HomeMy WebLinkAboutResolution 2638 Form, terms and covenants for SID bonds for SIDs 649, 650, 651: 10-20-86
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COMMISSION RESOLUTION NO. 2638
RESOLUTION RELATING TO $860,000 POOLED SPECIAL IMPROVEMENT
DISTRICT BONDS, SERIES 1986
(SPECIAL IMPROVEMENT DISTRICT
NOS. f,49, 650 and 61)1)
; PRESCRIBING THE FOID1 .A.ND '!.'Em1S A~1D
THE COVENANTS OF THE CITY FOR THE PAYMENT THEREOF.
I BE IT RESOLVED by the City Commission of the City of Boze~an,
Montana, as
follows:
Section 1. Recitals.
It is hereby found, determined and declared as follows:
1.01- Resolutions of Intention.
By Resolution No. 2599, adopted April
7,
1986, Resol1ltion No. 2600, adopted
April 7, 1086, and Resolution No.
2601, ad.opted
April 7, 198fi (the Resolutions of
Intention) this Council declared its
intention
to create Special Improvement Districts Nos. 6119,
650 and fi51 (-the Districts) ,
respectively for the purpose of making special improvements
for the special benefit
of the Districts, which resolutions designated the number of the Districts, describ
ed
the boundaries thereof, stated wl1.ether the Districts were extended Districts and
stated the general character of the improvements
to be made and an approximate
estimate of the costs thereof,
in accordance with the provisions of Montana Code
Annotated, Title 7, Chapter
12, Parts 41 and 42, as amended.
By the Resolutions of
Intention this Commission also declared its
intention to cause the cost and expense
of making the improvements especially benefitting each of the Districts
to he
assessed against the properties incluQed within the boundaries of each of
the
Districts, each lot or parcel of land to be assessed
for that part of the whole cost
which its area bears to the entire District, exclusive of streets,
avenues, alleys
and public places.
1. 02. ~.Jotices . Notices of the passage of the Resolutions
of Intention were
given by five consecutive publications in the Bozeman Daily Chronicle,
a daily
I newspaper published within the City. The notices described the general character
of the improvements proposed to be made, stated the estimated cost of the
improve-
ments, designated the time w.h2n and the place '"here the City Commission '"ould hear
and pass upon all protests made against the making of such improvements of the
creation or extension of such Districts, designated the method of assessment and
referred to the Resolutions of Intention,
designated above, as being on file in the
office of the Clerk of the Cmr.mission for the description of the boundaries of
the
Districts, all as provided in the Resolutions of
Int.ention. Notices of the passage
of the Resolutions of Intention were maileQ the same day the notice was
first
published to all persons, firms or corporations or the agents thereof having real
property within the proposed district listed in their names upon the
last completed
assessment roll for state,
county and school district taxes, '-it their last known
addresses.
l.03. Creation of Districts. J'>,t
the times and places specified in the
notices hereinabove described, thisCornmission met to hear,
consiQer and pass upon
all protests made against the making of such improvements and the creation of each
of the Districts, and after consideration thereof,
it was determined and declared
that insufficient protests against the creation or extension of each of the Districts
or the proposed work had been filed in the time and manner provided by
law by the
owners of the property to be assessed for the improvements,
and the Council did
therefore by Resolution No. 2(..02,
adopted May 12, 198~,
create Special Improvement
I District No. 649, Resolution No.
26/)3, adopted May 12, 1986, create
St;:>Bcial Improve-
ment District No. 6S/') and Resolution No.
2604, adopted Hay 12, 1986,
create Special
Improvement District Bo. 651, and did order the proposed
improvements in each
District in accordance with the Resolutions of Intention designated.
'-
l. 04 . Construction'-Contract. Plans,
specifications, maps,
profiles and
surveys for construction of
said improvements were prepared by the engineers acting
for the City, and were thereupon examined and approved by this Commission.
Adver-
tisements for bids for construction
of said improvements were published in the
COMMISS~QN RESOLUTION NO. 2638
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official newspaper of the City in accordance with the provisions of Montana
Code Annotated, Section 7-12-4141, after which the bids theretofore
received
were opened and examined. After referring the bids to the engineers for the
City it was determined that the lowest regular proposals for the furnishing
of all work and materials required for constructing the improvements in
accordance with the approved plans and specifications were the proposals of
Johnston Excavating, Inc. , of Bozeman,
Montana, at a total contract price of I
$247,429.76 for Special Improvement District No. 649,
and Big Sky Paving
Company, Inc. , of Bozeman, Montana,
for $385,635.44 for Special Improvement
District Nos. 650 and 651. The costs of said construction attributable to
improvements in Special Improvement District No. 650 are
$352,781.48 and the
costs of said construction attributable to improvements in Special
Improvement
District No. 651 are $32,853.96. Contracts
for construction of the improve-
ments wer~ therefore awarded to said bidders, subject to the right of owners
of pro~rtyliable to be assessed to elect to take the work and enter into a
written contract therefor in the manner provided by Montana Code Annotated,
Section 7-12-4147, which election the property owners failed to make,
whereupon
the City and the successful bidders entered into wr~tten contracts for construc-
tion of the improvements upon the bidders having executed and filed bonds
satisfactory to this Commission and in the form and manner provided by Montana
Code Annotated, Title 18, Chapter 2,
Part 2.
1.05. Costs. It is currently estimated that the cost and expense
connected with and incidental to the formation of the improvement districts to
the City, including costs of preparation of plans, specifications,
maps, profiles,
engineering superintendence and inspect~on, preparation of assessment rolls,
expenses of making the assessments, the cost of work and materials under the
construction contract and all other costs and expenses, including the deposit
of proceeds in the Special Improvement District Revolving Fund of the City, I
will be $355,000 for Special Improvement District No.
649, $458,000 for Special
Improvement District No. 650, and $47,000 for Special Improvement
District No.
651, which amounts will be levied and assessed upon all property within the
respective Districts on the basis described in the Resolutions of Intention.
This Council has jurisdiction and is required by law to levy and assess such
amount, to collect such special assessments and credit the same to the special
improvement district accounts created for each District, which accounts are
to be maintained on the official books and records of the City separate from
all other City funds, within the 1986 Pooled Special
Improvement District
Sinking Fund (the Sinking Fund) .
1.06. Sale and Issuance of Bonds. For the purpose
of financing the
share of the cost and expense of making the improvements for each District,
which is to be assessed against the assessable property within the respective
Districts, this Commission determined that the issuance and sale of bonds in
a pooled single offering was in the best interests of the City and the Districts
and would facilitate the sale of the Bonds at lower interest rates. The
Commission then called for the public sale of bonds
in the total aggregate
amount of $953,000, which amount represents bonds for each District in the
principal amounts of $448,000 for Special
Improvement District No. 649,
$458,000 for Special Improvement District No. 650
and $47,000 for Special
Improvement District No. 651. The sale was duly noticed and conducted
in I
accordance with applicable statutory provisions.
On July 14, 1986, this Council entered into a contract
with Grande &
Co. , Inc. of Seattle, Washington
(the Purchaser) , pursuant to which the
Purchasers agreed to purchase from the City the $953,000 Pooled Special Improve-
ment District Bonds, Series 1986 (Special Improvement Districts
Nos. 649, 650
and 651) (the Bonds) at a net effective interest rate of
8.57%. The total
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amount of Bonds to be sold was reduced by the City due to favorable construction
bids and $860,000 principal amount of Pooled Special Improvement District Bonds,
Series 1986, representing $355,000 in aggregate principal amount
of Bonds for
Special Improvement District No. 649, $458,000
in aggregate principal amount of Bonds
for Special Improvement District No. 650, $47,000
in aggregate principal amount of
I Bonds for Special Improvement District No. 651,
were confirmed by the City Commission
on September 29, 1986, to be sold to the Purchaser at a ne.t effective
interest rate
of 8.55%.
1. 07. Recital. All acts,
conditions and things required by the Constitution
and laws of the State of Montana, including Montana Code Annotated,
Title 7,
Chapter 12, Parts 41 and 42, in order to make the Bonds herein authorized
valid and
binding special obligations in accordance with their terms and in accordance with
the terms of this resolution have been done, do exist,
have happened and have been
performed in regular and due form, time and manner as so required.
Section ?. The Bonds.
2.01. Principal Amount, Maturity,
Denominations, Date, Basic Interest Rates
of Bonds. For the purpose of paying the costs and expenses incurred in construction
of the improvements authorized to be constructed in the Districts, and in anticipa-
tion of the collection of special assessments to be levied therefor, and
in accordance
with the proposal described in Section 1.06, the City shall forthwith issue and
deliver to the Purchaser the Bonds in the aggregate principal amount of
$860,000
payable solely from the Sinking Fund. The Bonds shall bear an original
issue date
and be registered as of October 1, 1986,
and shall be issued in the form of fully
registered Bonds of single maturities in denominations of $5,000 each or any
integral multiple thereof.
The Bonds shall mature on July 1 in the years and amounts set forth below,
I subject to prior redemption, and shall bear basic interest from the date of original
registration to their respective maturities or prior dates upon which they have been
duly called for redemption at the rates per annum set forth opposite such years
and amounts, respectively:
Year Amount Rate
Year Amount Rate
-
- -
-
1987 $15,000 8.00%
1997 $45,000 8.50%
1988 20,000 6.75
1998 50,000 8.50
1989 30,000 6.75
.1999 55,000 8.50
1990 35,000 6.75
2000 55,000 8.50
19'91 35,000 7.50
2001 60,000 8.50
1992 40,000 7.50
2002 65,000 8.50
1993 40,000 7.50
2003 65,000 8.50
1994 40,000 8.00
2004 65,000 8.50
1995 40,000 8.00
2005 65,000 8.50
1996 40,000 8.00
Each of the Bonds shall represent one or more principal installments
of the
issue of the same maturity. Principal installments of the issue are numbered from
1 through 172, each in the amount of $5,000.
Principal of and interest on the
Bonds are payable in lawful money of the United States of America. Upon the
original delivery of the Bonds or upon transfer or exchange of Bonds, the
Registrar
(as hereinafter defined) shall place the date of authentication on each Bond then
delivered.
2.02. Additional Interest Certificates.
All Bonds shall bear additional
interest from November 1, 1986, to July 1,
1987, at the rate of 1.00% per annum,
I payable on July 1, 1987. All Bonds representing principal
installment numbers 10
through 172 shall bear additional interest from July 1,
1987 to January 1, 1988,
at the rate of 1.00% per annum, payable on January 1,
1988. All Bonds representing
principal installment numbers 19
through 172 shall bear additional interest from
January 1, 1988 to July 1, 1988,
at the rate of 1.00% per annum payable on July 1,
1988. All Bonds representing principal installment numbers
25 through 172 shall
bear additional interest from July 1, 1988
to January 1, 1989, at the rate of 1.00%
COMMISSION RESOLUTION NO. 2638
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per annum payable on January 1, 1989. All Bonds representing
principal in-
stallment numbers 29 through 172 shall bear additional
interest from
January 1, 1989 to July 1, 1989 at the rate of 1.00% per annum payable on
July 1, 1989. Additional interest
on the Bonds shall be represented by
separate additional interest certificates (the Certificates) .
One or more
Certificates shall be issued to represent all additional interest
to be paid
on all Bonds on each additional interest payment date;
provided that all such I
Certificates shall represent an integral multiple of five-hundredth of one
percent ( . 05%) of the additional interest payable
on said date. The
Certificates representing additional interest on the Bonds shall be dated as
of October 1, 1986.
2.03. Method of Payment.
The Bonos and the Certificates shall be
issuable only in fully registered form, and the ownership of the Bonds and
the Certificates shall be transferred only upon the register of the City here-
inafter described. The basic interest on,
and upon presentation and ' surrender
thereof, the principal amount of each Bond, or the amount represented by each
Certificate, upon presentation and surrender thereof at the principal office
of the Registrar, shall be payable by check or draft issued by the Registrar
(as hereinafter defined).
2.04. Interest. _Payment Dates.
Basic interest on the Bonds shall be
payable on January 1 and July 1 in each year, commencing July 1,
1987, to the
owner of record thereof as of the close of business on the fifteenth day of
the immediately preceding month, whether or not such day is a business day.
Additional interest on the Bonds shall be payable July 1, 1987,
January 1,
1988, July 1, 1988, January 1,
1989 and July 1, 1989 to the extent the Bonds
have not been paid prior thereto, to the registered owners of the Certificates.
2.05. Registration. The City hereby
appoints the Director of Finance
of the City to act as registrar, transfer agent and paying agent
(the Registrar). I
The City reserves the right to appoint a bank, trust company or fiscal company
as successor bond registrar, transfer agent or paying agent,
as authorized by
the Model Public Obligations Registration Act of Montana (the Act) ,
but the
City agrees to pay the reasonable and customary charges of the Registrar for
the services performed. This Section 2.05 shall establish a system of registra-
tion for the Bonds and the Certificates as defined in the Act.
The effect of registration and the rights and duties of the City and the
Registrar with respect thereto shall be as follows:
(a) Bond Register.
The Registrar shall keep at its principal
office a bond register in which the Registrar shall provide for the
registration of ownership of the Bonds and the Certificates and the
registration of transfers of the Bonds and the Certificates entitled
to be registered or transferred.
(b) Transfer.
Upon surrender for transfer of any Bond or
Certificate duly endorsed by the registered owner thereof or
accompanied by a written instrument of transfer, in
form satisfactory
to the Registrar, duly executed by the registered owner thereof
or
by an attorney duly authorized by the registered owner in writing,
the Registrar shall authenticate and deliver,
in the name of the
designated transferee or transferees, one or more
new Bonds of a
like aggregate principal amount and maturity,
as requested by the I
transferor, or a new Certificate of like interest rate and payment
date, as the case may be.
The Registrar may, however, close the
books for registration of any transfer if the Bond to be transferred
has been called for redemption on the next succeeding interest
payment date. No transfer or exchange of a Bond shall affect its
order of registration for purposes of redemption pursuant to
Section 2.06.
COMMISSION RESOLUTION NO. 7.638
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(c) Exchange of Bonds
or Certificates. Whenever any Bond or
Certificate is surrendered by the registered owner for exchange,
the
Registrar shall authenticate and deliver one or more Bonds of a
like
aggregate principal amount and maturity, or a new Certificate of
like
interest rate and payment date, as the
case may be, as requested by
the registered owner or the owner's attorney duly authorized in writing.
I (d) Cancellation.
All Bonds and Certificates surrendered upon
any transfer or exchange shall be promptly cancelled by the Registrar
and thereafter disposed of as directed by the City.
(e) Improper or Unauthorized
Transfer. When any Bond or Certificate
is presented to the Registrar for transfer,
the Registrar may refuse to
transfer the same until it is satisfied that the endorsement on such Bond
or Certificate or separate instrument of transfer
is valid and genuine
and that the requested transfer is legally authorized.
The Registrar
shall incur no liability for the refusal,
in good faith, to make transfers
which it, in its judgment, deem
s improper or unauthorized.
(f) Persons Deemed
Owners. The City and the Registrar may treat
the person in whose name any Bond or Certificate is at any time registered
in the bond register as the absolute owner of
such Bond or Certificate,
whether such Bond or Certificate shall be overdue or not, for
the purpose
of receiving payment of, or on account of, th
e principal of and interest
on such Bond or the amount of such Bond or Certificate and for all other
purposes, and all such payments
so made to any such registered owner or
upon the owner's order shall be valid and effectual to satisfy and
discharge the liability upon such Bond to the extent of the sum or sums
so paid.
( g) Taxes,
Fees and Charges. For every transfer of Bonds or Certifi-
I cates or exchange of Bonds or Certificates (except an exchange upon a
partial redemption of a Bond), the Registrar may impose
a charge upon the
owner thereof sufficient to reimburse the Registrar for any tax,
fee or
other governmental charge required to be paid with respect to such transfer
or exchange.
(h) Mutilated,
Lost, Stolen or Destroyed Bonds or Certificates. In
case any Bond or Certificate shall become mutilated or be destroyed, stolen
or lost, the Registrar shall deliver a new Bond or Certificate of
like
amount, number, maturity date and tenor
in exchange and substitution for and
upon cancellation of any such mutilated Bond or Certificate or
in lieu of
and in substitution for any sdch Bond or Certificate destroyed,
stolen or
lost, upon the payment of the reasonable expenses and charges of the
Registrar in connection therewith; and,
in the case of a Bond or Certificate
destroyed, stolen or lost,
upon filing with the Registrar of evidence
satisfactory to 'it that such Bond or Certificate was destroyed,
stolen or
lost, and of the ownership thereof, and upon furnishing
to the Registrar
an appropriate bond or indemnity in form,
substance and amount satisfactory
to it, in which both the City and the Registrar shall be named as obligees.
All Bonds or Certificates so surrendered to the Registrar shall be
cancelled by it and evidence of such cancellation shall be given to the City.
If the mutilated, destroyed,
stolen or lost Bond or Certificate has already
I matured or such Bond has been called for redemption in accordance with its
terms, it shall not be necessary to issue
a new Bond or Certificate prior
to payment.
2.06. Re~emption. Whenever there
is any balance in the Sinking Fund after
payment of the principal and interest due on all Bonds drawn against it, either
from
the prepayment of special assessments levied in the Districts
or from the transfer
of surplus moneys from the Construction Account to the Principal Account as provided
in Section 3.02, the Director of Finance shall call
for redemption on any interest
payment date outstanding Bonds or principal installments thereof
in an amount which,
COMMISSION RESOLUTION NO. 2638
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together with the interest thereon to the date of redemption,
will equal (as
closely as the amount of the principal installment will permit)
the amount of
the Sinking Fund on that date. For purposes of redemption,
the order of
registration of the Bonds shall correspond to the order of the numbers
of the
principal installments represented by the Bonds. Bonds representing
more than
one principal installment may be redeemed in part,
in one or more whole
principal installments, and upon such partial
redemption, a new Bond or Bonds I
will be delivered to the registered owner without charge, representing the
remaining principal installments outstanding. The
Bonds are subject to
redemption at the option of the city from other sources of funds available
therefrom on any interest payment date. Bonds
shall be redeemed in the order
of the principal installments they represent,
at a redemption price equal to
the principal installment or installments of the Bonds
to be redeemed plus
interest accrued thereon to the date of redemption. The date of redemption
shall be fixed by the Director of Finance, who
shall give notice, by first
class mail, postage prepaid to the owner or owners of such
Bonds at their
addresses appearing in the bond register, of the numbers of
the principal in-
stallments and Bonds to be redeemed and the date on which payment will be made,
which date shall be not less than ten days after the date of mailing notice.
The Director of Finance shall at the same time mail notice of the redemption
to the original Purchaser of the Bonds. On the date
so fixed interest on the
Bonds or principal installments thereof so redeemed shall cease.
Notwi.thstanding
anything to the contrary contained herein, the Bonds shall not be called for
redemption from the proceeds of refunding special improvement district bonds
or warrants before July 1, 1996.
2.07. Form of Bonds and Certificates.
The Bonds and the Certificates
shall be drawn insubstantially the forms set forth in Montana Code Annotated,
Section 7-12-4202, with such modifications as are permitted by the Act,
and I
as more fully set forth in Exhibit A hereto and by this reference made a part
hereof.
2.08. Execution, Registration and
Delivery of Bonds and Certificates.
The Bonds and Certificates shall be prepared under the direction of the Clerk
of the Commission and shall be executed on behalf of the City by the signatures
of the City Manager and the Clerk of the Commission and
sealed with the official
seal of the City; provided that the seal
and all signatures may be printed,
engraved or lithographed facsimiles of the originals and the
seal need not
appear on the Certificates. In case any officer whose signature or a
facsimile
of whose signature shall appear on the Bonds or Certificates
shall cease to be
such officer before the delivery of any Bond or Certificate, such signature or
facsimile shall nevertheless be valid and sufficient for all purposes,
the
same as if he had remained in office until delivery.
Notwithstanding such
execution, no Bond or Certificate shall be valid or obligatory for any purpose
or entitled to any security or benefit under this resolution unless and until
a certificate of authentication and registration on such Bond or Certificate
has been duly executed by the manual signature of an authorized representative
of the Registrar. Certificates of authentication and registration on different
Bonds or Certificates need not be signed by the same representative. The
executed certificate of authentication and registration on each Bond or
Certificate shall be conclusive evidence that it has been authenticated and
I
delivered under this Resolution. The Bonds
shall be registered in order of
their serial numbers by the Director of Finance, as Registrar,
as attested by
the Certificate of Authentication and registration as of October 1,
1986, and
the Bonds and Certificates shall be delivered by the Registrar to
the Purchaser
upon payment of the par value of the Bonds plus accrued interest to the date of
delivery. The Purchasers shall not be obligated to see to the application
of
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the purchase price, but from the proceeds of the Bonds the Director of Finance shall
credit forthwith $43,000 to the Special Improvement District Revolving Fund of the
City, as authorized by Montana Code Annotated, Section 7-12-4169(2),
any accrued
interest to the Sinking Fund and the balance of such proceeds to the Construction
Accounts in the respective District Accounts, to be used solely for the
payment
I of the cost and expenses necessarily incurred in the completion of the improvements
heretofore ordered, except that the accrued interest received shall be applied
ln
payment of interest on the Bonds when due.
Section 3. Sinking Fund; Assessments.
3.0l. The Sinking Fund. There is hereby created
and establxshed the Sinking
Fund designated as the "1986 Pooled Special Improvement District Sinking Fund" which
shall be maintained by the Director of Finance on the books and records of the City
separate and apart from all other funds of the City. Within the 1986
Sinking Fund
there shall be maintained separate accounts, designated as Special Improvement
District No. 649 Account, special Improvement District No.
650 Account and Special
Improvement District No. 651 Account (the District Accounts).
Within each District
Account there shall be maintained separate subaccounts, designated as the
"Construction Subaccount," "Principal Subaccount" and
"Interest Subaccount,"
respectively.
3.02. Construction Subaccounts. There shall
be credited to the Construction
Subaccount of the District Accounts the proceeds of the sale of the Bonds attributable
to each District, less any interest accrued thereon to the date of delivery to the
Purchaser. Any earnings on investment of money in the Construction Subaccounts
shall
be retained therein. All costs and expenses of constructing the improvements
for a
District to be paid from proceeds of the Bonds shall be paid from time to time as
incurred and allowed from the Construction Account in accordance with the provisions
I of applicable law, and moneys in the Construction
Account shall be used for no other
purpose; provided that upon completion of said improvements and approval thereof by
the engineers for the District, and after all claims and expenses with respect to
said improvements have been fully paid and satisfied, any moneys remaining in the
Construction Subaccount shall be transferred to the Principal Account in the District
Account.
3.03. Principal Subaccounts and Interest Subaccounts.
Moneys in the
Principal Subaccounts and the Interest Subaccounts shall be used only for payment
of the principal of and interest on the Bonds as such payments become due, or to
redeem Bonds.
Upon collection of the installment of principal and interest due on November
30
and May 31 of each year on the special assessments to be levied with respect to the
improvements in each District, the Director of Finance shall credit to the Interest
Subaccount in the District Account so much of said special assessments as is
collected as interest payment and the balance thereof to the Principal Subaccount.
Any installment of any special assessment paid prior to its due date with interest
accrued thereon to the next succeeding bond call date shall be credited with respect
to principal and interest payments in the same manner as other assessments are
credited to the District Account. All moneys in the Interest Subaccount and the
Principal Subaccount shall be used first to pay interest due, and any remaining
moneys shall be used to pay Bonds then due and, if moneys are available,
to redeem
I Bonds Dr principal installments thereof in accordance with Section 2.06;
provided
that any money transferred to the Principal Subaccount from the Construction Sub-
account pursuant to Section 3.02 shall be applied to redeem Bonds or principal
installments thereof to the extent possible on the next interest payment date for
which notice of redemption may properly be given pursuant to Section 2.06. Redemption
of Bonds therefrom shall be in order of the principal installments they represent
as provided in Section 2.06, and interest shall be paid as accrued thereon to the
date of redemption, in accordance with the provisions of Montana Code Annotated,
Section 7-13-4203 and 7-12-4206.
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3.04. Loans from Revolving Fund.
The Commission shall annually or
more often if necessary issue an order authorizing a loan or advance from the
Special Improvement District Revolving Fund to the District Accounts
in an
amount sufficient to make good any deficiency then existing in the
Interest
Subaccount in the District Account, and shall
issue an order authorizing a
loan or advance from the Revolving Fund to the District Account in an amount
sufficient to make good any deficiency then existing in the Principal Sub-
I
account of the District Account, to the extent that moneys
are available in
the Revolving Fund. Pursuant to Ordinance No. 612,
the City has undertaken
and agreed to provide funds for the Revolving Fund by levying such tax or
making such loan from the General Fund as authorized by Montana Code Annotated,
Section 7-12-4222. In the event that the balance on hand in
the Revolving
Fund fifteen days prior to any date when interest is due on special improvement
district bonds or warrants of the City is not sufficient to make good all
deficiencies then existing in the improvement
district fund for which the City
has promised to make loans from the Revolving Fund,
the balance on hand in
the Revolving Fund shall be allocated to the funds of the improvement districts
in which such deficiencies then exist in proportion to the amounts of the
deficiencies on the respective dates of receipt of such money,
until all interest
accrued on such special improvement district bonds of the City has been paid.
On any date when all accrued interest on special
improvement district bonds or
warrants of the City payable from funds for which the City has
promised to make
loans from the Revolving Fund has been paid, any balance remaining
in the
Revolving Fund shall be loaned or advanced to the improvement district fund
for payment and redemption of bonds to the extent the improvement district fund
is deficient for such purpose, in an amount proportionate to the amount
of such
deficiency.
Section 4. Covenants.
The City covenants and agrees with the holder I
from time to time of each of the Bonds and Certificates
that until all the
Bonds and interest thereon are fully paid:
4.0l. Compliance with Resolution.
The City will hold the Sinking Fund
and the Special Improvement District Revolving Fund described above as
trust
funds, separate and apart from all of its other
funds, and the City, its
officers and agents, will comply with all covenants and agreements contained
in this resolution. The provisions hereinabove made with respect to the
Sinking Fund and the Revolving Fund are in accordance with the undertaking and
agreement of the City made in connection with the public offering and sale of
the Bonds as set forth in Section 1.06.
4.02. Construction of Improvements.
The City will do all acts and
things necessary to enforce the provisions of the construction contracts and
bonds referred to in Section 1.04 and to ensure the completion of the
improve-
ments for the benefit of the Districts in accordance with the plans
and
specifications and within the time therein provided, and will pay all costs
thereof promptly as incurred and allowed, out of the Construction
Account for
the District and within the amount of the bond proceeds appropriated thereto.
4.03. Levy of Assessments.
The City will do all acts and things
necessary for the final and valid levy of special
assessments upon all property
within the boundaries of the Districts in accordance with the Constitution and
laws of the State of Montana and the Constitution of the United
States, in an I
aggregate principal amount not less than $355,000
in Special Improvement
District No. 649, $458,000 in Special
Improvement District No. 650 and
$47,000
in Special Improvement District No. 65l.
Such special assessments shall be
levied on the basis prescribed in the Resolutions of Intention described above,
and shall be payable in semiannual
installments over a period of nineteen years,
each installment being due in an amount equal to
one thirty-seventh of the
principal amount of each assessment, with interest on the whole amount remaining
COMMISSION RESOLUTION NO. 2638
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319
unpaid at the average annual interest rate borne by the Bonds plus up to one-half
of one percent per annum as may be determined by the City Commission, interest
being payable with principal installments.
The assessments to be levied will be
payable on the 30th day of November in each of the years 1987 through 2004,
and
on the 31st day of May in the years 1987 through 2005,
inclusive, if not theretofore
paid, and shall become delinquent on such date unless paid in full.
The first
I partial payment of each assessment shall include interest on the entire assessment
from the date of original ~egistration of the Bonds to July 1, 1987,
and each
subsequent partial payment shall include interest for six months on that payment
and the then remaining balance of the special assessment. The assessments shall
constitute a lien upon and against the property against which they are made and
levied, which lien may be extinguished only by payment of the assessment with all
penalties, cost and interest as provided in Montana Code Annotated,
Section 7-12-4191.
No tax deed issued with respect to any lot or parcel of land shall operate as payment
of any installment of the assessment thereon which ~s payable after the execution of
such deed, and any tax deed so issued shall convey title subject only to the
lien
of said future installments, as provided in Montana Code Annotated,
Section 15-18-309.
4.04. Reassessment.
If at any time and for whatever reason any special
assessment or tax herein agreed to be levied is held invalid, the City and this
Commission, its officers and employees, will take all
steps necessary to correct
the same and to reassess and relevy the same, including the ordering of work,
with
the same force and effect as if made at the time provided by law,
ordinance or
resolution relating thereto, and will reassess and relevy the same with the same
force and effect as an original levy thereof,
as authorized in Montana Code Annotated,
Section 7-12-4186. Any special assessment, or reassessment
or. relevy shall, so far
as is practicable, be levied and collected as it would have been if the first
levy
had been enforced including the levy and collection of any interest accrued on the
I first levy.
If proceeds of the Bonds, including investment income thereon,
are applied
to the redemption of such Bonds, as provided in Montana Code Annotated,
Section
7-12-4205 and 7-12-4206, or if refunding bonds are issued
and the principal amount
of the outstanding Bonds is decreased or increased,
the city will reduce or increase,
respectively, the assessments levied in the Districts and
then outstanding pro rata
by the principal amount of such prepayment or the increment above or below the
outstanding principal amount of bonds represented by the refunding bonds. The
City and this Commission, its officers and employees will reassess and relevy such
assessments, with the game effect as an original levy,
in such reduced or increased
amounts in accordance with the provisions of Montana Code Annotated,
Sections
7-12-4176 through 7-12-4178.
4.05. Absence of Litigation.
There is now no litigation threatened or
pending questioning the validity or regularity of the creation of the Districts,
the contract for construction of improvements for the benefit thereof or
the under-
taking and agreement of the city to levy special assessments therefor and to make
good any deficiency in the collection thereof through the levy of taxes for and
the making of advances from the Special Improvement District Revolving Fund, or
the right and power of the City to issue the Bonds or in any manner questioning
the existence of any condition precedent to the exercise of the City's powers
in
these matters. If any such litigation should be initiated or threatened,
the City
I will forthwith notify in writing the Purchaser, and will
furnish the Purchaser a
copy of all documents, including pleadings, in connection
with such litigation.
4.06. Escrow Agreement. The
city will enter into an Escrow Agreement with
the developer of the Districts pursuant to which the developer will establish an
escrow account for the benefit of the City consisting of cash and a promissory note
in the amount of $157,778. The City covenants to abide by the terms
of such Escrow
Agreement and to enforce it against the developer during the term of the Bonds.
COMMISSION RESOLUTION NO. 2638
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Section 5. Investment of Moneys.
5.01. Covenant. The City covenants
and agrees with the holders from
--
time to time of the Bonds that it will not take or permit to be taken by any
of its officers, employees or agents any action
that would cause the interest
on the Bonds to become subject to taxation under the provisions of the United
States Internal Revenue Code (the Code), and
the Treasury Regulations promul-
gated thereunder in effect at the time of such action,
and covenants and
I
agrees that it will take or cause its officers,
employees or agents to take
any action within its or t'1eir powers to prevent the
interest on the Bonds
from becoming subject to taxation under the Code and applicable Treasury
Regulations.
5.02. Certification. The City
Manager, the Clerk of the Commission and
the Director of Finance, being the officers of the City charged with the
responsibility for issuing the Bonds, are authorized and
directed to execute
and deliver to the Purchaser a certification in accordance with the provisions
of Section 103 (c) of the Code
(Section 148, as the Code is amended
by the Tax
Reform Act of 1986) and Treasury Regulations,
Sections 1.103-13, -14 and
-15,
stating the facts, estimates and circumstances
in existence on the date of issue
and delivery of the Bonds which make it reasonable to expect that the proceeds
of the Bonds will be used in a manner that would not
cause the Bonds to be
arbitrage Bonds within the meaning of Section 103(c) of
the Code and applicable
Treasury Regulations. The certification shall
further state that to the best
of the knowledge and belief of the certifying officers no other
facts, estimates
or circumstances exist which would materially change this expectation.
Section 6. Authentication of Transcript.
The officers of the City are
hereby authorized and directed to furnish to the City and the original Purchasers,
and to the attorneys, certified copies of all proceedings relating to the
issuance of the Bonds and such other certificates and affidavits as may be
I
required to show the right, power and authority of the City to issue the Bonds
and the Certificates, and all statements contained in and
shown by such
instruments, including any heretofore furnished,
shall constitute representa-
tions of the City as to the truth of the statements Durported to be
shown
therby.
Section 7. Defeasance.
7.01. General. When the
liability of the City on all Bonds issued
under and secured by this Resolution has been discharged as 9rovided in this
Section 7, all pledges, covenants and other rights granted by this Resolution
to the owners of such obligations shall cease.
7.02. Payment. The City may discharge its
liability with reference
to any Bond or installment of interest thereon which is due on any date by
mailing to the registered holder of such Bond on or before that date a check
or draft in a sum sufficient and providing 9roceeds available for the payment
thereof in full; or if any Bond or installment
of interest thereon shall not
be paid when due, the City may nevertheless discharge its
liability with
reference thereto by mailing to the registered holder thereof a check or
draft in a sum sufficient and providing proceeds available
for the payment
thereof in full with interest accrued to the date of such mailing.
7.03. Redemption. The City may also discharge its
liability with
reference to any prepayable Bonds which are called for redemption on any
I
date in accordance with their terms by depositing with the Registrar on or
before that date an amount equal to the principal and interest which are
then due thereon; provided that notice of such redemption has been duly
given as provided in thi~ Resolution.
COMMISSION RESOLUTION NO. 2638
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7.04. Defeasance by Escrow. The City many
also at any time discharge its
liability in its entirety with reference to the Bonds, subject to the provisions
of law now or hereafter authorizing and regulating such action, by depositing
irrevocably in escrow, with a bank qualified by law as an escrow agent for this
purpose, cash or securities which are authorized by law to be so deposited,
bearing interest payable at such times and at such rates and maturing on such
I dates as shall be required without reinvestment to provide funds sufficie
nt to
pay all principal, interest and redemption premiums to become due on all Bonds
of the issue on or before maturity or, if any Bond has been duly called for
redemption or provision irrevocably made therefor, on or before the designated
redemption date.
Section 8. Pending Federal Legislation.
8.0!. Tax Reform Bill. This Council understands that
the Tax Reform Act
of 1986 (H.R. 3838) is pending before the Congress
of the united States, which,
among other things, includes substantial additional requirements
which must be
satisfied by the issuers of municipal obligations (including obligations of the
character of the Bonds) in order that the interest on such obligations be and
remain exempt from federal income taxation. In the form adopted by the conference
committee on H.R. 3838 (the Conference Bill) ,
the provisions of H.R. 3838 apply
to municipal obligations issued after December 31, 1985,
August 7, 1986, August 15,
1986 and September 1, 1986,
respectively. The Conference Bill has been passed
by the House and the Senate but has not yet been signed into law by the President.
To enhance the marketability of the Bonds, this Commission has determined it to
be necessary and desirable and in the best interests of the City to structure
the Bonds and the application of the proceeds thereof in a manner so as to comply
with the requirements of the Conference Bill and, if possible,
to com:oly with
the requirements of H.R. 3838 as
finally enacted, assuming that, as
finally
I enacted, it would apply to the Bonds.
8.02. General Covenants. The City covenants and agrees
with the owners
from time to time of the Bonds that it will take, and will cause its officers,
employees or agents to take, all actions necessary to comely with the Conference
Bill, and that it will not take or permit to be taken by any of its officers,
employees or agents any actions that would cause interest on the Bonds to become
subject to federal income taxations under the Conference Bill, until the Conference
Bill is enacted or the 99th Congress adjourns sine die without enactment of the
Tax Reform Bill. In addition, the City covenants and agrees
with the owners
from time to time of the Bonds that if the Tax Reform Bill is enacted and its
provisions are applicable to the Bonds, that the City will take,
and will cause
its officers, employees and agents to take, all actions
necessary to comply
with the Conference Bill as enacted, and that it will not take or permit to be
taken by any of its officers, employees or agents any action which would cause
interest on the Bonds to become subject to federal income taxation under the
provisions of H.R. 3838 as enacted.
8.03. Specific Covenants. In furtherance of
the general covenants of
the City contained in Section 5.01, the City further agrees with the owners
from
time to time of the Bonds, as follows:
(1) As provided in Section 4.03, payment
of principal of and interest on
the Bonds is secured by the Revolving Fund. The amount
on deposit in the
I Revolving Fund allocable to the Bonds (the Reserve Amount)
constitutes a
reasonably required reserve fund which may be invested without yield limitation
if the Reserve Amount does not at any time exceed the Maximum Reserve Requirement,
which is the lesser of: (i)
10 percent of the original 9roceeds of the Bonds
($86,000) , (ii) the maximum amount of principal and interest payable on the
Bonds in any fiscal year, or (iii)
125 percent of the average amount of princieal
and interest payable on the Bonds in any fiscal year. To ensure that the Reserve
COMMISSION RESOLUTION NO. 2638
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Amount never exceeds the Maximum Reserve Requirement, the City agrees that
following the payment of Bonds on each July 1, the City will circulate the
the Reserve Amount, and that, if the Reserve Amount exceeds the
maximum amount
of principal and interest payable on the Bonds then outstanding
in any future
fiscal year, the City will within 30 days thereafter either
(a) reduce the
Reserve Amount so that it does not exceed such amount or (b)
limit the yield
of the investments allocated to the Reserve Amount in excess of such amount
I
to the yield of the Bonds if and to the extent such reduction or limitation
is necessary to prevent the Bonds from becoming
"arbitrage bonds" within the
meaning of the Conference Bill. In determining the Reserve Amount,
the City
shall allocate amounts on deposit in the Revolving Fund to outstanding special
improvement district bonds or warrants secured thereby in proportion to their
original principal amounts.
(2 ) The City (1) will use
95 percent or more of the net proceeds of the
Bonds (gross proceeds less amounts deposited in the Revolving Fund)
to pay the
costs of improvements in the Districts and (2)
has not issued, and does not
intend to issue, any obligations other than the Bonds
in calendar year 1986.
8.04. Amendment of Resolution. The City reserves
the right to amend
or modify the provisions of Sections 4.02,
8 . 01 , 8.02 and 8.03,
if and to the
extent that the City receives an opinion of nationally recognized bond counsel
that such amendment or modification will not adversely affect the exemption
from federal income taxation of the interest on the Bonds under then existing
laws or regulations or any pending legislation or regulations that are
applicable to the Bonds.
Section 9. ReDeals and Effective Date.
9.0l. Repeal. All provisions
of other resolutions and other actions
and proceedings of the City and this Commission that are in any way inconsistent
with the terms and provisions of this resolution are repealed,
amended and I
rescinded to the full extent necessary to give full force and effect to the
provisions of this resolution.
9.02. Effective Date. This
resolution shall take effect immediately
upon its passage and adoption by this Commission.
PASSED by the City Commission of Bozeman, Montana this
20th day of
October 1986.
JUDITH A. MATHRE, Mayor
ATTEST:
Clerk of the Commission
State of Montana )
County of Gallatin : ss.
City of Bozeman )
I, Robin L. Sullivan, Clerk
of the Commission of the City of Bozeman,
do hereby certify that the foregoing Resolution No.
2638 was published by I
title and number in the Bozeman Daily Chronicle, a newspaper of general
circulation printed and published in said City, in the issue dated the
23rd
day of October 1986, and due proof of
such publication is on file in my
office.
IN WITNESS WHEREOF, I hereunto set my hand and affix the corDorate seal
of my office this 6th day of November 1986.
Clerk of the Commission
COMMISSION RESOLUTION NO. 2638