HomeMy WebLinkAboutResolution 2296 Prescribing form, terms and covenants for payment of SID 623 bonds: 1-21-81
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COMMISSION RESOLUTION NO. 2296
RESOLUTION AWARDING SALE OF $525,000 SPECIAL
IMPROVEMENT DISTRICT NO. 623
BONDS, AND PRESCRIBING THEIR FORM AND TERMS
AND COVENANTS OF THE CITY FOR
THE SECURITY OF THE HOLDERS THEREOF.
BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, as follows:
Sect ion 1. Recitals.
It is hereby found, determined and declared as follows:
I
1.01. By Resolution No. 2269, adopted November
5, 1980, this Commission declared its
intention to create Special Improvement District No. 623 for the purpose of making special
improvements within and for the special benefit of the district, which resolution designated the
number of the district, described the boundaries thereof, and stated the general character of the
improvements to be made therein 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.
By that
resolution this Commission also declared its intention to cause the cost and expense of making
such improvements to be assessed against the properties included within the boundaries of the
di strict.
1.02. Notice of the passage of Resolution No. 2269
was given by publication five times in
the Bozeman Daily Chronicle, a legal daily newspaper published within the City and by mailing a
copy of such notice to persons, firms or corporations, or the agents of such persons, firms or
corporations, having real property within the proposed district listed in their names upon the
last completed assessment roll for state, county or school district taxes, at their last known
addresses. The notice described the general character
of the improvements proposed to be made, I
stated the estimated cost of the improvements, described the boundaries of the district, designated
the time when and the place where the Commission would hear and pass upon all protests made
against the making of such improvements or the creation of such district, all as provided in the
resolution of intention.
1.03. At the time and place specified in the notices
hereinabove described, this Commission
met to hear, consider and pass upon all protests made against the making of such improvements for
the creation of the district, and after consideration thereof, it was determined and declared
that insufficient protests against the creation of the district or the proposed work had been
filed in the time and manner provided by law by the owners of the property to be assessed for the
improvements, and the Commission did therefore by Resolution No. 2276, adopted December 10, 1980,
create Special Improvement District No. 623, and did order the proposed improvements in accordance
with the resolution of intention designated in paragraph 1.01 hereof.
1.04. Plans, specifications, maps, profiles and
surveys for construction of the improvements
in Special Improvement District No. 623 were prepared by the engineers acting for the City, and
were thereupon examined and approved by this Commission.
An advertisement for bids for construction
of said improvements was published in the official newspaper of the City on October 2 and October 9,
I
1980, calling for bids to be received on October 22, 1980 after which the bids theretofore received
were opened and examined. After
referring the bids to the engineers for the City it was determined
that the lowest regular proposal for the furnishing of all work and materials required for con-
structing the improvements in accordance with the approved plans and specifications was the proposal
submitted by Johnston Excavating, Inc. of Bozeman, Montana, whose bid specified unit prices aggregating
the sum of $433,628.33, based upon quantities of work and materials estimated in the plans and
_',t"
COMMISSION RESOLUTION NO. 2296
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specifications.
A contract for construction of the improvements was therefore awarded to said
bidder, subject to the right of owners of
property liable to be assessed to elect to take the work
and enter into a written contract therefor
in the manner provided by Montana Code Annotated,
Section 7-12-4147, which election the property
owners failed to make, whereupon the City and the
I successful bidder entered into a written
contract for construction of the improvements upon the
bidder having executed and filed a bond satisfactory to this Commission and in the form and manner
provided by Montana Code Annotated, Title 18, Chapter 2, Part 2.
1.05.
It is currently estimated that the cost and expense connected with and incidental to
the formation of the improvement district,
including costs of preparation of plans, specifications,
maps, profiles, engineering superintendence
and inspection, preparation of assessment rolls,
expenses of making the assessments, the cost
of work and materials under the construction contracts,
and all other costs and expenses, will be
$525,000, which amount will be levied and assessed upon
all property within the improvement district
on the basis described in the resolution of intention.
The Commission has jurisdiction and is required
by law to levy and assess such balance, to collect
such special assessments and credit the same
to the special improvement district fund created for
the district, which fund is to be maintained
on the official books and records of the City separate
from all other City funds, to be used solely
for payment of interest when due on the bonds herei n
authorized and for redemption of such bonds
in order of their registration whenever and as often
as the balance in said fund after payment
of interest due is sufficient for the purpose.
1.06.
For the purpose of financing initially the total cost and expense of making the improve-
I ments, which is to be assessed against the
property within the district, this Commission called
for the sale of bonds in the principal amount of $600,000.
After a public sale noticed and conducted
in accordance with applicable statutory provisions,
the bonds were sold to D. A. Davidson & Co.,
of Great Falls, Montana.
Because a contract for construction of the
improvements was let in an amount smaller than
originally estimated, the cost of making
the improvements has not reached the initial estimate of
$600,000.
As indicated in Section 1.05 hereof, the current estimate of costs is $525,000. and
consequently. it is necessary to reduce the
proposed bond issue to $525.000. The purchaser of the
bonds. D. A. Davidson & Co.. has agreed to
purchase the bond issue so reduced on the terms and
conditions of its bid on October 22. 1980.
The City hereby determines that it is advantageous for
it to accept the bid by D. A. Davidson &
Co. for the reduced issue because the bid by D. A. Davidson
& Co. was the only bid received for the bonds
and no other interest in the sale was expressed to
the City. and market conditions are now unfavorable
so that resale of the bonds may result in a
substantially higher rate of interest.
1.07.
All acts, conditions and things required by the Constitution and laws of the State of
I Montana, including Montana Code Annotated.
Title 7. Chapter 12. Parts 41 and 42. in order to make
the bonds herein authorized valid and binding special obligations in accordance with their terms
and in accordance with the terms of this resolution have been done, do exist, have happened and have
been performed in regular and due form. time
and manner as so required.
Section 2.
Special Improvement District No. 623 Bonds. For the purpose
of paying the costs
and expenses incurred in construction of
the improvements authorized to be constructed in Special
COMMISSION RESOLUTION NO. 2296
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342
Improvement District No. 623, and in anticipation
of the collection of special assessments to be
levied therefor, and in accordance with the
public offering described in Section 1.06 hereof, the
City of Bozeman shall forthwith issue and
deliver to the purchaser its Special Improvement District
No. 623 Bonds in the total principal amount
of $525,000, payable solely from the Special Improvement
District No. 623 Fund.
The bonds shall be dated and registered as of January I, 1981, and shall
I
be 525 in number and numbered in the order
of their registration serially from 1 through 525, each
in the denomination of $1,000.
The bonds shall mature January I, 2001, subject to redemption and
prepayment prior thereto in accordance with
Section 3 hereof. The bonds shall be payable to bearer
and bonds numbered 1 through 320 shall bear
interest at the basic rate of 9.50% per annum and at
the additional rate of 0.75% per annum, bonds
numbered 321 through 395 shall bear interest at the
basic rate of 9.75% per annum and at the additional
rate of 0.50% per annum, and bonds numbered
396 through 525 shall bear interest at the
rate of 10.25% per annum, from their date of registration
until called for redemption or paid in full.
Interest shall be payable on the 1st day of January
and the 1 st day of July of each year, commencing
January I, 1982, represented by coupons appurten-
ant to each bond.
Section 3.
Payment of Principal and Interest. The principal of and interest on the bonds
shall
be payable at the office of the Director of
Finance. Interest shall be paid by the Director of
Finance from the Special Improvement District
No. 623 Fund on presentation when due of the coupons
appertaining to the bonds, and any balance
remaining in the fund shall be applied to the payment of
the principal and the redemption of the bonds
in the order of their registration as evidenced by I
their serial numbers.
Whenever there is any balance in the fund after payment of the interest due
on all bonds drawn against it, the Director
of Finance shall call in for payment outstanding bonds
in an amount which, together with the interest
thereon to the date of redemption, will equal the
amount of the fund on that date.
The date of redemption shall be fixed by the Director of Finance,
who shall give notice, by publication once
in a newspaper published in the City and by written
notice to any holder or holders of such bonds
if their addresses be known, of the numbers of the
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 pUblication or
of service of notice. On the date so fixed interest
sha 11 cease.
Section 4.
Form of Bonds. The bonds and the interest coupons appurtenant thereto shall be
drawn in substantially the form set forth
in Montana Code Annotated, Section 7-12-4202, as more
fully set forth in Exhibit A attached hereto
and by this reference made a part hereof.
Section 5.
Execution, Registration and Delivery of Bonds. The bonds shall be prepared
under
the direction of the Clerk of the Commission
and shall be executed by the printed, lithographed
or engraved facsimile signature of the Mayor
and the manual signature of the Clerk of the Commission,
and the interest coupons appurtenant thereto
shall be executed and authenticated by the printed, I
lithographed or engraved facsimile signatures
of the Mayor and Clerk of the Commission. The bonds
and coupons of each issue ~hall then be registered
in order of their serial numbers by the Director
of Finance, as attested by his printed, lithographed
or engraved facsimile signature, as of
January 1, 1981, and shall be delivered by
the Director of Finance to the purchaser upon payment
of the par value thereof plus accrued interest
from the registration date to the date of such
COMMISSION RESOLUTION NO. 2296
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delivery and payment.
The purchaser shall not be obligated to see to the application of the purchase
price, but the proceeds of the bonds shall
be credited by the Director of Finance forthwith to
the Special Improvement District No. 623 Fund,
and used solely for the payment of the cost and
expenses necessarily incurred in the completion
of the improvements heretofore ordered, except
I that the accrued interest received shall be
applied in payment of interest on the bonds when due.
Section 6. Special
Improvement District No. 623 Fund.
6.0l. There is hereby created
and established a fund designated as "Special Improvement
Di stri ct No. 623 Fund," whi ch sha 11 be
ma i nta i ned by the Di rector of Fi nance on the books and
records of the City separate and apart from
all other funds of the City. Within the District
Fund there shall be maintained separate accounts,
designated as the "Bond Account" and "Interest
Account," respectively.
Upon the 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 the district, the Director
of Finance shall credit to the Interest Account in the
District Fund so much of said special assessments
as is collected as interest payment. Any i nsta 11-
ment of any special assessment paid prior
to its due date with interest accrued thereon to the
nearest bond call date shall be credited with
respect to principal and interest payments the same
as other assessments are credited to the District
Fund. All moneys in the Interest Account and the
Bond Account shall be used first to pay interest
due, and any remaining moneys shall be used to pay
bonds.
Redemption of bonds therefrom shall be in order of their registration numbers, and interest
shall be paid as accrued thereon to the date
of redemption, in accordance with the provisions of
I Montana Code Annotated, Sections 7-12-4203
and 7-12-4206.
6.02. 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 Fund in an
amount sufficient to make good any deficiency
then existing in the Interest Account in the District
Fund, and shall issue an order authorizing
a loan or advance from the Revolving Fund to the
District Fund in an amount sufficient to make
good any deficiency then existing in the Bond Account
of the District Fund 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 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
district in which such deficiencies then exist in pro~
portion to the amounts of the deficiencies
on the respective dates of receipt of such money, until
I all interest accrued on such special improvement
district bonds of the City has been paid. On any
date when all accrued interest on improvement district bonds 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 I€volving 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. A deficiency shall be deemed
COMMISSION RESOLUTION NO. 2296
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to exist in the Bond Account of the Special Improvement District No. 623 Fund on any date on which
interest is due on bonds payable therefrom unless the City has then or theretofore redeemed bonds
in a principal amount equal to the sum of all installments of special assessments paid prior to
their due dates plus a fraction of the remaining principal amount of the special assessments
originally levied and appropriated to the District Fund equal to the number of installments of such
I
assessments then and theretofore due divided by the total number of installments
in which such
special assessments are permitted to be paid.
Section 7. Covenants. The City of Bozeman
covenants and agrees with the holder from time
to time of each of the bonds issued pursuant to this resolution that until all such bonds and
interest thereon are fully paid:
7.01. The City will hold the Special Improvement
District No. 623 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
District Fund and Revolving Fund are in accordance with the undertaking and agreement of the City
made in connection with the public offering of the bonds herein authorized.
7.02. The City will do all acts and things
necessary to enforce the provisions of the
construction contract and bonds referred to in Section 1.04 hereof and to ensure the completion
of the improvements in Special Improvement District No. 623 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 Special Improvement District No. 623 Fund and within the amount
I
of the bond proceeds appropriated thereto.
7.03. 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 Special Improvement District No. 623 in
accordance with the Constitution and laws of the State of Montana and the Constitution of the
United States, in an aggregate principal amount not less than $525,000.
Such special assessments
shall be levied on the basis prescribed in the resolution of intention described above, and shall
be payable in semiannual installments over a period of twenty years, each installment being due
in an amount equal to one-fortieth of the principal amount of each assessment, except the final
installment due on November 30. 2000 which shall be due in an amount equal to one-twentieth of
the principal amount of each assessment, with interest on the whole amount of each assessment.
with interest on the whole amount remaining unpaid at the rate or rates borne by the bonds,
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 1981 through 2000. inclusive. and on the 31st
day of May in the years 1982 through 2000, inclusive, if not theretofore paid, and shall become
delinquent on such date unless paid in full.
The first partial payment of each assessment shall I
include interest on the entire assessment from the date of registration of the bonds herein
authorized to January 1. 1982, and each subsequent partial payment shall include interest for
one year on that payment and the then remaining balance of the special assessment.
The assess-
ments shall constitute a lien upon and against the property against which they are made and
COMMISSION RESOLUTION NO.
2296
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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 is payable after
the execution of such deed, and any tax deed so issued
I shall convey title subject only to the lien
of said future installments, as provided in Montana
Code Annotated, Section 15-18-309.
7.04. 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 re-assess and re-levy the same, including the order-
ing of work, with the same force and effect
as if made at the time provided by law, ordinance or
resolution relating thereto, and will re-assess
and re-levy the same with the same force and
effect as an original levy thereof, as authorized
in Montana Code Annotated, Section 7-12-4186.
Any special assessment, or re-assessment or
re-levy shall, so far as is practicable, be levied
and collected as it would have been if the
first levy had been enforced including the levy and
collection of any interest accrued on the
first levy.
7.05.
There is now no litigation threatened or pending questioning the validity or regularity
of the creation of Special Improvement District
No. 623, the contract for construction of improve-
ments therein or the undertaking and agreement
of the City to levy special assessments therefor
and to make good any deficiency in the collection
thereof through the levy of taxes for and the
I making of advances from the Special Improvement
District Revolving Fund, or the right and power
of the City to issue the bonds herein authorized, 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 liti-
gation should be initiated or threatened,
the City will forthwith notify in writing the original
purchaser of the bonds herein authorized and
will furnish the purchaser with a copy of all
documents, including pleadings, in connection
with such litigation.
7.06.
The City will make no use of the proceeds of bonds issued hereunder which, if such
uses had been reasonably expected on the date
of issue thereof, would have cuased them to be
arbitrage bonds under the provisions of Section
103(c) of the Internal Revenue Code
of 1954,
as amended, and the regulations thereunder.
Section 8.
Authentication of Transcript. The City officers are hereby authorized and
directed to furnish to the purchaser of the
bonds, and to the attorneys approving the legality
thereof, certified copies of all proceedings
relating to the issuance of the bonds and such other
certificates and affidavits as may be required
to show the right, power and authority of the City
to issue the bonds, and all statements contained
in and shown by such instruments, including any
heretofore furni shed, sha 11 constitute representati
ons of the City as to the truth of the state-
I ments purported to be shown thereby.
Section 9. Effective Date.
This resolution shall be in full force and effect from and
after its passage.
COMMISSION RESOLUTION NO. 2296
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Passed and adopted by the City Commission
of B['eman, Montana, this 21< day :f,JanUary, 1981.
A ~/- II
. _J:~< ,/J/fV> I v -
Mayor
ATTEST:
I
~ d 4ti!1~.a
Clerk of the City Commission
State of Montana
)
County of Gallatin)
City of Bozeman
)
I, Erna V. Harding, Clerk of the Commission
of the City of Bozeman do hereby certify that
the foregoing Resolution No. 2296 was published
by title and number in the Bozeman Daily Chronicle,
a newspaper of general circulation printed
and published in said City, in the issue dated the 26th
day of January, 1981, and due proof of such
publication is on file in my office.
IN WITNESS WHEREOF I hereunto set my hand
and affix the corporate seal of my office this
3rd day of February, 1981.
&!~ ,;( u )~V~~~
I
Clerk of the City Commission
I
COMMISSION RESOLUTION NO.
2296
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