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HomeMy WebLinkAboutResolution 4571 Authorizting Obligation General Bond, Series 2014 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.-1...L►i. entitled: "RESOLUTION RELATING TO $5,100,000 GENERAL OBLIGATION BONDS, SERIES 2014; DETERMINING THE FORM AND DETAILS, AUTHORIZING THE EXECUTION AND DELIVERY AND LEVYING TAXES FOR THE PAYMENT THEREOF"(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 meeting on November 17, 2014, 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notice of such meeting given as required by law; and that the Resolution has not as of the date hereof been amended or repealed.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 Commis ioners voted in fav r thereof: ,` noj-, t ; voted against the same: & ; abstained from voting thereon: •e ; or were absent: , WITNESS my hand officially this day of November,2014., 0 Z E,n? • ' (SEAL) A It Ity" *7i a i [ i RESOLUTION NO. 4571 RESOLUTION RELATING TO $5,100,000 GENERAL OBLIGATION BONDS, SERIES 2014; DETERMINING THE FORM AND DETAILS, AUTHORIZING THE EXECUTION AND DELIVERY AND LEVYING TAXES FOR THE PAYMENT THEREOF BE 1T RESOLVED by the City Commission (the"Commission") of the City of Bozeman, Montana(the"City"),as follows: Section 1. Authorization and Sale, Recitals. 1.01. Authorization. At an election duly called and held November 6,2012,the electors of the City authorized this Commission to issue and sell general obligation bonds of the City in one or more series in the maximum principal amount of$15,000,000 (the"Bond Authorization") for the purpose of paying the costs of designing, constructing or equipping on open-space lands trails,parks and natural areas or multi-use recreational fields and facilities,or employing such lands in the preservation or enhancement of water quality, and acquiring rights to or interests in or improving open-space lands in or near the City (such as lands for trails in and around the Bridger Mountain foothills),to include necessary or related infrastructure for the use, enjoyment, or functioning of such lands or facilities and the operation,maintenance, repair, management, or planning of such lands or facilities(the"Project"'); and costs associated with the sale and issuance of the bonds. This Commission has determined that it is in the best interests of the City, upon the terms hereinafter set forth,to sell to D.A. Davidson& Co.,of Great Falls, Montana(the "Original Purchaser"), by private negotiated sale, its general obligation bonds in the principal amount of$5,100,000,pursuant to Montana Code Annotated, Sections 7-7-4254 and 17-5-107, in order to pay a portion of the costs of the Project and costs associated with the sale and issuance of such general obligation. The City has previously issued bonds in 2013 in the aggregate principal amount of$9,900,000 to finance a portion of the costs of the Project. The Bonds (as hereinafter defined)are being issued as open space general obligation bonds under Montana Code Annotated,Title 76,Chapter 6,Part 1,as amended, and Title 7, Chapter 7, Part 42, as amended. 1.02. Purchase and Sale. The Original Purchaser and the City have entered into a Bond Purchase Agreement,dated as of November 12, 2014, regarding the purchase and sale of general obligation bonds of the City,to be denominated"General Obligation Bonds, Series 2014"(the "Bonds"), in the aggregate principal amount of$5,100,000 at a purchase price of$5,369,154.45 (representing the par amount of the Bonds plus original issue premium of$309,954.45 and less underwriter's discount of$40,800.00). The Bonds bear interest at the rates and mature on the dates and in the amounts and contain the further terms and conditions set forth in this Resolution. The true interest cost of the Bonds is 3.043002%. The sale of the Bonds to the Original Purchaser is hereby ratified and confirmed. The indebtedness to be evidenced by the Bonds and all other indebtedness of the City does not exceed the limitation set forth in Section 7-7-4201, Montana Code Annotated. 1.03. Recitals. All acts, conditions and things required by the Constitution and laws of the State of Montana, including Montana Code Annotated,Title 7, Chapter 7. Part 42. as amended,and Title 76, Chapter 6, Part 1, as amended, in order to make the Bonds valid and binding general obligations in accordance with their terms and in accordance with the terms of this Resolution have been done, do exist,have happened and have been performed in regular and due form,time and manner as so required. The City has full power and authority to issue the Bonds. The indebtedness to be evidenced by the Bonds, together with all other indebtedness of the City, will not exceed 2.50%of the total assessed valuation of taxable property of the City, determined as provided in Section 15-8-111, M.C.A., ascertained by the last assessment for state and county taxes. Section 2. Bond Terms. Execution and Delivery. 2.01. Term of Bonds. The Bonds shall be designated"General Obligation Bonds, Series 2014." The Bonds shall be in the denomination of$5,000 each or any integral multiple thereof of single maturities. The Bonds shall mature on July 1 in the years and amounts listed below, and Bonds maturing in such years and amounts shall bear interest from date of original issue until paid or duly called for redemption (including mandatory sinking fund redemption as to the term bonds maturing in 2024,2030,2032, and 2035), at the rate per annum shown opposite such years and amounts, as follows: Year Amount Rate Year Amount Rate 2016 $110,000 1.000% 2025 $245,000 2.500% 2017 205,000 2.000 2026 250,000 4.000 2018 210,000 2.000 2027 260,000 4.000 2019 215,000 2.000 2028 270,000 4.000 2020 215,000 2.000 2030* 570,000 4.000 2021 220,000 2.000 2032* 620,000 4.000 2022 225,000 2.250 2035* 1,020,000 4.000 2024* 465,000 2.500 *Term bond subject to mandatory sinking fund redemption as set forth in Section 2.07 below. Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. 2.02. Registered Form, Interest Payment Dates. The Bonds shall be issuable only in fully registered form,and the ownership of the Bonds shall be transferred only upon the bond register of the City hereinafter described. The interest on the Bonds shall be payable on January 1 and July I in each year, commencing January 1, 2016. Interest on the Bonds shall be payable to the owners of record thereof as such appear on the bond register as of the close of business on the 15th day of the month immediately preceding each interest payment date, whether or not such day is a business day. Interest on, and upon presentation and surrender thereof,the principal of each Bond shall be payable by check or draft issued by the Registrar described herein. 2 2.03. Dated Date. Each Bond shall be originally dated as of December 9,2014, and upon authentication of any Bond the Registrar(as hereinafter defined)shall indicate thereon the date of such authentication. 2.04. Registration. The City shall appoint, and shall maintain,a bond registrar,transfer agent and paying agent(the"Registrar''). The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Re ister. The Registrar shall keep at its principal office a bond register in which the Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered,transferred or exchanged. (b) Transfer of Bonds. Upon surrender to the Registrar for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written 'instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing,the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of the same series of a like aggregate principal amount and maturity, as the case may be, as requested by the transferor. The Registrar may,however,close the books for registration of any transfer of any Bond or portion thereof selected or called for redemption. (c) Exchange of Bonds. Whenever any Bond is surrendered by the registered owner for exchange,the Registrar shall authenticate and deliver one or more new Bonds of the same series of 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 Bonds surrendered upon any transfer or exchange shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When any Bond is presented to the Registrar for transfer,the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment,deems improper or unauthorized. (0 Persons Deemed Owners. The City and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of such Bond,whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of,the principal of and interest on such 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 Bond to the extent of the sum or sums so paid. 3 (g) Taxes, Fees and Charges. For every transfer or exchange of Bonds (except for an exchange upon the partial redemption of a Bond),the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax.fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be lost, stolen or destroyed,the Registrar shall deliver a new Bond of the same series of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond lost, stolen or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond lost, stolen or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Bond was lost, stolen or destroyed,and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. All Bonds so surrendered to the Registrar shall be canceled by it and evidence of such cancellation shall be given to the City. If the mutilated, lost, stolen or destroyed Bond has already matured or such Bond has been called for redemption in accordance with its terms, it shall not be necessary to issue a new Bond prior to payment. 2.05. Appointment of Initial Registrar. The City hereby appoints U.S. Bank National Association, in Denver, Colorado,to act as registrar,transfer agent and paying agent(the "Registrar"). The City reserves the right to appoint a successor bond registrar,transfer agent or paying agent, as authorized by the Model Public Obligations Registration Act of Montana, Montana Code Annotated, Title 17, Chapter 5, Part 11,as amended (the "Registration Act"), but the City agrees to pay the reasonable and customary charges of the Registrar for the services performed. 2.06. Optional Redemption. (a) Bonds with stated maturities in the years 2016 through 2024 are not subject to optional redemption prior to their stated maturities. Bonds with stated maturities on or after July 1,2025 are subject to redemption on January 1,2025 and any date thereafter, at the option of the City, in whole or in part, and if in part from such stated maturities and in such principal amounts as the City may designate in writing to the Registrar(or, if no designation is made, in inverse order of maturities and within a maturity in $5,000 principal amounts selected by the Registrar by lot or other manner it deems fair),at a redemption price equal to the principal amount thereof and interest accrued to the redemption date, without premium. (b) The date of redemption and the principal amount of the Bonds to be redeemed shall be fixed by the City Administrative Services Director who shall give notice thereof to the Registrar at least 45 days prior to the redemption date a request that the Registrar deliver a notice of redemption to the registered owners of each Bond by first class mail or, if the registered owner of the Bonds is DTC,the notice of redemption may be sent by electronic means, and the Registrar shall mail or cause to be mailed such notice of redemption or, if the registered owner of the Bonds is DTC, send or cause to be sent such notice of redemption by electronic means, at least thirty days prior to the designated redemption date. No defect in or failure to give such 4 notice shall affect the validity of proceedings for the redemption of any Bond not affected by such defect or failure. The notice of redemption shall specify the redemption date. redemption price, the numbers, interest rates and CUSIP numbers of the Bonds to be redeemed and the place at which the Bonds are to be surrendered for payment. Official notice of redemption having been given as aforesaid,the Bonds or portions thereof so to be redeemed shall, on the redemption date,become due and payable at the redemption price therein specified and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions thereof shall cease to bear interest. (c) In addition to the notice prescribed by the preceding paragraph,the City Administrative Services Director shall also request that the Registrar give, and upon such request the Registrar shall give,at least thirty days prior to the designated redemption date,notice of the redemption of any Bond or Bonds or portions thereof in form and substance and in the manner provided in the preceding paragraph to the Purchaser, all registered securities depositories then in the business of holding substantial amounts of obligations of the character of the Bonds(such depository now being The Depository Trust Company,of New York, New York)and 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 Bond or portion thereof. 2.07. Mandatory Sinking Fund Redemption. The Bonds having stated maturities in 2024, 2030,2032, and 2035 (the "Term Bonds")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 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 to the redemption date: Principal Sinking Fund Amount on Payment Date Sinking Fund (July 1) Payment Date 2023 $230,000 2029 $280,000 2031 $305,000 2033 $325,000 2034 340,000 If the Term Bond with a stated maturity in 2024 is not previously purchased by the City in the open market, in respect of the Term Bond maturing in 2024, $235,000 in principal amount of such Term Bond would remain to mature in 2024. 5 If the Term Bonds with stated maturities in 2030,2032, and 2035 are not previously purchased by the City in the open market or prepaid, in respect of the Term Bond maturing in 2030. $290.000 in principal amount of such Term Bond would remain to mature in 2030. in respect of the Term Bond maturing in 2032, $315,000 in principal amount of such Term Bond would remain to mature in 2032, and in respect of the Term Bond maturing in 2035, $355,000 in principal amount of such Term Bond would remain to mature in 2035. The principal amount of the Term Bonds required to be redeemed on the above Sinking Fund Payment Dates shall be reduced by the principal amount of such Term Bonds theretofore redeemed at the option of the Commission and as to which the City has not previously applied amounts to reduce the principal amount of such Term Bonds on a Sinking Fund Payment Date. 2.08. Execution and Delivery. The Bonds shall be forthwith prepared for execution under the direction of the City Clerk and shall be executed on behalf of the City by the signatures of the Mayor,the City Administrative Services Director and the City Clerk, provided that said signatures may be printed, engraved or lithographed facsimiles thereof. The seal of the City need not be imprinted on or affixed to any Bond. In case any officer whose signature or a facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery thereof, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the Bonds have been so executed by said City officers,they shall be registered by the City Administrative Services Director in accordance with Montana Code Annotated, Section 7-7-4257, as amended. Notwithstanding such execution,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 Registrar. Certificates of authentication on different Bonds 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. When the Bonds have been fully executed and authenticated,they shall be delivered by the Registrar to the Original Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Original Purchaser shall not be obligated to see to the application of the purchase price. 2.09. Securities Depository for the Bonds. (a) For purposes of this Section 2.09,the following terms shall have the following meanings: "Beneficial Owner"shall mean,whenever used with respect to a Bond,the person in whose name such Bond is recorded as the beneficial owner of such 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 Bonds. "DTC" shall mean The Depository Trust Company of New York, New York. 6 "Participant" shall mean any broker-dealer, bank or other financial institution for which DTC holds Bonds as securities depository. "Representation Letter-" shall mean the Blanket Issuer Letter of Representations pursuant to which the City agrees to comply with DTC's Operational Arrangements. (b) The Bonds of each series shall be initially issued as separately authenticated fully registered Bonds, and one Bond shall be issued in the principal amount of each stated maturity of each series of the Bonds. Upon initial issuance,the ownership of such Bonds shall be registered in the Bond register in the name of Cede & Co.,as nominee of DTC. The Registrar and the City may treat DTC (or its nominee)as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, if any, giving any notice permitted or required to be given to registered owners of Bonds under this Resolution, registering the transfer of Bonds, and for all other purposes whatsoever: and neither the Registrar nor the City shall be affected by any notice to the contrary. Neither the Registrar nor the City shall have any responsibility or obligation to any Participant, any Person claiming a beneficial ownership interest in the 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 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 Bonds, with respect to any notice which is permitted or required to be given to owners of 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 Bonds, or with respect to any consent given or other action taken by DTC as registered owner of the Bonds. So long as any Bond is registered in the name of Cede & Co., as nominee of DTC,the Registrar shall pay all principal of and interest on such Bond, and shall give all notices with respect to such Bond,only to Cede & Co. in accordance with the Representation Letter, 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 Bonds to the extent of the sum or sums so paid. No Person other than DTC shall receive an authenticated 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 Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co.,the Bonds will be transferable to such new nominee in accordance with paragraph (e)hereof. (c) In the event the City determines to discontinue the book-entry-only system for one or both series of Bonds,the City may notify DTC and the Registrar,whereupon DTC shall notify the Participants of the availability through DTC of Bonds of such series in the form of certificates. In such event,the Bonds of such series will be transferable in accordance with paragraph (e)hereof. DTC may determine to discontinue providing its services with respect to the Bonds of one or both series at any time by giving notice to the City and the Registrar and discharging its responsibilities with respect thereto under 7 applicable law. In such event the Bonds of such series will be transferable in accordance with paragraph (e) hereof. (d)The Representation Letter sets forth certain matters with respect to, among other things, notices, consents and approvals by registered owners of the Bonds and Beneficial Owners and payments on the Bonds. The Registrar shall have the same rights with respect to its actions thereunder as it has with respect to its actions under this Resolution. (e) In the event that any transfer or exchange of Bonds of a series is permitted under paragraph (b)or(c) hereof, such transfer or exchange shall be accomplished upon receipt by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee in accordance with the provisions of this Resolution. In the event 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 Bonds, or another securities depository as owner of all the Bonds, the provisions of this Resolution shall also apply to all matters relating thereto, including, without limitation,the preparation of such Bonds in the form of Bond certificates and the method of payment of principal of and interest on such Bonds in the form of Bond certificates. 2.10 Form of Bond. The Bonds shall be prepared in substantially the form set forth in Exhibit A hereto, and by this reference made a part hereof. Section 3. Security Provisions. 3.01. Program Fund, Use of Proceeds. There is hereby created a special account to be designated as the "Park, Trail,and Open Space Program Fund" (the"Program Fund"),to be held and administered by the City Administrative Services Director separate and apart from all other funds of the City. The City appropriates to the Program Fund the proceeds of the sale of the Bonds in the amount of(a) $5,100,000 plus original issue premium on the Bonds, excluding original issue premium used to pay underwriter's discount, and (b)all income derived from the investment of amounts on hand in the Program Fund. The Program Fund shall be used solely to defray expenses of the Project to be paid with proceeds of the Bonds, including costs of issuance of the Bonds. Upon completion and payment of all costs and expenses of the Project to be paid with proceeds of the Bonds and investment earnings thereon,any amounts remaining in the Program Fund shall be credited and paid to the Debt Service Account. 3.02. Debt Service Account. There is hereby created a special account to be designated as the"Park, Trail, and Open Space Debt Service Account"(the"Debt Service Account"),to be held and administered by the City Administrative Services Director separate and apart from all other funds of the City,to be used solely to pay principal of and interest on the Bonds. The City irrevocably appropriates to the Debt Service Account: (a) all funds, if any,to be transferred thereto from the Program Fund in accordance with the provisions of Section 3.01, (b) any taxes levied in accordance with this Resolution,(c)all income derived from the investment of amounts on hand in the Debt Service Account,and(d) such other money as shall be received and appropriated to the Debt Service Account from time to time. 8 3.03. Tax Levies. The full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged to the payment of the Bonds and interest due thereon, and the City shall cause taxes to be levied annually on all taxable property in the City other than certain excluded property sufficient to pay the interest on the Bonds when it falls due and to pay and discharge the principal at maturity of each and all of the Bonds as they respectively become due; however, certain agricultural and forest land and improvements located in the City will not be subject to the tax levy to pay debt service on the Bonds. Taxable property in the City excluded from property tax levies to pay the Bonds includes: a. agricultural land eligible for valuation, assessments, and taxation as agricultural land under Montana Code Annotated 15-7-202; b. forest land as defined in Montana Code Annotated 15-44-102; C. all agricultural improvements on agricultural land referred to in (a); d. all noncommercial improvements on forest land referred to in (b); and e. agricultural implements and equipment described in Montana Code Annotated 15-6-138(1)(a). Section 4. Tax Covenants and Certifications. 4.01. Use of the Project. The Project will be owned or controlled and operated by the City and available for use by members of the general public on a substantially equal basis. The City shall not enter into any lease, use or other agreement with any non-governmental person relating to the use of the Project or security for the payment of the Bonds which might cause the Bonds to be considered"private activity bonds"or"private loan bonds" within the meaning of Section 141 of the Internal Revenue Code of 1986,as amended (the"Code"). 4.02. General Covenant. The City covenants and agrees with the owners from time to time of the Bonds that it will not take or permit to be taken by any of its officers,employees or agents any action which would cause the interest on the Bonds to become includable in gross income for federal income tax purposes under the Code and applicable Treasury Regulations (the "Regulations"),and covenants to take any and all actions within its powers to ensure that the interest on the Bonds will not become includable in gross income for federal income tax purposes under the Code and the Regulations. 4.03. Arbitrage Certification. The Mayor,the City Administrative Services Director and the City Clerk, being the officers of the City charged with the responsibility for issuing the 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 Bonds, it is reasonably expected that the proceeds of the Bonds will be used in a manner that would not cause the Bonds to be"arbitrage bonds"within the meaning of Section 148 of the Code and the Regulations. 9 4.04. Arbitrage Rebate. The City acknowledges that the 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 Bonds from gross income for federal income tax purposes, unless the Bonds qualify for the exception from the rebate requirement under Section 148(f)(4)(B)of the Code and no"gross proceeds of the Bonds (other than amounts constituting a"bona fide debt service fund")arise during or after the expenditure of the original proceeds thereof. In furtherance of the foregoing, the Mayor,the City Administrative Services Director and the City Clerk are hereby authorized and directed to execute a Rebate Certificate. substantially in the fonn to be 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. 4.05. Designation as Qualified Tax-Exempt Obligations. Pursuant to Section 265(b)(3)(B)(ii)of the Code, the City hereby designates the Bonds as "qualified tax-exempt obligations'for the purposes of Section 265(b)(3) of the Code. The City has not designated any bonds in 2014 under Section 265(b)(3)other than the Bonds, recognizing those bonds referenced in the immediately following paragraph were not taken into account in determining the City's status as a qualified small issuer under Section 265(b)(3)of the Code. The City hereby represents that it does not anticipate that the City and all "subordinate entities'of the City will issue in 2014 obligations bearing interest exempt from federal income taxation under Section 103 of the Code(including"qualified 502(c)(3)bonds' but excluding other"private activity bonds,"as defined in Sections 141(a) and 145(a) of the Code) in an amount greater than $10,000,000. 4.06. Information Reporting. The City shall file with the Secretary of the Treasury,not later than February 15, 2015, a statement concerning the Bonds containing the information required by Section 149(e) of the Code. Section 5. Defeasance or Discharge. 5.01. 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 Holders of such Bonds shall cease. 5.02. 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 Registrar for such Bonds on or before the date a sum sufficient for the payment thereof in full; or if any Bond or interest thereon shall not be paid when due, the City may nevertheless discharge its liability with reference thereto by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. 5.03. Redemption. The City may also discharge its liability with reference to any prepayable Bonds which are called for redemption on any date in accordance with their terms, by depositing with the Registrar on or before that date an amount equal to the principal, interest and 10 redemption premium, if any,which are then due thereon, provided that notice of such redemption has been duly given as provided in this Resolution. 5.04. Escrow. The City may also at any time discharge its liability in its entirety with reference to any Bonds subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow,with a bank qualified by law as an escrow agent for this purpose, cash or securities which are general obligations of the United States or securities of United States agencies 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, without reinvestment,to provide funds sufficient to pay all principal, interest and redemption premiums, if any, to become due on such Bonds at their Stated Maturities or, if such Bonds are prepayable and notice of redemption thereof has been given or irrevocably provided for,to such earlier redemption date. Section 6. Continuing Disclosure. (a) Purpose and Beneficiaries. To provide for the public availability of certain infonnation relating to the Bonds and the security therefor and to permit participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5)of Rule 15c2- 12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended(the "Rule"),the City hereby makes the following covenants and agrees, for the benefit of the Owners (as hereinafter defined)from time to time of the outstanding Bonds,to provide annual reports of specified information and notice of the occurrence of certain events to the Municipal Securities Rulemaking Board("MSRB")through its Electronic Municipal Market Access system website ("EMMA"),as hereinafter described (the"Disclosure Covenants"). The City is the only"obligated person" in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. In 2012,the City discovered that it was not in compliance with its prior undertakings and terminated undertakings, as applicable. Specifically,the City discovered that it had not provided annual audited financial reports, other certain operating data, and notice of certain rating changes as required by its prior undertakings and terminated undertakings for fiscal years ended June 30, 2008,2009,2010 and 2011. On May 18,2012 the City responded to this discovery by submitting an event notice of such failure to provide information,notice of certain rating changes and the required audited financial statements and other operating data for fiscal years ended June 30, 2008,2009, 2010 and 2011 to the MSRB through the EMMA. In November 2013 the City discovered it had submitted a majority of, but had not submitted all of the certain other operating data as required by the prior undertakings and terminated undertakings, as applicable. On November 13, 2013 the City submitted the missing other operating data to the MSRB through the EMMA together with a notice of failure to file such operating data. The City was reminded of its obligations with respect to continuing disclosure undertakings. The City believes it is currently in compliance with its prior undertakings. If the City fails to comply with the Disclosure Covenants, 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 the Disclosure Covenants, including an action for a writ of mandamus or specific performance. Direct, indirect, 11 consequential and punitive damages shall not be recoverable for any default hereunder. Notwithstanding anything to the contrary contained in the Disclosure Covenants, in no event shall a default under this Section 6 constitute a default under the Bonds or under any other provision of this Resolution. As used in this Section 6,"Owner'means, in respect of a Bond,the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any Beneficial Owner(as hereinafter defined)thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used in this Section 6, "Beneficial Owner'means, in respect of a Bond, any person or entity that(i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through nominees, depositories or other intermediaries),or(ii) is treated as the owner of the Bond for federal income tax purposes. (b) 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 of the City,commencing with the fiscal year ending June 30,2014,the following financial information and operating data in respect of the City(the"Disclosure Information"): (A) the audited financial statements of the City for such fiscal year, or, if unavailable, updated operating results for the City for the then most recent completed fiscal year(and submitting audited financials when available), similar to the format shown in Appendix A to the Official Statement related to the Bonds (the"Official Statement"); and (B) updated figures for the City for the then current fiscal year to include: (1) general obligation bonds outstanding; (2) general obligation debt capacity; (3) taxable market valuation, taxable valuation and open space taxable valuation, (4) estimated City population; (5) a description of any additional borrowing or future financing of the City; and (6) tax collection figures for the then most recent completed fiscal year in a format similar to the table in the Official Statement under the heading"Tax Collections." 12 Notwithstanding anything in this Section 6, if the audited financial statements are not available by the date specified,the City shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of the Disclosure Information and, within ten days after the receipt thereof, the City shall provide the audited financial statements. Any or all of the Disclosure Information may be incorporated, if it is updated as required hereby, by reference from other documents, including official statements, which have been submitted to the MSRB in the manner set forth in subsection (c) hereof. The City shall clearly identify in the Disclosure Information in 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 material (as hereinafter defined), 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 the Disclosure Covenants are amended, then the City shall include in the next Disclosure Information to be delivered pursuant to this Section 6,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 not in excess of ten business days,notice of the occurrence of any of the following events: (A) principal and interest payment delinquencies; (B) non-payment related defaults, if material; (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,the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; (G) modifications to rights of holders of the Bonds, if material; (H) bond calls, if material, and tender offers; (I) defeasances; 13 (J) release, substitution or sale of property securing repayment of the Bonds, if material: (K) rating changes; (L) bankruptcy, insolvency, receivership, or similar event of the obligated person; (M) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business. the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions. other than pursuant to its terms, if material;and (N) appointment of a successor or additional trustee or the change of name of a trustee, if material. An event is"material"if it is an event as to which a substantial likelihood exists that a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter the total infonnation otherwise available to an investor from the Official Statement, information disclosed in this Bond Resolution or information generally available to the public. Notwithstanding the foregoing sentence,an event is also "material" if it is an event that would be deemed material for purposes of the purchase,holding or sale of a 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 described above under paragraph (b)(1)above at the time specified thereunder; (B) the amendment or supplementing of the Disclosure Covenants,together with a copy of such amendment or supplement and any explanation provided by the City; (C) the termination of the obligations of the City under the Disclosure Covenants; and (D) any change in the fiscal year of the City. (c) Manner of Disclosure. The City agrees to make available the information described in subsection (b)hereof to the MSRB via EMMA or in a manner as may be otherwise proscribed by the MSRB consistent with the Rule. All documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB. (d) Term; Amendments; Interpretation. 14 (1) The Disclosure Covenants shall remain in effect so long as any Bonds are outstanding. (2) The Disclosure Covenants(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 (b)(3)hereof)or the consent of the Owners of any Bonds, by a resolution of this Commission tiled in the office of the recording officer of the City 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 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 or the type of operations conducted by the City, or(B) is required by,or better complies with, the provisions of paragraph (b)(5)of the Rule, assuming that such provisions apply to the Bonds. 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) The Disclosure Covenants are entered into to comply with the continuing disclosure provisions of the Rule and should be construed so the undertaking would satisfy the requirements of paragraph(b)(5)of the Rule. Section 7. Certification of Proceedings. The officers of the City are hereby authorized and directed to prepare and furnish to the Original Purchaser and to Dorsey & Whitney LLP, Bond Counsel, certified copies of all proceedings and records of the City, and such other affidavits, certificates and information as may be required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them,and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. Section 8. Repeals and Effective Date. 8.01. Repeal. All provisions of other resolutions and other actions and proceedings of the City and this Commission that are in any way inconsistent with the terms and provisions of this Resolution are repealed, amended and rescinded to the full extent necessary to give full force and effect to the provisions of this Resolution. 8.02. Effective Date. This Resolution shall take effect immediately upon its passage and adoption by this Commission. 15 PASSED AND ADOPTED by the City Commission of the City of Bozeman. Montana, this 17th day of November. 2014. ,t ayor Attest: (SEAL).e 1 J O -i • 1 Vr�i.If I6 EXHIBIT A UNITED STATES OF AMERICA STATE OF MONTANA COUNTY OF GALLATIN CITY OF BOZEMAN GENERAL OBLIGATION BOND SERIES 2014 No. $ .00 Date of Rate Maturitv OriainalIssue CUSIP % July 1, December 9. 2014 103637 REGISTERED OWNER: CEDE& CO. PRINCIPAL AMOUNT: AND NO/]00 DOLLARS FOR VALUE RECEIVED, the City of Bozeman, Gallatin County, State of Montana (the "City'), acknowledges itself to be indebted and hereby promises to pay to the registered owner named above, or registered assigns, the principal amount specified above on the maturity date specified above or, if this Bond is prepayable as stated herein, on any date prior thereto on which this Bond shall have been duly called for redemption, and to pay interest on said principal amount to the registered owner hereof from the Date of Original Issue set forth above or from such later date to which interest has been paid or duly provided for until this Bond is paid or, if this Bond is prepayable, until it has been duly called for redemption, at the rate specified above. Principal of this Bond is payable upon presentation and surrender hereof to U.S. Bank National Association, of Denver, Colorado, as Bond Registrar, Transfer Agent and Paying Agent, or its successor designated under the Resolution described herein (the"Registrar") at its operations center in St. Paul, Minnesota. The interest on this Bond shall be payable on January 1 and July 1 in each year, commencing January 1, 2016. Interest on the Bonds shall be payable to the owners of record thereof as such appear on the bond register as of the close of business on the 15th day of the month immediately preceding each interest payment date, whether or not such day is a Business Day. Interest on, and upon presentation and surrender thereof, the principal of each Bond shall be payable by check or draft issued by the Registrar described herein. "Business Day'means any day other than a Saturday, Sunday or legal holiday of the State of Montana. The principal of and interest on this Bond are payable in lawful money of the United States of America. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith, credit and taxing powers of the City have been and are hereby irrevocably pledged. 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 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 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 an issue in the total principal amount of $5,100,000 (the "Series 2014 Bonds"), all of like date of original issue and tenor except as to serial number, denomination, maturity date, interest rate and redemption privilege, all authorized by the favorable vote of more than the requisite majority of the qualified electors of the City voting on the question of the issuance thereof at a duly held election, all pursuant to resolutions duly adopted by the City Commission, including a bond resolution adopted on November 17, 2014 (the "Resolution"), and in full conformity with the Constitution and laws of the State of Montana thereunto enabling. The Bonds are issuable only as fully registered bonds of single maturities, in denominations of$5,000 or any integral multiple thereof. Bonds with stated maturities in the years 2016 through 2024 are not subject to redemption prior to their stated maturities. Bonds with stated maturities on or after July 1, 2025 are subject to redemption on January 1, 2025 and any date thereafter, at the option of the City, in whole or in part, and if in part from such stated maturities and in such principal amounts as the City may designate in writing to the Registrar(or, if no designation is made, in inverse order of maturities and within a maturity in $5,000 principal amounts selected by the Registrar by lot or other manner it deems fair), at a redemption price equal to the principal amount thereof and interest accrued to the redemption date,without premium. At least forty-five days prior to the redemption date, the City will provide or cause to be provided to the Registrar a request that the Registrar deliver a notice of redemption to the registered owners of each Bond by first class mail or, if the registered owner of the Bonds is DTC, the notice of redemption may be sent by electronic means, and the Registrar shall mail or cause to be mailed such notice of redemption or, if the registered owner of the Bonds is DTC, send or cause to be sent such notice of redemption by electronic means at least thirty days prior to the designated redemption date, a notice of redemption to the registered owners of each 2014A to be redeemed. Upon partial redemption of any Bond, a new Bond or Bonds will be delivered to the registered owner without charge, representing the remaining principal amount outstanding. The Bonds having stated maturities in 2024, 2030,2032, and 2035 (the"Term Bonds")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 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 to the redemption date: A-2 Principal Sinking Fund Amount on Payment Date Sinking Fund (July 1) Payment Date 2023 $230,000 2029 $280,000 2031 $305,000 2033 $325,000 2034 340,000 If the Term Bond with a stated maturity in 2024 is not previously purchased by the City in the open market, in respect of the Term Bond maturing in 2024, $235,000 in principal amount of such Term Bond would remain to mature in 2024. If the Term Bonds with stated maturities in 2030, 2032, and 2035 are not previously purchased by the City in the open market or prepaid, in respect of the Term Bond maturing in 2030, $290,000 in principal amount of such Term Bond would remain to mature in 2030, in respect of the Term Bond maturing in 2032, $315,000 in principal amount of such Term Bond would remain to mature in 2032, and in respect of the Term Bond maturing in 2035, $355,000 in principal amount of such Term Bond would remain to mature in 2035. The principal amount of the Term Bonds required to be redeemed on the above Sinking Fund Payment Dates shall be reduced by the principal amount of such Tenn Bonds theretofore redeemed at the option of the Commission and as to which the City has not previously applied amounts to reduce the principal amount of such Term Bonds on a Sinking Fund Payment Date. The Bonds have been designated by the City as "qualified tax-exempt obligations"pursuant to Section 265 of the Internal Revenue Code of 1986, as amended. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City in the principal office of the 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 Registrar, duly executed by the registered owner or his attorney, and may also be surrendered in exchange for Bonds of other authorized denominations. Upon any such transfer or exchange, the City will cause a new 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 and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the A-3 purpose of receiving payment and for all other purposes, and neither the City nor the Registrar shall be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Montana to be done, to exist,to happen and to be performed precedent to and in the issuance of this Bond, in order to make it a valid and binding general obligation of the City according to its terms, have been done, do exist, have happened and have been performed in regular and due form, time and manner as so required; that the City Commission will annually levy an ad valorem tax on all of the taxable property in the City (excluding certain agricultural and forest land and improvements) in an amount sufficient to pay the interest hereon when it falls due and also to pay and discharge the principal of this Bond at maturity; that this Bond, together with all other indebtedness of the City outstanding on the date of original issue hereof, does not exceed any constitutional or statutory limitation of indebtedness. 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 Registrar by the manual signature of one of its authorized representatives. A-4 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 City Administrative Services Director and the City Clerk, and by a printed facsimile of the official seal of the City. CITY OF BOZEMAN, MONTANA (Facsimile Signature) MAYOR (Facsimile Signature) (Facsimile Seal) CITY ADMINISTRATIVE SERVICES DIRECTOR (Facsimile Signature) CITY CLERK Dated: CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned herein. U.S. BANK NATIONAL ASSOCIATION, as Registrar, Transfer Agent, and Paying Agent By Authorized Signature A-5 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 UTMA............Custodian..................... in common (Cust) (Minor) TEN ENT-- as tenants by the entireties under Uniform Gifts to JT TEN -- as joint tenants Minor Act............................................ with right of (State) survivorship and not as tenants in common Additional abbreviations may also be used. ASSIGNMENT FOR VALUE 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. Dated: PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER NOTICE: The signature to this assignment OF ASSIGNEE: must correspond with the name as it appears upon the face of the within Bond in every particular,without alteration, enlargement or any change whatsoever. SIGNATURE GUARANTEED Signature(s)must be guaranteed by an eligible guarantor institution"meeting the requirements of the Bond Registrar. which requirements include membership or participation in STAMP or such other "signature guaranty program"as may be determined by the Bond Registrar in addition to or in substitution for STAMP. all in accordance with the Securities Exchange Act of 1934,as amended. A-6