HomeMy WebLinkAbout12-17-07_Resolution No_ 4073, Relating to Tax Increment Ren_27
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Anna Rosenberry, Finance Director
Chris Kukulski, City Manager
SUBJECT: Resolution No. 4073 – Relating to Tax Increment Renewal Bonds, Series
2007 (Downtown Bozeman Improvement District); Ratifying the Sale and
Prescribing the Form and Terms Thereof and the Security Therefore.
MEETING DATE: December 17, 2007
BACKGROUND: Resolution No. 3901, adopted on April 3, 2006, authorized the negotiated
sale of these Series 2007 bonds and authorized the Mayor, the City Manager, and the Director of
Finance to enter into a Bond Purchase Agreement.
The bonds will be offered for sale and a bond purchase agreement will be entered into on
December 13, 2007. The final results of the sale and bond purchase agreement will be presented
to the Commission on December 17, 2007. At that time, a final version of Resolution No. 4073
will be presented, incorporating the details of the sale and purchase agreements. A draft of
Resolution No. 4073, without specific sale and purchase agreement details, is attached for your
review. This resolution has been prepared by our Bond Counsel, Mae Nan Ellingson with the
firm of Dorsey & Whitney.
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RECOMMENDATION: Adopt Resolution No. 4073– Relating to Tax Increment Renewal
Bonds, Series 2007 (Downtown Bozeman Improvement District); Ratifying the Sale and
Prescribing the Form and Terms Thereof and the Security Therefore.
FISCAL EFFECTS: This resolution fixes the form and details of the Intermodal Facility
Bonds; without it, we would not be able to issue the $6.2M in TIF bonds that are financing a
portion of the construction of the facility. We will close the sale (receive cash) on December 27,
2007.
ALTERNATIVES: As suggested by the City Commission.
Respectfully submitted,
Anna Rosenberry, Finance
Director
Chris A. Kukulski, City Manager
Report compiled on: December 11, 2007
Attachments: Draft - Resolution No. 4073
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Draft 11/26/2007
CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE
I, the undersigned, being the duly qualified and acting recording officer of the City of Bozeman,
Montana (the “City”), hereby certify that the attached resolution is a true copy of Resolution No. 4073,
entitled: “RESOLUTION RELATING TO TAX INCREMENT URBAN RENEWAL REVENUE
BONDS, SERIES 2007 (DOWNTOWN BOZEMAN IMPROVEMENT DISTRICT); RATIFYING THE
SALE AND PRESCRIBING THE FORM AND TERMS THEREOF AND THE SECURITY
THEREFOR” (the “Resolution”), on file in the original records of the City in my legal custody; that the
Resolution was duly adopted by the City Commission of the City at a regular meeting on [December 3],
2007, and that the meeting was duly held by the City Commission and was attended throughout by a
quorum, pursuant to call and notice of such meeting given as required by law; and that the Resolution has
not as of the date hereof been amended or repealed.
I further certify that, upon vote being taken on the Resolution at said
meeting, the following Commission members voted in favor thereof: ________________________
____________________________________________________________________________; voted
against the same: __________________________________________; abstained from voting thereon:
______________________________________________________; or were absent:
___________________________________________________________.
WITNESS my hand and seal officially this ______ day of December, 2007.
Clerk of the Commission
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TABLE OF CONTENTS
[Not a part of the Resolution; for convenience of reference only.]
Page
SECTION 1. DEFINITIONS, AUTHORIZATIONS AND FINDINGS..................................................1
1.01. Definitions...........................................................................................................................1
1.02. Authorization .......................................................................................................................6
1.03. Prior City Actions ................................................................................................................6
1.04. The 2007 Project ..................................................................................................................6
1.05. Parking Garage Facility ........................................................................................................6
1.06. Estimated Costs of 2007 Project ............................................................................................6
1.07. Authorization and Sale of Series 2007 Bonds; Official Statement ............................................7
1.08. Estimate of Tax Increment ....................................................................................................7
1.09. Findings and Determinations.................................................................................................7
SECTION 2. THE BONDS .................................................................................................................8
2.01. General Title........................................................................................................................8
2.02. General Limitations; Issuable in Series ..................................................................................8
2.03. Terms of Particular Series .....................................................................................................8
2.04. Form and Denominations......................................................................................................9
2.05. Execution, Authentication and Delivery.................................................................................9
2.06. Temporary Bonds.................................................................................................................9
SECTION 3. THE SERIES 2007 BONDS..........................................................................................10
3.01. Denomination, Maturities, Payment and Date of Series 2007 Bonds ......................................10
3.02. System of Registration........................................................................................................11
3.03. Initial Bond Registrar and Paying Agent ..............................................................................13
3.04. Redemption .......................................................................................................................13
3.05. Execution and Delivery of Series 2007 Bonds ......................................................................15
3.06. Form of Series 2007 Bonds .................................................................................................15
3.07. Transcript Certification.......................................................................................................15
3.08. Securities Depository..........................................................................................................15
3.09. Application of Proceeds and Other City Funds .....................................................................17
SECTION 4. ADDITIONAL BONDS ...............................................................................................17
4.01. General Provisions .............................................................................................................17
4.02. Additional Bonds To Pay the Cost of Projects ......................................................................18
4.03. Additional Bonds for Refunding Purposes............................................................................19
4.04. Subordinate Obligations......................................................................................................20
4.05. Notes.................................................................................................................................20
SECTION 5. THE TAX INCREMENT FUNDS.................................................................................20
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5.01. Bond Proceeds and Tax Increment Pledged and Appropriated ...............................................20
5.02. Tax Increment Receipts ......................................................................................................21
5.03. Construction Account .........................................................................................................21
5.04. Bond Account ....................................................................................................................21
5.05. Reserve Account ................................................................................................................22
5.06. General Tax Increment Development Fund ..........................................................................23
5.07. Investments........................................................................................................................24
5.08. Insurance ...........................................................................................................................24
SECTION 6. OTHER COVENANTS OF CITY .................................................................................24
6.01. Punctual Payment...............................................................................................................24
6.02. Accumulation of Claims of Interest .....................................................................................24
6.03. Against Encumbrances .......................................................................................................25
6.04. Management and Operation of Properties.............................................................................25
6.05. Books and Accounts; Financial Statements ..........................................................................25
6.06. Completion of Projects .......................................................................................................25
6.07. Taxation of Leased Property ...............................................................................................25
6.08. Disposition of Property.......................................................................................................25
6.09. Further Assurances .............................................................................................................26
6.10. Amendment of Plan or Ordinance........................................................................................26
6.11. Adjustment of Tax Incremental Base ...................................................................................26
6.12. Federal Tax Exemption.......................................................................................................26
6.13. Pledge of Replacement Revenues ........................................................................................26
6.14. Bondowner Rights..............................................................................................................26
SECTION 7. SUPPLEMENTAL RESOLUTIONS .............................................................................27
7.01. General..............................................................................................................................27
7.02. Consent of Bondowners......................................................................................................27
7.03. Notice ...............................................................................................................................27
7.04. Manner of Consent .............................................................................................................27
SECTION 8. DEFEASANCE............................................................................................................28
8.01. General..............................................................................................................................28
8.02. Maturity ............................................................................................................................28
8.03. Redemption .......................................................................................................................28
8.04. Escrow ..............................................................................................................................28
SECTION 9. INSURANCE POLICY PAYMENT PROVISIONS AND COVENANTS FOR THE
SERIES 2007 BONDS......................................................................................................................28
9.01. Definitions.........................................................................................................................28
9.02. Covenant ...........................................................................................................................28
SECTION 10. TAX COVENANTS ...................................................................................................29
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10.01. Security for the Series 2007 Bonds ....................................................................................29
10.02. General Covenant.............................................................................................................29
10.03. Arbitrage Certification ......................................................................................................29
10.04. Arbitrage Rebate ..............................................................................................................29
10.05. Information Reporting ......................................................................................................29
SECTION 11. CONTINUING DISCLOSURE ...................................................................................29
11.01. Purpose and Beneficiaries .................................................................................................29
11.02. Information To Be Disclosed.............................................................................................30
11.03. Manner of Disclosure .......................................................................................................33
11.04. Term; Amendments; Interpretation ....................................................................................33
11.05. Further Limitation of Liability of City................................................................................34
SECTION 12. REPEAL....................................................................................................................34
SECTION 13. EFFECTIVE DATE....................................................................................................34
Exhibit A—Form of Series 2007 Bonds
Schedule A—[Policy Payment Provisions, Standard Terms and Conditions, and Special Covenants and
Conditions]
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RESOLUTION NO. 4073
RELATING TO TAX INCREMENT URBAN RENEWAL BONDS, SERIES 2007
(DOWNTOWN BOZEMAN IMPROVEMENT DISTRICT); RATIFYING THE SALE AND
PRESCRIBING THE FORM AND TERMS THEREOF AND THE SECURITY THEREFOR
BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, as follows:
Section 1. Definitions, Authorizations and Findings.
1.01. Definitions. The terms defined in this Section 1.01 shall for all purposes of this Resolution
have the meanings herein specified, unless the context clearly otherwise requires:
A. “Resolution” means this Resolution No. 4073 as originally adopted or as it may from time to
time be amended or supplemented pursuant to the applicable provisions hereof.
B. All references in this Resolution to designated sections and other subdivisions are to the
designated sections and other subdivisions of this instrument as originally adopted.
C. The words “herein,” “hereof” and “hereunder” and other words of similar import without
reference to any particular section or subdivision refer to this Resolution as a whole and not to any
particular section or other subdivision unless the context clearly indicates otherwise.
D. The terms defined in this Section include the plural as well as the singular.
E. All accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles applicable to governmental entities.
F. All computations provided herein shall be made in accordance with generally accepted
accounting principles applicable to governmental entities consistently applied.
G. “Or” is not intended to be exclusive, but is intended to contemplate or encompass one, more
or all of the terms or alternatives conjoined.
H. For purposes of amendments to this Resolution, direction of remedies and waivers of default,
Outstanding Notes shall be treated as “Bonds” Outstanding under this Resolution and Owners of such
Notes shall have the rights given Owners of Bonds in such circumstances.
Accountant shall mean a Person engaged in the practice of accounting as a certified public
accountant, whether or not employed by the City.
Act shall mean the Urban Renewal Law, Montana Code Annotated, Title 7, Chapter 15, Parts 42
and 43, as amended or supplemented.
Additional Bonds shall mean any Bonds issued pursuant to Section 4.02 or 4.03.
Bond Account shall mean the account so designated in the Tax Increment Bond Fund.
Bond Counsel shall mean any firm of nationally recognized bond counsel experienced in matters
relating to tax-exempt financing, selected by the City.
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Bond Register shall mean the register maintained for the purpose of registering the ownership,
transfer and exchange of the Bonds of any series.
Bond Registrar shall mean, with respect to the Series 2007 Bonds, [U.S. Bank National
Association, of Seattle, Washington], or any successor appointed pursuant to Section 3.03, and, with
respect to any series of Additional Bonds, the Person or Persons designated by or pursuant to this
Resolution or a Supplemental Resolution to receive and disburse the principal of, premium, if any, and
interest on the Bonds on behalf of the County and to hold and maintain the Bond Register.
Bondowner shall mean the Owner of a Bond.
Bonds shall mean the Series 2007 Bonds and any Additional Bonds.
Business Day shall mean, with respect to the Bonds of any series, any day other than a Saturday,
Sunday or other day on which the Paying Agent and Bond Registrar for such series of Bonds is not open
for business.
City shall mean the City of Bozeman, Montana, or its successors.
City Resolution shall mean a resolution, ordinance or other appropriate enactment by the
Commission certified by the Clerk of the Commission to have been duly adopted and to be in full force
and effect.
Code shall mean the Internal Revenue Code of 1986, as amended.
Construction Account shall mean the account so designated in the Tax Increment Capital Project
Fund.
Commission shall mean the City Commission of the City or any successor governing body
thereof.
District shall mean the Bozeman Downtown Improvement District, or any successor to its
functions.
Financial Consultant shall mean an Independent Person selected by the City, qualified to study
urban renewal areas and projects and tax increment financing plans, and in the judgment of the
Commission, having a favorable repute for skill and experience in such work.
Fiscal Year shall mean the period commencing on the first day of July of any year and ending on
the last day of June of the next calendar year, or any other twelve-month period authorized by law and
specified by the Commission as the City’s fiscal year.
Government Obligations shall mean (a) direct general obligations of, or obligations the prompt
payment of the principal of and the interest on which is fully and unconditionally guaranteed by, the
United States of America, (b) obligations the payment of the principal of, premium, if any, and interest on
which is fully guaranteed as a full faith and credit obligation of the United States of America, and (c)
certificates or other evidence of ownership in principal to be paid or interest to accrue on a pool of
obligations of the type described in the foregoing clause (a) or (b), which obligations are held by a
custodian, any obligations described in the foregoing clause (a) or (b) may be issued or held in book-entry
form on the books of the Department of Treasury of the United States of America.
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Independent shall mean, when used with respect to any specified Person, such a Person who (i) is
in fact independent; (ii) does not have any direct financial interest or any material indirect financial
interest in the City, other than the payment to be received under a contract for services to be performed by
such Person; and (iii) is not connected with the City as an officer, employee, promoter, trustee, partner,
director, underwriter or person performing similar functions. Whenever it is herein provided that any
Independent Person’s opinion or certificate shall be furnished, such Person shall be appointed by the City
and such opinion or certificate shall state that the signer has read this definition and that the signer is
Independent within the meaning hereof.
Interest Account shall mean the subaccount so designated in the Bond Account.
Interest Payment Date shall mean the Stated Maturity of an installment of interest on any of the
Bonds.
Maturity shall mean, when used with respect to any Bond, the date on which the principal of such
Bond becomes due and payable as therein or herein provided, whether at its Stated Maturity or by
declaration of acceleration, redemption or otherwise.
Note shall mean any note issued in anticipation of the issuance of Bonds pursuant to Section 4.05.
Opinion of Counsel shall mean a written opinion of counsel, who may (except as otherwise
expressly provided in this Resolution) be counsel for the City.
Ordinance shall mean Ordinance No. 1409, adopted by the Commission on November 20, 1995,
as amended by Ordinance No. 1628, adopted by the Commission on March 7, 2005, as such may be
further amended or supplemented in accordance with the Act, the Ordinance and this Resolution.
Original Purchaser shall mean, with respect to any series of Bonds, the Person who purchases
such series of Bonds from the City when first issued. The Original Purchaser of the Series 2007 Bonds is
D.A. Davidson & Co., of Great Falls, Montana.
Outstanding shall mean, with reference to Bonds or Notes, as of the date of determination, all
Bonds or Notes theretofore issued and delivered under this Resolution except:
(i) Bonds or Notes theretofore cancelled by the City or delivered to the City
cancelled or for cancellation;
(ii) Bonds and portions of Bonds for whose payment or redemption money or
Government Obligations (as provided in Section 8) shall have been theretofore deposited in trust
for the Owners of such Bonds; provided, however, that if such Bonds are to be redeemed, notice
of such redemption shall have been duly given pursuant to this Resolution or irrevocable
instructions to call such Bonds for redemption at a stated Redemption Date shall have been given
by the City; and
(iii) Bonds or Notes in exchange for or in lieu of which other Bonds or Notes shall
have been issued and delivered pursuant to this Resolution;
provided, however, that in determining whether the Owners of the requisite principal amount of
Outstanding Bonds or Notes have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Bonds or Notes owned by the City shall be disregarded and deemed not to be
Outstanding.
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Owner shall mean, with respect to any Bond, the Person in whose name such Bond is registered
in the Bond Register.
Paying Agent shall mean the Person designated by or pursuant to this Resolution to receive and
disburse the principal of, premium, if any, and interest on the Bonds of a series on behalf of the City.
Person shall mean any individual, corporation, partnership, joint venture, limited liability
company, limited liability partnership, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Plan shall mean the City of Bozeman Downtown Bozeman Improvement District Plan adopted by
the Commission on November 20, 1995, as amended on March 7, 2005, including all further amendments
thereof adopted in accordance with the Act and this Resolution.
Principal and Interest Requirements shall mean, with respect to any Bonds and for any Fiscal
Year or other specified period, the amount required to pay the principal of and interest on such Bonds
during such Fiscal Year or other period, determined on the assumption that each Serial Bond is to be paid
on its Stated Maturity and each Term Bond is to be paid on the Sinking Fund Payment Dates according to
the mandatory redemption requirements established for such Term Bond by the applicable section of this
Resolution or any Supplemental Resolution.
Principal Payment Date shall mean the Stated Maturity of principal of any Serial Bond and the
Sinking Fund Payment Date for any Term Bond.
Project shall mean the 2007 Project and any urban renewal project undertaken in or with respect
to the Urban Renewal Area under the Act, the costs of which are to be paid, in whole or in part, from the
proceeds of Bonds.
Qualified Investments shall mean the investments described as such in Section 5.06.
Redemption Date when used with respect to any Bond to be redeemed shall mean the date on
which it is to be redeemed.
Redemption Price when used with respect to any Bond to be redeemed shall mean the price at
which it is to be redeemed.
Reimbursement Revenues shall mean reimbursements currently being received by the City
pursuant to Senate Bill 184 enacted in the 1999 Legislative Session and codified at Section 15-1-112,
M.C.A., and House Bill 124 enacted in the 2001 Legislative Session and codified at 15-1-120 through 1-
1-122, M.C.A.
Reserve Account shall mean the account so designated in the Tax Increment Bond Fund.
Reserve Requirement shall mean, as of the date of calculation, an amount equal to the lesser of:
(1) the maximum Principal and Interest Requirements on Outstanding Bonds for the then current or any
future calendar year, or (2) ten percent (10%) of the aggregate original principal amount of all series of
Bonds any Bond of which is then Outstanding.
Retail Space shall mean the commercial and retail space portion of the 2007 Project.
Serial Bonds shall mean Bonds which are not Term Bonds.
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Series 2007 Bonds shall mean the City’s Tax Increment Urban Renewal Revenue Bonds, Series
2007 (Downtown Bozeman Improvement District), issued in the original aggregate principal amount of
$[6,260,000].
Sinking Fund Account shall mean the subaccount so designated in the Bond Account.
Sinking Fund Payment Date shall mean a date set forth in any applicable provision of this
Resolution or a Supplemental Resolution for the making of a mandatory principal payment for the
redemption of a Term Bond.
State Entitlements shall mean the system of local government entitlements and block grants
established pursuant to HB 124 enacted by the 2001 Legislature effective, for the most part, July 1, 2001.
Stated Maturity when used with respect to any Bond or any installment of interest thereon shall
mean the date specified in such Bond as the fixed date on which principal of such Bond or such
installment of interest is due and payable.
Subordinate Obligations shall mean any bonds, notes or obligations of the City issued on a
subordinate basis to the Bonds as to the Tax Increment pursuant to Section 4.04.
Supplemental Resolution shall mean any resolution supplemental to this Resolution adopted
pursuant to Section 7.
Tax Increment shall mean the amount received by the City pursuant to the Act and the Plan from
the extension of levies of Taxes (expressed in mills), against the incremental taxable value, as defined in
the Act, of all taxable property within the Urban Renewal Area, and shall include any payments in lieu of
Taxes attributable to the incremental taxable value, State Entitlements, Reimbursement Revenues, and all
payments received by the City designated as replacement revenues for lost Tax Increment, as provided in
Section 6.13.
Tax Increment Capital Project Fund shall mean the fund established pursuant to Section 5.01.
Tax Increment Bond Fund shall mean the fund established pursuant to Section 5.01.
Tax Increment Development Fund shall mean the fund established pursuant to Section 5.01.
Taxes shall mean all taxes levied on an ad valorem basis by a Taxing Body against taxable real
and personal property located within the Urban Renewal Area (exclusive of the six-mill levy for
university purposes levied by the State) and shall include all payments in lieu of taxes received by the
City with respect to property within the Urban Renewal Area.
Taxing Body shall mean the City; Gallatin County, Montana; High School District No. 7, Gallatin
County, Montana; Elementary School District No. 7, Gallatin County, Montana; the State of Montana;
and any other political subdivision or governmental unit which may hereafter levy Taxes against property
within the Urban Renewal Area.
Term Bond shall mean any Bond for the payment of the principal of which mandatory payments
are required by the Resolution or Supplemental Resolution to be made at times and in amounts sufficient
to redeem all or a portion of such Bond prior to its Stated Maturity.
2007 Project shall mean the Project described in Section 1.04.
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Urban Renewal Area shall mean the City of Bozeman Downtown Bozeman Improvement
District, created and established pursuant to the Act and the Ordinance, as such area may be enlarged or
reduced in accordance with the Act and the Ordinance.
1.02. Authorization. Under the provisions of the Act, the City is authorized to create urban
renewal areas, prepare and adopt an urban renewal plan therefor and amendments thereto, undertake
urban renewal projects therein, provide for the segregation and collection of tax increment with respect to
taxes collected in such areas, issue its bonds to pay the costs of such projects and to refund bonds
previously issued under the Act and pledge to the repayment of the bonds the tax increment and other
revenues derived from projects undertaken within the Urban Renewal Area.
1.03. Prior City Actions. Pursuant to the Act, the City has determined that blighted property is
located within the Urban Renewal Area, and that the rehabilitation, redevelopment or a combination
thereof is necessary for the public health, safety, morals or welfare of the residents of the City, and the
Commission has adopted the Plan which provides for the segregation and collection of Tax Increment
with respect to the Urban Renewal Area. The Urban Renewal Area and the Plan providing for the
segregation and collection of the Tax Increment have been duly and validly created and adopted in strict
accordance with applicable provisions of the Act and are in full force and effect.
1.04. The 2007 Project. Pursuant to the Act and Resolution No. 3901 adopted on April 3, 2006,
the City designated and approved public hearings of which notice was duly given, the construction of a
parking garage facility consisting of a three to six floor parking garage to provide up to 400 spaces to be
owned and operated by the City, and a ground floor retail or commercial component of approximately
13,000 square feet that to be sold to and developed by a private party (the “Parking Garage Facility”).
1.05. Parking Garage Facility. As currently designed by Prugh & Lenon Architects of Bozeman,
Montana, the Parking Garage Facility will consist of approximately 159,000 square feet and the retail
space will total approximately 10,070 square feet. The current Parking Garage Facility design plan
includes a basement parking level, a grade parking level, and three additional above-ground parking
levels. The total of 435 parking spaces will be created with the construction of the Parking Garage
Facility. Available parking on the existing surface lots that will be eliminated from construction of the
Parking Garage Facility totals 104 spaces, leaving a net gain of 331 parking spaces to be owned and
operated by the City.
1.06. Estimated Costs of 2007 Project. Based on construction bids received by the city, the total
cost of the Project including costs of insurance, debt service reserve and a reasonable contingency is
estimated to be $12,040,499, and is estimated as follows:
Construction Costs $11,039,159
Costs of Issuance of the Bonds 174,640
Debt Service Reserve Fund 426,700
Equipment/Contingency 400,000
Total Application of Funds $12,040,499
Costs of the 2007 Project in excess the amount of the Series 2007 Bond proceeds available therefor are
expected to be funded from proceeds of a grant from the United States Department of Transportation in
the amount of $4,024,659 as part of the Section 5309 Federal Transit Administration Projects (the
“Grant”), estimated investment earnings of $75,000, proceeds of the sale of the Retail Space in the
amount of $1,245,840, funds of the City on hand and available therefor in the amount of $435,000, and
investment earnings in the amount of $75,000.
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The costs of the Project attributable to the Retail Space is $1,100,000. The costs of the retail space are to
be paid from $1,245,840 to be received from City Center Commerce to acquire the Retail Space
condominium of the Parking Garage Facility.
1.07. Authorization and Sale of Series 2007 Bonds; Official Statement. This Commission
determined by Resolution No. 3901, adopted on April 3, 2006, that it is in the best interests of the City
that the City issue its Series 2007 Bonds, as authorized by Section 7-15-4301(1)(b) of the Act and this
Resolution, in order to provide funds to be used, with the Grant Funds, the Developer Funds and available
funds of the City, to pay the costs of the 2007 Project, to fund a deposit to the Reserve Account and to
pay costs of issuance of the Series 2007 Bonds. Pursuant to a resolution adopted on ___________, 2007,
this Commission, authorized the negotiated sale of the Series 2007 Bonds to D.A. Davidson & Co., of
Great Falls, Montana (the “Original Purchaser”) and authorized the Mayor and the Director of Finance to
enter into a Bond Purchase Agreement with the Original Purchaser (the “Bond Purchase Agreement”).
Pursuant to the Bond Purchase Agreement, dated as of [December 13], 2007, the Original Purchaser
agreed to purchase the Series 2007 Bonds at the purchase price of $_________, subject to the terms and
conditions of the Bond Purchase Agreement and this Resolution. The provisions of this Resolution shall
control any conflict.
The Series 2007 Bonds have been offered for sale by the Original Purchaser thereof by means of
an Official Statement, dated ______, 2007 (the “Official Statement”). The City hereby consents to the
distribution of the Official Statement to prospective purchasers of the Series 2007 Bonds and this
Commission hereby authorizes and directs the Mayor, the Director of Finance, and the Director of the
Downtown Bozeman Improvement District Board to execute such certificates relating to the accuracy and
completeness of the Official Statement as may be appropriate. The determination of the Mayor, the
Director of Finance, and the City Manager that the Preliminary Official Statement was “final” as of its
date for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 is hereby ratified and
confirmed.
1.08. Estimate of Tax Increment. It is estimated that the Tax Increment to be received in each of
the Fiscal Years the Series 2007 Bonds that will be outstanding will be $554,833. Based on the collection
rates for Tax Increment in the Fiscal Year ended June 30, 2007, of 97% it is projected that annual Tax
Increment collections will be at least $540,000. The maximum amount of principal and interest on the
Series 2007 Bonds is $426,700.
1.09. Findings and Determinations. It is hereby found, determined and declared by this
Commission as follows:
(a) the conditions precedent to the issuance of the Series 2007 Bonds under the Act,
the Ordinance and this Resolution have or shall be met prior to the issuance of the Series 2007
Bonds;
(b) the estimated Tax Increment to be received by the City, as set forth in Section 1.07,
and pledged to the payment of the Series 2007 Bonds will be sufficient to pay the principal
thereof and interest thereon when due; and
(c) it is in the best interests of the City to issue and sell the Series 2007 Bonds to
provided funds to pay a portion of the costs of the 2007 Project as provided in this Resolution.
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Section 2. The Bonds.
2.01. General Title. The general title of the Bonds of all series shall be “Tax Increment Urban
Renewal Revenue Bonds,” with appropriate additions for refunding Bonds and to distinguish Bonds of
each series from Bonds of other series.
2.02. General Limitations; Issuable in Series. The aggregate principal amount of Bonds that may
be authenticated and delivered and Outstanding under this Resolution is not limited, except as provided in
Section 4 and except as may be limited by law.
The Bonds may be issued in series as from time to time authorized by the Commission.
The Bonds are special, limited obligations of the City. Principal of, premium, if any, and interest
on the Bonds (except to the extent payable out of proceeds of the Bonds) are payable solely from the Tax
Increment and from other revenues derived by the City from Projects or other sources which may be
pledged to the payment of any series of Bonds. The Bonds shall not pledge the general credit or taxing
powers of the City, and the State of Montana shall not in any event be liable for the payment of the
principal of, premium, if any, or interest on the Bonds or for the performance of any pledge of any kind
whatsoever that may be undertaken by the City. Neither the Bonds nor any of the agreements or
obligations of the City contained herein or therein shall be construed to constitute an indebtedness of the
State of Montana, the City or Gallatin County within the meaning of any constitutional or statutory
provisions whatsoever.
With respect to the Bonds of any particular series, the City may incorporate in or add to the
general title of such Bonds any words, letters or figures designed to distinguish that series.
If any Stated Maturity, Redemption Date or Sinking Fund Payment Date shall be on a day which
is not a Business Day, then payment of principal, premium, if any, or interest due on such day may be
made on the next succeeding Business Day, with the same force and effect as if made on such Stated
Maturity, Redemption Date or Sinking Fund Payment Date (whether or not such next succeeding
Business Day occurs in a succeeding month).
2.03. Terms of Particular Series. Each series of Bonds (except the Series 2007 Bonds, which are
created by Section 3) shall be created by a Supplemental Resolution. The Bonds of each series (other
than the Series 2007 Bonds, as to which specific provision is made in Section 3) shall bear such date or
dates, shall be payable at such place or places, shall have such Stated Maturities and Redemption Dates,
shall bear interest at such rate or rates, from such date or dates, payable in such installments and on such
dates and at such place or places, and may be redeemable at such price or prices and upon such terms (in
addition to the prices and terms herein specified for redemption of all Bonds) as shall be provided in the
Supplemental Resolution creating that series. The City may, at the time of the creation of any series of
Bonds or at any time thereafter, make, and the Bonds of that series may contain, provision for:
A. a sinking, amortization, improvement or other analogous fund;
B. limiting the aggregate principal amount of the Bonds of that series or of all
Additional Bonds thereafter issued;
C. exchanging Bonds of that series, at the option of the Owners thereof, for other
Bonds of the same series of the same aggregate principal amount of a different authorized kind
and/or authorized denomination or denominations; or
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D. the issuance of Bonds not registered as to principal or interest and the exchange of
such Bonds for fully registered Bonds;
all upon such terms as the City may determine. All Bonds of the same series shall be substantially
identical except as to denomination and the differences specified herein or in a Supplemental Resolution
between interest rates, Stated Maturities and redemption provisions.
2.04. Form and Denominations. The form of the Bonds (other than the Series 2007 Bonds, as to
which specific provision is made in Section 3) shall be established by the Supplemental Resolution
creating such series. The Bonds of each series shall be distinguished from the Bonds of other series in
such manner as the Commission may determine.
The Bonds of any series shall be issuable as fully registered Bonds unless the Supplemental
Resolution provides otherwise.
The Bonds of each series shall be issuable in such denominations as shall be provided in the
provisions of the Supplemental Resolution creating such series (other than the Series 2007 Bonds, as to
which specific provision is made in Section 3). In the absence of any such provision with respect to the
Bonds of any particular series, Bonds shall be in the denomination of $5,000 or any integral multiple
thereof, of a single Stated Maturity.
2.05. Execution, Authentication and Delivery. Each Bond shall be executed on behalf of the City
by the manual or facsimile signature of the Mayor and Director of Finance, and attested by the signature
of the Clerk of the Commission (or other officers of the City authorized by City Resolution); provided
that if required by applicable laws, one such signature on each Bond shall be a manual signature. The
seal of the City need not be affixed to or imprinted on any Bond. Any Bond bearing the manual or
facsimile signature of an individual who was at any time an appropriate officer of the City shall be valid
and sufficient for all purposes, regardless whether such individual held such office as of the date of sale,
issue or delivery of such Bond or certificate. No Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit under this Resolution unless and until a certificate of authentication on
such Bond has been duly executed by the manual signature of an authorized representative of the Bond
Registrar. Certificates of authentication on each Bond need not be signed by the same representative.
The executed certificate of authentication on each Bond shall be conclusive evidence that it has been
authenticated and delivered under this Resolution and in accordance with the provisions hereof.
2.06. Temporary Bonds. Pending the preparation of definitive Bonds, the City, if authorized by
law, may execute and deliver, temporary Bonds which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive
Bonds in lieu of which they are issued, in registered form, and with such appropriate insertions,
omissions, substitutions and other variations as the officers of the City executing such Bonds may
determine, as evidenced by their signing of such Bonds.
If temporary Bonds are issued, the City will cause definitive Bonds to be prepared without
unreasonable delay. After the preparation of definitive Bonds, the temporary Bonds shall be
exchangeable for definitive Bonds upon surrender of the temporary Bonds, without charge to the Owner.
Upon surrender for cancellation of any one or more temporary Bonds the City shall execute and deliver in
exchange therefor a like principal amount of definitive Bonds of authorized denominations. Until so
exchanged the temporary Bonds shall in all respects be entitled to the security and benefits under this
Resolution, and interest thereon, when and as payable, shall be paid to the bearers of the temporary Bonds
upon presentation thereof for notation of such payment thereon, unless such temporary Bonds shall be
fully registered Bonds.
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Section 3. The Series 2007 Bonds.
3.01. Denomination, Maturities, Payment and Date of Series 2007 Bonds. The Series 2007
Bonds to be issued hereunder, in the aggregate principal amount of $[6,260,000], shall be denominated
“Tax Increment Urban Renewal Revenue Bonds, Series 2007 (Downtown Bozeman Improvement
District),” shall be issued as fully registered bonds of single Stated Maturities in any denomination which
is an integral multiple of $5,000. [The Stated Maturities of the Series 2007 Serial Bonds shall be on July
1 in the years ______ to _____, and the Stated Maturities of the Series 2007 Term Bonds shall be July 1,
_____, July 1, ____, and July 1, ____.] The Series 2007 Bonds shall bear interest from [December 1],
2007 until paid or discharged at the annual rates set forth opposite the Stated Maturity of each Series 2007
Bond, as follows:
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Year
Principal
Amount
Interest
Rate
Year
Principal
Amount
Interest
Rate
2008 270,000.00 2021 240,000.00
2009 150,000.00 2022 250,000.00
2010 155,000.00 2023 265,000.00
2011 160,000.00 2024 275,000.00
2012 165,000.00 2025 290,000.00
2013 170,000.00 2026 300,000.00
2014 180,000.00 2027 315,000.00
2015 185,000.00 2028 330,000.00
2016 195,000.00 2029 350,000.00
2017 200,000.00 2030 365,000.00
2018 210,000.00 2031 385,000.00
2019 220,000.00 2032 405,000.00
2020 230,000.00
[*Term bond subject to mandatory sinking fund redemption as set forth in Section 3.04(b) below.]
Interest shall be calculated on the basis of a year of 360 days composed of twelve 30-day months.
The Series 2007 Bonds shall be issuable only in fully registered form, and the ownership of the
Series 2007 Bonds shall be transferred only upon the Bond Register of the City hereinafter described.
Principal of and interest on the Series 2007 Bonds are payable in lawful money of the United States of
America. Principal and premium, if any, shall be payable by check or draft drawn on the Paying Agent
hereinafter described upon presentation and surrender of the Series 2007 Bonds at maturity or upon
redemption at the principal office of the Paying Agent. Interest on the Series 2007 Bonds shall be
payable on July 1 in each year, commencing July 1, 2008, by check or draft of the Paying Agent mailed to
the owners of record thereof as such appear in the Bond Register as of the close of business on the
fifteenth day of the immediately preceding month, whether or not such day is a Business Day.
Each Series 2007 Bond shall bear an original issue date as of November 15, 2007. Upon delivery
of the Series 2007 Bonds to the Original Purchaser thereof pursuant to Section 3.05 or upon the delivery
of Series 2007 Bonds upon a transfer or exchange pursuant to Section 3.02, the Bond Registrar shall date
each such Series 2007 Bond so delivered as of the date of its authentication.
3.02. System of Registration. The City shall appoint, and shall maintain, a bond registrar,
transfer agent and paying agent for the Series 2007 Bonds (the Bond Registrar). This Section 3.02 shall
establish a system of registration for the Series 2007 Bonds as defined in the Model Public Obligations
Registration Act of Montana, and shall govern in the event provisions of the Resolution relating to
registration, transfer or exchange of Series 2007 Bonds are inconsistent herewith, except as otherwise
provided in Section 3.08. The effect of registration and the rights and duties of the City and the Bond
Registrar with respect thereto shall be as follows:
(a) Bond Register. The Bond Registrar shall keep at its principal office a Bond
Register in which the Bond Registrar shall provide for the registration of ownership of Series
2007 Bonds and the registration of transfers and exchanges thereof.
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(b) Transfer. Upon surrender for transfer of any Series 2007 Bond duly endorsed by
the registered owner thereof or accompanied by a written instrument of transfer, in form
satisfactory to the Bond Registrar, duly executed by the registered owner thereof or by an
attorney duly authorized by the registered owner in writing, the Bond Registrar shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more
new Series 2007 Bonds of the same series and a like aggregate principal amount, interest rate
and maturity as requested by the transferor. The Bond Registrar may, however, close the books
for registration of the transfer of any Series 2007 Bond or portion thereof selected or called for
redemption.
(c) Exchange. Whenever any Series 2007 Bond is surrendered by the registered owner
for exchange, the Bond Registrar shall authenticate and deliver one or more new Series 2007
Bonds of the same series and a like aggregate principal amount, interest rate and maturity, as
requested by the registered owner or the owner’s attorney in writing.
(d) Cancellation. All Series 2007 Bonds surrendered upon any transfer or exchange
shall be promptly cancelled by the Bond Registrar and thereafter disposed of as directed by the
City.
(e) Improper or Unauthorized Transfer. When any Series 2007 Bond is presented to
the Bond Registrar for transfer, the Bond Registrar may refuse to transfer the same until it is
satisfied that the endorsement on such Series 2007 Bond or separate instrument of transfer is
legally authorized. The Bond Registrar shall incur no liability for the refusal, in good faith, to
make transfers which it, in its judgment, deems improper or unauthorized.
(f) Persons Deemed Owners. The City and the Bond Registrar may treat the Person in
whose name any Series 2007 Bond is at any time registered in the Bond Register as the
absolute owner of such Series 2007 Bond, whether such Series 2007 Bond shall be overdue or
not, for the purpose of receiving payment of, or on account of, the principal of, premium, if
any, and interest on such Series 2007 Bond and for all other purposes, and all such payments so
made to any such registered owner or upon the owner’s order shall be valid and effectual to
satisfy and discharge the liability of the City upon such Series 2007 Bond to the extent of the
sum or sums so paid.
(g) Taxes, Fees and Charges. For every transfer or exchange of Series 2007 Bonds
(except upon a partial redemption of a Series 2007 Bond pursuant to Section 3.04), the Bond
Registrar may impose a charge upon the owner thereof sufficient to reimburse the Bond
Registrar for any tax, fee or other governmental charge required to be paid with respect to such
transfer or exchange.
(h) Mutilated, Lost, Stolen or Destroyed Series 2007 Bonds. In case any Series 2007
Bond shall become mutilated or be lost, stolen or destroyed, the Bond Registrar shall deliver a
new Series 2007 Bond of like amount, number, maturity date and tenor in exchange and
substitution for and upon cancellation of any such mutilated Series 2007 Bond or in lieu of and
in substitution for any such Series 2007 Bond lost, stolen or destroyed, upon the payment of the
reasonable expenses and charges of the Bond Registrar in connection therewith; and, in the case
of a Series 2007 Bond lost, stolen or destroyed, upon filing with the Bond Registrar of evidence
satisfactory to it that such Series 2007 Bond was lost, stolen or destroyed, and of the ownership
thereof, and upon furnishing to the Bond Registrar of an appropriate bond or indemnity in form,
substance and amount satisfactory to it, in which both the City and the Bond Registrar shall be
named as obligees. All Series 2007 Bonds so surrendered to the Bond Registrar shall be
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cancelled by it and evidence of such cancellation shall be given to the City. If the mutilated,
lost, stolen or destroyed Series 2007 Bond has already matured or such Series 2007 Bond has
been called for redemption in accordance with its terms, it shall not be necessary to issue a new
Series 2007 Bond prior to payment.
3.03. Initial Bond Registrar and Paying Agent. The City hereby appoints U. S. Bank National
Association, of Seattle, Washington, as the initial Bond Registrar and the Paying Agent for the Series
2007 Bonds. The City reserves the right to appoint a successor Bond Registrar or Paying Agent, and the
City agrees to pay the reasonable and customary charges of the Bond Registrar and the Paying Agent for
the services performed. Upon merger or consolidation of a bank or trust company that is acting as the
Bond Registrar or the Paying Agent, if the resulting corporation is a bank or trust company authorized by
law to conduct such business, such corporation shall be authorized to act as successor Bond Registrar or
Paying Agent, as the case may be. The City reserves the right to remove any Bond Registrar or Paying
Agent upon 30 days’ notice and upon the appointment of a successor Bond Registrar or Paying Agent, in
which event the predecessor Bond Registrar or Paying Agent shall deliver all cash and Series 2007 Bonds
in its possession as Bond Registrar or Paying Agent to the successor Bond Registrar or Paying Agent and
shall deliver the Bond Register to the successor Bond Registrar. On or before each principal or interest
due date, without further order of this Commission, the Director of Finance shall transmit to the Bond
Registrar, solely from money in the Bond Account of the Tax Increment Fund available therefor, money
sufficient for the payment of all principal, premium, if any, and interest then due on the Series 2007
Bonds.
3.04. Redemption.
(a) Optional Redemption of Series 2007 Bonds. The Bonds with stated maturities before July 1,
2020 shall not be subject to optional redemption prior to maturity, but Bonds having stated maturity dates
on or after July 1, 2020, [in addition to being subject to mandatory sinking fund redemption,] are each
subject to redemption and prepayment at the option of the City, in whole or in part, and if in part in
principal amounts and from Stated Maturities selected by the City, and within a Stated Maturity in $5,000
principal amounts selected by lot or such other manner as determined by the Paying Agent, on July 1,
2020 and any date thereafter, at a price equal to the principal amount thereof to be redeemed plus interest
accrued to the redemption date, without premium.
[(b) Mandatory Sinking Fund Redemption of Series 2007 Term Bonds. The Series 2007 Bonds
having Stated Maturities in ____, _____, and _____ are subject to mandatory sinking fund redemption on
July 1 in the respective years and the respective principal amounts set forth below, in $5,000 principal
amounts selected by the Bond Registrar, by lot or other manner it deems fair, at a redemption price equal
to the principal amount thereof to be redeemed plus interest accrued thereon to the redemption date:]
Stated Maturity
of
Term Bonds
(July 1)
Sinking Fund
Payment Date
(July 1)
Principal Amount
on Sinking Fund
Payment Date
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Stated Maturity
of
Term Bonds
(July 1)
Sinking Fund
Payment Date
(July 1)
Principal Amount
on Sinking Fund
Payment Date
[The Bond Registrar shall select the Series 2007 Term Bonds to be redeemed on each Sinking
Fund Payment Date in accordance with Section 3.02, and the Series 2007 Bonds selected by the Bond
Registrar shall become due and payable on such date. The City may reduce the amount of any Mandatory
Sinking Fund Payment payable on any Sinking Fund Payment Date or Dates by an amount equal to the
principal amount of Outstanding Series 2007 Term Bonds then to be redeemed that shall be surrendered
uncancelled by the City to the Bond Registrar; provided that the City shall have surrendered such Series
2007 Term Bonds to the Bond Registrar not less than forty-five days before the first such Sinking Fund
Payment Date, together with a City Certificate stating its election to use such Series 2007 Term Bonds for
such purpose and designating the Sinking Fund Payment Date or Dates as to which such credit is to be
applied (if no such designation is made, such credits shall be applied in inverse order of Sinking Fund
Payment Dates). In such case, the City may reduce the amount of Series 2007 Bonds to be redeemed on
the Sinking Fund Payment Date or Dates so determined by the principal amount of Series 2007 Term
Bonds so surrendered by the City.]
[If Series 2007 Term Bonds are redeemed at the option of the City pursuant to Subsection (a) of
this Section 3.02, the Series 2007 Bonds so optionally redeemed may, at the option of the City, be
applied as a credit against any subsequent Mandatory Sinking Fund Payment or Payments with respect to
Series 2007 Term Bonds, such credit to be equal to the principal amount of such Series 2007 Term Bonds
redeemed pursuant to Subsection (a) of this Section 3.02; provided that the City shall have delivered to
the Bond Registrar not less than forty-five (45) days before the first such Sinking Fund Payment Date a
City Certificate stating its election to apply such Series 2007 Term Bonds as such a credit and designating
the Sinking Fund Payment Date or Dates as to which such credit is to be applied (if no such designation is
made, such credits shall be applied in inverse order of Sinking Fund Payment Dates). In such case, the
City may reduce the amount of Series 2007 Bonds to be redeemed on the Sinking Fund Payment Date or
Dates so determined by the principal amount of Series 2007 Bonds of the same Stated Maturity so
redeemed pursuant to Subsection (b) of this Section 3.02.]
[Any credit given to Mandatory Sinking Fund Payments pursuant to this Section 3.02(b) shall not
affect any other Mandatory Sinking Fund Payments, which shall remain payable as otherwise provided in
this Section 3.02(c), unless and until another credit is given in accordance with the provisions hereof.]
(c) Notice of Redemption. The Director of Finance shall cause notice of redemption, stating the
series, the amount, the serial numbers, the maturities, the CUSIP numbers and the interest rates of the
Series 2007 Bonds or portions thereof called for redemption, to be mailed to the Bond Registrar, the
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Paying Agent and to the registered owner of each Series 2007 Bond to be redeemed at his address shown
in the Bond Register not less than 30 days before the redemption date therefor; provided that any defect in
or failure to give such mailed notice shall not affect the validity of proceedings for the redemption of any
Series 2007 Bond not affected thereby. Notice of the call of any Series 2007 Bond for redemption having
been mailed as herein provided, and funds sufficient for the payment thereof with accrued interest having
been deposited with the Paying Agent on or before the redemption date, interest on such Series 2007
Bond shall cease to accrue on said date, and the Owner shall have no further rights with respect thereto or
under the Resolution except to receive the redemption price so deposited.
In addition to the notice prescribed by the preceding paragraph, the Director of Finance shall also
give, or cause the Bond Registrar to give, notice of the redemption of any Series 2007 Bond or Bonds or
portions thereof at least 35 days before the Redemption Date by certified mail, telecopy or express
delivery service to the Original Purchaser of the Series 2007 Bonds and all registered securities
depositories then in the business of holding substantial amounts of obligations of the character of the
Series 2007 Bonds (such depositories now being The Depository Trust Company, of New York, New
York) and the one or more national information services that disseminate information regarding
municipal bond redemptions; provided that any defect in or any failure to give any notice of redemption
prescribed by this paragraph shall not affect the validity of the proceedings for the redemption of any
Series 2007 Bond or portion thereof.
3.05. Execution and Delivery of Series 2007 Bonds. The Series 2007 Bonds shall be forthwith
prepared for execution under the direction of the Clerk of the Commission, at the expense of the City, and
shall be executed on behalf of the City and authenticated as provided in Section 2.05. When the Series
2007 Bonds have been fully executed and authenticated, they shall be delivered by the Bond Registrar to
the Original Purchaser thereof upon payment of the purchase price in accordance with the contract of sale
heretofore made and executed, and the Original Purchaser thereof shall not be obligated to see to the
application of the purchase price.
3.06. Form of Series 2007 Bonds. The Series 2007 Bonds shall be in substantially the form set
forth in Exhibit B hereto (which is hereby incorporated herein and made a part hereof), with such
appropriate variations, omissions and insertions as are permitted or required by this Resolution.
3.07. Transcript Certification. The officers of the City are directed to furnish to the Original
Purchaser of the Series 2007 Bonds and to Bond Counsel certified copies of all proceedings and
information in their official records relevant to the authorization, sale and issuance of the Series 2007
Bonds, and such certificates and affidavits as to other matters appearing in their official records or
otherwise known to them as may be reasonably required to evidence the validity and security of the Series
2007 Bonds, and all such certified copies, certificates and affidavits, including any heretofore furnished,
shall constitute representations and recitals of the City as to the correctness of all facts stated therein and
the completion of all proceedings stated therein to have been taken.
3.08. Securities Depository.
(a) For purposes of this Section 3.08, the following terms shall have the following meanings:
“Beneficial Owner” shall mean, whenever used with respect to a Series 2007 Bond, the
Person in whose name such Series 2007 Bond is recorded as the beneficial owner of such Series
2007 Bond by a Participant on the records of such Participant, or such Person’s subrogee.
“CEDE & Co.” shall mean CEDE & CO., the nominee of DTC, and any successor
nominee of DTC with respect to the Series 2007 Bonds.
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“DTC” shall mean The Depository Trust Company, of New York, New York.
“Participant” shall mean any broker-dealer, bank or other financial institution for which
DTC holds Series 2007 Bonds as securities depository.
“Representation Letter” shall mean the Blanket Issuer Letter of Representation
executed by the City to DTC pursuant to which the City agrees to comply with DTC’s
Operational Arrangements.
(b) The Series 2007 Bonds shall be initially issued as separately authenticated fully registered
bonds, and one Series 2007 Bond shall be issued in the principal amount of each Stated Maturity of the
Series 2007 Bonds. Upon initial issuance, the ownership of such Series 2007 Bonds shall be registered in
the Bond Register in the name of Cede & Co., as nominee of DTC. The Bond Registrar, Paying Agent
and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Series 2007 Bonds
registered in its name for the purposes of payment of the principal of or interest on the Series 2007 Bonds,
selecting the Series 2007 Bonds or portions thereof to be redeemed, if any, giving any notice permitted or
required to be given to registered owners of Series 2007 Bonds under this resolution, registering the
transfer of Series 2007 Bonds, and for all other purposes whatsoever; and neither the Bond Registrar,
Paying Agent nor the City shall be affected by any notice to the contrary. Neither the Bond Registrar,
Paying Agent nor the City shall have any responsibility or obligation to any Participant, any Person
claiming a beneficial ownership interest in the Series 2007 Bonds under or through DTC or any
Participant, or any other Person which is not shown on the Bond Register as being a registered owner of
any Series 2007 Bonds, with respect to the accuracy of any records maintained by DTC or any
Participant, with respect to the payment by DTC or any Participant of any amount with respect to the
principal of or interest on the Series 2007 Bonds, with respect to any notice which is permitted or required
to be given to owners of Series 2007 Bonds under this resolution, with respect to the selection by DTC or
any Participant of any Person to receive payment in the event of a partial redemption of the Series 2007
Bonds, or with respect to any consent given or other action taken by DTC as registered owner of the
Series 2007 Bonds. So long as any Series 2007 Bond is registered in the name of Cede & Co., as
nominee of DTC, the Paying Agent shall pay all principal of and interest on such Series 2007 Bond, and
shall give all notices with respect to such Series 2007 Bond, only to Cede & Co. in accordance with
DTC’s Operational Arrangements, and all such payments shall be valid and effective to fully satisfy and
discharge the City’s obligations with respect to the principal of and interest on the Series 2007 Bonds to
the extent of the sum or sums so paid. No Person other than DTC shall receive an authenticated Series
2007 Bond for each separate stated maturity evidencing the obligation of the City to make payments of
principal and interest. Upon delivery by DTC to the Bond Registrar of written notice to the effect that
DTC has determined to substitute a new nominee in place of Cede & Co., the Series 2007 Bonds will be
transferable to such new nominee in accordance with paragraph (d) hereof.
(c) In the event the City determines to discontinue the book-entry only system, the City may
notify DTC and the Bond Registrar and Paying Agent, whereupon DTC shall notify the Participants of the
availability through DTC of Series 2007 Bonds in the form of certificates. In such event, the Series 2007
Bonds will be transferable in accordance with paragraph (d) hereof. DTC may determine to discontinue
providing its services with respect to the Series 2007 Bonds at any time by giving notice to the City, the
Paying Agent and the Bond Registrar and discharging its responsibilities with respect thereto under
applicable law. In such event the Series 2007 Bonds will be transferable in accordance with paragraph (d)
hereof.
(d) In the event that any transfer or exchange of Series 2007 Bonds is permitted under paragraph
(b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt by the Bond Registrar of
the Series 2007 Bonds to be transferred or exchanged and appropriate instruments of transfer to the
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permitted transferee in accordance with the provisions of this resolution. In the event Series 2007 Bonds
in the form of certificates are issued to owners other than Cede & Co., its successor as nominee for DTC
as owner of all the Series 2007 Bonds, or another securities depository as owner of all the Series 2007
Bonds, the provisions of this resolution shall also apply to all matters relating thereto, including, without
limitation, the printing of such Series 2007 Bonds in the form of bond certificates and the method of
payment of principal of and interest on such Series 2007 Bonds in the form of bond certificates.
3.09. Application of Proceeds and Other City Funds. The City shall deposit the proceeds of the
sale of the Series 2007 Bonds (including accrued interest thereon from the date from which interest is to
be paid thereon to the date of delivery to the Original Purchaser thereof) as follows:
(a) Deposit to the credit of the Interest Account in the Tax Increment Fund the amount
of interest accrued on the Series 2007 Bonds from [December 1], 2007 to the date of delivery
thereof;
(b) Deposit a sufficient amount to the Reserve Account as to cause the balance therein
to equal the Reserve Requirement in respect of the Series 2007 Bonds; and
(c) Deposit the balance of the proceeds of the Series 2007 Bonds in the Acquisition
and Construction Account in the Tax Increment Fund to be used to pay costs of the 2007 Project
and to pay costs of issuance of the Series 2007 Bonds.
Section 4. Additional Bonds.
4.01. General Provisions. In addition to the Series 2007 Bonds, whose issuance and delivery is
provided for in Section 3, Additional Bonds may at any time and from time to time be issued, sold and
delivered by the City but only upon compliance with the conditions of, Sections 4.02 and 4.03, whichever
may be applicable, and upon filing with the Clerk of the Commission the following:
A. A Supplemental Resolution authorizing the issuance and creating the designated
series of Additional Bonds and the sale thereof to the Original Purchaser or Purchasers named
therein for the purchase price set forth therein;
B. A certificate executed by the Mayor and the Director of Finance stating that upon
the issuance of the Additional Bonds, no default hereunder has occurred and is continuing
which would not be cured upon the issuance of the Additional Bonds and application of the
proceeds thereof.
C. An Opinion of Bond Counsel (who may rely on factual representations of the City
and which opinion may be qualified by customary qualifications and exceptions) stating that:
(1) all conditions precedent provided for in this Resolution relating to the
issuance and delivery of such Additional Bonds have been complied with, including
any conditions precedent specified in this Section;
(2) the series of Additional Bonds when issued and delivered by the City will be
valid and binding special, limited obligations of the City in accordance with their terms
and entitled to the benefits of and secured by this Resolution; and
(3) the issuance of such Additional Bonds will not affect the tax-exempt nature
for federal income tax purposes of the Bonds then Outstanding.
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No Additional Bonds shall be issued unless, immediately after the issuance thereof and the
application of the proceeds thereof the balance on hand in the Reserve Account will be at least equal to
the Reserve Requirement after giving effect to the issuance of such Additional Bonds.
Any Additional Bonds shall be dated, shall bear interest at a rate or rates not exceeding the
maximum rate, if any, permitted by law, shall have Stated Maturities, and may be subject to redemption at
such times and prices and on such terms and conditions, all as may be provided by the Supplemental
Resolution authorizing their issuance. All Additional Bonds issued pursuant to Sections 4.02 and 4.03
shall be payable and secured ratably and equally and on a parity with the Series 2007 Bonds and any
Additional Bonds theretofore issued, entitled to the same benefits and security of this Resolution.
4.02. Additional Bonds To Pay the Cost of Projects. Additional Bonds may be issued under this
Section 4.02, at one time or from time to time, subject to the conditions provided in Section 4.01 and this
Section 4.02, for the purpose of providing funds, in an aggregate amount sufficient with any other funds
available and committed therefor to pay the cost of one or more Projects.
Before any Additional Bonds shall be issued under this Section 4.02, the City shall adopt a
Supplemental Resolution authorizing the issuance of such series of Additional Bonds, fixing the amount
and the details thereof, describing in brief and general terms the Projects to be acquired, constructed,
altered or improved and estimating the costs thereof.
In addition, prior to the execution and delivery of any series of Additional Bonds under this
Section 4.02, there shall be filed with the Clerk of the Commission:
(a) A certificate executed by the Mayor and the Director of Finance stating: (i) the
estimated cost of the Projects being financed thereby, including an allowance for contingencies
and all fees, expenses and financing costs, (ii) the amount, if any, which will be required to be
deposited to the credit of the Reserve Account in connection with the issuance of the Additional
Bonds, (iii) the amount, if any, which will be required to be credited to the Bond Account to
pay interest on the Additional Bonds prior to collection of sufficient Tax Increment available
therefor, (iv) the amount of Tax Increment received by the City in the last completed Fiscal
Year, (v) the amount of the maximum Principal and Interest Requirements on the Outstanding
Bonds and the Additional Bonds proposed to be issued for any future Fiscal Year during the
term of the Outstanding Bonds, and (vi) that the principal amount of such Additional Bonds is
sufficient to provide for the payment of all estimated costs of Projects to be financed thereby
and credits to the Reserve Account and Bond Account as set forth above; and
(b) a certificate executed by the Mayor and the Director of Finance stating that:
(i) the Tax Increment received by the City in the last completed Fiscal Year
was equal to at least 130% of the maximum Principal and Interest Requirements for
any future calendar year (during the term of the Outstanding Bonds) with respect to
Outstanding Bonds and the Additional Bonds proposed to be issued; and
(ii) the Tax Increment received by the City in the last completed Fiscal Year,
adjusted as provided in this Section 4.02(b)(ii), was, and the Tax Increment estimated
to be received in the next succeeding three Fiscal Years, adjusted as provided in
Section 4.02(c), is estimated to be, equal to at least 130% of the maximum Principal
and Interest Requirements for any future calendar year (during the term of the
Outstanding Bonds) with respect to the Outstanding Bonds and the Additional Bonds
proposed to be issued. For this purpose, the Tax Increment received by the City in the
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last completed Fiscal Year may be adjusted by adding any increase in Tax Increment
which would have resulted from applying the aggregate tax rates of the Taxing Bodies
effective for the last completed Fiscal Year to the value, as determined by certification
of the Montana Department of Revenue, of any projects which have been completed in
the Urban Renewal Area before the date of issuance of the Additional Bonds and the
taxable values of which as so completed are not included in the “actual taxable value”
of the Urban Renewal Area (within the meaning of the Act).
The Commission shall approve and confirm the findings and estimates set forth in the above-
described certificates in the Supplemental Resolution authorizing the issuance of the Additional Bonds.
(c) For purposes of the foregoing paragraph (b), in estimating the Tax Increment to be
received in any future Fiscal Year, the Mayor and the Director of Finance shall assume that: (1)
90% of the Taxes levied in the Urban Renewal Area will be collected in any Fiscal Year, (2) no
Taxes delinquent in a prior Fiscal Year will be collected in any subsequent Fiscal Year, and (3)
there will be no increase in the Tax Increment to be received in any future Fiscal Year resulting
from projected inflation in property values or projected increases in Taxes.
4.03. Additional Bonds for Refunding Purposes. Additional Bonds may be issued at any time or
from time to time, subject to the conditions hereinafter stated in this Section 4.03, for the purpose of
providing funds, with any other funds available and committed therefor, for paying at, or redeeming prior
to, their Stated Maturities any Outstanding Bonds, including the payment of any redemption premium
thereon and interest which will accrue on such Bonds to any Redemption Date or the Stated Maturities
thereof, and any expenses in connection with such financing. Such Additional Bonds shall be designated
substantially as the Bonds to be refunded, with the addition of the term “Refunding”.
Prior to authentication and delivery of any Additional Bonds under this Section 4.03 there shall
be filed with the Clerk of the Commission such documents as shall be required to show that provisions
have been duly made in accordance with the provisions of this Resolution for the redemption of all of the
Outstanding Bonds to be refunded.
The City shall not deliver any Additional Bonds under this Section 4.03 unless there shall be filed
with the Clerk of the Commission:
(i) a report of an Independent Accountant to the effect that (a) the proceeds (excluding
accrued interest but including any premium) of the Additional Bonds plus any moneys to be
withdrawn from the Bond Account for such purpose, together with any other funds deposited
for such purpose, will be not less than an amount sufficient to pay the principal of and
redemption premium, if any, on the Outstanding Bonds to be refunded and the interest which
will become due and payable on and prior to the Redemption Date or Stated Maturities of the
Bonds to be refunded, or (b) from such proceeds there shall be deposited in trust, Government
Obligations which do not permit the redemption thereof at the option of the issuer, the principal
of and the interest on which when due and payable (or redeemable at the option of the holder
thereof) will provide, together with any other moneys which shall have been deposited in trust
irrevocably for such purpose, but without reinvestment, sufficient moneys to pay such
principal, redemption premium and interest;
(ii) an opinion of Bond Counsel to the effect that the issuance of such Additional
Bonds will not prejudice the exclusion from gross income for purposes of federal income
taxation of the interest accruing on any of the Outstanding Bonds; and
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(iii) if Additional Bonds are issued to refund Subordinate Obligations issued pursuant
to Section 4.04, the conditions for the issuance of Additional Bonds pursuant to Section 4.02 be
satisfied.
4.04. Subordinate Obligations. Except as provided in Sections 4.01 to 4.03, no bonds, notes or
other evidence of indebtedness of the City will be issued under or secured by the provisions of this
Resolution, and no bonds, notes or other evidence of indebtedness will be made payable from the Bond
Account, unless the pledge and appropriation of such Tax Increment for the payment and security of such
bonds, notes or other evidence of indebtedness is expressly subordinated to the pledge and appropriation
made for the benefit and security of the Series 2007 Bonds and all Additional Bonds issued and to be
issued under and secured by this Resolution in accordance with Sections 4.01 to 4.03. In the event of the
issuance of any such Subordinate Obligations, the principal, interest and redemption premiums thereon
will be made payable from one or more additional accounts created within the Tax Increment Funds for
that purpose, and the balance of funds at any time on hand in any such accounts shall be available and
shall be transferred whenever needed to meet the current requirements of the Bond Account and Reserve
Account set forth in Sections 5.03 and 5.04.
4.05. Notes. When and if the City has established that all of the conditions precedent to the
issuance of a series of Additional Bonds have been satisfied (assuming a specified principal amount,
maturity schedule and interest rate to be borne by such Additional Bonds), the City may, after authorizing
the issuance of such series of Additional Bonds but in lieu of issuing such series of Additional Bonds,
issue a series of special, limited Notes, denominated as “Bond Anticipation Notes,” which shall have a
Stated Maturity not more than three years from their date of original issue and which shall be secured by a
lien on the Tax Increment subordinate to all Outstanding Bonds except that at their Stated Maturity they
shall be paid as to principal and interest to the extent required from the proceeds of the series of
Additional Bonds in anticipation of which they were issued or, if for any reason the City has been unable
to sell and issue that series of Additional Bonds, then, at the option of the holders of such Notes, Bonds of
such series of Additional Bonds shall be issued to the Holders of the Notes, in exchange therefor, on a
par-for-par basis, without the necessity for meeting the other requirements of this Section 4 in respect of
such Additional Bonds.
Section 5. The Tax Increment Funds.
5.01. Bond Proceeds and Tax Increment Pledged and Appropriated. Within the City’s
Downtown Bozeman Improvement District Tax Increment Fund, the City hereby establishes on its books
and records three funds designated as the Tax Increment Capital Project Fund, the Tax Increment Bond
Fund and the Tax Increment Development Fund (collectively, the Tax Increment Funds) related to the
Series 2007 Bonds and any Additional Parity Bonds (the Bonds). The Tax Increment Funds shall be
maintained as separate and special bookkeeping accounts on the official books and records of the City
until all Bonds have been fully paid, or the City’s obligation with reference to all Bonds has been
discharged as provided in this Resolution. All proceeds of Bonds and all other funds hereafter received or
appropriated for purposes of the Projects are appropriated to the Tax Increment Funds. All Tax Increment
is irrevocably pledged and appropriated and shall be credited as received to the Tax Increment Bond
Fund. The Bonds shall be secured by a first pledge of and lien on all of the Tax Increment and of all other
moneys from time to time in the Tax Increment Funds in the manner and to the extent provided in this
Section 5. The City shall not issue any obligation or security superior to or on a parity with the Series
2007 Bonds, payable or secured, in whole or in part, from or by the Tax Increment other than Additional
Bonds issued pursuant to Section 4, until all of the Series 2007 Bonds have been paid or discharged as
provided herein. The Tax Increment Funds shall be subdivided into separate accounts as designated and
described in Sections 5.03 to 5.06.
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5.02. Tax Increment Receipts. All Tax Increment received by the City and credited to the Tax
Increment Bond Fund, as required in Section 5.01, shall be credited as received as follows: (a) first, to
the Interest Account, until the balance on hand in the Interest Account is at least equal to all interest on
Bonds due and payable from the Interest Account within the next six full calendar months; (b) second,
after any credit to the Interest Account required by the preceding clause, to the Sinking Fund Account,
until the balance on hand in the Sinking Fund Account is at least equal to all principal of and premium, if
any, on Outstanding Bonds due and payable from the Sinking Fund Account (including amounts due and
payable on a Sinking Fund Payment Date) within the next twelve full calendar months; (c) third, after any
credit to the Interest Account or the Sinking Fund Account required by the preceding clauses, to the
Reserve Account until the balance on hand in the Reserve Account is equal to the Reserve Requirement;
and (d) fourth, after any credit to the Interest Account, the Sinking Fund Account or the Reserve Account
required by the preceding clauses, to the Tax Increment Development Fund.
5.03. Construction Account. For each Project there shall be a separate Construction Account
within the Tax Increment Capital Project Fund, to be used only to pay allowed costs as incurred, which
under accepted accounting principles are costs of the particular Project, including but not limited to
payments due for work and materials performed and delivered under construction contracts, architectural,
engineering, inspection, supervision, fiscal and legal expenses, the cost of lands and easements, and other
interests in land, interest accruing on Bonds during the period of construction of a Project financed
thereby and for a period of time thereafter authorized by the Act and deemed necessary by the
Commission, if and to the extent that the Interest Account is not sufficient for payment of such interest,
reimbursement of any advances made from other City funds, and all other expenses incurred in
connection with the acquisition, construction and financing of the Project. To the Construction Account
shall be credited as received all proceeds of Bonds issued to finance such Project, except amounts
otherwise appropriated in Section 3.09 or in a Supplemental Resolution or received from Additional
Bonds issued to refund Outstanding Bonds pursuant to Section 4 and all other funds appropriated by the
City for the Project, and all income received from the investment of the Construction Account. Upon
completion of any Project and payment of the cost thereof, the City may transfer any money then
remaining in the Construction Account for that Project, if permitted by the Act and if such transfer will
not adversely affect the tax exemption of interest on the series of Bonds that financed the Project, to the
Tax Increment Development Fund. Money in the Construction Account shall be transferred as needed to
the Interest Account to pay interest on Bonds payable therefrom to the extent moneys therein are
insufficient.
5.04. Bond Account.
(a) General. The Bond Account is hereby established as a special account within the Tax
Increment Bond Fund. There are hereby established within the Bond Account two separate subaccounts,
designated as the Interest Account and the Sinking Fund Account.
(b) Interest Account. There shall be credited to the Interest Account the following amounts: (i)
the amount specified in clause (a) of Section 3.09; (ii) any amount specified in any Supplemental
Resolution to be credited to the Interest Account; (iii) from the Tax Increment as received by the City, the
amount specified in clause (a) of Section 5.02; and (iv) any other amounts appropriated from time to time
to the Interest Account.
On or before each Interest Payment Date, the City shall withdraw from the Interest Account an
amount sufficient to pay the interest coming due on the Bonds on such Interest Payment Date, and shall
use such amount to pay, or make provision with the Paying Agent for the payment of, interest on the
Bonds on such Interest Payment Date.
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If on any Interest Payment Date the balance in the Interest Account is not sufficient to pay the
total amount of interest due on such Interest Payment Date, the City shall transfer any money then on
hand in the Tax Increment Development Fund, the Construction Account, the Reserve Account or the
Sinking Fund Account, in the order listed and in an amount equal to such deficiency, to the Interest
Account.
All income derived from the investment of amounts in the Interest Account shall be credited as
received to the Interest Account.
(c) Sinking Fund Account. There shall be credited to the Sinking Fund Account the following
amounts: (i) any amount specified in a Supplemental Resolution to be credited to the Sinking Fund
Account; (ii) from the Tax Increment as received by the City, the amount specified in clause (b) of
Section 5.02; investment income from the Reserve Account as provided in Section 5.05; and (iv) any
other amounts appropriated from time to time to the Sinking Fund Account.
Amounts on hand in the Sinking Fund Account shall be used on any Interest Payment Date to
make up a deficiency in the Interest Account, if and to the extent required by the third subparagraph of
paragraph (b) of this Section.
On or before each Principal Payment Date, the City shall withdraw from the Sinking Fund
Account an amount sufficient to pay the principal due on the Bonds on such Principal Payment Date, and
shall use such amount to pay, or make provision with the Paying Agent for the payment of, principal of
the Bonds on such Principal Payment Date, whether a Stated Maturity or a Sinking Fund Payment Date.
If on any Principal Payment Date the balance in the Sinking Fund Account is not sufficient to pay
the total amount of principal due on such Principal Payment Date, the City shall transfer any money then
on hand in the Tax Increment Development Fund, Construction Account or Reserve Account, in the order
listed and in an amount equal to such deficiency, to the Sinking Fund Account.
5.05. Reserve Account. The Reserve Account is hereby established as a special account within
the Tax Increment Bond Fund. There shall be credited to the Reserve Account the following amounts: (i)
$_________.00 from proceeds of the Series 2007 Bonds, as provided in Section 3.09; (ii) from the Tax
Increment as received by the City, the amount specified in clause (c) of Section 5.02; (iii) any amount
specified in any Supplemental Resolution to be credited to the Reserve Account; and (iv) any other
amounts appropriated from time to time to the Reserve Account.
If on any Interest Payment Date or on any Principal Payment Date there shall exist, after the other
transfers required by Sections 5.03(a) and (b), a deficiency in the Interest Account or Sinking Fund
Account, the City shall transfer from the Reserve Account to such account an amount equal to such
deficiency.
All income derived from the investment of amounts in the Reserve Account shall be credited as
received to the Reserve Account until such time as the balance in the Reserve Account is equal to the
Reserve Requirement, and thereafter all such investment income as received shall be transferred to the
Sinking Fund Account.
Money in the Reserve Account shall be used only to pay when due principal of, premium, if any,
and interest on Bonds when the balance on hand in the Bond Account is insufficient therefor; provided
that on any date when the balance then on hand in the Bond Account allocable to a series of Bonds, plus
the balance then on hand in the Reserve Account allocable to the series of Bonds, is sufficient with other
money available for the purpose to pay or discharge all Outstanding Bonds of that series and the interest
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accrued thereon in full, and the balance thereafter on hand in the Reserve Account will be at least equal to
the Reserve Requirement for all Outstanding Bonds not to be discharged, it may be used for that purpose.
In addition, amounts on hand in the Reserve Account may be used to make any arbitrage rebate payments
due under Section 148(f) of the Code in respect of any Bonds if available mounts on hand in the Tax
Increment Development Fund are insufficient therefor.
If at any time (including, but not limited to, any Principal Payment Date and any Redemption
Date), the balance in the Reserve Account exceeds the Reserve Requirement, the City shall transfer such
excess to the Sinking Fund Account.
5.06. General Tax Increment Development Fund. There shall be credited to the Tax Increment
Development Fund any and all Tax Increment remaining after the required credits to the Bond Account
and Reserve Account, subject to the creation of any other accounts and the appropriation of Tax
Increment thereto as provided in Sections 4.04 and 4.05, any investment income and other moneys in any
of the accounts within the Tax Increment Funds in excess of the requirements of said accounts and which
the City determines in its discretion to transfer to the Tax Increment Development Fund. Money from
time to time on hand in the Tax Increment Development Fund shall be transferred to the Bond Account
and Reserve Account as provided by Sections 5.04 and 5.05 and in addition may be used for any of the
following purposes and not otherwise:
(a) to be transferred to the Construction Account to pay costs authorized to be paid
therefrom;
(b) to pay costs incurred in connection with Projects within the Urban Renewal Area
as authorized by the Act and approved by the Commission;
(c) to make arbitrage rebate payments owing in respect of Bonds under Section 148(f)
of the Code;
(d) to redeem or discharge Bonds prior to their Stated Maturities in accordance with
the provisions of this Resolution or any Supplemental Resolution;
(e) to purchase Bonds on the open market;
(f) to pay, redeem or otherwise secure the payment of any Subordinate Obligations;
and
(g) to pay to Taxing Bodies a portion of the annual Tax Increment received by the City
pursuant to an agreement authorized by the Act; provided that the City may remit to Taxing
Bodies pursuant to such an agreement only from Tax Increment received in the fiscal year and
on hand in the Tax Increment Development Fund, only if, on the date of remittance, the balance
in the Reserve Account is not less than the Reserve Requirement and the funding requirements
of the Bond Account have been satisfied, and only to the extent that the balance on deposit in
the Tax Increment Development Fund, after such remittance, is not less than 50% of the
principal of and interest payable on Outstanding Bonds in the Fiscal Year such Tax Increment
is received; and provided, further, that if the Constitution or laws of the State of Montana are
amended to abolish or substantially reduce or eliminate real property taxation, and so long as
replacement revenues are not available to pay principal of and interest on the Bonds in
accordance with the provisions of Section 6.13, money in the Tax Increment Development
Fund is to be used, so long as any Bonds are Outstanding, solely for the payment of principal
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of, interest or premium, if any, on Outstanding Bonds, whether at their Stated Maturities, on a
Redemption Date or otherwise, or to purchase Outstanding Bonds on the open market.
5.07. Investments. The Director of Finance shall cause all moneys from time to time in the Tax
Increment Funds to be deposited as received with one or more depository banks duly qualified in
accordance with the provisions of Montana Code Annotated, Section 7-6-201, as amended, and shall
cause the balances in such accounts, except any part thereof covered by federal deposit insurance, to be
secured by the pledge of bonds or securities of the kinds required by law, and no money shall at any time
be withdrawn from such deposit accounts except for the purposes of the Tax Increment Funds as defined
and authorized by this Resolution. The funds to the credit of the several accounts within the Tax
Increment Funds may be commingled in one or more deposit accounts. The balance on hand in any of the
accounts of the Tax Increment Funds may at any time be invested and reinvested in Qualified Investments
as provided below, maturing and bearing interest payable at the times and in the amounts estimated to be
required to provide cash when needed for the purposes of the respective accounts; provided that the
Reserve Account and Tax Increment Development Fund shall be invested in Qualified Investments
maturing not later than five years from the date of investment. Income from the investment of the
moneys in the various accounts shall be credited thereto. Subject to the provisions of law now or
hereafter controlling investment of such funds, money on hand in any of the accounts of the Tax
Increment Funds may be invested in any of the following Qualified Investments, but no others:
(a) direct obligations of or obligations guaranteed by the United States of America;
(b) bank time deposits or certificates of deposit secured by obligations and securities
described in clause (a) above; and
(c) the Montana short-term investment pool administered by the Board of Investments
of the State of Montana or any similar pool hereafter created for the investment of public funds.
5.08. [Insurance. The payment of the Series 2007 Bonds has been insured by
[________________________] (the “Insurer”). The terms and conditions of the insurance are set forth in
the insurance policy of the Insurer referenced in the form of the Series 2007 Bonds under “Statement of
Insurance.”]
Section 6. Other Covenants of City.
6.01. Punctual Payment. The City will punctually pay or cause to be paid the principal and
interest to become due in respect to all the Bonds, in strict conformity with the terms of the Bonds and of
this Resolution, and it will faithfully observe and perform all of the conditions, covenants and
requirements of this Resolution and all Supplemental Resolutions and of the Bonds. Nothing herein
contained shall prevent the City from making advances of its own moneys however derived to any of the
uses or purposes referred to herein, nor shall be deemed or constitute a pledge or appropriation of funds or
assets of the City other than those expressly pledged or appropriated hereby.
6.02. Accumulation of Claims of Interest. In order to prevent any accumulation of claims for
interest after maturity, the City will not, directly or indirectly, extend or consent to the extension of the
time for the payment of any claim for interest on any of the Bonds and will not, directly or indirectly, be a
party to or approve any such arrangements by purchasing or funding said claims for interest or in any
other manner. In case any such claim for interest shall be extended or funded, whether or not with the
consent of the City, such interest so extended or funded shall not be entitled, in case of default hereunder,
to the benefits of this Resolution, except subject to the prior payment in full of the principal of all of the
Bonds then outstanding and of all claims for interest which shall not have been so extended or funded.
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6.03. Against Encumbrances. The City will not encumber, pledge or place any charge or lien
upon any of the Tax Increment superior to or on a parity with the pledge and lien herein created for the
benefit of the Bonds.
6.04. Management and Operation of Properties. The City will manage and operate or cause to be
managed and operated all Projects owned by the City in a sound and businesslike manner, and will keep
such Projects insured at all times in conformity with sound business practice.
6.05. Books and Accounts; Financial Statements. The City will keep, or cause to be kept, proper
books of record and accounts, separate from all other records and accounts of the City, in which complete
and correct entries shall be made of all transactions relating to the Projects, Tax Increment and the Tax
Increment Funds. Such books of record and accounts shall be at all time during business hours subject to
the inspection of the Owners of not less than ten percent (10%) of the principal amount of the Bonds then
Outstanding, or their representatives authorized in writing.
The City will prepare and file with the Clerk of the Commission annually, within one hundred
eighty (180) days after the close of each Fiscal Year so long as any of the Bonds are Outstanding,
complete financial statements with respect to the preceding Fiscal Year showing (1) the actual taxable
value, the base taxable value and the incremental taxable value (each as defined in the Act) of the Urban
Renewal Area; (2) the mill rates of all Taxing Bodies; (3) the Tax Increment, including a breakdown of
Tax Increment attributable to current and delinquent property tax collections; (4) all disbursements from
the Tax Increment Funds; (5) the financial conditions of the Projects; and (6) the balances in the Tax
Increment Funds and accounts therein as of the end of each such Fiscal Year, which statements shall be
accompanied by a certificate or opinion in writing of an Independent Accountant.
6.06. Completion of Projects. The City will commence, and will continue to completion, with all
practicable dispatch all Projects undertaken in the Urban Renewal Area in conformity with the Urban
Renewal Plan and the Act.
6.07. Taxation of Leased Property. Other than a Project owned and operated as a public
improvement or facility, whenever the City leases real property in the Urban Renewal Area to any Person
other than a governmental entity, the property shall to the extent authorized by law be assessed and taxed
in the same manner as privately-owned property and the lease shall provide (1) that the lessee shall pay
Taxes upon the taxable value for the entire property and not merely upon the assessed value of his or its
leasehold interest, and (2) that if for any reason the Taxes paid by the lessee on such property in any year
during the term of the lease shall be less than the Taxes which would have been payable upon the
assessed value of the entire property if the property were assessed and taxed in the same manner as
privately-owned property, the lessee shall pay such difference to the City within thirty days after the
Taxes for such year become payable to the Taxing Bodies and in any event prior to the delinquency date
of such Taxes established by law. All such payments to the City shall be treated as Tax Increment and
shall be deposited by the City in the Tax Increment Funds.
6.08. Disposition of Property. The City will not authorize the disposition of any land or real
property in the Urban Renewal Area to anyone which will result in such property becoming exempt from
taxation because of public ownership or use or otherwise (except property planned for such ownership or
use by the Urban Renewal Plan in effect on the date of this Resolution) if such disposition shall consist of
more than two percent (2%) of the land area in the Urban Renewal Area, except as provided in this
Section 6.08. The City shall appoint a reputable Independent Financial Consultant and direct said
consultant to report on the effect of said disposition. If the Report of the Independent Financial
Consultant concludes that Tax Increment (including any amounts resulting from payments in lieu of taxes
agreed to be paid with respect to the property) will not be reduced by the proposed disposition in each of
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the three complete Fiscal Years following such disposition (based on tax levies not greater than those for
the current Fiscal Year) below 200% of the maximum Principal and Interest Requirements on all
Outstanding Bonds in any future Fiscal Year and that the security of the Bonds or the rights of the
Bondowners will not be materially impaired by said proposed disposition, the City may make the
proposed disposition.
6.09. Further Assurances. The City will adopt, make, execute and deliver any and all such
further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the
intention or to facilitate the performance of this Resolution, and for the better assuring and confirming
unto the Owners of the Bonds of the rights and benefits provided in this Resolution.
6.10. Amendment of Plan or Ordinance. Except to authorize additional Projects, the City will
not amend or modify the Plan or the Ordinance or reduce the size of the Urban Renewal Area if an effect
thereof will be to materially and adversely affect the security of the Outstanding Bonds; provided,
however, the City may reduce the size of the Urban Renewal Area if a report as provided in Section 6.08
is received from the Financial Consultant regarding the reduction in size of the Urban Renewal Area.
6.11. Adjustment of Tax Incremental Base. The City shall not adjust the tax incremental base of
the Urban Renewal Area pursuant to Section 7-15-4287 of the Act so long as any Bonds are Outstanding,
if the effect would be to reduce the base.
6.12. Federal Tax Exemption. The City will not use the proceeds of any Bonds or use or permit
the use of any Project financed from the proceeds of the Bonds or revenues derived therefrom in such a
way as to cause the exemption from federal income taxation of interest on any Bonds to become
adversely affected.
6.13. Pledge of Replacement Revenues. In the event the Constitution or laws of the State of
Montana are amended to abolish or substantially reduce or eliminate real or personal property taxation
and State law then or thereafter provides to the City an alternate or supplemental source or sources of
revenue specifically to replace or supplement reduced or eliminated Tax Increment, then the City pledges,
and covenants to appropriate annually, subject to the limitations of then applicable law, to the Bond Fund
from such alternate or supplemental revenues an amount that will, with money on hand in the Bond Fund
or available and to be transferred to the Bond Fund during such Fiscal Year, be sufficient to pay the
principal of, premium, if any, and interest on the Outstanding Bonds payable in that Fiscal Year.
6.14. Bondowner Rights. No Owner of any Bond issued and secured under the provisions of this
Resolution shall have the right to institute any proceeding, judicial or otherwise, for the enforcement of
the covenants herein contained, without the written concurrence of the Owners of not less than 25% in
aggregate principal amount of all Bonds which are at the time Outstanding; but the Owners of this amount
of such Bonds may, either at law or in equity, by suit, action or other proceedings, protect and enforce the
rights of all Owners of such Bonds and compel the performance of any and all of the covenants required
herein to be performed by the City and its officers and employees. The Owner of a majority in principal
amount of such Outstanding Bonds shall have the right to direct the time, method and place of conducting
any proceedings for any remedy available to the Owners or the exercise of any power conferred on them,
and the right to waive a default in the performance of any such covenant, and its consequences, except a
default in the payment of the principal of or interest on any Bond when due. However, nothing herein
shall impair the absolute and unconditional right of the Owner of each Bond to receive payment of the
principal of and interest on such Bond as such principal and interest respectively become due, and to
institute suit for the enforcement of any such payment. In the Event of Default in any such payment, any
court having jurisdiction of the action may appoint a receiver to administer the Tax Increment Funds and
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to collect and segregate and apply the Tax Increment and other revenues pledged thereto as provided by
this Resolution and the Act.
Section 7. Supplemental Resolutions.
7.01. General. The City reserves the right to adopt Supplemental Resolutions to this Resolution
from time to time and at any time, for the purpose of curing any ambiguity or of curing, correcting or
supplementing any defective provision contained herein, or of making such provisions with regard to
matters or questions arising hereunder as the City may deem necessary or desirable and not inconsistent
with this Resolution, and which shall not adversely affect the interests of the Owners of Bonds issued
hereunder, or for the purpose of adding to the covenants and agreements herein contained, or to the Tax
Increment herein pledged, other covenants and agreements thereafter to be observed and additional
revenues or income thereafter appropriated to the Tax Increment Funds, or for the purpose of surrendering
any right or power herein reserved to or conferred upon the City, or for the purpose of authorizing the
creation and issuance of a series of Additional Bonds, as provided in and subject to the conditions and
requirements of Section 4. Any such Supplemental Resolution may be adopted by resolution, without the
consent of the Owner of any of the Bonds issued hereunder.
7.02. Consent of Bondowners. With the consent of the Owners of Outstanding Bonds as
provided in Section 7.03, the City may from time to time and at any time adopt a Supplemental
Resolution for the purpose of amending this Resolution by adding any provisions hereto or changing in
any manner or eliminating any of the provisions hereof or of any Supplemental Resolution, except that no
Supplemental Resolution shall be adopted at any time without the consent of the Owners of all
Outstanding Bonds affected thereby, if it would extend the time of payment of interest thereon, would
reduce the amount of the principal thereof or redemption premium thereon, would give to any Bond or
Bonds any privilege over any other Bond or Bonds (except for the privilege accorded Bonds over
Subordinate Bonds), would reduce the sources of Tax Increment or other revenues or income
appropriated to the Tax Increment Funds, or would reduce the percentage in principal amount of such
Bonds required to authorize or consent to any such Supplemental Resolution.
7.03. Notice. Notice of a Supplemental Resolution to be adopted pursuant to Section 7.02 shall
be mailed by first-class mail, postage prepaid, to the Owners of all Outstanding Bonds at their addresses
appearing in the Bond Register and shall become effective only upon the filing of written consents with
the Clerk of the Commission, signed by the Owners of not less than two-thirds in principal amount of the
Bonds issued hereunder which are then Outstanding. Any written consent to the Supplemental Resolution
may be embodied in and evidenced by one or any number of concurrent written instruments of
substantially similar tenor signed by Owners in person or by agent duly appointed in writing, and shall
become effective when delivered to the Clerk of the Commission. Any consent by the Owner of any
Bond shall bind that Owner and every future Owner of the same Bond with respect to any Supplemental
Resolution adopted by the City pursuant to such consent; provided than any Owner may revoke his
consent with reference to any Bond by written notice received by the Clerk of the Commission before the
Supplemental Resolution has become effective. In the event that unrevoked consents of the Owners of
the required amount of Bonds have not been received by the Clerk of the Commission within one year
after the publication of notice of the Supplemental Resolution, the Supplemental Resolution and all
consents theretofore received shall be of no further force and effect.
7.04. Manner of Consent. Proof of the execution of any consent, or of a writing appointing any
agent to execute the same shall be sufficient for any purpose of this Resolution and shall be conclusive in
favor of the City if made in the manner provided in this Section 7.04. The fact and date of the execution
by any Person of any such consent or appointment may be proved by the affidavit of a witness of such
execution or by the certification of any notary public or other officer authorized by law to take
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acknowledgment of deeds, certifying that the Person signing it acknowledged to him the execution
thereof. The fact and date of execution of any such consent may also be proved in any other manner
which the City may deem sufficient; but the City may nevertheless, in its discretion, require further proof
in cases where it deems further proof desirable. The ownership of any registered Bonds shall be proved
by the Bond Register.
Section 8. Defeasance.
8.01. General. When the liability of the City on all Bonds issued under and secured by this
Resolution and all interest thereon has been discharged as provided in this section, all pledges, covenants
and other rights granted by this Resolution to the Owners of such Bonds shall cease.
8.02. Maturity. The City may discharge its liability with reference to all Bonds and interest
thereon which are due on any date by depositing with the Paying Agent for such Bonds on or before the
date a sum sufficient for the payment thereof in full; or if any Bond or interest shall not be paid when due,
the City may nevertheless discharge its liability with reference thereto by depositing with the Paying
Agent a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit.
8.03. Redemption. The City may also discharge its liability with reference to any Bonds which
are called for redemption on any date in accordance with their terms, by depositing with the Paying Agent
on or before that date an amount equal to the principal, interest and redemption premium, if any, which
are then due thereon; provided that notice of such redemption has been duly given as provided in this
Resolution or a Supplemental Resolution.
8.04. Escrow. The City may also at any time discharge its liability with reference to any Bond
subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing
irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities
which are Government Obligations which are authorized by law to be so deposited, bearing interest
payable at such times and at such rates and maturing on such dates as shall be required to provide funds
sufficient to pay all principal and interest to become due on all such Bonds on or before the Stated
Maturities thereof or, if such Bonds are subject to redemption and the City has given the redemption
notice required therefor or given irrevocable instructions to give such notice and the funds provided will
also be sufficient to pay any applicable redemption premium, to an earlier Redemption Date.
Section 9. [ Insurance Policy Payment Provisions and Covenants for the Series 2007 Bonds.
9.01. Definitions.
"Insurance Trustee" shall mean [The Bank of New York].
"Insurer" shall mean [________________________], a corporation organized under the laws of
the State of [______________] or any successor thereto.
"Policy" shall mean the financial guaranty insurance policy issued by Insurer insuring the
payment when due of the principal of and interest on the Bonds as provided therein.
“Schedule A” shall mean the Insurer’s Insurance Policy Payments, the Standard Terms and
Conditions, and Special Covenants and Conditions attached hereto and incorporated by reference herein.
9.02. Covenant. As long as the Series 2007 Bonds are outstanding and the Policy is in effect, the
City shall comply with all terms and conditions and requirements set forth in Schedule A. ]
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Section 10. Tax Covenants.
10.01. Security for the Series 2007 Bonds. The City shall not enter into any lease, use or other
agreement with any non-governmental Person relating to the security for the payment of the Series 2007
Bonds which might cause the Series 2007 Bonds to be considered “private activity bonds” or “private
loan bonds” within the meaning of Section 141 of the Code. No “impermissible agreement” as defined in
Treasury Regulations, Section 1.141-4(e)(4)(ii), has been or will be entered into by the City in respect of
the Tax Increment or otherwise to secure the Series 2007 Bonds.
10.02. General Covenant. The City covenants and agrees with the owners from time to time of
the Series 2007 Bonds that it will not take or permit to be taken by any of its officers, employees or
agents any action which would cause the interest on the Series 2007 Bonds to become includable in gross
income for federal income tax purposes under the Code and applicable Treasury Regulations promulgated
thereunder (the “Regulations”), and covenants to take any and all actions within its powers to ensure that
the interest on the Series 2007 Bonds will not become includable in gross income for federal income tax
purposes under the Code and the Regulations.
10.03. Arbitrage Certification. The Mayor, the Clerk of the Commission and the Director of
Finance, being the officers of the City charged with the responsibility for issuing the Series 2007 Bonds
pursuant to this resolution, are authorized and directed to execute and deliver to the Original Purchaser a
certificate in accordance with the provisions of Section 148 of the Code, and Section 1.148-2(b) of the
Regulations, stating that on the basis of facts, estimates and circumstances in existence on the date of
issue and delivery of the Series 2007 Bonds, it is reasonably expected that the proceeds of the Series 2007
Bonds will be used in a manner that would not cause the Series 2007 Bonds to be “arbitrage bonds”
within the meaning of Section 148 of the Code and the Regulations.
10.04. Arbitrage Rebate. The City acknowledges that the Series 2007 Bonds are subject to the
rebate requirements of Section 148(f) of the Code. The City covenants and agrees to retain such records,
make such determinations, file such reports and documents and pay such amounts at such times as are
required under said Section 148(f) and applicable Treasury Regulations to preserve the exclusion of
interest on the Series 2007 Bonds from gross income for federal income tax purposes, unless the Series
2007 Bonds qualify for the spending exceptions from the rebate requirement under Section 148(f)(4)(B)
of the Code and the Treasury Regulations and no “gross proceeds” of the Series 2007 Bonds (other than
amounts constituting a “bona fide Bond Fund”) arise during or after the expenditure of the sale proceeds
thereof. In furtherance of the foregoing, the Director of Finance is hereby authorized and directed to
execute a Rebate Certificate, substantially in the form of the Rebate Certificate prepared by Bond Counsel
and the City hereby covenants and agrees to observe and perform the covenants and agreements contained
therein, unless amended or terminated in accordance with the provisions thereof.
10.05. Information Reporting. The City shall file with the Secretary of the Treasury, not later
than ________, 2007, a statement concerning the Series 2007 Bonds containing the information required
by Section 149(e) of the Code.
Section 11. Continuing Disclosure.
11.01. Purpose and Beneficiaries. To provide for the public availability of certain information
relating to the Series 2007 Bonds and the security therefor and to permit the Original Purchaser and other
participating underwriters in the primary offering of the Series 2007 Bonds to comply with amendments
to Rule 15c2-12 promulgated by the Securities and Exchange Commission (the “SEC”) under the
Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12), relating to continuing disclosure (as in effect
and interpreted from time to time, the “Rule”), which will enhance the marketability of the Series 2007
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Bonds, the City hereby makes the following covenants and agreements for the benefit of the Owners (as
hereinafter defined) from time to time of the Outstanding Series 2007 Bonds. The Tax Increment Fund of
the City and the City are the only “obligated persons” in respect of the Series 2007 Bonds within the
meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure
must be made. The City has complied in all material respects with any undertaking previously entered
into by it under the Rule.
If the City fails to comply with any provisions of this Section 10, any Person aggrieved thereby,
including the Owners of any Outstanding Bonds, may take whatever action at law or in equity may appear
necessary or appropriate to enforce performance and observance of any agreement or covenant contained
in this Section 10, including an action for a writ of mandamus or specific performance. Direct, indirect,
consequential and punitive damages shall not be recoverable for any default hereunder. Notwithstanding
anything to the contrary contained herein, in no event shall a default under this Section 10 constitute a
default under the Series 2007 Bonds or under any other provision of this Resolution.
As used in this Section 10, “Owner” or “Bondowner” means, in respect of a Series 2007 Bond,
the registered owner or owners thereof appearing in the Bond Register maintained by the Bond Registrar
or any “Beneficial Owner” (as hereinafter defined) thereof, if such Beneficial Owner provides to the Bond
Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the
Bond Registrar. As used herein, “Beneficial Owner” means, in respect of a Series 2007 Bond, any Person
which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of
ownership of, such Series 2007 Bond (including Persons or entities holding Series 2007 Bonds through
nominees, depositories or other intermediaries), or (b) is treated as the owner of the Series 2007 Bond for
federal income tax purposes.
11.02. Information To Be Disclosed. The City will provide, in the manner set forth in subsection
(c) hereof, either directly or indirectly through an agent designated by the City, the following information
at the following times:
(1) on or before 270 days after the end of each Fiscal Year, commencing with the Fiscal Year
ended June 30, 2007, the following financial information and operating data in relating to the Urban
Renewal Area and the City for the preceding Fiscal Year of the City as hereinafter specified (the
“Disclosure Information”).
The Disclosure Information comprises the following (subject to modification as described
below):
(A) the financial statements of the City for such Fiscal Year, accompanied by
the complete audit report and opinion of an independent certified public accountant
or state legislative auditor relating thereto, including the financial statements of the
Tax Increment Fund of the City, as permitted or required by the laws of the State of
Montana, containing balance sheets as of the end of such Fiscal Year and a statement
of operations, changes in fund balances and cash flows for the Fiscal Year then
ended, showing in comparative form such figures for the preceding Fiscal Year of the
City prepared in accordance with generally accepted accounting principles
promulgated by the Financial Accounting Standards Board as modified in accordance
with the governmental accounting standards promulgated by the Governmental
Accounting Standards Board or as otherwise provided under Montana law, as in
effect from time to time, or, if and to the extent such financial statements have not
been prepared in accordance with such generally accepted accounting principles for
reasons beyond the reasonable control of the City, noting the discrepancies therefrom
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and the effect thereof, and certified as to accuracy and completeness in all material
respects by the Director of Finance; and
(B) To the extent not included in the financial statements referred to in
paragraph (A) hereof, the information for such Fiscal Year or for the period most
recently available of the type identified below contained in the Official Statement,
which information may be unaudited, but shall be certified as to accuracy and
completeness in all material respects by the Director of Finance to the best of his or
her knowledge, which certification may be based on the reliability of information
obtained from governmental of other third-party sources:
1. Information, for such Fiscal Year, relating to Tax Increment revenue,
investment earnings, debt service and debt service coverage and incremental taxable
value, amount of Tax Increment resulting from property tax levy and Tax Increment
actually received of the type contained under the captions “Estimated Debt Service
Requirements and Coverage—Estimated Debt Service Requirements,” “Bozeman
Downtown Improvement District—Property Tax Levies in the District,” “—Major
Taxpayers in the District,” and “—Comparison of Incremental Taxable Value of the
District to City Taxable Value” in the Official Statement.
2. Information, as of January 1 for the current tax year, relating to the
appraised value and taxable value of taxable property in the Urban Renewal Area.
3. Identification of the ten taxpayers in the Urban Renewal Area with the
largest taxable value of property by name, type of property and taxable value.
4. Information regarding the mill levies of all Taxing Bodies levying
property taxes in the Urban Renewal Area of the type contained in the table under the
caption “Bozeman Downtown Improvement District—Property Tax Levies in the
District” in the Official Statement.
5. Information, as of the most recent date available, regarding employment
in the City, the State of Montana and the United States of the type contained in the
table under the caption “Economic and Demographic Information —Labor Force and
Unemployment” in the Official Statement.
6. Information, as of the end of the most recent Fiscal Year, regarding the
direct debt of the City, including debt evidenced by special improvement district
bonds, overlapping general obligation debt and debt ratios of the type contained
under the captions “The City — General Financial Information” in the Official
Statement.
Notwithstanding the foregoing paragraph, if the audited financial statements from which such
extracts are to be taken are not available by the date specified, the City shall provide on or before such
date extracts from unaudited financial statements in the format required for the audited financial
statements as part of the Disclosure Information and, within 10 days after the receipt thereof, the City
shall provide the audited financial statements.
Any or all of the Disclosure Information may be incorporated by reference, if it is updated as
required hereby, from other documents, including official statements, which have been submitted to each
of the repositories hereinafter referred to under subsection (b) or the SEC. If the document incorporated
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by reference is a final official statement, it must also be available from the Municipal Securities
Rulemaking Board. The City shall clearly identify in the Disclosure Information each document so
incorporated by reference.
If any part of the Disclosure Information can no longer be generated because the operations of the
City have materially changed or been discontinued, such Disclosure Information need no longer be
provided if the City includes in the Disclosure Information a statement to such effect; provided, however,
if such operations have been replaced by other City operations in respect of which data is not included in
the Disclosure Information and the City determines that certain specified data regarding such replacement
operations would be a Material Fact (as defined in paragraph (2) hereof), then, from and after such
determination, the Disclosure Information shall include such additional specified data regarding the
replacement operations.
If the Disclosure Information is changed or this Section 10.02 is amended in accordance with its
terms, then the City shall include in the next Disclosure Information to be delivered hereunder, to the
extent necessary, an explanation of the reasons for the amendment and the effect of any change in the
type of financial information or operating data provided.
(2) In a timely manner, notice of the occurrence of any of the following events which is a
Material Fact (as hereinafter defined):
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(C) Unscheduled draws on debt service reserves reflecting financial difficulties;
(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Adverse tax opinions or events affecting the tax-exempt status of the security;
(G) Modifications to rights of security holders;
(H) Bond calls;
(I) Defeasances;
(J) Release, substitution, or sale of property securing repayment of the securities; and
(K) Rating changes.
As used herein, a “Material Fact” is a fact as to which a substantial likelihood exists that a
reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Series 2007
Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor
from the Official Statement, information disclosed hereunder or information generally available to the
public. Notwithstanding the foregoing sentence, a “Material Fact” is also an event that would be deemed
“material” for purposes of the purchase, holding or sale of a Series 2007 Bond within the meaning of
applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event.
(3) In a timely manner, notice of the occurrence of any of the following events or conditions:
(A) the failure of the City to provide the Disclosure Information at the time specified
under “Annual Information” above;
(B) the amendment or supplementing of the Disclosure Covenants pursuant
to the Resolution, together with a copy of such amendment or supplement and any
explanation provided by the City under the Disclosure Covenants;
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(C) the termination of the obligations of the City under the Disclosure
Covenants pursuant to the Resolution; and
(D) any change in the Fiscal Year of the City.
11.03. Manner of Disclosure. The City agrees to make available the information described in
Section 10.02 to the following entities by telecopy, overnight delivery, mail or other means, as
appropriate:
(1) the information described in paragraph (1) of Section 10.02, to each then nationally
recognized municipal securities information repository under the Rule and to any state information
depository then designated or operated by the State of Montana as contemplated by the Rule (the “State
Depository”), if any;
(2) the information described in paragraphs (2) and (3) Section 10.02, to the Municipal Securities
Rulemaking Board and to the State Depository, if any.
In addition, any filing under this Section 10 may be made solely by transmitting such filing to the
Texas Municipal Advisory Commission (“MAC”) as provided at http://www.disclosureusa.org, unless the
United States Securities and Exchange Commission has withdrawn the interpretative advice in its letter to
MAC dated September 7, 2004.
11.04. Term; Amendments; Interpretation.
(1) The covenants of the City in this Section 10 shall remain in effect so long as any Series 2007
Bonds are Outstanding. Notwithstanding the preceding sentence, however, the obligations of the City
under this Section 10 shall terminate and be without further effect as of any date on which the City files in
the office of the Clerk of the Commission an opinion of Bond Counsel to the effect that, because of
legislative action or final judicial or administrative actions or proceedings, the failure of the City to
comply with the requirements of this Section 10 will not cause participating underwriters in the primary
offering of the Series 2007 Bonds to be in violation of the Rule or other applicable requirements of the
Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory
thereof.
(2) This Section 10 (and the form and requirements of the Disclosure Information) may be
amended or supplemented by the City from time to time, without notice to (except as provided in
paragraph 13.02(3) hereof) or the consent of the Owners of any Series 2007 Bonds, by a resolution of the
City Commission filed in the office of the Clerk of the Commission accompanied by an opinion of Bond
Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary
qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection with a
change in circumstances that arises from a change in law or regulation or a change in the identity, nature
or status of the City, the Urban Renewal Area or the Tax Increment Fund or the type of operations
conducted by the City or the Urban Renewal Area, or (b) is required by, or better complies with, the
provisions of paragraph (b)(5) of the Rule; (ii) this Section 10 as so amended or supplemented would
have complied with the requirements of paragraph (b)(5) of the Rule at the time of the primary offering of
the Series 2007 Bonds, giving effect to any change in circumstances applicable under clause (i)(a) and
assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in
effect at the time of the primary offering; and (iii) such amendment or supplement does not materially
impair the interests of the Bondowners under the Rule.
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If the Disclosure Information is so amended, the City agrees to provide, contemporaneously with
the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if
any, of the change in the type of financial information or operating data being provided hereunder.
(3) This Section 10 is entered into to comply with the continuing disclosure provisions of the
Rule and should be construed so as to satisfy the requirements of paragraph (b)(5) of the Rule.
11.05. Further Limitation of Liability of City. In and to the extent the limitations of liability
contained in Section 10.01 are not effective, anything contained in this Section 10 to the contrary
notwithstanding, in making the agreements, provisions and covenants set forth in this Section 10, the City
has not obligated itself except with respect to the Tax Increment and other amounts specifically pledged
under this Resolution. None of the agreements or obligations of the City contained herein shall be
construed to constitute an indebtedness of the City within the meaning of any constitutional or statutory
provisions whatsoever or constitute a pledge of the general credit or taxing powers of the City.
Section 12. Repeal. All provisions of ordinances, resolutions and other actions and proceedings
of the City which are in any way inconsistent with the terms and provisions of this Resolution are
repealed, amended and rescinded to the full extent necessary to give full force and effect to the provisions
of this Resolution.
Section 13. Effective Date. This Resolution shall be in full force and effect from and after its
final passage and approval according to law.
PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, this ___
day of December, 2007.
_____________________________________
Mayor
Attest:
Clerk of the Commission
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EXHIBIT A
FORM OF SERIES 2007 BONDS
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF GALLATIN
CITY OF BOZEMAN
TAX INCREMENT URBAN RENEWAL BOND
SERIES 2007 (DOWNTOWN BOZEMAN IMPROVEMENT DISTRICT)
No. $___________
Interest
Rate
Stated
Maturity
Date of
Original Issue
CUSIP
July 1, ____ [December 27], 2007
REGISTERED OWNER:
PRINCIPAL AMOUNT:
FOR VALUE RECEIVED, THE CITY OF BOZEMAN (the “City”), a duly organized municipal
corporation located in Gallatin County, Montana, acknowledges itself to be specially indebted and hereby
promises to pay to the registered owner specified above or registered assigns, solely from the Tax
Increment received by the City from certain taxable property in its Urban Renewal Area (as hereinafter
defined) which has been pledged and appropriated for the payment hereof as stated below, the principal
amount specified above on the maturity date specified above, or, if this Bond is prepayable as stated
below, on an earlier date on which it shall have been duly called for redemption, with interest thereon
from the date of original issue hereof, or such later date to which interest hereon has been paid or duly
provided for, until the principal amount is paid or until this Bond, if prepayable, has been duly called for
redemption, at the annual rate specified above. Interest hereon is payable annually on July 1 in each year,
commencing July 1, 2008, by check or draft drawn on U. S. Bank National Association, in Seattle,
Washington as Bond Registrar, Transfer Agent and Paying Agent, or its successor designated under the
Resolution described herein (the “Bond Registrar”), mailed to the registered owner of this Bond as such
appears of record in the Bond Register as of the close of business on the 15th day (whether or not a
business day) of the immediately preceding month. The principal of this Bond is payable upon
presentation and surrender hereof at maturity or earlier redemption at the principal office of the Bond
Registrar. Such principal and interest are payable in lawful money of the United States of America.
Notwithstanding any other provisions of this Bond, so long as this Bond is registered in the name
of Cede & Co., as nominee of The Depository Trust Company, or in the name of any other nominee of
The Depository Trust Company or other securities depository, the Bond Registrar shall pay all principal
of and interest on this Bond, and shall give all notices with respect to this Bond, only to Cede & Co. or
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other nominee in accordance with the operational arrangements of The Depository Trust Company or
other securities depository as agreed to by the City.
This Bond is one of a duly authorized issue of Bonds of the City designated as “Tax Increment
Urban Renewal Revenue Bonds” (collectively, the “Bonds”), issued and to be issued in one or more series
under, and all equally and ratably secured by Resolution No. 4073, adopted by the City Commission on
[December 17], 2007 (as amended or supplemented in accordance with the provisions thereof, the
Resolution), to which Resolution, copies of which are on file with the City, reference is hereby made for a
description of the nature and extent of the security, the respective rights thereunder of the Owners of the
Bonds and the City and the terms upon which the Bonds are to be issued and delivered. As provided in
the Resolution, the Bonds are issuable in series which may vary as in the Resolution provided or
permitted. This Bond is one of the series specified in its title, issued in the aggregate principal amount of
$6,260,000 (the “Series 2007 Bonds”), all of like date of original issue and tenor except as to serial
number, denomination, date, interest rate, maturity date and redemption privilege. The Series 2007
Bonds are issued by the City for the purpose of financing a portion of the cost of a portion of an urban
renewal project within the City of Bozeman Downtown Bozeman Improvement District (the “Urban
Renewal Area”) of the City, thereby assisting activities in the public interest and for the public welfare of
the City.
The Series 2007 Bonds are issued pursuant to and in full compliance with the Constitution and
laws of the State of Montana, particularly Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43,
as amended (the “Act”), and pursuant to the Resolution. The Bonds are payable solely and ratably from
Tax Increment received by the City and resulting from the extension of ad valorem taxes levied by certain
Taxing Bodies against the incremental taxable value of properties within the Urban Renewal Area
pursuant to the Act, except that under certain conditions as described in the Resolution, the Bonds may be
payable from replacement revenues, if any, provided in the event of the abolition or substantial
elimination of property taxation in Montana.
The Bonds are not general obligations of the City and the City’s general credit and taxing powers
are not pledged to the payment of the Bonds or the interest thereon. The Bonds shall not constitute an
indebtedness of the City within the meaning of any constitutional or statutory limitations.
Series 2007 Bonds maturing in the years 2008 through 2019 are not subject to redemption, but
Series 2007 Bonds having stated maturities in 2020 and later years are subject to redemption at the option
of the City and in whole or in part, and if in part from such stated maturities and in such principal
amounts as the City may designate and, within a stated maturity, in $5,000 principal amounts selected by
lot or other manner deemed fair, on July 1, 2020, and any date thereafter, at a redemption price equal to
the par amount of the Series 2007 Bonds to be redeemed together with the interest accrued on the
principal amount to be redeemed to the date fixed for redemption.
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[The Series 2007 Bonds having a stated maturity in ____, ____, and ____ are subject to
mandatory sinking fund redemption on July 1 in the respective years and the respective principal amounts
set forth below, in $5,000 principal amounts selected by the Bond Registrar, by lot or other manner it
deems fair, at a redemption price equal to the principal amount thereof to be redeemed plus interest
accrued thereon to the redemption date:]
Stated Maturity
of
Term Bonds
(July 1)
Sinking Fund
Payment Date
(July 1)
Principal Amount
on Sinking Fund
Payment Date
Notice of redemption will be mailed at least 30 days before the redemption date to the registered
owner of each Series 2007 Bond to be redeemed; provided that any defect in or failure to give such
mailed notice shall not affect the validity of proceedings for the redemption of any Series 2007 Bond not
affected thereby. All Series 2007 Bonds or portions thereof so called for redemption will cease to bear
interest on the specified redemption date, provided funds for their redemption have been duly deposited
and, except for the purpose of payment, shall no longer be secured by the Resolution and shall not be
deemed Outstanding under the Resolution. Upon partial redemption of any Series 2007 Bond, one or
more new Series 2007 Bond or Bonds will be delivered to the registered owner without charge,
representing the remaining principal amount not so redeemed.
If provision is made for the payment of principal of and interest on this Series 2007 Bond in
accordance with the Resolution, this Series 2007 Bond shall no longer be deemed Outstanding under the
Resolution, shall cease to be entitled to the benefits of the Resolution, and shall thereafter be payable
solely from the funds provided for payment.
The Resolution permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the City and the Owners of the Bonds at any time without
the consent of any Bondowners or with the consent of the Owners of a majority in aggregate principal
amount of the Bonds at the time Outstanding (as defined in the Resolution) which are affected by such
modifications. The Resolution also contains provisions permitting Owners of a majority in aggregate
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principal amount of the Bonds of all series at the time Outstanding, on behalf of all the Owners of all
Bonds, to waive compliance by the City with certain provisions of the Resolution and certain past defaults
under the Resolution and their consequences. Any such consent or waiver by the Owner of this Bond
shall be conclusive and binding upon such Owner and on all future Owners of this Bond and of any Bond
issued in lieu hereof, whether or not notation of such consent or waiver is made upon this Bond.
The Owner of this Bond shall have no right to enforce the provisions of the Resolution, or to
institute action to enforce the covenants therein or take any action with respect to a default under the
Resolution or to institute, appear in or defend any suit or other procedure with respect thereto except as
provided in the Resolution.
This Series 2007 Bond is a negotiable investment security as provided in the Montana Uniform
Commercial Code. As provided in the Resolution and subject to certain limitations set forth therein, this
Series 2007 Bond is transferable upon the books of the City at the principal office of the Bond Registrar,
by the registered owner hereof in person or by his attorney duly authorized in writing, upon surrender
hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by
the registered owner or his attorney; and may also be surrendered in exchange for Series 2007 Bonds of
other authorized denominations. Upon such transfer or exchange, the City will cause a new Series 2007
Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate
principal amount, bearing interest at the same rate and maturing on the same date, subject to
reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or
exchange.
The City, the Bond Registrar and Paying Agent may deem and treat the Person in whose name
this Series 2007 Bond is registered as the absolute owner hereof, whether this Series 2007 Bond is
overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City, the
Bond Registrar nor the Paying Agent shall be affected by any notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the
Constitution and laws of the State of Montana and ordinances and resolutions of the City to be done, to
exist, to happen and to be performed in order to make this Series 2007 Bond a valid and binding special,
limited obligation of the City in accordance with its terms have been done, do exist, have happened and
have been performed as so required; that this Series 2007 Bond has been issued by the City in connection
with an urban renewal project (as defined in the Act); that the City, in and by the Resolution, has validly
made and entered into covenants and agreements with and for the benefit of the Owners from time to time
of all Bonds issued thereunder, including covenants that it will pledge, appropriate and credit the Tax
Increment derived from properties in the Urban Renewal Area to the Tax Increment Bond Fund of the
City; that additional bonds may be issued and made payable from the Tax Increment Bond Fund on a
parity with the Series 2007 Bonds upon certain conditions set forth in the Resolution, but no obligation
will be otherwise incurred and made payable from the Tax Increment, unless the lien thereof shall be
expressly made subordinate to the lien of the Series 2007 Bonds on the Tax Increment; that all provisions
for the security of the Owners of the Bonds as set forth in the Resolution will be punctually and faithfully
performed as therein stipulated; and that the issuance of the Series 2007 Bonds does not cause the
obligations of the City to exceed any constitutional or statutory limitation.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any security
or benefit under the Resolution until the Certificate of Authentication hereon shall have been executed by
the Bond Registrar by the manual signature of an authorized representative.
488
A-5
IN WITNESS WHEREOF, the City of Bozeman, Montana, by its City Commission, has caused
this Bond to be executed by the facsimile signatures of the Mayor, the Clerk of the Commission and
Director of Finance.
CITY OF BOZEMAN, MONTANA
(Facsimile Signature) (Facsimile Signature)
Mayor Clerk of the Commission
(Facsimile Signature)
Director of Finance
Dated:__________________
489
A-6
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Tax Increment Urban Renewal Revenue Bonds, Series 2007 (Downtown
Bozeman Improvement District) delivered pursuant to the Resolution mentioned within.
[U. S. Bank National Association],
as Bond Registrar, Transfer
Agent and Paying Agent
By
Authorized Representative
The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though they were written out in full according to applicable laws or regulations:
TEN COM -- as tenants in common UTMA ………...as Custodian for …..………
(Cust) (Minor)
TEN ENT -- as tenants by entireties under Uniform Transfers to Minors Act ………
(State)
JT TEN -- as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
____________________
STATEMENT OF INSURANCE
[________________________ ("____________"), a New York corporation, has issued its Policy (the
"Policy") insuring the payment of principal of and interest on this Bond on the "due date," as defined in
the Policy. Reference is made to the Policy for the complete provisions thereof. All payments required to
be made under the Policy shall be made in accordance with the provisions thereof. The owner of this
Bond acknowledges and consents to the subrogation and transfer rights of ____________ as more fully
set forth in the Policy.]
490
A-7
____________________
ASSIGNMENT
FOR VALUED RECEIVED the undersigned hereby sells, assigns and transfers unto
___________________________________ the within Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints _________________________ attorney to transfer the within Bond
on the books kept for registration thereof, with full power of substitution in the premises.
Date: _________________
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER NOTICE: The signature to this Agreement
OF ASSIGNEE: must correspond with the name as it appears
upon the face of the within Bond in every
particular, without alteration or enlargement
/ / or any change whatsoever.
SIGNATURE GUARANTEE:
Signatures must be guaranteed by an “eligible
guarantor institution” meeting the requirements
of the Bond Registrar, which requirements include
membership or participation in the Securities
Transfer Association Medallion Program (STAMP)
or such other “signature guaranty program”
determined to be acceptable by the Bond Registrar
in addition to or in substitution for STAMP, all
in accordance with the Securities Exchange
Act of 1934, as amended.
491
Schedule A-1
SCHEDULE A
Policy Payment Provisions, Standard Terms and Conditions, and
Special Covenants and Conditions
492