution of the Preliminary Official Statement by the Purchaser to prospective purchasers of the Bonds and this Commission hereby authorizes and directs the City Manager and the Administrative Services Director to execute such certificates relating to the accuracy and completeness of the Official Statement as may be appropriate. 1.07. Recitals. All acts, conditions and things required by the Constitution and laws of the State of Montana, including the Act, in order to make the Bonds valid and binding special obligations in accordance with their terms and in accordance with the terms of this resolution have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required. Section 2. Terms of the Bonds and Certificates. 2.01. PrinciDal Amounts. Maturities. Denominations and Basic Interest Rates. For the purpose of providing funds sufficient, with other monies of the City legally available therefor, to refund in advance of their stated maturities the Outstanding Bonds, and in anticipation of the collection of special assessments to be levied therefor, and in accordance with the award of sale in Section 1.05, the City shall forhtwith issue and deliver to the Purchaser the Bonds, payable solely from the 1992 Refunding Pooled Special Improvement District Sinking Fund (the "Sinking Fund") created in Section 4.01. The Bonds shall be dated, as orginally issued, as of November 18, 1992, and shall be issued in the form of fully registered bonds of single maturities in denominations of $5,000 or any integral multiple thereof. The Bonds shall mature on July 1 in the years and amounts set forth below, subject to prior redemption, and shall bear basic interest from the date of original registration - 3 - to their respective maturities or prior dates upon which they have been duly called for redemption at the rates per annum set forth opposite such years and amounts, respectively: Basic Basic Principal Interest Principal Interest Year Amount Rate Yw Amount Rate 1993 $60,000 3.25% 1999 $25,000 5.40% 1994 60,000 3.75 2000 20,000 5.60 1995 60,000 4.20 2001 20,000 5,80 1996 60,000 4.50 2002 15,000 6.00 1997 60,000 4.80 2003 10,000 6.00 1998 50,000 5.10 2004 5,000 6.00 Each of the Bonds shall represent one or more principal installments of the issue of the same maturity. Principal installments of the issue are nubmered from 1 through 89, each in the amount of $5,000. 2.02. Additional Interest; Certificates. All Bonds shall bear additional interest at the rate of ten and seventy-hundredths percent (10.70%) per annum for the period from December 1, 1992 through June 30, 1993, payable on July 1, 1993. The additional interest on such Bonds shall be represented by separate additional interest certificates (the "Certificates"). One or more Certificates shall be issued to reprresent all additional interest to be paid on all Bonds on the additional interest payment date; provided that all such Certificates shall represent an integral multiple of five hundredths of one percent (0.05%) of the additional interest payable on said date. 2.03. Payment. The Bonds and the Certificates shall be issuable only in fully registered form, and the ownership of the Bonds and the Certificates shall be transferred only ant he books of the City at the principal office of the Registrar, as provided in Section 2.06. Basic interest on the Bonds shall be payable on January 1 and July 1 in each year, commencing July 1, 1993, to the owners of record of the Bonds as such appear on the Bond Register as of the close of business on the fifteenth day of the immediately plreceding month, whether or not such day is a Business Day. The basic interest on, and, upon presentation and surrender thereof, the principal of, each Bond, and, upon presentation and surrender of any Certificate, the amount payable with respect thereto, shall be payable in lawful money of the United States of America by check or draft issued by the Registrar. 2.04. Dating of Bonds and Certificates. Each Bond shall be dated, as originally issued, as of November 18, 1992, and each Certificate shall be dated as of November 18, 1992. Upon the origianl delivery of the Bonds pursuant to Section 2.09 or upon the delivery of a Bond upon an exchange or transfer pursuant to Section 2.06, the Registrar shall date - 4 - each Bond so delivered as of the date of its authentication. 2.05. Redemption. If on any interest payment date there will be a balance in the Sinking Fund after payment of the principal and interest due on all Bonds drawn against it, from the prepayment of special assessmetns levied in theDistricts, the Director of Finance shall call for redemption on the interest payment date outstanding Bonds or principal installments thereof in the order of their registration in an amount which, together with the interest thereon to the interest payment date, will equal the amount of the Sinking Fund on that date. For purposes of redemption, the order of registration of the Bonds shall correspond to the order of the numbers of the principal installments represented by the Bonds. Bonds representing more than one principal installment may be redeemed in part, in one or more whole principal installments, and upon such partial redemption, a new Bond or Bodns will be delivered to the registered owner without charge, representing the remaining principal installments outstanding. The Bonds are subject to redemption at the option of the City from other sources of funds available therefor on any interest payment date. The redemption price sahli equal the amount of the principal installment or installments of the Bonds to be redeemed plus interest accrued thereon to the date of redemption. The date of redemption shall be fixed by the Director of Finance, who shall give notice, by first class mail, postage prepaid, to the owner or owners of such Bonds at their addresses appearing in the bond register, of the numbers of the principal installments and Bonds to be redeemed and the date on which payment will be made, which date shall be not less than ten days after the date of mailing notice. On the date so fixed interest on the Bonds or principal installments thereof so redeemed shall cease to accrue. Notwithstanding anything to the contrary contained herein, the Bonds shall not be called for redemption from the proceeds of refunding special improvement district bonds before July 1, 1997. 2.06. System of Reaistration. The City shall appoint, and shall maintain, a bond registrar, transfer agent and paying agent for the Bonds and the Certificates (the "Registrar"). This Section 2.06 shall establish a system of registration for the Bonds and the Certificates as defined in the Model Public Obligations Registration Act of Montana. The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Bond Register. The Register shall keep at its principal office a Bond Register in which the Registrar shall provide for the registration of ownership of - 5 - --- - Bonds and Certificates and the registration of transfers and exchanges of Bonds and Certificates entitled to be registered, transferred or exchanged. (b) Transfer of Bonds and Certificates. Upon surrender for transfer of any Bond or Certificate 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 waner therof 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, or one or more new Certificates of like aggregate amount and payment date and representing the same additional interest period, as the case may be, as requested by the transferor. The Registrar may, however, close the books for registration of the transfer of a Bond or portion thereof selected for redemption. (c) Exchange of Bonds and Certificates. VVhenever any Bonds or Certificates are surrendered by the registered owner for exchange, the Registrar shall authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity, or one or more new Certificates of like aggregate amount and payment date and representing the same additional interest period, as the case may be, as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. All Bonds and Certificates surrendered upon any transfer or exchange shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Imorooer or Unauthorized Transfer. When any Bond or Certificate 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, Certificate or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgement, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name any Bond or Certificate is at any time registered in the Bond Register as the absolute owner of such Bond or Certificate, whether such Bond or Certificate shall be overdue or not, for the purpose of receiving payment of, or on ~ 6 ~ account of, the principal of, premium, if any, and basic interest on such bond or the amount of such Certificate and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the City upon such Bond or Certificate to the extent of the sum or sums to paid. (g) Taxes. Fees and Charaes. For every transfer or exchange of a Bond or Certificate (except for an exchange upon a partial redemption of any Bond), the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated. Lost. Stolen or Destroved Bonds or Certificates. I n case any Bond or Certificate shall become mutilated or be lost, stolen or destroyed, the Registrar shall delivery a new Bond or Certificate of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or Certificate 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 or Certificate lost, stolen or destroyed, upon receipt by the Registrar of evidence satisfactory to it that such Bond or Certificate was lost, stolen or destroyed, and of the ownership thereof, and upon receipt by the Registrar of an appropriate bond of indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. All Bonds and Certificates so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the City. If the mutilated, lost, stolen or destroyed Bond or Certificate 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 or Certificate before payment. 2.07. Initial Reaistrar. The City hereby appoints the Director of Finance of the City to act as registrar, transfer agent and paying agent (the "Registrar"). The City reserves the right to appoint a bank, trust company or fiscal company as successor bond registrar, transfer agent of paying agent, as authorized by the Model Public Obligations Registration Act of Montana, but the City agrees to pay the reasonable and customary charges of the - 7 - .~ Registrar for the services performed. In the event of such an appointment, upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Registrar. The City reserves the right to remove any Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar shall deliver the Bond Register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the Director of Finance shall transmit to the Registrar, if other than the Director of Finance, solely form monies in the Sinking Fund available therefor, monies sufficient for the payment of all principal, premium, if any, and interest then due on the Bonds. 2.08. Form of Bonds and Certificates. The Bonds and the Certificates shall be drawn in substantially the forms set forth in Exhibits A and B hereto, respectively, and by this reference made a part hereof, with such modifications as are permitted by the Act and this Resolution. 2.09. Execution. Registration and Deliverv of Bonds and Certificates. The Bonds and the Certificates shall be prepared under the direction of the Director of Finance and shall be executed on behalf of the City by the signatures of the City Manager and the Clerk of the Commission and sealed with the official seal of the City; provided that the seal and all signatures may be printed, engraved or lithographed facsimiles of the originals. In case any officer whose signature or a facsimile of whose signature shall appear on the Bonds or the Certificates shall cease to be such officer before the delivery of any Bond or Certificate, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in office until delivery. Notwithstanding such execution, no Bond or Certificate shall be valid or obligatory for any purpose or entitled to any security or benefit under this resolution unless and until a certificate of authentication and registration on such Bond or Certificate has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication and registration on different Bonds or Certificates need not be signed by the same representative. The executed certificate of authentication and registration on each Bond or Certificate shall be conclusive evidence that it has been authenticated and delivered under this Resolution. The Bonds and the Certificates shall be registered in order of their serial numbers by the Director of Finance, as Registrar, as attested by the Certificate of Authentication and Registration, as of - 8 - November 18, 1992, and the Bonds and the Certificates shall be delivered by the Registrar to the Purchaser upon payment of $445,000.00 plus accrued interest, if any, from the registration date to the date of such delivery and payment, and the Purchaser shall not be obligated to see to the application of the purchase price. Section 3. Aoolication of Proceeds: Escrow for Certain Outstanding Bonds: Redemotion of Outstandina Bonds. 3.01. Apolication of Proceeds: Escrow Account. On the date of issuance of the Bonds, the Director of Finance shall deposit in escrow with the First Interstate Bank of Billings, National Association, in Billings, Montana, the proceeds of the Bonds, in the amounts necessary, with other available funds in the funds of District No.s 591, 598, 607, 613, 615, 632 and 646 and $ from funds on deposit in the Revolving Fund, to redeem all Outstanding Bonds drawn on said Districts on January 1, 1993 and to pay interest accrued thereon to the date of redemption. The Director of Finance shall cause this amount so deposited to be invested in securities of the type described in Montana Code Annotated, Section 7-12-4194(5)(b), maturing on the dates and bearing interest at the rates to provide funds sufficient to pay interest on all Outstanding Bonds drawn on District Nos. 591, 598, 607, 613, 615, 632 and 646 when due to the redemption date of January 1, 1993 and to pay each such Outstanding Bond on said redemption date. The escrow account and all investments therein shall be held in safekeeping by said escrow agent, and said account and all income therefrom are irrevocably appropriated for the purposes stated in this Section 3.01. The balance of the proceeds of the Bonds and available funds of the City to the extent necessary shall be used to pay costs of issuance of the Bonds and of the refunding. 3.02. Escrow Agreement. There has been presented to this Commission a form of an escrow agreement to be entered into between the City and said escrow agent relating to the Outstanding Bonds described in Section 3.01. The form of such agreement is hereby approved, with such modifications, deletions or additions as the City Manager and the City Attorney shall approve. The City Manager and the Clerk of the Commission, or in their absence or disability, the acting City Manager or the acting Clerk of the Commission, respectively, are hereby authorized and directed to execute said escrow agreement on behalf of the City, at or before the time of making the deposit and investments referred to in Section 3.01. Execution of the escrow agreement by appropriate officers of the City shall be conclusive evidence of approval thereof by this Commission in accordance with the terms - 9 - of this resolution. 3.03. RedemDtion of Outstanding Bonds. As authorized by Montana Code Annotated, Section 7-12-4194(6)(b), the City hereby calls all Outstanding Bonds for redemption on January 1, 1993. Section 4. Sinking Fund; Revolving Fund. 4.01. Sinkina Fund. There is hereby created and established the Sinking Fund designated as the 1992 Refunding Pooled Special Improvement District Sinking Fund, which shall be maintained by the Director of Finance on the books and records of the City separate and apart from all other funds of the City. Within the Sinking Fund there shall be maintained separate accounts, designated as the special Improvement District No. 591 Account, the Special Improvement District No. 598 Account, the Special Improvement District No. 607 Account, the Special Improvement District No. 613 Account, the Special Improvement District No. 615 Account, the Special Improvement District No. 632 Account and the Special Improvement District No. 646 Account (the "District Accounts"). Within each District Account there shall be maintained separate subaccounts, designated as the "Principal Subaccount" and Interest Subaccount," respectively. 4.02. Principal Subaccounts and Interest Subaccounts. Money in the Principal Subaccounts and the Interest Subaccounts shall be used only for payment of the principal of and interest on the Bonds as such payments become due or to redeem Bonds. From the proceeds of the Bonds, there shall be deposited ratably in the Interest Subaccounts any accrued interest on the Bonds to the date of their delivery. Upon collection of the installments of principal and interest due on May 31, 1993 and on November 30 and May 31 of each fiscal year thereafter on the special assessments levied in each of the Districts, the Director of Finance shall credit to the Interest Subaccount in the District Account so much of said Principal Subaccount of said District Account. Any installment of any special assessment paid prior to its due date with interest accrued thereon to the next succeeding interest payment date shall be credited with respect to principal and interest payments in the same manner as other assessments are credited to the District Account. All money in the Interest Subaccount and the Principal Subaccount shall be used first to pay interest due, and any remaining money shall be used to pay Bonds then due and, if monies are available, to redeem Bonds or principal installments thereof in accordance with Section 2.05. Redemption of Bonds shall be in order of the principal installments they - 10 - ---"..- represent as provided in Section 2.05, and interest shall be paid as accrued thereon to the date of redemption, in accordance with the provisions of Montana Code Annotated, Sections 7-12-4203 and 7-12-4206. 4.03. Loans from Revolving Fund. The Commission shall annually or more often if necessary issue an order authorizing a loan or advance from the Special Improvement District Revolving Fund to the District Accounts in an amount sufficient to make good any deficiency then existing in the Interest Subaccount in the District Account, and shall issue an order authorizing a loan or advance from the Revolving Fund to the District Account in an amount sufficient to make good any deficiency then existing in the Principal Subaccount of the District Account, to the extent that money is available in the Revolving Fund. A deficiency shall be deemed to exist in a Principal Subaccount or an Interest Subaccount in a District Account if the money on deposit therein on any June 15 or December 15 (excluding amounts in the Principal Subaccount representing prepaid special assessments) is less than the amount necessary to pay Bonds due (other than upon redemption), and interest on all Bonds payable, on the next succeeding interest payment date. Pursuant to Ordinance No. 612, the City has undertaken and agreed to provide fund for the Revolving Fund by levying such tax or making such loan from the General Fund as authorized by Montana Code Annotated, Section 7-14-4222. In the event that the balance on hand in the Revolving Fund fifteen days prior to any date when interest is due on special improvement district bonds or warrants of the City is not sufficient to make good all deficiencies then existing in the special improvement district funds for which the City has promised to make loans from the Revolving Fund, the balance on hand in the Revolving Fund shall be allocated to the funds of the special improvement districts in which such deficiencies then exist in proportion to the amounts of the deficiencies on the respective dates of receipt of such money, until all interest accrued on such special improvement district bonds of the City has been paid. On any date when all accrued interest on special improvement district bonds or warrants of the City payable from funds for which the City has promised to make loans from the Revolving Fund has been paid, any balance remaining in the Revolving fund shall be lent or advanced to the special improvement district funds for payment and redemption of bonds to the extent the special improvement district funds are deficient for such purpose, and, if money in the Revolving Fund is sufficient therefor, in an amount proportionate for each such district to the amount of such deficiency. - 11 - ----- Section 5. Covenants. The City covenants and agrees with the owners from time to time of the Bonds that until the Bonds and interest thereon are fully paid: 5.01. Comoliance with Resolution. The City will hold the Sinking Fund and the Special Improvement District Revolving Fund described above as trust funds, separate and apart from all of its other funds, and the City, its officers and agents, will comply with all covenants and agreements contained in this resolution. The provisions hereinabove made with respect to the Sinking Fund and the Revolving Fund are in accordance with the undertaking and agreement of the City made in connection with the public offering and the sale of the Bonds. 5.02. Assessments. The City covenants that it has done all acts and things necessary for the final and valid levy of special assessments, on the basis prescribed in the resolutions of intention for each of the Districts, upon all assessable property within the boundaries of each of the Districts in accordance with the Constitution and laws of the State of Montana and the Constitution of the United States, in an original amount for each of the Districts equal to the original principal amount of the Outstanding Bonds drawn upon the district fund of said District. Such special assessments for each of the Districts have been levied and are estimated to be outstanding (including installments that are delinquent) as of July 1, 1992 in the principal amounts set forth below, and such installments not yet delinquent are payable in equal semiannual installments commencing May 31, 1993 and on each November 30 and May 31 thereafter until the final payment date noted below (if such date is November 30, the installment payable on that date is in a principal amount equal to twice that of the previous installments): Special Improvement Amount of District No. Outstanding Assessments Final Payment Date 591 $114,223 November 30, 1998 598 49,510 May 31, 1 998 607 40,553 November 30, 1997 613 49,507 November 30, 1999 615 115,101 November 30, 2003 632 47,167 November 30, 2003 646 64, 140 November 30, 2004 Pursuant to Montana Code Annotated, Section 7-12-4189, interest on the whole amount of the special assessments remaining unpaid shall accrue at the average annual interest rate borne by the Bonds plus one.half of one percent per annum. Each partial payment shall include interest for six months on that payment and the ten remaining balance of the special - 12 - -- assessment. The assessment shall constitute a lien upon and against the property against which they are made and levied, which lien may be extinguished only by payment of the assessment with all penalties, cost and interest as provided in Montana Code Annotated, Section 7-12-4191. No tax deed issued with respect to any lot or parcel of land shall operate as payment of any installment of the assessment thereon which is payable after the execution of such deed, and any tax deed so issued shall convey title subject only to the lien of said future installments, as provided in Montana Code Annotated, Section 15-18-214. The Commission shall reassess and re-Ievy such assessments in accordance with the provisions of Montana Code Annotated, Sections 7-12-4176 through 7-12-4178. 5.03. Reassessment. If at any time and for whatever reason any special assessment or tax levied against assessable property in any of the Districts is held invalid, the City and this Commission, its officers and employees, will take all steps necessary to correct the same and to reassess and re-Ievy the same, including the ordering of work, with the same force and effect as if made at the time provided by law, ordinance or resolution relating thereto, and will reassess and re-Ievy the same with the same force and effect as an original levy thereof, as authorized in Montana Code Annotated, Section 7-12-4186. Any special assessment, or reassessment or re-Ievy shall, so far as is practicable, be levied and collected as it would have been if the first levy had been enforced including the levy and collection of any interest accrued on the first levy. 5.04. Absence of Litiaation. There is now no litigation pending or, to the best knowledge of the City, threatened, questioning the validity or regularity of the creation of the Districts, the validity of the special assessments levied therein, the validity of the Outstanding Bonds or the issuance or validity of the Bonds or the undertaking and agreement of the City to make good any deficiency in the collection of special assessments through the levy of taxes for, and the making of advances from the General Fund to, the Revolving Fund, or the right and power of the City to issue the Bonds or in any manner questioning the existence of any condition precedent to the exercise of the City's powers in these matters. If any such litigation should be initiated or threatened, the City will forthwith notify in writing the Purchaser and will furnish the Purchaser a copy of all documents, including pleadings, in connection with such litigation. 5.05. Waiver of Penaltv and Interest. The City covenants not to waive the payment of penalty or interest on delinquent assessments levied on property in the Districts ~ 13 - -. .....-..- -..--..... ... for costs of the Improvements, unless the City determines, by resolution of this Commission, that such waiver is in the best interest of the holders of the outstanding Bonds. Section 6. Tax Matters. 6.01. General Covenant. The City covenants and agrees with the owners from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action that would cause the interest on the Bonds to become includable in gross income for purposes of federal income taxation under the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable Treasury Regulations thereunder in effect at the time of such action, 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. 6.02. Certification. The City Manager, the Clerk of the Commission and the Director of Finance, being the officers of the City charged with the responsibility for issuing the Bonds are authorized and directed to execute and deliver to the Purchaser a certification in accordance with the provisions of Section 148 of the Code and Treasury Regulations, Sections 1.103-13,-14, and -15, 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 be used in a manner that would not cause the Bonds to be arbitrage bonds within the meaning of Section 148 of the Code and 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. 6.03. ExceDtion to Arbitraae Rebate. The City hereby represents that the Bonds qualify for the exception for small governmental units to the arbitrage rebate provisions contained in Section 148(f)(4)(D) of the Code. Specifically, the City represents: (1 ) Each issue of Outstanding Bonds did not comprise industrial development bonds (as defined in Section 103(b)(3) of the Internal Revenue Code of 1954, as amended (the "1954 Code"), but without regard to subparagraph (B) of Section 1 03(b)(3) of the 1954 Code or a private loan bond (as defined in Section 103(0)(2)(A) of the 1954 Code, but without regard to any exception from such definition other than Section 103(0)(2)(C). - 14 - (2) The aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by or on behalf of the City and all subordinate entities thereof during 1979, 1980, 1983 and 1985 did not in any such calendar year exceed $5,000,000. (3) The average maturity date of the Series 1992 Bonds (4.28 years) is not later than the average maturity date of the Outstanding Bonds (6.09 years), assuming that the Outstanding Bonds are to be redeemed in equal principal amounts during the remainder of their original respective terms. If not withstanding the provisions of the preceding paragraph of this Section 6.03, the arbitrage rebate provisions of Section 148(1) of the Code apply to the Bonds, the City hereby covenants and agrees to make the determinations, retain records and rebate to the United States the amounts at the times and in the manner required by said Section 148(1). 6.04. Information ReDorting. The City shall file with the Secretary of the Treasury, not later than February 15, 1993, a statement concerning the Bonds containing the information required by Section 149(e) 01 the Code. Section 7. Qualified Tax-ExemDt Obligations. Pursuant to Section 265(bH3HBHii) of the Code, the City hereby designates the Bonds as "qualified tax-exempt obligations "for the purposes of Section 265(bH3) of the Code. The City has not designated any obligations in 1992 other than the Bonds under Section 265(bH3). The City hereby represents that it does not anticipate that obligations bearing interest not includable in gross income for purposes of federal income taxation under Section 103 of the Code (including refunding obligations as provided in Section 265(b)(#) of the code and including "qualified 501 (c)(3) bonds" but excluding other "private activity bonds," as defined in Sections 141 (a) and 145(a) of the Code) will be issued by or on behalf of the City and all "subordinate entities" of the City in 1992 in an amount greater than $10,000,000. Section 8. Authentication of TranscriDt. The officers of the City are hereby authorized and directed to furnish to the Purchaser and to bonds counsel certified copies of all proceedings relating to the issuance of the Bonds and Certificates and such other certificates and affidavits as may be required to show the right, power and authority of the City to issue the Bonds and Certificates, and all statements contained in and shown by such instruments, - 15 - including any heretofore furnished, shall constitute representations of the City as to the truth of the statements of fact purported to be shown thereby. Section 9. Discharge. 9.01. General. When the liability of the City on all Bonds issued under and secured by this resolution has been discharge as provided in this Section 9, all pledges, covenants and other rights granted by this resolution to the owners of such obligations shall cease. 9.02. Payment. The City may discharge it liability with reference to any Bond or installment of interest thereon which is due on any date by mailing to the registered owner of such Bond on or before that date a check or draft in a sum sufficient and providing proceeds available for the payment thereof in full; or if any Bond or installment of interest thereon shall not be paid when due, the city may nevertheless discharge its liability with reference thereto by mailing to the registered owner thereof a check or draft in a sum sufficient and providing proceeds available for the payment thereof in full with interest accrued to the date of such mailing. 9.03. Escrow. The City may also at any time discharge its liability in its entirety with reference to the Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities which are authorized by law to be so deposited, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without reinvestment, to provide funds sufficient to pay all principal and interest to become due on all Bonds on or before maturity or, if any Bonds has been duly called for redemption or notice of such redemption has been irrevocably provided for, on or before the designated redemption date. Section 10. Effective Date. This resolution shall be in force and effect from and after its passage. - 16 - PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 9th day of November, 1992. TIMOTHY SWANSON, Mayor ATTEST: ROBIN L. SULLIVAN Clerk of the Commission APPROVED AS TO FORM: PAUL J. LUWE City Attorney - 17 - ~Lt J wzLD---- c:~>-- ~L-Q. J---~+ ~>- L~G ~ ~ "'", ) EXHIBIT A . . (.eS~. \ g- (~~-,:t--~) . . '. [Face of the Bond] oL~ ~ UNITED STATES DF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN POOLED SPECIAL IMPROVEMENT DISTRICT REFUNDING BOND, SERIES 1992 (Special Improvement District No. 591, 598, 607, 613, 615, 632 and 646 Basic interest at the rate per annum specified below payable on the 1 st day of January and the 1 st day of July in each year, commencing July 1, 1993. No. $ Representing Principal Installment Nos. Basic Interest Date of Rate Maturity Original Issue CUSIP November 18, 1992 SEE REVERSE FOR CERTAIN DEFINITIONS REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS FOR VALUE RECEIVED, THE CITY OF BOZEMAN, Montana, will pay, solely from the 1992 Refunding Pooled Special Improvement District Sinking Fund herein described, to the registered owner identified above, or registered assigns, the principal amount specified above on the maturity date specified above, as authorized by Resolution No. 2893 adopted by the City Commission of the City on November 9, 1992 (the "Resolution"), all subject to the provisions hereinafter described relating to the redemption of this Bond before maturity. This Bond bears basic interest at the rate per annum specified above from the date of registration of this Bond, as expressed herein, or from the most recent date to which basic interest has been paid or duly provided for until the maturity date specified above or an earlier date on which this Bond shall have been duly called for redemption by the Director of Finance of the City. Principal of this Bond is payable upon presentation and surrender hereof to the Director of Finance of the City of Bozeman, at his or her office at City Hall, in Bozeman, Montana, as Bond Registrar, Transfer Agent and Paying Agent, or his or her successor designated under the provisions of the Resolution described herein (the" Registrar") Basic interest is payable by check or draft drawn on the Registrar on January 1 and July 1 of each year, commencing July 1, 1993, to the owner of this Bond as such appears of record in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. The Bonds also bear additional interest from December 1, 1992 through June 30, 1993, at the rate of ten and seventy hundredths percent (10.70%) per annum, payable on July 1, 1993. The additional interest on this and all other such Bonds is represented by, and payable in accordance with and upon presentation and surrender at the principal office of the Registrar of, separately registered additional interest certificates. The principal of and interest on this Bond are payable in lawful money of the United States of America. Additional provisions of this Bond are contained on the reverse hereof and such - 18 - .-----......... . provisions shall for all purposes have the same effect as though fully set forth hereon. This Bond shall no be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication and Registration hereon shall have been executed by the Registrar by the manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Bozeman, Montana, by its City Commission, has caused this Bond to be executed by the facsimile signatures of the City Manager and the Clerk of the Commission and by a facsimile of the official seal of the City. CITY OF BOZEMAN, MONT ANA (Facsimile Signature) City Manager (Facsimile Signature) Clerk of the Commission (Facsimile Seal) Date: CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the Bonds delivered pursuant to the Resolution mentioned herein and this Bond has been registered as required by law on the books of the City as of the 18th day of November, 1992. DIRECTOR OF FINANCE, City of Bozeman, Montana, as Registrar By Authorized Representative [Reverse of the Bonds] This Bond is one of an issue in the aggregate principal amount of $445,000 (the "Bonds"), all of like date of original issue and tenor, except as to serial number, denomination, date, basic interest rate and maturity date. The Bonds are 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 12, Parts 41 and 42, as amended, for the purpose of providing funds to refund in advance of their maturities certain valid outstanding special improvement district bonds of the City. Certain proceeds of the Bonds have been irrevocably pledged and deposited in escrow, and invested in securities with respect to which payments of principal and interest are due at times and in amounts required, with other deposited funds, to pay the principal of and the interest on certain of teh bonds refunded hereby on a designated redemption date. The Bonds are issuable only as fully registered bonds of single maturities in denominations of $5,000 or any integral multiple thereof. This Bond represents one or more principal installments of the Bonds numbered as set forth above. The principal installments for the issue are in the aggregate amount of $445,000, and are numbered from 1 through 89. This Bond is payable from the collection of a special tax or assessment levied upon all property within the boundaries of each of the following special improvement districts of the City the bonds of which are refunded hereby: Special Improvement District No. 591, Special Improvement District No. 591, Special Improvement District No. 607, Special Improvement District No. 613, Special Improvement District No. 615, Special Improvement - 19 - .-...- District No. 632, and Special Improvement District No. 646. Such assessments constitute a lien against real estate within said respective Districts, and the Bodns are not general obligations of the City. The principal installments of the Bonds are subject to mandatory redemption in order of registration on any interest payment date if, after paying all principal and interest then due on the Bonds, there are funds to the credit of the 1992 Refunding Pooled Special Improvement District Sinking Fund(in which the district fund for each of the special improvement districts described in the title hereof constitutes a subaccount), from the prepayment of assessments levied in the Districts, for the redemption thereof, and in the manner provided for the redemption of the same. The Bonds are subject to redemption at the option of the City from other sources of funds available therefor on any interest payment date; provided, however, that the City has agreed not to call Bonds for redemption from the proceeds of refunding special improvement district bonds before July 1, 1997. The redemption price is equal to the amount of the principal installment or installments of the Bonds to be redeemed plus interest accrued thereon to the date of redemption. The date of redemption shall be fixed by the Director of Finance, who shall give notice by first class mail, postage prepaid, to the owner or owners of such Bonds at their addresses shown ont he bond register, of the numbers of the principal installments and Bonds to be redeemed and the date on which payment will be made, which date shall not be less than ten days after the date of mailing of notice, on which date so fixed interest shall cease. On the date so fixed interest on the Bonds or principal installments thereof so redeemed shall cease to accrue. Upon partial redemption of any Bond, a new Bond will be delivered to the registered owner without charge, representing the remaining principal installments outstanding. As provided in the Bond Resolution, and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by his attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or his attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange, the City will cause a new Bond or or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing basic 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 teat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar shall be affected by any notice to the contrary. IT IS HEREBY CERTIFIED AND RECITED that all things required to be done precedent to the issuance of this Bond have been properly done, happened and been performed in the manner prescribed by the laws of the State of Montana and the resolutions and ordinances of the City of Bozeman, Montana, relating to the issuance thereof. The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UTMA........... .Custodian.......... (Cust) (Minor) TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of under Uniform Transfers to Minors survivorship and not as tenants in common Act............................... (State) Additional abbreviations may also be used. - 20- -.--."..".- ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto_ the within Bond and all rights thereu nder, 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: NOTICE: The signature to this assign- ment must correspond with the name as it appears upon the face of the within Bond in every particular, without alt- eration, enlargement or any change whatsoever. / / SIGNATURE GUARANTEED Certificate as to Legal QDinion The following certificate shall be printed on the reverse of each Bond, following a true cipy of the text of the legal opinion given at the time of delivery of the Bonds. We certify that the above is a true copy of the legal opinion on the issue of Bonds of the City of Bozeman, Montana, which includes the within Bond, dated as of the date of delivery of and payment for the Bonds. (Facsimile Signature) (Facsimile Signature) City Manager Clerk of the Commission - 21 - . -..------.......--.-.... -.--.- --.. EXHIBIT B FORM OF CERTIFICATES [Face of Certificates] UNITED STATE OF AMERICA STATE OF MONTANA COUNTY OF GALLA TIN CITY OF BOZEMAN REGISTERED ADDITIONAL INTEREST CERTIFICATE RELATING TO POOLED SPECIAL IMPROVEMENT DISTRICT REFUNDING BONDS, SERIES 1992 (SPECIAL IMPROVEMENT DISTRICT NOS. 591, 598, 607, 613, 615, 632 AND 646) DATED, AS ORIGINALLY ISSUED, AS OF NOVEMBER 18, 1992 No. Additional Interest Date of Percentage of Rate Interest Period Pavment Ownership REGISTERED OWNER: SEE REVERSE FOR CERTAIN DEFINITIONS AMOUNT: DOLLARS FOR VALUE RECEIVED, THE CITY OF BOZEMAN, (the "City"), a duly organized municpal corporation located in Gallatin County, Montana, will pay to the registered owner named above, or registered assigns, on the date specified above an amount equal to the percentage of ownership specified above multiplied by the amount then due representing additional interest at the annual rate and for the limited period specified above on the Pooled Special Improvement District Refunding Bonds, Series 1992 (Special Improvement District Nos. 591, 598, 607, 613, 615, 632 and 646) dated as originally issued, as of November 18, 1992, of the City (the "Bonds"), to the extent such Bonds have not been paid prior to said date. Such additional interest is payable, in lawful money of the United States of America, upon presentation and surrender of this Certificate to the Director of Finance of the City of Bozeman, at his or her office at City Hall, in Bozeman, Montana, as Bond Registrar, Transfer Agent and Paying Agent, or his or her successor designated under the provisions of the Resolution described herein (the "Registrar"), solely from the 1992 Refunding Pooled Special Improvement District Sinking Fund of the City, as further described in the Bonds and the Resolution. Additional provisions of this Certificate are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth herein. This Certificate 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 representatives. IN WITNESS WHEREOF, the City of Bozeman, Montana, by its City Commission, has caused this Certificate to be executed by the facsimile signatures of the City Manager and the Clerk of the Commission-Treasurer and has caused this Certificate to be dated as of November 18, 1992. (Facsimile Signature) (Facsimile Signature) City Manager Clerk of the Commission - 22 - . --- ____.._.__n__._ . CERTIFICATE OF AUTHENTICATION This is one of the Certificates representing additional interest on the Bonds delivered pursuant to the Resolution mentioned herein. DIRECTOR OF FINANCE City of Bozeman, Montana, as Registrar ,/" ~&g. '" By Authorized Representative -- [Reverse of Certificates] As provided in Resolution No. 2893 duly adopted by the City Commission of the City on November 9, 1992 (the "Resolution"), pursuant to which the Bonds and this Certificate were issued, and subject to certain limitations set forth therein, this Certificate is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by his attorney duly authorized in writing upon presentation 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 one or more Certificates representing other authorized percentages of the amount of additional interest payable on the date of payment hereinbefore specified. Upon such transfer or exchange, the City will cause one or more new Certificates to be issued in the name of the transferee or registered owner, representing additional interest to be paid at the same rate and 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 Certifcate is registered as the absolute owner hereof, whether this Certificate 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. The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UTMA........... .Custodian............. (Cust) (Minor) TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right under Uniform Transfers to Minors of survivorship and not as Act.............................. tenants in common (State) Additional abbreviations may also be used. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto_ the within Certificate and all rights thereunder, and herebyirrevocablyconstitutesand appoints attorney to transfer the within Certificate 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 assign- - 23 - - OF ASSIGNEE: ment must correspond with the name as it appears upon the face of the within Certificate in every particular, without alteration, enlarge- or any change whatsoever. I I SIGNATURE GUARANTEE - 24- --..---.----- --.--- -