HomeMy WebLinkAboutResolution 2297 Prescribing form, terms and covenants for payment of SID 624 bonds: 1-21-81
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COMMISSION RESOLUTION NO. 2297
RESOLUTION AWARDING SALE OF $550,000 SPECIAL IMPROVEMENT DISTRICT NO. 624 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:
I Sect i on I.
Recitals. It is hereby found, determined and declared as follows:
1.0I. By Resolution No.
2270, adopted November 5, 1980, this Commission declared its
intention to create Special Improvement District No. 624 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
district.
1.02.
Notice of the passage of Resolution No. 2270 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 improve-
ments, and the Commission did therefor by
Resolution No. 2277, adopted December 10, 1980, create
Special Improvement District No. 624, 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. 624 were
prepared by the engineers acting for the City, and
were thereupon examined and approved by this
Commission. An advertisement for bids for construction
I of said improvements was published in the
official newspaper of the City on October 2 and October 9,
1980, calling for bids to be received on October 22, 1980 after which the bids theretofore received
engineers for the City it was determined that the lowest
were opened and examined. Aft
er referring the bids to the/regular proposal for the furnishing of
all work and materials required for constructing
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 $459,020.92, based upon quantities of work
COMMISSION RESOLUTION NO. 2297
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'348
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and materials estimated in the plans and 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 successful bidder entered intoawritten
I
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 t10ntana State Code Anno-
tated. 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 $550.000. 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 herein
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.
I
1.06. For the purpose of financing initially
the total cost and expense of making the improve-
ments. which is to be assessed against the property within the district, this Commission called for
the sale of bonds in the prinicpal amount of $610.000.
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
$610.000. As indicated in Section 1.05 hereof3
the current estimate of costs is $550.000. and
consequently. it is necessary to reduce the proposed bond issue to $550.000.
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 I
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.
COMMISSION RESOLUTION NO.
2297
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Section 2.
Special Improvement District No. 624 Bonds. For the purpose
of paying the costs
and expenses incurred in construction of the
improvements authorized to be constructed in Special
Improvement District No. 624, and in anticipation
of the collection of special assessments to be
1 evi ed therefor, and in accordance with
the pub 1 i c offeri ng descri bed inSect ion 1. 06 hereof, the
I City of Bozeman
shall forthwith issue and deliver to the purchaser its Special Improvement
District No. 624 Bonds in the total principal amount of $550,000, payable solely from the Special
Improvement District No. 624 Fund.
The bonds shall be dated and registered as of January 1, 1981,
and shall be 550 in number and numbered in
the order of their registration serially from 1 through
550, each in the denomination of $1,000.
The bonds shall mature January 1, 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
340 shall bear interest at the basic rate of 9.50%
per annum and at the additional rate of 0.75%
per annum, bonds numbered 341 through 415 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 416 through 550 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 1st day of July of
each year, commencing January 1, 1982, represented by
coupons appurtenant 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. 624 Fund on presentation when due of the
I 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 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 shall 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
I 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,
lithographed or engraved facsimile signatures
of the Mayor and Clerk of the Commission. The bonds
and coupons of each issue shall 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
COMMISSION RESOLUTION NO. 2297
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350
value thereof plus accrued interest from the
registration date to the date of such 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. 624 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. 624 Fund.
6.0l.
There is hereby created and established a fund designated as "Special Improvement
District No. 624 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 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 installment 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
Fund sh~ll 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 Montana
I
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
proportion to the amounts of the deficiencies
on the respective dates of receipt of such money,
I
until 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
r
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. A deficiency shall be deemed
I' :
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COMMISSION RESOLUTION NO. 2297
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351
to exist in the Bond Account of the Special
Improvement District No. 624 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
I originally levied and appropriated to the
District Fund equal to the number of installments of
such 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:
7.0l.
The City will hold the Special Improvement District No. 624 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 offi
cers and agents, wi 11 comply wi tha 11 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. 624 in accordance with the plans and
specifications and within the time therein
provided, and will pay all costs thereof promptly as
I incurred and allowed, out of the Special Improvement
District No. 624 Fund and within the amount
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. 624 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 $550,000. Such special assessments
shall be levied on the bases 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 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 fi rst
I partial payment of each assessment shall 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 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
COMMISSION RESOLUTION NO. 2297
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352
of any installment of the assessment thereon which is payable after the execution of such deed,
and any tax deed so issued shall convey title subject only to the lien of said future install-
ments, 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
I
all steps necessary to correct the same and to re-assess and re-levy 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 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. 624, 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
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
I
purchaser of the bonds herein authorized and will furnish the purchaser with a copy of all docu-
ments 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 caused 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 furnished. shall constitute representations of the City as to the truth of the state-
ments purported to be shown thereby.
Section 9. Effective Date.
This resolution shall be in full force and effect from and
after its passage.
Passed and adopted by the City Commission
tana, thi s 21 day of January 1981. I
""'7;!~"--"""..'.
Mayor
ATTEST:
ri?A. c:I tJ~
Clerk of the City Commission
COMMISSION RESOLUTION NO.
22rJl:
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353
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
I the foregoing Resolution No. 2297 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, 1980, 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
5th day of February, 1981.
ifJ~ d t)A~4~
Clerk of the City Commission
I
I
COMMISSION RESOLUTION NO. 2297
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