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RESOLUTION NO. 5142
RESOLUTION RELATING TO $3,689,000 TAX INCREMENT URBAN RENEWAL
REVENUE REFUNDING BOND (DOWNTOWN BOZEMAN IMPROVEMENT
DISTRICT), SERIES 2020; AUTHORIZING AND DIRECTING THE SALE AND
ISSUANCE AND PRESCRIBING THE FORM AND TERMS THEREOF AND THE
SECURITY THEREFOR
BE IT RESOLVED by the City Commission(the"Commission")of the City of Bozeman,
Montana(the"City"), as follows:
Section 1
Definitions, Authorization 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. 5142 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.
Act means Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended or
supplemented.
Bond Re ig ster means the register maintained for the purpose of registering the ownership,
transfer and exchange of the Series 2020 Bonds.
Bond Registrar means the City Finance Director, or any successor appointed pursuant to
Section 2.04.
Business Day means any day other than a Saturday, Sunday or other day on which the
Bond Registrar is not open for business.
City means the City of Bozeman,Montana, or its successors.
Code means the Internal Revenue Code of 1986, as amended.
Commission means the City Commission of the City or any successor governing body
thereof.
Date of Taxability means the date specified in the determination, ruling or decision
constituting the Determination of Taxability that the interest payable on the Series 2020 Bond
becomes includible in the gross income of the Owner for federal income tax purposes.
Debt Service Account means the account established pursuant to Section 5.01.
Determination of Taxability means the issuance of a statutory notice of deficiency by the
Internal Revenue Service, a ruling by the National Office of the Internal Revenue Service, or a
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final, nonappealable decision of a court of competent jurisdiction which holds in effect that the
interest payable on the Series 2020 Bond is includible in the gross income of the Owner thereof
for federal income tax purposes.
Development Account means the account established pursuant to Section 5.01.
District means the Downtown Bozeman Improvement District, created and established as
an urban renewal area pursuant to the Act and the Ordinance, as such area may be enlarged or
reduced in accordance with the Act and this Resolution.
Fiscal Year means 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.
Interest Account means the subaccount so designated in the Debt Service Account.
Interest Payment Date means each January 1 and July 1 during the term of the Series 2020
Bond, commencing July 1, 2020 and ending on July 1, 2032, subject to prior optional redemption
of the Series 2020 Bond.
Lender has the meaning given in Section 1.06 hereof.
Opinion of Counsel means a written opinion of counsel, who may (except as otherwise
expressly provided in this Resolution)be counsel for the City.
Ordinance means Ordinance No. 1409, adopted by the Commission on November 20,
1995, as amended and supplemented 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.
Owner means the Person in whose name the Series 2020 Bond is registered in the Bond
Register.
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Parking Facility Project means the construction of a parking garage facility consisting of
an approximately 159,000 square foot parking garage, providing 435 parking spaces owned and
operated by the City.
Payment Date means any Interest Payment Date or Principal Payment Date.
Person means 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 means the City of Bozeman Urban Renewal Plan, adopted by the Commission on
November 20, 1995,as amended on March 7,2005 and as it may be further amended in accordance
with the Act, the Ordinance and this Resolution.
Principal Account means the subaccount so designated in the Debt Service Account.
Principal Payment Date means each July 1 during the term of the Series 2020 Bond,
commencing July 1, 2020 and ending on July 1, 2032, subject to prior optional redemption of the
Series 2020 Bond.
Qualified Investments means the investments described as such in Section 5.05.
Refunded Bonds means the Series 2007 Bonds maturing on and after July 1, 2020, which
are being refunded by the Series 2020 Bond.
Series 2007 Bonds means the City's Tax Increment Urban Renewal Revenue Bonds, Series
2007 (Downtown Bozeman Improvement District), issued pursuant to the 2007 Resolution in the
aggregate principal amount of$6,270,000.
Series 2020 Bond means the City's Tax Increment Urban Renewal Revenue Refunding
Bond (Downtown Bozeman Improvement District), Series 2020, to be issued in the original
principal amount of$3,689,000 pursuant to this Resolution.
State means the State of Montana.
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State Entitlements means 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 and codified at 15-1-120 through 15-1-122,M.C.A.
Tax Increment means the amount received by the City pursuant to the Act and the Plan
from the levying of Taxes by the Taxing Bodies against the incremental taxable value, as defined
in the Act, of all Taxable Property, and shall include any payments in lieu of Taxes attributable to
the incremental taxable value,State Entitlements,and all payments received by the City designated
as replacement revenues for lost Tax Increment, as provided in Section 6.06.
Taxable Property means all real and personal property located in the District and subject
to Taxes, including land, improvements and equipment.
Taxable Rate shall have the meaning given such term in Section 2.02.
Taxes means all taxes levied on an ad valorem basis by a Taxing Body against the Taxable
Property (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
District.
Taxing BodX means the City; Gallatin County, Montana; School District No. 7, Gallatin
County, Montana(Bozeman); High School District No. 7, Gallatin County, Montana(Bozeman);
the State of Montana;and any other political subdivision or governmental unit which may hereafter
levy Taxes against property within the District.
2007 Resolution means Resolution No. 4073, adopted by the Commission on December
17,2007,pursuant to which the Series 2007 Bonds were issued.
1.02. Authorization. Under the provisions of Montana Code Annotated, Title 7, Chapter
15, Parts 42 and 43, as amended(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 property taxes collected in such areas, issue its bonds to pay the costs of such projects and to
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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 and the Ordinance, the City has created the
District and has approved the Plan in accordance with the provisions of the Act. The Plan provides
for the segregation and collection of Tax Increment with respect to the District. The District 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 Series 2007 Bonds and the Refunding. Pursuant to the Act, the Ordinance and
the 2007 Resolution,the City issued the Series 2007 Bonds to finance a portion of the costs of the
Parking Facility Project, fund a deposit to a reserve account for the Series 2007 Bonds and pay
associated costs of the financing.
To achieve debt service savings, it is proposed that the City issue the Series 2020 Bond to
refund the Refunded Bonds,which are currently outstanding in the aggregate principal amount of
$3,995,000(the"Refunded Bonds"). The Refunded Bonds are subject to redemption at the option
of the City on January 1, 2020 and any day thereafter at a price of par plus accrued interest to the
date of redemption,without premium.
1.05. Cost of Refunding. The total cost of refunding the Refunded Bonds,including costs
incidental to the issuance and sale of the Series 2020 Bond,is estimated as follows:
Deposit to Escrow Account $ 4,047,871.68
Costs of Issuance $ 67,510.82
Total: $ 4,115,382.50
The costs of the refunding will be paid from the following sources:
Principal amount of Series 2020 Bond $ 3,689,000.00
Transfer from Debt Service Reserve Account for Series 2007 Bonds $ 426,382.50
Total: $ 4,115,382.50
1.06. Authorization and Sale of Series 2020 Bond. With the assistance of Stifel,Nicolaus
& Company, Incorporated, acting in the capacity of placement agent for the City(the "Placement
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Agent"), the City has received an offer from Truist Bank, a North Carolina banking corporation
(the"Lender"),to loan the City$3,689,000 at an interest rate of 2.44%per annum,to be evidenced
by the Series 2020 Bond and having such other terms and conditions as are set forth herein. The
Placement Agent has advised the City that issuing the Series 2020 Bond to the Lender to effect the
refunding of the Series 2007 Bonds will generate $649,786.30 in net present value savings to the
City. The City hereby determines that it is in the best interest of the City to sell and issue the
Series 2020 Bond to the Lender on the terms set forth herein. The City Finance Director or her
designee is hereby authorized to execute and deliver a Wire Transfer Agreement, in a form
reasonably acceptable to the City, dated on or after March 1, 2020, between the City and the
Lender,to effect the Lender's wire transfer of the loan evidenced by the Series 2020 Bond.
1.07. Adequacy of Tax Increment. The City estimates that Tax Increment to be received
from the District will be approximately $2,854,112 per year (based on Tax Increment from the
District of $2,854,112 received by the City in Fiscal Year 2019). The maximum payment of
principal and interest on the Series 2020 Bond in any Fiscal Year is $333,954.40. Upon the
refunding of the Refunded Bonds, other than the Series 2020 Bond, there will be no other
outstanding bonds or other obligations of the City payable from tax increment received in the
District. Accordingly, the estimated Tax Increment to be received by the City is expected to be
sufficient to pay the maximum Principal and Interest Requirements on the Series 2020 Bond.
1.08. 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 2020 Bond under the
Act, the Ordinance and this Resolution have or shall be met prior to the issuance of the
Series 2020 Bond;
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(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 2020 Bond will be sufficient to pay the
principal thereof and interest thereon when due;
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(c) it is in the best interests of the City to issue and sell the Series 2020 Bond for
the purpose of refunding the Refunded Bonds and paying costs of issuance of the Series
2020 Bond and the refunding, as provided in this Resolution; and
(d) all acts, conditions and things required by the Constitution and laws of the
State,including the Act,in order to pledge the Tax Increment to the payment of the Series
2020 Bond,to make the Series 2020 Bond a valid and binding special, limited obligation
of the City in accordance with its terms and with the terms of this Resolution have been
done, do exist, have happened and have been performed in regular and due form, time
and manner as so required.
Section 2
The Series 2020 Bond.
2.01. Payment Terms. The Series 2020 Bond shall be issued in the principal amount of
$3,689,000 and shall bear interest at a rate of 2.44% per annum, except as otherwise set forth in
Section 2.02 hereof. Interest on the Series 2020 Bond shall be payable on each Interest Payment
Date and principal of the Series 2020 Bond shall be payable on each Principal Payment Date, on
the dates and in the amounts set forth on Schedule I to the Series 2020 Bond.
Interest on the Series 2020 Bond shall be payable to the Owner of record thereof as such
appears on the Bond Register as of the close of business on the fifteenth day of the month
immediately preceding each Interest Payment Date, whether or not such day is a business day.
Interest on the Series 2020 Bond shall be calculated on the basis of a 360-day year composed of
twelve 30-day months. Payments on the Series 2020 Bond shall be made by the City either by
ACH or wire transfer and the Owner of the Series 2020 Bond shall not be required to present the
Series 2020 Bond in order to receive any payment. The Series 2020 Bond shall be issued as a
single bond with principal payments in minimum increments of$1,000.
2.02. Determination of Taxability. In the event that the City shall fail to observe any
covenant, agreement or representation in Section 8 of this Resolution, which failure results in a
Determination of Taxability, the interest rate on the Series 2020 Bond shall increase to an interest
rate per annum equal to the quotient of the tax-exempt rate of interest on the Series 2020 Bond
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(2.44%) divided by 67.5% (the "Taxable Rate"). In addition, the City shall pay to the Owner an
amount equal to the difference between the interest paid at the tax-exempt rate and the interest
which would have been paid at the Taxable Rate fiom and after the Date of Taxability, plus any
penalties,interest,assessments and additions to tax payable by the Owner as a result of such change
in taxable status. Thereafter,interest on the Series 2020 Bond shall accrue at the Taxable Rate and
shall be payable to the Owner on the Payment Dates specified in the Series 2020 Bond.
The Owner shall permit the City to contest,litigate or appeal any notice,ruling or decision
that would, with the lapsing of time, constitute a Determination of Taxability, at the City's sole
expense; provided that any such contest, litigation or appeal is, in the reasonable opinion of the
Owner, being undertaken and carried forward in good faith, diligently and with reasonable
dispatch. The expenses of any contest or appeal of such a notice, ruling or decision shall be paid
by the party initiating the contest and neither the City nor the Owner shall be required to contest
or appeal any such notice, ruling or decision.
2.03. System of Registration. The City shall appoint, and shall maintain, a bond registrar,
transfer agent and paying agent for the Series 2020 Bond and such person may be an officer or
employee of the City (the "Bond Registrar"). This Section 2.03 shall establish a system of
registration for the Series 2020 Bond 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 2020 Bond are inconsistent herewith. 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 2020 Bond and the registration of transfers and exchanges thereof.
(b) Transfer. Upon surrender for transfer of any Series 2020 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 2020 Bond of the same series and a like aggregate principal amount,
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interest rate and maturity as requested by the transferor. The Bond Registrar may,
however, close the books for registration of the transfer of the Series 2020 Bond if called
for redemption.
(c) Exchange. Whenever any Series 2020 Bond is surrendered by the registered
Owner for exchange,the Bond Registrar shall authenticate and deliver one or more new
Series 2020 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. Any Series 2020 Bond surrendered upon any transfer or
exchange shall be promptly canceled by the Bond Registrar and thereafter disposed of as
directed by the City.
(e) Improper or Unauthorized Transfer. When any Series 2020 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 2020 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 the Series 2020 Bond is at any time registered in the Bond Register
as the absolute Owner of the Series 2020 Bond,whether the Series 2020 Bond is overdue
or not, for the purpose of receiving payment of, or on account of, the principal of,
premium, if any, and interest on the Series 2020 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 the Series 2020
Bond to the extent of the sum or sums so paid.
(g) Taxes, Fees and Charges. For every transfer or exchange of the Series 2020
Bond, 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.
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(h) Mutilated, Lost, Stolen or Destroyed Bonds. In case the Series 2020 Bond
shall become mutilated or be lost, stolen or destroyed,the Bond Registrar shall deliver a
new Series 2020 Bond of the same series and a like amount, number, maturity date and
tenor in exchange and substitution for and upon cancellation of any such mutilated Series
2020 Bond or in lieu of and in substitution for any Series 2020 Bond that has been 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 2020 Bond lost,
stolen or destroyed,upon filing with the Bond Registrar of evidence satisfactory to it that
the Series 2020 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. Any Series 2020 Bond so surrendered to the Bond Registrar
shall be canceled by it and evidence of such cancellation shall be given to the City. If
the mutilated, lost, stolen or destroyed Series 2020 Bond has already matured or such
Series 2020 Bond has been called for redemption in accordance with its terms, it shall
not be necessary to issue a new Series 2020 Bond prior to payment.
2.04. Initial Bond Registrar. The City hereby appoints the City Finance Director as the
initial Bond Registrar for the Series 2020 Bond. The City reserves the right to appoint a bank,
trust company or financial institution as successor registrar, transfer agent or paying agent, as
authorized by the Model Public Obligations Registration Act of Montana, and the City agrees to
pay the reasonable and customary charges of the Bond Registrar for the services performed.
2.05. Optional Redemption of Series 2020 Bond. The Series 2020 Bond is subject to
prepayment and redemption,in whole,at the option of the City,on July 1,2026 and on any Interest
Payment Date thereafter, at a price of the principal amount being prepaid and redeemed plus
interest thereon through the date of prepayment or redemption, without premium or penalty. The
City shall give 15 days'prior written notice of any such redemption to the Owner at its address set
forth in the Bond Register.
2.06. Execution and Delivery. The Series 2020 Bond shall be forthwith prepared for
execution under the direction of the City Finance Director, at the expense of the City, and shall be
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executed on behalf of the City by the signatures of the Mayor, City Manager and City Clerk;
provided that said signatures may be printed, engraved or lithographed facsimiles thereof. The
seal of the City need not be affixed to or imprinted on the Series 2020 Bond. In case any officer
whose signature or a facsimile of whose signature shall appear on the Series 2020 Bond shall cease
to be such officer before the delivery of the Series 2020 Bond, 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. Notwithstanding such execution, no Series 2020 Bond shall be valid or
obligatory for any purpose or be entitled to any security or benefit under the Resolution unless and
until a certificate of authentication on such Series 2020 Bond has been duly executed by the manual
signature of an authorized representative of the Bond Registrar. The executed certificate of
authentication on the Series 2020 Bond shall be conclusive evidence that it has been authenticated
and delivered under and in accordance with the provisions of this Resolution. When the Series
2020 Bond has been fully executed and authenticated, it shall be delivered by the Bond Registrar
to the Lender upon payment of the purchase price thereof, and the Lender shall not be obligated to
see to the application of the purchase price.
2.07. Form of Series 2020 Bond. The Series 2020 Bond shall be in substantially the form
set forth in Exhibit A 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.
Section 3
Use of Proceeds; Refunding and Redemption.
3.01. Use of Proceeds. Simultaneously with the delivery of the Series 2020 Bond,the City
Finance Director shall deposit in escrow with U.S. Bank National Association, of Salt Lake City,
Utah (the "Escrow Agent") the following amounts: $3,621,489.18 of the proceeds of the Series
2020 Bond and$426,382.50 from the reserve account for the Series 2007 Bonds for the redemption
and prepayment of the Refunded Bonds on April 9, 2020, as set forth in the Escrow Agreement.
There are no amounts on hand in the debt service account for the Series 2007 Bonds available to
be contributed to the refunding. The Mayor, the City Manager and the City Finance Director (or
in the absence or inability of any of them, another Commissioner or officer of the City designated
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by any of the Mayor, City Manager or City Finance Director) are hereby authorized to enter into
an Escrow Agreement with the Escrow Agent, in the form which has been presented to this
Commission and attached hereto as Exhibit B, with such additions thereto or deletions therefrom
as are necessary or appropriate. Pursuant to Section 8.04 of the 2007 Resolution, upon the
establishment and funding of the escrow account pursuant to this Section 3.01, the Refunded
Bonds shall no longer be considered outstanding. The City Finance Director shall also deposit
from proceeds of the Series 2020 Bond $$67,510.82 in the Development Account for payment of
costs of issuance of the Series 2020 Bond and costs of the refunding.
3.02. Redemption. The Series 2007 Bonds with stated maturities in 2020 and thereafter
are hereby called for redemption on April 9, 2020.
Section 4
No Additional Bonds.
As set forth in the Ordinance and the Plan,the City has determined not to issue additional
bonds payable from the Tax Increment on a parity with the Series 2020 Bond.
Section 5
The Tax Increment Accounts.
5.01. Bond Proceeds and Tax Increment Pledged and Appropriated. The City hereby
establishes on its books and records the following accounts, collectively known as the "Tax
Increment Accounts": the Debt Service Account and the Development Account, as described in
this Section 5. The Tax Increment Accounts shall be maintained as separate and special
bookkeeping accounts on the official books and records of the City until the Series 2020 Bond has
been fully paid, or the City's obligation with regard to the Series 2020 Bond has been discharged
as provided in this Resolution.
All Tax Increment is irrevocably pledged and appropriated and shall be credited as received
to the Debt Service Account, and all other funds, if any, hereafter received or appropriated for
purposes of urban renewal projects are appropriated to the Tax Increment Accounts as set forth
below.
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5.02. Tax Increment Receipts. All Tax Increment received by the City and credited to the
Debt Service Account, as required in Section 5.01, shall be credited as received as follows:
(a) first, to the Interest Account, until the balance on hand is at least equal to all interest on the
Series 2020 Bond due and payable therefrom within the next six full calendar months; (b) second,
to the Principal Account,until the balance on hand is at least equal to all principal of and premium,
if any, on the Series 2020 Bond due and payable therefrom within the next twelve full calendar
months; and (c) third, after all credits required by the preceding clauses, to the Development
Account.
5.03. Debt Service Account. There are hereby established within the Debt Service
Account two separate subaccounts, designated as the Interest Account and the Principal Account.
(a) Interest Account. There shall be credited to the Interest Account the Tax
Increment, as received by the City, in the amount specified in clause (a) of Section 5.02.
On or before each Interest Payment Date,the City shall withdraw from the Interest
Account an amount sufficient to pay the interest due on the Series 2020 Bond on such
Interest Payment Date, and shall use such amount to pay, or make provision with the
Registrar for the payment of, interest on the Series 2020 Bond on such Interest Payment
Date.
If on any Interest Payment Date the balance in the Interest Account is not sufficient
to pay the total amount of interest due on the Series 2020 Bond on such Interest Payment
Date, the City shall transfer any money then on hand in the Development Account or the
Principal Account to such account, in the order listed and in an amount equal to such
deficiency.
All income derived from the investment of amounts in the Interest Account shall
be credited as received to the Interest Account.
(b) Principal Account. There shall be credited to the Principal Account from
the Tax Increment, as received by the City, the amount specified in clause (b) of Section
5.02.
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Amounts on hand in the Principal 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 this
Section 5.03.
On or before each Principal Payment Date, the City shall withdraw from the
Principal Account an amount sufficient to pay the principal due on the Series 2020 Bond
on such Principal Payment Date, and shall use such amount to pay, or make provision with
the Registrar for the payment of, principal of the Series 2020 Bond on such Principal
Payment Date.
If on any Principal Payment Date the balance in the Principal Account is not
sufficient to pay the total amount of principal due on the Series 2020 Bond on such
Principal Payment Date,the City shall transfer any money then on hand in the Development
Account to such account in an amount equal to such deficiency.
All income derived from the investment of amounts in the Principal Account shall
be credited as received to the Principal Account.
5.04. Development Account. There shall be credited to the Development Account (i)
the amount specified in Section 3.01 hereof, and(ii)any and all Tax Increment remaining after
the required credits to the Debt Service Account and any investment income and other moneys
in excess of the requirements of the Debt Service Account which the City determines in its
discretion to transfer to the Development Account. Money from time to time on hand in the
Development Account shall be transferred to the Debt Service Account as provided by Section
5.03 and may be used for any of the following purposes and not otherwise:
(a) to pay costs of issuance of the Series 2020 Bond;
(b) to pay administrative costs of the City and the District and costs incurred in
connection with urban renewal projects (as defined in the Act) within the District as
authorized by the Act (including any loans or advances therefor made from other City
funds);
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(c) to redeem or discharge the Series 2020 Bond prior to its stated maturity in
accordance with this Resolution;
(d) to make payments of arbitrage rebate to the United States of America
pursuant to Section 148(f) of the Code in respect of any series of Bonds; and
(e) to pay other Taxing Bodies a portion of the annual Tax Increment received
by the City, pursuant to an agreement with respect thereto as authorized by the Act;
provided,however,no such agreement shall require or permit the City to remit to any other
Taxing Bodies any portion of the annual Tax Increment received in a Fiscal Year and on
deposit in the Development Account unless there is no default under the provisions of this
Resolution as evidenced by a certificate of the City Treasurer filed with the City Clerk as
of the date of remittance.
5.05. Investments. The City Finance Director shall cause all moneys from time to time
in the Tax Increment Accounts 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 as required by law, and no money shall at any time be
withdrawn fiom such deposit accounts except for the purposes of the Tax Increment Accounts
as defined and authorized by this Resolution. The funds to the credit of the Tax Increment
Accounts may be commingled in one or more deposit accounts. The balance on hand in the
Tax Increment Accounts may at any time be invested and reinvested, in accordance with
applicable law, in investments 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.
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 the Series 2020 Bond, in strict conformity with the terms
of the Series 2020 Bond and of this Resolution, and it will faithfully observe and perform all of
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the conditions, covenants and requirements of this Resolution and of the Series 2020 Bond.
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. Against Encumbrances. The Series 2020 Bond shall be secured by and payable from
Tax Increment and all other moneys from time to time in the Tax Increment Accounts, on a first
lien basis. 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
Series 2020 Bond.
6.03. Books and Accounts, Financial Statements, Annual Reporting. 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 Tax Increment and the Debt Service Account and the Development Account. Such books
of record and accounts shall be subject to the inspection of the owner of the Series 2020 Bond
during business hours upon request.
On or before 270 days after the end of each Fiscal Year of the City, commencing with the
Fiscal Year ending June 30,2019,the City shall provide to the owner of the Series 2020 Bond the
audited financial statements of the City for such Fiscal Year, accompanied by the audit report and
opinion of the accountant or government auditor relating thereto. If the audited financial
statements are not available by the date that is 270 days after the end of the Fiscal Year, the City
shall provide to the Owner of the Series 2020 Bond the unaudited financial statements by such
date and shall provide the audited financial statements within 10 Business Days after receipt
thereof. The audited financial statements provided by the City shall include sufficient financial
information with respect to the District and the Tax Increment derived therefrom to enable the
Owner to ascertain the debt service coverage ratio for the Series 2020 Bond for such Fiscal Year.
6.04. 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
17
confirming unto the owner of the Series 2020 Bond of the rights and benefits provided in this
Resolution.
6.05. Reduction in Size of District; Amendment of Resolution.
(a) The City will not reduce the size of the District if an effect thereof will be to
materially and adversely affect the security of the Series 2020 Bond.
(b) The City may amend this resolution with the prior written consent of the Owner(s)
of a majority of principal amount of the Series 2020 Bond.
6.06. 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 Debt Service Account from such alternate or supplemental revenues an
amount that will, with money on hand in the Debt Service Account or available and to be
transferred to the Debt Service Account during such Fiscal Year,be sufficient to pay the principal
of,premium, if any, and interest on the Series 2020 Bond payable in that Fiscal Year.
6.07. Rights of the Owner. The Owner of a majority in principal amount of the Series
2020 Bond may, either at law or in equity,by suit, action or other proceedings,protect and enforce
the rights of all Owners and compel the performance of any and all of the covenants required
herein to be performed by the City and its officers and employees, and 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 the Series 2020 Bond when due. However, nothing herein shall impair the absolute
and unconditional right of the Owner to receive payment of the principal of and interest 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 Accounts and to collect and segregate and
18
apply the Tax Increment and any other revenues pledged thereto as provided by this Resolution
and the Act.
Section 7
Defeasance.
When the Series 2020 Bond has been discharged as provided in this Section 7, all pledges,
covenants and other rights granted by this resolution to the owners of the Series 2020 Bond shall
cease. The City may discharge its obligations with respect to the Series 2020 Bond by depositing
with the Registrar on or before the date of redemption or prepayment a sum sufficient for the
payment thereof in full; provided that notice of the redemption thereof has been duly given. The
City may also at any time discharge its obligations with respect to the Series 2020 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 that are general obligations of the United States or securities of United States agencies
that 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 pay all principal
and interest to become due thereon to the final Payment Date or, if notice of redemption as herein
required has been irrevocably provided for,to such earlier redemption date.
Section 8
Tax Covenants.
8.01. Security for the Series 2020 Bond. The City shall not enter into any arrangements
regarding the use of or payments with regard to the Parking Facility Project that might cause the
Series 2020 Bond to be considered a "private activity bond" or "private loan bond" within the
meaning of Section 141 of the Code. No "impermissible agreement" as defined in Section 1.141-
4(e)(4)(ii) of the Regulations, has been or will be entered into by the City in respect of the Tax
Increment or otherwise to secure the Series 2020 Bond.
8.02. General Covenant. The City covenants and agrees with the Owner that it will not
take or permit to be taken by any of its officers,employees or agents any action which would cause
19
the interest on the Series 2020 Bond to become includable in gross income for federal income tax
purposes under the Code and applicable Regulations, and covenants to take any and all actions
within its powers to ensure that the interest on the Series 2020 Bond will not become includable
in gross income for federal income tax purposes under the Code and the Regulations.
8.03. Arbitrage Certification. The Mayor, City Manager and the City Finance Director,
being the officers of the City charged with the responsibility for issuing the Series 2020 Bond
pursuant to this resolution, are authorized and directed to execute and deliver to the Lender 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 2020 Bond, it is reasonably expected that the proceeds
of the Series 2020 Bond will be used in a manner that would not cause the Series 2020 Bond to be
an"arbitrage bond"within the meaning of Section 148 of the Code and the Regulations.
8.04. Arbitrage Rebate. The City acknowledges that the Series 2020 Bond is 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 2020 Bond from gross income for federal income
tax purposes, unless the Series 2020 Bond qualifies 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 2020 Bond (other than amounts constituting a "bona fide debt service
account") arise during or after the expenditure of the sale proceeds thereof. In furtherance of the
foregoing, the City Finance Director is hereby authorized and directed to execute a Rebate
Certificate, substantially in the form 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.
8.05. Information Reporting. The City shall file with the Secretary of the Treasury, not
later than May 15, 2020, a statement concerning the Series 2020 Bond containing the information
required by Section 149(e) of the Code.
20
8.06. "Qualified Tax-Exempt Obligation." Pursuant to Section 265(b)(3)(D)(ii) of the
Code, the Series 2020 Bond is deemed designated by the City as a "qualified tax-exempt
obligation" for purposes of Section 265(b)(3) of the Code. The Series 2020 Bond is issued to
refund the Refunded Bonds on a current refunding basis; the aggregate principal amount of the
Series 2020 Bond does not exceed the aggregate principal amount of the Refunded Bonds; the
average maturity date of the Series 2020 Bond is not later than the average maturity date of the
Refunded Bonds; and the Series 2020 Bond has a final maturity date (July 1, 2032) not later than
30 years after the date the Series 2007 Bonds were issued (December 27, 2007).
Section 9
Transcript Certification.
The officers of the City are directed to furnish to the Purchaser and to bond counsel certified
copies of all proceedings and information in their official records relevant to the authorization and
issuance of the Series 2020 Bond,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 2020 Bond, 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.
Section 10
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.
21
Section 11
Effective Date.
This Resolution shall be in full force and effect from and after its final passage and approval
according to law.
22
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman,Montana, at a regular session thereof held on the 24th day of February, 2020.
r
CHRIS MEHL
OF B` IVor
• ■ ■ 02
ATTEST: k,4� �• •� '�
• V
r
MIKE MARSR188 �.�.
City Clerk Y ' ' ' ' •o
ATV EDD AST FORM:
IVAN
City Attorney
23
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 a
Resolution entitled: "RESOLUTION RELATING TO $3,689,000 TAX INCREMENT
URBAN RENEWAL REVENUE REFUNDING BOND (DOWNTOWN BOZEMAN
IMPROVEMENT DISTRICT), SERIES 2020; AUTHORIZING AND DIRECTING THE
SALE AND ISSUANCE 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 February 24, 2020, 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 Commissioners voted in favor thereof: I"lP_��, Qrl�wS, 'TI oyv- rc.,,
voted against the same: L ; abstained
from voting thereon: or were absent:
WITNESS my hand officially this 24th day of February,2020.
M I Lp 612's
MIKE MAAS
City Clerk
EXHIBIT A
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF GALLATIN
CITY OF BOZEMAN
TAX INCREMENT URBAN RENEWAL REVENUE REFUNDING BOND
(DOWNTOWN BOZEMAN IMPROVEMENT DISTRICT),
SERIES 2020
No. R-1 $3,689,000.00
Interest Stated Date of
Rate Maturity Original Issue
2.44% July 1, 2032 March 5, 2020
REGISTERED OWNER: TRUIST BANK
PRINCIPAL AMOUNT: THREE MILLION SIX HUNDRED EIGHTY NINE
THOUSAND DOLLARS AND NO/100
FOR VALUE RECEIVED,THE CITY OF BOZEMAN(the"City"),a duly organized and
validly existing 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 Tax Increment in the Debt Service Account, on each Payment Date
specified on the attached Schedule I,the dollar amount corresponding to that Payment Date as set
forth on such Schedule I, all subject to the provisions referred to herein with respect to the
prepayment and redemption of the principal of this Bond before Payment Dates. This Bond bears
interest from the date of original issue specified above, or from such later date to which interest
has been paid or duly provided for,until paid or discharged at the rate per annum specified above,
subject to a Determination of Taxability. Interest on this Bond shall be calculated on the basis of
a year of 360 days composed of twelve 30-day months. Principal of and interest on this Bond shall
be payable by ACH or wire transfer to the Owner hereof as such appears in the Bond Register as
of the close of business on the 15th day(whether or not a Business Day)of the month immediately
preceding each Payment Date, and the Owner of this Bond shall not be required to present this
Bond in order to receive any payment. Interest on this Bond shall be calculated on the basis of a
360-day year composed of twelve 30-day months. The City Finance Director shall initially serve
as the Bond Registrar for this Bond.
In the event that the City shall fail to observe any covenant, agreement or representation in
Section 8 of the Resolution (as defined below), which failure results in a Determination of
Taxability, the interest rate on this Bond shall increase to an interest rate per annum equal to the
quotient of the tax-exempt rate of interest on the Series 2020 Bond(2.44%) divided by 67.5% (the
A-1-I
"Taxable Rate"). In addition, the City shall pay to the Owner an amount equal to the difference
between the interest paid at the tax-exempt rate and the interest which would have been paid at the
Taxable Rate from and after the Date of Taxability, plus any penalties, interest, assessments and
additions to tax payable by the Owner as a result of such change in taxable status. Thereafter,
interest on this Bond shall accrue at the Taxable Rate and shall be payable to the Owner on the
Payment Dates specified in Schedule I.
This Bond is a duly authorized issue of the City designated as "Tax Increment Urban
Renewal Revenue Refunding Bond (Downtown Bozeman Improvement District), Series 2020,"
issued under and secured by Resolution No. [_ 1, adopted by the City Commission on February
24, 2020 (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 rights thereunder of the Owner
and the City and the terms upon which this Bond is issued and delivered. Capitalized terms used
herein but not otherwise defined shall have the respective meanings given such terms in the
Resolution. This Bond evidences a loan from the Lender to the City in the principal amount of
$3,689,000 for the purpose of refunding,together with other amounts available therefor,the City's
outstanding Tax Increment Urban Renewal Revenue Bonds, Series 2007 (Downtown Bozeman
Improvement District), and to pay costs of issuing the Series 2020 Bond and of the refunding.
This Bond is issued pursuant to and in full compliance with the Constitution and laws of
the State of Montana and the home rule charter of the City,particularly Montana Code Annotated,
Title 7, Chapter 15,Parts 42 and 43, as amended(the"Act"), and pursuant to the Resolution. This
Bond is payable solely from Tax Increment received by the City. Tax Increment results from the
levying of Taxes by the Taxing Bodies against the incremental taxable value,as defined in the Act,
of all Taxable Property, and shall include any payments in lieu of Taxes attributable to the
incremental taxable value, State Entitlements, and all payments received by the City designated as
replacement revenues for lost Tax Increment. By the Resolution, the City has pledged the Tax
Increment(including State Entitlements)received by the City to the Debt Service Account.
This Bond is not a general obligation of the City and the City's general credit and
taxing powers are not pledged to the payment of this Bond or the interest thereon. This Bond
shall not constitute an indebtedness of the City within the meaning of any constitutional,
statutory or charter limitations.
This Bond is subject to prepayment and redemption,in whole and not in part, at the option
of the City, on July 1, 2026 and on any Interest Payment Date thereafter at a price of the principal
amount being prepaid and redeemed plus interest thereon through the date of prepayment or
redemption, without premium or penalty. The City shall give 15 days' prior written notice of any
such redemption to the Owner at its address set forth in the Bond Register.
If provision is made for the payment of principal of and interest on this Bond in full in
accordance with the Resolution, this 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.
A-1-2
Except as provided in the Resolution,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.
As provided in the Resolution and subject to certain limitations set forth therein,this 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 its 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 its attorney; and may also be surrendered in exchange for a
Bond of like aggregate principal amount, interest rate and maturity. Upon 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.
On or before 270 days after the end of each Fiscal Year of the City, commencing with the
Fiscal Year ending June 30, 2019,the City shall provide to the owner of the Series 2020 Bond the
audited financial statements of the City for such Fiscal Year, accompanied by the audit report and
opinion of the accountant or government auditor relating thereto. If the audited financial
statements are not available by the date that is 270 days after the end of the Fiscal Year, the City
shall provide to the Owner of the Series 2020 Bond the unaudited financial statements by such
date and shall provide the audited financial statements within 10 Business Days after receipt
thereof. The audited financial statements provided by the City shall include sufficient financial
information with respect to the District and the Tax Increment derived therefrom to enable the
Owner to ascertain the debt service coverage ratio for the Series 2020 Bond for such Fiscal Year.
The City and the Bond 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 purpose of
receiving payment and for all other purposes, and neither the City nor the Bond Registrar shall be
affected by any notice to the contrary.
This Bond has been deemed designated by the City as a"qualified tax-exempt obligation"
pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND DECLARED that all
acts, conditions and things required by the Constitution and laws of the State of Montana and the
home rule charter and ordinances and resolutions of the City to be done,to exist,to happen and to
i be performed in order to make this 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 Bond has been issued by the City in connection with urban
renewal projects (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 Owner from time to time
of this Bond, including covenants that it will pledge, appropriate and credit the Tax Increment
derived from the District to the Debt Service Account of the City;that all provisions for the security
of the Owner of this Bond as set forth in the Resolution will be punctually and faithfully performed
A-1-3
as therein stipulated; and that the issuance of this Bond does not cause the indebtedness of the City
to exceed any constitutional, statutory or charter 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.
A-1-4
IN WITNESS WHEREOF, the City of Bozeman, Gallatin County, Montana, by its City
Commission, has caused this Bond to be executed by the facsimile signatures of the Mayor, the
City Manager and the City Finance Director and attested to by the City Clerk.
CITY OF BOZEMAN, MONTANA
Mayor
City Manager
City Clerk
Dated:
CERTIFICATE OF AUTHENTICATION
This is the Series 2020 Bond delivered pursuant to the Resolution mentioned within.
CITY OF BOZEMAN, MONTANA
as Bond Registrar, Transfer Agent
and Paying Agent
By
City Finance Director
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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 Transfers to
JT TEN-- as joint tenants with Minors Act................................
right of survivorship and (State)
not as tenants in common
Additional abbreviations may also be used.
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 OF NOTICE: The signature to this assignment
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 GUARANTEE
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 Registrar in addition
to or in substitution for STAMP,all in
accordance with the Securities Exchange
Act of 1934,as amended.
A-1-6
SCHEDULE I
Bond Payment Schedule
Period Annual
End nE Principal Coupon Interest Debt Service Debt Service
07/0112020 269,00U 2.440% 29,003.74 298,003.74 298,OU3.74
01/01/2021 41,724.00 41,724.00
07/01/2021 249,000 2.440% 41,724.00 290,724.00 332,448.00
01/01/2022 38,686.20 38,696.20
07/01/2022 25S,000 2.440% 38,686.20 293,686.20 332,372.40
01/01/2023 35,57S.20 35,575.20
07/01/2023 259,000 2.440% 35,575.20 294,575.20 330,150.40
01/01/2024 32,415.40 32.415.40
07/01/2024 268,000 2.440% 32,415.40 30U,415.40 332,830.80
01/01/202S 29,145.80 29,145.80
07/011202S 277,000 2.440% 29,145.80 306,1415.80 335,291.60
01/01/2026 25,76b.40 25,7b6.40
07/01/2026 279,000 2.440% 25,766.40 304,7b6.40 330,532.80
01/01/2027 22,362.60 22.i62.60
07/01/2027 286,000 2.440% 22,362,60 308,362.60 330,725.20
01/01/2028 18,873.40 18,873.40
07/01/2028 293,000 2.440% 18,873.40 311.873.40 330,746.80
01/01/2029 15,298.80 15,298.80
07/01/2029 303,000 2.440% 15,298.80 318,298.80 333,597.60
01/01/2030 11,602.20 11,602.20
07/01/2030 308,000 2.440% 11,602.20 319,602.20 331,204.40
01/01/2U31 7,844.60 7,844.60
07/01/2031 317,000 2.440% 7,844,60 324,944.60 332,689.20
01/01/2032 3,977.20 3,977.20
07/01/2032 326,000 2.440% 3,977.20 329,977.20 333.954.40
3,689,000 595.547.34 4,284,S47.34 4,2 84,54 7.34
A-1-I
EXHIBIT B
FORM OF ESCROW AGREEMENT
THIS ESCROW AGREEMENT(thus "Agreement") is made and executed between the
City of Bozeman, Montana(the"City"), and U.S. Bank National Association, in Salt Lake City,
Utah(the "Agent"). The parties hereto recite and, in consideration of the mutual covenants and
payments referred to and contained herein, covenant and agree as follows:
1. The City, in accordance with Resolution No. FI adopted by the City
Commission of the City on February 24, 2020, sold its Tax Increment Urban Renewal Revenue
Refunding Bond(Downtown Bozeman Improvement District), Series 2020, dated, as originally
issued, as of the date hereof, in the aggregate principal amount of$3,689,000 (the"Series 2020
Bond") for the purpose of providing funds to refund,pay and redeem the City's Tax Increment
Urban Renewal Revenue Bonds, Series 2007 (Downtown Bozeman Improvement District),
dated, as originally issued, as of December 27, 2007 (the"Series 2007 Bonds"), with stated
maturities in 2020 and thereafter, and outstanding in the aggregate principal amount of
$3,995,000 (the"Refunded Bonds"), and paying costs of issuance of the Series 2020 Bond and
the refunding of the Refunded Bonds. The City has directed that the proceeds of the Series 2020
Bond be applied as follows: (i) $3,621,489.18 to be deposited in the Escrow Account, and(ii)
$67,510.82 to be deposited in the Development Account held by the City and used to pay the
costs of issuance of the Series 2020 Bond and the refunding of the Refunded Bonds. The City
has appropriated$426,382.50 of the funds in the debt service reserve account for the Series 2007
Bonds for deposit to the Escrow Account.
2. The Agent acknowledges receipt of the cash in the aggregate amount of
$4,047,871.68 (representing$3,621,489.18 of proceeds of the Series 2020 Bond and
$426,382.50 of funds in the debt service reserve account for the Series 2007 Bonds) and agrees
that it will hold such cash in a special segregated escrow account in the name of the City(the
"Escrow Account"), and that it will remit from the Escrow Account to the paying agent of the
Series 2007 Bonds the funds required for the payment of principal of and interest on the
Refunded Bonds as shown on the attached Exhibit A(which is hereby incorporated herein and
made a part hereof).
The Agent will:
(i) not less than 30 days prior to April 9,2020,provide notice of the redemption of
the Refunded Bonds in the form of Exhibit B hereto (which is incorporated herein and made a
part hereof), by first class mail,to the bond registrar for the Series 2007 Bonds and to registered
owners of such Refunded Bonds at their addresses as they appear on the Bond Register, as
required by Section 3.05(c) of the resolution of the City Commission of the City adopted
December 17,2007, authorizing the issuance of the Series 2007 Bonds; and
(ii) not less than 35 days prior to April 9,2020,provide notice of the redemption of
the Refunded Bonds in the form of Exhibit B hereto,by certified mail,telecopy or express
delivery service, or by such other means required by the recipient,to D.A. Davidson& Co., 8
Third Street North, Great Falls, Montana 5 940 1,Attention: Aaron Rudio, as the Original
Purchaser of the Series 2007 Bonds; to The Depository Trust Company, of New York,New
York; and to the Municipal Securities Rulemaking Board.
After provision for payment of all Refunded Bonds with interest accrued thereon,the
Agent will remit any remaining funds in the Escrow Account to the City, which will hold said
cash in the Debt Service Account for the Series 2020 Bond for application toward the payment of
the interest to become due on the Series 2020 Bond on July 1, 2020.
3. The City represents, based on a certification from Stifel,Nicolaus & Company,
Incorporated,placement agent to the City,that the amount to be deposited by the City pursuant
to this Agreement into the Escrow Account(i.e., $4,047,871.68), is sufficient to pay the
redemption price of the Refunded Bonds on April 9,2020, as described in Exhibit A hereto,
including all interest accrued thereon.
4. The City acknowledges that regulations of the Comptroller of the Currency grant
the City the right to receive brokerage confirmations of the security transactions as they occur.
The City specifically waives such notification to the extent permitted by law and will receive
periodic cash transaction statements from the Escrow Agent which will detail all investment
transactions.
5. In order to ensure continuing compliance with Section 148 of the Internal
Revenue Code of 1986, as amended, and applicable Treasury Regulations,the Agent agrees that
it will not reinvest any cash held in the Escrow Account. Said prohibition on reinvestment shall
continue unless and until an opinion is received from nationally recognized bond counsel that
reinvestments in general obligations of the United States or obligations the principal of and
interest on which are guaranteed as to payment by the United States, as specified in said opinion,
may be made in a manner consistent with said Section 148 and then existing Treasury
Regulations.
6. The Agent also acknowledges receipt of a sum described in a letter agreement
between the City and the Agent, as and for full compensation for all services to be performed by
it as Agent under this Agreement, and the Agent expressly waives any lien upon or claim against
the moneys and investments in the Escrow Account.
7. If at any time it shall appear to the Agent that the money in the Escrow Account
will not be sufficient to make any payment due to the owners of any of the Refunded Bonds,the
Agent shall immediately notify the City. Upon receipt of such notice,the City shall forthwith
transmit to the Agent for deposit in the Escrow Account from moneys on hand and legally
available therefor, such additional moneys as may be required to make any such payment.
8. On or before April 15, 2020,the Agent shall submit to the City a report covering
all money it shall have received and all payments it shall have made or caused to be made
hereunder. Such report shall also list the amount of money existing in the Escrow Account, if
any, on such date.
9. It is recognized that title to the moneys held in the Escrow Account from time to
time shall remain vested in the City but subject always to the prior charge and lien thereon of this
Agreement and the use thereof required to be made by the provisions of this Agreement. The
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Agent shall hold all such money in the Escrow Account as a special trust fund and account
separate and wholly segregated from all other funds of the Agent on deposit therein and shall
never commingle such money with other money. It is understood and agreed that the
responsibility of the Agent under this Agreement is limited to the safekeeping and segregation of
the funds deposited with it in the Escrow Account and the collection of and accounting for any
interest payable with respect thereto. Except as provided in Section 5 hereof,no withdrawals,
transfers or investment or reinvestment shall be made of cash balances in the Escrow Account.
Cash balances shall be held by the Agent as cash balances as shown on the books and records of
the Escrow Agent and shall not be reinvested or invested by the Agent except as provided in
Section 5 hereof.
10. This Agreement is made by the City for the benefit of the owners of the Refunded
Bonds and is not revocable by the City, and the funds deposited in the Escrow Account have
been irrevocably appropriated for the payment and redemption of the Refunded Bonds and
interest thereon, in accordance with this Agreement.
11. This Agreement shall be binding upon and shall inure to the benefit of the City
and the Agent and their respective successors and assigns. In addition,this Agreement shall
constitute a third-party beneficiary contract for the benefit of the owners of the Refunded Bonds.
Said third-parry beneficiaries shall be entitled to enforce performance and observance by the City
and the Agent of the respective agreements and covenants herein contained as fully and
completely as if said third-party beneficiaries were parties hereto. Any bank or trust company
into which the Agent may be merged or with which it may be consolidated or any bank or trust
company resulting from any merger or consolidation to which it shall be a party or any bank or
trust company to which it may sell or transfer all or substantially all of its corporate trust
business shall, if the City approves,be the successor agent hereunder without the execution of
any additional document or the performance of any further act.
12. This Agreement may not be amended except to sever any clause herein deemed to
be illegal or cure any ambiguity or correct or supplement any provision herein which may be
inconsistent with any other provision;provided that the Agent shall determine that any such
amendment shall not adversely affect the owners of the Refunded Bonds.
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IN WITNESS WHEREOF the parties hereto have caused this Escrow Agreement to be
duly executed by their duly authorized officers, as of the 5th day of March, 2020.
CITY OF BOZEMAN, MONTANA
Mayor
City Manager
City Finance Director
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U.S. BANK NATIONAL ASSOCIATION,
as Escrow Agent
By
Its Vice President
(Signature page to Escrow Agreement, dated March 5, 2020,
with the City of Bozeman,Montana)
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EXHIBIT A
DEBT SERVICE SCHEDULE FOR
REFUNDED BONDS
Date Principal Interest Total
04/09/2020 $3,995,000 $52,871.68 $4,047,871.68
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EXHIBIT B
NOTICE OF REDEMPTION
Tax Increment Urban Renewal Revenue Bonds, Series 2007
(Downtown Bozeman Improvement District)
City of Bozeman, Montana
NOTICE IS HEREBY GIVEN that the City of Bozeman,Montana(the"City"),has
called for redemption all of its Tax Increment Urban Renewal Revenue Bonds, Series 2007
(Downtown Bozeman Improvement District), dated, as originally issued, as of December 27,
2007, maturing on July 1 in the years and amounts and bearing interest and CUSIP numbers as
set forth below:
Maturity Principal Interest CUSIP
Jul 1 Amount Rate Number
2020 $ 230,000 4.40% 103707 AN5
2021 240,000 4.50% 103707 APO
2022 250,000 4.60% 103707 AQ8
2023 260,000 4.70% 103707 AR6
2024 275,000 4.80% 103707 AS4
2028* 1,235,000 4.95% 103707 AW5
2032* 1,505,000 5.00% 103707 BA2
*Term Bonds
Such bonds have been called for redemption on April 9, 2020, and interest thereon will
cease to accrue from and after said date. The redemption price is equal to the principal amount
of the bonds plus interest accrued to the redemption date, without premium.
Holders of such bonds maturing in said years should surrender their bonds for payment to
U.S. Bank National Association, as paying agent, for payment on April 9,2020 at its operations
center at 60 Livingston Avenue- Bond Drop Window, St. Paul,Minnesota 55107 or if by mail to
P.O. Box 64111, St. Paul,Minnesota 55164-0111.
Important Notice:
We are required by law to withhold an applicable portion of the principal amount of your
holdings redeemed unless we are provided with your social security number or federal employer
identification number,properly certified. Accordingly, you are instructed to submit at the time
of surrender of your bonds a W-9 Form which may be obtained at a bank or other financial
institution.
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003,federal backup
withholding tax will be withheld at the applicable backup withholding rate in effect at the time
the payment is made if the tax identification number is not properly certified.
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The paying agent shall not be held responsible for the selection or use of the CUSIP
number,nor is any representation made as to its correctness indicated in the Redemption Notice.
It is included solely for the convenience of the holders.
Interest on the bonds shall cease to accrue on April 9, 2020 and the holders thereof shall
have no further rights with respect thereto except to receive the redemption price so deposited.
Dated: March 5,2020.
U.S. BANK NATIONAL ASSOCIATION
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