HomeMy WebLinkAbout$9.900,000 General Obligation Bonds, Series 2013 DORSEY'"
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TRICIA C. ELPEL,PARALEGAL
elpel.tricia@dorsey,com
December 12, 2013
Ms. Anna Rosenberry Via Federal Express
City Administrative Services Director
City of Bozeman
121 North Rouse Avenue
Bozeman, MT 59715-3740
Re: $9,900,000 General Obligation Bonds, Series 2013
City of Bozeman, Montana
Dear Anna:
In anticipation of the closing-on- this bond issue, scheduled for Monday, December 23,
2013, enclosed are five copies (unless otherw
,ise indicated) of each of the following closing
documents relatingto,the above-referenced ssue of bonds.-
1. 4M Officers' Certificate, yvhf(ich"should be executed by the Mayor, the City Clerk, and
you and-sealed,
2, febate Certificate, which,§hbuld be executed by the Mayor, the City Clerk, and
you and sealed.
3. tec ediby Services Director's Certificate and Receipt, which should be
4. "_Request ap�d Authorization, which s '6i'd be executed by the Mayor, the City
Clerk, and you,
5. Affidavit as to Signatures of Officers, which should be executed by the Mayor, the
City Clerk,apd,YoUrl-an
notarized.
.............. ...........
0. Certificate as to Organization, which sho,uld be executed by the City Clerk and
sealed.
7, Ce rtific:aWa sio-Traps cri ot of Proceed.i.nqs, which should be executed by the City
Clerk and sealed.
8. -Ohe IRS Form 8038-G, which shoui'd"te executed by you; and one form marked
"Taxpayer's Copy" for the City's file.
DORSEY & WHITNEY LLP - WWW DORSEY COM - T 406.721 60)5 - F 406,543.0863
MILLENNIUM BUILDING - 125 BANK STREET • SUITE 600 - MISSOULA, MONTANA 59802-4407
USA CANAIDA EURUPE
DC:) RSEY"
Ms. Anna Rosenberry
December 12, 2013
Page 2
Please see that each document is executed by the appropriate City official and return
four copies of each document plus the originally signed IRS Form 8038-G to us so that we
receive them no later than Thursday, December 19, 2013, so that we may review them prior to
closing on Monday morning. We will verify receipt of funds by the City prior to release of the
closing documents, the bonds and our opinion.
Let us know if you have any questions. Thank you.
Very truly yours,
t
C
Tricia C. Elpel, Paralegal
Enclosures
DO RSIFY& WHIZ NEY LLF
$9,900,000
General Obligation Bonds, Series 2013
City of Bozeman, Montana
OFFICERS' CERTIFICATE
We, Sean Becker, Anna Rosenberry, and Stacy Ulmen, hereby certify that we are the
duly qualified and acting Mayor, City Administrative Services Director and City Clerk,
respectively, of the City of Bozeman, Montana (the "City") and, on behalf of the City, certify
that:
1. True and correct facsimiles of the signatures of the Mayor, City Administrative
Services Director and the City Clerk have been affixed to $9,900,000 General Obligation Bonds,
Series 2013, of the City, dated, as originally issued, as of December 23, 2013 (the "Bonds").
The Bonds mature on the dates, bear interest at the rates and are substantially in the form
prescribed by a resolution duly adopted by the City Commission of the City on December 16,
2013, entitled "Resolution Relating to $9,900,000 General Obligation Bonds, Series 2013;
Determining the Form and Details, Authorizing the Execution and Delivery and Levying Taxes
for the Payment Thereof' (the "Resolution"). The Resolution is in full force and effect in the
form it was adopted. We have delivered the Bonds to U.S. Bank National Association, of
Seattle, Washington, as Registrar, for authentication and delivery to The Depository Trust
Company, in New York, New York, on behalf of D.A. Davidson & Co., of Great Falls, Montana,
as purchaser (the "Purchaser"). The Bonds are in fully registered form pursuant to a system of
registration established by the Resolution.
2. The Bonds have been in all respects duly executed for delivery pursuant to
authority conferred upon such officers; no obligations other than those described above have
been issued pursuant to such authority; none of the proceedings or records that has been certified
to the Purchaser or to the attorneys approving the legality of the issuance of the Bonds has been
in any manner repealed, amended or changed except as shown by additional proceedings or
records furnished each of them; and there has been no material adverse change in the financial
condition of the City or the circumstances affecting the Bonds, except as shown by the materials
so furnished..
3. No litigation is now pending, or, to the best of our knowledge, threatened (1)
restraining or enjoining the issuance or delivery of the Bonds, (ii) questioning the organization of
the City or the right of any officers of the City to their respective offices, (iii) questioning the
right and power of officers of the City to deliver the Bonds, (iv) challenging the validity of the
election authorizing the issuance of the Bonds, or (v) questioning the levy of any ad valorem
taxes to pay the principal of or interest on the Bonds.
4. To the best of our knowledge, the Official Statement, dated December 5, 2013,
relating to the Bonds did not as of the date thereof, and does not as of-the date hereof, contain
any misstatement of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made. not misleading;
provided that we make no comment regarding information provided by the Purchaser for
inclusion in the Official Statement relating to the Purchaser and the reol'lering prices of.'the
Bonds.
5. Pursuant to Section 148 of the Internal revenue Code of 1986, as amended (the
"Code"), and the Treasury regulations applicable thereunder (the "regulations"), we, as the
officers of the City responsible for issuing the Bonds, hereby certify the present expectations of
the City on the date hereof with respect to the Bonds are as follows:
(a) The Bonds are being issued for the purpose of paying a portion of the
costs of designing, constructing or equipping on open-space lands trails, parks and natural
areas or multi-use recreational fields and facilities, or employing such lands in the
preservation or enhancement of water quality, and acquiring rights to or interests in or
improving open-space lands in or near the City (such as lands for trails in and around the
Bridger Mountain foothills), to include necessary or related infrastructure for the use,
enjoyment, or functioning of such lands or facilities and the operation, maintenance,
repair, management, or planning of such lands or facilities (the "Project") and paying
costs associated with the sale and issuance of the Bonds. The Project is intended for use
by the City in providing services to members of the general public.
(b) The total costs of the Project to be paid with proceeds of the Bonds and
the costs associated with the sale and issuance of the Bonds are estimated to be as
follows:
Acquisition and Construction $9,969,924.30
Costs of Issuance 42,723.00
Underwriter's Discount 79.200.00
Total $10,091,847.30
(c) The City has heretofore entered or within six months will enter into
contracts for the Project, in the form of engineering services, site development or
construction, in the sum of at least 5% of the sale proceeds of the Bonds ($504,592.36).
(d) Expenditure of bond proceeds on the Project will commence substantially
simultaneously with the issuance of the Bonds, and the City expects to spend all of the
proceeds of the Bonds and investment earnings thereon in connection with the Project by
June 23, 2015.
(e) The City will receive $10,012,647.30 of proceeds from the sale of the
Bonds to the Purchaser. To the best of our knowledge, the price paid by the Purchaser
for the Bonds is reasonable under customary standards applicable in the municipal bond
market. This amount represents payment of$10,0I2,647.30 for the principal amount of
the Bonds (which price reflects a principal amount of$9,900,000, an underwriter's
discount of$79,200.00 and a reoffering premium of$191.847.30), no interest having
accrued on the Bonds to the date hereof The Purchaser has represented hereto that the
issue price of the Bonds to the public is $10,091,847.30.. and that a substantial amount of
each stated maturity ofthe Bonds has been sold at initial reoffering prices resulting in
such issue price.
(f) The yield of the Bonds, computed in accordance with Section 148 of the
Code and applicable Treasury Regulations, is 3.322195% per annum. The yield on the
Bonds has been calculated, as provided in Section 1.148-4(b) of the Treasury
Regulations, as that discount rate which when used in computing the present value as of
the issue date of all unconditionally payable payments of principal, interest and fees
payable or reasonably expected to be paid for qualified guarantees oil the Bonds,
produces an amount which is equal to the present value, using the same discount rate, of
the aggregate issue price thereof. The "issue price" of the Bonds is $1.0,091,847.30,
which is the initial offering price of the Bonds to the public.
(g) Of the amount the City will receive from the Purchaser, $9,969,924.30
will be deposited in the "Park, Trail, and Open Space Program Fund" and used to pay a
portion of the costs of the Project, and $42,723.00 will be deposited in the same fund and
used to pay costs of issuance of the Bonds (representing costs of bond counsel fees, rating
agency fees, costs of printing and distributing the preliminary and final official
statements, initial registrar and paying agent fees, Bond printing costs, and other related
fees and expenses).
(h) The amount to be received by the City from the Purchaser, less the costs
of issuance of the Bonds, plus any investment earnings, does not exceed the amount to be
spent by the City with respect to the portion of the Project to be financed with proceeds
of the Bonds.
(i) The City expects to spend on costs of the Project or costs of issuance of
the Bonds by June 23, 2015, all of the proceeds to be derived by the City from the sale of
the Bonds.
0) The Bonds are not "hedge bonds" within the meaning of Section 149(8) of
the Code. The City reasonably expects to spend not less than 85% of the sale proceeds of
the Bonds on the Project within three years after the date hereof and not more than 50%
of the proceeds of the Bond will be invested in nonpurpose investments having a
substantially guaranteed yield for four years or more.
(k) Proceeds of the Bonds and investment income thereon, if any, to be used
to finance the costs of the Project and pay costs of issuance of the Bonds will be invested
for a temporary period pursuant to Section 1.148-2(e)(2) of the Regulations ending on the
earlier of. (i) three years from the date hereof(December 23, 2016), or (ii) the date that
the portion of the Project to be acquired or constructed with proceeds of the Bonds would
be acquired or completed in the exercise of due diligence and all costs thereof promptly
paid. If, at the conclusion of such temporary period, sale proceeds of the Bonds and
investment income thereon have not been allocated to the governmental purposes of the
Bonds, such amounts will not be invested at a yield greater-than the yield of the Bonds, if
and to the extent such restriction is necessary to prevent the Bonds from being arbitrage
bonds within the meaning of Section 148 of the Code and Regulations unless the City
J
determines to take advantage of Section 1.148-5(c) of the Regulations relating to yield
reduction payments.
(1) The Project has not been and is not expected to be sold or otherwise
disposed of by the City during the term of the Bonds. The City expects that the Project
will remain owned or controlled and operated by the City substantially in the manner in
which it is now(or upon expenditure of proceeds of the Bonds) owned or controlled and
operated for the indefinite period concluding not earlier than the final stated maturity date
of the Bonds.
The City reasonably expects that during the term of the bonds no private business
use will be made of the Project and that no private payments or security will be made or
furnished that would cause the Bonds to be "private activity bonds" within the meaning
of Section 141 of the Code and applicable Regulations. No proceeds of the Bonds are
being or will be loaned to any nongovernmental person. The City reasonably expects that
the Bonds will not be private activity bonds within the meaning of Section 141 of the
Code.
(m) No obligations of the City (a) are being issued at substantially the same
time as the Bonds, (b) are being sold pursuant to the same plan of financing as the Bonds,
and (c) are reasonably expected to be paid from substantially the same source of funds
(determined without regard to guarantees from unrelated parties) as will be used to pay
the Bonds, within the meaning of Section 1.150-1(c) of the Regulations.
(n) Pursuant to the Resolution, the principal of and interest on the Bonds are
payable from the Park, Trail, and Open Space Debt Service Account (the "Debt Service
Account") of the City. The City does not reasonably expect to use any other fund or
account to pay principal of or interest on the Bonds. The ad valorem taxes pledged to the
Debt Service Account are expected to produce amounts sufficient to pay all principal of
and interest on the Bonds when due. It is expected that all amounts credited to the Debt
Service Account allocable to the Bonds will be used to pay principal of and interest on
the Bonds within 15 months after deposit. The Debt Service account will be used
primarily to achieve a proper matching of revenues and debt service within each Bond
Year and will be fully depleted at least once a year on ,duly 1, except for a reasonable
carryover amount which is not expected to exceed the greater of(i) the earnings on
money in the Debt Service account allocable to the Bonds for the immediately preceding
Bond Year or (ii) one-twelfth of the annual debt service on the Bonds in the immediately
preceding Bond Year. Consequently, the amounts on deposit in the Debt Service
Account allocable to the Bonds are expected to constitute a "bona fide debt service fund"
for the Bonds within the meaning of Section 1.148-1(b) of the Regulations.
(o) If the amount on deposit in the Debt Service account allocable to t he
Bonds exceeds the amount described in paragraph 5(n), the amount in excess thereof,
except as provided in paragraph 5(p), will be used to redeem Bonds or will be invested at
a yield less than or equal to the yield of the Bonds, if and to the extent such use or
restriction is necessary to prevent the Bonds from being arbitrage bonds within the
meaning of Section 148 of the Code and the Regulations.
4
(p) An aggregate amount of proceeds of the Bonds not to exceed the Minor
Portion Amount permitted by Section 148(e) of the Code ($100,000) (the "Minor Portion.
Amount") may be invested without restriction as to yield throughout the term of the
Bonds. To the extent that money on deposit in (i) the "Park, Trail, and Open Space
Program Fund" remains on hand therein after the earlier of three years frorn the date
hereof or acquisition or construction of the portion of the Project to be paid with proceeds
of the Bonds and investment earnings thereon with due diligence and payment of all costs
thereof, whichever is earlier, and (ii) the Debt Service Account in excess of the amount
described in paragraph 5(o), exceeds the Minor Portion Amount, no more than the Minor
Portion Amount may be invested at a yield which exceeds the yield of the Bonds.
(q) No portion of the Bonds is issued solely for the purpose of investing such
portion at a materially higher yield as less than the yield of the Bonds. None of the
proceeds of the Bonds will be used directly or indirectly to replace funds which were
used directly or indirectly to acquire obligations with a yield that is materially higher than
the yield of the Bonds.
(r) We have investigated the facts, estimates and circumstances surrounding
the issuance of the Bonds, which are described summarily in this Certificate. To the best
of our knowledge and belief, such facts, estimates and circumstances are correct and
complete and the City's expectations as to future events, which are based thereon, are in
all respects reasonable and made in good faith. To the extent that the expectations of the
City are based upon estimates and representations made by others, including the
Purchaser, we have examined such estimates and representations and consider them to be
reasonable and correct. Any statements in this Certificate involving future events,
whether or not expressly so stated, are intended as expectations of the City and not as
representations of fact. On the basis of such facts, estimates and circumstances, it is
expected that the proceeds of the Bonds will be used in a manner that would not cause the
Bonds to be considered"arbitrage bonds" within the meaning of Section 148 of the Code,
and there are no present facts, estimates or circumstances which would change the
foregoing conclusion.
(s) In the Resolution, the City has covenanted and agreed to comply with the
provisions of Section 148(f) of the Code, to the extent applicable and to be implemented
pursuant to the Rebate Certificate of even date herewith.
(t) The Bonds will not be outstanding longer than necessary, within the
meaning of Section 1.148-1(c)(4) of the Regulations. The weighted average maturity of
the Bonds (12.1444 years) does not exceed 120 percent of the average reasonably
expected economic life of the portion of the Project to be paid with proceeds of the
Bonds. Such average reasonably expected economic life is not less than 2.0 years.
6. The provisions of this paragraph 6 are intended to establish and provide for
compliance by the City with Treasury Regulations, Section 1.150-2 (the "Reimbursement
Regulations") applicable to the "reimbursement proceeds" of the Bonds, being those proceeds
which will be used by the City to reimburse itself for any expenditure with respect to the Project
5
which the City paid or will have paid prior to the issuance ofthe Bonds and as to which the City
will reimburse itself from "reirbursement proceeds" (a "Reimbursement Expenditure").
The City hereby certifies and covenants as follows:
(a) Except as hereinafter provided, on or before the date of payment of"any
Reimbursement Expenditure, the City by a resolution adopted by the City Commission
on July 16, 2012, made a written declaration of the City's official intent (each a
"Declaration") which complies with the provisions of Section 1.150-2(d) and (e) of the
Reimbursement Regulations. The Declaration need not cover, however, Reimbursement
Expenditures: (i) to be paid or reimbursed from sources other than the Bonds, (ii)
constituting "preliminary expenditures" (within the meaning of Section 1.150-2(f)(2) of
the Regulations) for the Project, including engineering or architectural expenses and
similar preparatory expenses, which in the aggregate do not exceed 2.0% of the "issue
price" of the Bonds, or(iii) in a"de minimus" amount (as defined in Section I.150-
2(f)(1) of the Regulations), i.e., $100,000.
(b) As of the date of the Declaration, no funds from sources other than the Bonds
were, or were reasonably expected to be, reserved, allocated on a long-term basis, or
otherwise set aside by the City to provide financing for the Reimbursement Expenditure
to be reimbursed from proceeds of the Bonds.
(c) Each Reimbursement.Expenditure to be reimbursed from proceeds of the
Bonds, other than costs of issuing the Bonds, is a capital expenditure (i.e., a cost that is
properly chargeable to capital account (or would be with a proper election) under general
federal income tax principles). As of the date hereof, the City has not paid any amounts
that will be reimbursed from proceeds of the Bonds.
(d) The "reimbursement allocation" described in the Reimbursement Regulations
for each Reimbursement Expenditure to be reimbursed from proceeds of the Bonds shall
be made forthwith following (but not prior to) the issuance of the Bonds and in all events
within the period ending on the date which is three years after the later of: (1) the date of
payment of the Reimbursement Expenditure or (ii) the date on which the portion of the
Project to be paid or reimbursed by proceeds of the Bonds are first placed in service or
abandoned.
(e) Each such reimbursement allocation will be evidenced by an entry on the
official books or records of the City maintained for and in connection with the Bonds and
will specifically identify the actual prior Reimbursement Expenditure to be reimbursed
from proceeds of the Bonds.
(f) The City is unaware of any facts or circumstances which would cause it to
question the reasonableness or accuracy of this paragraph 6 or of the Declaration, or its
compliance with any of the covenants herein contained.
6
7. The seal impressed below and on the Bonds is the true and official seal ofvthe
City.
Dated: December 23, 2013,
CITY OF BOZ MAN. MONTANA
ANA
Mayor
City Administra 'v Services i"e for
ft�J
r?�y Clerk
7
$9,900,000
General Obligation-Bonds, Series 2013
City of Bozeman, Montana
REBATE CERTIFICATE
The City of Bozeman, Montana (the "City") acting through its undersigned duly
authorized officers, hereby certifies and agrees as follows with respect to the $9,900,000 General
Obligation Bonds, Series 2013, dated, as originally issued, as of December 2.3, 2013 (the
"Bonds"), issued by the City pursuant to a resolution adopted by the City Commission of the
City on December 16, 2013 (the "Resolution").
Section 1. Undertakings.
1.01 The City, pursuant to Section 6.03 of the Resolution, has covenanted to comply
with the requirements of Section 148(f) of the Internal Revenue Code of 1986, as amended (the
"Code"), relating to the Bonds. The City acknowledges that, while the Internal Revenue Service
has now issued regulations with respect to computing whether any rebate amount is due the
federal government under Section 148(f) of the Code, those regulations (Sections 1.148-0
through 1.148-11, 1.148-12T, 1.148-013T, and 1.150-1, of the Income Tax Regulations) reserve
certain platters for further elaboration, including the determination of"gross proceeds." The
City covenants that it will consult with Bond Counsel (as hereinafter defined) and undertake to
determine what is required with respect to the rebate provisions contained in Section 148(0 of
the Code from time to time and will comply with any requirements that may be applicable to the
Bonds. "The methodology described in this Certificate will be followed, except to the extent.
inconsistent with any requirements of future regulations or written advice received from bond
counsel.
1.02 Detailed records with respect to each and every Nonpurpose Investment
attributable to Gross Proceeds of the Bonds shall be maintained by the City including:
( ) purchase date, (ii) purchase price, (iii) brokerage or other transaction costs of purchase,
(iv) information establishing fair market value on the date such investment became a
Nonpurpose Investment, (v) any accrued interest paid, (vi) face amount, (vii) coupon or stated
interest rate, (viii) periodicity of interest payments, (ix) disposition price, (x) any accrued interest
received, (xi) disposition date, and (xii) brokerage or other transaction costs of disposition. Such
detailed recordkeeping is required for the calculation of the Rebatable Arbitrage which, in part,
will require a determination of the difference between the actual aggregate earnings of all the
Nonpurpose Investments and the amount of such earnings assuming a rate of return equal to the
Yield of the Bonds.
Section 2. Definitions. Unless the context hereof otherwise requires; capitalized
terms shall have the same meaning as in the Resolution. In addition, the following capitalized
terms have the following meanings:
Available Proceeds shall mean "gross proceeds" of the Bonds as defined in
Section 1.148-7(c)(3) of the Regulations. (generally, "Available Proceeds" means the
sale proceeds of the Bonds and investment proceeds derived therefrom, it does not
include amounts allocable to the Bonds in the Debt Service Account to the extent they
constitute a "bona fide debt service fund"Tor the Bonds as described in the Officers'
Certificate executed by the City of even date herewith.
Bond Counsel shall mean nationally recognized bond counsel selected by the
City.
Bond Year shall mean each one-year period (or shorter period from the Closing
Date) that ends at the close of business on each July 1, or, if earlier, the date the Bonds
are paid.
Closing Date shall mean December 23, 2013, the date of delivery of the Bonds.
Code shall mean the Internal Revenue Code of 1986, as amended, and the
applicable Treasury Regulations (including any proposed or temporary regulations)
promulgated thereunder.
Computation Date shall mean an installment computation date (the last day of the
fifth and each succeeding fifth Bond Year) and the final computation date (the date the
last Bond is discharged). If the Bonds are paid at their stated maturities, the installment
computation dates are expected to be July 1, 2018, July 1, 2023, July 1, 2028, July 1,
2033, and a final Computation Date of July 1, 2031.
Debt Service Account shall mean the "Park, Trail, and Open Space Debt Service
Account" established by the City to pay debt service on the Bonds.
Gross Proceeds shall mean, with respect to the Bonds, all proceeds of the Bonds
(including original proceeds and transferred proceeds) and any funds (other than
proceeds) that are part of a reserve or replacement fiend for the Bonds, including amounts
on deposit in the Park, Trail, and Open Space Program Fund, but excluding amounts on
deposit in the Debt Service Account, to the extent it constitutes a "bona fide debt service
fund" as described in the Officers' Certificate of even date herewith and Section 3.03
below.
Investment Property shall mean any security, obligation (other than a tax-exempt
obligation), annuity contract or investment-type property.
Net Proceeds shall mean, with respect to the Bonds, the proceeds received from
the purchaser thereof, plus all investment earnings thereon.
Nonpurpose Investment shall mean any Investment Property that is not a purpose
investment in which Gross Proceeds of the Bonds are invested.
Opinion of Bond Counsel shall mean an opinion of nationally recognized bond
counsel selected by the City.
2
Rebatable Arbitrage shall mean, as of any Computation Date. the excess of the
future value of all .nonpurpose receipts wit11 respect to the Bonds over the lLiture value of
all nonpurpose payments with respect to the .Bonds.
Regulations shall mean the Treasury Regulations applicable to the Bonds and
promulgated under the Code or the Internal Revenue Code of 1986, as amended,
including, without limitation, Treasury Regulations, Sections 1.148-0 through 1.148-11,
1.148-12T, 1.148-12T, 1.149-1 and 1.150-0 through 1.150-1.
Yield, with reference to any obligation, shall mean that discount .rate which, when
computing the present value of all unconditionally payable payments of principal and
interest paid and to be paid on such obligation, produces an amount equal to the present
value of the issue price of the obligation.
Yield of the Bonds shall mean 3.322195%.
Section 3. Rebatable Arbitrage Calculation and Payment.
3.01 The Project will be owned and operated by the City and used for governmental
purposes. All of the Available Proceeds qualify for the temporary period under Section 1.148-
2(e)(2) of the Regulations. Apart from the sale proceeds of the Bonds and investment proceeds
derived therefrom, the City does not expect that any other Gross Proceeds will arise. Thus, if the
expenditure tests set forth in Section 1.148-7(d)(1)(i) of the Regulations are met (i.e., the
following percentages of Available Proceeds are spent within the following periods beginning on
the date of issuance. at least 15% within six months (June 23, 2014); 60%n within one year
(December 23, 2014); and 100% within eighteen months (June 23, 2015) (subject to a reasonable
contractual retainage amount not exceeding five percent of the net sale proceeds of the Bonds as
of December 2'). 2013 to be spent within 30 months after the date hereof, as defined in Section
1.148-7(h) of the Regulations); provided, however, that if the amount of Available Proceeds left
unexpended at the end of such 18-month period is less than 5300,379.42 (')% of the issue price
of the Bonds) and the City proceeds with due diligence to acquire or complete that portion of the
Project on which proceeds of the Bonds are to be expended, the failure to expend such Available
Proceeds may be disregarded), then the City may elect to treat the Available Proceeds as exempt
from the rebate requirements of Section 148(f) of the Code pursuant to the "18 month" spending
exception provided under Section 1.148-7(d) of the Regulations.
3.02 To monitor compliance with the spending requirements set forth in Section 3.01,
the City will file in the office of the City Administrative Services Director a report in the form
attached as Exhibit A within 30 days after the end of each six-month period set forth in
paragraph 3.01 until 100% of the Available Proceeds are in fact expended l()r Project costs.
3.03 Notwithstanding anything in this certificate to the contrary, any gross earnings
during a Bond Year on any bona fide debt service fund for the Bonds and amounts earned on
such amounts, if allocated to such bona fide debt service fund. shall not be taken into account in
calculating the Rebatable Arbitrage. For purposes of this paragraph 3.03, the term "gross
earnings means the aggregate amount earned on the Nonpurpose hnvestments in which the
Gross Proceeds deposited to the bona fide debt service fund are invested,. including amounts
earned on such amounts if allocated to the bona fide debt service fund. It is expected that the
amounts on deposit in the Debt Service Account allocable to the Bonds will constitute a bona
fide debt service fiend for the Bonds,
3.04 For purposes of complying with Section 148(f) of the Code, the City will prepare;
or have prepared a calculation of the Rebatable Arbitrage consistent with the rules described in
this Section 3, unless the "'18 month" spending exception is satisfied and no Gross Proceeds
other than Available Proceeds arise in respect of the Bonds. The City will prepare (and file a
report in the office of the City.Administrative Services Director) a completed copy of the
calculation of the Rebatable Arbitrage within 30 days after the Computation Date or the end of
the 18-month expenditure period, whichever is later.
3.05 The City shall pay to the United States Department of the "Treasury from surplus
money in the General .Fund or other available funds (A) not later than 60 days after the
Computation Date or the end of the 18-month expenditure period, whichever is later, an amount
equal to 100% of the Rebatable Arbitrage.
3.06 Each payment required to be made pursuant hereto shall be filed with the Internal
Revenue Service Center, Ogden, Utah 84201 (or at such other place as the Internal Revenue
Service shall designate), on or before the date such payment is due, and shall be accompanied by
a completed and executed Internal Revenue Service Form 8038-T. The City shall retain records
of the calculations required by this Section 3 until six years after the final Computation Date.
Section 4. Filing Requirements. The City shall file or cause to be filed such reports
or other documents with the Internal Revenue Service as required by the Code in accordance
with an opinion of Bond Counsel.
Section 5. Survival of Defeasance. Notwithstanding anything in this Certificate or
any other provisions of the Resolution to the contrary, the obligation to remit the Rebatable
Arbitrage to the United States Department of the Treasury and to comply with all other
requirements contained in this Certificate shall survive the defeasance of the Bonds,
Section 6. Amendments. The City may amend or supplement the provisions of this
Certificate by filing an executed copy of such amendment or supplement in the office of the
Treasurer accompanied by an opinion of Bond Counsel to the effect that such amendment or
supplement is required by, or better complies with, the provisions of Section 148 and applicable
Regulations.
4
Dated: December 2�, 201.x.
CITY OF BOZEMAN, MONTANA
By
Zyvo—r-
By _ ..._
Cit 'Administ ve Servac Director
By
City Jerk
(SEA"I}
N
5
EXHIBIT A
EXPENDITURE REPORT
This report is submitted pursttant to Section 3.02 of the Rebate Certificate, dated
December 23, 2013, delivered by City of Bozeman, Montana, As of 20 t t} the
aggregate "Available Proceeds" available for expenditure were $ t`) The amount
expended for costs of the Project as of , 20_ ,") was (4) which is
% of said aggregate "Available Proceeds." Consequently, the requirements of Section
3.01 of the Certificate [have been] [have not been] net as of , 20 tl
Dated: , 20_.
CITY OF BOZEMAN, MONTANA
By
Its
(I) Insert most recent date from Section 3.0 1,or semiannual date thereafter until all Available Proceeds are
expended.
(2) Total of 0) S _ _ (remaining sale proceeds of the bonds), plus (ii) investment income on
Available Proceeds of the bonds. [For the first two spending periods, the investment income is based on the
estimated investment earnings on the date of issuance of the Bonds (i.e., S__ ). For the final spending period,
the investment income is based on actual investment earnings.]
(3) Same date as first blank.
(4) Includes all disbursements for Project costs from Available Proceeds.
A-1
$9,900,000
General Obligation Bonds,'Series 20 1 3)
City of Bozeman, Montana
CITY ADMINISTRATIVE SERVICES DIRECTOR'S
CERTIFICATE AND RECEIPT
1, the undersigned, being the duly qualified and acting City Administrative Services
Director of the City of Bozeman, Montana, hereby certify and acknowledge that on the date of
this instrument I received from D.A. Davidson & Co., of Great Falls, Montana, as purchaser
thereof the purchase price of the $9,900,000 General Obligation Bonds, Series 2013, of City of
Bozeman, Montana, originally dated as of December 23, 2013, said purchase price being
computed as follows:
Principal Amount $9,900,000.00
Plus Reoffering Premium 191,847.30
Less Underwriter's Discount (79,200,00)
Net Purchase Price: $10,012,647.30
and that I thereupon caused said Bonds to be delivered to The Depository Trust Company, of
New York, New York, on behalf of said Purchaser.
WITNESS my hand officially as such City Administrative Services Director this 23rd
day of December, 2013.
C i "m inistr J- e Service, i rector
$9,900,000
General Obligation Bonds, Series 2013
City of Bozeman, Montana
REQUEST AND AUTHORIZATION
U.S. Bank National Association
Corporate Trust Services
1420— 5`h Avenue, 7`h Floor
Seattle, WA 98101
Ladies and Gentlemen;
You are hereby requested and authorized forthwith to execute the Certificate of
Authentication printed on the $9,900,000 General Obligation Bonds, Series 2013, dated as of
December 23, 2013 (the "Bonds"), of the City of Bozeman, Montana (the "City") and to deliver
the Bonds to The Depository Trust Company, in New York,New York, on behalf of D.A,
Davidson & Co., of Great Falls, Montana, as purchaser thereof, all in accordance with the
resolution adopted by the City Council on December 16, 2013 (the "Resolution") relating to said
Bonds.
We transmit to you herewith the Bonds described above, which have been duly executed
on behalf of the City, and a copy of the Resolution. We request that you acknowledge receipt of
the Bonds and the Resolution by signing the receipt attached hereto and made a part of this
document and by returning a copy hereof so signed to the City.
Dated, December 23, 2013.
CITY OF BOZEMA:N, MONTANA
Bye M ... ..__.
Mayor
An
I Adminlstr 4re Servic4bi rector
And b
C`ty Cl r.
STATE OF MONTANA
ss. AFFIDAVIT AS TO SIGNATURES
COUNTY OF GALLATIN OF OFFICERS
Affiants, being first duly sworn, upon oath depose and say that affiant SEAN
BECKER is the duly qualified and acting Mayor, that affiant ANNA ROSENBERRY is the duly
qualified and acting City Administrative Services Director, and that affiant STACY ULMEN is
the duly qualified and acting City Clerk of the City of Bozeman, Montana (the "City"); that the
Mayor, City Administrative Services Director, and City Clerk have been authorized to execute
$9,900,000 in aggregate principal amount of General Obligation Bonds, Series 2013 of the City,
dated, as originally issued, as of December 23, 2013; that the signatures subscribed to this
affidavit are the proper signatures of such affiants as such Mayor, City Administrative Services
Director, and City Clerk, respectively; that all facsimile signatures affixed to the Bonds are true
and correct engraved, printed or stamped facsimiles of the applicable afflants' proper signatures;
and that a duplicate original of this affidavit has been filed with the undersigned City Clerk in
accordance with the provisions of Montana Code Annotated, Section 2-16-114(2).
�7
Mayor
ri Admiiiistijtjt ve Service�/'bi rector
City(cle k
Subscribed and sworn to before me this ay of
d 2013.
AIMEE BRUNCKHORST - An tnI4�C"6-�-
Lucy NOTARY PUBLIC for the
Qua State of Montana Print 6d Name:
SEAL .-, Residing at BeIgrade, Montana Notary Public for the State of Montana
My commission Expires
December 04,2016 Residing at Montana
(Notari My Commission Expires:
STATE OF MONTANA ) CERTIFICATE AS TO ORGANIZATION
j ss OF CITY O BOZEMAN, MONTANA
COUNTY OF GALLATIN )
The undersigned, being the duly qualified and acting City Clerk of the City of Bozeman,
in the County and State aforesaid, and as such having custody of and access to the books and
records of the City relating to the matters hereinafter stated, hereby certifies that, as appears by
such books and records and as known to me, the following statements are true and correct.
1. The City has been a duly organized city for more than 125 years and is now
governed by the general laws of the State relating to cities of the first class, operating; under the
Commission-Manager form of government. Its population, according to the 2010 United States
census, was 37,280.
2. The territory included within its boundaries lies wholly in the County of Gallatin,
and comprises approximately 10,375 acres. The City is divided into 0 wards. The City is
governed by a Mayor, City Manager and four Commissioners. The following named persons
hold the offices set opposite their names and for the terms stated below:
Years on
Name Office Commission Term Ends
Sean Becker Mayor 7 years 12-31-2013
Jeff Krauss Deputy Mayor 11 years 12-31-2015
Carson Taylor Commissioner 2 years 12-31-2013
Chris Mehl Commissioner 2 years 12-31-2013
Cynthia Andrus Commissioner 2 years 12-31-2015
Name Office
Chris Kukulski City Manager -- --
Anna Rosenberry Administrative Services Director -- --
Greg; Sullivan City Attorney --
Stacy .Jlmen City Clerk -- --
3. Under the by-laws and ordinances of the City, regular meetings of the City
Commission are held on the first four Mondays of each month at 6:00 p.m., with the second
meeting of the month constituting a work session, and notice of special meetings is required to
be given in writing to all members in advance.
4. The following are newspapers of general circulation published in the City and the
days of their publication:
Name Days of Publication
Bozeman Daily Chronicle Sunday through Saturday
5. There is no litigation threatened or pending questioning the organization or
boundaries of the City or the right of any of the above-named persons to their respective offices
or questioning the right and power of the City and its officers to issue bonds for any purpose or
to levy, collect and apply taxes or other revenues for the payment of any bonds of the City.
6. The seal affixed below is the official corporate seal of the City.
WITNESS my hand and the seal of the City this 23rd day of December, 2013.
s
C C1 rk
(SEAS)
Po r
STATE O.F MONTANA } CERTIFICATE AS TO TRANSCRIPT
ss. OF PROCEEDINGS AUTHORIZING
County of Gallatin } GENERAL OBLIGATION BONDS OF
CITY OF BOZEMAN, MON'1"ANA
I, the undersigned, being the duly qualified and acting City Clerk of the City of
Bozeman, Montana, (the "City") hereby certify that each of the statements contained in this
cert ificate is true and correct as shown by the official records of the City in my custody, and as
otherwise known to me; that each and all of the documents hereto attached are duplicates or full,
true and correct copies of the originals of such documents which are on file and of record in nay
office; that the documents constitute a full, true and correct transcript of all proceedings of the
City Commission and other officers and employees of the City, and of the City's official record
of the performance of all acts and the existence of all conditions and things required by law to be
taken, to exist, to happen and to be performed prior to the date of this certificate, precedent to the
issuance of the following-described bonds of the City:
$9,900,000 General Obligation Bonds, dated as of December 30, 2013 and that
the attached documents are more fully described as follows:
g
.,
4. Minutes o f a meeting of the City Commission held July 16. 2012.
including the resolution adopted thereat, calling an election on the Bonds. (M.C.A., Section 7-7-
4226)
5. Notice of the election, dated September 19, 2012. (M.C.A., Section 7-7-
4227)
6. Affidavit of Publication of Notice of Election. (M.C.A., Sections 7-7-
4227, 0-1-1.08)
7. Printed ballot furnished to the qualified electors for voting on (each of} the
proposition(s) submitted at the election held November 6, 2012.
8. Canvass of Votes Cast setting forth the official returns of the votes cast on
the proposition submitted; dated November 19. 2012.
9. Certificate of the County Election Administrator, dated December-'. 2013,
relating to close of registration for the election. (M.C.A., Section 13-2-301(a)}•
10. 1.",lection certificate of County Election Administrator issued indicating
number of registered electorate, percentage of electors voting at the election., numbers voting in
favor and in opposition of the bond issue and declaring whether the bond issue was adopted.
11. Minutes of a regular meeting of the City Commission held October 2$.
2013. including the resolution adopted thereat, authorizing the issuance of the Bonds and sale
thereof to D.A. Davidson & Co,, subject to certain parameters. (M.C:.A., Section 7-7-4254 and
Section I7-5-I07.)
12. Bond purchase agreement between the City and the purchaser of the
Bonds.
13. Minutes of a meeting of the City Commission held December 16, 2013,
including the resolution adopted thereat,prescribing the form and details and authorizing
execution of the Bonds.
I further certify that there is no litigation threatened pending or known to me to be
threatened, questioning the organization or boundaries of the City, or the right of any officer or
member of the City Commission to his or her office, or in any manner questioning the right and
power of the City and its officers to issue the Bonds of the City and to authorize the City to levy
and apply taxes for the payment thereof.
WITNESS my hand officially as such City Clerk and the seal of the City this 23rd
day of December, 2013.
P
�y7 4 AW
(S l~ Cit Cl k
M 4"
e n P F ii
p. J
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2
(�XFIAYEKS COPY
Form 8038-G Information Return for Tax-Exempt Governmental Obligations
(Rev September 2011) F Under Internal Revenue Code section 149(e) OMB No 15,15-0720
Department of the Treasury *See separate instructions.
Internal Revenue Service Caution:If the issue price is under$100„000,use Form 8038-GC.
Reporting Authority If Amended Return, check here 01
1 Issuer's name 2 Issuer's employer identification number(FIN)
City of Bozeman,Montana 81-6001238
3a Name of person(other than issuer)with whom the IRS may communicate about this return(see instructions) 3b Telephone numbed of other person shown on 3a
4 Number and street(or P.O box if mail is not delivered to street address) /suite 5 Report number(For IPS Use Only)
P.O.Box 1230 =00M
6 City,town,or post office,state.and ZIP code 7 Date of issue
Bozeman,MT 59771-1230 December 23,2013
B Name of issue 9 CUSIP number
General Obligation Bonds,Series 2013 103637 GN8
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information(see 10b Telephone number of officer or other
instructions) employee shown or 1 Oa
Anna Rosenberry,Administrative Services Director 406-582-2300
[` . Type of Issue (enter the issue price). See the instructions and attach schedule,
11 Education . . . . . . . . . . . . . . . , , . 11
12 Health and hospital . . . . . . . . . . . . . . . . . . . 12
13 Transportation . . . . . . . . . . . . . . . . . 13
14 Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . 14
15 Environment(including sewage bonds) . . . . . . . . . . . is
16 Housing . . . . . . . . . . . . . . 16
17 Utilities . . . . . . . . . . . . . . . . . . 17
18 Other. Describe ► open-space lands trails,parks and natural areas or multi-use recreational 1,8471 30
19 If obligations are TANs or RANs,check only box 19a . . . .
If obligations are BANS,check only box 19b . . . . . . . . . . . .
20 If obligations are in the form of a lease or installment sale,check box . . . . . .
[?ascription of Obligations. Complete for the entire issue for which this form is being filed.
{a)Final maturity date (b)Issue price (c)Stated redemption M Weighted (e)Yield
price at maturity average maturity
21 07/0112034 $ 10,091,847.30 $ 9,900,000.00 12,1444 years 3.322195 %
[=: Uses of Proceeds of Bond Issue (including underwriters' discount)
22 Proceeds used for accrued interest . , , . . . . . . . . . . . . . . . . . . 22 0 00
23 Issue price of entire issue(enter amount from line 21, column(b)) . . . . . . . . . . 23 10,091,847 30
24 Proceeds used for bond issuance costs(including underwriters'discount), . 24 121,923 00
25 Proceeds used for credit enhancement . . . . . . . . . . . . 25 0 00
26 Proceeds allocated to reasonably requIred reserve or replacement fund . 26 0 00
27 Proceeds used to currently refund prior issues . . . 27 0 00
28 Proceeds used to advance refund prior issues . . . . . . . . 28 0 00
29 Total(add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . 29 121,923 00
30 Nonrefunding proceeds of the issue(subtract line 29 from line 23 and enter amount here) . . . 30 9,969,924 30
[j;M Description of Refunded Bonds. Complete this part only for refunding bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded 11111. ears
32 Enter the remaining weighted average maturity of the bonds to be advance refunded years
33 Enter the last date on which the refunded bonds will be called(MM/DDNYYY) . . . . . .
34 Enter the date(s)the refunded bonds were issued 0-(MM/DD/YYYY)
For Paperwork Reduction Act Notice,see separate instructions. Cat.No.637735 norm 8038-G(Rev.9-2011)
'
Form 8038-G(Rev,9-2011) pagL2
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35 0 00
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
b Enter the final maturity date of the GIC 10-
c Enter the name of the GIC provider 0-
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
38a If this issue is a loan made from the proceeds of another tax-exempt issue,check box 0- El and enter the following information:
b Enter the date of the master pool obligation b-
n Enter the E|Nof the issuer of the master pool obligation)0�
d Enter the name uf the issuer o[the master pool obligation m~
38 |f the issuer has designated the issue under section 28o(L*(3)(B)0(U|)(small issuer^xcop^|oo).check box 0. 21
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . LJ
41u |f the issuer has identified o hedge,check here m^ [] and enter the following information:
h Name of hedge provider 10,
c Type uf hedge J~
u Term of hedge IN~
42 |f the issuer has nupahmequated the hedge, check box . . . . . . . . . . . . . . . . . . . . � []
43 If the issuer has established written procedures to ensure that all nonquali§ed bonds of this issue are remedieted
according to the requirements under the Code and Regulations(see instructions),check box . . . . . . . . 0- GO
44 If the issuer has established written procedures to monitor the requirements of section 148,check box , . . . . 0- [�
45m |f some portion nfthe proceeds was used to reimburse expenditures,check here 0~ [] and enter the amount
of reimbursement mo
b Enter the date the official intent was adopted Do
Under penalties of perjury,I declare that I have examined this return Ind accompanying scheduies and statements,and to[he best of my knowledge
Signature and belief,they are true,correct,and complete.I further declare th -�ccnsent to the IRS's disclosure of the issuer's return information,as necessary to
and process this return,to the person Lhat I have authorized above. 'Iq
Consent C(1)
Anna Rosenberry,Admin.Services Director
Signature ol issuer's authorized representative Date Type or print name and title
Paid PrintrType preparer's name Prep signatur Date Check [],if �PTINPOJ
Firm's address 1- 125 Bank Street<�bfte 600,Missoula,MT 59802 Phone no. 406-721-6025
rorrn 8038-G(Rev 9-2011)