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HomeMy WebLinkAboutResolution 3567 $3,485,000 General Obligation Bond, series 2003B RESOLUTION NO. 3567 RESOLUTION RELATING TO GENERAL OBLIGATION REFUNDING BONDS, SERIES 2003B; AUTHORIZING THE ISSUANCE AND CALLING FOR THE SALE THEREOF BE IT RESOLVED by the City Commission (the "Commission") of the City of Bozeman, Montana (the "City"), as follows: Section 1. Recitals. At an election duly called and held on November 8, 1994, the electors of the City authorized the issuance and sale of general obligation bonds in the principal amount of $5,000,000. Pursuant to such authorization, this Commission issued and sold general obligation bonds ofthe City denominated "General Obligation Bonds, Series 1995," in the original aggregate principal amount of $5,000,000 (the "Series 1995 Bonds"). The Series 1995 Bonds are currently outstanding in the aggregate principal amount of$3,795,000 (the "Outstanding Bonds"). Section 2. Authorization. For the purposes of reducing the interest cost on the bonds authorized at the election referred to in Section 1 and reducing the taxes necessary to pay the principal of and interest on the Outstanding Bonds, it is hereby determined that it is in the best interests of the City and the owners of taxable property therein for the City to sell its general obligation refunding bonds, pursuant to Montana Code Annotated, Title 7, Chapter 7, Part 43, as amended, in order to advance refund all the outstanding Series 1995 Bonds with stated maturities in the years 2005 through 2014 (the "Refunded Bonds"). Such refunding bonds shall be denominated "General Obligation Refunding Bonds, Series 2003B" (the "Bonds"), and shall be issued in the aggregate principal amount of $3,485,000, subject to adjustment as provided in the Official Terms and Conditions hereinafter approved. Section 3. Sale of Bonds. Pursuant to Montana Code Annotated, Section 7-7-4302(1), as amended, this Commission hereby determines that it would be in the best interests of the City to sell the Bonds at a public, competitive sale. Section 4. Terms of the Bonds. Pursuant to the authority described in Section 3, this Commission hereby authorizes the issuance and sale of the Bonds of the City in the aggregate principal amount of$3,485,000, subject to adjustment as provided in the Official Terms and Conditions, for the purpose of providing funds to be used, with other available funds, to refund the Refunded Bonds. The Bonds shall be dated, as originally issued, as of February 1, 2003, and shall bear interest payable semiannually on January 1 and July 1 of each year, commencing July 1, 2003, at a rate or rates designated by the successful bidder at public sale and approved by this Commission. The Bonds shall be offered and sold in accordance with the Official Terms and Conditions attached as Exhibit A hereto (the "Official Terms and Conditions"), which is hereby incorporated by reference and made a part hereof. ---- ----.--.-- .......--...-- . ~ The Bonds shall be issued in DTC "book-entry" only fonn, in the denomination of $5,000 each or any integral multiple thereof of single maturities. Amortization bonds will not be issued. The Bonds shall be issuable only as fully registered bonds and shall be executed by the manual or facsimile signatures of the Mayor, City Manager and Clerk of the Commission. Section 5. Public Sale. Bids for the purchase of the Bonds shall be considered at a regular meeting of this Commission on January 13, 2003 at 3:00 P.M.., M.T. The City will receive sealed bids for the Bonds in accordance with the Official Tenns and Conditions. The Clerk of the Commission is hereby authorized and directed to cause notice of the sale to be published, as required by Montana Code Annotated, Sections 7-7-4302(1), 7-7-4252 and 17-5- 106, in Bozeman Daily Chronicle, Bozeman, Montana, once each week for two successive weeks preceding the week which contains the date of sale. The notice of sale shall be in substantially the fonn set forth as Exhibit B to this resolution, which is hereby incorporated herein and made a part hereof. Section 6. Preliminary Official Statement. The Clerk of the Commission and other officers of the City, in cooperation with Springsted Incorporated, of St. Paul, Minnesota, financial consultants to the City, are hereby authorized and directed to prepare on behalf of the City an official statement to be distributed to potential purchasers of the Bonds. Such official statement shall contain the Official Tenns and Conditions and such other infonnation as shall be advisable and necessary to describe accurately the City and the security for, and tenns and conditions of, the Bonds. Section 7. Continuing Disclosure. In order to pennit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), the City will covenant and agree, for the benefit ofthe registered holders and beneficial owners from time to time ofthe outstanding Bonds, in the resolution prescribing the terms of the Bonds to provide annual reports of specified infonnation and notice of the occurrence of certain events, if material. The City is the only "obligated person" in respect of the Bonds within the meaning of the Rule for the purposes of disclosing infonnation on an ongoing basis. A description of the undertaking is set forth in the Official Statement. Failure of the City to enter into an undertaking substantially similar to that described in the Official Statement would relieve the successful bidder of its obligation to purchase the Bonds. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. Section 8. Proceedings to the Attornev General. The Clerk of the Commission is hereby authorized and directed to furnish a certified copy of all proceedings taken by the City with respect to the issuance of the Bonds to the Attorney General for examination and request a report as to the validity of the Bonds, as required by Montana Code Annotated, Section 7-7-101. 2 . " Adopted by the City Commission of the City of Bozeman, Montana, on this 16th day of December, 2002, CITY OF BOZEMAN, MONT ANA _4- {(~cf Mayor Attest: ~y~ Clerk ofthe ComInission (SEAL) 3 EXHIBIT A TERMS AND CONDITIONS OF SALE General Obligation Refunding Bonds, Series 2003B City of Bozeman, Montana NOTICE IS HEREBY GIVEN by the City Commission (the "Commission") of the City of Bozeman, Montana (the "City"), that the City will receive sealed bids for the purchase of general obligation refunding bonds in the office of the Clerk of the Commission in City Hall, at 411 E. Main Street, Bozeman, Montana, in the total principal amount of $3,485,000* (the "Bonds"), until 11 :00 A.M., M.T., on January 13, 2003. The bids will be opened and tabulated by the Clerk of the Commission and presented to the City Commission at its regular meeting at 3:00 P.M., M.T., on the same day, in the Commission meeting room, at which time the Commission will consider the bids received, and if a responsive and acceptable bid is received, award sale of the Bonds to the responsive bidder whose bid reflects the lowest true interest cost (TIC). THE BONDS The Bonds will bear an original issue date of February 1, 2003, and will bear interest payable semiannually on January 1 and July 1 of each year, commencing July 1,2003, to the registered owners of the Bonds as such appear in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month, at a rate or rates designated by the successful bidder at public sale and approved by the Commission. Each rate must be expressed in an integral multiple of 1/8 or 5/100 of 1 %. No supplemental or "B" coupons or additional interest certificates are permitted. All Bonds ofthe same stated maturity must bear interest from date of original issue until paid at a single, uniform rate. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Bonds shall mature, subject to redemption as hereinafter provided, on July 1 in each of the following years and amounts: * The City reserves the right, after bids are opened and prior to the award, to increase or reduce the aggregate principal amount ofthe Bonds. Any such increase or reduction will not in the aggregate exceed $400,000, will not exceed $40,000 from any stated maturity and will be made in a multiple of$5,000 from any stated maturity. In the event the principal amount of the Bonds is adjusted, any premium offered or discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. A-I .______...__n. __..__.________ .--.- --.-- Year Amount Year Amount 2005 $280,000 2010 $350,000 2006 310,000 2011 365,000 2007 320,000 2012 385,000 2008 325,000 2013 395,000 2009 340,000 2014 415,000 Bonds shall be in the denomination of $5,000 each or any integral multiple thereof of single maturities. The Bonds will be issued as fully registered bonds only and shall be executed by the manual or facsimile signatures of the Mayor, City Manager and the Clerk of the Commission. The Bonds with stated maturities on or after July 1,2012 will be subject to redemption on July 1, 2011, and any day thereafter, at the option of the City, in whole or in part, and if in part from such stated maturities and in such principal amounts as the City may designate in writing to the Registrar (or, if no designation is made, in inverse order of maturities and within a stated maturity in $5,000 principal amounts selected by the Registrar by lot or other manner it deems fair), at a redemption price equal to the principal amount thereof to be redeemed plus interest accrued to the redemption date. BOOK ENTRY The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of$5,000 or any multiple thereof of a single maturity, through book entries made on the books and records ofDTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTe. PURPOSE AND SECURITY The Bonds will be issued for the purpose of advance refunding the City's General Obligation Bonds, Series 1995, and paying costs associated with the sale and issuance of the Bonds, in accordance with the provisions of Montana Code Annotated, Title 7, Chapter 7, Part 43, as amended. The Bonds will be general obligations of the City to the payment of which the full faith, credit and taxing power of the City will be pledged. Bidders should consult a copy of the Preliminary Official Statement for a discussion of the security for the Bonds and the form of opinion of bond counsel relating to the Bonds. A-2 -------- ---- ---- .......-. .-.- -... .-..- ,,- - -.--.- .. " CONTINUING DISCLOSURE In order to permit bidders for the Bonds and other participating Wlderwriters in the primary offering of the Bonds to comply with paragraph (b)( 5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), the City will covenant and agree, for the benefit of the registered holders and beneficial owners from time to time of the outstanding Bonds, in the resolution prescribing the terms of the Bonds to provide annual reports of specified information and notice ofthe occurrence of certain events, if material. The City is the only "obligated person" in respect of the Bonds within the meaning of the Rule for the purposes of disclosing information on an ongoing basis. A description of the Wldertaking is set forth in the Official Statement. Failure of the City to enter into an undertaking substantially similar to that described in the Official Statement would relieve the successful bidder of its obligation to purchase the Bonds. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. QUALIFIED TAX-EXEMPT OBLIGATIONS The Bonds will be designated by the City as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) ofthe Internal Revenue Code of 1986, as amended (the "Code"), and financial institutions described in Section 265(b)(5) of the Code may treat the Bonds for purposes of Sections 265(b )(2) and 291 (e)( 1 )(B) of the Code as if they were acquired on August 7, 1986. BIDDING AND SALE PROCEDURES Submission of Bids. Bids must be on the Official Bid form, a copy of which may be obtained from the Financial Advisor and enclosed in a sealed envelope marked as follows: "Bid for $3,485,000 General Obligation Refunding Bonds, Series 2003B, City of Bozeman, Montana" and delivered to the Clerk of the Commission. Each envelope when delivered must indicate on the outside the name and address of the bidder, or in the case of a group of bidders, of the representative. Basis of Award. The Bonds will be sold for not less than $3,453,635 with accrued interest to the date of delivery, and all bidders must state the lowest rate or rates of interest at which they will purchase the Bonds at par. Bids will be compared on the basis of true interest cost (TIC). The TIC is the effective cost of the Bonds based on bond proceeds received at closing calculated from the dated date of the Bonds. In the event that two or more bids state the lowest true interest cost, the sale of the Bonds will be awarded by lot. The Commission will accept sealed or faxed bids only. The Commission reserves the right to reject any and all bids and to sell the Bonds at private sale and to waive any informality and irregularity in any and all bids. Bidders must bid for all or none of the Bonds. Each bid must be unconditional (or conditioned on only those items specified in these Official Terms and Conditions of Sale). No bid may be altered or withdrawn after the time specified above for opening bids without the express consent of the Commission. Good Faith Deposit. A good faith deposit (the "Deposit") in the form of money, cashier's check, certified check, bank money order, or bank draft drawn and issued by a federally A-3 " , chartered or state chartered bank insured by the Federal Deposit Insurance Corporation or a financial surety bond in the sum of $69,700 payable to the order of the City of Bozeman, Montana is required for each bid to be considered. If money, cashier's check, certified check, bank money order, or bank draft is used, it must accompany each bid and be delivered to the Clerk ofthe Commission. If a financial surety bond is used, it must be from an insurance company licensed and qualified to issue such a bond in the State of Montana and such bond must be submitted to the Clerk of the Commission, or its financial advisor prior to the opening of the bids. The financial surety bond must identify each bidder whose Deposit is guaranteed by such financial surety bond. If the Bonds are awarded to a bidder utilizing a financial surety bond, then that purchaser is required to submit its Deposit to the City in the form of a cashier's check (or wire transfer such amount as instructed by the City or its financial advisor) not later than 1 :00 P.M., M.T., on the next business day following the award. If such Deposit is not received by that time, the financial surety bond may be drawn by the City to satisfy the Deposit requirement. No interest on the Deposit will accrue to the purchaser. The Deposit will be applied to the purchase price of the Bonds. In the event the purchaser fails to honor its accepted bid, the Deposit will be retained by the City. The Deposit of the unsuccessful bidders will be returned immediately on award of sale of the Bonds or after rejection of all bids. Instructions for wiring a Deposit may be obtained from the City's Financial Advisor, Springsted Incorporated, 85 East 11th Place, Suite 101, St. Paul, Minnesota 55101, (651) 223- 3000. BOND REGISTRAR, TRANSFER AGENT AND PAYING AGENT The City will designate and contract with a suitable bank or trust company to act as bond registrar, transfer agent and paying agent (the "Registrar"). The bond register will be kept, transfers of ownership will be effected and principal of and interest on the Bonds will be paid by the Registrar. The City will pay the charges of the Registrar for such services. The City reserves the right to remove the Registrar and to appoint a successor. LEGAL OPINION An opinion as to the validity of the Bonds and the exclusion from gross income for federal and Montana income tax purposes of the interest thereon will be furnished by Dorsey & Whitney LLP, of Missoula, Montana, and Minneapolis, Minnesota, as Bond Counsel. The legal opinion will be delivered at the time of closing. The legal opinion will state that the Bonds are valid and binding general obligations of the City enforceable in accordance with their terms, except to the extent to which enforceability thereof may be limited by the exercise of judicial discretion or by state or federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights. DELIVERY Within 40 days after the sale, the City will deliver to the Registrar the printed Bonds ready for completion and authentication. The original purchaser of the Bonds must notify the Registrar, at least five business days before issuance of the Bonds, of the persons in whose A-4 ~ ---..---- " , names the Bonds will be initially registered and the denominations of the Bonds to be originally issued. If notification is not received by that date, the Bonds will be registered in the name ofthe original purchaser and will be issued in denominations corresponding to the principal maturities of the Bonds. On the day of closing, the City will furnish to the purchaser the opinion of Bond Counsel described above, an arbitrage certification and a certificate stating that no litigation in any manner questioning the validity of the Bonds is then pending or, to the best knowledge of officers of the City, threatened. Payment for the Bonds must be received by the City in immediately available funds at its designated depository on the day of closing. The successful bidder shall submit to the Clerk of the Commission not earlier than 48 hours after the award of sale and not later than the date of closing a certificate, in form satisfactory to Bond Counsel, as to the initial reoffering prices of each stated maturity of the Bonds and stating that at least ten percent of the principal amount of the Bonds of each stated maturity has been sold at such prices. OFFICIAL STATEMENT The City will prepare an Official Statement relating to the Bonds which the City will deem to be final as of its date. The City will deliver, at closing, a certificate executed by the Mayor, City Manager and Clerk of the Commission to the effect that, to the best of their knowledge, as of the date of closing, the information contained in the Official Statement, including any supplement thereto, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading; provided that no comment will be made with respect to any information provided by the successful bidder for inclusion in any supplement to the Official Statement. By submitting a bid for the Bonds, the successful bidder agrees: (1) to disseminate to all members of the underwriting syndicate copies of the Official Statement, including any supplements prepared by the City, (2) to file promptly a copy of the Official Statement, including any supplement prepared by the City, with a nationally recognized municipal securities repository, and (3) to take any and all other actions necessary to comply with applicable rules of the Securities and Exchange Commission and the Municipal Securities Rulemaking Board governing the offering, sale and delivery of the Bonds to ultimate purchasers. Within seven business days after the sale the City will furnish to the successful bidder without charge 95 copies of the final Official Statement relating to the Bonds. The successful bidder must notify the Clerk of the Commission in writing within two business days after the award of sale of the Bonds if it requires additional copies of the Official Statement. The cost of additional copies shall be paid by the successful bidder. COSTS; CUSIP NUMBERS The City will pay for the cost of bond counsel opinion, printing ofthe bonds and the fees and charges of the Registrar. The City will apply for CUSIP numbers but will assume A-5 - --. ---=--.-----.-.--....--.- -.-------..------ -..... " . no cost or obligation for the printing of CUSIP numbers on the Bonds or for the correctness of any numbers printed thereon. BY ORDER OF THE CITY COMMISSION Robin Sullivan, Clerk ofthe Commission A-6 c, " EXHIBIT B NOTICE OF BOND SALE General Obligation Refunding Bonds, Series 2003B City of Bozeman, Montana NOTICE IS HEREBY GIVEN that the City Commission (the "Commission") of City of Bozeman, Montana (the "City"), will receive sealed bids for the purchase of General Obligation Refunding Bonds, Series 2003B, in the aggregate principal amount of $3,485,000, subject to adjustment as hereinafter provided (the "Bonds") at the office of the Clerk of the Commission, City of Bozeman, 411 E. Main Street, Bozeman, Montana, until 11 :00 A.M., M.T., on January 13,2003. The bids will be opened and tabulated by the Clerk of the Commission and presented to the Commission at its regular meeting at 3:00 P.M., M.T., on the same day in the City Commission meeting room. Bids will be compared on the basis of true interest cost (TIC) (calculated from the dated date). The Bonds are being issued for the purpose of refunding in advance of their stated maturities certain of the City's outstanding General Obligation Bonds, Series 1995 and to pay costs of issuance of the Bonds. Amortization bonds will not be issued. The Bonds shall mature July 1, subject to redemption as hereinafter described, in the following years and amounts: Year Amount Year Amount 2005 $280,000 2010 $350,000 2006 310,000 2011 365,000 2007 320,000 2012 385,000 2008 325,000 2013 395,000 2009 340,000 2014 415,000 The City reserves the right, after bids are opened and prior to award, to increase or reduce the aggregate principal amount of the Bonds. Any such increase or reduction will not in the aggregate exceed $400,000, will not exceed $40,000 from any stated maturity and will be made in a multiple of $5,000 from any stated maturity. The Bonds will bear an original issue date of February 1, 2003, and will bear interest payable semiannually on January 1 and July 1 of each year, commencing July 1,2003, to the registered owners of the Bonds as such appear in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. Interest rates shall be expressed in integral multiples of 5/100th or 1/8 of 1 %. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No supplemental or "B" coupons or additional interest certificates are permitted. The Bonds maturing on or after July 1, 2012 are subject to redemption at the option of the City and in whole or in part (and if in part from such stated maturities and in such principal amounts as the City may designate and, within a stated maturity, in $5,000 principal amounts, selected by lot or other manner deemed fair) on July 1, 2011 and on any day thereafter at a price equal to the principal amount being redeemed plus interest accrued to the date of redemption, without premiwn. B-1 , The City will designate the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b )(3) of the Internal Revenue Code of 1986, as amended. The Bonds will be sold for not less than $3,453,635 with accrued interest on the principal amount of the Bonds to the date of their delivery. (In the event the principal amount of the Bonds is adjusted, any premium offered or discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced.) The Commission reserves the right to reject any and all bids, to waive any informality in any bid, and to sell the Bonds at private sale. A good faith deposit in the form of money, cashier's check, certified check, bank money order, or bank draft drawn and issued by a federally chartered or state chartered bank insured by the Federal Deposit Insurance Corporation or a financial surety bond in the sum of 2% of the amount payable ($69,700) to the order of the City is required for each bid to be considered, as further specified in the Official Terms and Conditions. Copies of a statement of the Official Terms and Conditions of Sale and additional information may be obtained from Springsted Incorporated, 85 East 7th Place, Suite 100, S1. Paul, Minnesota 55101, (651) 223-3000. Prospective bidders should consult the Official Terms and Conditions of Sale and the Preliminary Official Statement for a description of the Bonds, the security therefor, and the form of legal opinion proposed to be rendered by Dorsey & Whitney LLP, of Missoula, Montana, as bond counsel. Dated: December _, 2002. BY ORDER OF THE COMMISSION OF CITY COMMISSIONERS Clerk of the Commission Publish: December 29,2002 January 5, 2003 B-2 --------- EXHIBIT A TERMS AND CONDITIONS OF SALE General Obligation Refunding Bonds, Series 2003B City of Bozeman, Montana NOTICE IS HEREBY GIVEN by the City Commission (the "Commission") of the City of Bozeman, Montana (the "City"), that the City will receive sealed bids for the purchase of general obligation refunding bonds in the office of the Clerk of the Commission in City Hall, at 411 E. Main Street, Bozeman, Montana, in the total principal amount of $3,485,000* (the "Bonds"), until 11 :00 A.M., M.T., on January 13, 2003. The bids will be opened and tabulated by the Clerk of the Commission and presented to the City Commission at its regular meeting at 3:00 P.M., M.T., on the same day, in the Commission meeting room, at which time the Commission will consider the bids received, and if a responsive and acceptable bid is received, award sale of the Bonds to the responsive bidder whose bid reflects the lowest true interest cost (TIC). THE BONDS The Bonds will bear an original issue date of February 1,2003, and wi]] bear interest payable semiannually on January 1 and July I of each year, commencing July 1,2003, to the registered owners of the Bonds as such appear in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month, at a rate or rates designated by the successful bidder at public sale and approved by the Commission. Each rate must be expressed in an integral multiple of 1/8 or 5/100 of 1 % and shall be in level or ascending order. No supplemental or "B" coupons or additional interest certificates are permitted. All Bonds of the same stated maturity must bear interest from date of original issue until paid at a single, uniform rate. Interest wi]] be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Bonds shall mature, subject to redemption as hereinafter provided, on July I in each of the following years and amounts: * The City reserves the right, after proposals are opened and prior to the award, to increase or reduce the principal amount ofthe Bonds offered for sale. Any such increase or reduction will be made in multiples of$5,000 in any ofthe maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. A-I --.-.----.--.---.----.---..-- ...-..-....-..- -...-..--.. Year Amount Year Amount 2005 $280,000 2010 $350,000 2006 310,000 2011 365,000 2007 320,000 2012 385,000 2008 325,000 2013 395,000 2009 340,000 2014 415,000 Bonds shall be in the denomination of $5,000 each or any integral multiple thereof of single maturities. The Bonds will be issued as fully registered bonds only and shall be executed by the manual or facsimile signatures of the Mayor, City Manager and the Clerk of the Commission. The Bonds with stated maturities on or after July 1,2012 will be subject to redemption on July 1, 2011, and any day thereafter, at the option of the City, in whole or in part, and if in part from such stated maturities and in such principal amounts as the City may designate in writing to the Registrar (or, if no designation is made, in inverse order of maturities and within a stated maturity in $5,000 principal amounts selected by the Registrar by lot or other manner it deems fair), at a redemption price equal to the principal amount thereof to be redeemed plus interest accrued to the redemption date. BOOK ENTRY The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate principal amount ofthe Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of$5,000 or any multiple thereof of a single maturity, through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of OTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery ofthe Bonds, will be required to deposit the Bonds with DTe. PURPOSE AND SECURITY The Bonds will be issued for the purpose of advance refunding the City's General Obligation Bonds, Series 1995, and paying costs associated with the sale and issuance of the Bonds, in accordance with the provisions of Montana Code Annotated, Title 7, Chapter 7, Part 43, as amended. The Bonds will be general obligations of the City to the payment of which the full faith, credit and taxing power of the City will be pledged. Bidders should consult a copy of the Preliminary Official Statement for a discussion of the security for the Bonds and the form of opinion of bond counsel relating to the Bonds. A-2 - -- - -- -------- -- ..-.-.......-- ..------....- - --------...-..- ---..--.---...- ------.-.--------.-..... . CONTINUING DISCLOSURE In order to permit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), the City will covenant and agree, for the benefit of the registered holders and beneficial owners from time to time of the outstanding Bonds, in the resolution prescribing the terms of the Bonds to provide annual reports of specified information and notice ofthe occurrence of certain events, if material. The City is the only "obligated person" in respect of the Bonds within the meaning of the Rule for the purposes of disclosing information on an ongoing basis. A description ofthe undertaking is set forth in the Official Statement. Failure ofthe City to enter into an undertaking substantially similar to that described in the Official Statement would relieve the successful bidder of its obligation to purchase the Bonds. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. QUALIFIED TAX-EXEMPT OBLIGATIONS The Bonds will be designated by the City as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and financial institutions described in Section 265(b)(5) of the Code may treat the Bonds for purposes of Sections 265(b )(2) and 291 (e)( 1 )(B) of the Code as if they were acquired on August 7, 1986. BIDDING AND SALE PROCEDURES Submission of Bids. Bids must be on the Official Bid form, a copy of which may be obtained from the Financial Advisor and enclosed in a sealed envelope marked as follows: "Bid for $3,485,000 General Obligation Refunding Bonds, Series 2003B, City of Bozeman, Montana" and delivered to the Clerk of the Commission. Each envelope when delivered must indicate on the outside the name and address of the bidder, or in the case of a group of bidders, of the representative. Basis of Award. The Bonds will be sold for not less than $3,453,635 with accrued interest to the date of delivery, and all bidders must state the lowest rate or rates of interest at which they will purchase the Bonds at par. Bids will be compared on the basis of true interest cost (TIC). The TIC is the effective cost of the Bonds based on bond proceeds received at closing calculated from the dated date of the Bonds. In the event that two or more bids state the lowest true interest cost, the sale of the Bonds will be awarded by lot. The Commission will accept sealed or faxed bids only. The Commission reserves the right to reject any and all bids and to sell the Bonds at private sale and to waive any informality and irregularity in any and all bids. Bidders must bid for all or none of the Bonds. Each bid must be unconditional (or conditioned on only those items specified in these Official Terms and Conditions of Sale). No bid may be altered or withdrawn after the time specified above for opening bids without the express consent of the Commission. Good Faith Deposit. A good faith deposit (the "Deposit") in the form of money, cashier's check, certified check, bank money order, or bank draft drawn and issued by a federally A-3 ---..- ..-----..--.-------..- --.--.---.- chartercd or state chartered bank insured by the Federal Deposit Insurance Corporation or a financial surety bond in the sum of $69,700 payable to the order of the City of Bozeman, Montana is required for each bid to be considered. If money, cashier's check, certified check, bank money order, or bank draft is used, it must accompany each bid and be delivered to the Clerk of the Commission. If a financial surety bond is used, it must be from an insurance company licensed and qualified to issue such a bond in the State of Montana and such bond must be submitted to the Clerk of the Commission, or its financial advisor prior to the opening of the bids. The financial surety bond must identify each bidder whose Deposit is guaranteed by such financial surety bond. If the Bonds are awarded to a bidder utilizing a financial surety bond, then that purchaser is required to submit its Deposit to the City in the form of a cashier's check (or wire transfer such amount as instructed by the City or its financial advisor) not later than 1:00 P.M., M.T., on the next business day following the award. If such Deposit is not received by that time, the financial surety bond may be drawn by the City to satisfy the Deposit requirement. No interest on the Deposit wi11 accrue to the purchaser. The Deposit will be applied to the purchase price of the Bonds. In the event the purchaser fails to honor its accepted bid, the Deposit will be retained by the City. The Deposit of the unsuccessful bidders will be returned immediately on award of sale of the Bonds or after rejection of all bids. Instructions for wiring a Deposit may be obtained from the City's Financial Advisor, Springsted Incorporated, 85 East i Place, Suite 100, St. Paul, Minnesota 5510 I, (651) 223- 3000. BOND REGISTRAR, TRANSFER AGENT AND PAYING AGENT The City wi11 designate and contract with a suitable bank or trust company to act as bond registrar, transfer agent and paying agent (the "Registrar"). The bond register will be kept, transfers of ownership will be effected and principal of and interest on the Bonds will be paid by the Registrar. The City will pay the charges of the Registrar for such services. The City reserves the right to remove the Registrar and to appoint a successor. LEGAL OPINION An opinion as to the validity of the Bonds and the exclusion from gross income for federal and Montana income tax purposes of the interest thereon will be furnished by Dorsey & Whitney LLP, of Missoula, Montana, and Minneapolis, Minnesota, as Bond Counsel. The legal opinion will be delivered at the time of closing. The legal opinion will state that the Bonds are valid and binding general obJigations of the City enforceable in accordance with their terms, except to the extent to which enforceability thereof may be limited by the exercise of judicial discretion or by state or federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights. DELIVERY Within 40 days after the sale, the City will deliver to the Registrar the printed Bonds ready for completion and authentication. The original purchaser of the Bonds must notifY the Registrar, at least five business days before issuance of the Bonds, of the persons in whose A-4 --- ------- --.-----.---.. names the Bonds will be initially registered and the denominations ofthe Bonds to be originally issued. If notification is not received by that date, the Bonds will be registered in the name of the original purchaser and will be issued in denominations corresponding to the principal maturities of the Bonds. On the day of closing, the City will furnish to the purchaser the opinion of Bond Counsel described above, an arbitrage certification and a certificate stating that no litigation in any manner questioning the validity ofthe Bonds is then pending or, to the best knowledge of officers of the City, threatened. Payment for the Bonds must be received by the City in immediately available funds at its designated depository on the day of closing. The successful bidder shall submit to the Clerk of the Commission not earlier than 48 hours after the award of sale and not later than the date of closing a certificate, in form satisfactory to Bond Counsel, as to the initial reoffering prices of each stated maturity of the Bonds and stating that at least ten percent of the principal amount of the Bonds of each stated maturity has been sold at such prices. OFFICIAL STATEMENT The City will prepare an Official Statement relating to the Bonds which the City will deem to be final as of its date. The City will deliver, at closing, a certificate executed by the Mayor, City Manager and Clerk of the Commission to the effect that, to the best of their knowledge, as of the date of closing, the information contained in the Official Statement, including any supplement thereto, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading; provided that no comment will be made with respect to any information provided by the successful bidder for inclusion in any supplement to the Official Statement. By submitting a bid for the Bonds, the successful bidder agrees: (1) to disseminate to all members of the underwriting syndicate copies of the Official Statement, including any supplements prepared by the City, (2) to file promptly a copy of the Official Statement, including any supplement prepared by the City, with a nationally recognized municipal securities repository, and (3) to take any and all other actions necessary to comply with applicable rules of the Securities and Exchange Commission and the Municipal Securities Rulemaking Board governing the offering, sale and delivery of the Bonds to ultimate purchasers. Within seven business days after the sale the City will furnish to the successful bidder without charge 95 copies of the final Official Statement relating to the Bonds. The successful bidder must notify the Clerk of the Commission in writing within two business days after the award of sale of the Bonds if it requires additional copies of the Official Statement. The cost of additional copies shall be paid by the successful bidder. BOND INSURANCE AT PURCHASER'S OPTION Prospective purchasers may seek to qualify the Bonds for insurance. If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the bidder, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Bonds from a rating agency, the A-5 .. --.....--......---. ...-..--- City will pay that rating fee. Any other rating agency fees shall be the responsibility of the purchaser. Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Bonds. COSTS; CUSIP NUMBERS The City will pay for the cost of bond counsel opinion, printing of the bonds and the fees and charges ofthe Registrar. The City will apply for CUSIP numbers but will assume no cost or obligation for the printing of CUSIP numbers on the Bonds or for the correctness of any numbers printed thereon. BY ORDER OF THE CITY COMMISSION Robin Sullivan, Clerk of the Commission A-6 .---..----------------... EXHIBIT B NOTICE OF BOND SALE General Obligation Refunding Bonds, Series 2003B City of Bozeman, Montana NOTICE IS HEREBY GIVEN that the City Commission (the "Commission") of City of Bozeman, Montana (the "City"), will receive sealed bids for the purchase of General Obligation Refunding Bonds, Series 2003B, in the aggregate principal amount of $3,485,000, subject to adjustment as hereinafter provided (the "Bonds") at the office of the Clerk of the Commission, City of Bozeman, 411 E. Main Street, Bozeman, Montana, until 11:00 A.M., M.T., on January 13,2003. The bids will be opened and tabulated by the Clerk of the Commission and presented to the Commission at its regular meeting at 3:00 P.M., M.T., on the same day in the City Commission meeting room. Bids will be compared on the basis of true interest cost (TIC) (calculated from the dated date). The Bonds are being issued for the purpose of refunding in advance of their stated maturities certain of the City's outstanding General Obligation Bonds, Series 1995 and to pay costs of issuance of the Bonds. Amortization bonds will not be issued. The Bonds shall mature July 1, subject to redemption as hereinafter described, in the following years and amounts: Year Amount Year Amount 2005 $280,000 2010 $350,000 2006 310,000 2011 365,000 2007 320,000 2012 385,000 2008 325,000 2013 395,000 2009 340,000 2014 415,000 The City reserves the right, after proposals are opened and prior to the award, to increase or reduce the principal amount of the Bonds offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. The Bonds will bear an original issue date of February 1,2003, and will bear interest payable semiannually on January 1 and July 1 of each year, commencing July 1,2003, to the registered owners of the Bonds as such appear in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. Interest rates shall be expressed in integral multiples of 5/100th or 1/8 of 1 % and shall be in level or ascending order. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No supplemental or "B" coupons or additional interest certificates are permitted. The Bonds maturing on or after July 1,2012 are subject to redemption at the option of the City and in whole or in part (and if in part from such stated maturities and in such principal amounts as the City may designate and, within a stated maturity, in $5,000 principal amounts, selected by lot or other manner deemed fair) on July 1,2011 and on any day thereafter B-1 at a price equal to the principal amount being redeemed plus interest accrued to the date of redemption, without premium. The City will designate the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The Bonds will be sold for not less than $3,453,635 with accrued interest on the principal amount of the Bonds to the date of their delivery. (In the event the principal amount of the Bonds is adjusted, any premium offered or discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced.) The Commission reserves the right to reject any and all bids, to waive any informality in any bid, and to sell the Bonds at private sale. A good faith deposit in the form of money, cashier's check, certified check, bank money order, or bank draft drawn and issued by a federally chartered or state chartered bank insured by the Federal Deposit Insurance Corporation or a financial surety bond in the sum of 2% of the amount payable ($69,700) to the order of the City is required for each bid to be considered, as further specified in the Official Terms and Conditions. Copies of a statement of the Official Terms and Conditions of Sale and additional information may be obtained from Springsted Incorporated, 85 East 7th Place, Suite 100, St. Paul, Minnesota 5510 I, (651) 223-3000. Prospective bidders should consult the Official Terms and Conditions of Sale and the Preliminary Official Statement for a description ofthe Bonds, the security therefor, and the form of legal opinion proposed to be rendered by Dorsey & Whitney LLP, of Missoula, Montana, as bond counsel. Dated: December _, 2002. BY ORDER OF THE COMMISSION OF CITY COMMISSIONERS Clerk of the Commission Publish: December 29,2002 January 5, 2003 B-2 _.._ __. ...u..... .----..-.--.--.-...-. EXHIBIT B NOTICE OF BOND SALE General Obligation Refunding Bonds, Series 2003B City of Bozeman, Montana NOTICE IS HEREBY GIVEN that the City Commission (the "Commission") of City of Bozeman, Montana (the "City"), will receive sealed bids for the purchase of General Obligation Refunding Bonds, Series 2003B, in the aggregate principal amount of $3,485,000, subject to adjustment as hereinafter provided (the "Bonds") at the office of the Clerk of the Commission, City of Bozeman, 411 E. Main Street, Bozeman, Montana, until 11:00 A.M., M.T., on January 13,2003. The bids will be opened and tabulated by the Clerk of the Commission and presented to the Commission at its regular meeting at 3:00 P.M., M.T., on the same day in the City Commission meeting room. Bids will be compared on the basis of true interest cost (TIC) (calculated from the dated date). The Bonds are being issued for the purpose of refunding in advance of their stated maturities certain of the City's outstanding General Obligation Bonds, Series 1995 and to pay costs of issuance of the Bonds. Amortization bonds will not be issued. The Bonds shall mature July 1, subject to redemption as hereinafter described, in the following years and amounts: Year Amount Year Amount 2005 $280,000 2010 $350,000 2006 310,000 2011 365,000 2007 320,000 2012 385,000 2008 325,000 2013 395,000 2009 340,000 2014 415,000 The City reserves the right, after btdsorooosals are opened and prior to ~award, to increase or reduce the aggregate principal amount of the Bonds_offered for sale. Any such increase or reduction will not in the aggregate exceed $100,000, will flot e]weed $10,000 from any stated maturity and will be made in a multiplemultiDles of $5,000 fromin any stated maturityofthe maturities. In the event the DfinciDal amount ofthe Bonds is increased or reduced. al)),_Dremt1,1_1!1 offered or anv discount lakenby thesJJc~essfuLbidd~L willJ2_!;jru:rea~ or reduce_d by a_percentage__e@aJto the DercentalZe bv which~he_DrincioaLamQ]JnLQfthe Bonds is increasedQI reguceQ, · The Bonds will bear an original issue date of February 1,2003, and will bear interest payable semiannually on January 1 and July 1 of each year, commencing July 1,2003, to the registered owners of the Bonds as such appear in the bond register as of the close of business on the 15th day (whether or not a business day) ofthe immediately preceding month. Interest rates shall be expressed in integral multiples of 5/1 OOth or 1/8 of 1 %_andJihallb!":inJeve.Lor ascendimzQrder. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No supplemental or "B" coupons or additional interest certificates are permitted. The Bonds maturing on or after July 1,2012 are subject to redemption at the option ......_.....u_____...._.._ _____.__... ...._..____._____.._._.n ------ - --- ofthe City and in whole or in part (and if in part from such stated maturities and in such principal amounts as the City may designate and, within a stated maturity, in $5,000 principal amounts, selected by lot or other manner deemed fair) on July I, 2011 and on any day thereafter at a price equal to the principal amount being redeemed plus interest accrued to the date of redemption, without premium. The City will designate the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b )(3) of the Internal Revenue Code of 1986, as amended. The Bonds will be sold for not less than $3,453,635 with accrued interest on the principal amount of the Bonds to the date oftheir delivery. (In the event the principal amount of the Bonds is adjusted, any premium offered or discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced.) The Commission reserves the right to reject any and all bids, to waive any informality in any bid, and to sell the Bonds at private sale. A good faith deposit in the form of money, cashier's check, certified check, bank money order, or bank draft drawn and issued by a federally chartered or state chartered bank insured by the Federal Deposit Insurance Corporation or a financial surety bond in the sum of 2% ofthe amount payable ($69,700) to the order of the City is required for each bid to be considered, as further specified in the Official Terms and Conditions. Copies of a statement of the Official Terms and Conditions of Sale and additional information may be obtained from Springsted Incorporated, 85 East ih Place, Suite 100, St. Paul, Minnesota 5510 I, (651) 223-3000. Prospective bidders should consult the Official Terms and Conditions of Sale and the Preliminary Official Statement for a description of the Bonds, the security therefor, and the form of legal opinion proposed to be rendered by Dorsey & Whitney LLP, of Missoula, Montana, as bond counsel. Dated: December _, 2002. BY ORDER OF THE COMMISSION OF CITY COMMISSIONERS Clerk of the Commission Publish: December 29,2002 January 5, 2003 2 . .-.....-.-.-- u......__ n_..____