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HomeMy WebLinkAboutResolution 2661 Authorizing commitment agreement for INTERCAP: 7-06-87 . - -...-" ----- .- . , ~ COMMISSION RESOLUTION NO. 2661 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, RELATING TO THE MONTANA ECONOMIC DEVELOPMENT BOARD'S INTERCAP PROGRAM; APPROVING AND AUTHORIZING PARTICIPATION THEREIN AND APPROVING THE COMMITMENT AGREEMENT. BE IT RESOLVED by the City Commission of the City of Bozeman, Mon- tana (the Participant), as follows: Section 1. The Montana Economic Development Board (the Board) has established an Intermediate Term Capital Program (I NTERCAP) pursuant to which it proposes to issue Bonds for the purpose of financing capital projects for Montana cities and towns (Local Government Units). Section 2. The Board has required that the Participant evidence its intention to participate in I NTERCAP by executing and returning to the Board a Commitment Agreement (the Agreement), the form of which has been presented to and reviewed by the Governing Body, and a Commitment Fee as defined in such Agreement. Section 3. The Participant is authorized to participate and hereby agrees to participate in I NTERCAP in the amount and subject to the terms and conditions set forth in the Commitment Agreement. The City Manager and Di rec- tor of Finance are hereby authorized to execute and deliver to. the Board the ,; Commitment Agreement and the Commitment, with such additions and corrections >> thereto as may be approved by the Clerk of the Commission and the Partici- pant's legal counsel. Section 4. The Participant hereby ratifies and approves all repre- sentations and covenants contained in the Agreement. PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, this 6th day of July 1987. f) /)) ~&1 .rO~ H A. MATHRE, Mayor ATTEST: ~1^ ~d!tO , ""-.", 1~Y""""'- t e~ of t e ommlSSlon ~~? :. . .' . -', ! COMMITMENT AGREEMENT Intermediate Term Capital Program (INTERCAP) between MONTANA ECONOMIC DEVELOPMENT BOARD (herein referred to as the Board) and City of Bozeman (herein referred to as the Participant) Line A: Cost of Project $ 280,000 Line B: Costs of Issuance 7,000 Line C: Total Committed Amount $ 287,000 ---------------- --------------~-- Line D: Less Deposit of Commitment Fee ( 2,800 ) Line E: Principal Amount of Installment $284,200 Purchase Contract ------------------ ---------------- , " . MONTANA ECONOMIC DEVELOPMENT BOARD INTERMEDIATE TERM CAPITAL PROGRAM (INTERCAP) Commitment Agreement The COlrmitment Agreement (the Agreement), is between the Board and the Participant. The Board and the Participant hereby agree as follows: Section l. Definitions, Recitals and Other Provisions of General Applications. See t ion 1. 1. Definitions. The terms defined in this Section 1.1 shall have the meanings herein specified, unless the context clearly otherwise requires: Act shall meanTitle 17, Chapter 5, Part 16, M.C.A., as amended. Adjustep Interest Rate shall mean the interest rate on the Insta llment Purchase Contract determined and established pursuant to Section 5.3 hereof and the Installment Purchase Contract. Agreement sha 11 mean this Commitment Agreement as the same may from time to time be amended or supplemented. Board sha 11 mean the Montana Economic Development Board and any successor to its functions hereunder. Board of Investments shall mean the Montana Board of Investments and every successor to its functions. Bonds shall mean the Bonds or Notes to be issued by the Board pursuant to the Indenture to finance the Program. Code shall mean the Internal Revenue Code of 1986, as amended. Committed Amount shall mean the total dollar amount shown on the cover hereof. Commitment Fee shall mean a fee equal to the fee owed the Board. Costs of Issuance s ha 11 mean all items of expense directly or indirectly payable by or reimbursable to the Board and related to the authorization, sale and issuance of the Bonds, including but not limited to the Issuer's fees, costs of preparation and reproduction of documents, initial fees and charges of the Trustee, underwriters discount, legal fees and charges, fees and disbursements of consultants and professionals, fees and charges for preparation and execution of the Bonds, and any other cost, charge or fee in connection with the 2 . .' original issuance of the Bonds. Governing Bo~ shall mean, with respect to a County, the Board of County Comnissioners, and with respect to a City, the City Councilor 'Comnission. Indenture shall mean the Indenture of Trust between the Board and the Trustee pursuant to which the Bonds are to be issued and all supplements thereto. Initial Interest Rate shall mean the rate on the Installment Purchase Contract from the date of the Installment Purchase Contract to March 1, 1988, not to exceed 5.75%. Installment Purchase Contract shall mean the Installment purchase Contract entered into by the Local Government Unit and the Board pursuant to the Installment Contract Act and Installment Contract Resolution. Installment Contract Act shall mean with respect to a city or town, SectlOn 7-5-4306, M.C.A. and with respect to a county, Section 7-5-2306 and 7-5-?307, M.C.A. Installment Resol ution shall mean the resolution duly enacted by the governing body of the Participant pursuant to which the Installment Purchase Contract is authorized. Interest Adjustment Date shall mean March 1, 1988 and each March 1 thereafter. Local Government Unit shall mean a Montana city, town or county. Part icipant shall mean the Local Government Unit named on the cover of this Agreement. Program shall mean the Intermediate Term Capital Program (INTERCAP) of the Board pursuant to which the Board will issue and sell the Bonds and use the proceeds thereof to finance the acquisition of Projects pursuant to Installment Purchase Contracts executed by participating Local Government Units pursuant to the Installment Contract Act. Project shall mean the items to be financed or refinanced by the Local Government pursuant to the Program and set forth on the Project Data Sheet hereto. Project Contract shall mean the contract with a vendor for the purchase or installation of the Project. Project Data Sheet shall mean the document attached hereto as Exhiblt A WhlCh contalns the list of the items to be financed or refinanced, the estimated cost of each item and the term over which the financing is to be amortized. 3 \' I' Trustee shall mean the bank or trust company from time to time act ing as trustee under the. Indenture and its successors and ass igns thereunder.'.' Section 1.2. References and Construction~ All references in this instrument to designated "Sections" and other subdivisions are to the designated Sections and other subdivisions of this instrument as originally executed. The words, "herein", "hereof", and "hereunder", and other words of s imil ar import refer to th is Agreement as a who 1 e and not to any particular Section or other subdivision unless the context clearly indicates otherwise. This Agreement shall be construed in accordance with the laws of the State of Montana. Section 1.3. Exhibits. The following Exhibits are attached to and by reference made a part of this Agreement. Exhibit A: The Project Data Sheet. Exhibit B: ,A form of resolution authorizing execution and delivery of this Agreement by the Participant (the Commitment Agreement Resolution). . ., Section 2. Representations by Board. The Board makes the following representations as the basis for its covenants herein: Section 2.1. The Board is authorized by the Act to issue and sell its Bonds and apply the proceeds thereof to finance loans or refinance loans to Local Government Units and to purchase bonds or notes issued by Local Government Units. Pursuant to this authorization the Board has created and implemented the Program and has authorized pursuant thereto the issuance of Bonds for the purpose of financing Projects by Local Government Units pursuant to the Installment Contract Act. Section 2.2. The Board has received an application from the Participant to participate in the Program for the purpose of obtaining financing for the items shown on Exhibit A hereto in the amount shown on the cover of this Agreement. Section 2.3. The Board has proposed to issue and sell its Municipal Finance Consolidation Act Intermediate Term Capital Program Bonds (the Bonds) in an amount sufficient to finance the capital equipment needs of Montana local governments over a three year period beginning on the date of the sale of the Board's bonds and ending February 15, 1990. Section 3. Representations by the Participant. The Participant makes the following representations as the basis for its covenants herein: Section 3.1. The Participant is a duly organized and existing 4 ----..""..-... ',' Local Government Unit in the State of Montana, has power to enter into this Agreement, and by proper action of its Governing Body has authorized the execution and delivery of this Agreement. Section 3.2. The purchase, acquisition or construction of the items set forth in Ex h i b it A hereto has been authorized by the Governing Body of the Participant. Section 3.3. The execution of an Installment Purchase Contract in the amount shown on the line E on the cover hereof will not cause the Participant to exceed its statutory debt limitation. Section 3.4. The execution of this Agreement has been duly authorized by the Governing Body of the Participant, as evidenced by a certified copy of a resolution in substantially the form of Exhibit B hereto. Section 4. Covenants of the Participant and the Board. Section 4.1. Participant's Agreement to Enter Into Project Contract. The Participant agrees to enter into a Project Contract with a vendor providing "for the delivery, construction and/or installation of the Project and to comply with all pertinent provisions of Title 7, Chapter 5, Parts 23 and 43. M.C.A., respectively, in the acquisition of such Project, to the extent required by law. Section 4.2. Participant's Agreement to Enter Into Installment Purchase Contract With Board. The Participant agrees to enter into an Insta l1ment Purchase Contract with the Board no 1 ater than August 15, 1987 for financing the Project in an amount equal to the amount shown on 1 i ne E on the cover hereof, or such other amount as herein be provided. Section 4.3. Covenants Under the Installment Purchase Contract. Pursuant to the Installment Purchase Contract, the Participant will agree to: a. Pay to the Board from any source available therefor in semi-annual installments, over a period not to exceed five years, the total principal amount of the Installment Purchase Contract, with interest thereon at a rate equal to the interest rate on the Bonds, as such rate as may be adjusted from time to time, plus up to 1.5% per annum which represents the amount necessary to pay the costs of administering the Program. b. Grant a security interest in the Project to the Board to the extent allowed by law. c. prov ide to the Board, no later than August 15 of each year of the term of the Installment Purchase Contract, evidence that the Governing Body has budgeted and appropriated for the then current fiscal year an amount suffic i ent to prov ide for the payment of that fiscal year's installments as they come due. 5 . 'IT . t. Section 4.4. Participant's Responsibility for Costs of Issuance. a. The Participant is responsible for paying its proportionate share of the Costs of Issuance, which share shall not exceed 2.5% of the Project Amount. The Participant's share of the Costs of Issuance shall be paid by a Commitment Fee based on 1% of the project amount payable with the submission of this Agreement and by capitalization of the remaining 1.5% in the principal amount of the Installment purChase Contract. b. In the event that the Participant does not enter into an Installment Purchase Contract with the Board by August 15, 1987, or if the amount of the Installment Purchase Contract entered into is less than the amount shown on line E on the cover hereof, the Participant shall nevertheless be obl igated to pay to the Board the full amount of Costs of Issuance as shown on 1 ine B on the cover of this Agreement, less the amount of Commitment Fee previously paid by the Participant. c. If the Participant has failed to enter into an Installment Purchase Contract with the Board or has entered into an Installment Purchase Contract in an amount less than the amount shown on line E of the cover hereof and subsequent to August 15, 1987, enters into an Installment purchase Contract with the Board or borrows the full amount shown on line E on the cover hereof, the costs of issuance paid pursuant to Section 4.4.a and 4.4.b shall be applied toward Participant's proportionate share of Costs of Issuance on that or any subsequent Installment Purchase Contract. If no Installment Purchase Contract has been entered into by August 15, 1987, the Participant shall pay to the MEDB the remainder of its share of the Costs of Issuance (1.5% of line A on the cover hereof). Section 4.5. Board's Covenant to Issue Bonds and purchase Installment Purchase Contracts. Based on representations and warranties conta ined herein, the Board agrees to use its best efforts to issue and sell the Bonds and, solely from the proceeds thereof, finance the purchase of the Project over a period not to exceed five years pursuant to an Installment Purchase Contract. If the Bonds are not sold by April 1, 1987, the Board will return the Commitment Fee, as hereinafter described. Section 5. Installment Purchase Contract. Section 5.1. Amount of Installment Purchase Contract. a. The amount of the Installment Purchase Contract shall be the dollar amount as set forth on line E on the cover hereof, 6 ---------- ..- . ! I .. ',' , ,10: except as provided in Section 5.1(b) hereof. b. Between the date of execution of this Agreement and the date of execution of the Installment purchase Contract, the Participant may request the Board to mod ify the Project to be financed so as to increase or decrease the scope and costs of the Project or to substitute elements of the Project by: 1. Del ivering to the Board a rev i sed Exh ib it A and Cover Page to the Agreement which reflects the requested changes; 2. Delivering a certificate of the chairman or presiding officer of the Governing Body that such changes have been duly authorized and approved. Provided, however, that a reduction in the amount of the Project to be financed sha 11 not reduce the obligation to pay Costs of Issuance as set forth in Section 4.4 hereof. c. Any changes in the scope or amount of the Project to be financed are.subject to the Board's approval. Section 5.2. Execution of Installment Purchase Contract. The Board will execute the Insta Ilment Purchase Contract and fund the Project subject to the following terms and conditions: a. The Installment Purchase Contract will be in a form provided by the Board; b. At the time of funding, the Participant will deliver to the Board: ( i ) a c e r t if i ed copy of a resolution, in a form acceptable to the Board, of the Governing Body authorizing the execution by the Participant of the Installment Purchase Contract, ( i i ) an opinion of counsel to the Participant, in a form acceptable to the Board, to the effect that the Installment Purchase Contract has been duly authorized, (iii) other cl os ing documents deemed appropriate by the Board. Section 5.3. Amortization of Installment Purchase Contract; Calculation of Interest Rate. a. At the time of execution of the Installment purchase Contract, the principal amount of the Installment Purchase Contract will be fully amortized over a period not to exceed five (5) years, as designated by the Participant, at the Initial Interest Rate and approved by the Board. The Initial Interest Rate shall not exceed 5.75%. The Board wi 11 prov i de a complete schedule of payments. b. On each Interest Adjustment Date the Board shall notify the Participant of the Adjusted Interest Rate and shall calculate and provide to the Part ic ipant the schedul e of payments for the 7 -.,.. Il1o .. . . ",-, I ., .,0" remainder of the term of the Installment purchase Contract at the Adjusted Interest Rate. c. The installment payments shall be due on August 15 and February 15 of each year. d. The Participant shall have the right to prepay the principal amount of the Installment Purchase Contract plus interest accrued thereon on February 15 with due notice to the Board. Section 6. Commitment Fee and Submission of Commitment Agreement. Section 6.1- Commitment Fee and Commitment Agreement. The Participant shall submlt to the Montana Economic Deve lopment Board no 1 ater than January 15, 1987 a fu 11 y executed copy of th i s Agreement, together with a fully executed copy of the Commitment Agreement Resolution and a Commitment Fee equal to one percent (1%) of the project amount as shown on line A on the cover hereof. Section 6.2. Refund of Commitment Fee. If the Board is unable to sell its bonds by April 15, 1987, the Commitment Fee will be refunded in full with interest thereon at the rate the Board is able to obtain on the investment of such fee. MONTANA ECONOMIC-DEVELOPMENT BOARD By Its Date of Execution PARTICIPANT S1 OF BOZEMAN . By '-t'~ >-;. W ~ Its City Manager Date of Execution July 6, 1987 8 _.__u_.........._...