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HomeMy WebLinkAboutResolution 2681 Prescribing form and terms of bonds for SID 652: 10-05-87 --;: __.__.._m 1 , .. '" . Commissioner Jordan introduced the following resolution and moved its adoption: RESOLUTION NO. 2681 RESOLUTION RELATING TO $462,000 SPECIAL IMPROVEMENT DISTRICT BONDS, SERIES 1987 (SPECIAL ..- IMPROVEMENT DISTRICT NO. 652); PRESCRIBING THE FORM AND TERMS AND THE COVENANTS OF THE CITY FOR THE PAYMENT THEREOF BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, as follows: Section 1. Recitals. It is hereby found, determined and declared as follows: 1.01. Resolutions of Intention. By Resolution No. 2657, adopted June 8, 1987, (the Resolution of Intention) this Commission declared its intention to create Special Improvement District No. 652 (the District), for the purpose of making special improvements for the special benefit of the District, which resolution designated the number of the District, described the boundaries thereof and stated the general character of the improvements to be made and an approximate estimate of the costs thereof, in accordance with the provisions of Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, as amended. By the Resolution of Intention this Commission also declared its intention to cause the cost and expense of making the improvements especially benefiting the District to be assessed against the properties included within the boundaries of the District, each lot or parcel of land to be assessed for that part of the whole cost which its area bears to the entire District, exclusive of streets, avenues, alleys and public places. 1.02. Notice. Notice of the passage of the Resolution of Intention was mailed to all persons, firms or corporations or the agents thereof having real property within the proposed district listed in their names upon the last completed assessment roll for state, county and school district taxes, at their last known addresses. The notice described the general character of the improvements proposed to be made, designated the time and the place where the City Commission would hear and pass upon all protests made against the making of such improvements or the creation of the District and described the boundaries of the District, all as provided in the Resolution of Intention. Because of certain defects in the notice as mailed and the failure of the City to publish notice, the City obtained consents, waivers and acknowledgements from -.---- .... ...- I \ It all persons to whom notice was sent which set forth the estimated cost of the improvements and the method of assessment. 1.03. Creation of District. On July 6, 1987, at the place specified in the notice hereinabove described, this Commission met to hear, consider and pass upon all protests made against the making of such improvements and the creation of the District, and after consideration thereof, it was determined and declared that insufficient protests against the creation of the District or the proposed work had been filed in the time and manner provided by law by the owners of the property to be assessed for the improvements, and the Commission did therefore by Resolution No. 2664, adopted July 27, 1987, create Special Improvement District No. 652, and did order the proposed improvements in the District in accordance with the Resolution of Intention. 1.04. Construction Contract. Plans, specifications, maps, profiles and surveys for construction of said improvements were prepared by the engineers acting for the City, and were thereupon examined and approved by this Commission. Advertisements for bids for construction of said improvements were published in the official newspaper of the City in accordance with the provisions of Montana Code Annotated, Section 7-12-4141, after which the bids theretofore received were opened and examined. After referring the bids to the engineers for the City it was determined that the lowest regular proposal for the furnishing of all work and materials required for constructing the improvements in accordance with the approved plans and specifications was the proposal of pioneer Ready Mix, of Bozeman, Montana, at a total contract price of $297,888. Said bidder also agreed to construct additional sidewalks in the District for a cost of just under $32,000. Contracts for construction of the improvements were therefore awarded to said bidders, subject to the right of owners of property liable to be assessed to elect to take the work and enter into a,written contract therefor in the manner provided by Montana Code Annotated, Section 7-12-4147, which election the property owners failed to make, whereupon the City and the successful bidders entered into written contracts for construction of the improvements upon the bidders having executed and filed bonds satisfactory to this Commission and in the form and manner provided by Montana Code Annotated, Title 18, Chapter 2, Part 2. 1.05. Costs. It is currently estimated that the cost and expense connected with and incidental to the formation of the improvement districts to the City, including costs of preparation of plans, specifications, maps, profiles, engineering superintendence and inspection, preparation of -2- . .--- -- , .. assessment rolls, expenses of making the assessments, the cost of work and materials under the construction contract and all other costs and expenses, including the deposit of proceeds 1n the Special Improvement District Revolving Fund of the City, will be $462,000 for the District, which amount will be levied and assessed upon all property within the District on the basis described in the Resolution of Intention. This Commission has jurisdiction and is required by law to levy and assess such amount, to collect such special assessments and credit the same to the special improvement district accounts created for the District, which accounts are to be maintained on the official books and records of the City separate from all other City funds, within the 1987 Special Improvement District No. 652 Sinking Fund (the Sinking Fund). 1.06. Sale and Issuance of Bonds. For the purpose of financing the share of the cost and expense of making the improvements for the District, which is to be assessed against the assessable property within the Drstrict, this Commission called for the public sale of bonds in the principal amount of $462,000. The sale was duly noticed and conducted in accordance with applicable statutory provisions. On September 8, 1987, this Commission entered into a contract with Grande & Co., Inc. of Seattle, Washington (the Purchaser) pursuant to which the Purchaser agreed to purchase from the City the $462,000 Special Improvement District Bonds, Series 1987 (Special Improvement Districts No. 652) (the Bonds) at a net effective interest rate of 8.032%. 1.07. Recital. All acts, conditions and things required by the Constitution and laws of the State of Montana, including Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42, in order to make the Bonds herein authorized 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. The Bonds. 2.01. Principal Amount, Maturity, Denominations, Date, Basic Interest Rates of Bonds. For the purpose of paying the costs and expenses incurred in construction of the improvements authorized to be constructed in the District, and in anticipation of the collection of special assessments to be levied therefor, and in accordance with the proposal described in Section 1.06, the City shall forthwith issue and deliver to the Purchaser the Bonds in the aggregate principal amount of $462,000 payable solely from the Sinking Fund. The Bonds shall -3- -- . .. bear an original issue date and be registered as of October 1, 1987, and shall be issued in the form of fully registered Bonds of single maturities in denominations of $5,000 each or any integral multiple thereof, provided that the Bond representing principal installment No. 1 shall be in the denomination of $7,000. 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 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: Year Amount Rate Year Amount Rate 1988 $17,000 5.50% 1998 $25,000 7.45% 1989 20,000 5.75 1999 25,000 7.60 1990 25,000 6.00 2000 25,000 7.75 1991 25,000 6.20 2001 25,000 7.90 1992 25,000 6.40 2002 25,000 8.00 1993 25,000 6.60 2003 25,000 8.00 1994 25,000 6.80 2004 25,000 8.10 1995 25,000 7.00 2005 25,000 8.10 1996 25,000 7.15 2006 25,000 8.10 1997 25,000 7.30 Each of the Bonds shall represent one or more principal installments of the issue of the same maturity. Principal installments of the issue are numbered from 1 through 92, each in the amount of $5,000, provided that principal installment No. 1 shall be in the amount of $7,000. Principal of and interest on the Bonds are payable in lawful money of the United States of America. Upon the original delivery of the Bonds or upon transfer or exchange of Bonds, the Registrar (as hereinafter defined) shall place the date of authentication on each Bond then delivered. 2.02. Additional Interest Certificates. All Bonds shall bear additional interest from October 15, 1987 to July 1, 1988, at the rate of 3.00% per annum, payable on July 1, 1988. All Bonds representing principal installment numbers 13 through 92 shall bear additional interest from July 1, 1988 to January 1, 1989, at the rate of 3.00% per annum, payable on January 1, 1989. All Bonds representing principal installment numbers 43 through 92 shall bear additional interest from January 1, 1989 to July 1, 1989, at the rate of 3.00% per annum payable on July 1, 1989. Additional interest on the Bonds shall be represented by separate additional interest -4- --.. -'-- ----..---... . " certificates (the Certificates). One or more Certificates shall be issued to represent all additional interest to be paid on all Bonds on each additional interest payment date; provided that all such Certificates shall represent an integral multiple of five-hundredths of one percent (.05%) of the additional interest payable on said date. The Certificates representing additional interest on the Bonds shall be dated as of October I, 1987. 2.03. Method of 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 upon the register of the City hereinafter described. The basic interest on, and upon presentation and surrender thereof, the principal amount of each Bond, or the amount represented by each Certificate, upon presentation and surrender thereof at the principal office of the Registrar, shall be payable by check or draft issued by the Registrar (as hereinafter defined). 2.04. Interest Payment Dates. Basic interest on the Bonds shall be payable on January 1 and July 1 in each year, commencing July I, 1988, to the owner of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. Additional interest on the Bonds shall be payable July I, 1988, January I, 1989 and July I, 1989 to the extent the Bonds have not been paid prior thereto, to the registered owners of the Certificates. 2.05. Reqistration. 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 or paying agent, as authorized by the Model Public Obligations Registration Act of Montana (the Act), but the City agrees to pay the reasonable and customary charges of the Registrar for the services performed. This Section 2.05 shall establish a system of registration for the Bonds and the Certificates as defined in the Act. 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 Registrar shall keep at its principal office a bond register in which the Registrar shall provide for the registration of ownership of the Bonds and the Certificates and the registration of -5- . ... --- --- . \ transfers of the Bonds and the Certificates entitled to be registered or transferred. (b) Transfer. 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 owner thereof 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, as requested by the transferor, or a new Certificate of like interest rate and payment date, as the case may be. The Registrar may, however, close the books for registration of any transfer if the Bond to be transferred has been called for redemption on the next succeeding interest payment date. No transfer or exchange of a Bond shall affect its order of registration for purposes of redemption pursuant to Section 2.06. (c) Exchange of Bonds or Certificates. Whenever any Bond or Certificate is 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 a new Certificate of like interest rate and payment date, as the case may be, as requested by the registered owner or the owner's attorney duly authorized 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) Improper 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 or Certificate or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, 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 -6- 00.. __ ---- , t purpose of receiving payment of, or on account of, the principal of and interest on such Bond or the amount of such Bond or 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 upon such Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. For every transfer of Bonds or Certificates or exchange of Bonds or Certificates (except an exchange upon a partial redemption of a 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 Destroyed Bonds or Certificates. In case any Bond or Certificate shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver 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 or Certificate destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond or Certificate destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that such Bond or Certificate was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. All Bonds or 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, destroyed, stolen or lost 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 prior to payment. 2.06. Redemption. Whenever there is any 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 District or from the transfer of surplus moneys from the Construction Account to the Principal Account as provided in Section 3.02, the Director of Finance shall call for redemption on any interest payment date outstanding Bonds or principal installments thereof in an amount which, together with the interest thereon to the date of -7- '.'- --- - -- --...--- --- --- . '" redemption, will equal (as closely as the amount of the principal installment will permit) 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 Bonds 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 therefrom on any interest payment date. Bonds shall be redeemed in the order of the principal installments they represent, at a redemption price equal to 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. The Director of Finance shall at the same time mail notice of the redemption to the original Purchaser of the Bonds. On the date so fixed interest on the Bonds or principal installments thereof so redeemed shall cease. Notwithstanding anything to the contrary contained herein, the Bonds shall not be called for redemption from the proceeds of refunding special improvement district bonds or warrants before July 1, 1997. 2.07. Form of Bonds and Certificates. The Bonds and the Certificates shall be drawn in substantially the forms set forth in Montana Code Annotated, Section 7-12-4202, with such modifications as are permitted by the Act, and as more fully set forth in Exhibit A hereto and by this reference made a part hereof. 2.08. Execution, Registration and Delivery of Bonds and Certificates. The Bonds and Certificates shall be prepared under the direction of the Clerk of the Commission 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 and the seal need not appear on the Certificates. In case any officer whose signature or a facsimile of whose signature shall appear on the Bonds or Certificates shall cease to be such officer before the delivery of any Bond or Certificate, such signature or facsimile shall -8- ------ , ~ 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 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 october 1, 1987, and the Bonds and Certificates shall be delivered by the Registrar to the Purchaser upon payment of the par value of the Bonds plus accrued interest to the date of delivery. The Purchaser shall not be obligated to see to the application of the purchase price, but from the proceeds of the Bonds the Director of Finance shall credit forthwith $23,100 to the Special Improvement District Revolving Fund of the City, as authorized by Montana Code Annotated, Section 7-12-4169(2), any accrued interest to the Sinking Fund and the balance of such proceeds to the Construction Account, to be used solely for the payment of the cost and expenses necessarily incurred in the completion of the improvements heretofore ordered, except that the accrued interest received shall be applied in payment of interest on the Bonds when due. Section 3. Sinking Fund; Assessments. 3.01. The Sinking Fund. There is hereby created and established the Sinking Fund designated as the "1987 Special Improvement District No. 652 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 "Construction Account," "Principal Account" and "Interest Account," respectively. 3.02. Construction Account. There shall be credited to the Construction Account the proceeds of the sale of the Bonds, less any interest accrued thereon to the date of delivery to the Purchaser. Any earnings on investment of money in the Construction Account shall be retained therein. All costs and expenses of constructing the improvements for the District to be paid from proceeds of the Bonds shall be paid from time to time as incurred and allowed from the Construction -9- -- -- --.. . , Account in accordance with the provisions of applicable law, and moneys in the Construction Account shall be used for no other purpose; provided that upon completion of said improvements and approval thereof by the engineers for the District, and after all claims and expenses with respect to said improvements have been fully paid and satisfied, any moneys remaining in the Construction Account shall be transferred to the Principal Account. 3.03. Principal Account and Interest Account. Moneys in the Principal Account and the Interest Account shall be used only for payment of the principal of and interest on the Bonds as such payments become due, or to redeem Bonds. Upon collection of the installment of principal and interest due on November 30 and May 31 of each year on the special assessments to be levied with respect to the improvements in each District, the Director of Finance shall credit to the Interest Account in the District Account so much of said special assessments as is collected as interest payment and the balance thereof to the Principal Account. Any installment of any special assessment paid prior to its due date with interest accrued thereon to the next succeeding bond call date shall be credited with respect to principal and interest payments in the same manner as other assessments are credited to the Sinking Fund. All moneys in the Interest Account and the Principal Account shall be used first to pay interest due, and any remaining moneys shall be used to pay Bonds then due and, if moneys are available, to redeem Bonds or principal installments thereof in accordance with Section 2.06; provided that any money transferred to the Principal Account from the Construction Account pursuant to Section 3.02 shall be applied to redeem Bonds or principal installments thereof to the extent possible on the next interest payment date for which notice of redemption may properly be given pursuant to Section 2.06. Redemption of Bonds therefrom shall be in order of the principal installments they represent as provided in Section 2.06, and interest shall be paid as accrued thereon to the date of redemption, in accordance with the provisions of Montana Code Annotated, Section 7-13-4203 and 7-12-4206. 3.04. Loans from Revolvinq 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 Sinking Fund in an amount sufficient to make good any deficiency then existing in the Interest Account, and shall issue an order authorizing a loan or advance from the Revolving Fund to the Sinking Fund in an amount sufficient to make good any deficiency then existing in the Principal Account, to the extent that moneys are available -10- -. -- . ._..._.___._. ..__u_ ...._.__.. . -..--- .---.---..-. f . in the Revolving Fund. Pursuant to Ordinance No. 612, the City has undertaken and agreed to provide funds for the Revolving Fund by levying such tax or making such loan from the General Fund as authorized by Montana Code Annotated, Section 7-12-4222. 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 improvement district fund 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 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, ~ny balance remaining in the Revolving Fund shall be loaned or advanced to the improvement district fund for payment and redemption of bonds to the extent the improvement district fund is deficient for such purpose, in an amount proportionate to the amount of such deficiency. Section 4. Covenants. The City covenants and agrees with the holder from time to time of each of the Bonds and Certificates that until all the Bonds and interest thereon are fully paid: 4.01. Compliance 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 sale of the Bonds as set forth in Section 1. 06. 4.02. Construction of Improvements. The City will do all acts and things necessary to enforce the provisions of the construction contracts and bonds referred to in Section 1. 04 and to ensure the completion of the improvements for the benefit of the District in accordance with the plans and specifications and within the time therein provided, and will pay all costs thereof promptly as incurred and allowed, out of the Construction Account and within the amount of the bond proceeds appropriated thereto. -11- -......---- ....- .--- . .--..........--. . .. .. 4.03. Levy of Assessments. The City will do all acts and things necessary for the final and valid levy of special assessments upon all property within the boundaries of the District in accordance with the Constitution and laws of the state of Montana and the Constitution of the United States, in an aggregate principal amount not less than $462,000. Such special assessments shall be levied on the basis prescribed in the Resolution of Intention described above, and shall be payable in semiannual installments over a period of nineteen years, each installment being due in an amount equal to one thirty-seventh of the principal amount of each assessment, with interest on the whole amount remaining unpaid at the average annual interest rate borne by the Bonds plus up to one-half of one percent per annum as may be determined by the City Commission, interest being payable with principal installments. The assessments to be levied will be payable on the 30th day of November in each of the years 1988 through 2005, and on the 31st day of May in the years 1988 through 2006, inclusive, if not theretofore paid, and shall become delinquent on such date unless paid in full. The first partial payment of each assessment shall include interest on the entire assessment from the date of original registration of the Bonds to July 1, 1988, and each subsequent partial payment shall include interest for six months on that payment and the then remaining balance of the special assessment. The assessments 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 t~x deed ioaued uith reapect to ~ny lot or parcel of land 3hall operate as payment of any installment of .the assC~3fficnt thereon which is payable after the execution of ouch d~cd, and any tax deed so issued shall convey title cubjcct only to the licn of :Jaid future in:JtallmoRta, aE: providod in Mont~na Code Annotatcd, Ccction 15 18 309. 4.04. Reassessment. If at any time and for whatever reason any special assessment or tax herein agreed to be levied 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-levy the same, including the ordering of wo r k , 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-levy 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-levy 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. -12- -.. "..-. .---- . I If proceeds of the Bonds, including investment income thereon, are applied to the redemption of such Bonds, as provided in Montana Code Annotated, Section 7-12-4205 and 7-12-4206, or if refunding bonds are issued and the principal amount of the outstanding Bonds is decreased or increased, the City will reduce or increase, respectively, the assessments levied in the Districts and then outstanding pro rata by the principal amount of such prepayment or the increment above or below the outstanding principal amount of bonds represented by the refunding bonds. The City and this Commission, its officers and employees will reassess and relevy such assessments, with the same effect as an original levy, in such reduced or increased amounts in accordance with the provisions of Montana Code Annotated, Sections 7-12-4176 through 7-12-4178. 4.05. Absence of Litigation. There is now no litigation threatened or pending questioning the validity or regularity of the creation of the District, the contract for construction of improvements for the benefit thereof or the undertaking and agreement of the City to levy special assessments therefor and to make good any deficiency in the collection thereof through the levy of taxes for and the making of advances from the Special Improvement District 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. 4.06. Escrow Agreement. The City will enter into an escrow agreement with each property owner in the District pursuant to which the property owners will establish escrow accounts for the benefit of the City in the total amount of $ 82,380 . The City covenants to abide by the terms of such Escrow Agreement and to enforce it against the property owners during the term of the Bonds. Section 5. Investment of Moneys. 5.0l. Covenant. The City covenants and agrees with the holders 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 subject to taxation under the provisions of the United States Internal Revenue Code of 1986 (the Code), and the Treasury Regulations promulgated thereunder in effect at the time of such action, and covenants and agrees that it will take -13- ----- ,.-. _____.__.._._ ..._____._...__.._n.____ . -...... .- - ---.---......-.-- ~ ~, 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 subject to taxation under the Code and applicable Treasury Regulations. 5.02. 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. 5.03. Specific Covenants. In furtherance of the general covenants of the City contained in Section 5.01, the City further agrees with the owners from time to time of the Bonds, as follows: (1) As provided in Section 4.03, payment of principal of and interest on the Bonds is secured by the Revolving Fund. The amount on deposit in the Revolving Fund allocable to the Bonds (the Reserve Amount) constitutes a reasonably required reserve fund which may be invested without yield limitation if the Reserve Amount does not at any time exceed the Maximum Reserve Requirement, which is the lesser of: (i) 10 percent of the original proceeds of the Bonds ($46,200), (ii) the maximum amount of principal and interest payable on the Bonds in any fiscal year, or (iii) 125 percent of the average amount of principal and interest payable on the Bonds in any fiscal year. To ensure that the Reserve Amount never exceeds the Maximum Reserve Requirement, the City agrees that following the payment of Bonds on each July 1, the City will calculate the Reserve Amount, and that, if the Reserve Amount exceeds the maximum amount of principal and interest payable on the Bonds then outstanding in any future fiscal year, the City will within 30 days thereafter either (a) reduce the Reserve Amount so that it does not exceed such amount or (b) limit the yield of the investments allocated to the Reserve Amount in excess of such amount to the yield of the Bonds if and to the extent such reduction or limitation is necessary to prevent the Bonds from becoming "arbitrage bonds" within the meaning of the Code. In -14- .---...--.-.-.-..-.-- " " , determining the Reserve Amount, the City shall allocate amounts on deposit in the Revolving Fund to outstanding special improvement district bonds or warrants secured thereby in proportion to their original principal amounts. (2 ) The City (1) has general taxing powers, (2) will use 95 percent or more of the net proceeds of the Bonds (gross proceeds less amounts deposited in the Revolving Fund) to pay the costs of improvements in the Districts and (3) has not issued, and does not intend to issue, more than $5,000,000 of obligations (other than "private activity bonds" as described in Section 141 of the Code) in calendar year 1987. Section 6. Authentication of Transcript. The officers of the City are hereby authorized and directed to furnish to the City and the original Purchaser, and to the attorneys, certified copies of all proceedings relating to the issuance of the Bonds 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 the Certificates, and all statements contained in and shown by such instruments, including any heretofore furnished, shall constitute representations of the City as to the truth of the statements purported to be shown thereby. Section 7. Defeasance. 7.0l. General. When the liability of the City on all Bonds issued under and secured by this Resolution has been discharged as provided in this Section 7, all pledges, covenants and other rights granted by this Resolution to the owners of such obligations shall cease. 7.02. Payment. The City may discharge its liability with reference to any Bond or installment of interest thereon which is due on any date by mailing to the registered holder 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 holder 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. 7.03. Redemption. The City may also discharge its liability with reference to any prepayable Bonds which are called for redemption on any date in accordance with their terms by depositing with the Registrar on or before that date -15- -------- ------------- .---.- ---.,.". -'--.-. ---. , ) 'i' an amount equal to the principal and interest which are then due thereon; provided that notice of such redemption has been duly given as provided in this Resolution. 7.04. Defeasance by 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, interest and redemption premiums to become due on all Bonds of the issue on or before maturity or, if any Bond has been dUly called for redemption or , provision irrevocably made therefor, on or before the designated redemption date. I Section 8. Repeals and Effective Date. 8.0l. Repeal. All provisions of other resolutions and other actions and proceedings of the City and this Commission that are in any way inconsistent with the terms and provisions of this resolution are repealed, amended and rescinded to the full extent necessary to give full force and effect to the provisions of this resolution. 8.02. Effective Date. This resolution shall take effect immediately upon its passage and adoption by this Commission. PASSED by the City Commission of Bozeman, Montana this 5th day of October, 1987. ~;',1h fJ" rn~ Mayor Attest: ~~ cd ~ Clerk of the Commission J, . -16- -.----..-..". ._-----~------ ------------.---.--....- ..-... _...____n.._._.__ ._ -.-.---...-. I ). " EXHIBIT A [Face of the Bond] UNITED STATES OF AMERICA STATE OF MONTANA CITY OF BOZEMAN $462,000 SPECIAL IMPROVEMENT DISTRICT BONDS, SERIES 1987 (Special Improvement District No. 652) Basic interest at the rate per annum specified below and additional interest for the limited period hereinafter described at the rate per annum specified herein Payable on July 1, 1988 and semiannually thereafter on the 1st day of January and the 1st day of July in each year. Issued by the City of Bozeman Gallatin County, Montana No. $ Representing Principal Installment Nos. Date of Original Basic Rate Maturity Issue CUSIP October I, 1987 REGISTERED HOLDER: SEE REVERSE FOR CERTAIN PRINCIPAL DEFINITIONS AMOUNT: The Director of Finance of the City of Bozeman, Montana, will pay to the registered owner identified above, or registered assigns, on the maturity date specified above the principal amount specified above, as authorized by Resolution No. adopted October 5, 1987 (the Bond Resolution), all subject to the provisions hereinafter described relating to the redemption of this Bond before maturity. Basic interest on and, upon presentation and surrender hereof at the principal office of the bond registrar and paying agent hereinafter named, the principal of this Bond are payable by check or draft of the Director of Finance of the City of Bozeman, Montana, as -17- I ) y bond registrar and paying agent, or its successor designated under the Bond Resolution described herein (the Registrar). The principal of and interest on this Bond are payable in lawful money of the United states of America. This Bond bears interest at the basic rate per annum specified above from the date of registration of this Bond, as expressed herein, or from such later date to which basic interest hereon 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. Basic interest on this Bond is payable semiannually, commencing July I, 1988, on the first day of January and the first day of July in each year, through July I, 2006, unless this Bond is paid previous thereto, to the owner of record of this Bond appearing as such in the bond register as of the close of business on the 15th day (whether or not such is a business day) of the' immediately preceding month. Additional interest is payable Dn all Bonds of the issue at the rate of 3.00% per annum from October IS, 1987 to July I, 1988 payable July I, 1988, additional interest is payable on Bonds of the issue representing principal installment numbers 13 through 92 from July I, 1988 to January I, 1989 at the rate of 3.00% per annum payable on January I, 1989, and additional interest is payable on the Bonds of the issue representing principal installment numbers 43 through 92 from January 1, 1989 to July I, 1989 at the rate of 3.00% per annum payable on July I, 1989, unless such Bonds are paid previous thereto. Additional interest hereon and on all 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. Additional provisions of this Bond are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth hereon. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond 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. CITY OF BOZEMAN, MONTANA (Facsimile Signature) CITY MANAGER (Facsimile Signature) CLERK OF THE COMMISSION (FACSIMILE SEAL) -18- ____._.___.._.._.._.u_."._.. 1 ) -r CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the Bonds delivered pursuant to the Bond Resolution mentioned herein and this Bond has been registered as required by law on the books of the City as of the 1st day of October, 1987. DIRECTOR OF FINANCE City of Bozeman, Montana By Authorized Signature Date of Authentication: [Reverse of the Bonds] This Bond is one of an issue in the aggregate principal amount of $462,000 (the Bonds), all of like date of original issue and tenor, except as to serial number, denomination, date, basic interest rate, bearing of additional interest, maturity date and redemption privilege. 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, to finance the costs of certain local improvements for the special benefit of property located in Special Improvement District No. 652 of the City (the District). The Bonds are issuable only as fully registered bonds of single maturities in denominations of $5,000 or any integral multiple thereof, provided that the Bond representing principal installment No. 1 shall be in the denomination of $7,000. This Bond represents one or more principal installments of an issue of Bonds of the City numbered as set forth above. The principal installments for the issue are in the aggregate principal amount of $462,000, and are numbered from 1 though 92, each in the amount of $5,000, provided that principal installment No. 1 is in the amount of $7,000. This Bond is payable from the collection of a special tax or assessment levied upon all property within the boundaries of the District, in an aggregate principal amount of not less than $462,000, except as such amount may be reduced or increased in accordance with provisions of Montana law. Such assessments constitute a lien against the assessable real estate within said District, and are not general obligations of the City. -19- ------- ---- --- ------- .. ) _.~' , 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 1987 Special Improvement District No. 652 Sinking Fund of the City, from the prepayment of assessments levied in the District or from surplus funds not required to pay costs of the Improvements, 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 Bonds are not to be called for redemption from the proceeds of refunding special improvement district bonds before July L 1997. The redemption price is equal to the amount of the principal installment or installments of the Bonds to be redeemed plus interest accrued 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 holder or holders of such Bonds at the~r addresses shown on 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 not be less than ten days after the date of publication or of service of notice, on which date 50 fixed interest shall cease. Upon partial redemption of any Bond, a new Bond or Bonds will be delivered to the registered holder without charge, representing the remaining principal installments outstanding. On the date so fixed interest on the Bonds or principal installments thereof so redeemed shall cease to accrue. As provided in the 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 Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same basic 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 treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the -20- I J -" 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 UNIF GIFT MIN ACT... ..Custodian..... in common (Cust) (Minor) TEN ENT -- as tenants by the entireties under Uniform Gifts to JT TEN -- as joint tenants Minors with right of survivorship and Ac t. . . . . . . . . . . . . . . . . . . . . . not as tenants in (State) corrunon Additional abbreviations may also be used. -21- .--. ..- --...---.......- .--...- , ) -" ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, 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: PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER NOTICE: The signature OF ASSIGNEE: to this assignment must correspond with the / / name as it appears upon the face of the within Bond in every particular, without alteration, enlargement or any change whatsoever. SIGNATURE GUARANTEED Signature(s) must be guaLanteed by a commercial bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges. -22- ..... -. --.--- _.__n __ . I ) , . -' UNITED STATES OF AMERICA STATE OF MONTANA CITY OF BOZEMAN, MONTANA DATED AS OF OCTOBER 1, 1987 REGISTERED ADDITIONAL INTEREST CERTIFICATE RELATING TO $462,000 POOLED SPECIAL IMPROVEMENT DISTRICT BONDS, SERIES 1987 (Special Improvement District No. 652) Interest Interest Date of Percentage of Period Rate Payment Ownership 3.00% REGISTERED OWNER: On the date specified above, the City of Bozeman, Montana, will pay to the registered holder specified above, or registered assigns, at the office of the Director of Finance, in Bozeman, Montana, or at the principal office of a successor Bond Registrar and Paying Agent (the Registrar), 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 portion of the Special Improvement District Bonds, Series 1987 (Special Improvement District No. 652) of the City of Bozeman, dated originally as of October 1, 1987, maturing on July 1 in the years 1988 through 2006 and issued in the aggregate principal amount of $462,000 (the Bonds), bearing additional interest during such period, to the extent such Bonds have not been paid previous to said date. Such additional interest is payable in lawful money of the United States of America, solely from the special tax or assessment referred to in the Bonds. As provided in a resolution adopted by the City Commission on October 5, 1987 (the Bond ~esolution), pursuant to which the Bonds and this Certificate were issued, 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 -23- -...-------- . f ~ ~ transfer satisfactory to the Registrar, duly executed by the registered owner or his attorney and may also be surrendered in exchange for 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 a new Certificate 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 Certificate 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. This Certificate shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond 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 Certificate to be executed by the signatures of the City Manager and the Clerk of the Commission and has caused the official seal of the City to be impressed hereon and has caused this Certificate to be dated as of October 1, 1987. CITY OF BOZEMAN, MONTANA Clerk of the Commission City Manager (Seal) -24- --..-....-. .--.. . I ,. . ~II CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the Certificates representing additional interest on the Bonds delivered pursuant to the Resolution mentioned within and this Certificate has been registered as required by law on the books of the City as of the 1st day of October, 1987. DIRECTOR OF FINANCE City of Bozeman, Montana By Authorized Representative -25- .-.---. ---..-- ----. . . J .: , ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within Certificate and all rights thereunder, and hereby irrevocably constitutes and 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 OF ASSIGNEE: assignment must correspond with the name as it appears / / upon the face of the within certificate in every particular, without alteration, enlargement or any change whatsoever. SIGNATURE GUARANTEED Signature(s) must be guaranteed by a commercial bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges. -26- . . I . -~ Upon vote being taken on the adoption of the foregoing resolution, the following Commissioners voted in favor thereof: Commissioner Jordan, Commissioner Stiff, Commissioner Martel and Mayor Mathre 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. -27- ~ ,~ .' ~ ~ .\ '*'. ....... CERTIFICATION OF MINUTES RELATING TO $462,000 Special Improvement District Bonds, Series 1987 (Special Improvement District No. 652) Issuer: City of Bozeman, Montana Governing Body: City Commission Kind, date, time and place of meeting: A regular meeting, held October 5, 1987, at 2:00 o'clock p.m. in the City Hall, Bozeman, Montana. Commissioners present: Mayor Mathre, Commissioner Jordan, Commissioner Stiff, Commissioner Martel Commissioners absent: Commissioner Vant Hull Documents Attached: Minutes of said meeting (pages): _ through _, including: RESOLUTION NO. 2681 RESOLUTION RELATING TO $462,000 SPECIAL IMPROVEMENT DISTRICT BONDS, SERIES 1987 (SPECIAL IMPROVEMENT DISTRICT NO. 652); PRESCRIBING THE FORM AND TERMS AND THE COVENANTS OF THE CITY FOR THE PAYMENT THEREOF I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the bonds 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 corporation 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 of the corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at the meeting, insofar as they relate to the bonds; 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 given as required by law and that Resolution No. 2681 has not of this date been amended or repealed. WITNESS my hand officially as such recording officer and the seal of the City this 5th day of October, 1987. (SEAL) (f~ d~ Robin L. Sullivan, Clerk of the Commission .-...-- ---.---