HomeMy WebLinkAboutSewer System Revenue Bond, Series 2010H, $9,573,000EDCJRSE:Y
DAN SEMMENS
semmens.dan@dorsey.corn
December 8, 201
Ms. Stacy Ullman Via Federal Express
City Clerk
City of Bozeman
121 North Rouse Avenue
Bozeman, MT 59715-3740
Re $9,573,000 Sewer System Revenue Bond (DNRC Water Pollution Control State
Revolving Loan Program), Series 2010H
City of Bozeman, Montana
Dear Stacy:
In anticipation of the closing of the above-referenced bond issue scheduled for Tuesday,
December 14, 201 we have completed and enclose the following documents:
One blue-backed bond. The Series 201 OH Bond should be executed by the
Mayor, the City Director of Finance, and you on page 4 and sealed and also
executed by the City Director of Finance on page 5 as indicated. These are the
only pages which require signatures. Also enclosed is a copy of the bond,
marked "Specimen," for the City's files,
2. Four copies of the Officers' Certificate to be executed by the Mayor, the City
Finance Director, and you and sealed.
3. Four copies of the Rebate Certificate to be executed by the City Director of
Finance.
4. Four copies of the Certificate and Receipt of the Director of Finance to be signed
by the City Director of Finance.
5. Four copies of the Certificate as to Satisfaction of Conditions Precedent for
Issuance of Additional Parity Bonds to be signed by the Mayor, the City Director
of Finance, and you and sealed.
& An IRS Form 8038-G that we have signed as tax preparer, for signature by the
City Director of Finance. Subsequent to closing, we will file this form on behalf of
the City with the Internal Revenue Service. We also enclose another completed
IRS Form 8038-G that we have not signed as tax preparer, which is the
"taxpayer's copy" and should be retained by the City.
7, Four copies of the Certificate as to Organization to be signed by you and sealed,
DORSEY & WHITNEY LLP • WWW.DORSFY-COM - T 406-721.6025 - F 406,543,0863
MILLENNIUM BUlDING - 125 BANK STREET - SUITE 600 - MISSOULA, MONTANA 59802-4407
us^ CA"Acl� EUROF-E ASI^
EDC:3RSEY
Ms. Stacy Ullman
December 8, 2010
Page 2
We would appreciate it if you would return the original Series 201 OH Bond and three
originally signed documents corresponding to 2-7, above, to our office for receipt no later than
Monday, December 13, 2010.
If you have any questions, please do not hesitate to call us.
Ver rely yours,
I /Dan Sem ns
DPS/te
Enclosures
cc: Anna Miller
DORSFY 2 WHITNEY LLP
STATE OF MONTANA j CERTIFICATE AS TO ORGANIZA "PION
j ss OF CITY OF BOZEMAN, MONTANA
COUNTY OF GALLATIN }
The undersigned, being the duly qualified and acting City Clerk of the City of Bozeman,
in the County and State aforesaid, and as such having custody of and access to the books and
records of the City relating to the matters hereinafter stated, hereby certifies that, as appears by
such books and records and as known to me, the following statements are true and correct.
Said City has been a duly organized city for more than 124 years and is now
governed by the general laws of the State relating to cities of the first class, operating under the
Commission- Manager form of government. Its population, according to the 2000 United States
census, was 27,509, and its estimated present population is 35,061.
2. The territory included within its boundaries lies wholly in the County of Gallatin,
and comprises approximately 10,375 acres. Said City is divided into 0 wards. The City is
governed by a Mayor, City Manager and four Commissioners. The following named persons
hold the offices set opposite their names and for the terms stated below:
Name
Office
Term Began
Term Ends
Jeff Krauss
Mayor
01 -01 -2006
12 -31 -201.1
Chris Kukulski
City Manager
08 -18 -2004
--
Anna Rosenberry
Finance Director
02 -17 -2005
--
Stacy Ulmen
City Clerk
--
_-
Laurae Clark
Treasurer
05 -01 -1996
--
Greg Sullivan
City Attorney
04 -01 -2009
--
Carson "Taylor
Commissioner
01 -01 -2010
12 -a1 -2013
Sean Becker
Commissioner, Deputy Mayor
01 -01 -2006
12.31 -2011
Chris Mehl
Commissioner
01 -01 -2010
12 -31 -2013
Cyndy Andrus
Commissioner
01 -25 -2010
12 -31 -2011
Linder the bylaws and ordinances of said City, regular meetings of the City
Commission are held on the first four Mondays of each month at 6:00 p.m., with the second
meeting of the month constituting a work session, and notice of special meetings is required to
be given in writing to all members in advance.
4. The following are all of the newspapers published in the City and the days of their
publication:
Name
Bozeman wily Chronicle
Days of Publication
Sunday through Saturday
5. There is no litigation threatened or pending questioning the organization or
boundaries of said City or the right of any of the above - named persons to their respective offices
or questioning the right and power of the City and its officers to issue bonds for any purpose or
to levy, collect and apply taxes or other revenues for the payment of any bonds of the City.
6. The seal affixed below is the official corporate seal of said City.
WITNESS my hand and the seal of said City this 14th day of December, 2010.
w
. -
Ci Cerk
2.
'TAX PAYERS COPY
,,,8038-G
(Rev. May 2010)
Department of the Treasury
Internal Revenue Service
Information Return for Tax-Exempt Governmental Obligations
10- Under Internal Revenue Code section 149(e)
0- See separate instructions.
Caution: If the issue price is under $100,000, use Form 8038-GC.
OMB No. 1545-0720
K;M�l Reporting Authority If Amended Return, check here Ii ❑
1 Issuer's name
2
Issuer's employer identification number i
CITY OF BOZEMAN, MONTANA
12
81 :i 6001238
3 Number and street (or P.O. box if mail is not delivered to street address)
Room /suite
4
Report number (For IRS Use Only)
P.O. Box 1.230
131 1
5 City, town, or post office, state, and ZIP code
6
Date of issue
Bozeman, IVIT 59771-1230
December 14, 2010
7 Name of issue
8
CUSIP number
Sewer System Rev. Bonds (DNRC Water Pollution Control Revolving Fund) 2010H
N/A
9 Name and title of officer of the issuer or other person whom the IRS may call for more information
10
Telephone number of officer or other persar
Anna Rosenberry, Finance Director
(b) Issue price
( 406 ) 582-2300
[M Type of Issue (enter the issue price) See instructions and attach schedule
11 Education . . . . . . . . . . . . . . . . . . . . .
12 Health and hospital . . . . . . . . . . . . . . . . .
13 Transportation . . . . . . . . . . . . . . . . . . . .
14 Public safety , . . . . . . . , , . . . . . . . . . . .
15 Environment (including sewage bonds) . . . . . . . . . . . . . .
16 Housing . . . . . . . . . . . . .
17 Utilities . . . . . . . . . . . . . . . . . . . . . . . . .
18 Other. Describe 1
19 If obligations are TANS or RANs, check only box 19a
If obligations are BANS, check only box 19b . . . . . . .
20 If obligations are in the form of a lease or installment sale, check box i F
11
12
13
14
15
$9,573,000
00
16
17
18
12-Mo
Description o Obligations. Complete for the entire issue for which this form is bei q filed,
(a) Final maturity date
(b) Issue price
(c) Stated redemption
price at maturity
(d) Weighted
average maturity
(e) Yield
21
01/0112031
$ 9,573,000
$ 9,573,000
11.744 years
3.749800 %
u ses of Proceeds of Bond Issue _fincluding underwriters' discount)
22 Proceeds used for accrued interest . . . . . . . . . . . . . . . .
23 Issue price of entire issue (enter amount from line 21, column (b))
24 Proceeds used for bond issuance costs (including underwriters' discount) 24 $13,154 00
25 Proceeds used for credit enhancement , . . . . . . . . . 25 - 0
26 Proceeds allocated to reasonably required reserve or replacement fund 26 $680,808 00
27 Proceeds used to currently refund prior issues . . . . . . . . . 27 0
28 Proceeds used to advance refund prior issues . . . . . . . . 28 0
29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . .
30 Nonrefunding proceeds of the issue subtract line 29 from line 23 and enter amount here)
22
0
23
$9,573,000
00
$693,962
—
00
30
$8,879,038
00
Description of Refunded Bonds (Complete this part only for refunding bonds.)
31 Enter the remaining weighted average maturity of the bonds to be currently refunded 0- years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded ► years
33 Enter the last date on which the refunded bonds will be called (IvlIvI/DDi
34 Enter the date(s) the refunded bonds were issued ► (MM/DD/YYYY)
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cal. No, 637735 Form 8038-G (Rev. 5-201 Oy
Form 8038-G (Rev. 5-2010) Page 2
Miscellaneous
36 Enter the amount of the state volume cap allocated to the issue under section 141 (b)(5) . 35 0 —
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
(GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . ,36a 0
b Enter the final maturity date of the GIC 0►
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other
governmental units . . . . . . . . . . . I . . . . . . 37a 0
b if this issue is a loan made from the proceeds of another tax-exempt issue, check box OP-F] and enter the name of the
issuer Op- and the date of the issue Po.
38 If the issuer has designated the issue under section 265(b)(3)(13)(i)(111) (small issuer exception), check box . . . . ► El
39 It the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . ► ❑
40 If the issuer has identified a hedge, check box . . . . . . . . . . . . . . . . . . . . op ❑
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge
Signature and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary
and to process this return, to the person that P have authorized above,
Consent
— Anna Rosenberry, Finance Director
Signature of issuer's authorized rep
Date TYPc or print name and title
Paid Preparer's Date Check if 5N or PTIN
Preparer 5 s signature . . .. ... ..... ...... . ... ...... . . ..... self-employed (XXX(X
im"s name lor Dorsey & Whitney LLP FIN 41 0223337
�
Use On f
Only yours i s elf-employed),
address, and ZIP code 125 Bank Street, Suite 600, Missoula, MT 59802 Phone no. (406) 721-6025
Farm 8038-G (Rev. 5-2010)
S9,573,000
Sewer System Revenue Bond
(DNRC 'Water Pollution Control State Revolving Loan Program), Series 201014
City of Bozeman, Montana
CERTIFICATE AS TO SATISFACTION OF CONDITIONS
PRECEDENT FOR ISSUANCE OF
ADDITIONAL PARITY BONDS
We, the undersigned, being the duly qualified Mayor, the Director of Finance, and the
Clerk of the Commission of the City of Bozeman, Montana (the "City "), do hereby certify in
connection with the issuance by the City of its $9,573,000 Sewer System Revenue Bond (DNRC
Water Pollution Control State Revolving Loan Program), Series 201 OH (the "Series 201 OH
Bond "), as follows:
1. The Series 2010H Bond is being issued pursuant to Resolution No. 4220, adopted
by the City on November 16, 2009, as amended and supplemented by Resolution Nos. 4234,
4245, and 4254, adopted on January 19, 2010, February 16, 2010, and May 3, 2010, respectively
(as so amended and supplemented, the "Original Resolution "), and Resolution No. 4299 adopted
by the City Commission on November 1, 2010 (the "Supplemental Resolution "). The Original
Resolution, as so amended and supplemented, is referred to herein as the "Resolution."
Capitalized terms used herein without definition shall have the meanings given them in the
Resolution. The Original Resolution has not been amended or repealed as of the date hereof,
except as described in this paragraph.
2. The Series 2010H Bond constitutes an additional parity revenue bond under
Section 10.3 of the Original Resolution.
3. The Series 201 OH Bond is being issued to pay a portion of the costs of expanding
and upgrading the System's wastewater treatment plant and associated improvements (the
"Project "), to fund deposits to a reserve account and to pay costs of issuance.
4. The only bonds or other indebtedness payable from the Net Revenues of the
System now outstanding are the City's $359,300 Sewer System Revenue Bond (DNRC Water
Pollution Control State Revolving Loan Program), Series 2010B, its $1,223,000 Sewer System
Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series 2010C,
its $9,500,000 Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving
Loan Program), Series 201 OD, its $816,000 Sewer System Revenue Bond (DNRC Water
Pollution Control State Revolving Loan Program), Series 2010F, and its $3,903,000 Sewer
System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program), Series
20106 (collectively, the "Outstanding Bonds "). No other bonds or indebtedness are outstanding
that are payable from revenues of the System, except the City's $390,700 Subordinate Lien
Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program),
Taxable Series 201 0A (the "Series 2010A Bond ") and the $384,000 Subordinate Lien Sewer
System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program),
Taxable Series 2010E (the "Series 2010E Bond "). The Series 2010A Bond and the Series 2010E
Bond are Subordinate Obligations payable out of available Surplus Net Revenues in the
Replacement and Depreciation Account or the Surplus Account in the Sewer System Fund of the
City and are not parity Bonds taken into consideration under paragraphs 7 and 8 of this
Certificate. For purposes of this certificate, the Series 201 OH Bond is deemed to be outstanding
in the aggregate principal amount of $9,573,000.
5. The estimated total cost of the Project, funding of the reserve, and costs of
issuance of the Series 2010H Bond is $40,071,903. The proceeds of the Series 2010H Bond are
expected to be sufficient to pay the a portion of the costs of the Project, to pay costs of issuance
of the Series 2010H Bond and to establish the required reserve. Costs of the Project in excess of
the total amount of the Series 20101-1 Bond are expected to be paid from the City's $9,500,000
Sewer System Revenue Bond (DNRC Water Pollution Control State Revolving Loan Program),
Series 201 OD and funds it has on hand and available therefor in the amount of $20,998,903.
6. The Project is reasonably necessary for the proper and economical operation of
the System, for meeting existing or prospective demands for the System, or both.
7. Based on the Comprehensive Annual Financial Report of the City for the fiscal
year ended June 30, 2009 (an extract of which is attached as Exhibit A ), we hereby certify that
the Net Revenues of the System computed in accordance with the provisions of Section 10.3 of
the Original Resolution for the last complete fiscal year preceding the date hereof for which
audited financial statements are available, equaled $1,413,564 (i.e., $4,905,744 --- $3,492,180
and applying the rate increase effective as of September 1, 2010, and assuming the same level of
usage of the System for the fiscal year preceding the date hereof and, in consultation with the
engineer for the City, taking into account the System as improved by the Project, equaled at least
$2,401,573 (i.e., $5,833,000 - $3,431,427), as reflected on the unaudited financial statement and
budget attached hereto as Exhibit B , which is not less than $2,399,482, such amount being 125%
of the maximum amount of principal and interest in the current and any subsequent fiscal year
during the term of the Outstanding Bonds and the Series 2010H Bond proposed to be issued
(125% x $1,919,585). The City approved an incremental rate increase for the use and
availability of the System effective as of September 2009 and September 2010.
8. The amount to be in the Reserve Account securing the Outstanding Bonds
assuming the full principal amounts thereof are advanced totals $1,238,777, and satisfies the
Reserve Requirement allocable to the Outstanding Bonds. Assuming the full principal amount of
the Series 201 OH Bond are advanced, the amount on deposit in the Reserve Account will total
$1,919,585, which is the Reserve Requirement for the Outstanding Bonds and the Series 201 OH
Bond, as shown on the attached Exhibit C . All of the amount necessary to satisfy the Reserve
Requirement upon the issuance of the Series 201 OH Bond (i.e., $680,808) is currently expected
to be funded from proceeds of the Series 2010H Bond. On the date of issuance of the Series
1 As a result of new estimating technique required ror Governmental accounting Standards Board's (GASES) statement 49 "Accounting For
Pollution Retttediation Obligations and as a result of recent Consultant work on this issue, the City was required to book a one -time
expense in the amount ol'$1,351.000 for June 30. 2009. This expense is a one -time entry that is not a current, re;!ular operating cost of the
System. As such, it is rant within the meaning of 'operating. expenses" as defined '.in the original Resolution and has been removed from
calculations of'Svstem operating expenses for Iwrposes ofthis certificate,
2
20101.1 Bond, the balance in the reserve in the Reserve Account will equal the Reserve
Requirement for the Series 2010H Bond.
9. The City is not, as of the date hereof, in default in any payment of principal of or
interest on any notes or bonds payable from the Sewer System. Fund, and no deficiency now
exists in the balances required by the Resolution to be maintained in any accounts within the
Fund. To the best of my knowledge, the City is not in default under any of the other provisions
of the Resolution.
Dated this 14th day of December, 2010.
CITY OF BOZEMAN, MONTANA
B
0 .
IC,; ..
_ —. _ B
EXHIBIT A
FISCAL YEAR 2009 FINANCIAL STATEMENTS
CITY OF POZENDN. MOMANA 39
STXIT MEN OF REVI", UES, EXPE":SES AM) CHANGES IN NET ASSETS - PROPRIET. RY FL
Yeir Ended Amc 30. 2009
nil,lmsi•typd AclwMi s
Entums, Fuid,
OFLRA t I:-N(; RLVLNL LS
U'LKA1 Mi LXFLh:SLS
MuI'nk' md 'z'ppl-
R.I.-
ch.wl,
lmurancQ claims
am -[ -
IhP-W"'T' and ."'UA"n
cl.ng" in astmlwd O-w L' and 1-1-
dc-ro " c.I'
- rMd 'J."Ang -�XP Tb"
OVenfting -int tl-)
NONOPE KA:rl N G li S (E XPEN S HS)
Inta"m illcome
Interestexp.
ctj'c' in.m"
Grain Inc mc
hup't f-
(jan (less) on 6�fo al ora,,,tts
T.W m �N'ohng --m t��Wns.j
hic"'n, do,$) nd u.n,'F-
C antnmonr, of nifiraAramr- - dcvd,4r ,
Tnn,f,Ts of capital assets
T.w,fu, ni
T lamfm out
C112.4'r.e "Mer
NET ASSETS, bqpmmg ofy.r
w r ASSETS, ncl nfylfll
Solid pakmg
V."& VVnel Fwd Wim. Fwd F.1d Tclulw Serv,ce Fwut'
4X5744 s 2 312,666 -, a3'0 s
1,7 1"15"448 213,70s 1,;644Q3 21
@41M0 1 0.0,933 2 33,b6u 50J01 8 1,131,81 247,701
6L 1 83 130,6"'% 1311,813 4,754 152,0: 6,640
170,795 397,012 11.II % 9 VtQ
257,407 12,2 1,519,9640 51
201,771 7 2.769.032 367,359
8,096.206 5 ' 4 9 0: I4 362,52 372,950 14,282,39.1
1 1 867,006
10,293,894
2,6F,7,590
742 769
25,590.754
3,88?.650
(3,921t,2o1)
fs
£504 ' 260)
(199,003),
(12,220,274)
(I
467,964
423,09
65,038
620
956,651
(5,978)
-
(24,185)
(30,143)
46,306
64,191
23j07
4,106
137,680
26,9D6
1,132
1,260
895
2,125,640
2,129;22
768,30
663,
-
1,432,130
-
(4,063)
120,156
120,215
230349
-
1,279,087
1I4 &184
- 209,20
- 2,226,396
- 4,861,873
24,230
(4,234,906)
(295,054)
1,826,793
(
(91,185)
1: x66,62 3
-
4,338-155
6,311,321
0,311,124
3,690,381
3,690,381
89.323
650'659)
6 195 „330)
(118,940)
(440,452)
(242'2 x2)
(490,M4)
11,709,558
6, 541,01
114.739K
91,280
6,222,013
213,248, - 175
(66,6 1)
(63,809)
The Naes to FimAcial Stqtm rii, wa in Lrnewal part of th financial stitew cros
A-1
EXHIBIT B
CITY'S UNAUDITED FISCAL YEAR 2010 ACTUAL FINANCIAL.., STATEMENT
AND FISCAL YEAR 2011 BUDGET
B-1
P
F ^; SC.L tF:Sft I.1V
SC A R
6G1 Jr Fi ?P. I.'.S_'..
P
1CC'.,"7.1T ; J!".HYS CCtri.Pi.;' L'E "E= !!T:QPI
y ' dS
F
F : ,
�
C'n V.:u..y
--T
H PGaT
Af :L'A!.
M;-UAL
F
FSti HE'p
VILNA 521 'WASTE; W=.EP
BASIC 31 SPEC7"L P.SSMSSW,F,N';',q
62C- tl6C0- S!.2.n2 02 PENALTY A,M 7NTFRESl'
' SPP_'CT 1:',h SF °:FCI'f'S
-
G -.
.B.
BASIC 33 INT'ERG. - FEVFJ,' E
530 00 ' 3i. 10 -Gtl EBF;—TA ,VarrS
n
o20 -C 014 - 333.sn�GC OTHfiR 5'A eEVEY'E
-
0
1
_ -
• ?NTER[:6�JEA.*P,V'C: [Fw Hr.. ":Flff'
---
3.260
67&. O.nO
5.l 34 7EM 0cS - o 57.RHI ^.ES
4x0-gn00 -345 .?. G -'_G ME'F F;R::ll $t:'n F.k
.,.9,7,16
_,E33,,1J4
c. k. " s in..28 F1T6 ':,NC:R
Ow
II1CC:1E ]'i .CG.!Vl TAKS::.:a
C:.iER LINE -..c..
9 7}5,UnO
o20 0010-345. 2n._9 EISCOMI - , - LGG I,,ao.
5,tY6!
G.OGGv
3,Ey9-
3,'Jtl3-
nca
bah - 000 - 345..^_0 15'=NYTCFRS!] EE
:.9.719
31,+a Gn
i, xa4
7S➢. nus
:,EWE' TE %"
BL'D3 *'Y 13.
2:0,000
20, 000
620. C00 20 - 20 SEWER '.Pddhi %i' CHA.ECES
ao
7.000
all
).00f
-svEl, TEXT
T R:
BEE` rvie
;;.nn
2.000
G20- dd00- 3.a5,3,q -30 SALES OF;SE:AER .'ATERIA.S 1,76a
3,pa0
3, G51
3,000
;,EVE- TF..:IT
[£ T
e'u�3 es'3,,
� >�ana
B-1
?R2PPR: Y/30; IO„ a1. 1i. J: BL::G' -T 'R
.,ou CF FISCQ - .. uE.AR '_iIPSRD 541 REY:e.TNr&G
'A4I `EARS Fv 6 ] 7y 21:11
P.CCG aIT f .iBER
ACCp JVT 5. C :n•••.".:15
C U�Ii,S
-2 1'.
9:R;GET
Y -1
n[T3F .
43 rII
C'\ PU7
M211 62- VA81y: WATE
,o9'Y
`.G', 656
IC9, G^,d
LEVRt. "'h,Y.T
BASUC 3-0 Cyr+.aCZ&
P'OR SSR'✓T'CF6
ELM
]09,9PP
000
i`v4 %, 901
E2G- 099C1-S4,5.2r5 -A9
6626
SFIwzP. GIi1F JVe RciF .NG
2i 1.267
100 0;0 nWta.
57,
�Y Q0 d0df
-O.CC0 -341. Zd•5d
if
,63'1
12.90 0
1.EVEp, IE%-
E2'P- 9090- ]''a7. 11 90 IGNTRIBJTEC CA ITAL A15S9T
266.62:
7D3 pyll'.
/1,152.646
I2,
aa, GtlS
3G.PQ.7
«4J, 3531^
I ?9,.d 0Q�
LEVEL : "&XP
r.2, QCo
T?Y. a
G2tl -V3 G9 3 +5.2.0 ,1
LTFT STITICX- '.,AVAFL rLEp:'
3b�19P
039 -9 I'6 345,29 �0
E %T'RI. STPEivGa.!: SlJACHARGZ
30..000
R3G 3B 0
0 liEFt
"EVF.I. Tev^
`a. Pao
J
•, '. �- 1 9•a6
\
2t"X7 `'2
LF.VE$. 'zl:x -1
Bllt)3 F:'ll
26, , ?4.7
5, dQP
20,13C6
° CHt1P,GRS VO4
SERv:CFS
------ --- - -- -----
.1, ?P5. ':rC4
- -- ......._-
4,515 „l24
..... -
S, 3B.6, --_- _ - __
5, 3,T3,:2Qd
B4STC 3.6 IN7ERE9T IrCON'P:
539 -pQQd- 361 -q9 -PP INTEREST 1NcQME
739,2d'1
,o9'Y
`.G', 656
IC9, G^,d
LEVRt. "'h,Y.T
TEXT J.
ELM
]09,9PP
i`v4 %, 901
” SLiTP.'vEST IH(:CT 12.
2i 1.267
100 0;0 nWta.
"-` ,6,661
�Y Q0 d0df
if
WItIC JN OTHER AEVE—FS
E2'P- 9090- ]''a7. 11 90 IGNTRIBJTEC CA ITAL A15S9T
266.62:
/1,152.646
62Q-0 OO -] &E. QQ -00 Rp:PUNV5 h .rzImat:RSIENRNTS
aa, GtlS
3G.PQ.7
«4J, 3531^
I ?9,.d 0Q�
LEVEL : "&XP
T?Y. a
HUM py,
3b�19P
30..000
R3G 3B 0
0 liEFt
.,".86
`a. Pao
J
•, '. �- 1 9•a6
\
V, =. Cn9 �}
LF.VE$. 'zl:x -1
TEXT 111
SUM FYI'
5, dQP
B-2
?.REPA}i :5 09/1:./20 .�.,4 I1 L - Y'6- FhE ?A.RAT: GEL LN 65 riE'_&'
R c:l'J65 F.g ' tSCA YmAF 20 -0 -"JE 1
s 6'E
OF FTS2AL YEAR i?s / 3,2 AF':-,A_VINO
LAST YEARS F": 2c1.D
T,L'Cf]Jh:S 6PJFtGER .,. ccc,�a, ;;'FE:FI:d`.: AC_JAI.S k 20,: Y -T -L '13 F0.'1.1
FTN
62'0 W,,;T - 6 F:.ATZa
DA, TO 36 07HRR REvwjE,
6n ^.
O'fHEk REJ `:i;:Eu^ l G, c:. 3. 000 - 111..04 -, OGG_
Bkllc 39 0TIRER El= S4JRCEE
529- OOG1- 392.3A -uA LCT% FFQCEFOd 9,5AA, IAG
LEVEL 2P: T
SREMA.INDEF. OF ndw Kks Lib i' RFEN BETCEVEn IN PR'FV
YFARE.
620 -0000- $9].10 -a0 S 5.,051- L, GGG s I.OW
5JJ3 FY' 1.00r,
1, occ
'3P:Ed FZPITA ' "N,; .SG'ilitOF.i c, 053 .. 1�:. 7':, OCO
.. ..- . 5,3 ..
'i;ASI'F' iiA9'c:,�! �,. 6.e.3, ' nq 2.O,E�5, 324
f.e'i, 191
...,._- - - - -
T,103, 43 +'i 1S,a G9, 000
D
1 — 3 '
PkEF "IRPD p9/20/1�, 2I:'i9:dfi
P ' ='1` PE
ARA=r MRKSHEET
P,nCCdA.vr v?ta C1I
P'oF
FPSCAL Y'P R 2p: =.
GE
P Ai
FCC:?:INi INP Y..R } /2p_
t CUM GR',IPT:CN
IAA YEI.RS
AI].ICISTEU
v,.T -
3
ACTL„d -5
P;]DG.S'i
ACr"Aj-
FIN S',1U
DSIT
52 WASTRWA'I°pR OEEkATSONS
PIV
_Q "N+SMAIER OPEP- AT:.OWS
'
`
SaARIES 6 WAGES
CVERTIN.E
'a, 52.6
376,IGS
349.666.
369.529
'
BENEFITS
12,Lp6
18
17,136
" N
:Q,fiv0
.{.39R
`50
'
P
GUR:.I RS ,qNO rATP.P.1:ti,S
-NANCE
a ^u, ?]
81,850
NN
E3
SB, ASP
•
°
tnAINT.
JISLXTI ➢$
9,725
-§ . "7
'S. SQQ
29 3..Q
".s9'
636
15, 5P9
3h, 250
COrySTn'.4c°C'k =➢ SER4YCE5
T /TRAINING
ag:, 91a
503 062 CAD
( Py>
±'GCA. ?gg
CYPHER
ZTZ
„39A
5 25G
16]3
/ `
°
IN TlWAI, CHFEOP'S
742 J40
2@ tl.2
Y�5 '
'a' 326
1 7.494
,.A, P7s
,d:.er
5,28:2.%'00 G••.
21 a2.5
( 5.2
3].'1, 995
OTMER'AF
O -HER F'I dAdICZ ?IG CSES
9 k. 6 ti 1
-6 -.
931,
,559,050, r� -.
'•
WAS Th Gi'A.TCi1.«ICVS
_8a, 602
'.,
DIV
20 UTILITY WCA',F.S
•.
•
OVERT') n ",E
SUPPLIES i, ? TEMALB,
P
717
4.qH
`
CONTRACTED 55RVI:CEE
2,4.61
:,400
2.,500
54
1, 1G4
.. 49P
7,100
••
t9TTF.ITY I.00ATE'S
3..99
•1.3i8
1,53:
4,a "49
31i
10 WASTEWATER SERVICES
'
SUPPLIES At�9 XATERIALS
,000
I. 5Y2
8, pDP
'
OTHER
p
A
15
p
�,
W1�S:'E'�IA'1 E:R SERVICES:
:, 36G
tl 000
x,947
6,600
DIV
40 WAS«F.IA'TEe C09$rRVC7PUN
C,AER
CAPITA'.
6.,763.._60
0
4,'154, 5A
0
+
O7ErR P', 'isZ5
3a.
'•
WAE7',P.F;ITPR CQpYSTAUCT'.Uw
S,'18'G.i86
Q .•
5, 043, S4A
C
DIV
5P MATP. Q( S
C •.
°
SUP.L1ES av MAT'ERTALs
3,32a.
25,09p
0, Ise
S, UOp
•
OTYdER
706
r
I2
Q
CAPITAL,
a.cce
o
_=
Yli'•'NCLS9
10,210
UTV
�0 I'ZT. VCSING
SUPPLIES ILO au *V=a:Ai.5
4., 6.6Q
2, 1CC
'x,149
'
I4A i. NTENADICR.
U'CHER
y_?
G
'' 0
-
B -4
PREPARED 09 /2n. /io, 2A:5N »
d(,'�i.G- ?7k;P,ivZr'.T TCN n'JP?Ss3E2":
O'RCGRkN. r9,.5bi�
-0F
xiSC:u 't'cAR 20 L'_
I,CC ^_. .TItrG PP;E.CL' 120
'C.=MT SL I -L:±
IASI n
A C's,..._S
to-71STEC
fi:7.lGE'1
�' (3
AC `C _4
03 Ll1
.:?{ :DD
DIV 60 T3'_7.E'.'2SIi14
TF:LE'TI$I *:v
3 395
b, 50=
k.. 254
CIV FC `MIF FF.nF.;R.9
SI3 &2I.I E5 AkIR P.A'u ",kiP_I.S
1,y$.9
F. 000
967
S,ODD
•. h Cp; FtS.':.IC.O
D..Ag
.:UO
-_407
.., 0 G
WASIEWAT R PPSPATICNS
PR'VT 56 WA6TEWATER PI: ,,'VT
6,396, s2fi
_.'n03,149
... ..2,322,463
DIV 10 WASTEWA.TEk PI,PJJ: L'a „ LUTE
' 'tyl.pp2IRS b NAGES
9WERTINE
551,477
��. 5; _'
X 34,
5'J3, x.05
AENEPITS
?J, U22
2,6 1,
A�
226,"19
39.,790
' SUPPLIES 90th} N TLRTAIS
92,25"1
':2_77,0
7, 052
90,553.
238,. dq'1
:24,100
ImITENANCE
4TFII,I TIES
95,423
• CO::'Tft?,CTk:➢ SE'JEV$CES
160,950
2b, b•LG
3'16,306
�
, yl SE,
, 145, 30U
` TRAWB „ /TPAINTNw
1b, 59E
CCC
LC.5C6
2o, a20
9, c32
41,000
10,500
Cf3'fiEA
I N.”: F.AN.Y. CN.1RCE5
204,295
"2F, °252
.'4.2'2
114 ,.b1S
° CAPITA:
234,1.53
264,4:97
259 „M1F7
36'1.907
5,100
q
"•• WRS'1'EKATER P:ui.Ni OP6$AT'E
_,522,493
w., 956. :12
1, 617,bT5
2,039,25
ETv 34 _A6C:{ATORy
• S(i_ApllES 5 i7:yGk;5
” PV.P, THE
97,07 6
8,244
',
9;P,38
Sa,)U"1
- 9 LSEF24a
5,323
"S,f48
4. 19a.
- .A, o4i
•
ica
11 165
35,639
_E, 4CU
n..Yi.EN71NCq
CCNTMCTEI3 =:4
2,670.
A, SOO
3,12
SERV_�
DIP,F
"2,.72H
18. 060
,DES
4, beb
122
500
o£
'r LABORJtTK1kT
152,963
:(.2.891
L55,'E6'G
2Id, 240
DIV ib SLJGu °_ 1St.IECTt/?t
' S'ALT'Rfis L WA(: €5
” OVEk'TSM;;
"71
n.5v2
RENEPIFS
„Ee9
943
82
'.76
1..6 ?3
5:7_P:,Irs 1N0 t+:ATF:;t1A_S
'
':, 46
.',
B,C,00.
1Y, 964
`..653
',i8, £UG
FAI;7E[vA,4:CF:
' MbITI°.
2 -,�C9
2, 5UU
39,3`5
:5,604
” CAN'TP,A6'1'.Ei SxEVeC`SS
35
5?'6
L
'Y. 404
0
2,079
6
6 „JO[1
B -5
FR_PAR= z,. -q, ;.a
H'.P.GL1 PRE Pk;A1 la:r 3a0RNS!.,TT
PRCGNi C�M60 - -'L
=OR
E'SL'Ai Y R 20.1
LAST p
iCd'dsTSC
y -
°9 FY.3
% ",
C cOC CPSCR ?T1.^.ti
ACT',"�.5
H�C6E4'
'f JAy
F:\ SM
I'ZP1 Sf 'N'AS_LWAT2:T P, "..DINT
ETV TO $f'J'GE
TPAV_:L /:E.FhTN.A^.,`
C
2'P9
6
«'500
37,83
°^ 53.'JEC6 TN. Em'TON
lull, 05
6n, K3'm
O .3�tl
66,010
CIV +O PRr1ZA -VEM
SUPPLIES ANE. hTATERIM,S
A 3i t 3iTENANCL'
i, 5']T
9
0
_DmTRV_'IL'.E SER.V2CE. ^,
•. orN
_.,:& �=
a.'_zo
r,
•• 'rnHA��nr-Nr
eRS
- ---
=,905
. ---
0
2,saa
E,4rt
------
z. sca
ETV 50 h'AST04ATER PLANT CCNST
THA I L. — z' INING
122
n
` MEP.
` CAPITAi
E ea Q,246
,5. i' <5 3a4
".37.9 f`e5
1. 1 W�iS
EFf1T SEitVTCE
OTIIEP: FINA.NC'NG USES
0
0
2;5,.10
:7„356,917
..• 0
•» HFSTEw'ATEP
P:.1 ^T. CCNSF
5,a-1e.00?.
1 ",424 2
f10:. -9. 5G
� 2 1 IE ..
a"• WflSt'Errv?.';"ER PLia \ ^.
5.619,557
17,0:6 „763
25•".83,853
4o ,629
26,4_2,A30
Pf,G
AcceLrr:NC ?Easeo �.s�zoi
B —V
A
I
as
CD
C::)
In
CD
00
C
r-
--^
00
C)
N
'ter
In
C�
a
r'
In
=
c-
In
(
C)
00
cc
"T
d'
d`
If)
(
r-
C
C
00
00
In
r,
00
- �r
N
C7
O
r-`
or-�
00
'z t
ll3
krI
1 0
oc
v^
In
oc
rl)
r11
l'S.
In
C-
m
r-i
N
oo
rn
oo
C
»
M
Ca
-7r
In
-z
':'
'It
Ov
(N
�C
C)
Lr1
Ch
1, 0
C:l
I 'D
CD
kn
�o
C)
W)
F
Ol
o
CZ)
C
rn
CZ)
O
C
kr)
CD
cD
M
\o
In
V1
C>
Cl
c+1
C �
+'!
" t
z t
f" !
" t
lz7
ll-
-:,
=?
':'�
Cl
ll ��
'4 �
-4 �
o
1`
as
CD
00
CD
00
CD
00
c)
00
+o
r-
oo
I
C
r-
v)
r-
c:)
w
In
r-
r--
r-
a
[--
Cq
=
c>
=
—
oc
k")
C,4
G.
W)
10
IC
I'D
10
I'o
1 \0
10
\0
I'D
I'o
1 10
I'D
1 10
V
`
o
r--
00
co
Cs Gn
In
rn
co
10
V'I
00
o
C4
'r
r-
r-
r-
r-
r-
00
oc
C
0\
rn
't
=�
-:�,
0
n
fl)
C �
It
00
Go
00
00
oc
r- �
00
r1 i
00
110
V
r\�
J
Ira
r)
V�
Lr�
Cr
00
C
C
�
r-
r-
r-
r-
r-
C3
N
N
N
rq
N
C,4
rq
rl
Cq
N
t
rq
cA
<
rq
r
In
. 61
fn
CZ)
cl)
�
of
t-
r
r-
00
ON
1 7r
M
'
CD
--
c
rn
fl)
Cl
0
00
M
'n
00
"o
a
I'o
C
1
11
m
I'o
r
Cl
r-
!
w
rl-
r-
00
00
CQ
oc
w
GO
00
GS Faw 00
In
Ln
In
U
In
Ln
V)
V')
In
In
In
Le)
Ln
W)
In
In
V)
In
W)
(
1 c
Gn CA
rn
00
00
ot O
rr1
CD
a)
DO
c")
- T
-7 T
- t
C,
—
C:)
In
C)
C)
C>
In
C)
C:)
C
tr)
s t
1 ^t
(N
lC
r-
00
cl)
I'D
r
00
It
' o
tr)
C>
Lr)
C
Ca
--:
rl�
Cn
ol �
C �
n
't
cQ
n
%,:�
=�
r--
r--
C
®
--
U.,
cc
cli
10
C�
C,-
o'
C)
CD
C-,
C',
ON
0
0
a%
l
C,
N
C:�
DO
G cc
r
r
t
r-
r-
00
t-
t-
El-
r
r
r-
00
=
r-
Id.
I'10
1 10
I'D
1 10
10
10
+o
I'-o
Ic
do
Ln
rJ
V%
Ln
C,
00
cD
Cq
C
In
- 'T
rn
t
C7
C;l
�n
I'D
4o
10
r•)
":T
CIO
CD
C)
I'D
It
ON
O
CS
O
O
Oti.
cz�
oc
I'D
Cl
00
71
CD
ol
ol
C
00
m
oc�
06
06
r-�
C4
C-
00
r-1
;a -
C)
If.)
00
r)
1-
"o
oc
00
awl r
C-1
r-
00
01
t-
kJ'
CIA
QC
rn
C0
r')
'r
-r
CE)
oo
00
00
00
00
oc
04
oc
00
00
00
00
00
00
00
00
00
cn
C)
<Z:)
CD
C5
C)
CD
C)
a
IZI
00
In
kfr)
V)
Lr
In
W)
I 'D
cl)
Lr s
r
G,
—
C
00
In
7r
N
CD
Lf'a
Z)
In
C)
kn
ol
00
o
In
O
as
In
r �
C
r
N
r
C4
C%4
N
Cl
N
N
rj
(
rq
(
rq
<
(
Cl
N
N
N
(,j
rj
tn
ID
O
-t
in
t--
LC
a
CD
N
cq
In
r-
CD
CD
I=
CD
La^
CD
10
(
c
(
C
fli
CD
(
CD
C
C
Z)
0
r
t^
N
f
(
(
("1
(
(-1
rl
(
r
7
N
rl
r
hJ
CN)
r-1
—
$9,573,000
Sewer System Revenue Bond
(DNRC Water Pollution Control State Revolving Loan Program), Series 2010H
City of Bozeman, Montana
CERTIFICATE AND RECEIPT
OF DIRECTOR OF FINANCE
1, the undersigned, being the duly qualified and acting Director of Finance of the City of
Bozeman, Montana (the "City ") hereby certify and acknowledge that on the date of this
instrument, I received from the Department of Natural Resources and Conservation of the State
of Montana (the "DNRC "), as purchaser thereof (the "Purchaser "), the amount of $821,845, as
the first advance of the principal amount of the Sewer System Revenue Bond (DNRC Water
Pollution Control State Revolving I...oan Program), Series 201 OH, of the City (the "Series 2010H
Bond "), dated, as originally issued, as of the date hereof, and issued in the maximum principal
amount of $9,573,000. All of the advance received on the date hereof shall be used for
construction costs and to fund a portion of the deposit to the Reserve Account. The Series
201011 Bond bears interest at the rate of two percent (2.00 %) per annum. In addition, the City
shall pay an Administrative Expense 'Surcharge and a Loan Loss Reserve Surcharge on the
outstanding principal amount of the Series 2010H Bond at the rates of seventy -five hundredths of
one percent (0.75 %) per annum. and one percent (1.00 %) per annurn, respectively.
As Bond Registrar designated under Resolution No. 4299, adopted by the City
Commission on November 1, 2010, authorizing the issuance of the Series 2010H Bond, I further
certify that on the date hereof the Bond Registrar has authenticated and delivered the Series
2010H Bond to the Purchaser. I further certify that the Series 201011 Bond so authenticated and
delivered was registered, on the face thereof and also in the bond register maintained by the
Bond Registrar, in the name of the Purchaser.
WITNESS my hand officially as such Director of Finance as of this 14th day of
December, 2010.
hector Finance
$9,573,000
Sewer System Revenue Bond
(DNRC Water Pollution Control State Revolving Loan Program), Series 201011
City of Bozeman, Montana
REBATE CERTIFICATE
The City of Bozeman, Montana (the "City "), acting through its undersigned duly
authorized officers, hereby certifies and agrees as follows with respect to the $9,573,000 Sewer
System Revenue Bond (DNRC Water Pollution Control State Revolving Fund Program), Series
2010H, dated, as originally issued, as of December 14, 2010 (the "Series 201OH Bond ") issued
pursuant to Resolution No. 4220, adopted by the City on November 16, 2009, as amended and
supplemented by Resolution Nos, 4234, 4245, and 4254, adopted on January 19, 2010, February
16, 2010, and May 3, 2010 (collectively, the "Original Resolution ") and as further amended and
supplemented by Resolution No. 4299, adopted by the City Commission on November 1, 2010
(the "201 OH Resolution;" the Original Resolution as amended and supplemented by the 201 OH
Resolution, the "Resolution ").
Section 1. Undertakings
1.01. The City, pursuant to Section 10.4 of the 201 OH Resolution., has covenanted to
comply with the requirements of Section 148(f) of the Internal Revenue Code of 1986, as
amended (the "Code ") relating to the Series 201 OH Bond. The City covenants that it will consult
with Bond Counsel (as hereinafter defined) and undertake to determine what is required with
respect to the rebate provisions contained in Section 148(f) of the Code from time to time and
will comply with any requirements that may be applicable to the Series 201 OH Bond. The
methodology described in this Certificate will be followed, except to the extent inconsistent with
any requirements of future regulations or written advice received from Bond Counsel.
1.02. Detailed records with respect to each and every Nonpurpose Investment
attributable to Gross Proceeds of the Series 20101I Bond shall be maintained by the City,
including: (i) purchase date, (ii) purchase price, (iii) brokerage or other transaction costs of
purchase, (iv) information establishing fair market value on the date such investment became a
Nonpurpose Investment, (v) any accrued interest paid, (vi) face amount, (vii) coupon or stated
interest rate, (viii) periodicity of interest payments, (ix) disposition price, and (xii) brokerage or
other transaction costs of disposition. Such detailed recordkeeping is required for the calculation
of the Rebatable Arbitrage which, in part, will require a determination of the difference between
the actual aggregate earnings of all the Nonpurpose Investments and the amount of such earning
assuming a rate of return equal to the Yield of the Series 201 OH Bond.
Section 2. Definitions. Unless the context hereof otherwise requires, capitalized terms
shall have the respective meanings given them in the Resolution or in the Officers' Certificate of
the City of even date herewith. In addition, the following capitalized terms have the following
respective meanings in this Certificate:
Available Proceeds shall mean "gross proceeds" of the Series 201 OH Bond as
defined in Section 1.148- 7(c)(3) of the Regulations. Generally, "Available Proceeds"
means the sale proceeds of the Series 20101 -1 Bond and investment proceeds derived
therefrom; it does not include amounts allocable to the Series 201014 Bond in the Debt
Service Account to the extent they constitute a "bona fide debt service fiend" for the
Series 201 Off Bond or a "reasonably required reserve," each as described in the Officers'
Certificate executed by the City of even date herewith.
City.
Bond Counsel shall mean nationally recognized bond counsel selected by the
Bond Year shall mean each one -year period (or shorter from the Closing
Date) that ends at the close of business on each July 1, or, if earlier, the date the
last Bond is paid.
Closing Date shall mean December 14, 2010, the date of delivery of the
Series 2010H Bond.
Code shall mean the Internal Revenue Code of 1986, as amended, from
time to time, and the applicable Treasury Regulations (including proposed or
temporary regulations) promulgated thereunder.
Computation Date shall mean an installment computation date (the last
day of the fifth and each succeeding fifth Bond Year) and the final computation
date (the date the last Bond is discharged). If the Series 2010H Bond are paid at
its stated maturities, the installment computation dates are expected to be July 1,
2015, July 1, 2020, July 1, 2025, July 1, 2030 and the final computation date is
expected to be January 1, 2031.
Gross Proceeds shall mean, with respect to the Series 201 OH Bond, all
proceeds of the Series 201Off Bond (including original proceeds and transferred
proceeds) and any funds (other than proceeds) that are part of a reserve or
replacement fund for the Series 201Off Bond, including amounts on deposit in
the Acquisition and Construction Account, if any, and in the Reserve Account,
each of the Sewer System Fund (the "Fund "), but excluding amounts on deposit
in the Debt Service Account, allocable to the Series 2010H Bond to the extent it
constitutes a "bona fide debt service fund" as described in the Officers'
Certificate of even date herewith.
Investment Property shall mean any security, obligation (other than a
Non -AMT Obligation), annuity contract or investment -type property.
Non -AMT Obligation means any obligation the interest on which is not
includable in gross income under Section 103 of the Code and which is not a
"specified private activity bond" (within the meaning of Section 57(a)(5)(C) of
the Code).
Nonpurpose Investment shall mean any Investment Property that is not a
purpose investment in which Gross Proceeds of the Series 20101-1 Bond are
invested, including investments allocated to the Series 201014 Bond in the
Construction Account in the Fund and the Reserve Amount.
" Project " shall mean the Water Reclamation Facility Project as
described in Appendix A to the 201 Of-I Resolution..
Rebatable Arbitrage shal l mean, as of any Computation Date, the excess
of the future value of all nonpurpose receipts with respect to the Series 201011
Bond over the future value of all nonpurpose payments with respect to the
Series 2010H Bond.
Regulations shall mean the Treasury Regulations applicable to the Series
2.01 OH Bond and promulgated under the Code or the Internal Revenue Code of
1954, as amended, including, without limitation, "Treasury Regulations, Sections
1.103 -13, 1.103.14, 1.103 -15, 1.148 -0 through 1.148 -11, 1.148 -12T, 1.148 -13T,
1.149 -1 and 1.150 -0 through 1.150 -1.
Reserve Amount shall mean the amount on deposit in the Reserve
Account in the Fund that is allocable to the Series 201011 Bond from time to
time, as provided in the Officers' Certificate of the City, of even date herewith.
Yield with reference to any obligation, shall mean that discount rate
which, when computing the present value of all unconditionally payable
payments of principal and interest paid and to be paid on such obligation,
produces an amount equal to the present value of the issue price of the
obligation.
Yield ofthe Series 201 OH Bond shall mean 3.749800% per annum.
Section 3. Rebatable Arbitrage Calculation and Payment.
3.01. The Project will be owned and operated by the City and used for governmental
purposes. The City expects to spend or have spent within five business days after receipt all
advances of the Series 201 OH Bond. Such amounts advanced will reimburse the City for
payments made by the City on the Project. In any event, all of the Available Proceeds qualify for
the temporary period under Section 1.148- 2(e)(2) of the Regulations. Apart from the sale
proceeds of the Series 2010H Bond and investment proceeds derived therefrom and the City's
contribution of amounts to the Reserve Account from proceeds of the Series 2010H Bond, the
City does not expect that any other Gross Proceeds will arise. Thus, if the expenditure tests set
forth in Section 1.148- 7(d) (1)(1) of the Regulations are met (i.e., the following percentages of
Available Proceeds are spent within the following periods beginning on the date of issuance: at
least 15% within six months (June 14, 2011); 60% within one year (December 14, 2011), and
100% within eighteen months (June 14, 2012) (subject to a reasonable contractual retainage
amount not exceeding; five percent of the net sale proceeds of the Bond as of June 14, 2012 to be
spent within 30 months after the date hereof, as described in Section 1.148- 7(d)(2) of the
Regulations)), then the City may elect to treat the Available Proceeds as exempt from the rebate
requirements of Section 148(0 of the Code pursuant to the "18 month" spending exception
provided under Section 1.148 -7(d) of the Regulations.
3.02. For purposes of complying with Section 148(f) of the Code, the City will prepare
or have prepared a calculation of the Rebatable Arbitrage consistent with the rules described in
this Section 3, recognizing that even if the "18 month" spending exception is applicable and no
Gross Proceeds other than Available Proceeds arise in respect of the Series 201 OH Bond, the
Reserve Amount is still subject to rebate. The City will prepare and file in the office of the City
Director of Finance a completed copy of the calculation of the Rebatable Arbitrage within 30
days after each Computation Date. For the purpose of evidencing, compliance with the "18-
month" spending exception, the City shall prepare and file with the City Director of Finance the
Construction Expenditure Report attached as Exhibit A at the end of each of the three six- month .
increments with the "18- month" spending exception period..
3.03. The City shall pay to the United States Department of Treasury from surplus
money in the Sewer System Fund or other available funds (A) not later than 60 days after each
Computation Date, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of
such Computation Date; and (B) not later than 60 days after the final Computation Date, an
amount equal to 100'% of the Rebatable Arbitrage.
304. Each payment required to be made pursuant hereto shall be filed with the Internal
Revenue Service Center, Ogden, Utah 84201 (or at such other place as the Internal Revenue
Service may designate), on or before the date such payment is due, and shall be accompanied by
a completed and executed Internal Revenue Service Form 8038 -T. The City shall retain records
of the calculations required by this Section 3 until six years after the final Computation Date.
3.05. Notwithstanding anything in this certificate to the contrary, gross earnings during a
Bond Year on any bona fide debt service fund for the Series 2010H Bond and amounts earned on
such amounts, if allocated to such bona fide debt service fund, shall not be taken into account in
calculating the Rebatable Arbitrage. For purposes of this paragraph 3.05, the term "gross
earnings" means the aggregate amount earned on the Nonpurpose Investments in which the
Gross Proceeds deposited to the bona fide debt service fund are invested, including amounts
earned on such amounts if allocated to the bona fide debt service fund. It is expected that the
amounts on deposit in the Debt Service Account allocable to the Series 2010H Bond will
constitute a bona fide debt service fund for the Series 2010H Bond.
Section 4. Filing Requirements. The City shall file or cause to be filed such reports or
other documents with the Internal Revenue Service as required by the Code in accordance with
an opinion of Bond Counsel.
Section 5. Survival of Defeasance. Notwithstanding anything in this Certificate or any
other provisions of the Resolution to the contrary, the obligation to remit the Rebatable Arbitrage
to the United States Department of the Treasury and to comply with all other requirements
contained in this Certificate shall survive the defeasance of the Series 2010H Bond.
Section 6. Amendments The City may amend or supplement the provisions of this
Certificate by filing an executed copy of such amendment or supplement in the office of the
Secretary accompanied by an opinion of Bond Counsel to the effect that such amendment or
supplement is required by, or better complies with, the provisions of Section 148 and applicable
Regulations.
Dated: December 14, 2010
CITY OF BOZEMAN, MONTANA
By
irector Finance
4
EXHIBIT A
CONSTRUCTION EXPENDITURE REPORT
This report is submitted pursuant to Section 3.02 of the Rebate Certificate, dated
December 14, 2010. The aggregate "Available Proceeds" available for expenditure were
$ (1) 'The amount expended for costs of the Improvements as of
, (2) was $ ,( which is % of said aggregate "Available Proceeds."
Consequently, the requirements of Section 3.01 of the Rebate Certificate [have been] [have not
been], met. (4)
M
CITY OF BOZEMAN, MONTANA,
Its
(1) Total of S (issue price of Series 2010H Bond less sale proceeds contributed to the
Reserve Account), plus (ii) aggregate investment earnings on amounts in Acquisition and Construction Account in
the Sewer System Fund up to the date inserted in first blank and future investment income thereon that the City
reasonably expects as of the date inserted in the first blank.
(2) Same date as last blank.
(3) Includes all disbursements for costs of the Improvements (excluding amounts contributed to the
Reserve Account) from proceeds of the Series 201011 Bond or investment income thereon from the Acquisition and
Construction Account.
rebate.
Dated: , 20_
(4) If percentage requirement of Section 3.01 is not met, all Available Proceeds are subject to arbitrage
A -1
$9,573,000
Sewer System Revenue Bond
(DNRC Water Pollution Control State Revolving Loan Program), Series 2010H
City of Bozeman, Montana
OFFICERS' CERTIFICATE
We, Jeff Kraus, Stacy Ulmen, and Anna Rosenberry, hereby certify that we are on the
date hereof the duly qualified and acting Mayor, City Clerk, and Director of Finance,
respectively, of the City of Bozeman, Montana (the "City ") and, on behalf of the City, that:
1. The undersigned Mayor, City Clerk, and Director of Finance have executed with their
true signatures as such officers the Sewer System Revenue Bond (DNRC Water Pollution
Control State Revolving Fund Program), Series 201OH, in the maximum principal amount of
$9,573,000 (the "Series 20101-1 Bond "), dated, as originally issued, as of the date hereof. The
Series 20101 -I Bond, matures on the date, bears interest at the rate and is substantially in the form,
prescribed by Resolution No. 4299, duly adopted by the City Commission of the City on
November 1, 2010, entitled "Resolution Relating to $9,573,000 Sewer System Revenue Bond
(DNRC: Water Pollution Control State Revolving Loan Program), Series 201OH, Authorizing the
Issuance and Fixing the Terms and Conditions Thereof" (the "201 OH Resolution "),
The Series 2010H Bond is issued pursuant to Resolution No. 4220, adopted by the City
on November 16, 2009 (the "Original Resolution "), as amended and supplemented by Resolution
Nos. 4234, 4245, and 4254, adopted on January 19, 2010, February 16, 2010, and May 3, 2010,
respectively (collectively, the "Original Resolution "), as further amended and supplemented by
the 201 OH Resolution. (as so amended and supplemented, the "Resolution "). Terms used herein
with initial capital letters but not defined herein have the meanings given them in the Resolution.
Pursuant to the Original Resolution, the City has issued and there is outstanding its $1,973,000
Sewer System Revenue Bonds (DNRC Water Pollution Control State Revolving Loan Program),
Consisting of $390,700 Subordinate Lien Taxable Series 2010A Bond (the "Series 2010A
Bond "), $359,300 Series 201 OB Bond (the "Series 201.0B Bond "), and $1,223,000 Series 2010C
Bond (the "Series 2010C Bond "), its $9,500,000 Sewer System Revenue Bond (DNRC Water
Pollution Control State Revolving Loan Program), Series 201 OD, and its $5,103,000 Sewer
System Revenue Bonds (DNRC Water Pollution Control State Revolving Loan Program),
Consisting of $384,000 Subordinate Lien Taxable Series 201 OE Bond (the `Series 2010E
Bond "), $816,000 Series 201 OF Bond (the "Series 201 OF Bond "), and $3,903,000 Series 201 OG
Bond (the "Series 201 OG Bond "). The Series 201 OB Bond, the Series 20100 Bond, the Series
2010D Bond, the Series 201 OF Bond, the Series 201 OG Bond, the Series 20IOH Bond, and any
other bonds hereafter issued by the City on a parity therewith under the Resolution are referred to
herein as the "Bonds." The Series 201OA Bond and the Series 201 OE Bond are issued as
Subordinate Obligations payable out of available Surplus Net Revenues in the Replacement and
Depreciation Account or the Surplus Account in the Sewer System Fund of the City.
The Resolution is in full force and effect in the form it was adopted. We have delivered
the Series 201 OH Bond, duly authenticated by the Director of Finance, as Registrar, to the
Department of Natural Resources and Conservation of the State of Montana, as purchaser (the
"Purchaser "). The Series 20101-1 Bond is in fully registered form pursuant to a system of
registration established by the Resolution. Terms used herein with initial capital letters but not
defined herein have the meanings given them in the Resolution.
2. The Series 201 OlI Bond has been in all respects duly executed for delivery pursuant to
authority conferred upon us as such officers; that no obligations other than those described above
have been issued pursuant to such authority; that none of the proceedings or records which has
been certified to the Purchaser or to the attorneys approving the validity of the Series 20101I
Bond has been in any manner repealed, amended or changed except as shown by additional
proceedings or records furnished each of them; and that there has been no material adverse
change in the financial condition of the City or the circumstances affecting the Series 201 OH
Bond, except as shown by the materials so furnished.
3. No litigation is now pending, or, to the best of our knowledge, threatened (1)
restraining or enjoining the issuance or delivery of the Series 201OH Bond, (ii) questioning the
organization or boundaries of the City or the right of any officers of the City to their respective
offices, (iii) questioning the right and power of officers of the City to deliver the Series 201011
Bond, (iv) challenging the validity of or security for the Series 201 OH Bond, the pledge of Net
Revenues of the sewer system of the City (the "System ") to pay the principal of, premium, if
any, and the interest on the Series 201 OH Bond, or (v) challenging the validity or enforceability
of the Resolution.
4. The representations of the City contained in Article 11 of the 201 OH Resolution are
true and complete as of the date hereof as if made on this date, except to the extent that the City
has specifically advised the Purchaser and the attorneys approving the validity of the Series
201OH Bond otherwise in writing.
5. The Series 2010H Bond is being delivered to the Purchaser on the date hereof and
$821,845 of the principal amount of the Series 20101-1 Bond are being advanced on the date
hereof.
6. We are among the officers of the City responsible for issuing the Series 201 OH Bond
and, pursuant to Section 148 of the Internal Revenue Code of 1986, as amended (the "Code "),
and the Treasury Regulations promulgated thereunder (the "Regulations "), on behalf of the City
we hereby certify and reasonably expect that the proceeds of the Series 201 OH Bond will be used
as follows within the meaning of applicable provisions of 'Section 148 of the Code and of
applicable Treasury Regulations (the "Regulations "), such facts, estimates and circumstances
being as follows:
(a) The Series 201 OH Bond is being issued to finance a portion of the cost of
acquiring or constructing certain improvements to the System, generally described in
Appendix A to the 20101-1 Resolution (the "Improvements "), fund deposits to the Reserve
Account, and to pay costs of issuance. The Improvements are intended for use by
members of the general public or users of the System. All users of the System pay
standard rates for the use and availability of the System.
(b) The City has spent or expects to spend the following amounts from proceeds
of the Series 2010H Bond in connection with the Improvements and associated financing
costs:
Construction $8,879,038.00
Debt Service Reserve 680,808.00
Bond Counsel 13,151.00
TOTAL, PROJECT COSTS $9,573,000.00
(c) The City has heretofore entered or within six months will enter into contracts
for the Improvements, in the form of engineering services, site development or
construction, in the sum of at least 5% of the expected sale proceeds of the Series 201 OH
Bond, i.e. $478,650, which the City expects to spend on the Improvements.
(d) Work on the Improvements has begun and will proceed with due diligence to
completion, and the Improvements are expected to be completed by December 31, 2011.
(e) The Series 201011 Bond will be purchased by the Purchaser at a purchase price
equal to the principal amount of the Series 201 OH Bond advanced thereunder. Pursuant
to the Resolution and the Series 201 OH Bond, the Purchaser has agreed to advance to the
City principal amounts of the Series 201 OH Bond from time to time upon satisfaction of
certain conditions precedent set forth in the Resolution, up to the maximum principal
amount of $9,573,000. No interest accrues on principal of the Series 201 OH Bond and
the City is not entitled to any investment income thereon until the principal amount is
advanced.
(f) 0[the purchase price of the Series 201 OH Bond, assuming the full principal
amount thereof is drawn, $8,879,038 will be used to pay costs of Improvements, $13,154
to pay costs of issuance of the Series 201 OH Bond (representing costs of legal services),
and $680,808 to fund the deposit to the Reserve Account. No proceeds of the Series
201 OH Bond will be used to reimburse the City for original expenditures of the City in
connection with the Improvements except in accordance with paragraph 7 below.
(g) The City expects to spend on costs of the Improvements by no later than
February 28, 2012 all of the proceeds to be derived by the City from the sale of the Series
201 OH Bond and investment earnings thereon.
(i) The Series 201 OH Bond is not a "hedge bond" within the meaning of Section
149(8) of the Code. The City expects to spend not less than 85% of the sale proceeds of
the Series 201 OH Bond within three years after the elate hereof and less than 50% of the
proceeds of the Series 201 OH Bond are invested in nonpurpose investments having a
substantially guaranteed yield for four years or more.
0) Proceeds of the Series 20101 -I Bond and investment income thereon, if any, to
be used to finance the costs of the Improvements and pay costs of issuance of the Series
20101 Bond will be invested for a temporary period pursuant to Section 1.148- 2(e)(2) of
the Regulations ending on the earlier of: (i) three years from the date hereof (December
14, 2013), or (ii) the date that the Improvements would be completed in the exercise of
due diligence and all costs thereof promptly paid. If, at the conclusion of such temporary
period, sale proceeds of the Series 20I OH Bond and investment income thereon, other
than sale proceeds deposited in the Reserve Account, have not been allocated to the
governmental purposes of the Series 20101 -1 Bond, such amounts will not be invested at a
yield greater than the yield of the Series 201 OH Bond, if and to the extent such restriction
is necessary to prevent the Series 201 OH Bond from being an arbitrage bond within the
meaning of Section 148 of the Code and Regulations unless the City determines to take
advantage of Section 1.148 -5(c) of the Regulations relating to yield reduction payments.
(k) The Improvements have not been and are not expected to be sold or otherwise
disposed of by the City during the term of the Series 201 OH Bond. The City expects that
the Improvements will remain owned and operated by the City substantially in the
manner in which they are now owned and operated for the indefinite period concluding
not earlier than the final stated maturity date of the Series 201 OH Bond,
The City reasonably expects that during the term of the Series 201 OH Bond no
private business use will be made of the Improvements or the System and that no private
payments or security will be made or furnished that would cause the Series 201 OH Bond
to be a "private activity bond" within the meaning of Section 141 of the Code and
applicable Regulations. No proceeds of the Series 201 OH Bond are being or will be
loaned to any nongovernmental person. The City reasonably expects that the Series
201 OH Bond will not be a private activity bond within the meaning of Section 141 ofthe
Code.
(I) No obligations of the City (a) are being issued at substantially the same time
as the Series 201014 Bond, (b) are being sold pursuant to the same plan of financing as
the Series 201 OH Bond, and (c) are reasonably expected to be paid from substantially the
same source of funds (determined without regard to guarantees from unrelated parties) as
will be used to pay the Series 2.01 OH Bond, within the meaning of Section 1.150 -1(c) of
the Regulations.
(m) Pursuant to the Resolution, the principal of, premium, if any, and interest on
the Bonds are to be paid from the Revenue Bond Account in the Sewer System Fund (the
"Revenue Bond Account "). The City does not reasonably expect to use any other fund or
account to pay principal of, premium, if any, or interest (including, for purpose of this
paragraph G(m), Administrative Expense Surcharge and Loan Loss Reserve Surcharge, as
provided in the Resolution) on the Series 201 OH Bond. The Net Revenues appropriated
by the Resolution to the payment of the Series 201 OH Bond are to be deposited in the
Revenue Bond Account.
It is expected that all amounts credited to the Revenue Bond Account allocable to
the Series 201014 Bond will be used to pay the interest on and principal of the Series
201014 Bond within 13 months after deposit. The Revenue Bond Account will be used
primarily to achieve a proper matching of revenues and debt service within each bond
year (the 12 -month period (or shorter period from the date hereof) ending on a July 1)
and is expected to be fully depleted at least once a year on July 1, except for a reasonable
carryover amount which is not expected to exceed the greater of (i) the earnings on
money in the Revenue Bond Account allocable to the Series 201 OH Bond for the
preceding bond year or (ii) one - twelfth of the annual debt service on the Series 201011
Bond in the preceding bond year. Consequently, the amounts on deposit in the Revenue
M
Bond Account allocable to the Series 201 OH Bond constitute a "bona fide debt service
hand" for the Series 201 OH Bond within the meaning of Section 1.148 -1(b) of the
Regulations.
(n) As of the first day of each month coaramencing January 1, 2011, the Director
of Finance will determine the balance on deposit in the Revenue Bond Account allocable
to the Series 201 OH Bond. If the amount on deposit in the Revenue Bond Account
allocable to the Series 201011 Bond exceeds the sum of the amount of principal and
interest payable from the Revenue Bond Account on the Series 201 OH Bond through the
following July 1 plus the carryover amount described in paragraph 6(m) hereof, then, to
the extent necessary to prevent the Series 201 OH Bond from becoming an arbitrage bond,
the excess over such sum will either be (i) used to redeem principal installments of the
Series 201 OH Bond, or (ii) invested at a yield less than or equal to the yield of the Series
201 OH Bond, except as permitted by paragraph 6(p) hereof,:
(o) Pursuant to the Resolution, the City has established a Reserve Account in the
Sewer System Fund (the "Reserve Account ") to secure its parity Bonds, including the
Series 2010B Bond, the Series 20100 Bond, the Series 201OD Bond, the Series 2010E
Bond, the Series 2010E Bond, and the Series 201 OH Bond. Upon the advance of the full
principal of the Bonds outstanding as of the date hereof, the City estimates it will have
$1,238,777 in the Reserve Account. The maximum cumulative fiscal year debt service
on the Series 2010B Bond, the Series 20100 Bond, the Series 201 OD Bond, the Series
201 OF Bond, the Series 2.010E Bond, and the Series 201 OH Bond, assuming the full
principal amount thereof is advanced, will total $1,919,585. The amount required to be
on deposit into the Reserve Account to satisfy the Reserve Requirement, assuming the
full principal amount of the Series 201 OH Bond is advanced, totals $680,808, which will
be funded from proceeds of the Series 201 OH Bond. The amount on deposit therein on
the date hereof that is allocated to the Series 20101 =1 Bond (i.e., S60,476) is from the
proceeds of the Series 201 OH Bond, Upon each monthly apportionment from Net
Revenues remaining after the apportionment to the current requirements of the Revenue
Bond Account, the City shall credit to the Reserve Account such additional Net Revenues
as may be required to maintain the balance in the Reserve Account in an amount equal, as
of the date of calculation, to the Reserve Requirement. The City will allocate amounts on
deposit in the Reserve Account in proportion to the maximum amount of principal and
interest payable in the current or any future fiscal year for the Series 201 OH Bond;
provided that such amount shall not be less than the amount of proceeds of Bonds of such
series (whether sale or transferred proceeds) deposited therein.
The Reserve Account, as established and implemented pursuant to the Resolution,
constitutes a "reasonably required reserve" within the meaning of Section 148(d) of the
Code to the extent the amount therein allocable to the Series 201 OH Bond (the "201 OH
Reserve Amount ") does not exceed 201011 Reserve Limitation (as hereinafter defined),
As of the date hereof the 201 OH Reserve Amount is $60,476, and, assuming the full
principal amount of the Bonds outstanding as of the date hereof and of the Series 2010H
Bond is advanced, is $680,808.
Any portion of the 201 OH Reserve Amount that is in excess of the 201 OH Reserve
Limitation shall not be invested at a yield in excess of the yield of the Series 201 OH Bond
(3.749800 %), except as permitted by paragraph 6(p) hereof. As used herein, the "201 OH
Reserve Limitation" is equal. as of the date of calculation, to the least of. (i) ten percent
(10 %) of the principal amount of the Series 2010E Bond and the Series 2010C Bond that
is actually advanced pursuant to the terms of the Resolution (if all proceeds are advanced,
$957,300.00); (ii) the maximum amount of principal and interest payable on the Series
201 OH Bond in the current or any future fiscal year of the City (initially, S858,168.75);
and (iii) 125% of the average debt service on the Series 2010H Bond payable in any
fiscal year of the City during the term of the Series 201 OH Bond (initially, $861,818.11).
Assuming the full principal amount of the Series 201 OH Bond is advanced, the
201 OH Reserve Amount, using the method described in the first paragraph of paragraph
6(o) above, is $680,808. All of the 201 OH Reserve Amount, assuming the full principal
amount of the Series 201 OH Bond is advanced, is a reasonably required reserve for the
Series 201 OH Bond to the extent not in excess of the 201 OH Reserve Limitation.
However, because the Series 201011 Bond is subject to rebate, amounts earned on the
201014 Reserve Amount that are subject to rebate shall be rebated as provided in the
Rebate Certificate dated as of the date hereof.
(p) An aggregate amount of proceeds of the Series 2010H Bond not to exceed the
Minor Portion Amount Lander Section 148(e) of the Code ($100,000) (the "Minor Portion
Amount ") may be invested without restriction as to yield throughout the term of the
Series 201 OH Bond. To the extent that money, allocated to the Series 201 OH Bond
pursuant to the Regulations, on deposit in (i) the Construction Account remains therein
for a period longer than that prescribed by paragraph 60), (ii) the Revenue Bond Account
in excess of the amount described in paragraph 6(n) hereof, or (iii) the 201 OH Reserve
Amount exceeds the 201 OH Reserve Limitation described in paragraph 6(o) hereof,
exceeds the Minor Portion Amount, no more than the Minor Portion Amount may be
invested at a yield which exceeds the yield of the Series 201 OH Bond.
(q) No portion of the Series 201 OH Bond is issued solely for the purpose of
investing such portion at a materially higher yield as less than a major portion. None of
the proceeds of the Series 2010I-1 Bond will be used directly or indirectly to replace funds
which were used directly or indirectly to acquire obligations with a yield that is
materially higher than the yield of the Series 2010H Bond (3.749800 %%).
(r) 'I'he Series 201 OH Bond will not be outstanding longer than necessary, within
the meaning of Section 1.148- 1(c)(4) of the Regulations. The weighted average maturity
of the Series 201 OH Bond (11.744 years) does not exceed 120 percent of the average
reasonably expected economic life of the Improvements. Such average reasonably
expected economic life is not less than 20 years.
(s) As determined in Section 10.4 of the 201.01 -1 Resolution, the Series 201 OH
Bond is subject to rebate requirements of Section 148(f) of the Code.
(t) On the basis of all the facts, estimates and circumstances now in existence and
set forth in the documents relating to the issuance of the Series 201 OH Bond, including;
without limitation this instrument, it is expected that the proceeds of the Series 201 OH
6
Bond will be used in a manner that would not cause the Series 201 OH Bond to be an
"arbitrage bond" within the meaning of Section 148 of the Code and the Regulations.
(u) To the best of our knowledge and belief, there are no other facts, estimates or
circumstances that would materially change the foregoing expectations and said
expectations are reasonable. No matters have come to our attention which make
unreasonable or incorrect the representations made in this Certificate.
7. The provisions of this Section 7 are intended to establish and provide for compliance
by the City with Treasury Regulations, Section 1.150 -2 (the "Reimbursement Regulations ")
applicable to the "reimbursement proceeds" of the Series 2010H Bond, being those proceeds
which will be used by the City to reimburse itself for any expenditure with respect to the
Improvements which the City paid or will have paid prior to the issuance of the Series 201 OH
Bond (a "Reimbursement Expenditure ").
The City hereby certifies and/or covenants as follows
(a) On December 16, 2009, the City (or person designated to do so on behalf
of the City) made a written declaration of the City's official intent (a "Declaration ")
which complies with the provisions of Section 1.150 -2(d) and (e) of the Reimbursement
Regulations. The Declaration need not cover, however, Reimbursement Expenditures:
(i) to be paid or reimbursed from sources other than the Series 2010H Bond, (ii)
constituting "preliminary expenditures" (within the meaning of Section 1.150- 2(f)(2) of
the Regulations) for the Improvements, including engineering or architectural expenses
and similar preparatory expenses, which in the aggregate do not exceed 20% of the "issue
price" of the Series 2010H Bond, (iii) in a "de minimis" amount (as defined in Section
1.150- 2(f)(1) of the Regulations), i.e., $100,000; or (iv) Reimbursement Expenditures
paid not more than GO days before the date of the Declaration.
(b) As of the date of the Declaration, no funds from sources other than the
Series 201 OH Bond were, or were reasonably expected to be, reserved, allocated on a
long -term basis, or otherwise set aside by the City to provide financing for the
Reimbursement Expenditure to be reimbursed from proceeds of the Series 201 OH Bond.
(c) Each Reimbursement Expenditure to be reimbursed from proceeds of the
Series 201 OH Bond, other than costs of issuing the Series 201 OH Bond, is a capital
expenditure (i.e., a cost that is properly chargeable to capital account (or would be with a
proper election) under general federal income tax principles).
(d) The "reimbursement allocation" described in the Reimbursement
Regulations for each Reimbursement Expenditure to be reimbursed from proceeds of the
Series 201 OH Bond shall be made forthwith following (but not prior to) the issuance of
the Series 201011 Bond and in all events within the period ending on the date which is
three years alter the later of. (i) the date of payment of the Reimbursement Expenditure
or (ii) the Improvements is first placed in service or abandoned.
(e) Each such reimbursement allocation will be evidenced by all entry on the
official books or records of the City maintained for and in connection with the Series
7
201 OH Bond and will specifically identify the actual prior Reimbursement Expenditure to
be reimbursed from proceeds of the Series 2010H Bond.
(0 The City is unaware of any facts or circumstances which would cause it to
question the reasonableness or accuracy of this Section 7 or the Declaration, or its
compliance with any of the covenants herein or therein contained.
8. The seal impressed on this Certificate and on the Series 2010H Bond is the true
and only official corporate sea] of the City.
WITNESS our hands on behalf of the City as of this 14th day of December, 2010.
CITY OF BOZEMAN, MONTANA
13 ,
Director of Fi6grice
UNITED STATES OF AMERICA
STATE OF MONTANA
GALLATIN COUNTY
CITY OF BOZEMAN
SEWER SYSTEM REVENUE BOND
(DNRC WATER POLLUTION CONTROL STATE REVOLVING LOAN PROGRAM),
SERIES 201 OH
No. R -1 $9,573,000
FOR VALUE RECEIVED, the City of Bozem , !Montana (the "Borrower "), a
duly organized municipal corporation and politicalr`st�bdivisign of the State of Montana,
acknowledges itself to be specially indebted anal, for value •eceivd, hereby promises to pay to
the Department of Natural Resources and Cop' s'erv� ti6n of the' State of Montana (the "DNRC "),
or its registered assigns, solely from the Revenue B hd Account of its Sewer System Fund, the
principal sum equal to the sum .;of the amounts enf6red` on Schedule A attached hereto under
" "Total Amount Advanced, >' -earth nixes° on etch such amount from the date such amount is
advanced hereunder at the ratd of 12.00 rper annum on the unpaid balance until paid. In
addition, the Borrower shallr'ay, solely from said source, an Administrative Expense Surcharge
and a Loan Loss Reserve Surcharge tin the outstanding principal amount of this Bond at the rates
of seventy -five hundredths Q`f I ne percent (0.75i%) per annum and one percent (1.00'%) per
annum, respectively. Interest and Administrative Expense Surcharge and a Loan Loss Reserve
Surcharge shall be payable in semiannual installments payable on each January 1 and July 1
(each a "Loan Repayment Date") commencing July 1, 2011. Principal shall be payable on the
dates set forth in Schedule B hereto. Each installment shall be in the amount set forth opposite
its due date in Schedule B attached hereto under "Total Loan Payment." The portion of each
such payment consisting of principal, the portion consisting of interest and the portion consisting
of Administrative Expense Surcharge and the portion consisting of Loan Loss Reserve Surcharge
shall be as set forth in Schedule B hereto. Upon each disbursement of 2010H Loan amounts to
the Borrower pursuant to the Resolution described below, the DNRC shall enter (or cause to be
entered) the amount advanced on Schedule A under "Advances" and the total amount advanced
under the Resolution (as hereinafter defined), including such disbursement, under "Total Amount
Advanced." The DNRC shall prepare Schedule B and any revised Schedule B, or cause
Schedule B and any revised Schedule B to be prepared, as provided in Section 5.1 of the
Resolution No. 4299. Schedule B shall be calculated and recalculated on a level debt service
basis assuming an interest rate of 3.75% per annum. Past -due payments of principal and interest
and Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall bear interest at
the rate of ten percent (10.00 %) per annum, until paid. Interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge shall be calculated on the basis of a 360 -day year
comprising 12 months of 30 days each. All payments under this Bond shall be made to the
registered holder of this Bond, at its address as it appears on the Bond register, in lawful money
of the United States of America.
This Bond is one of an issue of Sewer System Revenue Bonds of the Borrower
authorized to be issued in one or more series from time to time, and constitutes a series in the
maximum authorized principal amount of $9,573,000 (the "Series 2010H Bond "). The Series
2010H Bond is issued to finance a portion of the costs of the construction of certain
improvements to the sewer system of the Borrower (the "System "), to fiend deposits to the
Reserve Account, and to pay costs of issuance of the Series 2010TI Bond. The Series 2010H
Bond is issued pursuant to and in full conformity with the Constitution and laws of the State of
Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, Part 44, as
amended, and ordinances and resolutions duly adopted by the governing body of the Borrower,
including Resolution No. 4220 duly enacted by the City Commission on November 16, 2009, as
amended and supplemented by Resolution Nos. 4234, 4245, 4254, and 4299 adopted on January
19, 2010, February 16, 2010, May 3, 2010, and November 1, 2010, respectively (as so amended
and supplemented, the "Resolution "). The Series 2010H Bond is issuable only as a single, fully
registered bond. The Series 201OH Bond is issued on a pars y With the Borrower's $359,300
Sewer System Revenue Bond (DNRC Water Pollution ,Control State Revolving Loan Program),
Series 2010B, its $1,223,000 Sewer System Revenue; Bog:d (DNRC Water Pollution Control
State Revolving Loan Program), Series 20100, its $9,5b0,060 Sewer System Revenue Bond
(DNRC Water Pollution Control State Revolving L6an Proglr m), Series 2010D, its $816,000
Sewer System Revenue Bond (DNRC Water Poiiut , 'on Control State Revolving Loan Program),
Series 2010F, and its $3,903,000 '§ewer System,R v nice Bond (DNRC Water Pollution Control
State Revolving Loan. Progvarn) ; Seizes 2t}�OG (eailectively, the "Outstanding Bonds ").
Reference is "` j to the Resolution for a more complete statement of the terms
and conditions upon which. the':Serics 2010H Bond has been issued, the net revenues of the
System pledged and appropriated for the payment and security thereof, the conditions upon
which additional bonds may be issued under the Resolution and made payable from such net
revenues on a parity with the Outstanding Bonds and the Series 2010H Bond (collectively, the
"Bonds ") or otherwise, the conditions upon which the Resolution may be amended, the rights,
duties and obligations of the Borrower, and the rights of the owners of the Series 2010H Bond.
The Borrower may prepay the principal of the Series 2010H Bond only if (i) it
obtains the prior written consent of the DNRC thereto, and (ii) no Loan Repayment or
Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. Any
prepayment permitted by the DNRC must be accompanied by payment of accrued interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment
on the amount of principal prepaid. If the Series 2010H Bond is prepaid in part, such
prepayments shall be applied to principal payments in inverse order of maturity.
The Bonds, including interest and any premium for the redemption thereof, are
payable solely from the net revenues pledged for the payment thereof and do not constitute a
debt of the Borrower within the meaning of any constitutional or statutory limitation or
provision.
The Borrower may deem and treat the person in whose name this Series 2010H
Bond is registered as the absolute owner hereof, whether this Series 2010H Bond is overdue or
not, for the purpose of receiving payment and for all other purposes, and the Borrower shall not
-2-
be affected by any notice to the contrary. The Series 2010H Bond may be transferred hereinafter
as provided.
IT IS HEREBY CERTII{IED, RECITED, COVENANTED AND AGREED that
the Borrower will forthwith construct and complete the improvements to the System .hereinabove
described, that it will prescribe and collect reasonable rates and charges for all services and
facilities afforded by the System, including all additions thereto and replacements and
improvements thereof, and has created a special Sewer System Fund into which the gross
revenues of the System will be paid, and a separate and special Revenue Bond Account in that
fluid, into which will be paid each month, from and as a first and prior lien on the Net Revenues
of the System then on hand, an amount equal to not less than the sum of one -sixth of the interest
due within the next six months plus one - twelfth of the principal due within the next twelve
months with respect to all Bonds payable from the Revenue Bond Account; that the Borrower
has created a Reserve Account in such fund into which shall ' be Oaid additional Net Revenues,
after required credits to the Revenue Bond Account, sufficient to rriaintain a reserve therein equal
to the maximum amount of principal and interest, payable in any; subsequent fiscal year on all
such Bonds; that the Revenue Bond Account will be used only to pay the principal of, premium, .
if any, and interest on the Bonds and any other ; 'additional Bonds issued pursuant to the
Resolution on a parity therewith; that the rates and c e for the System will from time to time
be made and kept sufficient, to provide gross income` 'A revenues adequate to pay promptly the
reasonable and current exper yes o 'o Crating and'inaintaining the System and to produce in each
fiscal year Net Revenues m excess of such' current expenses, equal to 125% of the maximum
amount of principal and interest payable from the Revenue Bond Account in any subsequent
fiscal year; that additional Bonds and refunding Bonds may be issued and made payable from the
Revenue Bond Account dn, ,, o parity with the Bonds and other parity Bonds, upon certain
conditions set forth in the Resolution, but no obligation will be otherwise incurred and made
payable from the Net Revenues of the System, unless the lien thereof shall be expressly made
subordinate to the lien of the Bonds and additional parity Bonds on such Net Revenues; that all
provisions for the security of the holder of this Series 2.010H Bond set forth in the Resolution
will be punctually and faithfully performed as therein stipulated; that all acts, conditions and
things required by the Constitution and laws of the State of Montana and the ordinances and
resolutions of the Borrower to be done, to exist, to happen and to be performed in order to make
this Series 2010H Bond a valid and binding special obligation of the Borrower according to its
terms have been done, do exist, have happened and have been performed in regular and due
form, time and manner as so required; and that this Series 2010H Bond and the interest hereon
are payable solely from the Net Revenues of the System pledged and appropriated to the
Revenue Bond Account and do not constitute a debt of the Borrower within the meaning of any
constitutional or statutory limitation or provision and the issuance of the Series 2010I 1 Bond
does not cause either the general or the special indebtedness of the Borrower to exceed any
constitutional or statutory limitation.
IN WITNESS WHF,RFOF', the City of Bozeman, Montana, by its governing
f tli Mayor the Director of
body, has caused adnd by the signatures o I
has caused the official seal of the Borrower to be „ °
Finance, and the Clerk of the Commission,
affixed hereto, and has caused this Bond to be dated as of the 14th day of December, 2010.
y { >( YN y
13 00
M
(Belk
ti
� a c
-4-
REGISTRATION AND 'TRANSFER
This Bond shall be fully registered as to both principal and interest. No transfer of this
Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized
attorney or legal representative, executes the form of assignment appearing on this Bond, and (2)
the Director of Finance as bond registrar (the "Registrar "), has duly noted the transfer on the
Bond and recorded the transfer on the Registrar's registration books. The Borrower shall be
entitled to deem and treat the person in whose name this Bond is registered as absolute owner
thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the
Bond shall be made only to the order of the registered holder thereof, and all such payments shall
be valid and effectual to satisfy and discharge the Borrower's liability upon the Bond to the
extent of the sum or sums so paid.
REGISTER
The ownership of the unpaid Principal
thereon is registered on the books of the City of
holder appearing on the first page hereof or as,, lc
Date of Name-and -Addre
Registration of histered Hol
December 14 2010
1 "625 Eleventh Avenue
Helena MT 59620
of thi� Bond and the interest accruing
r, M ont aria in the name of the registered
Signature of
Director of Finance
THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The Director of Finance of the Borrower, acting as Bond Registrar, has transferred, on
the books of the Borrower, on the date last noted below, ownership of the principal amount of
and the accrued interest on this Bond to the new registered holder noted next to such date, except
for amounts of principal and interest theretofore paid.
Name of New Signature of
Date of Transfer Registered Holder Bond Registrar
-5-
FORM OF ASSIGNMENT
For value received, this Bond is hereby transferred and assigned by the undersigned
holder, without recourse, to
on this day of
(Authorized Signature)
For
-6-
SCHEDULE A
Date
12/14/2010
SCHEDULE OF AMOUNTS ADVANCED
Advances
Total Amount
Advanced
Notation
Made By
5821,845.00 $821,845,00
-7-
r
�E
-7-
SCHEDULE B
Bate Principal Interest
r
Administrative
Expense Surcharge
Loan Loss
Reserve
Surcharge
Total Lean
Payment
N