HomeMy WebLinkAboutResolution 3394 Land sale for SIDs 666, 667, 668
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RESOLUTION NO. 3394
RESOLUTION RELATING TO $2,630,000 POOLED SPECIAL
IMPROVEMENT DISTRICT BONDS, SERIES 2000 (SPECIAL
IMPROVEMENT DISTRICT NOS. 666, 667 AND 668); AUTHORIZING THE
ISSUANCE AND CALLING FOR THE PUBLIC SALE THEREOF
BE IT RESOLVED by the City Commission (the "Commission") of the City of
Bozeman, Montana (the "City"), as follows:
Section 1. Recitals.
(a) This Commission has duly and validly created and established in the City
under Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as amended (the "Act"),
special improvement districts, designated as Special Improvement District Nos. 666, 667 and 668
(the "Districts"), for the purpose of financing costs of certain public improvements of special
benefit to the properties within the Districts (the "Improvements") and paying costs incidental
thereto, including costs associated with the sale and the security of special improvement district
bonds of the City drawn on the Districts (the "Bonds"), the creation and administration of the
Districts, the funding of a deposit to the City's Special Improvement District Revolving Fund
(the "Revolving Fund") and the funding of a District Reserve Account securing the Bonds in the
District Fund (the "Reserve Account"). The total estimated costs of the Improvements, including
such incidental costs, to be financed by the Districts is $2,630,000. The costs of the
Improvements are to be paid from the proceeds of the Bonds, which are to be payable primarily
from special assessments to be levied against property in the Districts, which property will be
specially benefitted by the Improvements in an amount not less than $2,630,000.
(b) It is necessary that Bonds be issued and sold in an aggregate principal amount
of $2,630,000 to finance the costs of the Improvements within each of the Districts, including
incidental costs, described in Subsection (a). The costs of the Improvements are currently
estimated, as follows:
District No. 666 District No. 667 District No. 668
Improvement Costs $1,187,175.15 $503,518.50 $634,862.38
Revolving Fund Deposit 66,750.00 28,750.00 36,000.00
City Administration 40,050.00 17.250.00 21,600.00
Bond Discount 26,700.00 11,500.00 14.400.00
Reserve Account 6,048.85 8,595.50 7,199.62
Costs of Issuance and
Miscellaneous 8.276.00 5.386.00 5.938.00
Total $1,335,000.00 $575,000.00 $720,000.00
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(c) The City is authorized pursuant to Montana Code Annotated, Section
7-12-4193, to issue and sell special improvement district bonds of more than one district in a
single offering on a pooled basis upon a determination that such pooling is in the best interests of
the Districts and the City.
(d) The City is further authorized by Montana Code Annotated, Section
7 -12-4204( 1) to sell the Bonds at a price less than the principal amount thereof, but including
interest thereon to the date of delivery, if this Commission determines that such sale is in the best
interests of the Districts and the City.
Section 2. Determinations of Public Interest in Allowing: Bond Discount and
Permitting: Pooling: of Bonds. Pursuant to the authority described in Section 1, this Commission
hereby determines that the issuance and sale of the Bonds in a pooled single offering for the
following Special Improvement Districts in the respective principal amounts set forth below:
District No. Principal Amount
666 $1,335,000
667 $ 575,000
668 $ 720,000
is in the best interest of each of the Districts and the City and will facilitate the sale of the Bonds
because the size of the issue will attract more interest in the marketplace and thus help to lower
interest rates on the Bonds and because a single issue will reduce the costs of issuance. This
Commission further determines to fix the minimum price for the Bonds at $2,577,400 (98% of
par), plus interest accrued thereon to the date of delivery. Such minimum bid will enable bidders
to bid more efficiently for the Bonds by permitting them to submit their bids based on actual
market conditions without adjusting the interest rates thereon to provide compensation for their
purchase of the Bonds. This procedure will facilitate the sale of the Bonds at the lowest interest
rates, which is in the best interests of each of the Districts and the City.
Section 3. Findings and Determination To Pledge the Revolving Fund. In the
Resolutions of Intention To Create Special Improvement District Nos. 666, 667 and 668, all
adopted on August 7, 2000, this Commission found it to be in the public interest, and in the best
interest of the City and the Districts, to secure payment of principal of and interest on the Bonds
by the Revolving Fund and authorized the City to enter into the undertakings and agreements
authorized in the Act in respect of the Bonds, based on the factors required to be considered
under Section 7 -12-4225(4) of the Act. Those findings and determinations were ratified and
confirmed in the resolutions creating Special Improvement District Nos. 666, 667 and 668, all
adopted by this Commission on September 11, 2000, and are hereby ratified and confirmed. It is
hereby covenanted and recited that the City has the power under the Act to pledge the Revolving
Fund to payment of the principal of and interest on the Bonds.
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Section 4. Tenns of the Bonds. This Commission hereby authorizes the issuance
and sale of Pooled Special hnprovement District Bonds, Series 2000 (Special hnprovement
District Nos. 666, 667 and 668) of the City in the aggregate principal amount of $2,630,000 (the
"Bonds") for the purpose of financing the hnprovements. The Bonds shall be dated, as originally
issued, as of October 15,2000, and shall bear interest payable semiannually on January 1 and
July 1 of each year, commencing January 1, 2001, at a rate or rates designated by the successful
bidder at public sale and approved by this Commission. If issued as serial bonds, the Bonds shall
mature on July 1 in each of the following years and amounts:
Year Amount Year Amount
2001 $135,000 2011 $140,000
2002 135,000 2012 140,000
2003 135,000 2013 140,000
2004 135,000 2014 140,000
2005 135,000 2015 140,000
2006 135,000 2016 140,000
2007 140,000 2017 140,000
2008 140,000 2018 140,000
2009 140,000 2019 140,000
2010 140,000
If issued as amortization bonds, the Bonds will be issued as a single bond or divided
into several bonds, as the Commission may detennine at the time of the sale, and the principal of
and interest on the Bonds shall be payable semiannually in equal payments on each January 1 and
July 1, commencing January 1,2001, and concluding July 1,2019, unless the Bonds are earlier
redeemed. Serial bonds shall be in the denomination of $5,000 each or any integral multiple
thereof of single maturities.
The Bonds shall be issuable only as fully registered bonds and shall be executed by
the manual or facsimile signatures of the Mayor, City Manager and the Clerk of the Commission.
The Bonds shall be secured by the Reserve Account and the Revolving Fund and shall be issued
in "book-entry" only form.
Section 5. Public Sale. The Bonds shall be sold at a public competitive sale which is
hereby called and shall be held at a regular meeting of this Commission on October 2, 2000, at
3:00 P.M., M.T. The City will receive sealed bids for the Bonds in accordance with the notice of
sale hereinafter prescribed. The Clerk of the Commission is authorized and directed to cause
notice of the sale to be published, as required by Montana Code Annotated, Sections 7-12-4204,
7-7-4252 and 17-5-106, in the Bozeman Daily Chronicle once each week for two successive
weeks preceding the week which contains the date of sale. The notice of sale shall be published
and mailed in substantially the form set forth as Exhibit A to this resolution and this Commission
hereby adopts the terms and conditions set forth in such notice of sale as the tenns and conditions
of the sale of the Bonds.
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Section 6. Continuing Disclosure. In order to permit bidders for the Bonds and other
participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5)
of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934 (the "Rule"), the City will covenant and agree, for the benefit of the
registered holders and beneficial owners from time to time of the outstanding Bonds, in the
resolution prescribing the terms of the Bonds, to provide annual reports of specified information
and notice of the occurrence of certain events, if material. The City is the only "obligated
person" in respect of the Bonds within the meaning of the Rule for the purposes of disclosing
information on an ongoing basis. A description of the undertaking is set forth in the Official
Statement. Failure of the City to enter into an undertaking substantially similar to that described
in the Official Statement would relieve the successful bidder of its obligation to purchase the
Bonds. The City has complied in all material respects with any undertaking previously entered
into by it under the Rule.
Section 7. Official Statement. The Administrative Services Director and other
officers of the City, in cooperation with D.A. Davidson & Co., financial consultants to the City,
are hereby authorized and directed to prepare on behalf of the City an official statement to be
distributed to potential purchasers of the Bonds. Such official statement shall contain the terms
and conditions of sale set forth in the notice of sale referred to in Section 5 and such other
information as shall be advisable and necessary to describe accurately the City and the security
for, and terms and conditions of, the Bonds. The Administrative Services Director is authorized
on behalf of the City to deem the official statement near "final" as of its date, in accordance with
Rule 15c2-12(b)(I) under the Securities Exchange Act of 1934.
Passed by the City Commission of the City of Bozeman, Montana, this 11 th day of
September, 2000.
May~~~
Attest: ~ /~
Clerk of the Commission
Approved as to form:
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EXHIBIT A
NOTICE OF BOND SALE
$2,630,000 Pooled Special Improvement District Bonds,
Series 2000
(Special Improvement District Nos. 666, 667 and 668)
CITY OF BOZEMAN, MONTANA
NOTICE IS HEREBY GIVEN that the City of Bozeman, Montana (the "City"),
will sell to the highest and best bidder for cash, as evidenced by sealed bids, the above-described
Bonds drawn against the funds of the following special improvement districts in the respective
principal amounts set forth below:
District No. Principal Amount
666 $ 1,335,000
667 $ 575,000
668 $ 720,000
Sealed bids for the purchase of the Bonds will be received until 12:00
noon, M.T., on Monday, October 2,2000, in the Clerk of the Commission's office, City Hall,
411 East Main Street, Bozeman, Montana, at which time the bids will be opened and tabulated.
The City Commission of the City will meet at their regular meeting at 3:00 P.M. on the same day
in the Commission Room in the City Hall to consider the bids and to award the sale of the
Bonds.
Book Entry
The Bonds will be issued by means of a book entry system with no physical
distribution of Bonds made to the public. The Bonds will be issued in fully registered form and
one Bond, representing the aggregate principal amount of the Bonds maturing in each year, will
be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"),
New York, New Yark, which will act as securities depository of the Bonds. Individual purchases
of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single
maturity, through book entries made on the books and records of DTC and its participants.
Principal and interest are payable by the registrar to DTC or its nominee as registered owner of
the Bonds. Transfer of principal and interest payments to participants of DTC will be the
responsibility of DTC; transfer of principal and interest payments to beneficial owners by
participants will be the responsibility of such participants and other nominees of beneficial
owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the
Bonds with DTC.
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Purpose and Security
The Bonds will be issued for the purpose of financing the cost of construction of
certain local improvements (the "Improvements") within or for the benefit of Special
Improvement District Nos. 666, 667 and 668 (collectively, the "Districts"), in accordance with
the provisions of Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as amended.
The Bonds will be special, limited obligations of the City and do not constitute general
obligations of the City.
The Bonds are payable primarily from the collection of a special tax or assessment
which is a lien against the assessable real property within the respective Districts benefitted by
the Improvements to be undertaken therein or therefor. The special assessments are payable in
equal, semiannual installments over a 19-year term, with unpaid installments of the special
assessments bearing interest at a rate equal, from time to time, to the sum of (i) the average rate
of interest borne by the then outstanding Bonds, plus (ii) one-half of one percent (0.50%) per
annum. The Bonds are further secured by the Special Improvement District Revolving Fund of
the City (the "Revolving Fund"). The City will agree to make a loan from the Revolving Fund to
the sinking fund established for the Districts to make good any deficiency then existing in the
principal and interest subaccounts therein after depletion of a Reserve Account in the District
Fund equal to 5% of the principal amount of the Bonds and to provide funds for the Revolving
Fund by levying a tax or making a loan from the City's general fund to the extent authorized by
law.
Date and Type
The Bonds will be dated, as originally issued, as of October 15, 2000, and will be
issued as negotiable investment securities in registered form as to both principal and interest.
Maturities and Redemption
If issued as serial bonds, the Bonds shall mature, subject to redemption, on July 1
in the following years and amounts:
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Year Amount Year
Amount
2001 $135,000 2011
$140,000
2002 135,000 2012
140,000
2003 135,000 2013
140,000
2004 135,000 2014
140,000
2005 135,000 2015
140,000
2006 135,000 2016
140,000
2007 140,000 2017
140,000
2008 140,000 2018
140,000
2009 140,000 2019
140,000
2010 140,000
If issued as amortization bonds, the Bonds will be issued as a single bond or
divided into several bonds, as the Commission may determine, and the principal of the Bonds
shall be payable semiannually on each January 1 and July 1, commencing January 1, 2001, and
continuing through July 1,2019, subject to prior redemption. Serial bonds shall be in the
denomination of $5,000 each or any integral multiple thereof of single maturities. Amortization
bonds shall be preferred.
Redemption
Mandatory 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,
either from the prepayment of special assessments levied in the Districts or from the transfer of
surplus money from the Construction Account to the Principal Account, outstanding Bonds, or
portions thereof, in an amount which, together with the interest thereon to the interest payment
date, will equal the amount of such funds on deposit in the Sinking Fund on that date are subject
to mandatory redemption on that interest payment date. The redemption price shall equal the
amount of the principal amount of the Bonds to be redeemed plus interest accrued to the date of
redemption.
O{>tional Redemption. The Bonds are subject to redemption, in whole or in part,
at the option of the City from sources of funds available therefor other than those described under
"Mandatory Redemption" on any interest payment date; provided, however, the Bonds shall not
be called for redemption (i) from amounts on deposit in the Reserve Account or (ii) before July
1,2005, from the proceeds of refunding special improvement district bonds or warrants. The
redemption price shall equal the principal amount of the Bonds to be redeemed plus interest
accrued to the date of redemption.
Selection of Bonds for Redemption. If less than all of the Bonds are to be
redeemed, Bonds shall be redeemed in order of the stated maturities thereof. If less than all
Bonds of a stated maturity are to be redeemed, the Bonds of such maturity shall be selected for
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redemption in $5,000 principal amounts selected by the Registrar by lot or other manner it deems
fair.
Interest Payment Dates. Rates
Interest will be payable each January 1 and July 1, commencing January 1,2001,
to the registered owners of the Bonds as such appear 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.
All Bonds of the same stated maturity must bear interest from date of original issue until paid at a
single, unifoffi1 rate. No interest rate may exceed seven percent (7.50%) per annum, and the
difference between the highest and lowest rate of interest may not exceed three and one-half
percent (3.50%) per annum. Each rate must be expressed in an integral multiple of 1/8 or 5/100
of 1 %. Supplemental or "B" interest is not pennitted. Interest will be calculated on the basis of a
360-day year consisting of twelve 30-day months.
Bond Registrar. Transfer Agent
and Paving Agent
The Administrative Services Director of the City will act as bond registrar,
transfer agent and paying agent (the "Registrar"). The bond register will be kept, transfers of
ownership will be effected and principal of and interest on the Bonds will be paid by the
Registrar. The City will pay the charges of the Registrar for such services. The City reserves the
right to appoint a suitable bank or trust company as a successor Registrar.
Delivery
Within 45 days after the sale, the City will deliver to the Registrar the printed
Bonds ready for completion and authentication. The original purchaser of the Bonds must notify
the Registrar, at least five business days before issuance of the Bonds, of the persons in whose
names the Bonds will be initially registered and the authorized denominations of the Bonds to be
originally issued. If notification is not received by that date, the Bonds will be registered in the
name of the original purchaser and, if serial bonds, will be issued in denominations
corresponding to the principal maturities of the Bonds. On the day of closing, the City wi1I
furnish to the purchaser the opinion of bond counsel hereinafter described, an arbitrage
certification and a certificate verifying that no litigation in any manner questioning the validity of
the Bonds is then pending or, to the knowledge of officers of the City, threatened. Payment for
the Bonds must be received by the City in immediately available funds at its designated
depositary on the day of closing. As a condition of delivery, the purchaser must certify to the
City in writing the initial reoffering prices of the Bonds.
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Qualified Tax-Exempt Obligations
The Bonds will be designated by the City as "qualified tax-exempt obligations"
within the meaning of Section 265(b )(3) of the Internal Revenue Code of 1986, as amended (the
Code), and financial institutions described in Section 265(b)(5) of the Code may treat the Bonds
for purposes of Sections 265(b )(2) and 29 I (e)(1 )(B) of the Code as if they were acquired on
August 7, 1986.
Legal Opinion
An opinion as to the validity of the Bonds and the exclusion from gross income
for federal income tax purposes and Montana individual income tax purposes of the interest
thereon will be furnished by Dorsey & Whitney LLP, of Missoula, Montana, and Minneapolis,
Minnesota, as Bond Counsel. The legal opinion will be provided at closing. The legal opinion
will state that the Bonds are valid and binding special obligations of the City enforceable in
accordance with their terms, except to the extent to which enforceability thereof may be limited
by the exercise of judicial discretion or by state or federal laws relating to bankruptcy,
reorganization, moratorium or creditors' rights; however, Dorsey & Whitney LLP will not
express an opinion as to the enforceability of the agreement of the City to make loans or
advances from the Revolving Fund to the Sinking Fund as may be required to pay principal and
interest on the Bonds.
Type of Bid and Good Faith Deposit
Sealed bids for not less than $2,577,400 and accrued interest on the principal sum
of $2,630,000 must be mailed or delivered to the undersigned and must be received at the office
of the Clerk of the Commission prior to the time stated above. Bidders must bid for all or none
of the Bonds. Each bid must be unconditional.
Except for a bid by or on behalf of the Board of Investments of the State of
Montana, a good faith deposit (the "Deposit") in the form of money, cashier's check, certified
check, bank money order, or bank draft drawn and issued by a federally chartered or state
chartered bank insured by the federal deposit insurance corporation or a financial surety bond in
the sum of $52,600 payable to the order of the City is required for a bid to be considered. If
money, cashier's check, certified check, bank money order, or bank draft is used, it must
accompany the bid and be delivered to the Clerk of the Commission. If a financial surety bond is
used, it must be from an insurance company licensed and qualified to issue such a bond in the
State of Montana and such bond must be submitted to the Clerk of the Commission prior to the
opening of the bids. The financial surety bond must identify each bidder whose Deposit is
guaranteed by such financial surety bond. If the Bonds are awarded to a bidder utilizing a
financial surety bond, then that purchaser is required to submit its Deposit to the City in the form
of a cashier's check (or wire transfer such amount as instructed by the City or its financial
advisor) not later than 1:00 p.m., M.T., on the next business day foIIowing the award. If such
Deposit is not received by that time, the financial surety bond may be drawn by the City to satisfy
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the Deposit requirement. No interest on the Deposit will accrue to the purchaser. The Deposit
will be applied to the purchase price of the Bonds. In the event the purchaser fails to honor its
accepted bid, the Deposit will be retained by the City as liquidated damages. The Deposit of the
unsuccessful bidders will be returned immediately on award of the Bonds to the purchaser or
after rejection of all bids. Instructions for wiring the Deposit may be obtained from the City's
Financial Advisor, Bridget R. Ekstrom, D.A. Davidson, 529 East Main Street, Bozeman,
Montana 59715 (406) 582-3457.
Award
The bid authorizing the lowest true interest cost (total interest on all Bonds from
the dated date to their maturities) will be deemed the most favorable. In the event that two or
more bids state the lowest true interest cost, the sale of the Bonds will be awarded by lot. No
oral bid will be considered. The City reserves the rights to reject any and all bids, to waive
informalities in any bid and to adjourn the sale.
Official Statement
The City will prepare an Official Statement relating to the Bonds which the City
will deem, for purposes of SEC Rule 15c2-12, to be final as of its date. The City will deliver, at
closing, a certificate executed by the Mayor, City Manager, Administrative Services Director and
the Clerk of the Commission to the effect that, to the best of their knowledge, as of the date of
closing, the information contained in the Official Statement, including any supplement thereto,
does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances in which they are made, not
misleading; provided that no comment will be made with respect to any information provided by
the successful bidder for inclusion in any supplement to the Official Statement.
By submitting a bid for the Bonds, the successful bidder agrees: (1) to disseminate
to all members of the underwriting syndicate copies of the Official Statement, including any
supplements prepared by the City, (2) to file promptly a copy of the Official Statement, including
any supplement prepared by the City, with a nationally recognized municipal securities
repository, and (3) to take any and all other actions necessary to comply with applicable rules of
the Securities and Exchange Commission and the Municipal Securities Rulemaking Board
governing the offering, sale and delivery of the Bonds to ultimate purchasers.
Within seven business days after the sale the City will furnish to the successful
bidder without charge up to 100 copies of the final Official Statement relating to the Bonds. The
successful bidder must notify the Administrative Services Director in writing within five
business days after the award of sale of the Bonds if it requires additional copies of the Official
Statement. The cost of additional copies shall be paid by the successful bidder.
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Continuing Disclosure
In order to permit bidders for the Bonds and other participating underwriters in the
primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the
"Rule"), the City will covenant and agree, for the benefit of the registered holders and beneficial
owners from time to time of the outstanding Bonds, in the resolution prescribing the terms of the
Bonds, to provide annual reports of specified information and notice of the occurrence of certain
events, if material. The City is the only "obligated person" in respect of the Bonds within the
meaning of the Rule for the purposes of disclosing information on an ongoing basis. A
description of the undertaking is set forth in the Official Statement. Failure of the City to enter
into an undertaking substantially similar to that described in the Official Statement would relieve
the successful bidder of its obligation to purchase the Bonds. The City has complied in all
material respects with any undertaking previously entered into by it under the Rule.
CUSIP Numbers
The City will assume no fee or obligation for the assignment or printing of CUSIP
numbers on the Bonds or for the correctness of any numbers printed thereon, but will permit such
numbers to be assigned and printed at the expense of the purchaser, if the original purchaser
waives any delay in delivery occasioned thereby.
Information for bidders and bidding forms may be obtained from Bridget R.
Ekstrom, D.A. Davidson, 529 East Main Street, Bozeman, Montana 59715, telephone (406) 582-
3457, as financial consultants to the City.
Dated: September 11, 2000.
BY ORDER OF THE CITY COMMISSION
Clerk of the Commission
City of Bozeman, Montana
Publish: September 17, 2000
September 24, 2000
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