HomeMy WebLinkAboutApprove Resolution No. 4168, Blast Clean-up Loan FundMemo re: Loan Program for Cleanup of Blast Debris
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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chris Kukulski, City Manager
Anna Rosenberry, Finance Director
Greg Sullivan, City Attorney
SUBJECT/SUGGESTED ACTIONS:
1. Authorize Approval of Resolution 4168 Creating, Capitalizing, and Establishing the
Guidelines for the Bozeman Blast Clean-Up Loan Fund;
2. Authorize the City Manager to Sign Memorandums of Agreement with Affected
Property Owners; and
3. Authorize City Manger to Sign a Participation Agreement with NorthWestern Energy
for Contributing $50,000 to the Bozeman Blast Clean-Up Loan Fund.
MEETING DATE: Monday, May 18, 2009 (Consent Agenda)
BACKGROUND: On April 20, 2009, you directed City Staff to move forward with creation
of a loan program to provide financial assistance to property owners whose buildings were
destroyed in the explosion on March 5, 2009. The stated public purpose of the loan program will
be to expedite the removal of debris from the affected sites and to enable the property and
business owners to move more swiftly with redevelopment of the sites. You have previously
determined doing so constitutes a valid public purpose in helping to support the economic
vitality of Downtown Bozeman and, in turn, the entire City.
During the meeting, you and City Staff discussed options for funding the loan. Over the past
several weeks we have worked with Mike Hope as representative of the affected property owners
and Prospera Business Network to resolve the terms and process for the loan program. Prospera
will be servicing the loan program for a minimal administrative fee, to be paid by the borrowers.
This amount will compensate Prospera, to a degree, for their work and oversight of the fund
during a 5 year period.
The actions you are to take tonight are necessary to authorize the program, authorize the City
Manager to sign agreements with each of the four borrowers, and also enter into an agreement
with NorthWestern Energy for their $50,000 contribution.
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Memo re: Loan Program for Cleanup of Blast Debris
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The money will be loaned to the four real property owners whose buildings were destroyed in
the March 5th event: Ralph Ferraro; Robert and Mary Sanks; Ann C. Bates; and the Gallatin Post
#14 of the American Legion.
The money to be loaned will come from the following sources:
· $50,000 from the City General Fund.
· $50,000 from the NorthWestern Energy contribution.
· $110,000 from the City's Housing Revolving Loan Funds.
· $90,000 from the City's Economic Development Revolving Loan Fund.
Because this loan program is using money from both the Economic Development Revolving
Loan Fund and the City’s Housing Revolving Loan Fund, and Prospera Business Network has
graciously agreed to manage the Fund. The agreement with the borrowers was modeled on the
existing Economic Development Revolving Loan program documents and, as such, contains
procedural requirements customary to those programs.
The general terms of the loan agreement include:
1. No interest over the life of the loan;
2. No regular payments required but full payback required within five years;
3. Must assign existing insurance proceeds to the City payable within 10 days after receipt
by the borrower;
4. Must carry City’s statutory limit on insurance and name the City and Prospera as
secondary insured;
5. Hold harmless and agree to completely indemnify the City and Prospera for any actions
taken with the loan funds; and
6. Prospera is allotted a 2% closing and administrative fee on each allocation to be charged
to the borrower and reduced from their total eligible amount.
Each borrower must agree to and provide to the City and Prospera the following:
1. Execution of Promissory Notes for the amount paid by Prospera under each invoice prior
to receiving monies for that invoice under the loan; and
2. Assignment of existing insurance proceeds to the City.
The process identified below will be followed for the disbursement of funds:
1. The borrowers provide documentation of the required insurance assignment and to the
City Attorney and, after City Attorney approval, the City Manager signs each agreement.
2. Once the documents are executed, the City transfers money from the General Fund and
Housing Revolving Loan Fund to Prospera to hold in a distinct account for distribution
and invoices. When the City obtains the agreed upon payment from NorthWestern
Energy, it will be transferred to Prospera for inclusion in the account. The City also
directs Prospera, who currently holds the Economic Development Revolving Loan funds,
to transfer $90,000 to this account.
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Memo re: Loan Program for Cleanup of Blast Debris
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3. When the contractor invoices the borrowers, the borrowers deliver to Prospera the
detailed invoices along with the borrowers signed certification the work has been
completed.
4. Prospera then pays EACH owner an amount in proportion to their respective share of the
total liability. For example, if Ralph Ferraro delivers an invoice to Prospera for
$100,000.00 worth of clean up costs Mr. Ferraro, being eligible for 24.7% of the total
Fund amount (which represents 24.7% of the above ground floor area of all buildings
destroyed and as agreed upon by the borrowers), will be loaned $24,700 less Prospera’s
2% administration fee of $494.00. Other borrowers will be paid at the same time
according to their percent allocation.
5. Prospera will first pay the borrowers out of the City’s general fund contribution until all
those monies are depleted, and then pay out of NorthWestern Energy’s contribution until
those monies are depleted, then the Housing fund, and, finally, the Economic
Development Fund. When clean-up is completed, Prospera will report to the City and
recommend the return of any unused amounts to their respective sources.
6. Prospera will report to the City quarterly regarding reimbursements to the Fund and,
when reimbursements are obtained, will reimburse the funds in reverse order of
allocation.
7. At the time all monies are returned to the City, the City will sign releases indicating all
monies have been paid.
ALTERNATIVES: As suggested by the City Commission.
UNRESOLVED ISSUES: None.
FISCAL EFFECTS:
This new loan program will commit up to $50,000 of the General Fund Reserve, $110,000 of the
City’s Housing Revolving Loan Funds, and $90,000 of the City’s Economic Development
Revolving Loan Fund for a term of up to 5 years, without interest earnings. It also requires the
City to sign a funding agreement with Northwestern Energy for their $50,000 (16.6%)
participation, although we have no additional obligation to pay Northwestern Energy if we do
not recover money from the borrowers.
We have proposed the order of expenditure and order of repayment so that the Revolving Loan
Funds are used last (or not at all) and replenished first. The City currently has no outstanding
requests for the Housing Revolving Loan Funds money, but Prospera has recently received
request for the Economic Development (ED) Revolving Loan Fund money, leading us to
recommend that the ED Fund money be the last to be used and the first re-paid.
General Fund: As previously presented to the Commission, use of $50,000 of General Fund
Reserve will leave the Fiscal Year 2009 General Fund Estimated Unreserved Fund Balance at
$2.8 Million, or 13.4% of Operating Revenues.
General Fund Estimated Unreserved Fund Balance, End of FY09
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Memo re: Loan Program for Cleanup of Blast Debris
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FY08 Ending Unreserved Fund Balance 4,519,814
Plus: FY09 Budgeted Revenues 22,287,851
Less: FY09 Budgeted Appropriations, amended (23,161,276)
Plus: Spending Plan, less Air Handler (no PD & Fire) 8,000
Less: City Hall Value Decrease & Commission (804,000)
Less: Proposed Blast Loans (50,000)
Revised Projected Unreserved Fund Balance 2,800,389
As a % of FY09 Revenues 13.4%
Housing Revolving Loan Funds: Spending $110,000 will drain the Housing Revolving Loan
Funds of current cash. Until this amount is repaid by the borrowers, these funds will not be
available for housing projects. Going forward, the Housing Revolving Loan Funds are estimated
to receive approximately $10,500 annually in principal and interest on existing loans. This
amount would available for housing projects beyond the Blast Clean-Up Fund efforts
Economic Development Revolving Loan Fund: Spending $90,000 will drain the fund of its
current cash. Until this amount is repaid by the borrowers, these funds will not be available for
Economic Development projects. Going forward, the Economic Development Revolving Loan
Fund is estimated to receive approximately $156,000 annually in principal and interest on
existing loans, which would be available for Economic Development projects beyond the Blast
Clean-Up Fund efforts.
Attachments:
1. Resolution 4168 Creating, Capitalizing, and Establishing the Guidelines for the Bozeman Blast Clean-
Up Loan Fund;
2. Participation Agreement with NorthWestern Energy for Contributing $50,000 to the Bozeman Blast
Clean-Up Loan Fund.
3. Memorandums of Agreement with Ralph Ferraro;
4. Memorandum of Agreement with Robert Sanks;
5. Memorandum of Agreement with Ann C. Bates;
6. Memorandum of Agreement with Gallatin Post #14 of the American Legion; and
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COMMISSION RESOLUTION NO. 4168
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, CREATING, CAPITALIZING, AND ESTABLISHING THE GUIDELINES
FOR THE BOZEMAN BLAST CLEAN-UP LOAN FUND.
WHEREAS, downtown Bozeman is a hub of the Bozeman community, a major
contributor to the City’s quality of life, and is critical to the City’s economic vitality as it
provides immeasurable social and economic benefits to residents and guests of the City; and
WHEREAS, an explosion occurred on March 5, 2009, destroying several buildings on
the north side of the 200 block of East Main St. in downtown Bozeman; and
WHEREAS, the debris of the destroyed buildings continues to exist; and
WHEREAS, several property and business owners whose property and businesses were
destroyed in the explosion and resulting fire seek to clean up debris located on the site as quickly
as possible to ensure plans for rebuilding are moved forward in as expeditious a manner as
possible; and
WHEREAS, the City Commission desires to assist the various business and property
owners whose property was destroyed in the March 5, 2009 explosion in expediting the cleanup
of the affected sites by providing a loan of money to four property owners to be used exclusively
for cleanup of existing debris and as such desires to create the Bozeman Blast Clean-Up Fund;
and
WHEREAS, the monies for the Fund will consist of $90,000 of money recycled from the
City’s Economic Development Revolving Loan Fund, $110,000 of money from the City’s
Housing Revolving Loan Fund, $50,000 from the City’s general fund; and $50,000 from
Northwestern Energy pursuant to the Bozeman Downtown Recovery Fund Participation
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Agreement, approved by the City Commission for signature by the City Manger on May 18,
2009; and
WHEREAS, Gallatin Development Corporation, d/b/a/ Prospera Business Network, a
private, non-profit, member-supported economic development organization, as a gesture of good
will to the citizens of Bozeman, agrees to hold, distribute and track the monies allocated under
this Fund and loaned to the four participating property owners and receive payments from the
owners and, in turn, return those payments to the appropriate contributing source as detailed
below; and
WHEREAS, Prospera Business Network is in no way responsible for the loan proceeds
or assumes any liability stemming from the cleanup of the site; and
WHEREAS, the City Commission specifically finds loaning money to the affected
property owners constitutes a valid public purpose because the existing condition of the
properties destroyed in the explosion is having a negative effect on the economic vitality of
downtown Bozeman and expediting the cleanup will benefit the economic recovery of the entire
City of Bozeman; and
WHEREAS, the City Commission specifically finds that while the loans may be
provided to private individuals to expedite the cleanup of the affected properties, the loans
benefit the inhabitants of the City of Bozeman as a community, not just as individual property
owners and although private property and business owners may benefit from the loans, the loans
provides a public benefit as it shows the community’s commitment to the social and economic
vitality of downtown Bozeman.
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NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana:
Section 1 - Fund Establishment
The Bozeman Blast Clean-Up Loan Fund (the Fund) is hereby established. The use of
monies from the Fund are exempt from requirements of City of Bozeman Res. 3866 (Policy for
Granting City Funds) but are subject to the City of Bozeman’s living wage ordinance (Chapter
2.96 of the Bozeman Municipal Code) as well as all other federal and state law regarding
prevailing wages, including the Montana Prevailing Wage Act, Title 18, Chpt. 2, Part 4, MCA,
and any State of Montana administrative rules established there under by the Montana
Department of Labor & Industry.
Section 2 - Eligible Borrowers
The Fund will make loans, through Prospera Business Network (“Prospera”) to the real
property owners who experienced catastrophic building loss as a result of the natural gas
explosion on March 5, 2009. The only property owners eligible under the Fund include the
following: Ralph Ferraro, Robert Sanks, Ann C. Bates, and the Gallatin Post #14 of the
American Legion. Each of the above property owners are eligible to receive a percentage of the
total Fund capitalization, described in Section 5, below, based on their specific percentage of the
total above ground square footage as described in Section 4, below. The above listed property
owners are hereby referred to individually and collectively as the “Borrowers.”
Section 3 - Eligible Activities
Loans will be made available to eligible borrowers for the only following activities:
debris removal services, hauling costs, landfill tipping fees, and fencing and screening of the site.
Use of the loan proceeds by a borrower for any purpose other than described herein and not
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consistent shall be cause for immediate breach and all monies shall be repaid to the City of
Bozeman immediately. No monies from this loan will be used for any political purpose.
Section 4 - Application Procedures & Loan Terms
Upon adoption of this Resolution, eligible borrowers may apply for loans under this Fund
by making a request to the Bozeman City Attorney's Office. The City Attorney's Office will
prepare a Memorandum of Agreement for each loan recipient. Prior to distribution of the Fund
monies to the Borrowers, agreements with all eligible Borrowers must be executed by the
Borrowers and the City Manager. By adopting this Resolution the Commission specifically
authorizes the City Manager to sign the Memorandum of Agreements thus fully executing and
binding the City of Bozeman to said Agreement. The loan monies will be transferred to Prospera
and will be available for draw, pursuant to Section 6, below, by the eligible Borrowers.
The loan amount for each recipient will be pursuant to the loan recipient's total above
ground floor area as a percentage of the sum of the above ground floor area for all properties
located within the affected area pursuant to the following schedule:
Ralph Ferraro 24.7% $74,100
Robert and Mary Sanks 15.8% $47,400
Ann C. Bates 30% $90,000
Gallatin Post #14 of the American Legion 29.5% $88,500
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Section 5 - Fund Capitalization
The Fund will be created with a total and maximum of $300,000. This is the maximum
amount available for loans to Borrowers. Principal will be loaned-out from the sources in the
amounts and order listed below, fully utilizing one source before moving to the next:
i. $50,000 from the City General Fund.
ii. $50,000 from the NorthWestern Energy contribution.
iii. $110,000 from the City's Housing Revolving Loan Funds.
iv. $90,000 from the City's Economic Development Revolving Loan Fund.
In the event that the cost of eligible activities does not amount to $300,000, unused
portions of the Fund will be returned to their sources immediately upon completion of all eligible
activities.
To the extent money is loaned-out, re-payments of Principal will be credited to sources in
the following order, fully crediting one source before moving to the next:
i. $90,000 to the City's Economic Development Revolving Loan Fund.
ii. $110,000 to the City's Housing Revolving Loan Funds.
iii. $50,000 to Northwestern Energy for their contribution.
iv. $50,000 to the City General Fund.
Section 6 - Fund Administration
Prospera will administer the Fund, and in doing so perform the following duties:
i. Hold the Fund dollars in an interest-bearing account fully covered by FDIC insurance.
ii. Upon written certification by the Borrowers and the presentation of detailed itemized
invoices indicating the work completed, and after execution of Promissory Notes for the
amount to be loaned as approved by the City Attorney, disburse eligible loan amounts
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commensurate with the invoice amounts to Borrowers for eligible activities. Borrowers
may receive only those amounts for which certification and invoices have been presented
and in no case shall receive more than the allocation listed in Section 4, above.
iii. Issue account statements to Borrowers for payments according to the terms of each
Borrower’s Memorandum of Agreement and Promissory Note(s) on a quarterly basis.
iv. Determine when eligible activities are complete and no more loan funds will be available
to Borrowers and recommend to the City when "unused portions" of the Loan Fund may
be returned to their sources.
v. Report to the City, in writing, the balance of the fund and all outstanding loan balances
on June 30, 2009, and each quarter there-after.
vi. Upon payment by the Borrower to Prospera for any principal amount Prospera will return
any funds other than those that are to return to the Economic Development Revolving
Loan Fund to the City on a quarterly basis. Prospera will transfer directly to the
Economic Development Revolving Loan Fund any monies owed to that fund.
vii. As compensation for fund administration services, Prospera will retain a 2% (two-
percent) closing and administrative fee at the time each loan disbursement is made to the
Borrowers.
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PASSED AND ADOPTED by the City Commission of the City of Bozeman, Montana, at a
regular session thereof held on the 18th day of May 2009.
___________________________________
KAAREN JACOBSON
Mayor
ATTEST:
_____________________________________
STACY ULMEN, CMC
City Clerk
APPROVED AS TO FORM:
___________________________________
GREG SULLIVAN
City Attorney
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1360026.2
BOZEMAN DOWNTOWN RECOVERY FUND
PARTICIPATION AGREEMENT
The City of Bozeman, Montana (the "City") desires to establish a fund to be
known as the Bozeman Downtown Recovery Fund (the "Fund"), which Fund is to be
used to provide financial assistance in the form of loans on an expedited basis to certain
businesses and/or property owners ("Affected Owners") located in downtown Bozeman,
Montana to assist in the recovery of businesses affected by the explosion and fire that
occurred in downtown Bozeman, Montana, on March 5, 2009 (the "March 5 Events").
NorthWestern Energy agrees to contribute $50,000 to the Fund (the "Funding
Amount").
The City will loan all or part of the Fund to Affected Owners or an entity agreeing
to process the funds on behalf of the Affected Owners as determined exclusively by the
City. Loans from the Fund ("Fund Loans") may require repayment and may be backed
by adequate security, as determined exclusively by the City, including assignment of
applicable insurance proceeds or other amounts received by Affected Owners in regard
to the March 5 Events. The City will use reasonable efforts to collect from Affected
Businesses, by the Maturity Date and thereafter as necessary, the outstanding amounts
of all Fund Loans.
The City has established a capitalization strategy for the Fund that requires
money in the Fund to be loaned-out in the amounts and order listed below, fully utilizing
one source before moving to the next source:
i. $50,000 from the City General Fund.
ii. $50,000 from the NorthWestern Energy contribution.
iii. $110,000 from the City's Housing Revolving Loan Funds.
iv. $90,000 from the City's Economic Development Revolving Loan Fund.
The Fund capitalization strategy also requires repayment of funds to be credited to
sources in the following order, fully crediting one source before moving to the next:
i. $90,000 to the City's Economic Development Revolving Loan Fund.
ii. $110,000 to the City's Housing Revolving Loan Funds.
iii. $50,000 to Northwestern Energy for their contribution.
iv. $50,000 to the City General Fund.
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1360026.2 2
NorthWestern Energy agrees any repayment made under this Agreement will be
pursuant to the repayment schedule listed above.
To the extent NorthWestern Energy does not receive full repayment of the
Funding Amount, such NorthWestern Energy may treat such deficiency as a donation to
the Fund or otherwise as such NorthWestern Energy may deem appropriate, provided,
however, that the NorthWestern Energy will not have any further recourse against the
Fund or the City with respect to such deficiency if the City otherwise complies with its
obligations under this Participation Agreement.
NorthWestern Energy is providing the Funding Amount as a gesture of goodwill
to assist the City in its efforts to quickly address immediate concerns of the Bozeman
downtown district in regard to recovery from the effects of the March 5 Events. Entering
into this Participation Agreement, providing any Funding Amount, or otherwise taking
any actions in regard thereto, is not and shall not be deemed an admission of any fault
or liability on the part of the Funding Participant, with respect to the March 5 Events or
otherwise, which fault and liability are expressly denied by NorthWestern Energy.
This Participation Agreement is entered into by the City and NorthWestern
Energy as of the date set forth below.
City:
CITY OF BOZEMAN
By:___________________________
Chris A. Kukulski, Bozeman City Manager
ATTEST:
_________________________
Stacy Ulmen, Clerk of Bozeman City Commission
APPROVED AS TO FORM:
________________________
Greg Sullivan, Bozeman City Attorney
53
1360026.2 3
NorthWestern Energy:
By: ______
Name: ______________________________
Title: ______________________________
Funding Amount: $______________
Date: ____________________________
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Memorandum of Agreement _______________
Bozeman Blast Clean-Up Loan Fund BORROWER INITIAL
PAGE 1 OF 11
Memorandum of Agreement
Bozeman Blast Clean-Up Loan Fund
This Memorandum of Agreement (Agreement) is made and entered into this ___ day of
__________, 2009, between the City of Bozeman, Montana, a self-governing political
subdivision of the state of Montana, with principal offices at 121 North Rouse Ave., Bozeman,
Montana, 59715 (hereinafter referred to as the City), and Ralph A. Ferraro, a property owner
whose property was directly affected by the explosion in downtown Bozeman on March 5, 2009,
(hereinafter referred to as Borrower).
WHEREAS, downtown Bozeman is a hub of the Bozeman community and quality of life
and as such is critical to the City’s economic vitality as it provides immeasurable social and
economic benefits to residents and guests of the City of Bozeman; and
WHEREAS, an explosion occurred on March 5, 2009, effectively destroying several
buildings on the north side of the 200 block of East Main St. in downtown Bozeman; and
WHEREAS, the debris of the destroyed buildings continues to exist on several properties
at the site; and
WHEREAS, several property and business owners whose property and businesses were
destroyed in the explosion and resulting fire seek to clean up debris located on the site as quickly
as possible to ensure plans for rebuilding are moved forward in as expeditious a manner as
possible; and
WHEREAS, the City Commission desires to assist the various business and property
owners whose property was destroyed in the March 5, 2009 explosion in expediting the cleanup
of the affected sites by providing a loan of money to the Borrower to be used exclusively for
cleanup of existing debris and as such has created the Bozeman Blast Clean-Up Loan Fund (the
“Fund”); and
WHEREAS, the monies for the Fund will consist of $90,000 of money recycled from the
City’s Economic Development Revolving Loan Fund; $110,000 recycled from the City’s
Housing Revolving Loan Program; $50,000 of money from the City of Bozeman general fund,
and $50,000 from Northwestern Energy pursuant to the Bozeman Blast Clean-Up Loan Fund
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Memorandum of Agreement _______________
Bozeman Blast Clean-Up Loan Fund BORROWER INITIAL
PAGE 2 OF 11
Participation Agreement, approved by the City Commission for signature by the City Manger on
May 18, 2009; and
WHEREAS, the Gallatin Development Corporation, d/b/a Prospera Business Network, a
private, non-profit, member-supported economic development organization, as a gesture of good
will to the citizens of Bozeman, agrees to act as the administrator of this Fund and to distribute
the monies allocated under this Fund to the Borrower and receive payments from the Borrower.
Prospera in no way assumes any liability or responsibility for the repayment of the loan proceeds
or any liability stemming from the cleanup of the site; and
WHEREAS, the City Commission specifically finds loaning money to the affected
property owners constitutes a valid public purpose because the existing condition of the
properties destroyed in the explosion is having a negative effect on the economic vitality of
downtown Bozeman and expediting the cleanup will benefit the entire City of Bozeman; and
WHEREAS, the City Commission specifically finds that while the loan may be provided
to private individuals to expedite the cleanup of the affected properties, the loan affects the
inhabitants of the City of Bozeman as a community, not just as individual property owners and
although private property and business owners may benefit from the loan, the loan provides a
public benefit as it shows the community’s commitment to the social and economic vitality of
downtown Bozeman.
NOW, THEREFORE, in consideration of the above, the City and Borrower agree as
follows:
1. Amount of Loan
The City agrees under the terms and conditions of this Agreement, to make available
money in the form of a loan to Borrower in the principal amount of up to a maximum
$74,100 (Seventy Four Thousand One Hundred Dollars and Zero Cents) representing
approximately 24.7% of total above ground square footage of the buildings destroyed in
the March 5, 2009 event and 24.7% of the $300,000 allocated by the City under the Fund.
The principal amount cited above shall be repaid by Borrower over a term of not more
than five (5) years, specifically and solely for the cleanup of debris at the following
described real property(s):
The East 2.5 feet of Lot 2, All of Lots 3 and 4 and the West 13.5 feet of Lot 5, all
within Block D of the Bozeman Original Plat, Sect. 7, Township 2 South, Range 6
East, Gallatin County, Montana.
This loan shall be evidenced by a Promissory Note(s) required prior to and for each
disbursement made under the Fund to a Borrower. The loan shall be further secured by
any proceeds of any insurance reimbursements pursuant to Section 9, below.
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Memorandum of Agreement _______________
Bozeman Blast Clean-Up Loan Fund BORROWER INITIAL
PAGE 3 OF 11
2. Interest Rate and Repayment
The loan shall bear no interest for its life. The Borrower(s) shall be required to pay back
only the principal of the loan amount actually disbursed. The Borrower shall make
payments in as expeditious and timely a manner as possible but all funds loaned shall be
paid back within five (5) years.
There will be no penalty for prepayment of the loan.
3. Disbursement of Funds
The City shall make monies up to the entire sum mentioned in Section 1, above, available
to the Borrower through Prospera. Payments will be dispersed at the time Borrower
provides Proposer the invoices from the Borrower’s agents conducting the cleanup work.
The invoices shall be detailed as to expenditures for labor, materials, waste disposal
costs, etc… There shall be no cash advances. Loan money shall only be released to pay
existing invoices.
4. Conditions of Loan
A. The Borrower agrees to comply with all requirements of City of Bozeman
Resolution 4168 (Attachment A) and those requirements are fully incorporated
herein.
B. In the event that the Borrower’s interest in the real property for which the money
allocated under this Agreement benefits is sold, transferred, or otherwise
conveyed during the term of this loan, the City has sole discretion to determine
whether the loan will become immediately due and payable.
C. The Borrower shall not remove from the city limits of the City of Bozeman the
Borrower’s business activities that were located within the buildings destroyed in
the March 5, 2009 event or any property associated with the business activities for
which the loan is intended to benefit during the term of this Agreement.
D. The Borrower, recognizing public monies are being used for their personal
benefit, shall use best efforts to repay the entire principle of the loan amount
within as expeditious a time as possible and, in doing so, shall continually
communicate with the City and Prospera as to the course of events related to
debris clean up, payments from insurance companies, and expected timelines for
repaying the Fund.
E. The Borrower also specifically agrees to not use any of the money loaned under
this Agreement for any purpose other than cleanup of the affected properties.
Specifically, the Borrower agrees that no monies from this loan will be used for
any political purpose.
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Memorandum of Agreement _______________
Bozeman Blast Clean-Up Loan Fund BORROWER INITIAL
PAGE 4 OF 11
F. The Borrower agrees under no circumstances will the City or Prospera make
available to the Borrower any money exceeding the amount listed in Section 1,
above if the total required by the Borrower for cleanup exceeds the amount
authorized.
5. Protection of Right-of-Way/Sidewalk to Remain Open
The Borrower specifically agrees to ensure the public right-of-way on the south of the
affected properties is kept clear of debris and open to the public. Notwithstanding the
above, the City agrees to work with the Borrower to allow for periodic closures of the
sidewalk on Main St. if necessary to facilitate the safe handling and removal of debris
from the subject properties. The Borrower agrees to use best efforts to ensure the
sidewalk closing is for the minimal time necessary. During the removal of debris, the
Borrower will take all necessary precautions to ensure the public is protected at all times.
The Borrower shall install and maintain in good working condition a perimeter fence on
the south side of the subject properties specifically designed to prevent the exit of debris
onto the Main St. sidewalk.
6. Promissory Note/Insurance Proceeds
A. Any monies paid to Borrower upon invoice to Prospera will only be released by
the Borrower executing a Promissory Note(s), with approval by the City Attorney.
B. Borrower specifically agrees to assign to the City the proceeds from any insurance
reimbursements made to Borrower regarding damage to their property or business
and agree to forward said proceeds Prospera within 10 days of receipt of the
proceeds. Evidence of the Borrower’s insurance proceeds shall be attached as
Appendix B to this Agreement. The Borrower specifically agrees the City has a
priority right to these insurance proceeds as collateral for the loan. The Borrower
agrees to allow the City to file with the applicable governmental recording office
any necessary documents that allows the City to evidence its priority interest in
the above described insurance proceeds.
7. Living Wage/Prevailing Wage
The Borrower agrees to require any contractor working on the cleanup using funds to be
paid by this loan a living wage as provided by Chapter 2.96 of the Bozeman Municipal
Code. The Borrowers agree to require any contractor working on the cleanup using funds
to be paid by this loan to make available for City inspection its payroll records relating to
employees providing services under this loan. If any payroll records of the Borrower’s
contractor contain any false, misleading or fraudulent information, or if the Borrowers
and their contractors fail to comply with any of the provisions of Bozeman Municipal
Code Chapter 2.96, the Borrowers will be in default and the City may withhold payments
on the agreement, terminate, cancel or suspend the agreement in whole, or in part in
addition to any remedies contained herein or at law.
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The Borrowers agrees to require any contractor or subcontractor working on the cleanup
to comply with federal and state law regarding prevailing wages, including the Montana
Prevailing Wage Act, Title 18, Chpt. 2, Part 4, MCA, and any State of Montana
administrative rules established there under by the Montana Department of Labor &
Industry.
8. Default
Use of the loan proceeds by a borrower for any purpose other than described herein
and not consistent shall be cause for immediate breach and all monies shall be
repaid to the City of Bozeman immediately.
A. The occurrence of any one or more of the following events may, in the discretion
of the City, constitute a default (“event of default”) by Borrowers under this
Agreement:
i. Any representation or warranty made by the Borrowers in this Agreement
or in any request or certificate or other information furnished to the City
hereunder proves to have been incorrect in any material respect;
ii. The Borrower fails in any material respect to carry out the obligations
under the proposal to the City for the loan provided hereunder;
iii. The Borrower fails to pay, when due, any indebtedness for any money
borrowed, for which the City is liable as principal obligor;
iv. The Borrowers apply for or consent to the appointment of a receiver,
trustee or liquidator, admit in writing to its inability to pay its debts as they
become due, make a general assignment for the benefit of creditors, or
invoke any relief under any chapter of the United States Bankruptcy Code;
v. The Borrowers fail to pay all local real property taxes specified to the
project funded by the proceeds of this loan, as applicable;
vi. The Borrowers remove the business activities for which the loan is
intended from the City’s jurisdictional area during the term of the loan;
vii. The Borrower fail to execute any documents reasonably necessary to make
the City secure in its financial position as stated in this Agreement;
viii. The Borrower sells, transfers, or otherwise conveys their right, title or
interest in the real property being benefited to render the City insecure in
its position of having the loan repaid;
ix. The Borrowers violate any term, assurance, or condition of this
Agreement; or
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x. Borrowers fail to obtain all applicable City business, building licenses or
other any other required City permit.
B. In the event the Borrowers fail to make timely payments under this Agreement or
perform any of the covenants on its part or any event of default occurs as stated
above, the City at any time thereafter may declare the Borrowers to be in default
and thereafter give the Borrowers written notice setting forth the action or
inaction which constitutes the default and giving the Borrowers thirty (30) days in
which to correct the default. If the Borrowers fail to correct the default within
thirty (30) days of receipt of this notice, the City may notify the Borrowers in
writing that the full balance due upon this Agreement is then due and payable in
full within thirty (30) days. It is agreed by the parties hereto that the provisions of
this Agreement provide for reasonable and sufficient notice to be given to the
Borrowers in case of the Borrower’s failure to perform any of its covenants and
that this notice is sufficient for the Borrowers to rectify its actions or inaction of
default.
Any waiver by the City of any default by the Borrowers does not constitute a
waiver of a continuing breach or a waiver of a subsequent breach. Any agreement
contrary to this Agreement is not binding upon either party hereto unless it is in
writing and signed by both parties.
In the event of default, the City, in its own absolute discretion, may exercise any
one or more of the rights and remedies accruing to a secured party under the laws
of the State of Montana and any other applicable law and this agreement. All of
the City’s rights and remedies under this Agreement and the other agreements are
cumulative and nonexclusive.
9. Non-Discrimination
The Borrowers specifically agrees to comply with all provisions of the Montana Human
Rights Act (Title 49, MCA).
10. Insurance
Prior to allocation to the Borrower of any monies under this Agreement Borrower shall
acquire, provide to the City and Prospera, property and liability insurance for personal
injury, including death, as well as third party property damage, in the amount of Seven
Hundred Fifty Thousand and no 0/100 Dollars ($750,000.00) for each occurrence with
One Million Five Hundred Thousand and no 0/100 Dollars ($1,500,000.00) umbrella
coverage per occurrence. The Borrower shall maintain the above for the term of this
Agreement. The City of Bozeman and Prospera shall be named as an additional insured
on the Borrower’s policies. During the term of this Agreement, when the Borrower
renews the insurance policy by payment of an additional year's premium, the Borrowers
will provide proof of payment of the premium to the City and Prospera so as to keep the
City and Prospera advised at all times that the properties are insured as required by this
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Section. Failure to so notify the City and Prospera is an event of default of this
Agreement for purposes of the default provisions of Section 8 above.
11. Additional Assurances
The Borrowers will remain fully obligated under the provisions of this Agreement
notwithstanding the Borrowers designation of any third party or parties (with written
approval of the City) for the undertaking of all or any part of the reimbursement with
respect to which assistance is being provided under this Agreement. The Borrower will
comply with all applicable laws, rules and regulations of the City and with all lawful
requirements of the City so as to insure that this Agreement is carried out in accordance
with the obligations and responsibility of the City and of the State of Montana.
12. Indemnification/Hold Harmless
The Borrowers waive any and all claims and recourse against the City and Prospera,
including the right of contribution for loss and damage to persons or property arising
from, growing out of, or in any way connected with or incident to this Agreement and th
use of loan proceeds including any actions taken by the Borrower with the loan proceeds
such as cleanup, debris removal, or any other activity of any kind. Further, the
Borrowers will indemnify, hold harmless, and defend the City and Prospera Business
Network against any and all claims, demands, damages, costs, expenses or liability
arising out of the performance of the Borrowers, its agents, or assigns, with regard to this
Agreement and cleanup, debris removal, or any other activity using the loan proceeds,
including any pollution existing or occurring onsite.
13. Litigation
The Borrowers state that to the best of its knowledge and belief there are no suits or
proceedings pending or threatened against or affecting it which, if adversely determined,
would have a material adverse effect on its financial condition and thus its ability to
reimburse the City under this Agreement. In addition, to the knowledge of the
Borrowers, there are no proceedings by or before any governmental commission, board,
bureau or other administrative agency pending, or threatened against the Borrowers.
14. Attorney Fees
In the event that either party, or Prospera, incurs legal expenses, including the costs,
expenses, salary and fees of the in-house counsel, to include the City Attorney, to enforce
the terms and conditions of this Agreement, the prevailing party is entitled to recover
reasonable attorney's fees and other costs and expenses, whether the same are incurred
with or without suit, including fees on appeal.
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15. Avoidance of Conflict of Interest
The Borrowers covenant that no officer, member, agent, or employee of the City or
Prospera who participates in the administration of this Agreement in other than a purely
ministerial capacity will have any personal interest, real or apparent, in the proceeds of
the loan provided hereby. For purposes of this covenant, an impermissible conflict of
interest exists if the officer, member, agent or employee; any member of his or her
immediate family; his or her partner; or an organization which employs, or is about to
employ, any of the foregoing has a financial or other interest in the proceeds hereof
during his or her tenure or for one year thereafter. The Borrowers shall incorporate, or
cause to be incorporated, in all contracts or subcontracts a provision prohibiting such
interest pursuant to the purposes of this section.
16. Construction and Venue
This Agreement will be construed under and governed by the laws of the State of
Montana. In the event of litigation concerning it, venue is in the 18th Judicial District
Court, Gallatin County, Montana.
17. Modifications
Any amendments or modifications of this agreement, or any provisions herein shall be
made in writing and executed in the same manner as an original document and shall after
execution become part of this agreement.
18. Assignment
In the event that the Borrower sells, transfers or otherwise conveys all, or a part, of its
interest in either the real property or the business entity included herein, the Borrower
shall contact the City prior to such sale, transfer or conveyance. This Agreement is non-
assignable except upon the written consent of the City, and the City may consider
assignment without notice and consent a default under Section 8. The City may, at its
sole discretion, determine whether the loan will become immediately due and payable or
consent to assignment. A request for consent to assignment must include a statement
justifying the request and the financial statement of the proposed assignee. This
statement must be current to within 90 days of the request. The City reserves the right to
deny requests for assignment and to modify the terms of this Agreement and its exhibits
as conditions of an assignment.
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19. Demand
Any demand upon or notice to either party shall be by personal service or addressed and
mailed to the following addresses:
CITY:
BORROWER:
City Manager
City of Bozeman
121 North Rouse Ave.
Bozeman, MT 59715
Ralph Ferraro
211 East Main St.
Bozeman, MT 59715
ADMINISTRATOR:
Chief Executive Officer
Prospera Business Network
222 East Main St. Suite 102
Bozeman, MT 59715
Mailing shall be by certified mail, return receipt requested, and shall be effective when
served or three (3) days after deposit in the United States Mail, whichever occurs first.
20. Headings
The headings used in this Agreement are for reference purposes only.
21. Entire Agreement
This agreement constitutes the entire agreement between the parties. No alterations,
modifications, or additions to this Agreement shall be binding unless reduced to writing
and signed by both parties.
22. Waiver
No waiver of any default shall constitute a waiver of any other default, nor shall such
waiver constitute a continuing waiver. No waiver of any term or condition of this
Agreement shall constitute a waiver of any other term or condition, whether or not
similar, nor shall such waiver constitute a continuing waiver. No covenant, term, or
addition to this Agreement shall be deemed waived by either party unless such waiver
shall be reduced to writing and signed by both parties.
23. Recordation
Borrower, at its sole cost and expense, shall cause this Agreement to be recorded and
filed with the Gallatin County Clerk and Recorder within ten (10) business days of
execution of this Agreement by both parties. Evidence of said recordation shall be
delivered to the City.
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24. Authority
The undersigned Borrower affirms they have the authority to enter into this agreement on
behalf of themselves and to bind the undersigned Borrower to this Agreement.
25. Binder
This Agreement shall be binding upon the heirs, personal representatives, successors and
assigns of the Parties.
CITY:
CITY OF BOZEMAN
By:___________________________
Chris A. Kukulski, Bozeman City Manager
ATTEST:
_________________________
Stacy Ulmen, Clerk of Bozeman City Commission
APPROVED AS TO FORM:
________________________
Greg Sullivan, Bozeman City Attorney
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BORROWER:
By:________________________________
Ralph Ferraro
STATE OF MONTANA )
:ss
County of Gallatin )
This instrument was acknowledged before me on the ______ day of _____________________,
2009 by _______________________________.
____________________________________
(Signature of notarial officer)
(Seal, if any)
______________________________
(Name)
____________________________________
Title (and Rank)
____________________________________
(Residing at)
[My commission expires: ________]
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Memorandum of Agreement
Bozeman Blast Clean-Up Loan Fund
This Memorandum of Agreement (Agreement) is made and entered into this ___ day of
__________, 2009, between the City of Bozeman, Montana, a self-governing political
subdivision of the state of Montana, with principal offices at 121 North Rouse Ave., Bozeman,
Montana, 59715 (hereinafter referred to as the City), and Robert and Mary Sanks, property
owners whose property was directly affected by the explosion in downtown Bozeman on March
5, 2009, (hereinafter referred to as Borrower).
WHEREAS, downtown Bozeman is a hub of the Bozeman community and quality of life
and as such is critical to the City’s economic vitality as it provides immeasurable social and
economic benefits to residents and guests of the City of Bozeman; and
WHEREAS, an explosion occurred on March 5, 2009, effectively destroying several
buildings on the north side of the 200 block of East Main St. in downtown Bozeman; and
WHEREAS, the debris of the destroyed buildings continues to exist on several properties
at the site; and
WHEREAS, several property and business owners whose property and businesses were
destroyed in the explosion and resulting fire seek to clean up debris located on the site as quickly
as possible to ensure plans for rebuilding are moved forward in as expeditious a manner as
possible; and
WHEREAS, the City Commission desires to assist the various business and property
owners whose property was destroyed in the March 5, 2009 explosion in expediting the cleanup
of the affected sites by providing a loan of money to the Borrower to be used exclusively for
cleanup of existing debris and as such has created the Bozeman Blast Clean-Up Loan Fund (the
“Fund”); and
WHEREAS, the monies for the Fund will consist of $90,000 of money recycled from the
City’s Economic Development Revolving Loan Fund; $110,000 recycled from the City’s
Housing Revolving Loan Program; $50,000 of money from the City of Bozeman general fund,
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and $50,000 from Northwestern Energy pursuant to the Bozeman Blast Clean-Up Loan Fund
Participation Agreement, approved by the City Commission for signature by the City Manger on
May 18, 2009; and
WHEREAS, the Gallatin Development Corporation, d/b/a Prospera Business Network, a
private, non-profit, member-supported economic development organization, as a gesture of good
will to the citizens of Bozeman, agrees to act as the administrator of this Fund and to distribute
the monies allocated under this Fund to the Borrower and receive payments from the Borrower.
Prospera in no way assumes any liability or responsibility for the repayment of the loan proceeds
or any liability stemming from the cleanup of the site; and
WHEREAS, the City Commission specifically finds loaning money to the affected
property owners constitutes a valid public purpose because the existing condition of the
properties destroyed in the explosion is having a negative effect on the economic vitality of
downtown Bozeman and expediting the cleanup will benefit the entire City of Bozeman; and
WHEREAS, the City Commission specifically finds that while the loan may be provided
to private individuals to expedite the cleanup of the affected properties, the loan affects the
inhabitants of the City of Bozeman as a community, not just as individual property owners and
although private property and business owners may benefit from the loan, the loan provides a
public benefit as it shows the community’s commitment to the social and economic vitality of
downtown Bozeman.
NOW, THEREFORE, in consideration of the above, the City and Borrower agree as
follows:
1. Amount of Loan
The City agrees under the terms and conditions of this Agreement, to make available
money in the form of a loan to Borrower in the principal amount of up to a maximum
$47,400 (Forty Seven Thousand Four Hundred Dollars and Zero Cents) representing
approximately 15.8% of total above ground square footage of the buildings destroyed in
the March 5, 2009 event and 15.8% of the $300,000 allocated by the City under the Fund.
The principal amount cited above shall be repaid by Borrower over a term of not more
than five (5) years, specifically and solely for the cleanup of debris at the following
described real property(s):
The East 14.5 feet of Lot 5, and the West 11.5 feet of Lot 6, all within Block D of
the Bozeman Original Plat, Sect. 7, Township 2 South, Range 6 East, Gallatin
County, Montana.
This loan shall be evidenced by a Promissory Note(s) required prior to and for each
disbursement made under the Fund to a Borrower. The loan shall be further secured by
any proceeds of any insurance reimbursements pursuant to Section 9, below.
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2. Interest Rate and Repayment
The loan shall bear no interest for its life. The Borrower(s) shall be required to pay back
only the principal of the loan amount actually disbursed. The Borrower shall make
payments in as expeditious and timely a manner as possible but all funds loaned shall be
paid back within five (5) years.
There will be no penalty for prepayment of the loan.
3. Disbursement of Funds
The City shall make monies up to the entire sum mentioned in Section 1, above, available
to the Borrower through Prospera. Payments will be dispersed at the time Borrower
provides Proposer the invoices from the Borrower’s agents conducting the cleanup work.
The invoices shall be detailed as to expenditures for labor, materials, waste disposal
costs, etc… There shall be no cash advances. Loan money shall only be released to pay
existing invoices.
4. Conditions of Loan
A. The Borrower agrees to comply with all requirements of City of Bozeman
Resolution 4168 (Attachment A) and those requirements are fully incorporated
herein.
B. In the event that the Borrower’s interest in the real property for which the money
allocated under this Agreement benefits is sold, transferred, or otherwise
conveyed during the term of this loan, the City has sole discretion to determine
whether the loan will become immediately due and payable.
C. The Borrower shall not remove from the city limits of the City of Bozeman the
Borrower’s business activities that were located within the buildings destroyed in
the March 5, 2009 event or any property associated with the business activities for
which the loan is intended to benefit during the term of this Agreement.
D. The Borrower, recognizing public monies are being used for their personal
benefit, shall use best efforts to repay the entire principle of the loan amount
within as expeditious a time as possible and, in doing so, shall continually
communicate with the City and Prospera as to the course of events related to
debris clean up, payments from insurance companies, and expected timelines for
repaying the Fund.
E. The Borrower also specifically agrees to not use any of the money loaned under
this Agreement for any purpose other than cleanup of the affected properties.
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Specifically, the Borrower agrees that no monies from this loan will be used for
any political purpose.
F. The Borrower agrees under no circumstances will the City or Prospera make
available to the Borrower any money exceeding the amount listed in Section 1,
above if the total required by the Borrower for cleanup exceeds the amount
authorized.
5. Protection of Right-of-Way/Sidewalk to Remain Open
The Borrower specifically agrees to ensure the public right-of-way on the south of the
affected properties is kept clear of debris and open to the public. Notwithstanding the
above, the City agrees to work with the Borrower to allow for periodic closures of the
sidewalk on Main St. if necessary to facilitate the safe handling and removal of debris
from the subject properties. The Borrower agrees to use best efforts to ensure the
sidewalk closing is for the minimal time necessary. During the removal of debris, the
Borrower will take all necessary precautions to ensure the public is protected at all times.
The Borrower shall install and maintain in good working condition a perimeter fence on
the south side of the subject properties specifically designed to prevent the exit of debris
onto the Main St. sidewalk.
6. Promissory Note/Insurance Proceeds
A. Any monies paid to Borrower upon invoice to Prospera will only be released by
the Borrower executing a Promissory Note(s), with approval by the City Attorney.
B. Borrower specifically agrees to assign to the City the proceeds from any insurance
reimbursements made to Borrower regarding damage to their property or business
and agree to forward said proceeds Prospera within 10 days of receipt of the
proceeds. Evidence of the Borrower’s insurance proceeds shall be attached as
Appendix B to this Agreement. The Borrower specifically agrees the City has a
priority right to these insurance proceeds as collateral for the loan. The Borrower
agrees to allow the City to file with the applicable governmental recording office
any necessary documents that allows the City to evidence its priority interest in
the above described insurance proceeds.
7. Living Wage/Prevailing Wage
The Borrower agrees to require any contractor working on the cleanup using funds to be
paid by this loan a living wage as provided by Chapter 2.96 of the Bozeman Municipal
Code. The Borrowers agree to require any contractor working on the cleanup using funds
to be paid by this loan to make available for City inspection its payroll records relating to
employees providing services under this loan. If any payroll records of the Borrower’s
contractor contain any false, misleading or fraudulent information, or if the Borrowers
and their contractors fail to comply with any of the provisions of Bozeman Municipal
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Code Chapter 2.96, the Borrowers will be in default and the City may withhold payments
on the agreement, terminate, cancel or suspend the agreement in whole, or in part in
addition to any remedies contained herein or at law.
The Borrowers agrees to require any contractor or subcontractor working on the cleanup
to comply with federal and state law regarding prevailing wages, including the Montana
Prevailing Wage Act, Title 18, Chpt. 2, Part 4, MCA, and any State of Montana
administrative rules established there under by the Montana Department of Labor &
Industry.
8. Default
Use of the loan proceeds by a borrower for any purpose other than described herein
and not consistent shall be cause for immediate breach and all monies shall be
repaid to the City of Bozeman immediately.
A. The occurrence of any one or more of the following events may, in the discretion
of the City, constitute a default (“event of default”) by Borrowers under this
Agreement:
i. Any representation or warranty made by the Borrowers in this Agreement
or in any request or certificate or other information furnished to the City
hereunder proves to have been incorrect in any material respect;
ii. The Borrower fails in any material respect to carry out the obligations
under the proposal to the City for the loan provided hereunder;
iii. The Borrower fails to pay, when due, any indebtedness for any money
borrowed, for which the City is liable as principal obligor;
iv. The Borrowers apply for or consent to the appointment of a receiver,
trustee or liquidator, admit in writing to its inability to pay its debts as they
become due, make a general assignment for the benefit of creditors, or
invoke any relief under any chapter of the United States Bankruptcy Code;
v. The Borrowers fail to pay all local real property taxes specified to the
project funded by the proceeds of this loan, as applicable;
vi. The Borrowers remove the business activities for which the loan is
intended from the City’s jurisdictional area during the term of the loan;
vii. The Borrower fail to execute any documents reasonably necessary to make
the City secure in its financial position as stated in this Agreement;
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viii. The Borrower sells, transfers, or otherwise conveys their right, title or
interest in the real property being benefited to render the City insecure in
its position of having the loan repaid;
ix. The Borrowers violate any term, assurance, or condition of this
Agreement; or
x. Borrowers fail to obtain all applicable City business, building licenses or
other any other required City permit.
B. In the event the Borrowers fail to make timely payments under this Agreement or
perform any of the covenants on its part or any event of default occurs as stated
above, the City at any time thereafter may declare the Borrowers to be in default
and thereafter give the Borrowers written notice setting forth the action or
inaction which constitutes the default and giving the Borrowers thirty (30) days in
which to correct the default. If the Borrowers fail to correct the default within
thirty (30) days of receipt of this notice, the City may notify the Borrowers in
writing that the full balance due upon this Agreement is then due and payable in
full within thirty (30) days. It is agreed by the parties hereto that the provisions of
this Agreement provide for reasonable and sufficient notice to be given to the
Borrowers in case of the Borrower’s failure to perform any of its covenants and
that this notice is sufficient for the Borrowers to rectify its actions or inaction of
default.
Any waiver by the City of any default by the Borrowers does not constitute a
waiver of a continuing breach or a waiver of a subsequent breach. Any agreement
contrary to this Agreement is not binding upon either party hereto unless it is in
writing and signed by both parties.
In the event of default, the City, in its own absolute discretion, may exercise any
one or more of the rights and remedies accruing to a secured party under the laws
of the State of Montana and any other applicable law and this agreement. All of
the City’s rights and remedies under this Agreement and the other agreements are
cumulative and nonexclusive.
9. Non-Discrimination
The Borrowers specifically agrees to comply with all provisions of the Montana Human
Rights Act (Title 49, MCA).
10. Insurance
Prior to allocation to the Borrower of any monies under this Agreement Borrower shall
acquire, provide to the City and Prospera, property and liability insurance for personal
injury, including death, as well as third party property damage, in the amount of Seven
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Hundred Fifty Thousand and no 0/100 Dollars ($750,000.00) for each occurrence with
One Million Five Hundred Thousand and no 0/100 Dollars ($1,500,000.00) umbrella
coverage per occurrence. The Borrower shall maintain the above for the term of this
Agreement. The City of Bozeman and Prospera shall be named as an additional insured
on the Borrower’s policies. During the term of this Agreement, when the Borrower
renews the insurance policy by payment of an additional year's premium, the Borrowers
will provide proof of payment of the premium to the City and Prospera so as to keep the
City and Prospera advised at all times that the properties are insured as required by this
Section. Failure to so notify the City and Prospera is an event of default of this
Agreement for purposes of the default provisions of Section 8 above.
11. Additional Assurances
The Borrowers will remain fully obligated under the provisions of this Agreement
notwithstanding the Borrowers designation of any third party or parties (with written
approval of the City) for the undertaking of all or any part of the reimbursement with
respect to which assistance is being provided under this Agreement. The Borrower will
comply with all applicable laws, rules and regulations of the City and with all lawful
requirements of the City so as to insure that this Agreement is carried out in accordance
with the obligations and responsibility of the City and of the State of Montana.
12. Indemnification/Hold Harmless
The Borrowers waive any and all claims and recourse against the City and Prospera,
including the right of contribution for loss and damage to persons or property arising
from, growing out of, or in any way connected with or incident to this Agreement and th
use of loan proceeds including any actions taken by the Borrower with the loan proceeds
such as cleanup, debris removal, or any other activity of any kind. Further, the
Borrowers will indemnify, hold harmless, and defend the City and Prospera Business
Network against any and all claims, demands, damages, costs, expenses or liability
arising out of the performance of the Borrowers, its agents, or assigns, with regard to this
Agreement and cleanup, debris removal, or any other activity using the loan proceeds,
including any pollution existing or occurring onsite.
13. Litigation
The Borrowers state that to the best of its knowledge and belief there are no suits or
proceedings pending or threatened against or affecting it which, if adversely determined,
would have a material adverse effect on its financial condition and thus its ability to
reimburse the City under this Agreement. In addition, to the knowledge of the
Borrowers, there are no proceedings by or before any governmental commission, board,
bureau or other administrative agency pending, or threatened against the Borrowers.
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14. Attorney Fees
In the event that either party, or Prospera, incurs legal expenses, including the costs,
expenses, salary and fees of the in-house counsel, to include the City Attorney, to enforce
the terms and conditions of this Agreement, the prevailing party is entitled to recover
reasonable attorney's fees and other costs and expenses, whether the same are incurred
with or without suit, including fees on appeal.
15. Avoidance of Conflict of Interest
The Borrowers covenant that no officer, member, agent, or employee of the City or
Prospera who participates in the administration of this Agreement in other than a purely
ministerial capacity will have any personal interest, real or apparent, in the proceeds of
the loan provided hereby. For purposes of this covenant, an impermissible conflict of
interest exists if the officer, member, agent or employee; any member of his or her
immediate family; his or her partner; or an organization which employs, or is about to
employ, any of the foregoing has a financial or other interest in the proceeds hereof
during his or her tenure or for one year thereafter. The Borrowers shall incorporate, or
cause to be incorporated, in all contracts or subcontracts a provision prohibiting such
interest pursuant to the purposes of this section.
16. Construction and Venue
This Agreement will be construed under and governed by the laws of the State of
Montana. In the event of litigation concerning it, venue is in the 18th Judicial District
Court, Gallatin County, Montana.
17. Modifications
Any amendments or modifications of this agreement, or any provisions herein shall be
made in writing and executed in the same manner as an original document and shall after
execution become part of this agreement.
18. Assignment
In the event that the Borrower sells, transfers or otherwise conveys all, or a part, of its
interest in either the real property or the business entity included herein, the Borrower
shall contact the City prior to such sale, transfer or conveyance. This Agreement is non-
assignable except upon the written consent of the City, and the City may consider
assignment without notice and consent a default under Section 8. The City may, at its
sole discretion, determine whether the loan will become immediately due and payable or
consent to assignment. A request for consent to assignment must include a statement
justifying the request and the financial statement of the proposed assignee. This
statement must be current to within 90 days of the request. The City reserves the right to
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deny requests for assignment and to modify the terms of this Agreement and its exhibits
as conditions of an assignment.
19. Demand
Any demand upon or notice to either party shall be by personal service or addressed and
mailed to the following addresses:
CITY:
BORROWER:
City Manager
City of Bozeman
121 North Rouse Ave.
Bozeman, MT 59715
Robert and Mary Sanks
1201 Highland Blvd., Apt. D309
Bozeman, MT 59715
ADMINISTRATOR:
Chief Executive Officer
Prospera Business Network
222 East Main St. Suite 102
Bozeman, MT 59715
Mailing shall be by certified mail, return receipt requested, and shall be effective when
served or three (3) days after deposit in the United States Mail, whichever occurs first.
20. Headings
The headings used in this Agreement are for reference purposes only.
21. Entire Agreement
This agreement constitutes the entire agreement between the parties. No alterations,
modifications, or additions to this Agreement shall be binding unless reduced to writing
and signed by both parties.
22. Waiver
No waiver of any default shall constitute a waiver of any other default, nor shall such
waiver constitute a continuing waiver. No waiver of any term or condition of this
Agreement shall constitute a waiver of any other term or condition, whether or not
similar, nor shall such waiver constitute a continuing waiver. No covenant, term, or
addition to this Agreement shall be deemed waived by either party unless such waiver
shall be reduced to writing and signed by both parties.
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23. Recordation
Borrower, at its sole cost and expense, shall cause this Agreement to be recorded and
filed with the Gallatin County Clerk and Recorder within ten (10) business days of
execution of this Agreement by both parties. Evidence of said recordation shall be
delivered to the City.
24. Authority
The undersigned Borrower affirms they have the authority to enter into this agreement on
behalf of themselves and to bind the undersigned Borrower to this Agreement.
25. Binder
This Agreement shall be binding upon the heirs, personal representatives, successors and
assigns of the Parties.
CITY:
CITY OF BOZEMAN
By:___________________________
Chris A. Kukulski, Bozeman City Manager
ATTEST:
_________________________
Stacy Ulmen, Clerk of Bozeman City Commission
APPROVED AS TO FORM:
________________________
Greg Sullivan, Bozeman City Attorney
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BORROWER:
By:________________________________
Robert Sanks
STATE OF MONTANA )
:ss
County of Gallatin )
This instrument was acknowledged before me on the ______ day of _____________________,
2009 by _______________________________.
____________________________________
(Signature of notarial officer)
(Seal, if any)
______________________________
(Name)
____________________________________
Title (and Rank)
____________________________________
(Residing at)
[My commission expires: ________]
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Memorandum of Agreement
Bozeman Blast Clean-Up Loan Fund
This Memorandum of Agreement (Agreement) is made and entered into this ___ day of
__________, 2009, between the City of Bozeman, Montana, a self-governing political
subdivision of the state of Montana, with principal offices at 121 North Rouse Ave., Bozeman,
Montana, 59715 (hereinafter referred to as the City), and Robert and Ann C. Bates, a property
owner whose property was directly affected by the explosion in downtown Bozeman on March
5, 2009, (hereinafter referred to as Borrower).
WHEREAS, downtown Bozeman is a hub of the Bozeman community and quality of life
and as such is critical to the City’s economic vitality as it provides immeasurable social and
economic benefits to residents and guests of the City of Bozeman; and
WHEREAS, an explosion occurred on March 5, 2009, effectively destroying several
buildings on the north side of the 200 block of East Main St. in downtown Bozeman; and
WHEREAS, the debris of the destroyed buildings continues to exist on several properties
at the site; and
WHEREAS, several property and business owners whose property and businesses were
destroyed in the explosion and resulting fire seek to clean up debris located on the site as quickly
as possible to ensure plans for rebuilding are moved forward in as expeditious a manner as
possible; and
WHEREAS, the City Commission desires to assist the various business and property
owners whose property was destroyed in the March 5, 2009 explosion in expediting the cleanup
of the affected sites by providing a loan of money to the Borrower to be used exclusively for
cleanup of existing debris and as such has created the Bozeman Blast Clean-Up Loan Fund (the
“Fund”); and
WHEREAS, the monies for the Fund will consist of $90,000 of money recycled from the
City’s Economic Development Revolving Loan Fund; $110,000 recycled from the City’s
Housing Revolving Loan Program; $50,000 of money from the City of Bozeman general fund,
and $50,000 from Northwestern Energy pursuant to the Bozeman Blast Clean-Up Loan Fund
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Participation Agreement, approved by the City Commission for signature by the City Manger on
May 18, 2009; and
WHEREAS, the Gallatin Development Corporation, d/b/a Prospera Business Network, a
private, non-profit, member-supported economic development organization, as a gesture of good
will to the citizens of Bozeman, agrees to act as the administrator of this Fund and to distribute
the monies allocated under this Fund to the Borrower and receive payments from the Borrower.
Prospera in no way assumes any liability or responsibility for the repayment of the loan proceeds
or any liability stemming from the cleanup of the site; and
WHEREAS, the City Commission specifically finds loaning money to the affected
property owners constitutes a valid public purpose because the existing condition of the
properties destroyed in the explosion is having a negative effect on the economic vitality of
downtown Bozeman and expediting the cleanup will benefit the entire City of Bozeman; and
WHEREAS, the City Commission specifically finds that while the loan may be provided
to private individuals to expedite the cleanup of the affected properties, the loan affects the
inhabitants of the City of Bozeman as a community, not just as individual property owners and
although private property and business owners may benefit from the loan, the loan provides a
public benefit as it shows the community’s commitment to the social and economic vitality of
downtown Bozeman.
NOW, THEREFORE, in consideration of the above, the City and Borrower agree as
follows:
1. Amount of Loan
The City agrees under the terms and conditions of this Agreement, to make available
money in the form of a loan to Borrower in the principal amount of up to a maximum
$90,000 (Ninety Thousand Dollars and Zero Cents) representing approximately 30.0% of
total above ground square footage of the buildings destroyed in the March 5, 2009 event
and 30.0% of the $300,000 allocated by the City under the Fund. The principal amount
cited above shall be repaid by Borrower over a term of not more than five (5) years,
specifically and solely for the cleanup of debris at the following described real
property(s):
The East 16.5 feet of Lot 6, and the West 10 feet of Lot 7, all within Block D of
the Bozeman Original Plat, Sect. 7, Township 2 South, Range 6 East, Gallatin
County, Montana.
This loan shall be evidenced by a Promissory Note(s) required prior to and for each
disbursement made under the Fund to a Borrower. The loan shall be further secured by
any proceeds of any insurance reimbursements pursuant to Section 9, below.
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2. Interest Rate and Repayment
The loan shall bear no interest for its life. The Borrower(s) shall be required to pay back
only the principal of the loan amount actually disbursed. The Borrower shall make
payments in as expeditious and timely a manner as possible but all funds loaned shall be
paid back within five (5) years.
There will be no penalty for prepayment of the loan.
3. Disbursement of Funds
The City shall make monies up to the entire sum mentioned in Section 1, above, available
to the Borrower through Prospera. Payments will be dispersed at the time Borrower
provides Proposer the invoices from the Borrower’s agents conducting the cleanup work.
The invoices shall be detailed as to expenditures for labor, materials, waste disposal
costs, etc… There shall be no cash advances. Loan money shall only be released to pay
existing invoices.
4. Conditions of Loan
A. The Borrower agrees to comply with all requirements of City of Bozeman
Resolution 4168 (Attachment A) and those requirements are fully incorporated
herein.
B. In the event that the Borrower’s interest in the real property for which the money
allocated under this Agreement benefits is sold, transferred, or otherwise
conveyed during the term of this loan, the City has sole discretion to determine
whether the loan will become immediately due and payable.
C. The Borrower shall not remove from the city limits of the City of Bozeman the
Borrower’s business activities that were located within the buildings destroyed in
the March 5, 2009 event or any property associated with the business activities for
which the loan is intended to benefit during the term of this Agreement.
D. The Borrower, recognizing public monies are being used for their personal
benefit, shall use best efforts to repay the entire principle of the loan amount
within as expeditious a time as possible and, in doing so, shall continually
communicate with the City and Prospera as to the course of events related to
debris clean up, payments from insurance companies, and expected timelines for
repaying the Fund.
E. The Borrower also specifically agrees to not use any of the money loaned under
this Agreement for any purpose other than cleanup of the affected properties.
Specifically, the Borrower agrees that no monies from this loan will be used for
any political purpose.
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F. The Borrower agrees under no circumstances will the City or Prospera make
available to the Borrower any money exceeding the amount listed in Section 1,
above if the total required by the Borrower for cleanup exceeds the amount
authorized.
5. Protection of Right-of-Way/Sidewalk to Remain Open
The Borrower specifically agrees to ensure the public right-of-way on the south of the
affected properties is kept clear of debris and open to the public. Notwithstanding the
above, the City agrees to work with the Borrower to allow for periodic closures of the
sidewalk on Main St. if necessary to facilitate the safe handling and removal of debris
from the subject properties. The Borrower agrees to use best efforts to ensure the
sidewalk closing is for the minimal time necessary. During the removal of debris, the
Borrower will take all necessary precautions to ensure the public is protected at all times.
The Borrower shall install and maintain in good working condition a perimeter fence on
the south side of the subject properties specifically designed to prevent the exit of debris
onto the Main St. sidewalk.
6. Promissory Note/Insurance Proceeds
A. Any monies paid to Borrower upon invoice to Prospera will only be released by
the Borrower executing a Promissory Note(s), with approval by the City Attorney.
B. Borrower specifically agrees to assign to the City the proceeds from any insurance
reimbursements made to Borrower regarding damage to their property or business
and agree to forward said proceeds Prospera within 10 days of receipt of the
proceeds. Evidence of the Borrower’s insurance proceeds shall be attached as
Appendix B to this Agreement. The Borrower specifically agrees the City has a
priority right to these insurance proceeds as collateral for the loan. The Borrower
agrees to allow the City to file with the applicable governmental recording office
any necessary documents that allows the City to evidence its priority interest in
the above described insurance proceeds.
7. Living Wage/Prevailing Wage
The Borrower agrees to require any contractor working on the cleanup using funds to be
paid by this loan a living wage as provided by Chapter 2.96 of the Bozeman Municipal
Code. The Borrowers agree to require any contractor working on the cleanup using funds
to be paid by this loan to make available for City inspection its payroll records relating to
employees providing services under this loan. If any payroll records of the Borrower’s
contractor contain any false, misleading or fraudulent information, or if the Borrowers
and their contractors fail to comply with any of the provisions of Bozeman Municipal
Code Chapter 2.96, the Borrowers will be in default and the City may withhold payments
on the agreement, terminate, cancel or suspend the agreement in whole, or in part in
addition to any remedies contained herein or at law.
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The Borrowers agrees to require any contractor or subcontractor working on the cleanup
to comply with federal and state law regarding prevailing wages, including the Montana
Prevailing Wage Act, Title 18, Chpt. 2, Part 4, MCA, and any State of Montana
administrative rules established there under by the Montana Department of Labor &
Industry.
8. Default
Use of the loan proceeds by a borrower for any purpose other than described herein
and not consistent shall be cause for immediate breach and all monies shall be
repaid to the City of Bozeman immediately.
A. The occurrence of any one or more of the following events may, in the discretion
of the City, constitute a default (“event of default”) by Borrowers under this
Agreement:
i. Any representation or warranty made by the Borrowers in this Agreement
or in any request or certificate or other information furnished to the City
hereunder proves to have been incorrect in any material respect;
ii. The Borrower fails in any material respect to carry out the obligations
under the proposal to the City for the loan provided hereunder;
iii. The Borrower fails to pay, when due, any indebtedness for any money
borrowed, for which the City is liable as principal obligor;
iv. The Borrower apply for or consent to the appointment of a receiver,
trustee or liquidator, admit in writing to its inability to pay its debts as they
become due, make a general assignment for the benefit of creditors, or
invoke any relief under any chapter of the United States Bankruptcy Code;
v. The Borrower fails to pay all local real property taxes specified to the
project funded by the proceeds of this loan, as applicable;
vi. The Borrower removes the business activities for which the loan is
intended from the City’s jurisdictional area during the term of the loan;
vii. The Borrower fails to execute any documents reasonably necessary to
make the City secure in its financial position as stated in this Agreement;
viii. The Borrower sells, transfers, or otherwise conveys their right, title or
interest in the real property being benefited to render the City insecure in
its position of having the loan repaid;
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ix. The Borrower violates any term, assurance, or condition of this
Agreement; or
x. Borrower fails to obtain all applicable City business, building licenses or
other any other required City permit.
B. In the event the Borrowers fail to make timely payments under this Agreement or
perform any of the covenants on its part or any event of default occurs as stated
above, the City at any time thereafter may declare the Borrowers to be in default
and thereafter give the Borrowers written notice setting forth the action or
inaction which constitutes the default and giving the Borrowers thirty (30) days in
which to correct the default. If the Borrowers fail to correct the default within
thirty (30) days of receipt of this notice, the City may notify the Borrowers in
writing that the full balance due upon this Agreement is then due and payable in
full within thirty (30) days. It is agreed by the parties hereto that the provisions of
this Agreement provide for reasonable and sufficient notice to be given to the
Borrowers in case of the Borrower’s failure to perform any of its covenants and
that this notice is sufficient for the Borrowers to rectify its actions or inaction of
default.
Any waiver by the City of any default by the Borrowers does not constitute a
waiver of a continuing breach or a waiver of a subsequent breach. Any agreement
contrary to this Agreement is not binding upon either party hereto unless it is in
writing and signed by both parties.
In the event of default, the City, in its own absolute discretion, may exercise any
one or more of the rights and remedies accruing to a secured party under the laws
of the State of Montana and any other applicable law and this agreement. All of
the City’s rights and remedies under this Agreement and the other agreements are
cumulative and nonexclusive.
9. Non-Discrimination
The Borrowers specifically agrees to comply with all provisions of the Montana Human
Rights Act (Title 49, MCA).
10. Insurance
Prior to allocation to the Borrower of any monies under this Agreement Borrower shall
acquire, provide to the City and Prospera, property and liability insurance for personal
injury, including death, as well as third party property damage, in the amount of Seven
Hundred Fifty Thousand and no 0/100 Dollars ($750,000.00) for each occurrence with
One Million Five Hundred Thousand and no 0/100 Dollars ($1,500,000.00) umbrella
coverage per occurrence. The Borrower shall maintain the above for the term of this
Agreement. The City of Bozeman and Prospera shall be named as an additional insured
on the Borrower’s policies. During the term of this Agreement, when the Borrower
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renews the insurance policy by payment of an additional year's premium, the Borrowers
will provide proof of payment of the premium to the City and Prospera so as to keep the
City and Prospera advised at all times that the properties are insured as required by this
Section. Failure to so notify the City and Prospera is an event of default of this
Agreement for purposes of the default provisions of Section 8 above.
11. Additional Assurances
The Borrowers will remain fully obligated under the provisions of this Agreement
notwithstanding the Borrowers designation of any third party or parties (with written
approval of the City) for the undertaking of all or any part of the reimbursement with
respect to which assistance is being provided under this Agreement. The Borrower will
comply with all applicable laws, rules and regulations of the City and with all lawful
requirements of the City so as to insure that this Agreement is carried out in accordance
with the obligations and responsibility of the City and of the State of Montana.
12. Indemnification/Hold Harmless
The Borrowers waive any and all claims and recourse against the City and Prospera,
including the right of contribution for loss and damage to persons or property arising
from, growing out of, or in any way connected with or incident to this Agreement and th
use of loan proceeds including any actions taken by the Borrower with the loan proceeds
such as cleanup, debris removal, or any other activity of any kind. Further, the
Borrowers will indemnify, hold harmless, and defend the City and Prospera Business
Network against any and all claims, demands, damages, costs, expenses or liability
arising out of the performance of the Borrowers, its agents, or assigns, with regard to this
Agreement and cleanup, debris removal, or any other activity using the loan proceeds,
including any pollution existing or occurring onsite.
13. Litigation
The Borrowers state that to the best of its knowledge and belief there are no suits or
proceedings pending or threatened against or affecting it which, if adversely determined,
would have a material adverse effect on its financial condition and thus its ability to
reimburse the City under this Agreement. In addition, to the knowledge of the
Borrowers, there are no proceedings by or before any governmental commission, board,
bureau or other administrative agency pending, or threatened against the Borrowers.
14. Attorney Fees
In the event that either party, or Prospera, incurs legal expenses, including the costs,
expenses, salary and fees of the in-house counsel, to include the City Attorney, to enforce
the terms and conditions of this Agreement, the prevailing party is entitled to recover
reasonable attorney's fees and other costs and expenses, whether the same are incurred
with or without suit, including fees on appeal.
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15. Avoidance of Conflict of Interest
The Borrowers covenant that no officer, member, agent, or employee of the City or
Prospera who participates in the administration of this Agreement in other than a purely
ministerial capacity will have any personal interest, real or apparent, in the proceeds of
the loan provided hereby. For purposes of this covenant, an impermissible conflict of
interest exists if the officer, member, agent or employee; any member of his or her
immediate family; his or her partner; or an organization which employs, or is about to
employ, any of the foregoing has a financial or other interest in the proceeds hereof
during his or her tenure or for one year thereafter. The Borrowers shall incorporate, or
cause to be incorporated, in all contracts or subcontracts a provision prohibiting such
interest pursuant to the purposes of this section.
16. Construction and Venue
This Agreement will be construed under and governed by the laws of the State of
Montana. In the event of litigation concerning it, venue is in the 18th Judicial District
Court, Gallatin County, Montana.
17. Modifications
Any amendments or modifications of this agreement, or any provisions herein shall be
made in writing and executed in the same manner as an original document and shall after
execution become part of this agreement.
18. Assignment
In the event that the Borrower sells, transfers or otherwise conveys all, or a part, of its
interest in either the real property or the business entity included herein, the Borrower
shall contact the City prior to such sale, transfer or conveyance. This Agreement is non-
assignable except upon the written consent of the City, and the City may consider
assignment without notice and consent a default under Section 8. The City may, at its
sole discretion, determine whether the loan will become immediately due and payable or
consent to assignment. A request for consent to assignment must include a statement
justifying the request and the financial statement of the proposed assignee. This
statement must be current to within 90 days of the request. The City reserves the right to
deny requests for assignment and to modify the terms of this Agreement and its exhibits
as conditions of an assignment.
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19. Demand
Any demand upon or notice to either party shall be by personal service or addressed and
mailed to the following addresses:
CITY:
BORROWER:
City Manager
City of Bozeman
121 North Rouse Ave.
Bozeman, MT 59715
ADMINISTRATOR:
Chief Executive Officer
Prospera Business Network
222 East Main St. Suite 102
Bozeman, MT 59715
Ann C. Bates
30 Domingo Rd.
Sante Fe, NM 87508
Mailing shall be by certified mail, return receipt requested, and shall be effective when
served or three (3) days after deposit in the United States Mail, whichever occurs first.
20. Headings
The headings used in this Agreement are for reference purposes only.
21. Entire Agreement
This agreement constitutes the entire agreement between the parties. No alterations,
modifications, or additions to this Agreement shall be binding unless reduced to writing
and signed by both parties.
22. Waiver
No waiver of any default shall constitute a waiver of any other default, nor shall such
waiver constitute a continuing waiver. No waiver of any term or condition of this
Agreement shall constitute a waiver of any other term or condition, whether or not
similar, nor shall such waiver constitute a continuing waiver. No covenant, term, or
addition to this Agreement shall be deemed waived by either party unless such waiver
shall be reduced to writing and signed by both parties.
23. Recordation
Borrower, at its sole cost and expense, shall cause this Agreement to be recorded and
filed with the Gallatin County Clerk and Recorder within ten (10) business days of
execution of this Agreement by both parties. Evidence of said recordation shall be
delivered to the City.
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24. Authority
The undersigned Borrower affirms they have the authority to enter into this agreement on
behalf of themselves and to bind the undersigned Borrower to this Agreement.
25. Binder
This Agreement shall be binding upon the heirs, personal representatives, successors and
assigns of the Parties.
CITY:
CITY OF BOZEMAN
By:___________________________
Chris A. Kukulski, Bozeman City Manager
ATTEST:
_________________________
Stacy Ulmen, Clerk of Bozeman City Commission
APPROVED AS TO FORM:
________________________
Greg Sullivan, Bozeman City Attorney
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BORROWER:
By:________________________________
Ann C. Bates
STATE OF MONTANA )
:ss
County of Gallatin )
This instrument was acknowledged before me on the ______ day of _____________________,
2009 by _______________________________.
____________________________________
(Signature of notarial officer)
(Seal, if any)
______________________________
(Name)
____________________________________
Title (and Rank)
____________________________________
(Residing at)
[My commission expires: ________]
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Memorandum of Agreement
Bozeman Blast Clean-Up Loan Fund
This Memorandum of Agreement (Agreement) is made and entered into this ___ day of
__________, 2009, between the City of Bozeman, Montana, a self-governing political
subdivision of the state of Montana, with principal offices at 121 North Rouse Ave., Bozeman,
Montana, 59715 (hereinafter referred to as the City), and the Gallatin Post #14 of the American
Legion, a property owner whose property was directly affected by the explosion in downtown
Bozeman on March 5, 2009, with principal offices at _____________________ (hereinafter
referred to as Borrower).
WHEREAS, downtown Bozeman is a hub of the Bozeman community and quality of life
and as such is critical to the City’s economic vitality as it provides immeasurable social and
economic benefits to residents and guests of the City of Bozeman; and
WHEREAS, an explosion occurred on March 5, 2009, effectively destroying several
buildings on the north side of the 200 block of East Main St. in downtown Bozeman; and
WHEREAS, the debris of the destroyed buildings continues to exist on several properties
at the site; and
WHEREAS, several property and business owners whose property and businesses were
destroyed in the explosion and resulting fire seek to clean up debris located on the site as quickly
as possible to ensure plans for rebuilding are moved forward in as expeditious a manner as
possible; and
WHEREAS, the City Commission desires to assist the various business and property
owners whose property was destroyed in the March 5, 2009 explosion in expediting the cleanup
of the affected sites by providing a loan of money to the Borrower to be used exclusively for
cleanup of existing debris and as such has created the Bozeman Blast Clean-Up Loan Fund (the
“Fund”); and
WHEREAS, the monies for the Fund will consist of $90,000 of money recycled from the
City’s Economic Development Revolving Loan Fund; $110,000 recycled from the City’s
Housing Revolving Loan Program; $50,000 of money from the City of Bozeman general fund,
and $50,000 from Northwestern Energy pursuant to the Bozeman Blast Clean-Up Loan Fund
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Participation Agreement, approved by the City Commission for signature by the City Manger on
May 18, 2009; and
WHEREAS, the Gallatin Development Corporation, d/b/a Prospera Business Network, a
private, non-profit, member-supported economic development organization, as a gesture of good
will to the citizens of Bozeman, agrees to act as the administrator of this Fund and to distribute
the monies allocated under this Fund to the Borrower and receive payments from the Borrower.
Prospera in no way assumes any liability or responsibility for the repayment of the loan proceeds
or any liability stemming from the cleanup of the site; and
WHEREAS, the City Commission specifically finds loaning money to the affected
property owners constitutes a valid public purpose because the existing condition of the
properties destroyed in the explosion is having a negative effect on the economic vitality of
downtown Bozeman and expediting the cleanup will benefit the entire City of Bozeman; and
WHEREAS, the City Commission specifically finds that while the loan may be provided
to private individuals to expedite the cleanup of the affected properties, the loan affects the
inhabitants of the City of Bozeman as a community, not just as individual property owners and
although private property and business owners may benefit from the loan, the loan provides a
public benefit as it shows the community’s commitment to the social and economic vitality of
downtown Bozeman.
NOW, THEREFORE, in consideration of the above, the City and Borrower agree as
follows:
1. Amount of Loan
The City agrees under the terms and conditions of this Agreement, to make available
money in the form of a loan to Borrower in the principal amount of up to a maximum
$88,500 (Eighty Eight Thousand Five Hundred Dollars and Zero Cents) representing
approximately 29.5% of total above ground square footage of the buildings destroyed in
the March 5, 2009 event and 29.5% of the $300,000 allocated by the City under the Fund.
The principal amount cited above shall be repaid by Borrower over a term of not more
than five (5) years, specifically and solely for the cleanup of debris at the following
described real property(s):
The East 18 feet of Lot 7, and the West 8 feet, 4 inches of Lot 8, all within Block
D of the Bozeman Original Plat, Sect. 7, Township 2 South, Range 6 East,
Gallatin County, Montana.
This loan shall be evidenced by a Promissory Note(s) required prior to and for each
disbursement made under the Fund to a Borrower. The loan shall be further secured by
any proceeds of any insurance reimbursements pursuant to Section 9, below.
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2. Interest Rate and Repayment
The loan shall bear no interest for its life. The Borrower(s) shall be required to pay back
only the principal of the loan amount actually disbursed. The Borrower shall make
payments in as expeditious and timely a manner as possible but all funds loaned shall be
paid back within five (5) years.
There will be no penalty for prepayment of the loan.
3. Disbursement of Funds
The City shall make monies up to the entire sum mentioned in Section 1, above, available
to the Borrower through Prospera. Payments will be dispersed at the time Borrower
provides Proposer the invoices from the Borrower’s agents conducting the cleanup work.
The invoices shall be detailed as to expenditures for labor, materials, waste disposal
costs, etc… There shall be no cash advances. Loan money shall only be released to pay
existing invoices.
4. Conditions of Loan
A. The Borrower agrees to comply with all requirements of City of Bozeman
Resolution 4168 (Attachment A) and those requirements are fully incorporated
herein.
B. In the event that the Borrower’s interest in the real property for which the money
allocated under this Agreement benefits is sold, transferred, or otherwise
conveyed during the term of this loan, the City has sole discretion to determine
whether the loan will become immediately due and payable.
C. The Borrower shall not remove from the city limits of the City of Bozeman the
Borrower’s business activities that were located within the buildings destroyed in
the March 5, 2009 event or any property associated with the business activities for
which the loan is intended to benefit during the term of this Agreement.
D. The Borrower, recognizing public monies are being used for their personal
benefit, shall use best efforts to repay the entire principle of the loan amount
within as expeditious a time as possible and, in doing so, shall continually
communicate with the City and Prospera as to the course of events related to
debris clean up, payments from insurance companies, and expected timelines for
repaying the Fund.
E. The Borrower also specifically agrees to not use any of the money loaned under
this Agreement for any purpose other than cleanup of the affected properties.
Specifically, the Borrower agrees that no monies from this loan will be used for
any political purpose.
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F. The Borrower agrees under no circumstances will the City or Prospera make
available to the Borrower any money exceeding the amount listed in Section 1,
above if the total required by the Borrower for cleanup exceeds the amount
authorized.
5. Protection of Right-of-Way/Sidewalk to Remain Open
The Borrower specifically agrees to ensure the public right-of-way on the south of the
affected properties is kept clear of debris and open to the public. Notwithstanding the
above, the City agrees to work with the Borrower to allow for periodic closures of the
sidewalk on Main St. if necessary to facilitate the safe handling and removal of debris
from the subject properties. The Borrower agrees to use best efforts to ensure the
sidewalk closing is for the minimal time necessary. During the removal of debris, the
Borrower will take all necessary precautions to ensure the public is protected at all times.
The Borrower shall install and maintain in good working condition a perimeter fence on
the south side of the subject properties specifically designed to prevent the exit of debris
onto the Main St. sidewalk.
6. Promissory Note/Insurance Proceeds
A. Any monies paid to Borrower upon invoice to Prospera will only be released by
the Borrower executing a Promissory Note(s), with approval by the City Attorney.
B. Borrower specifically agrees to assign to the City the proceeds from any insurance
reimbursements made to Borrower regarding damage to their property or business
and agree to forward said proceeds Prospera within 10 days of receipt of the
proceeds. Evidence of the Borrower’s insurance proceeds shall be attached as
Appendix B to this Agreement. The Borrower specifically agrees the City has a
priority right to these insurance proceeds as collateral for the loan. The Borrower
agrees to allow the City to file with the applicable governmental recording office
any necessary documents that allows the City to evidence its priority interest in
the above described insurance proceeds.
7. Living Wage/Prevailing Wage
The Borrower agrees to require any contractor working on the cleanup using funds to be
paid by this loan a living wage as provided by Chapter 2.96 of the Bozeman Municipal
Code. The Borrowers agree to require any contractor working on the cleanup using funds
to be paid by this loan to make available for City inspection its payroll records relating to
employees providing services under this loan. If any payroll records of the Borrower’s
contractor contain any false, misleading or fraudulent information, or if the Borrowers
and their contractors fail to comply with any of the provisions of Bozeman Municipal
Code Chapter 2.96, the Borrowers will be in default and the City may withhold payments
on the agreement, terminate, cancel or suspend the agreement in whole, or in part in
addition to any remedies contained herein or at law.
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The Borrowers agrees to require any contractor or subcontractor working on the cleanup
to comply with federal and state law regarding prevailing wages, including the Montana
Prevailing Wage Act, Title 18, Chpt. 2, Part 4, MCA, and any State of Montana
administrative rules established there under by the Montana Department of Labor &
Industry.
8. Default
Use of the loan proceeds by a borrower for any purpose other than described herein
and not consistent shall be cause for immediate breach and all monies shall be
repaid to the City of Bozeman immediately.
A. The occurrence of any one or more of the following events may, in the discretion
of the City, constitute a default (“event of default”) by Borrowers under this
Agreement:
i. Any representation or warranty made by the Borrowers in this Agreement
or in any request or certificate or other information furnished to the City
hereunder proves to have been incorrect in any material respect;
ii. The Borrower fails in any material respect to carry out the obligations
under the proposal to the City for the loan provided hereunder;
iii. The Borrower fails to pay, when due, any indebtedness for any money
borrowed, for which the City is liable as principal obligor;
iv. The Borrowers apply for or consent to the appointment of a receiver,
trustee or liquidator, admit in writing to its inability to pay its debts as they
become due, make a general assignment for the benefit of creditors, or
invoke any relief under any chapter of the United States Bankruptcy Code;
v. The Borrowers fail to pay all local real property taxes specified to the
project funded by the proceeds of this loan, as applicable;
vi. The Borrowers remove the business activities for which the loan is
intended from the City’s jurisdictional area during the term of the loan;
vii. The Borrower fail to execute any documents reasonably necessary to make
the City secure in its financial position as stated in this Agreement;
viii. The Borrower sells, transfers, or otherwise conveys their right, title or
interest in the real property being benefited to render the City insecure in
its position of having the loan repaid;
ix. The Borrowers violate any term, assurance, or condition of this
Agreement; or
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x. Borrowers fail to obtain all applicable City business, building licenses or
other any other required City permit.
B. In the event the Borrowers fail to make timely payments under this Agreement or
perform any of the covenants on its part or any event of default occurs as stated
above, the City at any time thereafter may declare the Borrowers to be in default
and thereafter give the Borrowers written notice setting forth the action or
inaction which constitutes the default and giving the Borrowers thirty (30) days in
which to correct the default. If the Borrowers fail to correct the default within
thirty (30) days of receipt of this notice, the City may notify the Borrowers in
writing that the full balance due upon this Agreement is then due and payable in
full within thirty (30) days. It is agreed by the parties hereto that the provisions of
this Agreement provide for reasonable and sufficient notice to be given to the
Borrowers in case of the Borrower’s failure to perform any of its covenants and
that this notice is sufficient for the Borrowers to rectify its actions or inaction of
default.
Any waiver by the City of any default by the Borrowers does not constitute a
waiver of a continuing breach or a waiver of a subsequent breach. Any agreement
contrary to this Agreement is not binding upon either party hereto unless it is in
writing and signed by both parties.
In the event of default, the City, in its own absolute discretion, may exercise any
one or more of the rights and remedies accruing to a secured party under the laws
of the State of Montana and any other applicable law and this agreement. All of
the City’s rights and remedies under this Agreement and the other agreements are
cumulative and nonexclusive.
9. Non-Discrimination
The Borrowers specifically agrees to comply with all provisions of the Montana Human
Rights Act (Title 49, MCA).
10. Insurance
Prior to allocation to the Borrower of any monies under this Agreement Borrower shall
acquire, provide to the City and Prospera, property and liability insurance for personal
injury, including death, as well as third party property damage, in the amount of Seven
Hundred Fifty Thousand and no 0/100 Dollars ($750,000.00) for each occurrence with
One Million Five Hundred Thousand and no 0/100 Dollars ($1,500,000.00) umbrella
coverage per occurrence. The Borrower shall maintain the above for the term of this
Agreement. The City of Bozeman and Prospera shall be named as an additional insured
on the Borrower’s policies. During the term of this Agreement, when the Borrower
renews the insurance policy by payment of an additional year's premium, the Borrowers
will provide proof of payment of the premium to the City and Prospera so as to keep the
City and Prospera advised at all times that the properties are insured as required by this
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Section. Failure to so notify the City and Prospera is an event of default of this
Agreement for purposes of the default provisions of Section 8 above.
11. Additional Assurances
The Borrowers will remain fully obligated under the provisions of this Agreement
notwithstanding the Borrowers designation of any third party or parties (with written
approval of the City) for the undertaking of all or any part of the reimbursement with
respect to which assistance is being provided under this Agreement. The Borrower will
comply with all applicable laws, rules and regulations of the City and with all lawful
requirements of the City so as to insure that this Agreement is carried out in accordance
with the obligations and responsibility of the City and of the State of Montana.
12. Indemnification/Hold Harmless
The Borrowers waive any and all claims and recourse against the City and Prospera,
including the right of contribution for loss and damage to persons or property arising
from, growing out of, or in any way connected with or incident to this Agreement and th
use of loan proceeds including any actions taken by the Borrower with the loan proceeds
such as cleanup, debris removal, or any other activity of any kind. Further, the
Borrowers will indemnify, hold harmless, and defend the City and Prospera Business
Network against any and all claims, demands, damages, costs, expenses or liability
arising out of the performance of the Borrowers, its agents, or assigns, with regard to this
Agreement and cleanup, debris removal, or any other activity using the loan proceeds,
including any pollution existing or occurring onsite.
13. Litigation
The Borrowers state that to the best of its knowledge and belief there are no suits or
proceedings pending or threatened against or affecting it which, if adversely determined,
would have a material adverse effect on its financial condition and thus its ability to
reimburse the City under this Agreement. In addition, to the knowledge of the
Borrowers, there are no proceedings by or before any governmental commission, board,
bureau or other administrative agency pending, or threatened against the Borrowers.
14. Attorney Fees
In the event that either party, or Prospera, incurs legal expenses, including the costs,
expenses, salary and fees of the in-house counsel, to include the City Attorney, to enforce
the terms and conditions of this Agreement, the prevailing party is entitled to recover
reasonable attorney's fees and other costs and expenses, whether the same are incurred
with or without suit, including fees on appeal.
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15. Avoidance of Conflict of Interest
The Borrowers covenant that no officer, member, agent, or employee of the City or
Prospera who participates in the administration of this Agreement in other than a purely
ministerial capacity will have any personal interest, real or apparent, in the proceeds of
the loan provided hereby. For purposes of this covenant, an impermissible conflict of
interest exists if the officer, member, agent or employee; any member of his or her
immediate family; his or her partner; or an organization which employs, or is about to
employ, any of the foregoing has a financial or other interest in the proceeds hereof
during his or her tenure or for one year thereafter. The Borrowers shall incorporate, or
cause to be incorporated, in all contracts or subcontracts a provision prohibiting such
interest pursuant to the purposes of this section.
16. Construction and Venue
This Agreement will be construed under and governed by the laws of the State of
Montana. In the event of litigation concerning it, venue is in the 18th Judicial District
Court, Gallatin County, Montana.
17. Modifications
Any amendments or modifications of this agreement, or any provisions herein shall be
made in writing and executed in the same manner as an original document and shall after
execution become part of this agreement.
18. Assignment
In the event that the Borrower sells, transfers or otherwise conveys all, or a part, of its
interest in either the real property or the business entity included herein, the Borrower
shall contact the City prior to such sale, transfer or conveyance. This Agreement is non-
assignable except upon the written consent of the City, and the City may consider
assignment without notice and consent a default under Section 8. The City may, at its
sole discretion, determine whether the loan will become immediately due and payable or
consent to assignment. A request for consent to assignment must include a statement
justifying the request and the financial statement of the proposed assignee. This
statement must be current to within 90 days of the request. The City reserves the right to
deny requests for assignment and to modify the terms of this Agreement and its exhibits
as conditions of an assignment.
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19. Demand
Any demand upon or notice to either party shall be by personal service or addressed and
mailed to the following addresses:
CITY:
BORROWER:
City Manager
City of Bozeman
121 North Rouse Ave.
Bozeman, MT 59715
Gallatin Post #14 of the American Legion
Post Office Box 936
Bozeman, MT 59771
ADMINISTRATOR:
Chief Executive Officer
Prospera Business Network
222 East Main St. Suite 102
Bozeman, MT 59715
Mailing shall be by certified mail, return receipt requested, and shall be effective when
served or three (3) days after deposit in the United States Mail, whichever occurs first.
20. Headings
The headings used in this Agreement are for reference purposes only.
21. Entire Agreement
This agreement constitutes the entire agreement between the parties. No alterations,
modifications, or additions to this Agreement shall be binding unless reduced to writing
and signed by both parties.
22. Waiver
No waiver of any default shall constitute a waiver of any other default, nor shall such
waiver constitute a continuing waiver. No waiver of any term or condition of this
Agreement shall constitute a waiver of any other term or condition, whether or not
similar, nor shall such waiver constitute a continuing waiver. No covenant, term, or
addition to this Agreement shall be deemed waived by either party unless such waiver
shall be reduced to writing and signed by both parties.
23. Recordation
Borrower, at its sole cost and expense, shall cause this Agreement to be recorded and
filed with the Gallatin County Clerk and Recorder within ten (10) business days of
execution of this Agreement by both parties. Evidence of said recordation shall be
delivered to the City.
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24. Authority
The undersigned Borrower affirms they have the authority to enter into this agreement on
behalf of themselves and to bind the undersigned Borrower to this Agreement.
25. Binder
This Agreement shall be binding upon the heirs, personal representatives, successors and
assigns of the Parties.
CITY:
CITY OF BOZEMAN
By:___________________________
Chris A. Kukulski, Bozeman City Manager
ATTEST:
_________________________
Stacy Ulmen, Clerk of Bozeman City Commission
APPROVED AS TO FORM:
________________________
Greg Sullivan, Bozeman City Attorney
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BORROWER:
By:________________________________
Tom Jones,
The __________________________ and duly
authorized representative of the Gallatin Post #14 of
the American Legion.
STATE OF MONTANA )
:ss
County of Gallatin )
This instrument was acknowledged before me on this _____day of ________________, 2009,
by_______________________________ as ________________________________ of
_________________________________________.
_____________________________________
(Signature of notarial officer)
(Seal, if any)
________________________________________
(Name - typed, stamped, or printed)
_____________________________________
Title (and Rank)
_____________________________________
(Residing at)
[My commission expires: ________]
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