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HomeMy WebLinkAboutResolution 2829 DNRC bonds - Lyman Creek II 1...... . . ~ CERTIFICATION OF MINUTES RELATING TO $352,715 WATER SYSTEM REVENUE BONDS, SERIES 1991 Issuer: City of Bozeman, Montana Governing Body: City Commission Kind, date, time and place of meeting: A regular meeting held on April 15, 1991, at 7:30 p.m. at the Municipal Building, Bozeman, Montana. Members present: Commissioner Goehrung, Commissioner Frost, Commissioner Swanson, Commissioner Knapp and Mayor Hawks Members absent: None Documents attached: Minutes of said meeting (pages): __ through ___ including: RESOLUTION NO. 2829 RESOLUTION RELATING TO $352,715 WATER SYSTEM REVENUE BOND, SERIES 1991; AUTHORIZING THE ISSUANCE AND AWARDING THE SALE THEREOF I, the undersigned, being the duly qualified and acting recording officer of the municipality issuing the obligations referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of the municipality in my legal custody, from which they have been transcribed; that the documents are a correct and complete transcript of the minutes of a meeting of the governing body at the meeting, insofar as they relate to the obligations; and that the meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer this ~ day of April, 1991. ..~ . (/ . L/uv. t5/:m-dJ A2(ing lark of the Commission 9679A ---.--.------.- ----------.. .-.-.... -.-..--.... --- -.".-.-..- _/" . ~ ,:0- RESOLUTION NO. 2829 RESOLUTION RELATING TO $352,715 WATER SYSTEM REVENUE BOND, SERIES 1991; AUTHORIZING THE ISSUANCE AND AWARDING THE SALE THEREOF BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, AS FOLLOWS: Section 1. Authorization and Recitals. 1.01. Authorization. Under the provisions of Montana Code Annotated, Title 7, Chapter 7, Parts 44 and 45, as amended (the Act), the City is authorized to issue and sell its revenue bonds payable during a term not exceeding forty years from their date of issue, to provide funds for the reconstruction, improvement, betterment and extension of its Water System or to refund its revenue bonds issued for such purpose; provided that the bonds and the interest thereon are to be payable solely out of the net income and revenues to be derived from rates, fees and charges for the services, facilities and commodities furnished by the undertaking, and are not to create any obligation for the payment of which taxes may be levied except to pay for services provided by the undertaking to the City. 1.02. Outstandina Bonds. In accordance with the authorization described in Section 1.01 hereof and pursuant to Resolution No. 2745, adopted April 10, 1989, the City issued and sold $5,625,000 Water System Refunding Revenue Bonds, Series 1989A, dated, as originally issued, as of April 16, 1989 (the Series 1989A Bonds), for the purposes of refunding certain water system revenue bonds of the City and financing the costs of construction of improvements to the municipal Water System (the System) as described in Section 1.04 of Resolution No. 2745. On April 10, 1989 in accordance with Resolution No. 2745, this Commission adopted Resolution No. 2749 (the Supplemental Resolution) and pursuant thereto the City issued and sold $726,079 Water System Revenue Bonds, Series 1989B for the purpose of financing the 1989B Water System Project. No other bonds or indebtedness are outstanding that are payable from revenues of the System. 1.03. The 1991 Project. The City, through its City Commission and officers, has ordered, received and approved plans and specifications for a project to improve the System, consisting of the second phase of enclosure of all exposed portions of the Lyman Creek Water System, including the construction of a cover for the storage reservoir and extension of piping toward a future enclosed spring box (the 1991 -1- -- , , . . . Project), has determined the necessity and contracted for the construction of the Project and the contractors have duly executed construction contracts and posted proper bonds with the City. The total cost of the acquisition and construction of the Project to be funded from the proceeds of the Series 1991 Bond is presently estimated to be $352,715.00, as follows: Construction $249,920.00 Engineering 40,460.00 Contingency 24,992.00 Legal 6,865.00 Origination Fee 10,581. 00 Reserve 13,897.00 Administration 6.000.00 TOTAL: $352,715.00 The City will make an additional contribution to the reserve account of $44,649.00 from other available funds of the City. 1. 04 . Parity Revenue Bonds. The City reserved the right under Section 6.03 of Resolution No. 2745 to issue additional bonds for the purpose of financing improvements to the System which bonds may be made payable from and secured by the net revenues of the System on a parity with any Outstanding Bonds if the net revenues of the System for the last complete fiscal year preceding the date of issuance of the additional Bonds have equaled at least 125% of the maximum amount of principal and interest payable from the Revenue Bond Account in any subsequent fiscal year during the term of the outstanding Bonds, on all Bonds then outstanding and on the additional Bonds proposed to be issued. Based on a certificate executed by the City Manager, the Director of Finance and the City Engineer and to be filed in the office of the Clerk of the Commission, the City is authorized to issue the Series 1991 Bond herein authorized as an additional parity Bond pursuant to Section 6.03 of Resolution No. 2745. Capitalized terms not defined herein but defined in Resolution No. 2745 shall, when used herein, have the meanings therein specified, unless the context of this Supplemental Resolution clearly requires otherwise. 1. 05. Net Revenues Available. The City is authorized to charge just and equitable rates, charges and rentals for all services directly or indirectly furnished by the System, and to pledge and appropriate to the Bonds the net revenues to be derived from the operation of the System, including improvements, betterments or extensions thereof hereafter constructed or acquired. The net revenues to be produced by such rates, charges and rentals during the term of the Series 1991 Bond will be more than sufficient to pay the principal and interest when due on the Series 1989A Bonds, the Series 1989B Bonds and the Series 1991 Bond, and to create and maintain reasonable reserves therefor and to provide an adequate -2- --- - -- . . . . . allowance for replacement and depreciation, as herein prescribed. 1. 06. DNRC Commitment. The City has received a commitment from the Department of Natural Resources and Conservation of the State of Montana (the DNRC), pursuant to which the DNRC has agreed, subject to certain terms and conditions to lend the City $352,715 for the purpose of financing the costs of the 1991 Project such loan to be evidenced by the Series 1991 Bond authorized to be issued hereunder. The terms and conditions of such commitment are reasonable and advantageous to the City and are hereby accepted. 1. 07 . Issuance and Sale of the Series 1989B Bondi Bond Purchase Aareement. The Commission has investigated the facts necessary and hereby finds, determines and declares it to be necessary and desirable for the City to issue its $352,715 Water System Revenue Bond, Series 1991 (the Series 1991 Bond), for the purpose of financing the costs of the 1991 Project. Pursuant to the authority recited in Sections 1.01 and 1.04, the City hereby authorizes the issuance and sale of the Series 1991 Bond, in the principal amount of $352,715 in accordance with the provisions of Resolution No. 2745 and this Supplemental Resolution. The sale of the Series 1991 Bonds is hereby awarded to the DNRC pursuant to Montana Code Annotated, Section 7-7-4433(2)(a). There has been presented to this Commission a form of a Bond Purchase Agreement proposed to be entered into between the City and the DNRC, relating to the purchase and sale of the Series 1991 Bond (the Bond Purchase Agreement). This Commission hereby approves the Bond Purchase Agreement and authorizes it to be executed on behalf of the City by 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, in 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 Bond Purchase Agreement by appropriate officers of the City shall be conclusive as to the approval by this Commission of the terms and provisions thereof. Section 2. Series 1991 Bond. 2.01. Terms. (a) The Series 1991 Bond shall be in the principal amount of $352,715, shall be issued as a single, fully registered bond numbered R-1, shall be dated as of the date of delivery to the DNRC, and shall bear interest from its date until the date five years thereafter at the rate of four and eighty-seven hundredths percent (4.87%) per annum and -3- -----.----.----------..----- ...--------- ---.., ---.....--.-- .... . r . . thereafter at the rate of six and eighty-seven hundredths percent (6.87%) per annum. The principal of and interest on the Series 1991 Bond shall be payable in semiannual installments beginning November 23, 1991 and continuing semiannually thereafter until the principal of and interest on the Series 1991 Bond have been paid in full. Principal and interest in the amount of $14,273.95 shall be paid on November 23, 1991; in the amount of $13,897.46 on each May 23 and November 23 thereafter, to and including November 23, 1995; in the amount of $14,028.97 on May 23, 1996; and in the amount of $15,823.71 on each November 23 and May 23 thereafter, to and including May 23, 2011; provided that the final semiannual installment shall be in such lesser or greater amount as is necessary to pay the principal and interest then due. (b) The City will pay to the DNRC on the date of delivery, out of the proceeds of the sale of the Series 1991 Bond, a loan origination fee equal to $10,581, to recover the costs which have been incurred by DNRC in obtaining the funds with which to purchase the Series 1991 Bond. 2.02. Payments Due on Saturdays. Sundays and Holidavs. In any case in which the date on which an installment paYment is due shall be a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized by law to close~ then such installment payment need not be made on such date, but may be made on the next business day that is not a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized by law to close, with the same force and effect as if made on the date on which the installment payment was due. No penalty shall attach to a paYment made pursuant to this provision. 2.03. Redemption. The City may at any time prepay all or any part of the principal of the Series 1991 Bond with the approval of the holder and only after request to prepay has been made in writing to the holder thirty days prior to such prepayment. Any prepaYment shall be identified as such, shall be applied first to accrued interest and then to unpaid principal installments of the Series 1991 Bond in inverse order of maturity, and shall not otherwise extend or postpone the due date of any installment payment on the Series 1991 Bond. 2.04. Negotiability. Transfer and Registration. The Series 1991 Bond shall be fully registered as to both principal and interest, and shall be initially registered in the name of and payable to the DNRC. While so registered, principal of and interest on the Series 1991 Bond shall be payable to the DNRC at the Office of the Department of Natural Resources and Conservation, 1520 East Sixth Avenue, Helena, Montana 59620-2301 or such other place as may be designated by the DNRC -4- , , . . . . in writing and delivered to the Director of Finance. The Series 1991 Bond shall be negotiable, subject to the provisions for registration and transfer contained in this section. No transfer of the Series 1991 Bond shall be valid unless and until (1) the holder, or his duly authorized attorney or legal representative, has executed the form of assignment appearing on the Series 1991 Bond, and (2) the Director of Finance, as Bond Registrar, has duly noted the transfer on the Series 1991 Bond and recorded the transfer on the Director of Finance's registration books. The Director of Finance may, prior to noting and recording the transfer, require appropriate proof of the transferor's authority and the genuineness of the transferor's signature. The City shall be entitled to deem and treat the person in whose name the Series 1991 Bond is registered as the absolute owner of the Series 1991 Bond for all purposes, notwithstanding any notice to the contrary, and all payments to the registered holder shall be valid and effectual to satisfy and discharge the City's liability upon such Bond to the extent of the sum or sums so paid. 2.05. Execution. The Series 1991 Bond shall be executed on behalf of the City by the manual signatures of the City Manager, the Clerk of the Commission and the Director of Finance. Any or all of such signatures may be affixed at or prior to the date of delivery of the Series 1991 Bond. The Series 1991 Bond shall be sealed with the corporate seal of the City. In the event that any of the officers who shall have signed the Series 1991 Bond shall cease to be officers of the City before the Series 1991 Bond is issued or delivered, their signatures shall remain binding upon the City. Conversely, the Series 1991 Bond may be signed by an authorized official who did not hold such office on the date of adoption of this Supplemental Resolution. 2.06. Delivery. The Series 1991 Bond shall be delivered to the DNRC, or its attorney or legal representative. The purchase price of the Series 1991 Bond shall be not less than the principal amount thereof; provided, howeve r , that the DNRC may withhold from the purchase price an amount not greater than the loan origination fee described in Section 2.01(b) of this Supplemental Resolution. 2.07. E.Qm . The Series 1991 Bond shall be in substantially the following form (with appropriate insertions for dates and amounts as described above): -5- ---.-------. .-. . '... ~. [Face of the Series 1991 Bond] UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN WATER SYSTEM REVENUE BOND SERIES 1991 No. R-1 $352,715 FOR VALUE RECEIVED, the City of Bozeman (the City), a duly organized municipal corporation located in Gallatin County, Montana, acknowledges itself to be specially indebted and, for value received, hereby promises to pay to the Department of Natural Resources and Conservation of the State of Montana, or its registered assigns, solely from the Revenue Bond Account of its Water System Fund, the principal sum of THREE HUNDRED FIFTY-TWO THOUSAND SEVEN HUNDRED FIFTEEN DOLLARS ($352,715), plus interest from the date hereof until the date five years thereafter at the rate of four and eighty-seven hundredths percent (4.87%) per annum, and thereafter at the rate of six and eighty-seven hundredths percent (6.87\) per annum, until paid or discharged. Such principal and interest shall be paid in consecutive semiannual installments. Payments in the amount of $14,273.95 shall be paid on November 23, 1991; in the amount of $13,897.46 on each May 23 and November 23 thereafter, to and including November 23, 1995; in the amount $14,028.97 on May 23, 1996; and in the amount of $15,823.71 on each November 23 and May 23 thereafter, to and including May 23, 2011; subject to prepayment as set forth below. The final monthly installment may be in such lesser or greater amount as is necessary to pay the balance of principal and interest then remaining due. If any installment of principal or interest is not paid when due, each and every such delinquent installment shall bear interest, to the extent permitted by law, at the annual rate of interest installment until payment thereof. The final semiannual installment may be in such lesser or greater amount as is necessary to pay the balance of principal and interest then remaining due. Such installment payments shall be made to the registered holder of this Bond, at its address as it appears on the Bond register, in lawful money of the United States of America. This Bond constitutes a series in the principal amount of $352,715 (the Series 1991 Bond), to construct certain -6- -....----- , .. . . . improvements to the Water System of the City (the System), to make a deposit to a reserve fund for the Bonds and to pay costs of issuance of the Series 1991 Bond. The Series 1991 Bond is issued pursuant to and in full conformity with the Constitution and laws of the State of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, Parts 44 and 45, as amended, and ordinances and resolutions duly adopted by the City Commission. The Series 1991 Bond is issuable only as a single, fully registered bond. Reference is made to Resolution Nos. 2745, 2749 and 2829, duly adopted by the City Commission of the City on April 10, 1989, May 22, 1989 and April 15, 1991 (collectively, the Resolution), for a more complete statement of the terms and conditions upon which the City's $5,625,000 Water System Refunding Revenue Bonds, Series 1989A, the Series 1989B Bond and the Series 1991 Bond have been issued, the net revenues of the System pledged and appropriated for the paYment and security thereof, the conditions upon which additional bonds may be issued under the Resolution and made payable from such net revenues on a parity with the Series 1989A Bonds, the Series 1989B Bond and the Series 1991 Bond (collectively, the Bonds) or otherwise, the conditions upon which the Resolution may be amended, the rights, duties and obligations of the City, and the rights of the owners of the Series 1991 Bond. The City may at any time prepay all or any part of the principal of the Series 1991 Bond with the approval of the Bondholder and only after request to prepay has been made in writing to the Bondholder thirty days prior to such prepayment. Any prepayment shall be identified as such, shall be applied first to accrued interest and then to unpaid principal in inverse order of installments, and shall not extend or postpone the due date of any subsequent installment payment on the Series 1991 Bond. The Bonds, including interest and any premium for the redemption thereof, are payable sole~y from the net revenues pledged for the payment thereof and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation or provision. The City may deem and treat the person in whose name this Series 1991 Bond is registered as the absolute owner hereof, whether this Series 1991 Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and the City shall not be affected by any notice to the contrary. -7- - _". n__ -----.---.-.-.-.----....... --. . . . IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has duly authorized and will forthwith undertake the improvements to the System hereinabove described, has fixed and established and will collect reasonable rates and charges for the services and facilities afforded by the System, subject to any required approval by or regulation of the Public Service Commission of the State of Montana, and has created a special Water System Fund into which the gross revenues of the System, including all additions thereto and replacements and improvements thereof, will be paid, and a separate and special Revenue Bond Account in that fund, into which will be paid each month, from and as a first and prior lien on the net revenues of the System then on hand, an amount equal to not less than the sum of one-sixth of the interest due within the next six months and one-twelfth of the principal due within the next twelve months with respect to all outstanding Bonds payable from that account, and into which shall be paid additional net revenues sufficient to maintain a reserve therein equal to, as of the date oE calculation, the lesser of (i) 10\ of the original principal amount of all series of Bonds then outstanding or (ii) an amount equal to the maximum principal and interest payable on all outstanding Bonds in the current or any future fiscal year (giving effect to any mandatory sinking fund redemption); that the Revenue Bond Account will be used only to pay the principal of, premium, if any, and interest on the Bonds issued pursuant to the authority herein recited; that the rates and charges for the System will from time to time be made and kept sufficient, subject to regulation of the Montana Public Service Commission, to provide gross income and revenues adequate to pay promptly the reasonable and current expenses of operating and maintaining the System and to produce in each fiscal year net revenues in excess of such current expenses equal to 125% of the maximum amount of principal and interest payable from the Revenue Bond Account in any subsequent fiscal year; that additional Bonds and refunding Bonds may be issued and made payable from the Revenue Bond Account on a parity with the Series 1989A Bonds, the Series 1989B Bond and the Series 1991 Bond upon certain conditions set forth in the Resolution but no obligation will be otherwise incurred and made payable from the net revenues of the System, whether or not such obligation shall also constitute a general obligation and indebtedness of the City, unless the lien thereof shall be expressly made subordinate to the lien of the Series 1989A Bonds, the Series 1989B Bond and the Series 1991 Bond and other parity Bonds on such net revenues; that all provisions for the security of this Series 1991 Bond set forth in the Resolution will be punctually and faithfully performed as therein stipulated; that all acts, conditions and things required by the Constitution and laws of the State of Montana and the ordinances and resolutions of the City to be done, to exist, to -8- . . . . happen and to be performed in order to make this Series 1991 Bond a valid and binding special obligation of the City according to its terms have been done, do exist, have happened and have been performed as so required; and that this Series 1991 Bond and the premium, if any, and interest hereon are payable solely from the net revenues of the System pledged and appropriated to the Revenue Bond Account and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation or provision and the issuance of the Series 1991 Bond does not cause either the general or the special indebtedness of the City to exceed any constitutional or statutory limitation. IN WITNESS WHEREOF, the City of Bozeman, Gallatin County, Montana, by its City Commission, has caused this Bond to be executed by the signatures of the City Manager, the Clerk of the Commission and the Director of Finance, and has caused the official seal of the City to be affixed hereto, and has caused this Bond to be dated as of the 15 day of May, 1991. City Manager Clerk of Commission Finance Director (Seal) REGISTRATION AND TRANSFER This Bond shall be fully registered as to both principal and interest. No transfer of this Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized attorney or legal representative, executes the form of assignment appearing on this Bond, and (2) the Director of Finance, as bond registrar, has duly noted the transfer on the Bond and recorded the transfer on the Director of Finance's registration books. The City shall be entitled to deem and treat the person in whose name this Bond is registered as absolute owner thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the Bond shall be made only to the order of the registered holder thereof, and all such payments shall be valid and effectual to satisfy and discharge the City's liability upon the Bond to the extent of the sum or sums so paid. -9- ...- ....-.. .... ---.-.......-..--.. ,......--."'" -.....------ . . . . . . ASSIGNMENT(S) l. For value received, this Bond is hereby transferred and assigned by the undersigned holder, without recourse, to on this ____ day of , 19_. By: (authorized signature) For: (Holder) 2. For value received, this Bond is hereby transferred and assigned by the undersigned holder, without recourse, to on this ____ day of , 19_. By: (authorized signature) For: (Holder) -10- ---..----..-.". -.----..- . . . . . THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND REGISTRAR UPON REGISTRATION OF EACH TRANSFER The Director of Finance of the City of Bozeman, Gallatin County, Montana, acting as Bond Registrar, has transferred, on the books of the City, on the date last noted below, ownership of the principal amount of and the accrued interest on this Bond to the new registered holder noted next to such date, except for amounts of principal and interest theretofore paid. Name of New Signature of Date of Transfer Reaistered Holder Bond Reaistrar Section 3. Use of Proceeds. 3.0I. Application of Proceeds. All proceeds of the Series 1991 Bond, except the $13,897 to be deposited in the Reserve pursuant to Section 4.02, shall be deposited in a separate subaccount established in the Acquisition and Construction Account designated as the "1991 Subaccount- (the 1991 Subaccount) and shall be used only to pay as incurred and allowed costs which under accepted accounting practice are capital costs of the 1991 Project as contemplated by Section 5.02 of Resolution No. 2745. 3.02. Disbursements from 1991 Subaccount. (a) The money deposited in the 1991 Subaccount from the proceeds of the Series 1991 Bond shall not be commingled with money in any other account, but shall all be deposited in one or more financial institutions as provided in Montana Code Annotated, Section 7-6-201 et seq. At such time as the City desires to payor to reimburse itself for the payment of costs of the 1991 Project, it may do so only by following the procedure set forth in this Section 3.02. (b) (1) The City may withdraw money from the 1991 Account to pay costs of the 1991 Project from time to time, -11- -.-- . . . provided: (i) that such payments are due and owing, are proper charges against the Construction Account, and have not previously been paid; (ii) that the City is not aware of any lien or claim affecting the right of the payees to receive such payments; (iii) that sufficient money remains available to complete the 1991 Project; and (iv) that the City has submitted to the DNRC payment vouchers (containing the information required in this Section) which, taken in conjunction, cover the entire period from the date of delivery of the Series 1991 Bond through the end of the last full calendar month preceding the date of payment. (2) Such payment vouchers shall be submitted on a monthly basis and shall contain the fOllowing information; (i) the period of time covered by the payment vouchers; (ii) the name of each person or entity to whom a payment for costs of the 1991 Project was made from the 1991 Subaccount during the period, which may include the City if the City had previously paid costs of the 1991 Project from other funds; (iii) the amount or amounts paid; (iv) a short description of the nature and purpose of the cost(s) of the 1991 Project for which payment was made; (v) a statement that obligations in the stated amounts had been incurred by the City and on the date of payment were due and payable (or had already been paid by the City) and that each item thereof was a proper charge against the 1991 Subaccount and had not previously been paid; (vi) a statement that the City at the time of payment was not aware of any lien or attachment upon the 1991 Project, or of any claim affecting the right of the persons named in the payment voucher to receive payment of the amounts set forth therein, which was not released simultaneously with paYment of such obligation, other than materialmen's or mechanics' liens accruing by operation of law; (vii) a statement that the money remaining on deposit in the 1991 Subaccount, together with other moneys available or to be available for the 1991 Project (from sources specified in the payment voucher), will -12- -....-.-...-..------.-..-.----... .------- .-..-.----.....-.- --. -....----...--. ...- . . . . .. . be sufficient to complete the 1991 Project and pay all liens thereon. (3) Such written payment vouchers shall be submitted on any forms provided by the DNRC. They shall be signed by two authorized officials of the City and shall be accompanied by copies of all relevant billing statements and by any inspection certificate required by the DNRC. (c) Upon completion of the 1991 Project, any balance remaining in the 1991 Subaccount shall be transferred to the Reserve in the Revenue Bond Account, except that any amount which would cause the Reserve in the Revenue Bond Account to exceed the Reserve Requirement shall be transferred to the Revenue Bond Account. Section 4. Security for the Series 1991 Bond. 4.01. Lien on Net Revenues. The Series 1991 Bond is issued under Section 6.03 of Resolution No. 2745 and shall, with any additional parity Bonds issued under the provisions of Section 6 of Resolution No. 2745, be equally and ratably secured with the Series 1989A Bonds and the Series 1989B Bond by the provisions of Resolution No. 2745 and payable out of the net revenues appropriated to the Revenue Bond Account of the Water System Fund, without preference or priority, all as provided in Resolution No. 2745. The City shall keep, perform and observe each and every of its covenants and undertakings set forth in Resolution No. 2745 and in the Bond Purchase Agreement. In addition, the City will complete the 1991 Project described in Section 1.03 of this Supplemental Resolution as expeditiously as practical. The City shall not enter into any lease, use or other agreement with any non-governmental person relating to the use of the 1991 Project or the System or security for the payment of the Series 1991 Bond which might cause the Series 1991 Bond to be considered a "private activity bond" or "private loan bond" within the meaning of Section 141 of the Internal Revenue Code of 1986, as amended (the Code). Except as supplemented hereby, Resolution No. 2745 shall continue in full force and effect for the benefit of the holders of the Series 1989A Bonds, the Series 1989B Bond and the Series 1991 Bond. 4.02. Establishment of Reserve. Pursuant to the provisions of Section 5.04 of Resolution No. 2745, the Reserve in the Revenue Bond Account shall be increased to $670,279 on or before June 30, 1991, from a deposit of $13,897 from proceeds of the Series 1991 Bond and $44,649 from other available funds of the District. -13- .-- ..-...--.------ ...-..- _...__.__..._"....._...___u._...._ ------..---.-. , III. ..,. .. ,. Section 5. Certification of proceedinas and Arbitraae. 5.01. Certification of Proceedinas. The officers of the City are hereby authorized and directed to prepare and furnish to the DNRC and to Dorsey & Whitney, Bond Counsel, certified copies of all proceedings and records of the City, and such other affidavits, certificates and information as may be required to show the facts relating to the legality and marketability of the Series 1991 Bond as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 5.02. Tax Covenants. (a) 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 which would cause the interest on the Series 1991 Bond to become includable in gross income for purposes of federal income taxation under the Internal Revenue Code of 1986, as amended (the Code), and applicable Treasury Regulations (the Regulations), and that it will take, or will cause its officers, employees or agents to take any and all actions which may be necessary to ensure that such interest will not become includable in gross income for purposes of federal income taxation, including, without limitation, compliance with Section 148 of the Code. References to the Code herein include all regulations, amended regulations and proposed regulations issued thereunder, as now existing or as hereafter amended or proposed. (b) In furtherance of its covenant in subsection (a) the City further covenants and agrees that it will not use the proceeds of the Series 1991 Bond in such a manner as to cause the Series 1991 Bond to be an "arbitrage bond" within the meaning of Section l48(a) of the Code and applicable Treasury Regulations; to this end, the City shall: (1) maintain records identifying all "gross proceeds" attributable to the Series 1991 Bond, the yield at which such gross proceeds are invested, any arbitrage profit derived therefrom (earnings in excess of the yield of the Series 1991 Bond) and any earnings derived from the investment of such arbitrage profit; -14- --.---- ---..-.....---.....--.......-.--..-..- . " . . (2) make, or cause to be made, as of May 23 of each year, the annual determinations of the amount, if any, of excess arbitrage required to be paid to the United States; (3) pay, or cause to be paid, to the United States at least once every five years the amount, if any, which is required to be paid to the United States, pursuant to Section 148(f) of the Code, including the last installment which shall be paid no later than 60 days after the day on which the Series 1991 Bond is paid in full; (4) not invest, or permit to be invested, "gross proceeds" in any acquired nonpurpose obligations so as to deflect arbitrage otherwise payable to the United States as a "prohibited payment" to a third party; and (5) retain all records of the annual determination of the foregoing amounts until six years after the Series 1989A Bond has been fully paid. The City reserves the right to amend the provisions of this Section 5.02(b) if it files in the office of the Clerk of the Commission an opinion of nationally recognized bond counsel to the effect that an amendment as described in such opinion will not adversely affect the exemption from federal income taxation of interest on the Series 1991 Bond. (c) The City Manager, the Director of Finance and the Clerk of the Commission, being the officers of the City charged with the responsibility for issuing the Bonds pursuant to this resolution, are authorized and directed to execute and deliver to the DNRC a certificate pursuant to the provisions of Section 148 of the Code and the Regulations. Section 6. Qualified Tax-Exempt Qbliaation. Pursuant to Section 265(b)(3) of the Code, the City hereby designates the Series 1991 Bond as a "qualified tax-exempt obligation" for purposes of said Section 265(b)(3). The City has not designated any obligations other than the Series 1991 Bonds under Section 265(b)(3) in 1991, and the City hereby represents that it does not expect that the amount of obligations bearing interest excludable from gross income under Section 103 of the Code (including "qualified 501(c)(3) bonds" but excluding other "private activity bonds," as defined in Sections 145(a) and 141(a) , respectively, of the Code) issued by or on behalf of the City and all subordinate entities thereof in 1989 will exceed $10,000,000. -15- - . ~ . . , Section 7. Effective Date. This Supplemental Resolution shall be in full force and effect from and after its final passage and approval. Passed by the City Commission and approved by the Mayor of the City of Bozeman, Montana, this 15 day of A ril, 1991. Approved: ....- . :' I,;J RESOLUTION. NO. 2821 RESOLUTION RELATING TO rlft i~a~ i t of 'ubli~atio\t $352,715 WATEFI SYSTEM REVENUE BOND, SERIES ( 1991: AUTHORIZNING THE ISSUANCE AND AWARDING THE SALE THEREOF. City of BoI..,..n St.t. of Monte... County of G.II.tln STATE OF MONTANA, } ss. I, Robin L. Sullivan, Clerk of the City Commission of the County of Gallatin, City of Bozeman, Montana, do hereby certify that the forego- Vivie Portnell , being duly sworn, Ing Is the true and correct title and nl,lmber of comm: deposes and says: That ~he is Principdl Clerk Resolution No. 2829 pa sed and adopted at a regular sessions thereof held on the ofthe Bozeman Daily Chronicle, a newspaper of general circulation, 15th day of April, 1991. Dated this 16th day of April, printed and published in Bozeman, Gallatin County, Montana; and that the 1991. ROBIN L. SULLIVAN Clerk of the City Commission notice hereunto annexed ( Resolution No. 2829 ) , has been correctly published in the regular and entire issue of every number of said paper for ~ -eeftsecmWe insertion day of April 19 .22.- , and the last on the 19 91 Subscribed and sworn to before me this ')lrrJ daYo(~~ 91 ( Notary Public for the State of Montana, residing at Bozeman~~ NOTARY PUBLIC tor RuidlAg at Bozeman, ..".,. My Commillion........ 1183 ---. .....---.--""- -...---.-.---- - -......,....- .-.. - - -~ ..":""IIII!II!~- r '-"'...!'" . ,~ .. Upon vote being taken on the adoption of the foregoing resolution, the fOllowing Council members voted in favor thereof: Commissioner Swanson. Commissioner Knapp. Commissioner Goehrung. Commissioner Frost and Mayor Hawks and the following voted against the same: None and the following abstained from voting thereon: None whereupon the resolution was declared duly passed and adopted, and was signed by the Mayor, which signature was attested by the Clerk of the Commission. 9679A -17-