On the agenda: Kalispell meeting — license plate reader (Sep 21)

CITY COUNCIL MEETING AGENDA
September 21, 2026, 7:00 P.M.
City Hall Council Chambers, 201 First Avenue East
See the bottom of the agenda to learn how to provide public comment
and watch meetings live or later.
A.

CALL TO ORDER

B.

ROLL CALL

C.

PLEDGE OF ALLEGIANCE

D.

AGENDA APPROVAL

E.

CONSENT AGENDA
All items on the consent agenda will be voted on with one motion. If a council member
desires to discuss an item separately, the item can be removed from the consent agenda
by motion.
1.

Council Minutes –August 17, 2026

2.

Award Bid for Three Ford Police Interceptor Utility Vehicles with upfit
This item considers awarding this bid to Duval Ford in the amount of $204,762.

3.

Award Bid for 31-Yard Side Arm Solid Waste Truck
This item considers awarding this bid to Missoula Peterbilt in the amount of $433,020
after a trade-in credit.

4.

Award Bid for Regenerative Air Sweeper
This item considers awarding this bid to Joe Johnson Equipment in the amount of
$364,194.

5.

Award Bid for Tandem Axle Truck Chassis with Dump Box and Plow
This item considers awarding this bid to Missoula I-State Truck Center in the amount of
$284,266.

F.

COMMUNITY REPORTS

G.

PUBLIC COMMENT
Persons wishing to address the council on any issue not on the agenda are asked to do so
at this time. See the bottom of the agenda for the protocol for providing comment.

H.

REPORTS, RECOMMENDATIONS, AND COUNCIL ACTION

Kalispell City Council Agenda, September 21, 2026
1)

Ordinance 1955 – First Reading - Utilization of Downtown City Parking Lots and
Residential Block Parties
This item considers allowing utilization of city parking lots and residential block parties
as eligible with conditions, for special event permits.

2)

Resolution 6354 - Montana Board of Investments Loan for Purchase of Two Fire Pumper
Trucks
This item considers a 10 year loan of $1,917,000 for this purchase.

3)

Morning Star Special Improvement District Bonds
This item considers authorizing bonds to finance a portion of the costs of water and sewer
improvements within the Morning Star Community.
a. Resolution 6355 – Series A&B Bonds
b. Resolution 6356 – Series C&D Bonds

I.

CITY MANAGER, COUNCIL, AND MAYOR REPORTS (No Action)

J.

ADJOURNMENT

UPCOMING SCHEDULE
Next Work Session Meeting – September 28, 2026, at 7:00 p.m. – Council Chambers
Next Regular Meeting – October 5, 2026, at 7:00 p.m. – Council Chambers
PARTICIPATION
Those addressing the council are asked to give their name and address for the record. See the last
page of the agenda for how to address Council and limit comments to three minutes. Comments
can also be emailed to [email protected]. Written public comments received by the
council at least one day prior to the meeting can be seen at www.kalispell.com/publiccomment.
Council may not have the opportunity to review written public comment received on the day of
the meeting.
To provide public comment live, remotely, join the video conference through zoom at:
https://us02web.zoom.us/webinar/register/WN_XdRakimhRRm9jBXHWxVCoQ.
Raise your virtual hand to indicate you want to provide comment. Due to occasional technical
difficulties, the most reliable way to participate is through in-person attendance. Electronic
means are not guaranteed.
The City does not discriminate on the basis of disability in its programs, services, activities, and
employment practices. Auxiliary aids are available. For questions about disability
accommodation please contact the City Clerk at 406-758-7756, or [email protected].
ADMINISTRATIVE CODE – Section 2-20 Manner of Addressing Council
a. Each person not a Council member shall address the Council at the time designated in the
agenda or as directed by the Council, by stepping to the podium or microphone, giving
that person’s name and address in an audible tone of voice for the record, and unless
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Kalispell City Council Agenda, September 21, 2026
further time is granted by the Council, shall limit the address to the Council to three
minutes.
b. All remarks shall be addressed to the Council as a body and not to any member of the
Council or staff.
c. No person, other than the Council and the person having the floor, shall be permitted to
enter into any discussion either directly or through a member of the Council, without the
permission of the presiding officer.
d. No question shall be asked of individuals except through the Presiding Officer.
PRINCIPLES FOR CIVIC DIALOGUE – Adopted by Resolution 5180
• We provide a safe environment where individual perspectives are respected, heard, and
acknowledged.
•

We are responsible for respectful and courteous dialogue and participation.

•

We respect diverse opinions as a means to find solutions based on common ground.

•

We encourage and value broad community participation.

•

We encourage creative approaches to engage in public participation.

•

We value informed decision-making and take personal responsibility to educate and be
educated.

•

We believe that respectful public dialogue fosters healthy community relationships,
understanding, and problem solving.

•

We acknowledge, consider, and respect the natural tensions created by collaboration,
change, and transition.

•

We follow the rules and guidelines established for each meeting.

Page 3 of 3

CITY COUNCIL DRAFT MEETING MINUTES
August 17, 2026, 7:00 P.M.
City Hall Council Chambers, 201 First Avenue East
Video of this meeting with time stamped minutes can be found at:
https://www.kalispell.com/MeetingVideos.
A.
CALL TO ORDER
Council President Waterman called the meeting to order at 7 p.m.
B.

ROLL CALL

Council Member - Kari Gabriel: Present
Council Member - Sam Nunnally: Present
Council Member - Jed Fisher: Present
Council Member - Sid Daoud: Present
Mayor - Ryan Hunter: Absent
Council Member - Wes Walker: Absent
Council Member - Lisa Blank: Present
Council President - Kyle Waterman: Present
Council Member - Dustin Leftridge: Present
Staff present included City Manager Jarod Nygren, City Attorney Johnna Preble, City Clerk and
Communications Manager Aimee Brunckhorst, Development Services Director P.J. Sorensen,
Finance Director Aimee Cooke, Assistant Finance Director Carrie Jones, Director of Parks and
Recreation Chad Fincher, Public Works Director Susie Turner, and Police Chief Jordan Venezio.
C.

PLEDGE OF ALLEGIANCE

D.

AGENDA APPROVAL

Motion and Vote to approve the agenda as presented.
Council Member - Sam Nunnally: Motion
Council Member - Kari Gabriel: 2nd
Council Member - Kari Gabriel: Approve
Council Member - Sam Nunnally: Approve
Council Member - Jed Fisher: Approve
Council Member - Sid Daoud: Approve
Mayor - Ryan Hunter: Absent
Council Member - Wes Walker: Absent
Council Member - Lisa Blank: Approve
Council President - Kyle Waterman: Approve
Council Member - Dustin Leftridge: Approve

Kalispell City Council Minutes, August 17, 2026
The motion passed unanimously on voice vote with Council Member Walker, and Mayor
Hunter absent.
E.

CONSENT AGENDA
All items on the consent agenda will be voted on with one motion. If a council member
desires to discuss an item separately, the item can be removed from the consent agenda
by motion.




1.

Council Minutes – July 13, and July 20, 2026

2.

Award Professional Services Agreement for SCADA Project to AE2S 
This item considers awarding on-call engineering services for Water and Wastewater
Treatment Plant Supervisory Control Data Acquisition Systems.

Public Comment
Council President Waterman opened public comment on the consent agenda. Seeing none, he
closed public comment.
00:03:18 Motion and Vote to approve the consent agenda as published.
Council Member - Sid Daoud: Motion
Council Member - Jed Fisher: 2nd
Council Member - Kari Gabriel: Approve
Council Member - Sam Nunnally: Approve
Council Member - Jed Fisher: Approve
Council Member - Sid Daoud: Approve
Mayor - Ryan Hunter: Absent
Council Member - Wes Walker: Absent
Council Member - Lisa Blank: Approve
Council President - Kyle Waterman: Approve
Council Member - Dustin Leftridge: Approve
The motion passed unanimously on voice vote with Council Member Walker and Mayor
Hunter absent.
F.

COMMUNITY REPORTS – None.

G.

PUBLIC HEARING – Fernwell Apartments – Meets Community Housing Need 
This item solicits public comments on whether this restricted-rent apartment building at
20 4th Avenue East, meets a community housing need as part of an application to the
Montana Department of Revenue for potential property tax exemption.

Council President Waterman opened the public hearing, explained background on this item and
opened public comment.
Seeing none, Council President Waterman closed the public hearing.
H.
PUBLIC COMMENT
Council President Waterman opened general public comment.
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Kalispell City Council Minutes, August 17, 2026
Public comment received in writing to the Mayor and Council can be seen at
www.kalispell.com/publiccomment.
Seeing none, Council President Waterman closed public comment.
I.

REPORTS, RECOMMENDATIONS, AND COUNCIL ACTION
1)

Ordinance 1954 – Second Reading - Birchwood Planned Unit Development 
This item considers a Planned Unit Development overlay for 95 residential units, on 21.32
acres located west of Northland Drive, south of Four Mile Drive, east of U.S. Hwy 93
alternative and north of Northridge Way.

City Manager Jarod Nygren provided the staff report on this item.
00:08:02 Council Member Daoud asked about the percentage of Habit for Humanity Homes
within the development.
City Manager Nygren answered questions.
00:08:50 Council Member Blank referred to public comments related to traffic and asked about
the traffic study for this development and getting across Four Mile Drive to Kidsports.
00:09:32 City Manager Nygren answered questions.
00:10:12 Council Member Blank provided discussion about pedestrian impacts on Four Mile
Drive and whether traffic impact studies analyze pedestrian safety.
00:11:02 Council Member Blank provided discussion about wanting to talk about pedestrian
safety in the future.
00:11:25 Council Member Gabriel asked whether progress has been made in getting an easement
to Four Mile.
Public Comment
Council President Waterman opened public comment on this item.
00:12:11 Garrett, Public Comment
Garrett, the Construction Manager with Habitat for Humanity explained they have been in
communication with the neighbors to the north asking for access from the property owner to the
north for a roadway to Four Mile Drive at the very least for a construction easement. He
explained a pedestrian path will lead to the Rails to Trails path.
Seeing no further comments, Council President Waterman closed public comment.
00:13:54 Motion to approve the second reading of Ordinance 1954, the second reading of
the Birchwood Planned Unit Development.
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Kalispell City Council Minutes, August 17, 2026
Council Member – Dustin Leftridge: Motion
Council Member – Lisa Blank: 2nd
00:14:16 Council Member Gabriel provided discussion on the motion explaining why she is
opposed to the motion.
00:14:49 Council Member Leftridge thanked the applicant for the update and working on
concerns related to traffic.
00:15:08 Vote on the motion.
Council Member - Dustin Leftridge: Motion
Council Member - Lisa Blank: 2nd
Council Member - Kari Gabriel: Disapprove
Council Member - Sam Nunnally: Approve
Council Member - Jed Fisher: Approve
Council Member - Sid Daoud: Approve
Mayor - Ryan Hunter: Absent
Council Member - Wes Walker: Absent
Council Member - Lisa Blank: Approve
Council President - Kyle Waterman: Approve
Council Member - Dustin Leftridge: Approve
The motion passed on roll call vote with Council Members Daoud, Fisher, Leftridge,
Nunnally, Blank, and Council President Waterman in favor, Council Member Gabriel
opposed, and Council Member Walker, and Mayor Hunter absent.
2)

Resolution 6341 – Budget – Business Improvement District Work Plan and Budget 
This resolution approves the annual work plan and budget for the BID for fiscal year
2026-2027.

City Manager Jarod Nygren presented the staff report.
07:18:33 PM (00:17:06) Council Member Daoud asked about a visual for this item.
00:17:33 Council Member Daoud explained to the public that the Council has had many hours of
presentations and discussion via work sessions on the budget.
00:18:02 Council President Waterman provided discussion further explaining this item.
Public Comment
Council President Waterman opened public comment on this item. Seeing none, Council
President Waterman closed public comment.
00:18:45 Motion and Vote to approve Resolution 6341, a resolution approving the work
plan and budget for the fiscal year 2026-2027 for the Kalispell Business Improvement
District as recommended by its Board of Directors.
Council Member - Kari Gabriel: Motion
Council Member - Sam Nunnally: 2nd
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Kalispell City Council Minutes, August 17, 2026
Council Member - Kari Gabriel: Approve
Council Member - Sam Nunnally: Approve
Council Member - Jed Fisher: Approve
Council Member - Sid Daoud: Approve
Mayor - Ryan Hunter: Absent
Council Member - Wes Walker: Absent
Council Member - Lisa Blank: Approve
Council President - Kyle Waterman: Approve
Council Member - Dustin Leftridge: Approve
The motion passed anonymously on roll call vote with Council Member Walker, and Mayor
Hunter absent.
3)

Resolution 6342 – Budget – Tourism Business Improvement District Work Plan and
Budget 
This resolution approves the annual work plan and budget for the TBID for fiscal year
2026-2027.

City Manager Jarod Nygren presented the staff report.
Public Comment
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.
00:22:12 Motion to approve Resolution 6342, a resolution approving the work plan and
budget for the fiscal year 2026-2027 for the Kalispell Tourism Business Improvement
District as recommended by its Board of Directors.
00:22:38 Council Member Daoud provided discussion in appreciation for having people attend
the budget meeting and provided information to the public about the budget resolutions.
00:23:38 Council President Waterman provided discussion on the motion.
00:23:51 Vote on the motion.
Council Member - Sid Daoud: Motion
Council Member - Jed Fisher: 2nd
Council Member - Kari Gabriel: Approve
Council Member - Sam Nunnally: Approve
Council Member - Jed Fisher: Approve
Council Member - Sid Daoud: Approve
Mayor - Ryan Hunter: Absent
Council Member - Wes Walker: Absent
Council Member - Lisa Blank: Approve
Council President - Kyle Waterman: Approve
Council Member - Dustin Leftridge: Approve
The motion passed anonymously on roll call vote with Council Member Walker, and Mayor
Hunter absent.

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Kalispell City Council Minutes, August 17, 2026
4)

Resolution 6343 – Emergency Responder Levy 
This resolution approves levying $4,613,323 in property tax revenue for the voter
approved Emergency Responder Levy for fiscal year 2026-207.

City Manager Jarod Nygren presented the staff report.
Public Comment
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.
00:26:17 Motion and Vote to approve Resolution 6343, a resolution levying the voter
approved Emergency Responder Property Tax for the City of Kalispell, Montana, for fiscal
year 2026-2027.
Council Member - Kari Gabriel: Motion
Council Member - Lisa Blank: 2nd
Council Member - Kari Gabriel: Approve
Council Member - Sam Nunnally: Approve
Council Member - Jed Fisher: Approve
Council Member - Sid Daoud: Approve
Mayor - Ryan Hunter: Absent
Council Member - Wes Walker: Absent
Council Member - Lisa Blank: Approve
Council President - Kyle Waterman: Approve
Council Member - Dustin Leftridge: Approve
The motion passed anonymously on roll call vote with Council Member Walker, and Mayor
Hunter absent.
5)

Resolution 6344 – Budget Mill Levy 
This resolution sets the annual mill levy for the City of Kalispell for fiscal year 20262027.

City Manager Jarod Nygren presented the staff report.
00:30:22 Council President Waterman asked for an explanation of what a mill is.
00:30:35 City Manager Jarod Nygren explained what a mill is and how it is determined.
00:31:21 Council President Waterman provided discussion about the value of a mill, when the
valuation is received from the state, and considerations regarding the amount to be milled.
Public Comment
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.
00:32:32 Motion to approve Resolution 6344, a resolution making the annual tax levies for
the City of Kalispell, Montana for the fiscal year 2026-2027.
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Kalispell City Council Minutes, August 17, 2026
00:32:54 Council Member Leftridge provided discussion on the motion.
00:33:39 Council Member Daoud provided discussion on the motion.
00:34:58 Council President Waterman provided discussion on the motion.
Vote on the motion.
Council Member - Lisa Blank: Motion
Council Member - Kari Gabriel: 2nd
Council Member - Kari Gabriel: Approve
Council Member - Sam Nunnally: Approve
Council Member - Jed Fisher: Approve
Council Member - Sid Daoud: Approve
Mayor - Ryan Hunter: Absent
Council Member - Wes Walker: Absent
Council Member - Lisa Blank: Approve
Council President - Kyle Waterman: Approve
Council Member - Dustin Leftridge: Approve
The motion passed on roll call vote with Council Member Walker, and Mayor Hunter
absent.
6)

Resolution 6345 - Budget – Annual Appropriations 
This resolution sets the annual appropriations for the City of Kalispell for fiscal year
2026-2027.

City Manager Jarod Nygren presented the staff report.
00:39:08 Council Member Daoud asked for an explanation of carry-over funds within the
budget.
00:39:35 City Manager Jarod Nygren answered questions.
00:40:08 Council President Waterman asked for an explanation regarding the license plate reader
line item within the Police Department budget.
00:40:17 City Manager Jarod Nygren answered questions.
00:41:23 Council Member Daoud asked questions regarding the license plate reader line item
and spoke regarding what he would like to be included in an LPR policy prior to purchase.
00:47:28 Council President Waterman confirmed that state law is very specific regarding what a
license plate reader can and cannot be used for.
00:47:56 Council Member Leftridge asked questions about the procurement process that would
be utilized if license plate reader technology is purchased and what it would be used for.
00:48:31 City Manager Nygren spoke about the procurement process.
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Kalispell City Council Minutes, August 17, 2026
Public Comment
Council President Waterman opened public comment on this item.
00:49:38 Dave Voncleist, Public Comment
Voncleist of Whitefish expressed opposition to any type of surveillance cameras, framing any use
as an incremental step toward broader overreach and a violation of the Fourth Amendment. He
cited instances of cities and states removing cameras, technical inaccuracies, reports of
unauthorized personal tracking, and concerns regarding capabilities extending beyond basic
license plate reading. He urged Council to reject the use of this technology.
00:54:11 Lana Glaus, Public Comment
Glaus of Whitefish spoke in opposition to the license plate reader proposal, citing concerns
regarding public tracking and the preservation of constitutional liberties. She cited community
opposition to license plate readers and her view that citizens would be logged into monitoring
databases. She urged the council to reject automated AI technology and instead allocate more
funding toward hiring staff for manual enforcement.
00:56:40 Alex Miller, Public Comment
Miller of Marion spoke in agreement with the previous speakers and in opposition to license
plate readers and his views that they violate 4th amendment rights and how cameras and this type
of technology can make errors and should not be used.
00:58:40 Riker Gannon, Public Comment
Gannon of Steel Bridge Road spoke in agreement with previous comments in opposition to
license plate readers and spoke regarding his views that using cameras violates 4th amendment
rights, takes away freedoms, the technology can make mistakes, and violates privacy rights.
01:01:41 Chelsea Bauska, Public Comment
Bauska of Dunwoody Lane in Columbia Falls spoke in opposition to the use of license plate
readers and her view that a single camera normalizes widespread surveillance. She raised
concerns regarding data security, privacy, potential misuse by law enforcement, and the
expanded capabilities of integrated AI platforms like Axon. She referred to studies and error
rates, and system misreads in various programs leading to unnecessary traffic stops, erroneous
citations, and officers drawing weapons on innocent individuals.
01:06:07 Austin Stanley, Public Comment
Stanley of Hwy 93 spoke against any type of surveillance infrastructure, expressing concern that
once installed, the technology could be misused. He emphasized the importance of personal
privacy and the freedom to live without constant oversight. He urged Council to prioritize human
employment over automated systems, AI, and data centers, noting that job availability is vital for
working residents aiming to achieve financial stability and homeownership.
01:07:30 John McDonnell/McDonald, Public Comment
McDonnell of Kalispell referred to public comments he has provided verbally and in writing
opposing license plate readers. He asked that the resolution be modified citing specific terms he
believes should be included for the use of LPR technology, or that the LPR line item be tabled.
He spoke further to his views that license plate reader technology violates constitutional liberties.
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Kalispell City Council Minutes, August 17, 2026
01:13:44 Byron Kringle, Public Comment
Kringle of Whitefish spoke in opposition to the use of license plate reader technology cautioning
that vendors can mislead local governments and threaten civil liberties. He spoke to his view that
small scale automated enforcement can lead to widespread surveillance and urged Council to
delay adoption until courts further clarify Fourth Amendment implications and the technology
proves its reliability.
01:16:50 Matthew Robacher, Public Comment
Robacher of West Valley spoke in opposition to the use of license plate reader technology citing
concerns that those using it would make mistakes and it would be misused.
01:18:02 Jordan Channel, Public Comment
Channel of Kalispell spoke in opposition to the use of license plate reader technology and asked
Council to adopt a policy prior to budget approval, and that Council approve any related
appropriation by resolution. He stated specific items he would like to see written into a related
policy.
01:22:00 Max Fisher, Public Comment
Fisher spoke in opposition to the use of license plate reader technology citing privacy and rights
concerns and his view that people will hack into the system.
01:23:54 Miles Flake, Public Comment
Flake of Northern Lights Boulevard spoke regarding cyber security risk concerns providing
reasons why he believes cyber security is an issue.
01:32:46 Art Vander, Public Comment
Vander of Kalispell spoke to his views that politicians are not truthful, and he does not believe
that license plate readers would only be used as intended.
01:28:08 Joseph Beatrice, Public Comment
Beatrice spoke regarding license plate reader technology and why he believes that a private
vendor could not be trusted with responsible management of data and that taxpayer funds should
not be used to facilitate the implementation of any surveillance technology in the community.
01:29:01 Mary, Public Comment
Mary of Stage Lane spoke to her beliefs that the use of license plate reader technology would not
help anything and could make mistakes and would take away her rights to freedom and privacy.
01:30:54 Laura Lee O’Neil, Public Comment
O’Neil of Foothill Road spoke in opposition to license plate reader technology citing price
concerns, and data collection and freedom concerns.
01:31:46 Rod Sanchez, Public Comment
Sanchez of Marion spoke in opposition to license plate reader technology and not shopping at
companies that he believes are collecting his information. He cited technology trust concerns,
and his preference that an employee perform related duties, and his preference that tax-payers
fund cost differences.
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Kalispell City Council Minutes, August 17, 2026
01:34:34 Leah Fisher, Public Comment
Fisher of Memory Lane in Kalispell talked with appreciation for the explanations given
regarding the budget. She then spoke in opposition to license plate reader technology citing
legality and Fourth Amendment concerns that others have had in towns where it is has been
implemented. She talked about concerns with AI taking jobs, not trusting data management, and
concerns that cost increases could occur.
01:38:02 John O’Neill, Public Comment
O’Neill of Foothill Road asked that everyone in the audience give a standing ovation.
01:38:59 Bella Brown, Public Comment
Brown spoke as the lead organizer in the Flathead for Forward Montana spoke in opposition to
the use of a license plate reader and believes the money should be used for employee costs. She
then advocated for money to be used for transportation and pedestrian safety and for Mountain
Climber to hire additional drivers for a standing route.
01:41:24 Benjamin Lipski, Public Comment
Lipski spoke in opposition to license plate reader technology referring to state law and court
cases that he believes argues against its use.
Seeing no further comments, Council President Waterman closed public comment.
01:46:42 Motion to approve Resolution 6345, a resolution setting the annual appropriations
for the City of Kalispell, Montana, for Special Revenue Funds, Debt Service Funds, Capital
Project Funds and Proprietary Enterprise Funds as set forth in the 2026-2027 Budget
adopted by the City Council.
Council Member – Sid Daoud: Motion
Council Member – Dustin Leftridge: 2nd
01:48:12 Council Member Nunnally provided discussion on the motion.
01:50:50 Motion to amend to strip the License Plate Reader from this year’s budget.
Council Member – Sam Nunnally: Motion
Council Member – Sid Daoud: 2nd
01:51:39 Council Member Daoud provided discussion on the motion.
01:54:07 Council Member Leftridge provided discussion on the motion.
01:57:55 Council Member Blank provided discussion on the motion.
02:00:06 Council Member Daoud provided further discussion on the motion.
02:02:09 Council Member Fisher provided discussion on the motion.
02:02:33 City Manager Nygren provided information on the repercussions of this action.

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Kalispell City Council Minutes, August 17, 2026
02:03:37 Council Member Fisher provided further discussion on the motion.
02:04:47 Council Member Gabriel provided discussion on the motion.
City Manager Nygren provided further information.
02:07:00 Council Member Gabriel provided discussion on the motion.
02:07:24 City Manager Nygren provided further information.
02:08:28 Council Member Fisher provided further discussion on the motion.
02:09:42 City Manager Nygren provided further information.
02:10:45 Council Member Fisher asked for information from a representative from the
Downtown Forward.
02:11:20 Kisa Davison, spoke as the Chair of the Kalispell Business Improvement District, part
of the group - Downtown Kalispell Forward - a coalition that includes downtown property
owners and business owners, the Chamber of Commerce, the Flathead Builders Association, the
Association of Realtors, and other downtown people. She pointed out that the recommendations
that were made by the group were based on information on previous studies and information
from the City including the previous parking enforcement officer. She referred to the frustration
with parking enforcement inefficiencies and the large state increase in property taxes for
commercial property owners. She referred to problems with the structure of downtown parking
including over and under-utilization of parking lots, 2 hour parking that could be changed, and
30 minute parking that had not been monitored and other inefficiencies. She referred to the many
people that were represented by the individuals that presented at the previous work sessions
where the parking recommendations were discussed.
02:14:21 Council President Waterman thanked Davison for the information and then provided
discussion on the Council process.
02:15:01 Council Member Leftridge asked whether a policy could come before Council prior to
procurement by amendment.
City Manager Nygren answered questions and provided information about procurement
processes.
02:16:31 Council Member Leftridge provided further discussion.
02:16:43 Vote on the motion to amend.
Council Member - Sam Nunnally: Motion
Council Member - Sid Daoud: 2nd
Mayor - Ryan Hunter: Absent
Council Member - Sid Daoud: Approve
Council Member - Sam Nunnally: Approve
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Kalispell City Council Minutes, August 17, 2026
Council President - Kyle Waterman: Approve
Council Member - Jed Fisher: Approve
Council Member - Kari Gabriel: Disapprove
Council Member - Lisa Blank: Approve
Council Member - Wes Walker: Absent
Council Member - Dustin Leftridge: Disapprove
The motion to amend passed on roll call vote with Council Members Daoud, Nunnally,
Blank, Fisher and Council President Waterman in favor, and Council Members Leftridge,
and Gabriel opposed and Council Member Walker and Mayor Hunter absent.
02:17:49 Motion to amend to include not a license plate reader but sufficient FTE in order
for a parking enforcement for this next fiscal year.
Council Member Dustin Leftridge: Motion
Council Member Sam Nunnally: 2nd
02:18:02 Council Member Leftridge provided clarification on his motion to amend.
02:18:23 City Manager Nygren explained the budget amendment would affect the entire budget
and would be difficult to change at this time and asked for additional clarification.
02:19:21 Council Member Leftridge further defined his motion to amend.
02:19:44 City Manager Nygren explained that the current budget did not remove the FTE but
rather was to be partially re-assigned to cover additional code enforcement duties.
02:20:25 Council Member Blank provided discussion on the original motion to amend and the
consequences of the vote.
02:21:56 Council Member Leftridge asked a question about the parking enforcement officer.
02:22:09 City Manager Nygren answered questions about current parking enforcement and
timing.
02:22:56 Council Member Leftridge withdrew his motion to amend.
Manager Nygren provided further information about parking enforcement.
02:23:37 Police Chief Jordan Venezio explained the training concerns that were considered in the
choice to wait to hire.
02:24:01 Manager Nygren provided further information.
02:24:47 Council Member Fisher provided discussion on parking enforcement.
02:25:28 Council Member Nunnally asked questions about the possibility of a future budget
amendment for parking enforcement.

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Kalispell City Council Minutes, August 17, 2026
02:26:49 Council President Waterman provided discussion about parking enforcement.
02:27:11 Vote on the motion as amended.
Council Member - Sid Daoud: Motion
Council Member - Dustin Leftridge: 2nd
Council Member - Kari Gabriel: Approve
Council Member - Sam Nunnally: Approve
Council Member - Jed Fisher: Approve
Council Member - Sid Daoud: Approve
Mayor - Ryan Hunter: Absent
Council Member - Wes Walker: Absent
Council Member - Lisa Blank: Approve
Council President - Kyle Waterman: Approve
Council Member - Dustin Leftridge: Approve
The motion as amended passed unanimously on roll call vote with Council Member Walker
and Mayor Hunter absent.
7)

Resolution 6346 - Storm Sewer Maintenance District Assessment 
This resolution considers the storm sewer maintenance assessment and sets the levy for
fiscal year 2026-2027.

City Manager Jarod Nygren presented the staff report.
Public Comment
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.
02:29:04 Motion to approve Resolution 6346, a resolution levying assessments for the cost of
Storm Sewer Maintenance for the Fiscal Year 2026-2027.
Council Member – Sam Nunnally: Motion
Council Member – Jed Fisher: 2nd
02:29:51 Council Member Leftridge provided discussion on the motion.
02:30:23 Council President Waterman provided discussion on the motion.
02:30:42 Vote on the motion.
Council Member - Sam Nunnally: Motion
Council Member - Jed Fisher: 2nd
Mayor - Ryan Hunter: Absent
Council Member - Sid Daoud: Approve
Council Member - Sam Nunnally: Approve
Council President - Kyle Waterman: Approve
Council Member - Jed Fisher: Approve
Council Member - Kari Gabriel: Approve
Council Member - Lisa Blank: Approve
Council Member - Wes Walker: Absent
Page 13 of 18

Kalispell City Council Minutes, August 17, 2026
Council Member - Dustin Leftridge: Approve
The motion passed on roll call vote with Council Member Walker, and Mayor Hunter
absent.
8)

Resolution 6347 – Urban Forestry Maintenance District Assessment 
This resolution considers the urban forestry maintenance assessment and sets the levy for
fiscal year 2026-2027.

City Manager Jarod Nygren presented the staff report.
Public Comment
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.
02:31:42
Motion to approve Resolution 6347, a resolution levying an assessment for the cost of
Urban Forestry Maintenance in the City for the fiscal year 2026-2027.
Council Member – Lisa Blank: Motion
Council Member – Kari Gabriel: 2nd
02:31:59 Council Member Daoud provided discussion on the motion.
02:32:48 Council President Waterman provided discussion on the motion.
02:33:18 Vote on the motion.
Council Member - Lisa Blank: Motion
Council Member - Kari Gabriel: 2nd
Mayor - Ryan Hunter: Absent
Council Member - Sid Daoud: Approve
Council Member - Sam Nunnally: Approve
Council President - Kyle Waterman: Approve
Council Member - Jed Fisher: Approve
Council Member - Kari Gabriel: Approve
Council Member - Lisa Blank: Approve
Council Member - Wes Walker: Absent
Council Member - Dustin Leftridge: Approve
The motion passed on roll call vote with Council Member Walker, and Mayor Hunter
absent.
9)

Resolution 6348 – Light Maintenance District Assessment 
This resolution levies the assessment for maintaining the street lighting in the city
for fiscal year 2026-2027.

City Manager Jarod Nygren presented the staff report.
Public Comment
Page 14 of 18

Kalispell City Council Minutes, August 17, 2026
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.
02:34:10 Motion and Vote to approve Resolution 6348, a resolution levying an assessment
for the cost of Lighting the Streets and Alleys in the City Special Lighting District for the
Fiscal Year 2026-2027.
Council Member - Kari Gabriel: Motion
Council Member - Lisa Blank: 2nd
Mayor - Ryan Hunter: Absent
Council Member - Sid Daoud: Approve
Council Member - Sam Nunnally: Approve
Council President - Kyle Waterman: Approve
Council Member - Jed Fisher: Approve
Council Member - Kari Gabriel: Approve
Council Member - Lisa Blank: Approve
Council Member - Wes Walker: Absent
Council Member - Dustin Leftridge: Approve
The motion passed unanimously on roll call vote with Council Member Walker, and Mayor
Hunter absent.
10) Resolution 6349 – Street Maintenance District Assessment 
This resolution levies the assessment for maintaining the streets and avenues for fiscal
year 2026-2027.
City Manager Jarod Nygren presented the staff report.
Public Comment
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.
02:36:23 Motion and Vote to approve Resolution 6349, a resolution levying an assessment
for the cost of Special Maintenance for the purpose of maintaining the Streets and Avenues
of the City of Kalispell for the fiscal year 2026-2027.
Council Member - Lisa Blank: Motion
Council Member - Sam Nunnally: 2nd
Mayor - Ryan Hunter: Absent
Council Member - Sid Daoud: Approve
Council Member - Sam Nunnally: Approve
Council President - Kyle Waterman: Approve
Council Member - Jed Fisher: Approve
Council Member - Kari Gabriel: Approve
Council Member - Lisa Blank: Approve
Council Member - Wes Walker: Absent
Council Member - Dustin Leftridge: Approve
The motion passed unanimously on roll call vote with Council Member Walker, and Mayor
Hunter absent.

Page 15 of 18

Kalispell City Council Minutes, August 17, 2026
11) Resolution 6350 – Solid Waste District Assessment 
This resolution levies the assessment for removing solid waste from city streets and alleys
for fiscal year 2026-2027.
City Manager Jarod Nygren presented the staff report.
Public Comment
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.
02:37:49 Motion to approve Resolution 6350, a resolution to levy the cost of removal of
garbage or other offensive matter from streets, alleys, or on any premises as a special tax
against property from which such matter was deposited, and the disposition thereof.
Council Member – Lisa Blank: Motion
Council Member – Kari Gabriel: 2nd
02:38:19 Council President Waterman provided discussion on the motion.
02:38:52 Vote on the motion.
Council Member - Lisa Blank: Motion
Council Member - Kari Gabriel: 2nd
Mayor - Ryan Hunter: Absent
Council Member - Sid Daoud: Approve
Council Member - Sam Nunnally: Approve
Council President - Kyle Waterman: Approve
Council Member - Jed Fisher: Approve
Council Member - Kari Gabriel: Approve
Council Member - Lisa Blank: Approve
Council Member - Wes Walker: Absent
Council Member - Dustin Leftridge: Approve
The motion passed unanimously on roll call vote with Council Member Walker, and Mayor
Hunter absent.
12) Resolution 6351 – Tourism Business Improvement District Appropriations 
This resolution approves the annual appropriations for the TBID for fiscal year 20262027.
City Manager Jarod Nygren presented the staff report.
02:39:37 Council Member Daoud asked for a comparison to the previous year’s budget.
Public Comment
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.

Page 16 of 18

Kalispell City Council Minutes, August 17, 2026
02:40:32 Motion and Vote to approve Resolution 6351, a resolution setting the annual
appropriation for the Tourism Business Improvement District for the City of Kalispell,
Montana, as set forth in the 2026-2027 Budget adopted by the City Council.
Council Member - Kari Gabriel: Motion
Council Member - Sam Nunnally: 2nd
Mayor - Ryan Hunter: Absent
Council Member - Sid Daoud: Approve
Council Member - Sam Nunnally: Approve
Council President - Kyle Waterman: Approve
Council Member - Jed Fisher: Approve
Council Member - Kari Gabriel: Approve
Council Member - Lisa Blank: Approve
Council Member - Wes Walker: Absent
Council Member - Dustin Leftridge: Approve
The motion passed unanimously on roll call vote with Council Member Walker, and Mayor
Hunter absent.
13) Resolution 6352 – Downtown Business Improvement District Appropriations 
This resolution approves the annual appropriations for the BID for fiscal year 2026-2027.
City Manager Jarod Nygren presented the staff report:
Public Comment
Council President Waterman opened public comment on this item. Seeing none, he closed public
comment.
02:42:16 Motion and Vote to approve Resolution 6352, a resolution making the annual tax
levy for the Business Improvement District of Kalispell, Montana, for the fiscal year 20262027 and levying an assessment for the BID for fiscal year 2026-2027.
Council Member - Dustin Leftridge: Motion
Council Member - Jed Fisher: 2nd
Mayor - Ryan Hunter: Absent
Council Member - Sid Daoud: Approve
Council Member - Sam Nunnally: Approve
Council President - Kyle Waterman: Approve
Council Member - Jed Fisher: Approve
Council Member - Kari Gabriel: Approve
Council Member - Lisa Blank: Approve
Council Member - Wes Walker: Absent
Council Member - Dustin Leftridge: Approve
The motion passed unanimously on roll call vote with Council Member Walker, and Mayor
Hunter absent.
J.

CITY MANAGER, COUNCIL, AND MAYOR REPORTS (No Action)

City Manager Jarod Nygren provided the following report:

Page 17 of 18

Kalispell City Council Minutes, August 17, 2026
•

•

City Taxiway Airport Project update: A pass-through grant for the Airport User Group
was received and authorized and the project is currently being constructed by LHC. The
project needs a significant change order that will need to come before Council, but work
needs to proceed to avoid further delay costs. The item will come before Council
September 8, 2026.
Discussion on weekend city lot rentals and block parties in residential areas is scheduled
for the August 24, work session.

02:44:33 Council Member Leftridge talked about further discussions that will be needed related
to parking enforcement.
02:45:43 Council Member Daoud corrected the statement he made earlier in the meeting that he
had not heard from anyone in favor of license plate readers when Council had heard public
comment from those representing hundreds of people regarding the entire comprehensive
parking enforcement plan, including license plate reader technology when discussed in May and
June. He clarified he was referring to a more recent time frame. He then provided discussion on
LPR systems.
02:47:41 Council President Waterman thanked everyone for their comments and referred to
future conversations that will need to happen regarding parking enforcement. He then explained
the public process that requires public discourse on agenda items.
K.
ADJOURNMENT
Council President Waterman adjourned the meeting at 9:49 p.m.
______________________________
Aimee Brunckhorst, City Clerk
Minutes approved on
UPCOMING SCHEDULE
Next Work Session Meeting – August 24, 2026, at 7:00 p.m. – Council Chambers
City Offices Closed – Monday, September 7, 2026 – Labor Day Holiday
Next Regular Meeting – TUESDAY, September 8, 2026, at 7:00 p.m. – Council Chambers
PARTICIPATION
Written public comments received by the council at least one day prior to the meeting can be
seen at www.kalispell.com/publiccomment. Council may not have the opportunity to review
written public comment received on the day of the meeting.
The City does not discriminate on the basis of disability in its programs, services, activities, and
employment practices. Auxiliary aids are available. For questions about disability
accommodation please contact the City Clerk at 406-758-7756, or [email protected].

Page 18 of 18

POLICE DEPARTMENT
312 1st Ave East – PO Box 1997 – Kalispell, MT 59903
‘Striving to Exceed Expectations’

REPORT TO:

Jarod Nygren, City Manager

FROM:

Jordan Venezio, Chief of Police

SUBJECT:

Police vehicle purchase

MEETING DATE: September 21, 2026
BACKGROUND: The Police Department budgeted to replace three of its older patrol
vehicles.
The city advertised an invitation for bids for three (3) Oxford White (YZ) 2025 (99W) Ford
Police Interceptor Utility Vehicles with specific options and police upfit equipment.
The following bid was received in response to the published Invitation for Bids:
Duval Ford

$204,762.00

ACTION REQUESTED: Award the bid for three (3) Ford Police Interceptor Utility
Vehicles to Duval Ford.
FISCAL EFFECTS: The cost for the vehicles was budgeted for in the FY2026-2027
budget and is covered in line item 944 (Capital) two within the General Fund, and one
within the Public Safety Levy fund.
ALTERNATIVES: As suggested and approved by the City Council.

JORDAN VENEZIO, CHIEF OF POLICE

City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758

TO:

Jarod Nygren, City Manager
Susie Turner, PE, Public Works Director
FROM:
Gene Corne, Road and Fleet Superintendent
SUBJECT: Bid Recommendation: 31-Yard Side Arm Solid Waste Truck
MEETING: September 21, 2026
BACKGROUND: The FY 2027 budget allocated funds within the Solid Waste Division for the
purchase of a new 31-yard side-arm solid waste collection truck. The procurement solicited bids
for a new 31-yard side-arm solid waste truck to be delivered to Kalispell within 366 days of
contract award. The bid also included an alternate for the trade-in of the City’s existing 2010
Curbtender side-arm solid waste truck that is being replaced.
Bids were opened on Friday, September 11, 2026. Of the prospective vendors that obtained bid
documents, two (2) responsive bids were received, as summarized below:
Bidder

Manufacture

Base Bid
Price

Trade in
Discount

Met Required
Specifications

Total Purchase
price with
Trade in
Discount
$454,222.00

Jackson
Heil
$460,222.00
$6,000.00
No1
Group
Peterbilt
Missoula
$464,170.00
$31,150.00
Yes
$433,020.00
Labrie
Peterbilt
1. Bid did not meet specifications for a) equipment size to ensure maneuverability and safe operation
in the City’s confined work areas, b) warranty processes that account for the costs of repairs and
travel to manufacturer repair facilities, and c) minimum engine size.

After review of the submitted bids, Missoula Peterbilt was determined to be the lowest
responsive bidder. Missoula Peterbilt bid provided the lowest overall cost and met all
requirements of the advertised bid specifications.
ACTION REQUESTED: Motion to award the base bid for a new 31-yard side-arm solid waste
truck to Missoula Peterbilt in the amount of $464,170.00, and to accept the alternate trade-in bid
for the City’s 2010 Curbtender side-arm solid waste truck in the amount of $31,150.00.
FISCAL EFFECTS: The purchase will be funded through the Solid Waste Fund, line item
5510-460-430840-944 – Vehicle Replacement: New Side Arm Garbage Truck. A total of
$500,000 was budgeted in FY 2027 for the purchase of the new 31-yard side-arm solid waste
truck. After applying the $31,150 trade-in credit, the net purchase cost will be $433,020.
ALTERNATIVES: As suggested and approved by the City Council.
Attachments: Bid Tabulations

Bid Tabulations- 31-Yard Side Arm Solid Waste Truck
9/11/2026

City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758

TO:

Jarod Nygren, City Manager
Susie Turner, PE, Public Works Director
FROM:
Gene Corne, Road and Fleet Superintendent
SUBJECT: Bid Recommendation: Regenerative Air Sweeper
MEETING: September 21, 2026
BACKGROUND: The FY 2027 budget allocated funds within the Street Division and
Stormwater Division for the purchase of a new regenerative air sweeper. The procurement
solicited bids for a new regenerative air sweeper to be delivered to Kalispell within 366 days of
contract award. The bid solicitation also included an alternate for the trade-in of the City’s
existing 2009 Elgin regenerative air sweeper being replaced.
Bids were opened on Friday, September 11, 2026. Of the prospective vendors that obtained bid
documents, two (2) responsive bids were received, as summarized below:
Bidder

Manufacture

Base Bid Price

Bid-Alternative Met Required
Trade in
Specifications
Discount
Joe Johnson Equipment
Elgin
$364,194.00
$5,000.00
Yes
Torgersons Equipment
Schwarts
Withdrawn
Withdrawn
No1
1. The bid was incomplete and did not meet the minimum specifications outlined in the bid
documents. Torgerson’s subsequently withdrew its bid.

After reviewing the submitted bids, Joe Johnson Equipment was determined to be the lowest
responsive bidder and met all requirements of the advertised bid specifications. The trade-in
value offered under the bid alternate was not considered advantageous to the City. Therefore,
staff recommends retaining the existing unit and selling it at auction once the new sweeper is
delivered and operational.
ACTION REQUESTED: Motion to award the base bid for a new regenerative air sweeper to
Joe Johnson Equipment in the amount of $364,194.00 and to reject the bid alternate offering a
$5,000.00 trade-in allowance for the City’s 2009 Elgin Regenerative Air Sweeper.
FISCAL EFFECTS: Sufficient funds were allocated in the FY 2027 budget for this purchase.
Funding will be provided through the Special Street Maintenance Fund line item 5510-460430840-944 and the Stormwater Fund line item 5349-453-430246-940.
ALTERNATIVES: As suggested and approved by the City Council.
ATTACHMENT: Bid Tabulations

Bid Tabulations- Regenerative Air Sweeper
9/11/2026

City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758

TO:

Jarod Nygren, City Manager
Susie Turner, PE, Public Works Director
FROM:
Gene Corne, Road and Fleet Superintendent
SUBJECT: Bid Recommendation: Tandem Axle Truck Chassis with 12-yard Asphalt Dump
Box and Plow.
MEETING: September 21, 2026
BACKGROUND: As part of the FY 2027 budget, the Street Division allocated funds for the
purchase of a new tandem axle truck chassis with a 12-yard asphalt dump box and plow. The
purchase is a scheduled replacement of the City’s existing 20-year-old 12-yard dump truck and
plow, which has become increasingly costly to maintain due to age and recurring mechanical
issues.
The bids were solicitated for one new tandem axle truck chassis with a 12-yard asphalt dump box
and plow. Bids were opened on Friday, September 11, 2026. Of the prospective vendors that
obtained bid documents, one responsive bid was received as follows:
Bidder
Missoula IState Truck Center

Bid Amount
$284,266.00

Staff reviewed the bid submitted by Missoula I-State Truck Center and determined that it met the
minimum specifications outlined in the bid documents.
ACTION REQUESTED: Motion to award the bid for a new Tandem Axle Truck Chassis with
12-yard Asphalt Dump Box and Plow to Missoula IState Truck Center in the amount of
$284,266.00.
FISCAL EFFECTS: Sufficient funds were budgeted in FY 2027 budget for this purchase. The
purchase will be funded through the Special Street Fund line item 2500-421-430245-940 –
Machinery & Equipment.
ALTERNATIVES: As suggested and approved by the City Council.
ATTACHEMENT: Bid Tabulations

Bid Tabulations- Tandem Axle Truck Chassis with 12-yard Asphalt Dump Box and Plow
9/11/2026

Office of City Manager
201 1st Avenue East
Kalispell, MT 59901
Phone: (406) 758-7703

REPORT TO:

Honorable Mayor Hunter and City Council

FROM:

Jarod Nygren, City Manager

SUBJECT:

Ordinance No. 1955 – Amending Kalispell Municipal Code 3-18 by
Incorporating Downtown City Parking Lots and Residential Block Parties

DATE:

September 21, 2026

BACKGROUND: At the August 24 work session, the Council had discussion about allowing
downtown city parking lots to be utilized for special events, similarly to how other city venues
are used. Currently, the city has not allowed special event permits on downtown city lots as there
are not any clear provisions. In addition, the Council discussed allowing a local city street in a
residential zone to be closed for a residential block party. Residential block parties are common
across the nation where social gatherings in those neighborhoods foster a healthy and beneficial
aspect of living within an urban environment. At the meeting there was support for both ideas.
Given the work session discussion, Council is being asked to consider an amendment to the
existing code KMC 3-18. Accordingly, staff has prepared Ordinance No. 1955, an ordinance
adding provisions for downtown city parking lots and residential block parties as eligible for a
special event permit. Downtown parking lots within the B-3 and B-4 zones would also be
eligible for an alcohol permit with this amendment. This regulation requires, among other things,
the applicant to acquire appropriate liability insurance, time provisions, and application
requirements. In addition, a deposit of $1,000.00 is proposed with each special event permit.
Finally, in addition to the substantive changes, staff made some clerical updates to KMC 3-18 for
clarity by changing the title of KMC 3-18 and organizing accordingly.
RECOMMENDATIONS: It is recommended that the Council consider a motion to approve the
first reading of Ordinance No. 1955, an ordinance amending Kalispell Municipal Code 3-18
incorporating downtown city parking lots and residential block parties, declaring an effective
date and authorizing the City Attorney to codify the same.
ALTERNATIVES: The Council may discuss and offer other alternatives.
ATTACHMENTS: Ordinance 1955 with Exhibit “A”
KMC 3-18

ORDINANCE NO. 1955
AN ORDINANCE RENAMING KALISPELL MUNICIPAL CODE CHAPTER 3,
AMENDING KMC 3-18 TO ADD RESIDENTIAL BLOCK PARTIES, AMENDING KMC
3-18 TO INCLUDE THE PERMITTED USE OF CITY-OWNED PARKING LOTS FOR
EVENTS IN WHICH ALCOHOL MAY BE SERVED AND CONSUMED SUBJECT TO
THE REGULATIONS THEREIN, DECLARING AN EFFECTIVE DATE AND
AUTHORIZING THE CITY ATTORNEY TO CODIFY THE SAME.
WHEREAS, the City has, within KMC 3-18, permitting regulations in place for events in City
owned venues in which alcohol will be served and consumed; and
WHEREAS, the existing regulations require, among other things, the applicant to acquire all
appropriate liability insurance, compliance with all Department of Revenue
requirements and a bounded area in which alcohol is served and consumed; and
WHEREAS, Council discussed allowing downtown city parking lots to be utilized for special
events and allowing a local city street in a residential zone to be closed in order to
hold a residential block party, with certain provisions; and
WHEREAS, minor clerical updates have been made to KMC Chapter 3 including changing the
title of Chapter 3 as well as the title KMC 3-18, adding clarifying language, and
reorganizing accordingly.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL AS FOLLOWS:
SECTION 1.

The title of Kalispell Municipal Code Chapter 3 is hereby changed
as set forth in Exhibit “A” attached hereto and is hereby incorporated
herein by this reference.

SECTION 2. Ordinance No. 1355 enacted by the Kalispell City Council, last
amended as Ordinance No. 1876 and codified in the Kalispell
Municipal Code at 3-18, is hereby amended as set forth in Exhibit
“A” attached hereto.
SECTION 3.

The City Attorney is hereby authorized and directed to recodify this
Ordinance.

SECTION 4.

This Ordinance shall take effect thirty (30) days after its final
passage.

PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL THIS 5TH DAY OF OCTOBER, 2026.

____________________________________
Ryan Hunter
Mayor
ATTEST:
_______________________________
Aimee Brunckhorst
City Clerk

Exhibit “A”
Chapter 3 Alcoholic Beverages and Special Event Permits
§ 3-1 Definitions.
Alcohol. Ethyl alcohol, also called ethanol, or the hydrated oxide of ethyl.
Alcoholic beverage. A compound produced and sold for human consumption as a drink that
contains more than 0.5 of alcohol by volume.
Beer. A malt beverage containing not more than 7% of alcohol by weight.
Brewer. A person who produces malt liquor.
Liquor. An alcoholic beverage except beer or table wine.
Public place. A place, building, or conveyance to which the public has or may be permitted to
have access and any place of public resort.
Special Events. Include but are not limited to such activities as arts, festivals, fairs, tours,
concerts, holiday celebrations, business promotional events, car washes, bicycle races, runs,
parades, marches and processions, motorcades and assemblies that occur in whole or in part on
city owned or maintained properties, such as streets, sidewalks, boulevards and parks.
Wine. An alcoholic beverage made from or containing the normal alcoholic fermentation of the
juice or sound, ripe fruit or other agricultural products without addition or abstraction, except as
may occur in the usual cellar treatment of clarifying and aging, and that contains more than 0.05
but not more than 24% of alcohol. Wine may be ameliorated to correct natural deficiencies,
sweetened, and fortified in accordance with applicable Federal regulations and the customs and
practices of the industry. Other alcoholic beverages not defined in this subsection but made in the
manner of wine and labeled and sold as wine in accordance with Federal regulations are also
wine.
(Ord. 1355, 6-5-2000)

…
§ 3-18 Alcohol Consumption in Street, Alley, or Public Place Prohibited; Exceptions and
Special Event Permit Provisions.
A. No person shall sell, serve, dispense, consume or possess an open container of any alcoholic
beverage in or upon any building or other property owned or occupied by the City or upon any
street or sidewalk unless such action is otherwise authorized as set forth in this section.
B. Special Event Permit and Alcohol Permit Application Process and Requirements. An
application form for a special public event permit and City alcohol permit may be obtained from
the City Attorney's office or online at the City's website and shall be timely submitted to the City
Attorney's office. The application form will require certain information such as the date, place,
time, and any city services required for such event. An application for an event in which alcohol
is distributed or consumed outdoors shall include a detailed map specifically showing the
proposed location of a fenced area in which all such distribution and consumption shall occur
and be monitored. All permit applications must be submitted in adequate time for all necessary
City departments to review, comment and prepare for the event. All permits will be
administratively considered and approved or disapproved by the City Manager.
The applicant for a City alcohol permit shall comply with all statutes and regulations of the
Montana Department of Revenue governing sales of alcohol and shall ensure that a trained
volunteer or employee in one of the preapproved Montana Department of Revenue training
courses is present at the point of sale and service.
Any special public event that uses, occupies, closes, restricts, or otherwise affects a City street,
alley, sidewalk, parking area, or other public right-of-way shall require a City special event
permit.
The applicant shall submit, as part of the special event permit application, a traffic control plan
addressing vehicular, pedestrian, and bicycle traffic, emergency access, street closures, detours,
parking restrictions, and traffic control devices, as applicable to the proposed event. The traffic
control plan shall be reviewed and approved by the City Department of Public Works prior to
issuance of the special event permit.
The applicant shall be responsible for obtaining, placing, maintaining, and removing all
barricades, signs, and other traffic control devices required by the approved traffic control plan,
unless otherwise authorized by the City.
The applicant shall be responsible for all applicable special event permit fees, traffic control
review and inspection fees, and other fees established by the City Council. The applicant shall
also reimburse the City for actual costs incurred in support of the event, including, as applicable,
Public Works, Police, Fire, solid waste, traffic control, equipment, materials, and other City
services.
C. Exceptions for Leased or Managed City Properties. Certain City owned properties, as set forth
in this paragraph, are leased and/or managed by separate entities. If the entity that leases or

manages one of these properties elects to allow alcoholic beverages to be sold, served, consumed
or possessed upon such property they must notify the City of this election and provide the City
with proof of liability insurance, including an alcohol insurance addendum (if alcoholic
beverages are sold on the premises) and all necessary Department of Revenue permissions. The
minimum liability coverages shall be no less than $750,000 per occurrence and one million five
hundred thousand dollars ($1,500,000.00) aggregate and the City must be designated as the
additional named insured upon the policy. This paragraph shall apply to the following City
owned properties:
1. Buffalo Hill Golf Course;
2. Hockaday Center for the Arts and its grounds;
3. Kalispell Chamber of Commerce (Depot) Building and leased grounds;
4. Northwest Montana History Museum and its grounds;
5. Conrad Mansion Museum and its grounds.
DC. Exceptions for Other City Owned Properties. Entities seeking to utilize certain City owned
properties, as set forth in this paragraph, for events in which alcoholic beverages are to be sold,
served, consumed, or possessed upon such property must first timely submit an application for a
City alcohol permit to append to the special event permit for use of the City owned property.
This shall apply to the use of the following City owned property:
1. Depot Park;
2. Lakers Ball Fields;
3. The hockey rink and surrounding grounds between the dates of October 14th and
March 21st, at Woodland Park;
4. The Parkline between the hours of 11:00am and 11:00pm with the trail within the
Parkline remaining open to the public.
5. City-owned surface parking lots located within the B-3 and B-4 Zones between the
hours of 11:00 am and 11:00 p.m. Saturdays and Sundays.
D. 6.Exceptions for Streets and Rights-of-Way of the City within the B-3 and B-4 Zones.
Either a for profit or a not-for-profit entity may apply to utilize a street or right-of-way within the
business B-3 and B-4 zones of the City for an event in which alcoholic beverages are to be sold,
served, consumed or possessed. The entity must first timely submit an application for a city
alcohol permit to append to the application for a special event permit for use of the City streets
and rights-of-way.
E. Application Process and Requirements. An application form for a special public event permit
and City alcohol permit may be obtained from the City Attorney's office or online at the City's
website and shall be timely submitted to the City Attorney's office. The application form will
require certain information such as the date, place, time, and any city services required for such
event. An application for an event in which alcohol is distributed or consumed outdoors shall
include a detailed map specifically showing the proposed location of a fenced area in which all
such distribution and consumption shall occur and be monitored. All permit applications must be
submitted in adequate time for all necessary City departments to review, comment and prepare
for the event. All permits will be administratively considered and approved or disapproved by
the City Manager.

The applicant for a City alcohol permit shall comply with all statutes and regulations of the
Montana Department of Revenue governing sales of alcohol and shall ensure that a trained
volunteer or employee in one of the preapproved Montana Department of Revenue training
courses is present at the point of sale and service.
F. The City Manager may grant a City special event and alcohol permit, if, considering the type
of function, he or she finds that:
1. The time, location and duration of the function are not likely to significantly interfere
with public services;
2. The number and concentration of participants at the function are not likely to result in
crowds exceeding limitations in the City fire regulations, or other significant inconvenience to
the residents of the surrounding neighborhoods;
3. Underage persons will not obtain alcoholic beverages served at the function, and the
precautions proposed, such as fencing barriers to create separation, use of ID bracelets, and
manned security, are likely to adequately secure and supervise the area and the participants
during the function;
4. The applicant agrees to limit the consumption under the permit to the hours between
10:00 a.m. and 11:00 p.m.;
5. The applicant agrees to pay such fees and damage deposit to reimburse the City for its
costs of solid waste pick up and removal and barricade placements and comply with all rules set
out in the permit regarding the treatment of solid waste, material that may be used, e.g., no glass
bottles;
6. The applicant agrees to provide security for the permitted function commensurate with
the recommendations of the Chief of Police;
7. The applicant agrees to indemnify and hold harmless the City, its employees and
agents for all liability claims arising out of the event as well as provide liability insurance
coverage in the amount of $750,000 per occurrence and one million five hundred thousand
dollars ($1,500,000.00) aggregate (along with an alcohol insurance addendum) naming the City
of Kalispell as an additional named insured;
8. The general public cannot be prohibited from attending the event.
9.In addition to applicable fees, a refundable damage deposit in the amount of $1,000.00
is required at time of special event permit approval. Any costs incurred by the City for repair,
cleanup, restoration, removal of traffic control devices, or other work resulting from the event
may be deducted from the deposit. Costs exceeding the deposit shall be the responsibility of the
applicant.
FG. Either for profit or not-for-profit entities may apply for and the City Manager may approve a
seasonal special public event permit for public events that recur in the same location in the B-3
or B-4 zones over a period of time not to exceed four months.
G. City residents within the residential zones of the city may apply for a special event permit to
temporarily close a portion of a local city street that does not serve as an arterial or collector
street for the purposes of providing a safe outdoor space for the residents to facilitate a social
gathering of the neighborhood in the form of a residential block party. For this purpose, the
following conditions shall apply:

a) The event must not extend for more than one day in a calendar year and
must occur only between the hours of 10:00 a.m. and 10:00 p.m.
b) Alcohol is not permitted within the city right-of-way.
c) The applicant shall contact in writing all abutting or adjacent property
owners and residents (if a property is not owner-occupied) within the area
to be closed as well as the property owners on the corner lots immediately
across the intersection on the opposite side of the street closure. The
applicant shall provide written documentation to the City Manager at the
time of application indicating each of the above-described property
owners/residents consent to the application.
d) The general public cannot be prohibited from attending the event.
H. The City Manager may deny a permit on the grounds that approval would be detrimental to
the public safety, health, order or welfare by reason of the nature of the event, or result in the
consumption of alcoholic beverages by minors, or the failure of the applicant to conduct a past
event in compliance with applicable laws and regulations. The request may also be denied if
another event has previously been scheduled for that location on the same day and time, or if the
event would unreasonably interfere with normal activities and customary and general use and
enjoyment of the facility.
I. The City supplants the provisions of subsection (1) Section 16-3-306, of Montana Code
Annotated as follows:
1. With respect to restaurant beer and wine (RBW) licenses as authorized by Montana
Code Annotated Sections 16-4-420 through 16-4-423 only, the City supplants the provisions of
subsection (1) Section 16-3-306, of Montana Code Annotated, by eliminating entirely the
distance requirement between licensed establishments and a church, synagogue or other place of
worship, so long as such licensee is located within the General Business B-2, Core Area
Business B-3, Central Business B-4, or Industrial-Commercial B-5 City land use zones.
2. With respect to any level of liquor licenses, as authorized by Montana Code
Annotated, Title 16, the City supplants the provisions of subsection (1) Section 16-3-306, of
Montana Code Annotated, by eliminating entirely the distance requirement between licensed
establishments and a church, synagogue or other place of worship, so long as such licensee is
located within a Core Area Business B-3, or Central Business B-4 land use zone.
3. With respect to any level of liquor licenses, as authorized by Montana Code
Annotated, Title 16, the City supplants the provisions of subsection (1) Section 16-3-306, of
Montana Code Annotated, by reducing the distance requirement between licensed liquor
establishments and schools to 300 feet in the General Business B-2, Core Area Business B-3,
Central Business B-4, and the Industrial-Commercial B-5 City land use zones.
(Ord. 1355, 6-5-2000; amd. Ord. 1638, 6-2-2008; Ord. 1725, 6-17-2013; Ord. 1757, 5-18-2015;
Ord. 1786, 3-6-2017; Ord. 1876, 5-2-2022)

City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997
Telephone (406) 758-7701 Fax - (406) 758-7758

REPORT TO:

Jarod Nygren, City Manager

FROM:

Aimee Cooke, Finance Director

SUBJECT:

Resolution No. 6354 – Authorizing Loan with the Montana Board of
Investments for Purchase of Two Fire Pumper Trucks

MEETING DATE:

September 21, 2026 – Regular Council Meeting

BACKGROUND:
The City utilizes the Montana Board of Investments (BOI)
INTERCAP Loan Program to assist in financing the purchase of essential equipment.
Participation in this program allows the City to better manage the consistency of its cash flows.
The proposed financing is for two fire pumper trucks. The first pumper was approved and
ordered as part of the FY2023 budget, and the second pumper was approved and ordered as part
of the FY2025 budget. Due to the extended manufacturing lead time for fire apparatus, the two
pumpers were completed and delivered together.
The Montana Board of Investments has approved a loan of up to $1,917,000 to finance costs
associated with the purchase of two fire pumper trucks. The loan term is 10 years. The current
interest rate is 4.50% through February 15, 2027, and the rate adjusts annually each February 16
under the INTERCAP variable-rate program.
RECOMMENDATION: It is recommended that the City Council adopt Resolution No.
6354, authorizing the City Manager to execute the necessary agreements and documents to
finalize the $1,917,000 loan through the Montana Board of Investments INTERCAP Loan
Program for the purchase of two fire pumper trucks.
FISCAL IMPACT: Annual debt service for the two fire pumper trucks is estimated at
$269,339. Approximately $127,434 will be paid from the General Fund, and approximately
$141,905 will be paid from the EMS Levy Fund. Actual debt service may vary as the
INTERCAP interest rate is adjusted annually.
ATTACHMENTS: Resolution 6354

www.kalispell.com

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(GENERAL FUND LOAN)
RESOLUTION AUTHORIZING PARTICIPATION IN THE INTERCAP PROGRAM
CERTIFICATE OF MINUTES RELATING TO
RESOLUTION NO. 6354

Issuer: City of Kalispell
Kind, date, time and place of meeting: A
in
, Montana.

meeting held on

at ____o'clock ___.m.

Members present:
Members absent:
RESOLUTION NO. 6354
RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS OF
THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE MUNICIPAL FINANCE
CONSOLIDATION ACT EXTENDABLE BOND (INTERCAP LOAN PROGRAM),
APPROVING THE FORM AND TERMS OF THE LOAN AGREEMENT AND
AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED
THERETO
I, the undersigned, being the fully qualified and acting recording officer of the public body
issuing the obligations referred to in the title of this certificate, certify that the documents attached hereto,
as described above, have been carefully compared with the original records of the public body in my legal
custody, from which they have been transcribed; that the documents are a correct and complete transcript
of the minutes of a meeting of the governing body at the meeting, insofar as they relate to the obligations;
and that the meeting was duly held by the governing body at the time and place and was attended
throughout by the members indicated above, pursuant to call and notice of such meeting given as required
by law.
WITNESS my hand officially as such recording officer this ____ day of
By
Its

RESOLUTION - 1

, 2026.

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RESOLUTION NO. 6354
RESOLUTION AUTHORIZING PARTICIPATION IN THE BOARD OF INVESTMENTS OF
THE STATE OF MONTANA ANNUAL ADJUSTABLE RATE MUNICIPAL FINANCE
CONSOLIDATION ACT EXTENDABLE BOND (INTERCAP LOAN PROGRAM),
APPROVING THE FORM AND TERMS OF THE LOAN AGREEMENT AND
AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED
THERETO
BE IT RESOLVED BY THE City Council (the Governing Body) OF THE CITY OF
KALISPELL (the Borrower) AS FOLLOWS:
ARTICLE I
DETERMINATIONS AND DEFINITIONS
Section 1.01. Definitions. The following terms will have the meanings indicated below for
all purposes of this Resolution unless the context clearly requires otherwise. Capitalized terms used in
this Resolution and not defined herein shall have the meanings set forth in the Loan Agreement.
Adjusted Interest Rate means the rate of interest on the INTERCAP Bond determined in
accordance with the Board Resolution.
Authorized Representative shall mean the officers of the Borrower designated and duly
empowered by the Governing Body and set forth in the application.
Board means the Board of Investments of the State of Montana, a public body corporate
organized and existing under the laws of the State and its successors and assigns.
Board Act means Section 2-15-1808, Title 17, Chapter 5, Part 16, MCA, as amended.
"Board Resolution" means Board Resolution No. 249, adopted November 30, 2021,
authorizing the issuance and sale of the INTERCAP Bonds for the purpose of making loans to Eligible
Government Units.
Borrower means the local government entity above named, eligible to participate in the
INTERCAP Loan Program.
"Borrower Act" means §§ 7-7-4101, and 7-7-4201, 7-5-4306 , MCA authorizing an Eligible
Government Unit to borrow money on terms consistent with the Program.
"Electronic Funds Transfer (EFT) Authorization" shall mean the authorization given by the
Borrower to the Board to initiate electronic debit and/or credit entries to the Borrower’s specified account
to fund the Loan and make automatic Loan repayments when due. The Board may also initiate the
electronic debit for periodic principal paydown or payoff prior to loan maturity upon the Borrower’s request.
INTERCAP Bond means the Bond issued by the Board pursuant to the Board Resolution
to finance the Program.
Loan means the loan of money by the Board to the Borrower under the terms of the Loan
Agreement pursuant to the Act and the Borrower Act and evidenced by the Note.
Loan Agreement means the Loan Agreement between the Borrower and the Board,
including any amendment thereof or supplement thereto entered into in accordance with the provisions
thereof and hereof.
RESOLUTION - 2

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Loan Agreement Resolution means this Resolution or such other form of resolution that the
Board may approve and all amendments and supplements thereto.
Loan Date means the date of closing a Loan.
Loan Rate means the rate of interest on the Loan which is initially 4.50% per annum through
February 15, 2027 and thereafter a rate equal to the Adjusted Interest Rate on the Bond and up to 1.50%
per annum as necessary to pay Program Expenses.
Note means the promissory note to be executed by the Borrower pursuant to the Loan
Agreement, in accordance with the provisions hereof and thereof, in substantially the form set forth in the
Promissory Note, or in such form that may be approved by the Board.
Program means the Board’s INTERCAP Loan Program pursuant to which the Board issued
the INTERCAP Bond to use the proceeds to make loans to participating Eligible Government Units.
Project means those items of equipment, personal or real property improvements to be
acquired, installed, financed or refinanced under the Program as set forth in the Description of the
Project/Summary of Draws.
Section 1.02. Authority. The Borrower is authorized to undertake the Project and is further
authorized by the Borrower Act to enter into the Loan Agreement for the purpose of obtaining a loan to
finance or refinance the acquisition and installation costs of the Project.
Section 1.03. Execution of Agreement and Delivery of Note. Pursuant to the Board Act,
the Board has issued and sold the INTERCAP Bond and deposited a part of proceeds thereof in the Loan
Fund. The Board has, pursuant to the Term Sheet, agreed to make a Loan to the Borrower in the principal
amount of $1,917,000.00 and upon the further terms and conditions set forth herein, and as set forth in the
Term Sheet and the Loan Agreement.
ARTICLE II
THE LOAN AGREEMENT
Section 2.01. Terms. (a) The Loan Agreement shall be dated as of the Loan Date, in the
principal amount of $1,917,000.00 and shall constitute a valid and legally binding obligation of the
Borrower. The obligation to repay the Loan shall be evidenced by a Promissory Note. The Loan shall bear
interest at the initial rate of 4.50% per annum through February 15, 2027, and thereafter at the Adjusted
Interest Rate, plus up to 1.50% per annum as necessary to pay the cost of administering the Program (the
Program Expenses). All payments will be automatic pursuant to the EFT Authorization attached hereto
when due.
(b)

The Loan Repayment Dates shall be February 15 and August 15 of each year.

(c)
The principal amount of the Loan may be prepaid in whole or in part if the Borrower
requests that the Board approve prepayment of the loan. Upon approval, the Board will initiate an electronic
debit using the attached EFT Authorization for prepayment provided that the Borrower has given written
notice of its intention to prepay the Loan in whole or in part to the Board no later than 30 days prior to the
designated prepayment date or less if the Board agrees to shorter notice.
(d)
The Prepayment Amount shall be equal to the principal amount of the Loan
outstanding, plus accrued interest thereon to the date of prepayment.
RESOLUTION - 3

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(e)
Within the next month following an Adjustment Date, the Board shall calculate the
respective amounts of principal and interest payable by each Borrower on and with respect to its Loan
Agreement and Note for the subsequent August 15 and February 15 payments and prepare and mail a
statement therefor to the Borrower.
Section 2.02. Use and Disbursement of the Proceeds. The proceeds of the Loan will be
expended solely for the purposes set forth in the Description of the Project/Summary of Draws. The
proceeds from the sale of the Note to the Board shall remain in the Borrower's Account pending
disbursement at the request of the Borrower to pay the budgeted expenditures in anticipation of which the
Note was issued. Requests for disbursement of the Loan shall be made to the Board. Prior to the closing
of the Loan and the first disbursement, the Borrower shall have delivered to the Board a certified copy of
this Resolution, the executed Loan Agreement and Note in a form satisfactory to the Borrower's Counsel
and the Board's Bond Counsel and such other certificates, documents and opinions as set forth in the Loan
Agreement or as the Board may require. The Borrower will pay the loan proceeds to a third party within
five business days after the date they are advanced (except for proceeds to reimburse the Borrower for
previously paid expenditures, which are deemed allocated on the date advanced).
Section 2.03. Payment and Security for the Note. In consideration of the making of the
Loan to the Borrower by the Board, the provisions of this Resolution shall be a part of the Agreement of
the Borrower with the Board. The provisions, covenants, and Agreements herein set forth to be performed
by or on behalf of the Borrower shall be for the benefit of the Board. The Loan Agreement and Note shall
constitute a valid and legally binding obligation of the Borrower and the principal of and interest on the
Loan shall be payable from the general fund of the Borrower, and any other money and funds of the
Borrower otherwise legally available therefor. The Borrower shall enforce its rights to receive and collect
all such taxes and revenues to insure the prompt payment of the Borrower obligations hereunder.
Section 2.04. Representation Regarding the Property Tax Limitations. The Borrower
recognizes and acknowledges that the amount of taxes it may levy is limited by state law pursuant to
§
15-10-402, MCA, et. seq. The Borrower is familiar with the Montana’s property tax limitations and
acknowledges that the obligation to repay the Loan under the Agreement and Note are not exceptions to
these provisions. The Borrower represents and covenants that the payment of principal of and interest on
the Loan can and will be made from revenues available to the Borrower in the years as they become due,
notwithstanding the provisions of property tax limitations.
Section 2.05. Levy and Appropriate Funds to Repay Loan. The Borrower agrees that in
order to meet its obligation to repay the Loan and all other payments hereunder that it will budget, levy
taxes for and appropriate in each fiscal year during the term of the Loan an amount sufficient to pay the
principal of and interest hereon within the limitations of the Property Tax Limitation Act, as may be
amended, and will reduce other expenditures if necessary to make the payments hereunder when due.
ARTICLE III
CERTIFICATIONS, EXECUTION, AND DELIVERY
Section 3.01. Authentication of Transcript. The Authorized Representatives are authorized
and directed to prepare and furnish to the Board and to attorneys approving the validity of the Loan,
certified copies of this Resolution and all other resolutions and actions of the Borrower and of said officers
relating to the Loan Agreement and the Note and certificates as to all other proceedings and records of
the Borrower which are reasonably required to evidence the validity and marketability of the Note. All such
certified copies and certificates shall be deemed the representations and recitals of the Borrower as to the
correctness of the statements contained therein.

RESOLUTION - 4

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Section 3.02. Legal Opinion. The attorney to the Borrower is hereby authorized and
directed to deliver to the Board at the time of Closing of the Loan his or her opinion regarding the Loan,
the Loan Agreement, the Note, and this Resolution in substantially the form of the opinion set forth in the
Attorney's Opinion.
Section 3.03. Execution. The Loan Agreement, the Note, and any other document required
to close the Loan shall be executed in the name of the Borrower and shall be executed on behalf of the
Borrower by the signatures of the Authorized Representatives of the Borrower.
of September,

PASSED AND APPROVED by the City Council and signed by the Mayor this 21st day
, 2026.

By
Its
Attest:
By
Its

City Clerk

RESOLUTION - 5

Mayor

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Loan #3107
LOAN AGREEMENT
between
BOARD OF INVESTMENTS
OF THE STATE OF MONTANA
as Lender
and
CITY OF KALISPELL
as Borrower

DATE OF AGREEMENT:

October 9, 2026

LOAN AMOUNT:

ONE MILLION NINE HUNDRED SEVENTEEN THOUSAND AND
NO/100 DOLLARS ($1,917,000.00)

ADDRESS OF BORROWER:

City of Kalispell
P.O. Box 1997
Kalispell, MT 59903

CONTACT PERSON OF BORROWER:
NAME
TITLE
TELEPHONE
E-MAIL

Aimee Cooke
Finance Director
(406) 758-7755
[email protected]

ALTERNATE CONTACT PERSON
NAME
TITLE
TELEPHONE
E-MAIL

Carrie Jones
Assistant Finance Director
(406) 758-7750
[email protected]

STATUTORY AUTHORITY FOR BORROWING: §§ 7-7-4101, 7-7-4201, and 7-5-4306, MCA

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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND RULES OF INTERPRETATION. .................................................................. 2
SECTION 1.01. DEFINITIONS .................................................................................................................................... 2
SECTION 1.02. RULES OF INTERPRETATION. ............................................................................................................. 5
SECTION 1.03. ATTACHMENTS ................................................................................................................................. 5

ARTICLE II. REPRESENTATIONS, COVENANTS AND WARRANTIES OF BORROWER.............................. 6
SECTION 2.01. REPRESENTATIONS AND WARRANTIES. ............................................................................................. 6
SECTION 2.02. PARTICULAR COVENANTS OF BORROWER. ........................................................................................ 7

ARTICLE III. LOAN TO BORROWER. ...................................................................................................... 7
ARTICLE IV. LOAN PROVISIONS. ......................................................................................................... 7
SECTION 4.01. COMMENCEMENT OF LOAN AGREEMENT............................................................................................ 7
SECTION 4.02. TERMINATION OF AGREEMENT. ......................................................................................................... 7
SECTION 4.03. TERM OF LOAN AGREEMENT. ............................................................................................................ 8
SECTION 4.04. LOAN CLOSING SUBMISSIONS. .......................................................................................................... 8
SECTION 4.05. INITIAL AND SUBSEQUENT DRAWS OF LOAN. ...................................................................................... 8

ARTICLE V. LOAN REPAYMENTS AND NOTE. ....................................................................................... 8
SECTION 5.01. PAYMENT OF LOAN REPAYMENTS ..................................................................................................... 8
SECTION 5.02. DELINQUENT LOAN PAYMENTS.......................................................................................................... 9
SECTION 5.03. THE NOTE. ...................................................................................................................................... 9

ARTICLE VI. TERM. .............................................................................................................................. 10
ARTICLE VII. OBLIGATIONS OF BORROWER UNCONDITIONAL ........................................................ 10
SECTION 7.01. OBLIGATIONS OF BORROWER. ........................................................................................................ 10

ARTICLE VIII. FINANCIAL COVENANTS (GENERAL FUND). .............................................................. 10
SECTION 8.01. REPRESENTATION REGARDING PROPERTY TAX LIMITATIONS............................................................ 10
SECTION 8.02. LEVY AND APPROPRIATE FUNDS TO REPAY LOAN. ........................................................................... 10
SECTION 8.03. REPORTS AND OPINION; INSPECTIONS. ........................................................................................... 10

ARTICLE IX. DISCLAIMER OF WARRANTIES. ....................................................................................... 10
ARTICLE X. OPTION TO PREPAY LOAN. ............................................................................................. 11
ARTICLE XI. ASSIGNMENT. ................................................................................................................. 11
ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES............................................................................. 11
SECTION 12.01. EVENTS OF DEFAULT DEFINED...................................................................................................... 11
SECTION 12.02. NOTICE OF DEFAULT. ................................................................................................................... 12
SECTION 12.03. REMEDIES ON DEFAULT. ............................................................................................................... 12
SECTION 12.04. ATTORNEYS’ FEES AND OTHER EXPENSES. ................................................................................... 12
SECTION 12.05. APPLICATION OF MONEY............................................................................................................... 12
SECTION 12.06. NO EXCLUSIVE REMEDY, WAIVER, AND NOTICE. ............................................................................ 12

ARTICLE XIII. MISCELLANEOUS. ......................................................................................................... 13
SECTION 13.01. NOTICES...................................................................................................................................... 13
SECTION 13.02. BINDING EFFECT. ......................................................................................................................... 13
SECTION 13.03. SEVERABILITY. ............................................................................................................................. 13
SECTION 13.04. AMENDMENTS, CHANGES, AND MODIFICATIONS. ............................................................................ 13
SECTION 13.05. EXECUTION IN COUNTERPARTS..................................................................................................... 13
SECTION 13.06. APPLICABLE ACT. ......................................................................................................................... 13
SECTION 13.07. CONSENTS AND APPROVALS......................................................................................................... 13
SECTION 13.08. INDEMNITY. .................................................................................................................................. 14
SECTION 13.09. WAIVER OF PERSONAL LIABILITY................................................................................................... 14
SECTION 13.10. CAPTIONS. ................................................................................................................................... 14
i

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This Loan Agreement (the "Agreement") dated as of October 9, 2026, and entered into
between the Board of Investments of the State of Montana (the "Board"), a public body corporate and
instrumentality of the state of Montana, and the City of Kalispell ("the Borrower"), a political subdivision of
the state of Montana;
W I T N E S S E T H:
WHEREAS, pursuant to § 2-15-1808, Montana Code Annotated (MCA) and Title 17,
Chapter 5, Part 16, MCA (the "Act"), the Board has established its INTERCAP Loan Program pursuant to
which the Board will issue, from time to time, its Annual Adjustable Rate Municipal Finance Consolidation
Act Extendable Bond (INTERCAP Loan Program) (the "INTERCAP Bond"), for the purpose of making
loans to Eligible Government Units to finance or refinance the acquisition and installation of equipment,
personal and real property improvements, and to provide temporary financing of projects, or for other
authorized corporate purposes of an Eligible Government Unit (the "Projects"); and
WHEREAS, the Board has agreed to loan part of the proceeds of an issue of such Bonds
to the Borrower in the amount of $1,917,000.00, and the Borrower has agreed to borrow such amount from
the Board, subject to the terms and conditions of and for the purposes set forth in this Agreement; and
WHEREAS, the Borrower is authorized under the laws of the State of Montana, and has
taken all necessary action, to enter into this Agreement for the Project as identified in the Description of
the Project/Summary of Disbursements attached hereto.
NOW, THEREFORE, for and in consideration of the premises hereinafter contained, the
parties hereby agree as follows:
ARTICLE I. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.01. Definitions
The following terms will have the meanings indicated below for all purposes of this Agreement
unless the context clearly requires otherwise. Capitalized terms used in this Agreement and not defined
herein shall have the meanings set forth in the Board Resolution.
"Act" means Section 2-15-1808, MCA and Title 17, Chapter 5, Part 16, MCA as now in
effect and as it may from time to time be amended or supplemented.
"Adjusted Interest Rate" means the interest rate on the Loan determined and established
pursuant to the Promissory Note and the Loan Agreement or Borrower Resolution.
"Adjustment Date" means the Initial Adjustment Date or a Subsequent Adjustment Date.
"Adjustment Period" means the period beginning on an Adjustment Date and ending on the
day before the next succeeding Adjustment Date.
"Amortization Schedule" means the schedule prepared for a loan advance to the Borrower
showing the principal amount advanced, the amortization of the principal, and the interest and principal
payments due to the Subsequent Interest Adjustment Date.
"Authorized Representative" shall mean the officers of the Borrower designated by the
Governing Body and set forth in the Application and signed on behalf of the Borrower by a duly authorized
official.

2

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"Board" means the Board of Investments of the State of Montana, a public body corporate
organized and existing under the laws of the State and its successors and assigns.
"Board Resolution" means Board Resolution No. 249, adopted November 30, 2021,
authorizing the issuance and sale of the INTERCAP Bond for the purpose of making loans to Eligible
Government Units.
"Borrower" means the City of Kalispell, the Eligible Government Unit, which is borrowing
and using the proceeds of the Loan to finance, refinance, or be reimbursed for, all or a portion of the Cost
of the Total Project.
"Borrower Act" means §§ 7-7-4101, 7-7-4201, and 7-5-4306, MCA, authorizing an Eligible
Government Unit to borrow money on terms consistent with the Program.
"Borrower Resolution" means a resolution, duly and validly adopted by a Borrower
authorizing the execution and delivery to the Board of an Agreement and Note, in substantially the form
provided, or such other form of Resolution that the Board may approve, and all amendments and
supplements thereto.
"Commencement Date" means October 9, 2026, the date when the term of this Agreement
begins and when the obligation of the Borrower to make Loan Repayments begins to accrue.
"Counsel" means an attorney or firm of attorneys duly admitted to practice law before the
highest court of any state.
"Default" means an event or condition the occurrence of which would, with the lapse of time
or the giving of notice or both, become an Event of Default.
"Electronic Funds Transfer (EFT) Authorization" shall mean the authorization given by the
Borrower to the Board to initiate electronic debit and/or credit entries to the Borrower’s specified account
to fund the Loan and make automatic Loan repayments when due. The Board may also initiate the
electronic debit for periodic principal paydown or payoff prior to loan maturity upon the Borrower’s request.
"Eligible Government Unit" shall mean any municipal corporation or political subdivision of
the state, including without limitation any city, town, county, school district, or other special taxing district
or assessment or service district authorized by law to borrow money; any board, agency, or department of
the state; or the board of regents of the Montana university system when authorized by law to borrow
money.
"Event of Default" means any occurrence or event described in Article X hereof.
"Fiscal Year" means the fiscal year of the Borrower beginning July 1 and ending June 30.
"Governing Body" means (i) with respect to a county, the Board of County Commissioners;
(ii) with respect to a city, the City Council or Commission; and (iii) with respect to a school district, county
water or sewer district, hospital district, rural fire district, or any other special purpose district, the Board of
Trustees.
"Initial Adjustment Date" means the first February 16 following the date of the Agreement.
"Initial Interest Rate" means the Loan Rate from the date of the Agreement to the Initial
Adjustment Date.

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"INTERCAP Bond" means the Board of Investments of the State of Montana's Annual
Adjustable Rate Municipal Finance Consolidation Act Extendable Bond (INTERCAP Loan Program),
Taxable Series 2022, authorized to be issued for the Program.
"Loan" means the loan of money by the Board to the Borrower under the terms of this
Agreement pursuant to the Act and the Borrower Act, evidenced by the Note.
"Loan Agreement" or "Agreement" means this Agreement, including, the attachments
hereto, as originally executed or as they may from time to time be supplemented, modified or, amended in
accordance with the terms hereof.
"Loan Date" means the date of closing a Loan.
Agreement.

"Loan Rate" means the rate of interest on the Loan as provided for in Section 5.01 of this

"Loan Repayment Date" means February 15th and August 15th or, if any such day is not a
Business Day, the next Business Day thereafter, during the term of the Loan.
"Loan Repayments" means the payments payable by the Borrower pursuant to Article V of
this Agreement.
"Loan Term" means the term provided for in Article VI of this Agreement.
"Maximum Rate" means the maximum rate of interest on the INTERCAP Bond which shall
not exceed seven and sixty-five hundredths percent (7.65%) per annum plus up to an additional one and
fifty hundredths percent (1.50%), as such Maximum Rate may be adjusted as provided in the Board
Resolution.
"Note" means the promissory note executed and delivered by the Borrower attached hereto
and made a part hereof.
"Program" means the Board's INTERCAP Loan Program established under the Act and
pursuant to which the Board finances Projects for Eligible Government Units.
"Program Expenses" means the expenses of the Program, including (without limitation)
other fees and expenses of the Program or of the Board relating thereto as shall be approved by the Board.
"Project" means those items of equipment, personal or real property improvements to be
acquired, installed, financed, or refinanced under the Program and set forth in the Description of the
Project/Summary of Disbursements attached hereto.
"Project Costs" shall mean the portion of the costs of the Total Project to be financed by the
INTERCAP Loan. The Project Costs may not exceed the Loan Amount as set forth on the cover hereof.
"State" means the state of Montana.
"Subsequent Interest Adjustment Date or Subsequent Adjustment Date" means February
16 in the years the Loan remains outstanding.
"Term Sheet" means the document containing the terms and conditions issued by the Board
to the Borrower that must be satisfied prior to entering into a Loan Agreement.
"Term Sheet Issuance Date" means the date the Board executes its Term Sheet under the
Board's Program.
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"Total Project" means the project as described in Section 14 of the Term Sheet and/or
Section 2 of the application, of which some or all is to be financed by the INTERCAP Loan.
"Total Project Costs" means the entire cost of acquiring, completing or constructing the
project as further described in Section 14 of the Terms & Conditions Sheet and/or Section 2 of the
application.
Section 1.02. Rules of Interpretation.
For purposes of this Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) "This Agreement" means this instrument as originally executed and as it may from time
to time be modified or amended.
(b) All references in this instrument to designated "Articles", "Sections" and other
subdivisions are to the designated Articles, Sections and other subdivisions of this instrument as
originally executed. The words "herein", "hereof", "hereunder", and "herewith" and other words of
similar import refer to this Agreement as a whole and not to any particular Article, Section or other
subdivision.
(c) The terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular.
(d) All accounting terms not otherwise defined herein have the meanings assigned to them
in accordance with generally accepted accounting principles.
(e) The terms defined elsewhere in this Agreement shall have the meanings therein
prescribed for them.
(f) Words of the masculine gender shall be deemed and construed to include correlative
words of the feminine and neuter gender.
(g) The headings or captions used in this Agreement are for convenience of reference only
and shall not define or limit or describe any of the provisions hereof or the scope or intent hereof.
(h) This Agreement shall be construed in accordance with the laws of the State.
Section 1.03. Attachments
The following are attachments and a part of this Agreement:
Description of the Project/Summary of Disbursements.
Borrower's Draw Certificate.
Promissory Note.
Opinion of Borrower's Counsel.
Electronic Funds Transfer (EFT) Authorization
Certificate of Appropriation (if applicable).

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ARTICLE II. REPRESENTATIONS, COVENANTS AND WARRANTIES OF BORROWER.
Section 2.01. Representations and Warranties.
Borrower represents and warrants for the benefit of the Board and the Bondholder as follows:
(a) Organization and Authority. The Borrower:
(1) is a political subdivision of the State of Montana; and
(2) has complied with all public bidding and other State and Federal laws applicable
to this Agreement and the acquisition or installation of the Project.
(b) Full Disclosure. There is no fact that the Borrower has not disclosed to the Board or its
agents in writing that materially adversely affects or (so far as the Borrower can now foresee),
except for pending or proposed legislation or regulations that are a matter of public information
affecting the ability of the Borrower to levy property taxes, collect fees and charges for services
provided by the Borrower or otherwise receive revenues, that will materially adversely affect the
properties, activities, prospects or condition (financial or otherwise) of the Borrower or the ability of
the Borrower to make all repayments and otherwise perform its obligations under this Agreement,
and the Note.
(c) Pending Litigation. There are no proceedings pending, or to the knowledge of the
Borrower threatened against or affecting the Borrower in any court or before any governmental
authority or arbitration board or tribunal that, if adversely determined, would materially adversely
affect the properties, activities, prospects or condition (financial or otherwise) of the Borrower, or
the ability of the Borrower to make all Loan Repayments and otherwise perform its obligations
under this Agreement, and the Note, and that have not been disclosed in writing to the Board.
(d) Borrowing Legal and Authorized. The transaction provided for in this Agreement and
the Note:
(1) are within the powers of the Borrower and have been duly authorized by all
necessary action on the part of the Borrower, including the adoption of a resolution
substantially in the form provided hereto with such modification as may be provided by the
Board; and
(2) will not result in any breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Borrower pursuant to any indenture, loan
agreement or other instrument (other than this Agreement and the Note) to which the
Borrower is a party or by which the Borrower may be bound, nor will such action result in
any violation of the provisions of any state laws, or ordinances or resolutions of the
Borrower; and
(3) the amount of the Loan represented hereby has been added to the amount of
all other outstanding debt of the Borrower and together therewith does not result in the
Borrower exceeding its statutory debt limitation.
(e) No Violation. No event has occurred and no condition exists that, upon execution of
this Agreement and the Note or receipt of the Loan, would constitute a Default or an Event of
Default. The Borrower is not in violation in any material respect, and has not received notice of
any claimed violation, of any term of any agreement, statute, ordinance, resolution, bylaw or other
instrument to which it is a party or by which it or its property may be bound.
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(f) Use of Proceeds. The Borrower will apply the proceeds of the Loan solely to finance
the Project Costs described in the Description of the Project/Summary of Disbursements attached
hereto. In addition, the Borrower will pay the loan proceeds to a third party within five business
days after the date they are advanced (except for proceeds to reimburse the Borrower for
previously paid expenditures, which are deemed allocated on the date advanced).
(g) Completion of the Total Project; Payment of Total Project Costs. The Borrower shall
proceed diligently to complete the Total Project and to obtain the necessary funds to pay the Total
Project Costs thereof. The Borrower shall pay any amount required for the acquisition, construction
and equipping of the Total Project in excess of the Loan Amount as set forth on the cover hereof.
Section 2.02. Particular Covenants of Borrower.
(a) Compliance with Statutory Requirements, Competitive Bidding, Montana Labor Laws,
Environmental Review, and Other Legal Requirements. The Borrower has complied with all
statutory requirements, including competitive bidding and labor requirements and environmental
review, applicable to the acquisition and construction of the Project.
(b) Maintenance and Use of Project. The Borrower shall maintain the Project in good
condition, make all necessary renewals, replacements, additions, betterments and improvements
thereto, is not for private use, and maintain insurance with respect to the Project, its other properties
and its operations in such amounts and against such risks as are customary for governmental
entities such as the Borrower.
(c) Financial Reports and Audits. The Borrower shall comply with the provisions of Title 2,
Chapter 7, Part 5 Montana Code Annotated.
(d) Liens. The Borrower shall not create, incur or suffer to exist any lien, charge or
encumbrance on the project vehicle and/or equipment.
(e) Expenses. The Borrower will, at the request of the Board, pay all expenses relating to
the Loan and the Note and this Agreement.
ARTICLE III. LOAN TO BORROWER.
Subject to the terms and conditions of this Agreement, the Board hereby agrees to loan and
advance to the Borrower, and the Borrower agrees to borrow and accept from the Board, the Loan in the
principal amount not to exceed $1,917,000.00.
ARTICLE IV. LOAN PROVISIONS.
Section 4.01. Commencement of Loan Agreement
This Agreement shall commence on the date hereof unless otherwise provided in this Agreement.
Section 4.02. Termination of Agreement.
This Agreement will terminate upon payment in full of all amounts due under this Agreement and
upon the full and complete performance and payment of all the Borrower's other obligations hereunder.
Until such termination, all terms, conditions, and provisions of this Agreement shall remain in full force and
effect.

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Section 4.03. Term of Loan Agreement.
This Agreement shall be valid for the entire loan amount approved for one year from the Term
Sheet Issuance Date. Beginning one year after the Term Sheet Issuance Date, the Board may refuse to
make a loan advance if the Board determines that there has been a material adverse change in the
circumstances of the Borrower.
Section 4.04. Loan Closing Submissions.
Concurrently with the execution and delivery of this Agreement, the Borrower is providing to the
Board, the following documents (except that the Board may waive any of such documents):
(a) A certified resolution of the Borrower in form and substance substantially identical to
that provided hereto; provided, however, that the Board may permit variances in such certified
resolution from the form or substance of such resolution if, in the good faith judgment of the Board,
such variance is not to the material detriment of the interests of the Program and the Bondholder;
(b) An opinion of the Borrower's counsel in form and substance substantially identical to
the Attorney's Opinion hereto; provided, however, that the Board may permit variances in such
opinion from the form or substance of such Attorney's Opinion if, in the good faith judgment of the
Board, such variance is not to the material detriment of the interests of the Program and the
Bondholder;
(c) The complete and executed EFT Authorization, attached hereto, required by the Board;
(d) A bill, or bills of sale, construction contract or contracts, invoice or invoices, purchase
order or purchase orders or other evidence satisfactory to the Board that the Project has been
purchased, ordered, constructed or installed by the Borrower or that any construction has been
substantially completed and that payment therefor is due and owing or, if the Borrower is to be
reimbursed, that payment has been made; and for any debt being refinanced, the canceled note or
other financing document or other evidence satisfactory to the Board of such refinancing;
(e) Such other closing documents and certificates as the Board may reasonably request.
Section 4.05. Initial and Subsequent Draws of Loan.
For the initial draw of the Loan, the Borrower shall deliver to the Board an executed copy of the
Agreement, complete with all attachments as listed in Section 4.04, including the Note and the Agreement
Resolution and other documents the Board requires.
For subsequent draws, if applicable, the Borrower shall deliver to the Board, an executed copy of
a Disbursement Request items listed in 4.04(d) that are equal to or more than requested draw amount,
and any other documents the Board requires.
ARTICLE V. LOAN REPAYMENTS AND NOTE.
Section 5.01. Payment of Loan Repayments
(a) The Loan Repayment Dates shall be on February 15 and August 15 of each year with
the first Loan Repayment Date determined as follows:

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Date of Draw
February 15 through April 17

First Loan
Repayment Date
August 15

Payment
Consisting of:
Principal and Interest

April 18 through June 16

August 15

Interest only

June 17 through August 14

February 15

Principal and interest
from date of draw

August 15 through October 18

February 15

Principal and Interest

October 19 through December 17

February 15

Interest only

December 18 through February 14

August 15

Principal and Interest
from date of draw

(b) Borrower hereby agrees the Loan Repayments will be made pursuant to the attached
EFT Authorization on each Loan Repayment Date to be calculated by the Board and consisting of
the sum of the following items:
(i) Principal in an amount based upon the initial Amortization Schedule, the
Amortization Schedule being initially determined utilizing the Initial Interest Rate. Each
advance of the principal of the Loan as shown on the Amortization Schedule shall be repaid
in semiannual installments on each Loan Repayment Date commencing on the first Loan
Repayment Date following the date thereof and ending on the final maturity date set forth
on the Amortization Schedule. Principal payments will not be adjusted but the interest
payment will be adjusted as provided in Section 5.01 hereof.
(ii) Interest for each Adjustment Period at the Loan Rate.
(c) The Loan Rate is a combination of the INTERCAP Bond rate per annum plus up to an
additional one and fifty hundredth percent (1.50%) per annum as is necessary to pay the Borrower’s
share of Program Expenses, as determined by the Board, and shall not exceed the Maximum Rate.
(d) Within the following month of the Adjustment Date the Board shall calculate the new
interest component of the Loan Repayments and shall send a revised Amortization Schedule to
the Borrower showing the amount of the Borrower's semiannual Loan Repayments.
Section 5.02. Delinquent Loan Payments.
If the automatic EFT Authorization fails due to insufficient funds, from and after any Loan
Repayment Date, until repaid, the Loan shall bear interest at a rate equal to two percent on the yield
(coupon equivalent) as of the Loan Repayment Date, on U.S. Treasury Bills of a duration as close as
possible to the term over which the Loan Repayment is delinquent.
Section 5.03. The Note.
On the date of this Agreement, the Borrower shall execute the attached Note. The obligations of
the Borrower under the Note shall be deemed to be amounts payable under Section 5.01. Each payment
made to the Board pursuant to the Note shall be deemed to be a credit against the corresponding obligation
of the Borrower under Section 5.01 and any such payment made to the Board shall fulfill the Borrower's
obligation to pay such amount hereunder and under the Note.

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ARTICLE VI. TERM.
The term of the Loan will be a maximum of ten (10) years and the specific term for each loan draw
will be set forth in the Borrower’s Draw Certificate.
ARTICLE VII. OBLIGATIONS OF BORROWER UNCONDITIONAL
Section 7.01. Obligations of Borrower.
The obligations of the Borrower to make the payments required hereunder shall be absolute and
unconditional without any defense or right of set off, counterclaim, or recoupment by reason of any default
by the Board under the Loan Agreement or under any other indebtedness or liability at any time owing to
the Borrower by the Board or for any other reason.
ARTICLE VIII. FINANCIAL COVENANTS (GENERAL FUND).
Section 8.01. Representation Regarding Property Tax Limitations.
The Borrower recognizes and acknowledges that the amount of taxes it may levy may be limited
by the state pursuant to §15-10-402, et seq. The Borrower is familiar with the Montana property tax
provisions and acknowledges that the Loan Repayments to be made under the Agreement and Note are
not exceptions to those provisions. The Borrower represents and covenants that such Loan Repayments
can and will be made from revenues available to the Borrower, notwithstanding those provisions.
Section 8.02. Levy and Appropriate Funds to Repay Loan.
The Borrower agrees that in order to meet its obligation to make the Loan Repayments and all
other payments hereunder that it will budget for as authorized and appropriate from taxes or any other
available sources in each fiscal year during the term of this Agreement an amount sufficient to pay the
principal of and interest hereon within property tax limitations and will reduce other expenditures if
necessary to make the payments hereunder when due.
Section 8.03. Reports and Opinion; Inspections.
(a) The Borrower shall deliver to the Board by no later than August 15 of each year during
the term of this Agreement, a certificate in substantially the form attached hereto that the Governing
Body of the Borrower has budgeted and appropriated for the then current Fiscal Year an amount
sufficient to make the Loan Repayments due in that Fiscal Year, as required in Article VIII.
(b) The Borrower agrees to permit the Board to visit, examine, and inspect, at any
reasonable time, the property constituting the Project, and the Borrower's facilities, and any
accounts, books and records, including its receipts, disbursements, contracts, investments, and
any other matters relating thereto and to its financial standing, and to supply such reports and
information as the Board or the Trustee may reasonably require.
ARTICLE IX. DISCLAIMER OF WARRANTIES.
THE BOARD AND ITS AGENTS MAKE NO WARRANTY OR REPRESENTATION,
EITHER EXPRESSED OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY,
OR FITNESS FOR ANY OR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROJECT OR
ANY PORTION THEREOF OR ANY OTHER WARRANTY WITH RESPECT THERETO. In no event shall
the Board or its respective agents be liable for any incidental, indirect, special, or consequential damages
in connection with or arising out of this Agreement or the Project or the existence, furnishing, functioning,
or Borrower's use of the Project or any item or products or services provided for in this Agreement.
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ARTICLE X. OPTION TO PREPAY LOAN.
The Borrower may request the Board approve prepayment of the loan, in whole or if in part,
in multiples of $100, any unpaid principal of the Note plus interest accrued to the date of prepayment.
Upon approval, the Board will initiate an electronic debit using the attached EFT Authorization for
prepayment of the Loan in whole or in part upon giving 30 days prior written notice to the Board unless the
Board agrees to shorter notice.
If the Loan is prepaid in part, the principal amount of the Loan shall be reduced by the
portion of the prepayment representing principal and the Loan shall be reamortized by ratably reducing the
principal portion of each remaining Loan Repayment.
ARTICLE XI. ASSIGNMENT.
This Agreement may not be assigned or encumbered by the Borrower for any reason without the
express written consent of the Board.
ARTICLE XII. EVENTS OF DEFAULT AND REMEDIES.
Section 12.01. Events of Default Defined.
If any of the following events occur, it is an "Event of Default":
(a) Failure by the Borrower to pay any Loan Repayment required to be paid hereunder at
the time specified herein and the continuation of such failure for a period of three (3) days after
telephonic or e-mail notice by the Board that such payment has not been received;
(b) Failure by the Borrower to observe and perform any covenant, condition, or agreement
on its part to be observed or performed under this Agreement, other than as referred to in Section
12.01(a) for a period of thirty (30) days after written notice, specifying such failure and requesting
that it be remedied, is given to the Borrower by the Board, unless the Board shall agree in writing
to an extension of time prior to its expiration; provided, however, if the failure stated in the notice
cannot be corrected within the applicable period, the Board will not unreasonably withhold their
consent to an extension of such time if corrective action is instituted by the Borrower within the
applicable period and diligently pursued until the Default is corrected;
(c) Any warranty, representation, or other statement by or on behalf of the Borrower
contained in this Agreement or in any instrument furnished in compliance with or in reference to
this Agreement or in connection with the Loan, is false or misleading in any material respect;
(d) The Borrower files a petition in voluntary bankruptcy under the United States Bankruptcy
Code or seeks relief under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, or liquidation law of any jurisdiction, whether now or
hereafter in effect, or consents to the filing of any petition against it under such law;
(e) The Borrower is generally not paying its debts as the debts become due, or becomes
insolvent or bankrupt or makes an assignment for the benefit of creditors, or a custodian (including
without limitation a receiver, liquidator or trustee) of the Borrower or any of its property is appointed
by court order or takes possession thereof and such order remains in effect or the possession
continues for more than 30 days.

11

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Section 12.02. Notice of Default.
The Borrower agrees to give the Board prompt written notice if any petition referred to in Section
12.01(d) is filed by the Borrower or upon the occurrence of any other event or condition constituting a
Default or an Event of Default immediately upon becoming aware of the existence thereof.
Section 12.03. Remedies on Default.
If an Event of Default referred to in Section 12.01 shall have occurred, the Board shall declare the
Loan and all other amounts due hereunder to be immediately due and payable, and upon notice to the
Borrower the same shall become due and payable without further notice or demand. Whenever any Event
of Default referred to in Section 12.01 hereof shall have happened and be continuing, the Board shall have
the right to take one or any combination of the following remedial steps:
(a) Declare the Loan and all other amounts due hereunder to be immediately due and
payable, and upon notice to the Borrower the same shall become immediately due and payable by
Borrower without further notice or demand; and
(b) Take whatever other action at law or in equity may appear necessary or desirable to
collect the amounts then due and thereafter to become due hereunder or to enforce any other of
its or the Board's rights hereunder, including without limitation, the appointment of a receiver as
provided in the Act.
Section 12.04. Attorneys’ Fees and Other Expenses.
Upon an Event of Default, the Borrower shall pay to the Board the reasonable fees and expenses
of attorneys and other reasonable expenses incurred by either of them, or by any agency of the State
selected by the Board to act on its behalf or by the Attorney General, in the collection of Loan Repayments
or any other sum due or the enforcement of performance of any other obligations of Borrower.
Section 12.05. Application of Money.
Any money collected by the Board pursuant to Section 12.03 shall be applied: (a) first, to pay any
attorney's fees or other fees and expenses owed by Borrower pursuant to Section 12.04 hereof; (b) second,
to pay interest due on the Loan; (c) third, to pay principal due on the Loan; (d) fourth, to pay any other
amounts due hereunder; and (e) fifth, to pay interest and principal on the Loan and other amounts payable
hereunder but which are not due, as they become due (in the same order, as to amounts which come due
simultaneously, as in (a) through (d) in this Section 12.05).
Section 12.06. No Exclusive Remedy, Waiver, and Notice.
No remedy herein conferred upon or reserved to the Board is intended to be exclusive and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement
or now or hereafter existing at law or in equity. No delay or omission to exercise any right, remedy, or
power accruing upon any Default or Event of Default shall impair any such right, remedy, or power or shall
be construed to be a waiver thereof, but any such right, remedy, or power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the Board to exercise any remedy
reserved to it in this Article XII, it shall not be necessary to give any notice, other than such notice as may
be required in this Article XII.

12

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ARTICLE XIII. MISCELLANEOUS.
Section 13.01. Notices.
All notices, certificates, or other communications hereunder shall be sufficiently given when hand
delivered or five days after mailing by registered or certified mail, postage prepaid, to the Borrower at the
address specified herein and to the other parties at the following address:
(1)

Board:

Montana Board of Investments
Attn: Municipal Loans Program
PO Box 200126
Helena, Montana 59620-0126

(2)

Borrower:

City of Kalispell
P.O. Box 1997
Kalispell, MT 59903

Any of the parties may, by notice in writing given to the others, designate any further or different address
to which subsequent notices, certificates, or other communications shall be sent.
Section 13.02. Binding Effect.
This Agreement shall inure to the benefit of and shall be binding upon the Board, the Borrower, and
their respective successors and assigns.
Section 13.03. Severability.
In the event any provision of this Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 13.04. Amendments, Changes, and Modifications.
This Agreement may not be amended, changed, or modified by the Borrower unless the
amendment shall have been consented to in writing by the Board and made part of this Agreement.
Section 13.05. Execution in Counterparts.
This Agreement may be simultaneously executed in several counterparts, each of which shall be
an original and all which shall constitute but one and the same instrument.
Section 13.06. Applicable Act.
This Agreement shall be governed by and construed in accordance with the laws of the State.
Section 13.07. Consents and Approvals.
Whenever the written consent or approval of the Board shall be required under the provisions of
this Agreement, such consent or approval may be given by the Executive Director of the Board, or
designee, unless otherwise provided by law or by rules, regulations or resolutions of the Board.

13

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Section 13.08. Indemnity.
The Borrower agrees to indemnify and hold harmless the Board, their respective officers,
employees, and agents, from and against any and all losses, claims, damages, liability, or expenses, of
every conceivable kind, character and nature whatsoever, including, but not limited to, losses, claims,
damages, liabilities, or expenses (including reasonable fees for attorneys, accountants, consultants, and
other experts) (collectively referred to hereinafter in this Section 13.08 as "Damages") as follows:
(a) For all Damages arising out of, resulting from, or in any way connected with the Loan
or this Agreement, without limitation; and
(b) For all Damages arising out of, resulting from, or in any way connected with the
acquisition, construction, installation, and operation of the Project.
Notwithstanding the foregoing, the Borrower shall have no liability for damages solely arising out of,
resulting from, or connected to the Loan or Agreement of any other Borrower.
Section 13.09. Waiver of Personal Liability.
No member, officer, agent, or employee of the Board shall be individually or personally liable for
the making of the Loan or be subject to any personal liability or accountability by reason hereof; but nothing
herein contained shall relieve any such member, officer, agent, or employee from the performance of any
official duty provided by law or by this Agreement.
Section 13.10. Captions.
The captions or headings in this Agreement are for convenience only and in no way define, limit,
or describe the scope or intent of any provisions or sections of this Agreement.
IN WITNESS WHEREOF, the Board has executed this Agreement by its duly authorized
officers and the Borrower has caused this Agreement to be executed in its name by its duly authorized
officers. All the above occurred as of the date first above written.
BOARD OF INVESTMENTS OF THE
STATE OF MONTANA

By
Its

Louise Welsh
Director of Municipal Loans

CITY OF KALISPELL

By
Its

WITNESS OR ATTEST:

By
Its

Aimee Brunckhorst
City Clerk
14

Jarod Nygren
City Manager

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DESCRIPTION OF THE PROJECT/SUMMARY OF DISBURSEMENTS
FOR
CITY OF KALISPELL
Allocated
Amount
of Loan

Description of Project
1.

Pumper trucks

Draw
#

Description
of I tem

3107-01 #1 above

$1,917,000.00

Amount
Allocated
for I tem

Date
of Draw

$1,917,000.00

10/9/2026 $1,917,000.00

DESCRIPTION OF PROJECT/SUMMARY OF DISBURSEMENTS - 1

Amount
of
Draw

Amount
Remaining
for I tem
$0.00

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BORROWER'S DRAW CERTIFICATE NO. 3107-1
FOR DISBURSEMENT OF FUNDS
UNDER THE LOAN AGREEMENT
The undersigned, Authorized Representative of the City of Kalispell (the "Borrower")
under the Loan Agreement, dated October 9, 2026 (the "Loan Agreement"), by and between the Board
of Investments of the state of Montana (the "Board"), certify pursuant to Section 4.04, as follows:
1.
We have read Section 4.05 of the Loan Agreement and subsections of Section
4.04 referred to therein and have reviewed appropriate records and documents of the Borrower relating
to matters covered by this Certificate. All capitalized terms used in this Certificate shall have the
meanings given them in the Loan Agreement unless otherwise defined herein;
2.
All terms and conditions of the Loan Agreement to be complied with by the
Borrower as of this date have been complied with and satisfied, and all documents described in Section
4 have been delivered;
3.
The item number, amount, and nature of each item of Project Costs, as shown
on the attached Borrower's Cash Advance Certificate, hereby requested to be reimbursed or paid to
the Borrower: (a) has been paid or incurred; (b) is an eligible Project Cost; and (c) has not been
previously reimbursed or paid by the Program under the Loan Agreement;
4.
To our knowledge after reasonable investigation, there has been no default by
the Borrower under the Loan Agreement, which has not been cured; and
5.
All representations and warranties made by the Borrower in the Loan Agreement
are true and correct on and as of the date of this Certificate and has the same effect as if made on
such date.
You are hereby requested to advance pursuant to Section 4.05 of the Loan Agreement
the amount shown below and make payment to the entitled entity to receipt thereof as shown on the
EFT Authorization.
Cash Amount to (ACH): $1,917,000.00
Term to be Amortized:

October 9, 2026 through August 15, 2036 (10 years)

Project Description:

Pumper trucks

WITNESS my hand this 9th day of October, 2026.

ATTEST:

By
Its

Aimee Brunckhorst
City Clerk

BORROWER’S DRAW CERTIFICATE - 1

CITY OF KALISPELL

By
Its

Jarod Nygren
City Manager

KALISPELL 3107

AUTOPAY
BORROWER: CITY OF KALISPELL
LOAN COMMITMENT: $ 1,917,000.00
TOTAL DRAWS TO DATE: $
THIS DRAW DOWN: $ 1,917,000.00
REMAINING COMMITMENT: $
PROJECT: PUMPER TRUCKS
PAYMENT
DUE
2/15/2027
8/15/2027
2/15/2028
8/15/2028
2/15/2029
8/15/2029
2/15/2030
8/15/2030
2/15/2031
8/15/2031
2/15/2032
8/15/2032
2/15/2033
8/15/2033
2/15/2034
8/15/2034
2/15/2035
8/15/2035
2/15/2036
8/15/2036

INTEREST
RATE

* BEGINNING BALANCE *
4.500%

COMMENTS:

# DAYS
DUE

MATURITY DATE: 8/15/2036
# OF LOAN PAYMENTS: 20
LOAN/DRAW NUMBER: 3107-01
DATE OF THIS DRAW: 10/9/2026
NOTE/BOND DATE: 10/9/2026
JOURNAL #
INTEREST
PAYMENT

129
181
184
182
184
181
184
181
184
181
184
182
184
181
184
181
184
181
184
182

30,488.18

PRINCIPAL
PAYMENT
89,596.67
79,306.22
80,429.39
82,767.37
84,229.73
86,597.28
88,006.69
90,493.58
92,055.96
94,567.19
96,289.49
98,767.12
100,767.26
103,278.79
105,343.11
107,934.20
110,181.29
112,801.46
115,239.64
98,347.56

O/S LOAN
BALANCE
1,917,000.00
1,827,403.33
1,748,097.11
1,667,667.72
1,584,900.35
1,500,670.62
1,414,073.34
1,326,066.65
1,235,573.07
1,143,517.11
1,048,949.92
952,660.43
853,893.31
753,126.05
649,847.26
544,504.15
436,569.95
326,388.66
213,587.20
98,347.56
0.00

TOTAL AMOUNT
OF PAYMENT
$120,084.85

Your first payment will be on February 15, 2027. Interest payments shown from February 16, 2026 to
February 15, 2027 are computed at 4.50 percent. After February 15, 2027 interest rates will be adjusted to
reflect the adjusted interest rate applied on the outstanding principal balance.

CITY OF KALISPELL
PO BOX 1997
KALISPELL, MT 59903

CONTACT:
MONTANA BOARD OF INVESTMENTS
INTERCAP LOAN PROGRAM
PO BOX 200126
HELENA, MT 59620-0126
406-444-0001

INVOICE

Northwest Fire Services Inc.
Invoice # :
Invoice Date :

PO Box 821
Bigfork, MT 59911
Phone: 406-837-0118
Fax: 406-837-1339
www.northwestfireservices.com
JOB

1

ITEM #

PUMPER

August 7, 2026

Customer Name:

BILL TO
Kalispell Fire Department
312 1st Ave E
Kalispell, MT 59911

QTY

260807-1

SHIP TO (if different)

DESCRIPTION

UNIT PRICE

E-ONE CYCLONE 4X4 1500 GPM PUMPER

LINE TOTAL

$

907,000.00

$

907,000.00

$

907,000.00

SO #: 146911
VIN #: 4EN6AAA83T1006911

THIS DOES NOT INCLUDE ANY HEAVY USE
TAX OR STATE AND LOCAL TAXES

[42]
Other Comments or Special Instructions

SUBTOTAL
TAXABLE
TAX RATE
TAX
S&H
OTHER
TOTAL

Make checks payable to

Northwest Fire Services
Thank You For Your Business!

INVOICE

Northwest Fire Services Inc.
Invoice # :
Invoice Date :

PO Box 821
Bigfork, MT 59911
Phone: 406-837-0118
Fax: 406-837-1339
www.northwestfireservices.com
JOB

1

ITEM #

PUMPER

August 7, 2026

Customer Name:

BILL TO
Kalispell Fire Department
312 1st Ave E
Kalispell, MT 59901

QTY

260807-2

SHIP TO (if different)

DESCRIPTION

UNIT PRICE

E-ONE CYCLONE 4X4 1500 GPM PUMPER

LINE TOTAL

$

1,116,380.00

$

1,116,380.00

$

1,116,380.00

SO #: 148471
VIN #: 4ENLAAA87T1008471

THIS DOES NOT INCLUDE ANY HEAVY USE
TAX OR STATE AND LOCAL TAXES

[42]
Other Comments or Special Instructions

SUBTOTAL
TAXABLE
TAX RATE
TAX
S&H
OTHER
TOTAL

Make checks payable to

Northwest Fire Services
Thank You For Your Business!

Docusign Envelope ID: BD4F718A-188E-81D1-80F6-4469010C2FE2

Loan #3107
PROMISSORY NOTE
FOR VALUE RECEIVED, the City of Kalispell, a political subdivision organized under the
laws of the state of Montana (the "Borrower"), hereby promises to pay to the order of the Board of
Investments of the State of Montana (the "Board") the principal amount of ONE MILLION NINE HUNDRED
SEVENTEEN THOUSAND AND NO/100 DOLLARS ($1,917,000.00) or such lesser amount as shall
actually be advanced to the Borrower under the Loan Agreement (hereinafter defined) as evidenced by
the Amortization Schedule attached hereto and as annually revised in March for every year the loan
advance is outstanding, together with interest thereon in the amount calculated as provided in the Loan
Agreement, payable semiannually on February 15 and August 15 in the amounts and as provided in the
Loan Agreement and as set forth hereto.
The maturity date of this loan, as evidenced by this Promissory Note, is August 15, 2036,
or sooner at the option of the Borrower pursuant to the Loan Agreement.
This Promissory Note is issued pursuant to the Loan Agreement dated as of October 9,
2026, between the Board and the Borrower (the "Loan Agreement")and issued in consideration of the loan
made thereunder (the "Loan") and in evidence of the obligations of the Borrower set forth in Section 5
thereof. Payments hereunder shall be made directly to the Board pursuant to the EFT Authorization
attached hereto. All the terms, conditions and provisions of the Loan Agreement are, by this reference
hereto, incorporated herein as a part of this Promissory Note.
Interest on this Note is computed on a 365/365 simple interest basis; that is, by applying
the ratio of the interest rate over the number of days in a year, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable
under this Note is computed using this method.
Pursuant to the Loan Agreement, advances shall be made to the Borrower under the Loan
Agreement from time to time upon the terms and conditions set forth in the Loan Agreement.
This Promissory Note is entitled to the benefits and is subject to the conditions of the Loan
Agreement. The obligations of the Borrower to make the payments required hereunder shall be absolute
and unconditional without any defense or right of setoff, counterclaim, or recoupment by reason of any
default by the Board under the Loan Agreement or under any other indebtedness or liability at any time
owing to the Borrower by the Board or for any other reason.
This Promissory Note is subject to optional prepayment under the terms and conditions
provided in Article X of the Loan Agreement upon giving 30 days prior written notice to the Board or less if
the Board agrees to shorter notice.
If an "Event of Default" occurs under Section 12.01 of the Loan Agreement, the principal of
this Promissory Note may be declared due and payable in the manner and to the extent provided in Article
XII of the Loan Agreement.
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 Note, in order to make it a valid
and binding obligation of the Borrower 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 Borrower will,
as authorized by and according to applicable provisions and limitations of law annually levy sufficient tax
PROMISSORY NOTE - 1

Docusign Envelope ID: BD4F718A-188E-81D1-80F6-4469010C2FE2

receipts or collect sufficient revenues, as the case may be, with other funds available therefor, to pay the
principal and interest hereon when due; and that this Note, together with all other indebtedness of the
Borrower outstanding on the date of original issue hereof and on the date of its actual issuance and
delivery, does not exceed any constitutional or statutory limitation of indebtedness of the Borrower.
IN WITNESS WHEREOF, the City of Kalispell has caused this Promissory Note to be duly
executed, attested, and delivered, as of this 9th day of October, 2026.
CITY OF KALISPELL

By
Its

Jarod Nygren
City Manager

(SEAL)
ATTEST:

By
Its

Aimee Brunckhorst
City Clerk

BOARD OF INVESTMENTS OF THE
STATE OF MONTANA

By
Its

PROMISSORY NOTE - 2

Louise Welsh
Director of Municipal Loans

Docusign Envelope ID: BD4F718A-188E-81D1-80F6-4469010C2FE2

MONTANA BOARD OF INVESTMENTS
ELECTRONIC FUNDS TRANSFER (EFT)/AUTOMATED CLEARING HOUSE (ACH)
AUTHORIZATION
INTERCAP LOAN PROGRAM
Borrower Name: City of Kalispell

Loan #:3107

I, the undersigned, a duly authorized representative, hereby authorize the Montana Board of Investments
to initiate electronic debit and/or credit entries to the Account listed below. The authorized representative
acknowledges the origination of ACH transactions to the listed account complies with provisions of U.S.
law.

Name of Financial Institution to debit/credit Account:
Address:
City, State, Zip:
Financial Institution Routing Number:
For Credit To:
☒ Checking ☐ Savings (check one) Account Number:
For Further Credit To (such as to _____Fire or School District):
Type of transfer for this account: City of Kalispell INTERCAP Loan# 3107
This authority remains in effect until the Montana Board of Investments and the designated Financial
Institution have received a revised EFT Authorization from an authorized representative or Loan #3107
has been paid in full according to its terms.

Signature 

Date 

Printed Name 

Please notify the Montana Board of Investments if you have applied a filter or a block to your
account.

Please mail with documents or upload the completed form to:
https://investmentmt.com/INTERCAP/

ELECTRONIC FUNDS TRANSFER AUTHORIZATION - 1

Docusign Envelope ID: BD4F718A-188E-81D1-80F6-4469010C2FE2

CERTIFICATE OF APPROPRIATION
The undersigned Finance Director hereby certifies with respect to the Loan Agreement (the "Loan
Agreement"), dated as of October 9, 2026, by and between the City of Kalispell (the "Borrower") and the
Board of Investments (the "Board") that:
1. The governing body of the Borrower will prepare its budget for the fiscal year 2027.
2. The Borrower will include in the budget an amount designated and sufficient to make the Loan
Repayments (as defined in the “Loan Agreement”) due in fiscal year 2027.
Dated this October 9, 2026.
CITY OF KALISPELL

By Aimee Cooke
Its Finance Director

CERTIFICATE OF APPROPRIATION - 1

Development Services
201 1st Avenue East
Kalispell, Montana 59901
Phone (406) 758-7940

Report To:

Jarod Nygren, City Manager

From:

Nelson Loring, Community Development Manager

Subject:

Morning Star Special Improvement District Bond Resolution 6355 and
Resolution 6356

Meeting Date:

September 21, 2026

BACKGROUND: On June 16, 2025, the Council created Special Improvement Districts (SID)
No. 346 and 347 (Morning Star Community sewer and water districts) via Resolution 6258 and
6259 for the purpose of funding sewer and water improvements. Resolution 6355, under
consideration, authorizes issuance of Special Improvement District Bonds for the Morning Star
sewer SID and comprises the Series 2026A and 2026B bonds. Resolution 6356, under
consideration, authorizes issuance of Special Improvement District Bonds for the Morning Star
water SID and comprises the Series 2026C and 2026D bonds. The Series 2026A and 2026B Bonds
for the sewer Special Improvement District total $67,415 and $71,000. The Series 2026C Bond
totals $185,000 and 2026D Bond totals $185,000 for the water district.
The four loans will finance a portion of the costs of local sewer and water improvements to benefit
the Morning Star community. Principal and interest on the Series 2026 Bonds will be paid from a
special assessment levied against property located in the District for the water and sewer
improvements.
FISCAL IMPACTS: The city will initially incur maximum principal loan amounts of $508,415
for all four loans. The Series 2026A and 2026 C Loans, in the amount of $252,415, will be forgiven
once construction is completed and conditions have been met, leaving only the Series 2026B and
2026D Loans to be paid. The $256,000 in Series 2026B and 2026D Loans will be paid from an
assessment levied against Morning Star property. Morning Star has consented to the levy of special
assessments against the real property to fund the Series 2026B and 2026D Loans, therefore limiting
the risk to the general city tax/rate payer.
RECOMMENDATION: It is recommended that the Council consider and pass Resolution
6355 and Resolution 6356, authorizing the issuance of Special Improvement District Bonds, in
four series, two taxable Series 2026A and 2026C Bonds in the maximum principal amount of up
to $252,415, and the other two Tax-Exempt Series 2026B and 2026D Bonds in the maximum
principal amount of up to $256,000, in order to finance a portion of the costs of local water and
sewer improvements to benefit the Morning Star community.
ATTACHMENTS: Bond Resolution 6355
Bond Resolution 6356

RESOLUTION NO. 6355
RESOLUTION AUTHORIZING THE ISSUANCE OF SPECIAL IMPROVEMENT
DISTRICT BONDS (SPECIAL IMPROVEMENT DISTRICT NO. 346 (MORNING
STAR COMMUNITY SEWER IMPROVEMENTS)), (I) SUBORDINATE LIEN
TAXABLE SERIES 2026A, AND (II) TAX-EXEMPT SERIES 2026B; FIXING THE
FORM AND DETAILS AND PROVIDING FOR THE EXECUTION AND
DELIVERY THEREOF AND SECURITY THEREFOR
BE IT RESOLVED by the City Council (the “City Council”) of the City of Kalispell, Montana (the
“City”), as follows: ‘
Section 1.
1.01

Recitals. It is found, determined and declared as follows:

Special Improvement District No. 346.

Special Improvement District No. 346 (Morning Star Community) (the “District”) was established
by Resolution No. 6258, adopted by the City Council on June 16, 2025 (“Intent Resolution”).
Section 2.

Method of Financing.

2.01
The City will issue its Special Improvement District Bonds, in two series, one a taxable
Series 2026A Bond (the “Series 2026A Bond”) in the maximum principal amount of up to $67,415 (the
“Series 2026A Loan”), and the other a Tax Exempt Series 2026B Bond (the “Series 2026B Bond” or the
“Series 2026 Tax-Exempt Bond,” and together with the Series 2026A Bond, the “Series 2026 Bonds”) in
the maximum principal amount of up to $71,000 (the “Series 2026B Loan,” and together with the Series
2026A Loan, the “2026 Loans”), and will loan the proceeds of the 2026 Loans to Morning Star Community,
Inc. (“Morning Star”), in order to finance a portion of the costs of local sewer improvements (the
“Improvements”) to benefit the property located at 1717 South Woodland Drive in the City (“Morning Star
Community”). Principal of and interest on the Series 2026 Bonds will be paid from a special assessment
levied against property located in the District for sewer improvements (the “Assessments”). The City
Council further finds it is in the public interest and in the best interest of the City and the District to secure
payment of the principal and interest on the Series 2026B Bond from amounts on deposit in a reserve
account or fund.
2.02
Construction Contracts and Related Costs. Plans, specifications, maps, profiles and surveys
for construction of the Improvements in the District were prepared by the engineers acting for the City with
respect to the Improvements and were thereupon examined and approved by this City Council. An
advertisement for bids for construction of the Improvements in the District was published by the City, in
accordance with the provisions of Section 7-12-4141 of the Act, after which the bids theretofore received
were opened and examined. The City, along with officials from the Morning Star Community and its
independent third-party consultants, subsequently reviewed the bids for the Improvements to the District,
and the City, along with input from the Morning Star Community and its independent third-party
consultants, subsequently awarded the contract for construction of the Improvements in the District to the
contractors determined to be the lowest bidders for the furnishing of all work and material required for
constructing the Improvements in the District.
2.03
Costs. The costs of the Improvements to be funded from the Series 2026 Bonds and other
sources are currently estimated and shown on the table on the following page:

1

District
Grant and Loan
Administration
Line of Credit Origination and
Interest
Loan Reserves
Bond Counsel and Related
Costs of
Preliminary Engineering and
Design
Final Engineering Design
Construction Inspection Eng.
Construction
Contingency
Total

Estimated
Estimated
Cost paid
Cost paid
Estimated
from Series from Series Costs from
2026A Bond 2026B Bond
MCEP
proceeds
proceeds
Grant

$ 5,500
$5,000

62,415
$67,415

Estimated
Cost paid
from
RRGL
Grant

Estimated
Costs from
WMCC
Funds

Estimated
Costs from
NPS Funds

Estimated
Cost paid
from CDBG
Funds

Morning
Star
Equity

$ 20,438

$ 20,438

21,600

21,600
5,500

$5,000

60,500
$71,000

Total

10,000
$12,500

8,855
19,989
200,000

$ 65,803
53,017
6,180

$80,000

$100,000

$321,391

$270,882

$125,000

$80,000

$100,000

$321,391

(The remainder of this page intentionally left blank)

2

$12,500

12,500
74,658
73,006
707,571
122,915
$1,048,188

The City currently estimates that the costs and expenses to be specially assessed against the
Morning Star Community, which is the only property benefited by the Improvements in the District, for
which the City has not already received payment, including costs of preparation of plans, specifications,
maps, profiles, engineering superintendence and inspection, preparation of assessment rolls, expenses of
making the special assessments, the cost of work and materials under the construction contracts and all
other costs and expenses, are not less than $260,000. Such amount will be levied and assessed upon Morning
Star’s assessable real property within the District on the basis described in the Intent Resolution.
This City Council has jurisdiction and is required by law to levy and assess $260,000, together with
interest thereon, to collect such special assessments and credit the same to the District Account (defined
herein) created for the District, which District Account is to be maintained on the official books and records
of the City separate from all other City funds, for the payment of principal and interest due on the Series
2026 Bonds.
2.04

The 2026 Loans; Disbursement of the 2026 Loans.

(a)
The Department of Natural Resources and Conservation of the State of Montana, an agency
of the State of Montana (the “DNRC”), has agreed to lend to the City, from time to time as the requirements
of this Section are met, an amount up to: (i) $67,415 (the “2026A Committed Amount”); and (ii) $71,000
(the “2026B Committed Amount,” and together with the 2026A Committed Amount, the “Committed
Amounts”) for the purposes of financing, refinancing or reimbursing the City for costs of the Improvements
in the District, funding a deposit (the “Reserve Requirement”) to the Reserve Subaccount (defined herein),
and paying costs of issuance of the Series 2026 Bonds; provided the DNRC shall not be required to disburse
any proceeds of the 2026 Loans after December 31, 2028. The Committed Amounts may be reduced as
provided in this Resolution. If the City complies with certain conditions for principal forgiveness, the City’s
obligation to repay the Series 2026A Bond will be forgiven by the DNRC and the City will cancel the
associated special assessments.
(b)
The DNRC intends to disburse the 2026 Loans through U.S. Bank Trust Company,
National Association, as trustee (the “Trustee”) under the State of Montana’s General Obligation Bonds
(Water Pollution Control State Revolving Fund Program), issued or to be issued pursuant to the Indenture
of Trust, dated as of June 1, 1991, between the Board of Examiners of the State and the Trustee, as such
may be supplemented or amended from time to time. In consideration of the issuance of the Series 2026
Bonds by the City, the DNRC shall make, or cause the Trustee to make, a disbursement of all or a portion
of the 2026 Loans upon receipt of the following documents;
(i)
an Opinion of Bond Counsel as to the validity and enforceability of the Series 2026
Bonds and the security therefor and stating in effect that interest on the Series 2026B Bond, and if
the City has met the requirements for the forgiveness of the Series 2026A Loan, the Series 2026A
Bond, is not includable in gross income of the owner thereof for purposes of federal income
taxation, in form and substance satisfactory to the DNRC;
(ii)
the Series 2026A Bond and the Series 2026B Bond, fully executed and
authenticated in substantially the forms attached hereto as Exhibit A-l and Exhibit A-2,
respectively;
(iii)

a certified copy of this Resolution;

(iv)
any other security instruments or documents required by the DNRC or DEQ as a
condition to their approval of the 2026 Loans;

3

(v)
if all or part of a 2026 Loan is being made to refinance the Improvements or
reimburse the City for costs of the Improvements paid prior to the date of delivery of the Series
2026 Bonds (the “Closing”), evidence, satisfactory to the DNRC and Bond Counsel, (A) that the
acquisition or construction of the Improvements was begun no earlier than March 7, 1985 or the
debt was incurred no earlier than March 7, 1985, (B) of the City’s title to the Improvements, (C) of
costs of such Improvements and that such costs have been paid by the City, and (D) if such costs
were paid before adoption of this Resolution that the City has complied with Section 1.150-2 of the
Regulations; and
(vi)
such other certificates, documents and other information as the DNRC, the
Department of Environmental Quality of the State of Montana, an agency of the State (the “DEQ”),
or the Opinion of Bond Counsel referred to in subparagraph (1) may require (including any
necessary arbitrage rebate instructions).
(c)
In order to obtain a disbursement of a portion of the 2026 Loans to pay a portion of the
costs of the Improvements, the City shall submit to the DNRC and the Trustee a signed request for
disbursement on the form prescribed by the DNRC, with all attachments required by such form. The City
may obtain disbursements only for costs which have been legally incurred and are due and payable. All
2026 Loan disbursements will be made to the City only upon proof that cost was incurred.
(d)
From and after the first advance of funds of the Series 2026B Loan by the DNRC to the
City in an amount of at least $3,550 (the “2026B First Advance”), the 2026 Loans shall be disbursed, subject
to the other terms and conditions of this Resolution, in the following order;
(i)
First, the total amount of each advance will be split equally between the Series
2026A Loan and the Series 2026B Loan, until the entire amount of the Series 2026A Loan is
advanced; provided that the initial advance shall include the 2026B First Advance.
(ii)
Second, after the Series 2026A Loan is advanced in full, all advances will be from
the Series 2026B Loan.
(e)
The City shall not be entitled to, and the DNRC shall have no obligation to make, the
2026B First Advance or any subsequent advance of any amounts under the Series 2026B Loan until such
time as the City shall have funded the Reserve Subaccount in an amount then required to satisfy the Reserve
Requirement for the applicable issue.
(f)
The City shall submit the request for the 2026B First Advance in the form required by the
DNRC so that it is received in sufficient time for the DNRC to process the information by the date desired
by the City for the making of the 2026B First Advance.
(g)
For refinancings, a disbursement schedule complying with the requirements of the Clean
Water Act (the “Clean Water Act”) shall be established by the DNRC and the City at Closing.
(h)
If all or a portion of the 2026 Loans are made to reimburse a City for Improvement costs
paid by it prior to Closing, the City shall present at Closing the items required by (b) above relating to such
costs.
(i)
Notwithstanding anything herein to the contrary, the Trustee shall not be obligated to
disburse the 2026 Loans any faster or to any greater extent than it has available Series 2026 Bond proceeds
and other amounts available therefor in the Reserve Subaccount. The City acknowledges that if
Improvement costs are incurred faster than the City projected at Closing, there may be delays in making

4

2026 Loan disbursements for such costs. The DNRC will use its reasonable best efforts to obtain an
acceleration of such schedule if necessary.
(j)
Upon making each Series 2026A Loan disbursement and Series 2026B Loan disbursement,
the Trustee shall note such disbursement on Schedule A to the Series 2026A Bond and the Series 2026B
Bond, respectively. At Closing, Schedule A to the Series 2026B Bond shall note the 2026B First Advance
that is made.
(k)
The City agrees that it will deposit in the Reserve Subaccount upon receipt thereof, on the
date of the 2026B First Advance and any subsequent disbursement dates, any proceeds of the 2026B Loan
borrowed for the purpose of increasing the balance in the Reserve Subaccount to equal the Reserve
Requirement. The City further acknowledges and agrees that any portion of the 2026 Loans representing
capitalized interest shall be advanced only on January 1 and July 1 (each a “Payment Date”) and shall be
transferred by the Trustee on the Payment Date directly to the Revenue Bond Account. The amount of any
such transfer shall be a credit against the interest payments due on the Bonds and interest thereon shall
accrue only from the date of transfer.
(l)
Compliance by the City with its representations, covenants and agreements contained in
this Resolution and any security agreement, guaranty or other document or agreement delivered to the
DNRC securing the obligations of the City under this Resolution and the Series 2026 Bonds (the “Collateral
Documents”) shall be a further condition precedent to the disbursement of the 2026 Loans in whole or in
part. The DNRC and the Trustee, in their sole and absolute discretion, may make one or more
disbursements, in whole or in part, notwithstanding such noncompliance, and without liability to make any
subsequent disbursement of the 2026 Loans.
(m)
The determination of the pro-ration of the percentage of each disbursement between the
2026 Loans shall be made by the DNRC. It is the understanding of the City that the 2026 Loans are
anticipated to be disbursed with an intended allocation of approximately 49% to the Series 2026A Loan
and 51% to the Series 2026B Loan.
2.05
Commencement of Loan Term. The City’s obligations under this Resolution shall
commence on the date hereof unless otherwise provided in this Resolution. However, the obligation to
make payments under Article I hereof shall commence only upon the first disbursement of the 2026B First
Advance.
2.06
Termination of Loan Term. The City’s obligations under this Resolution with respect to
the Series 2026 Bonds shall terminate upon payment in full of all amounts due under the Series 2026 Bonds
and this Resolution; provided, however, that the covenants and obligations provided in Section 8 of this
Resolution shall survive the termination of this Resolution.
2.07
Compliance with the Montana Constitution and Statutes. All acts, conditions and things
required by the Constitution and laws of the State of Montana, including the Act, in order to make the Series
2026 Bonds valid and binding special obligations in accordance with their terms and in accordance with
the terms of this Resolution have been done, do exist, have happened and have been performed in regular
and due form, time and manner as so required.
Section 3.

The Series 2026 Bonds.

3.01
Issuance and Sale of the Series 2026 Bonds. The City Council has investigated the facts
necessary and hereby finds, determines and declares it to be necessary and desirable for the City to issue
the Series 2026 Bonds to evidence the 2026 Loans. The Series 2026 Bonds are issued to the DNRC without
public sale as authorized under Montana law,
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3.02
Terms. The Series 2026A Bond and the Series 2026B Bond shall be in the maximum
principal amount equal to the original 2026A Committed Amount and the 2026B Committed Amount,
respectively, shall each be issued as a single, fully registered bond numbered R-l, shall be dated as of the
date of delivery to the DNRC, and shall each bear interest at the rate charged by the DNRC on the 2026A
Loan and the 2026B Loan, respectively.
3.03
Interest and Surcharges. Until a written statement delivered to the City by the DNRC
(i) that the City’s obligation to repay the principal of the Series 2026A Bond is not forgiven (the
“Noncompliance Statement”) or (ii) in response to a Compliance Certificate and Request (in the form
attached hereto as Exhibit B) that the City’s obligation to repay the principal of the Series 2026A Bond is
forgiven (the “Forgiveness Statement,” and together with the Noncompliance Statement, the
“Determination Statement”), and so long as the City’s obligation to repay the principal of the 2026A Loan
is forgiven as provided in Section 3.04 below, amounts disbursed by the DNRC under this Resolution that
are evidenced by the Series 2026A Bond bear interest at the rate of zero percent (0.00%) per annum from
the date of each advance; provided, however, if the DNRC delivers to the City a Noncompliance Statement,
then all principal of the Series 2026A Bond advanced by the DNRC shall he payable and amounts disbursed
by the DNRC under this Resolution that are evidenced by the Series 2026A Bond shall bear interest at the
rate of two percent (2.00%) per annum, and in addition the City shall pay the Administrative Expense
Surcharge and the Loan Loss Reserve Surcharge from the date of each advance under the Series 2026A
Bond, each at the rate of twenty-five hundredths of one percent (0.25%) per annum. The 2026B Loan shall
each bear interest at the rate of two percent (2.00%) per annum and the City shall pay the Administrative
Expense Surcharge and Loan Loss Reserve Surcharge on the outstanding principal amounts of the 2026B
Loan at the rate of twenty-five hundredths of one percent (0.25%) per annum. For purposes of this
Resolution and the DNRC’s program, with respect to the 2026A Loan and the 2026B Loan, the term
“interest on the 2026 Loans” or “interest on the 2026A Loan” or “interest on the 2026B Loan”, when not
used in conjunction with a reference to any surcharges, shall include the Administrative Expense Surcharge
and the Loan Loss Reserve Surcharge, if applicable. The City shall pay all Loan Repayments and surcharges
in lawful money of the United States of America to the DNRC. Interest, Administrative Expense Surcharge,
and Loan Loss Reserve Surcharge shall be calculated on the basis of a year of 360 days comprising 12
months of 30 days each.
3.04

Repayment of 2026A Loan: Principal Forgiveness.

(a)
The City is obligated to repay the principal and interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge on the 2026A Loan, unless the DNRC forgives the City’s
obligation to repay the principal of the 2026A Loan as provided below. Subject to the provisions of (b)
below, the Loan Repayments and the Administrative Expense Surcharge and Loan Loss Reserve Surcharge
on the 2026A Loan shall be due on each Payment Date as follows:
(i)
Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge
on the outstanding principal balance of the 2026A Loan shall be payable on each Payment Date
following the date of delivery of the DNRC of a Noncompliance Statement and concluding on
July 1, 2046; and
(ii)
The principal of the 2026A Loan shall be payable on each Payment Date beginning
on the Payment Date that is the first to occur following delivery by the DNRC of Noncompliance
Statement and concluding on July 1, 2046, and the amount of each principal payment shall be
calculated on the basis of a substantially level debt service at the rate of 2.00% per annum; provided
that principal of the 2026A Loan is payable only in amounts that are multiples of $1.
(b)
Notwithstanding (a) above, so long as the City is proceeding diligently to completion of
the Improvements and the City has executed and delivered the Compliance Certificate and Request to the
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DNRC and DEQ in substantially the form attached hereto as Exhibit B within thirty (30) days after the date
that the Compliance Certificate and Request provided to the City by the DNRC, the DNRC will, following
review and approval of the Compliance Certificate and Request, deliver to the City a Forgiveness Statement
and the City will thereafter have no obligation to repay amounts advanced under the Series 2026A Bond or
interest or surcharges thereon and the Series 2026A Bond will be marked “CANCELLED” and returned by
the DNRC to the City. However, in the event the City fails to deliver timely the Compliance Certificate and
Request, or the City cannot submit the Compliance Certificate and Request because it cannot make the
certifications required therein, or the Compliance Certificate and Request is delivered in a form that deviates
materially from the attached hereto as Exhibit B as determined in the sole and absolute discretion of the
DNRC and the DEQ, or the DNRC or the DEQ determines at any time that the Improvements or any portion
thereof or of the work relating thereto fails to comply with DNRC program requirements, then the DNRC
will deliver to the City a Noncompliance Statement. Upon delivery of a Noncompliance Statement by the
DNRC to the City, all principal advanced or to be advanced under the Series 2026A Bond, together with
interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge thereon from the date of
each advance, shall be payable as provided in (a) above.
(c)
In addition, in the event the DNRC delivers a Noncompliance Statement, the Series 2026
A Bond will continue in effect as a subordinate obligation.
3.05
Repayment of 2026B Loan. The Loan Repayments and surcharges on the 2026B Loan
required by this Section shall be due on each Payment Date, as follows:
(i)
interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge
on the outstanding principal balance of the 2026B Loan shall be payable on each January 1 and
July 1, beginning on January 1, 2027 and concluding on July 1, 2046; and
(ii)
the principal of the 2026B Loan shall be repayable on each Payment Date,
beginning on January 1, 2027, and concluding on July 1, 2046, and the amount of each principal
payment shall be calculated on the basis of a substantially level debt service at a rate of 2.50% per
annum; provided that principal of the 2026B Loan is payable only in amounts that are multiples of
$1,000.
3.06
Details Regarding 2026 Loan Repayments. Upon each disbursement of the 2026 Loans to
the City pursuant to this Resolution, the Trustee shall enter or cause to be entered the amount advanced on
Schedule A to the Series 2026A Bond and the Series 2026B Bond, as applicable, under “Advances” and
the total amount advanced under this Resolution, including such disbursement, under “Total Amount
Advanced.” Loan Repayments and the Administrative Expense Surcharge and the Loan Loss Reserve
Surcharge on the 2026B Loan and, if applicable, on the 2026A Loan, accrue on each such advance from
the date of disbursement and shall be due and payable on the dates and in the amounts shown in Schedule
B to the Series 2026A Bond and the Series 2026B Bond, as such Schedule B shall be modified from time
to time as provided in this Resolution. The portion of each such Loan Repayment consisting of principal,
of interest, of Administrative Expense Surcharge and of Loan Loss Reserve Surcharge shall be set forth in
Schedule B to the Series 2026A Bond and the Series 2026B Bond.
If DNRC shall have delivered a Noncompliance Statement, then Schedule B to the Series 2026A
Bond shall continue to reflect interest and surcharges on amounts advanced under the Series 2026A Bond
at the rate of 2.00% per annum. If the DNRC delivers a Forgiveness Statement, Schedule B to the Series
2026A Bond will be disregarded and of no effect.
Past-due Loan Repayments and the Administrative Expense Surcharge and the Loan Loss Reserve
Surcharge shall bear interest at the rate of ten percent (10.00%) per annum, until paid.

7

Any payment of principal and interest as to the Series 2026B Bond and, if applicable, the Series
2026A Bond, and the Administrative Expense Surcharge and the Loan Loss Reserve Surcharge as to the
Series 2026B Bond and, if applicable, the Series 2026A Bond under this Resolution shall be credited against
the same payment obligation under the Series 2026B Bond and, as applicable, the Series 2026A Bond.
3.07

Redemption of the Series 2026 Bonds.

(a)
Mandatory Redemption – Series 2026B Bonds. If on any Payment Date there will be a
balance in the Debt Service Fund after payment of the principal and interest due on all Series 2026B Bonds
drawn against it, either from (i) the prepayment of special assessments levied in the District or (ii) the
transfer of surplus proceeds from the Project Subaccount to the District Account and, subsequently, to the
Debt Service Fund, as provided in Section 4 hereof, then the Finance Director shall call for redemption on
the Payment Date outstanding Series 2026B Bonds, or portions thereof, in an amount which, together with
the interest thereon to the Payment Date, will equal the amount of such funds on deposit in the Debt Service
Fund on that date. The redemption price of the Series 2026B Bonds on such Payment Date shall equal the
amount of the principal amount of the Series 2026 B Bonds to be redeemed, plus interest accrued to the
date of redemption on the applicable Payment Date.
(b)
Optional Redemption – Series 2026B Bonds. The City may not prepay all or any part of
the outstanding principal amount of the Series 2026B Bond and, if applicable, the Series 2026A Bond,
unless (i) a Determination Statement has been delivered, (ii) it obtains the prior written consent of the
DNRC thereto, and (iii) no Loan Repayment or Administrative Expense Surcharge or Loan Loss Reserve
Surcharge is then delinquent. Any prepayment permitted by the DNRC must be accompanied by payment
of accrued interest, Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of
prepayment on the amount of principal prepaid. If the Series 2026 Bonds are prepaid in part pursuant to
this Section, such prepayments shall be applied to principal payments in inverse order of maturity.
(c)
Selection of Series 2026B Bonds for Redemption; Partial Redemption. If less than all of
the Series 2026B Bonds are to be redeemed, Series 2026B Bonds shall be redeemed in order of the stated
maturities thereof. If less than all Series 2026B Bonds of a stated maturity are to be redeemed, the Series
2026B Bonds of such maturity shall be selected for redemption in $1 principal amounts selected by the
Registrar by lot or other manner it deems fair. Upon partial redemption of a Series 2026B Bond, a new
Series 2026B Bond or Series 2026B Bonds will be delivered to the registered owner without charge,
representing the remaining principal amount thereof outstanding.
(d)
Notice and Effect of Redemption. The date of redemption and the principal amount of the
Series 2026B Bonds to be redeemed shall be fixed by the Finance Director, who shall give notice thereof
to the Registrar forty-five (45) days in advance in order for the Registrar to give notice, by first class mail,
postage prepaid, or by other means required by DTC (hereafter defined), to the owner or owners of such
Series 2026B Bonds at their addresses appearing in the Bond register, of the numbers of the Series 2026B
Bonds or portions thereof to be redeemed and the date on which payment will be made, which date shall be
not less than thirty (30) days after the date of mailing notice. On the date so fixed interest on the Series
2026B Bonds or portions thereof so redeemed shall cease.
3.08
Negotiability. Transfer and Registration. The Series 2026 Bonds shall be fully registered
as to both principal and interest, shall be initially registered in the name of and payable to the DNRC, and
shall be dated the date of delivery. While so registered, principal of and interest on the Series 2026 Bonds
shall be payable to the DNRC at the Office of the Department of Natural Resources and Conservation, 1625
Eleventh Avenue, Helena, Montana 59620 or such other place as may be designated by the DNRC in writing
and delivered to the City. The Series 2026 Bonds shall be negotiable, subject to the provisions for
registration and transfer contained in this Section. No transfer of the Series 2026 Bonds shall be valid unless
and until (1) the holder, or his duly authorized attorney or legal representative, has executed the form of
8

assignment appearing on the Series 2026 Bonds, and (2) the Finance Director of the City or their successor,
as bond registrar (the “Registrar”), has duly noted the transfer on the Series 2026 Bonds and recorded the
transfer on the registration books of the Registrar. The Registrar may, prior to noting and recording the
transfer, require appropriate proof of the transferor’s authority and the genuineness of the transferor’s
signature. The City shall be entitled to deem and treat the Person in whose name the Series 2026 Bonds are
registered as the absolute owner of the Series 2026 Bonds for all purposes, notwithstanding any notice to
the contrary, and all payments to the registered holder shall be valid and effectual to satisfy and discharge
the City’s liability upon such Series 2026 Bonds to the extent of the sum or sums so paid.
3.09
Execution, Registration and Delivery. The Series 2026 Bonds shall be prepared under the
direction of the Finance Director, or his or her designee, and shall be executed on behalf of the City by the
signatures of the Mayor, the City Manager, and Finance Director, provided that the signatures and the
corporate seal may be printed, engraved or lithographed facsimiles of the originals. The seal of the City
need not be impressed or imprinted on any Series 2026 Bond. In case any officer whose signature or a
facsimile of whose signature shall appear on the Series 2026 Bonds shall cease to be such officer before the
delivery of any Series 2026 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 2026 Bond shall be valid or obligatory for any purpose or entitled to any security or
benefit under this Resolution unless a certificate of authentication and registration on such Series 2026
Bond has been duly executed by the manual signature of an authorized representative of the Registrar.
Certificates of authentication and registration on different Series 2026 Bonds need not be signed by the
same representative. The executed certificate of authentication and registration on each Series 2026 Bond
shall be conclusive evidence that it has been authenticated and delivered under this Resolution. The Series
2026 Bonds shall be registered in order of their serial numbers by the Registrar, as attested by the Certificate
of Authentication, as of the date of issuance of the Series 2026 Bonds. When the Series 2026 Bonds have
been so executed, authenticated and registered, they shall be delivered by the Registrar to DNRC.
3.10
Form. The Series 2026A Bond shall be prepared in substantially the form attached hereto
as Appendix A-l. The Series 2026B Bond shall be prepared in substantially the form attached as Appendix
A-2.
3.11
Application of Bond Proceeds. The Finance Director shall credit the proceeds of the Series
2026 Bonds, when disbursed, as follows:
(a)
the District;
(b)

Up to $0 to the General Fund of the City for the City’s administrative fees with respect to
Up to $5,500 of the proceeds of the Series 2026B Bond to the Reserve Subaccount;

(c)
Up to $132,915 to the Project Subaccount in the District Account of the Debt Service Fund
for the cost of the Improvements and the payment of costs of issuance of the Series 2026 Bonds.
Section 4.

Debt Service Fund; Accounts Created Therein; Special Assessments.

4.01
Debt Service Fund. There is created and established a fund designated as the “Special
Improvement District No. 346 Fund” (the “Debt Service Fund”), which fund shall be maintained by the
Finance Director on the books and records of the City separate and apart from all other funds of the City.
Within the Debt Service Fund there shall be created and maintained a separate account of the District
designated as the “Special Improvement District No. 346 Account” (the “District Account”). Within the
District Account there shall be maintained three separate subaccounts, designated as the “Project
Subaccount,” the “Principal Subaccount,” and the “Interest Subaccount,” respectively.

9

4.02
Project Subaccount. There shall be credited to the Project Subaccount in the District
Account the sale proceeds of the Series 2026 Bonds as provided in this Resolution. Any earnings on
investment of money in the Project Subaccount shall be retained therein. All costs and expenses of
constructing the Improvements to be paid from proceeds of the Series 2026 Bonds shall be paid from time
to time as incurred and allowed from the Project Subaccount in accordance with the provisions of applicable
law, and money in the Project Subaccount shall be used for no other purpose; provided that upon completion
of the Improvements and after all claims and expenses with respect to the Improvements have been fully
paid and satisfied, any money remaining in the Project Subaccount shall be transferred to the Principal
Subaccount and then to the Debt Service Fund and used to redeem Series 2026 Bonds as provided in Section
3.07 hereof.
4.03

Principal Subaccount and Interest Subaccount.

(a)
Principal Subaccount and Interest Subaccount Generally. Money in the Principal
Subaccount and Interest Subaccount shall be used only for (i) payment of the principal of the Series 2026B
Bonds from the Principal Subaccount and interest on the Series 2026B Bonds from the Interest Subaccount
as such payments become due or (ii) to redeem Series 2026B Bonds. If the Series 2026A Bonds are not
forgiven, then principal and interest of the Series 2026A Bonds will be paid as set forth in this subsection.
(b)
Deposits to Principal Subaccount and Interest Subaccount. Upon the collection of the
installment of principal and interest due each year on the special assessments to be levied with respect to
the Improvements in the District, the Finance Director shall credit to the Interest Subaccount the District
Account so much of said special assessments as are collected as interest payments, and the balance thereof
to the Principal Subaccount. Interest income on money in the Principal Subaccount and the Interest
Subaccount shall be retained therein and used as any other funds therein. Any installment of a special
assessment paid prior to its due date with interest accrued thereon to the next succeeding Payment Date
shall be credited with respect to principal and interest payments in the same manner as other special
assessments are credited to the Principal Subaccount and the Interest Subaccount. All money in each
Interest Subaccount and Principal Subaccount shall be used to, respectively, (i) pay interest on the Series
2026 Bonds then due, then to (ii) pay principal on the Series 2026 Bonds then due. Prior to the applicable
Payment Date, the Finance Director shall transfer the applicable amount from the Principal Subaccount and
the Interest Subaccount to the Debt Service Fund to make the payment due on the Series 2026 Bonds on
such Payment Date. Subsequently, if any money is available, it may be used to redeem Series 2026 Bonds,
in accordance with Section 3.07 hereof. Redemption of the Series 2026 Bonds shall be in order of the
principal amounts they represent as provided in Section 3.07 hereof and interest shall be paid as accrued
thereon to the date of redemption, in accordance with the provisions of Section 7-12-4206 of the Act. In
addition, on the date of issuance of the Series 2026 Bonds, the accrued interest of the Series 2026 Bonds
shall be deposited in the Interest Subaccount.
4.04
Reserve Subaccount. The City hereby establishes the Special Improvement District No.
346 Reserve Subaccount (the “Reserve Subaccount”) to which the City will deposit a portion of the
proceeds of the Series 2026B Bonds in the amount of the Reserve Requirement on the date of the 2026B
First Advance. Amounts in the Reserve Subaccount may be used to pay principal of and interest on the
Series 2026B Bond if amounts in the Debt Service Fund are insufficient for such purpose on a payment
date.
Section 5.
City Covenants. The City covenants and agrees with the owners from time to time
of each of the Series 2026 Bonds that until all the Series 2026 Bonds and interest thereon are fully paid:
5.01
Compliance with Resolution. The City will hold the Debt Service Fund and the Reserve
Subaccount as trust funds, separate and apart from all of its other funds, and the City, its officers and agents,
will comply with all covenants and agreements contained in this Resolution.
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5.02
Construction of Improvements. The City will do all acts and things necessary to enforce
the provisions of the construction contracts referred to herein and to ensure the completion of the
Improvements for the benefit of the District in accordance with the plans and specifications and within the
time therein provided and will pay all costs thereof promptly as incurred and allowed, out of Project
Subaccount of the Debt Service Fund and within the amount of the proceeds of the Series 2026 Bonds
appropriated thereto.
5.03
Levy of Assessments. The City will do all acts and things necessary for the final and valid
levy of special assessments upon all assessable real property of the District within the boundaries of the
District in accordance with the Constitution and laws of the State and the Constitution of the United States,
in an aggregate principal amount not less than $260,000.
The special assessments shall be levied on the basis set forth in the Intent Resolution and shall be
payable in equal, semiannual installments over a period not to exceed twenty (20) years, with interest on
the whole amount remaining unpaid at an annual rate equal to the sum of: (i) the average annual interest
rate borne by the Series 2026B Bonds, plus, (ii) in the discretion of the City, one-half of one percent (0.50%)
per annum. The special assessments to be levied will be payable on the 30th day of November in each of
the years 2026 through 2045, and on the 31st day of May in the years 2027 through 2047, inclusive, if not
theretofore paid, and shall become delinquent on such dates unless paid in full. The first partial payment of
each assessment shall include interest on the entire assessment from the date of original registration of the
Series 2026 Bonds, and each subsequent partial payment shall include interest for six (6) months on that
payment and the then remaining balance of the special assessment. The special assessments shall constitute
a lien upon and against the property against which they are made and levied, which lien may be extinguished
only by payment of the assessment with all penalties, cost and interest as provided in Section 7-12-4191 of
the Act. No tax deed issued with respect to any lot or parcel of land shall operate as payment of any
installment of the assessment thereon which is payable after the execution of such deed, and any tax deed
so issued shall convey title subject only to the lien of said future installments, as provided in Montana Code
Annotated, Section 15-18-214.
5.04
Reassessment. If at any time and for whatever reason any special assessment or tax herein
agreed to be levied is held invalid or determined by the City in its sole discretion needed to be reassessed
(including the forgiveness of the Series 2026A Bond), the City and this City Council, its officers and
employees, will take all steps necessary to correct the same and to reassess and re-levy the same, including
the ordering of work, with the same force and effect as if made at the time provided by law, ordinance or
resolution relating thereto, and will reassess and re-levy the same with the same force and effect as an
original levy thereof, as authorized in Section 7-12-4186 of the Act. Any special assessment, or
reassessment or re-levy shall, so far as is practicable, be levied and collected as it would have been if the
first levy had been enforced including the levy and collection of any interest accrued on the first levy.
If proceeds of the Series 2026 Bonds, including investment income thereon, are applied to the
redemption of such Series 2026 Bonds, as provided in Sections 7-12-4205 and 7-12-4206 of the Act, or if
refunding bonds are issued and the principal amount of the outstanding Series 2026 Bonds of the District
is decreased or increased, the City will reduce or increase, respectively, the special assessments levied in
the District and then outstanding pro rata by the principal amount of such prepayment or the amount above
or below the outstanding principal amount of bonds represented by the refunding bonds. The City and this
City Council, its officers and employees will reassess and re-levy such special assessments, with the same
effect as an original levy, in such reduced or increased amounts in accordance with the provisions of
Sections 7-12-4176 through 7-12-4178 of the Act.
5.05
Absence of Litigation. There is now no litigation pending or, to the knowledge of the City,
threatening or questioning: (i) the validity or regularity of the creation of the District, the contracts for

11

construction of the Improvements or the undertaking and agreement of the City to levy special assessments
therefor and to make good any deficiency in the collection thereof through the making of advances from
the Reserve Subaccount as security for the Series 2026 Bonds; the right and power of the City to issue the
Series 2026 Bonds; or (iii) in any manner questioning the existence of any condition precedent to the
exercise of the City’s powers in these matters. If any such litigation should be initiated or threatened, the
City will forthwith notify in writing the DNRC and will furnish the DNRC a copy of all documents,
including pleadings, in connection with such litigation.
5.06
Waiver of Penalty and Interest. The City covenants not to waive the payment of penalty or
interest on delinquent special assessments levied on Morning Star property in the District, unless the City
determines, by resolution of this City Council, that such waiver is in the best interest of the owners of the
outstanding Series 2026 Bonds.
Section 6.

Tax Matters.

6.01
Use of Improvements. The Improvements will be owned 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
Improvements or security for the payment of the Series 2026 Bonds which might cause the Series 2026
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”) and the applicable Regulations.
6.02
General Covenant. The City covenants and agrees with the owners from time to time of the
Series 2026 Bonds that it will not take or permit to be taken by any of its officers, employees or agents any
action which would cause the interest on the Series 2026 Bonds to become includable in gross income for
federal income tax purposes under the Code and applicable Treasury Regulations. By this Resolution, the
City covenants to take any and all actions within its powers to ensure that the interest on the Series 2026
Bonds will not become includable in gross income for federal income tax purposes under the Code and
applicable Regulations.
6.03
Arbitrage Certification. The Mayor, the City Manager and the Finance Director, being the
officers of the City charged with the responsibility for issuing the Series 2026 Bonds pursuant to this
Resolution, are authorized and directed to execute and deliver to the DNRC a certificate in accordance with
the provisions of Section 148 of the Code and the Regulations, stating that on the basis of facts, estimates
and circumstances in existence on the date of issue and delivery of the Series 2026B Bonds, it is reasonably
expected that the proceeds of the Series 2026B Bonds will be used in a manner that would not cause the
Series 2026 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code and the
Regulations.
6.04
Not Qualified Tax-Exempt Obligations. The Series 2026B Bonds do not qualify as
“qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code.
Section 7.
Authentication of Transcript. The officers of the City are authorized and directed
to furnish to DNRC and to bond counsel certified copies of all proceedings relating to the issuance of the
Series 2026 Bonds and such other certificates and affidavits as may be required to show the right, power
and authority of the City to issue the Series 2026 Bonds, and all statements contained in and shown by such
instruments, including any heretofore furnished, shall constitute representations of the City as to the truth
of the statements purported to be shown thereby.

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Section 8.

Defeasance.

8.01
General. When the liability of the City on all Series 2026 Bonds issued under and secured
by this Resolution has been discharged as provided in this Section, all pledges, covenants and other rights
granted by this Resolution to the owners of such obligations shall cease.
8.02
Payment. The City may discharge its liability with reference to any Series 2026 Bond or
installment of interest thereon which is due on any date by on or before that date depositing with the
Registrar funds sufficient and providing proceeds available for the payment thereof in full, or if any Series
2026 Bond or installment of interest thereon shall not be paid when due, the City may nevertheless discharge
its liability with reference thereto by depositing with the Registrar funds sufficient and providing proceeds
available for the payment thereof in full with interest accrued to the date of such deposit or mailing.
8.03
Prepayment. The City may also discharge its liability with reference to any prepayable
Series 2026 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 and interest which are then due
thereon, provided that notice of such redemption has been duly given as provided in this Resolution.
8.04
Escrow. The City may also at any time discharge its liability in its entirety with reference
to the Series 2026 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 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 and interest to become due on all Series 2026 Bonds on or before
maturity or, if any Series 2026 Bond has been duly called for redemption or notice of such redemption has
been irrevocably provided for, on or before the designated redemption date.
8.05
Irrevocable Deposits. If an officer of the City is the Registrar, any deposit made under this
Section with the Registrar shall be irrevocable and held for the benefit of the owners of the Series 2026
Bonds in respect of which such deposits have been made.
Section 9.

Indemnification of DNRC and DEQ.

The City shall, to the extent permitted by law, indemnify and save harmless the DNRC and the
DEQ and their officers, employees and agents (each an ‘‘Indemnified Party” or, collectively, the
‘‘Indemnified Parties”) against and from any and all claims, damages, demands, expenses, liabilities and
losses of every kind asserted by or on behalf of any Person arising out of the acts or omissions of the City
or its employees, officers, agents, contractors, subcontractors, or consultants in connection with or with
regard or in any way relating to the condition, use, possession, conduct, management, planning, design,
acquisition, construction, installation or financing of the Improvements. The City shall, to the extent
permitted by law, also indemnify and save harmless the Indemnified Parties against and from all costs,
reasonable attorneys’ fees, expenses and liabilities incurred in any action or proceeding brought by reason
of any such claim or demand. If any proceeding is brought against an Indemnified Party by reason of such
claim or demand, the City shall, upon notice from an Indemnified Party, defend such proceeding on behalf
of the Indemnified Party.
Section 10.

Repeals and Effective Date.

10.01 Repeal. All provisions of other resolutions and other actions and proceedings of the City
and this City Council 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.
13

10.02 Effective Date. This Resolution shall take effect immediately upon its passage and adoption
by this City Council.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY
OF KALISPELL, THIS 21ST DAY OF SEPTEMBER. 2026.

ATTEST:

Kyle Waterman
Council President

Aimee Brunckhorst
City Clerk

14

APPENDIX A-1
[FORM OF THE SERIES 2026A BOND]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
CITY OF KALISPELL
SPECIAL IMPROVEMENT DISTRICT BOND
(SPECIAL IMPROVEMENT DISTRICT NO. 346
(MORNING STAR COMMUNITY SEWER IMPROVEMENTS))
SUBORDINATE LIEN TAXABLE SERIES 2026A
No.R-1
Dated: October ___, 2026

$67,415

FOR VALUE RECEIVED, the City of Kalispell, Montana (the “City”), a duly organized and
existing municipal corporation in Flathead County, Montana, acknowledges itself to be specially indebted
and hereby promises to pay to the Department of Natural Resources and Conservation of the State of
Montana (the “DNRC”), or its registered assigns, solely out of available funds in the District Account (the
“District Account”), the principal sum equal to the sum of the amounts entered on Schedule A attached
hereto under “Total Amount Advanced,” with interest on each such amount from the date such amount is
advanced hereunder at the rate of two percent (2.00%) per annum on the unpaid balance until paid, together
with an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge on the outstanding principal
amount of this Series 2026A Bond from the date of each advance of principal, each at the rate of twenty-five
hundredths of one percent (0.25%) per annum, all subject to the effect of the immediately following
paragraph. Principal, interest, Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall
be payable in semiannual installments payable on each January 1 and July 1 (each a “Loan Repayment
Date”) commencing with the Payment Date that is the first to occur following delivery by the DNRC to the
City of a statement that the City’s obligation to repay the principal amount of the 2026A Loan is not forgiven
and ending on July 1, 2046, all as described in the Resolution (as hereinafter defined), subject to earlier
redemption. Each installment shall be in the amount set forth opposite its due date in Schedule B attached
hereto under “Total Loan Payment.” The portion of each such payment consisting of principal, of interest,
of Administrative Expense Surcharge, and of Loan Loss Reserve Surcharge shall be as set forth in Schedule
B hereto. Upon each disbursement of 2026A Loan, the DNRC shall enter (or cause to be entered) the
principal amount advanced on Schedule A under “Advances” and the total amount advanced under the
Resolution, including such advance, under “Total Amount Advanced.” The DNRC shall prepare Schedule
B and any revised Schedule B, or cause Schedule B and any revised Schedule B to be prepared, as provided
in the Resolution, and the final Schedule B will reflect repayments under the Resolution. Schedule B shall
be calculated and recalculated on a level debt service basis assuming an interest rate of 2.50% per annum.
Past-due payments of principal and interest and Administrative Expense Surcharge and Loan Loss Reserve
Surcharge shall bear interest at the rate of ten percent (10.00%) per annum, until paid. Interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be calculated on the basis of a
360-day year comprising 12 months of 30 days each. All payments under this Series 2026A Bond shall be
made to the registered holder of this Series 2026A Bond, at its address as it appears on the Bond register,
in lawful money of the United States of America.
NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SERIES 2026A BOND, IN
THE EVENT THAT THE CITY TIMELY DELIVERS A COMPLIANCE CERTIFICATE AND REQUEST
A-1-1

(AS DEFINED IN THE RESOLUTION) IN FORM AND SUBSTANCE SATISFACTORY TO THE
DNRC AND THE DNRC IN RESPONSE THERETO SUPPLIES TO THE CITY A FORGIVENESS
STATEMENT, THEN THEREUPON INTEREST SHALL BE DEEMED TO ACCRUE ON THE
PRINCIPAL ON THIS SERIES 2026A BOND FROM THE DATE OF EACH ADVANCE AT THE RATE
OF ZERO PERCENT (0.00%) PER ANNUM AND THE CITY’S OBLIGATION TO REPAY PRINCIPAL
ADVANCED HEREUNDER SHALL BE FORGIVEN, AND THE CITY SHALL HAVE NO
OBLIGATION TO REPAY THE DNRC OR ITS REGISTERED ASSIGNS ANY AMOUNTS
ADVANCED HEREUNDER OR INTEREST OR ANY SURCHARGE THEREON. THIS SERIES 2026A
BOND SHALL THEREUPON BE MARKED “CANCELLED” AND RETURNED BY THE HOLDER
TO THE CITY, AND THIS SERIES 2026A BOND SHALL NO LONGER CONSTITUTE AN
OBLIGATION OF THE CITY. IN ADDITION, UNTIL THE DELIVERY OF A DETERMINATION
STATEMENT BY THE DNRC TO THE CITY, THE OBLIGATION OF THE CITY TO REPAY THE
OUTSTANDING PRINCIPAL AMOUNT HEREOF SHALL BE DEFERRED UNTIL THE PAYMENT
DATE FIRST OCCURRING AFTER DELIVERY OF A NONCOMPLIANCE STATEMENT AND
INTEREST SHALL BE DEEMED TO ACCRUE ON THE PRINCIPAL OF THIS SERIES 2026A BOND
FROM THE DATE OF EACH ADVANCE UNTIL DELIVERY OF SUCH NONCOMPLIANCE
STATEMENT AT THE RATE OF ZERO PERCENT (0.00%) PER ANNUM.
This Series 2026A Bond is one of an issue of Special Improvement District No. 346 (Morning Star
Community Sewer Improvements)), Series 2026 Bonds of the City authorized to be issued in one or more
series from time to time, and constitutes a series in the maximum authorized principal amount of $67,415
(the “Series 2026A Bond”). The Series 2026A Bond is issued to finance a portion of costs of local sewer
improvements (the “Improvements”) to benefit the property located at 1717 South Woodland Drive in the
City (“Morning Star Community”) and to pay costs of issuance of the Series 2026 Bonds (as defined herein).
The Series 2026A Bond is issued pursuant to and in full conformity with the Constitution and laws of the
State of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, Part 44 and
45, as amended, and a Resolution No. _____ duly adopted by the City Council of the City on September
21, 2026 (the “Resolution”). Terms used with initial capital letters but not defined herein have the meanings
given to them in the Resolution. This Series 2026A Bond is issuable only as a single, fully registered bond.
This Series 2026A Bond is issued as a Subordinate Obligation payable out of District Fund. Simultaneously
herewith, the City is issuing its $71,000 Special Improvement District No. 346 (Morning Star Community
Sewer Improvements)), Tax-Exempt Series 2026B (the “Series 2026B Bond,” and together with the Series
2026A Bond, the “Series 2026 Bonds”), which is payable from the District Fund. Following the 2026B
First Advance, the total amount of each advance will be split equally between the Series 2026A Bond and
the Series 2026B Bond, until the entire amount of the Series 2026A Bond is advanced.
Reference is made to the Resolution for a more complete statement of the terms and conditions
upon which this Series 2026A Bond has been issued, the conditions upon which the Resolution may be
amended, the rights, duties and obligations of the City, and the rights of the owners of this Series 2026A
Bond.
The City may prepay the principal of this Series 2026A Bond only if (i) a Determination Statement
has been delivered, (ii) it obtains the prior written consent of the DNRC thereto, and (iii) no Loan
Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. Any
prepayment permitted by the DNRC must be accompanied by payment of accrued interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the
amount of principal prepaid. If this Series 2026A Bond is prepaid in part, such prepayments shall be applied
to principal payments in inverse order of maturity.

A-1-2

This Series 2026A Bond, including interest and any premium, is payable solely from the District
Fund and does not constitute a debt of the City within the meaning of any constitutional or statutory
limitation or provision.
The City may deem and treat the person in whose name this Series 2026A Bond is registered as the
absolute owner hereof, whether this Series 2026A Bond is overdue or not, for the purpose of receiving
payment and for all other purposes, and the City shall not be affected by any notice to the contrary. This
Subordinate Series 2026A Bond may be transferred as hereinafter provided.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has duly
authorized and will forthwith construct and complete the Improvements to the Morning Star Community
described in the Resolution, that it will levy special assessment against property located in the District; that
all acts, conditions and things required by the Constitution and laws of the State of Montana and the
ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order to make
this Series 2026A Bond a valid and binding special obligation of the City according to its terms have been
done, do exist, have happened and have been performed as so required; and that this Series 2026A Bond
and the premium, if any, and interest hereon are payable solely out of the District Fund and do not constitute
a debt of the City within the meaning of any constitutional or statutory limitation or provision and the
issuance of this Series 2026A Bond does not cause either the general or the special indebtedness of the City
to exceed any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana, by its City Council,
has caused this Series 2026A Bond to be executed on its behalf by the facsimile or manual signatures of the
Mayor, City Manager and Finance Director and has caused this Series 2026A Bond to be dated as of the
date first written above.
CITY OF KALISPELL, MONTANA

Mayor

City Manager

ATTEST:

Finance Director

City Clerk

A-1-3

REGISTRATION AND TRANSFER
The Series 2026A Bond shall be fully registered as to both principal and interest. No transfer of the
Series 2026A Bond shall be valid unless and until (1) the registered holder of the Series 2026A Bond, or
his duly authorized attorney or legal representative, executes the form of assignment appearing on the Series
2026A Bond, and (2) the Finance Director as bond registrar (the “Registrar”), has duly noted the transfer
on the Series 2026A Bond and recorded the transfer on the Registrar’s registration books. The City shall be
entitled to deem and treat the person in whose name the Series 2026A Bond is registered as absolute owner
thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the Series
2026A Bond shall be made only to the order of the registered holder thereof, and all such payments shall
be valid and effectual to satisfy and discharge the City’s liability upon the Bond to the extent of the sum or
sums so paid.
REGISTER
The ownership of the outstanding principal balance of the Series 2026A Bond and the interest
accruing thereon is registered on the books of City of Kalispell, Montana in the name of the registered
holder appearing on the first page hereof or as last noted below:
Date of
Registration

October ___, 2026

Name and Address
of Registered Holder
Department of Natural
Resources and Conservation
1625 Eleventh Avenue
Helena, MT 59620

Signature of
Finance Director

THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The Finance Director of the City of Kalispell, Montana, acting as Bond Registrar, has transferred,
on the books of the City, on the date last noted below, ownership of the principal amount of and the accrued
interest on the Series 2026A Bond to the new registered holder noted next to such date, except for amounts
of principal and interest theretofore paid.
Date of Transfer

Name of New
Registered Holder

A-1-4

Signature of
Bond Registrar

FORM OF ASSIGNMENT
For value received, the Series 2026A Bond is hereby transferred and assigned by the undersigned
holder, without recourse, to _____________________________________________________________
on this _____ day of ___________________________, _____.

By:

For:

A-1-5

(Authorized Signature)

(Holder)

SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED

Date

Advances

Total Amount
Advanced

A-1-6

Notation Made by

SCHEDULE B

Date

Principal

Interest

Administrative
Expense
Surcharge

A-1-7

Loan Loss
Reserve
Surcharge

Total Loan
Payment

EXHIBIT A-2
[FORM OF SERIES 2026B BOND]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL, MONTANA
SPECIAL IMPROVEMENT DISTRICT BOND
(SPECIAL IMPROVEMENT DISTRICT NO. 346
(MORNING STAR COMMUNITY SEWER IMPROVEMENTS))
TAX-EXEMPT SERIES 2026B
No. R-__
Dated: October ___, 2026

$71,000

FOR VALUE RECEIVED, CITY OF KALISPELL, MONTANA (the “Borrower”), a duly
organized municipal corporation and political subdivision of the State of Montana, acknowledges itself to
be specially indebted and, for value received, hereby promises to pay to the Department of Natural
Resources and Conservation of the State of Montana (the “DNRC”), or its registered assigns, solely from
the Debt Service Fund, the principal sum equal to the sum of the amounts entered on Schedule A attached
hereto under “Total Amount Advanced,” with interest on each such amount from the date such amount is
advanced hereunder at the rate of two percent (2.00%) per annum on the unpaid balance until paid. In
addition, the Borrower shall pay an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge
on the outstanding principal amount of this Bond, each at the rate of twenty-five hundredths of one percent
(0.25%) per annum. Principal, interest and Administrative Expense Surcharge and Loan Loss Reserve
Surcharge shall be payable in semiannual installments payable on each January 1 and July 1, commencing
on January 1, 2027 and concluding on July 1, 2046. Each installment shall be in the amount set forth
opposite its due date in Schedule B attached hereto under “Total Loan Payment.” The portion of each such
payment consisting of principal, the portion consisting of interest, the portion consisting of Administrative
Expense Surcharge, and the portion consisting of Loan Loss Reserve Surcharge shall be as set forth in
Schedule B attached hereto. Upon each disbursement of 2026B Loan amounts to the Borrower pursuant to
the Resolution described below, the DNRC shall enter (or cause to be entered) the amount advanced on
Schedule A under “Advances” and the total amount advanced under the Resolution, including such
disbursement, under “Total Amount Advanced.” The DNRC shall prepare Schedule B and any revised
Schedule B, or cause Schedule B and any revised Schedule B to be prepared, as provided in Section 3.06
of the Resolution. Schedule B shall be calculated and recalculated on a level debt service basis assuming
an interest rate of 2.50% per annum. Past-due payments of principal and interest and Administrative
Expense Surcharge and Loan Loss Reserve Surcharge shall bear interest at the rate of ten percent (10.00%)
per annum, until paid. Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge
shall be calculated on the basis of a 360-day year comprising 12 months of 30 days each. All payments
under this Series 2026B Bond shall be made to the registered holder of this Series 2026B Bond, at its
address as it appears on the Bond register, in lawful money of the United States of America.
This Series 2026B Bond is one of an issue of Special Improvement District Bond (Special
Improvement District No. 346 (Morning Star Community Sewer Improvements)), Series 2026 of the City
authorized to be issued in one or more series from time to time, and constitutes a series in the maximum
authorized principal amount of $71,000 (the “Series 2026B Bond”). The Series 2026B Bond is issued to
finance a portion of costs of local sewer improvements (the “Improvements”) to benefit the property located
at 1717 South Woodland Drive in the City (“Morning Star Community”) and to pay costs of issuance of the

A-2-1

Series 2026 Bonds (as defined herein). The Series 2026B Bond is issued pursuant to and in full conformity
with the Constitution and laws of the State of Montana thereunto enabling, including Montana Code
Annotated, Title 7, Chapter 7, Part 44 and 45, as amended, and the Resolution. Terms used with initial
capital letters but not defined herein have the meanings given to them in the Resolution. This Series 2026B
Bond is issuable only as a single, fully registered bond. Simultaneously herewith, the City is issuing its
$67,415 Special Improvement District Bond (Special Improvement District No. 346 (Morning Star
Community Sewer Improvements)), Subordinate Lien Taxable Series 2026A (the “Series 2026A Bond,”
and together with the Series 2026B Bond, the “Series 2026 Bonds”), which is a subordinate obligation
payable out of District Fund. Following the 2026B First Advance, the total amount of each advance will be
split equally between the Series 2026A Bond and the Series 2026B Bond, until the entire amount of the
Series 2026A Bond is advanced.
The Series 2026 Bonds are issuable only as fully registered bonds of single maturities in
denominations of $1 or any integral multiple thereof.
This Series 2026B Bond is payable from the collection of an assessment levied upon all assessable
real property within the boundaries of the District, in an aggregate principal amount of not less than
$260,000, except as such amount may be reduced or increased in accordance with provisions of Montana
law. Such special assessments constitute a lien against the assessable real estate within the District and are
to be deposited into the Special Improvement District No. 346 Fund of the City (the “Debt Service Fund”)
and the Principal Subaccount and Interest Subaccount of the District Account established therein. This
Series 2026B Bond is a special, limited obligation of the City and is not a general obligation of the City.
The City has also validly established a Special Improvement District No. 346 Reserve Subaccount
(the “Reserve Subaccount”) to secure the payment of this Series 2026B Bond. The City has agreed, to the
extent permitted by the Act, to issue orders authorizing loans or advances from the Reserve Subaccount to
Debt Service Fund in amounts sufficient to make good any deficiency in the Debt Service Fund to pay
principal of or interest on the Series 2026B Bond to the extent that funds are available in the Reserve
Subaccount, and to provide funds for the Reserve Subaccount by an initial deposit of proceeds of the Series
2026B Bond in the Reserve Subaccount. In addition, the City has covenanted to comply with the
requirements of the Code and the Regulations in order that the Reserve Subaccount comply and continue
to qualify as “reasonably required” debt service Reserve Subaccount for the Series 2026B Bond.
The Borrower may prepay the principal of the Series 2026B Bond only if (i) a Determination
Statement has been delivered, (ii) it obtains the prior written consent of the DNRC thereto, and (iii) no Loan
Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. Any
prepayment permitted by the DNRC must be accompanied by payment of accrued interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the
amount of principal prepaid. If the Series 2026B Bond is prepaid in part, such prepayments shall be applied
to principal payments in inverse order of maturity.
As provided in the Resolution and subject to certain limitations set forth therein, this Series 2026B
Bond is transferable upon the books of the City at the operations center of the Registrar, by the registered
owner hereof in person or by the owner’s 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
the owner’s attorney, and may also be surrendered in exchange for Series 2026B Bonds of other authorized
denominations. Upon such transfer or exchange, the City will cause a new Series 2026B Bond or Series
2026B 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.

A-2-2

The City and the Registrar may deem and treat the person in whose name this Series 2026B Bond
is registered as the absolute owner hereof, whether this Series 2026B Bond is overdue or not, for the 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.
The City has not designated this Series 2026B Bond as a “qualified tax-exempt obligation” for
purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.
IT IS CERTIFIED, RECITED, COVENANTED AND AGREED that all things required to be done
precedent to the issuance of this Series 2026B Bond have been properly done, happened and been performed
in the manner prescribed by the laws of the State of Montana and the resolutions and ordinances of the City
of Kalispell, Montana, relating to the issuance thereof; and that the opinion attached hereto is a true copy
of the legal opinion given by Bond Counsel with reference to the Series 2026B Bonds, dated the date of
original issuance and delivery of the Series 2026B Bonds.
This Series 2026B 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 and Registration herein
shall have been executed by the Registrar by the manual signature of one of its authorized representatives.

(The remainder of this page is intentionally left blank.)

A-2-3

IN WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana, by its City Council,
has caused this Series 2026B Bond to be executed on its behalf by the facsimile or manual signatures of the
Mayor, City Manager and Finance Director and has caused this Series 2026B Bond to be dated as of the
date first written above.
CITY OF KALISPELL, MONTANA

Mayor

City Manager

ATTEST:

Finance Director

City Clerk

A-2-4

REGISTRATION AND TRANSFER
The Series 2026B Bond shall be fully registered as to both principal and interest. No transfer of the
Series 2026B Bond shall be valid unless and until (1) the registered holder of the Series 2026B Bond, or
his duly authorized attorney or legal representative, executes the form of assignment appearing on the Series
2026B Bond, and (2) the Finance Director as bond registrar (the “Registrar”), has duly noted the transfer
on the Series 2026B Bond and recorded the transfer on the Registrar’s registration books. The City shall be
entitled to deem and treat the person in whose name the Series 2026B Bond is registered as absolute owner
thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the Series
2026B Bond shall be made only to the order of the registered holder thereof, and all such payments shall
be valid and effectual to satisfy and discharge the City’s liability upon the Bond to the extent of the sum or
sums so paid.
REGISTER
The ownership of the outstanding principal balance of the Series 2026B Bond and the interest
accruing thereon is registered on the books of City of Kalispell, Montana in the name of the registered
holder appearing on the first page hereof or as last noted below:
Date of
Registration

October ___, 2026

Name and Address
of Registered Holder
Department of Natural
Resources and Conservation
1625 Eleventh Avenue
Helena, MT 59620

Signature of
Finance Director

THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The Finance Director of the City of Kalispell, Montana, acting as Bond Registrar, has transferred,
on the books of the City, on the date last noted below, ownership of the principal amount of and the accrued
interest on the Series 2026B Bond to the new registered holder noted next to such date, except for amounts
of principal and interest theretofore paid.
Date of Transfer

Name of New
Registered Holder

A-2-5

Signature of
Bond Registrar

FORM OF ASSIGNMENT
For value received, the Series 2026B Bond is hereby transferred and assigned by the undersigned
holder, without recourse, to _____________________________________________________________
on this _____ day of ___________________________, _____.

By:

For:

A-2-6

(Authorized Signature)

(Holder)

SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED

Date

Advances

Total Amount
Advanced

A-2-7

Notation Made by

SCHEDULE B
PAYMENT SCHEDULE

A-2-8

EXHIBIT B
City of Kalispell, Montana
Special Improvement District Bonds
(Special Improvement District No. 346 (Morning Star Community Sewer Improvements))
$67,415 Subordinate Lien Taxable Series 2026A
$71,000 Series 2026B
COMPLIANCE CERTIFICATE AND REQUEST
We, Mayor, City Manager and Finance Director, hereby certify that we are on the date hereof the
duly qualified and acting Mayor, City Manager and Finance Director, respectively, of the City of Kalispell,
Montana (the “City”), and that:
1.
Pursuant to a Resolution adopted on September 21, 2026 (the “Resolution”), the City issued
its (i) Special Improvement District Bond (Special Improvement District No. 346 (Morning Star
Community Sewer Improvements)), Subordinate Lien Taxable Series 2026A, dated, as originally issued, as
of October ____, 2026, in the maximum aggregate principal amount of $67,415 (the “Series 2026A Bond”),
and (ii) Special Improvement District Bond (Special Improvement District No. 346 (Morning Star
Community Sewer Improvements)), Tax-Exempt Series 2026B, dated, as originally issued, as of
October ____, 2026, in the maximum aggregate principal amount of $71,000 (the “Series 2026B Bond,”
and together with the Series 2026A Bond, the “Series 2026 Bonds”). The City has reviewed the Resolution,
including, without limitation, Section 3 thereof. The City acknowledges and agrees that the Series 2026A
Bond evidences a loan made to the City from the DNRC from funds made available to the DNRC, and that
this Certificate is being relied upon by the DNRC for ensuring compliance with requirements applicable to
the City, the DNRC, and the Improvements (as hereinafter defined). Capitalized terms used herein without
definition shall have the meanings given them in the Resolution.
2.
The Series 2026A Bond is issued to finance costs of local sewer improvements (the
“Improvements”) to benefit the property located at 1717 South Woodland Drive in the City, generally
described in the Resolution and to pay costs of issuing the Series 2026 Bonds. Construction of the
Improvements have complied with all federal and state standards, including, without limitation, EPA
regulations and standards. The Improvements have been completed.
3.
Costs of the Improvements in the amount of $__________ have been paid as of the date of
delivery of this Certificate. The City hereby waives its right to any remaining 2026B Committed Amount
not advanced or to be advanced upon delivery hereof. The City specifically confirms and agrees that any
remaining amounts of the 2026 Loans to be lent to the City, if any, shall be evidenced by the Series 2026B
Bond.
4.
As of the date hereof, the City has spent the following amounts in connection with the
Improvements and costs related thereto:
Professional Services
Debt Service Reserve
Bond Counsel & Related costs
Construction Engr. Services
Construction
TOTAL PROJECT COSTS

$

$

Of such amounts, $__________ were paid from advances of proceeds of the Series 2026A Bond.

B-1

5.
The Trustee has delivered to the City a copy of Schedule B to be attached to the Series
2026A Bond, which reflects the amortization of all advances made or to be made on the date hereof of
proceeds of the Series 2026A Bond (i.e., $__________). The City hereby acknowledges and agrees that
Schedule B has been calculated in accordance with the provisions of the Resolution, and that the Series
2026A Bond, with said Schedule B attached to each thereto, have been duly issued pursuant to the
Resolution and are a valid and binding obligation of the City in accordance with its terms and the terms of
the Resolution; provided, however, if the DNRC delivers a Forgiveness Statement, the City’s obligation to
repay the principal of the Series 2026A Bond and interest and surcharges thereon is thereupon forgiven,
and if the DNRC delivers a Noncompliance Certificate, amounts advanced under the Series 2026A Loan
evidenced by the Series 2026A Bond at the rate of two percent (2.00%) per annum and the City shall pay
currently with interest and the Administrative Expense Surcharge and the Loan Loss Reserve Surcharge, all
as described in the Resolution authorizing the Series 2026A Bond.
6.
The representations of the City contained in Sections 2 and 3 of the Resolution are true and
complete as of the date hereof as if made on this date, except to the extent that the City has specifically
advised the DEQ and the DNRC otherwise in writing.
7.
No default in any covenant or agreement on the part of the City contained in the Resolution
has occurred and is continuing.
8.
The City is delivering this Certificate to the DNRC, in part, to ensure compliance with EPA
regulations and standards. The City certifies that all laborers and mechanics employed by contractors and
subcontractors on the Improvements have been and will be paid wages at rates not less than those prevailing
on projects of a character similar in the locality as determined by the United States Secretary of Labor in
accordance with Subchapter IV of Chapter 31 of Title 40, United States Code, and that the iron and steel
products used in the Improvements comply with the “American Iron and Steel” requirements of Section
436 of the Consolidated Appropriations Act of 2016 (P.L. 113-76), as those requirements are further
interpreted by applicable EPA guidance.
9.
The City acknowledges and agrees that this Certificate completed by the City in form
satisfactory to the DNRC must be executed and delivered to the DNRC by the date that is 30 days after
receipt of the form of this Certificate from the DNRC. By submitting this Certificate, the City requests that
the DNRC forgive the obligation of the City to repay the principal of the Series 2026A Bond, together with
interest and surcharges thereon. The City acknowledges and agrees that (i) the forgiveness of principal of
and interest and surcharges on the Series 2026A Bond by the DNRC is contingent on the timely delivery of
this Certificate by the City in satisfactory form as determined in the DNRC’s sole and complete discretion,
(ii) the DNRC has no obligation to grant such forgiveness, and (iii) if the DNRC delivers to the City a
Noncompliance Certification, the obligation of the City to repay the principal of the Series 2026A Bond
plus interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge thereon shall
continue in full force and effect until the principal of the Series 2026A Bond advanced and interest,
Administrative Expense Surcharge and Loan Loss Reserve Surcharge thereon are paid in full, as set forth
in Schedule B delivered pursuant to paragraph 5 above, and as provided in the Series 2026A Bond and the
Resolution.

B-2

WITNESS our hands on behalf of the City as of this _____ day of _______________, 20___.
CITY OF KALISPELL, MONTANA

Mayor

City Manager

Finance Director

B-3

RESOLUTION NO. 6356
RESOLUTION AUTHORIZING THE ISSUANCE OF SPECIAL IMPROVEMENT
DISTRICT BONDS (SPECIAL IMPROVEMENT DISTRICT NO. 347 (MORNING
STAR COMMUNITY WATER IMPROVEMENTS)), (I) SUBORDINATE LIEN
TAXABLE SERIES 2026C, AND (II) TAX-EXEMPT SERIES 2026D; FIXING THE
FORM AND DETAILS AND PROVIDING FOR THE EXECUTION AND
DELIVERY THEREOF AND SECURITY THEREFOR
BE IT RESOLVED by the City Council (the “City Council”) of the City of Kalispell, Montana (the
“City”), as follows:
Section 1.
1.01

Recitals. It is found, determined and declared as follows:

Special Improvement District No. 347.

Special Improvement District No. 347 (Morning Star Community) (the “District”) was established
by Resolution No. 6259, adopted by the City Council on June 16, 2025 (“Intent Resolution”).
Section 2.

Method of Financing.

2.01
The City will issue its Special Improvement District Bonds, in two series, one a taxable
Series 2026C Bond (the “Series 2026C Bond”) in the maximum principal amount of up to $185,000 (the
“Series 2026C Loan”), and the other a Tax Exempt Series 2026D Bond (the “Series 2026D Bond” or the
“Series 2026 Tax-Exempt Bond,” and together with the Series 2026C Bond, the “Series 2026 Bonds”) in
the maximum principal amount of up to $185,000 (the “Series 2026D Loan,” and together with the Series
2026C Loan, the “2026 Loans”), and will loan the proceeds of the 2026 Loans to Morning Star Community,
Inc. (“Morning Star”), in order to finance a portion of the costs of local water improvements (the
“Improvements”) to benefit the property located at 1717 South Woodland Drive in the City (“Morning Star
Community”). Principal of and interest on the Series 2026 Bonds will be paid from a special assessment
levied against property located in the District for drinking water improvements (the “Assessments”). The
City Council further finds it is in the public interest and in the best interest of the City and the District to
secure payment of the principal and interest on the Series 2026D Bond from amounts on deposit in a reserve
account or fund.
2.02
Construction Contracts and Related Costs. Plans, specifications, maps, profiles and surveys
for construction of the Improvements in the District were prepared by the engineers acting for the City with
respect to the Improvements and were thereupon examined and approved by this City Council. An
advertisement for bids for construction of the Improvements in the District was published by the City, in
accordance with the provisions of Section 7-12-4141 of the Act, after which the bids theretofore received
were opened and examined. The City, along with officials from the Morning Star Community and its
independent third-party consultants, subsequently reviewed the bids for the Improvements to the District,
and the City, along with input from the Morning Star Community and its independent third-party
consultants, subsequently awarded the contract for construction of the Improvements in the District to the
contractors determined to be the lowest bidders for the furnishing of all work and material required for
constructing the Improvements in the District.
2.03
Costs. The costs of the Improvements to be funded from the Series 2026 Bonds and other
sources are currently estimated and shown on the table on the following page:

District
Grant and Loan
Administration
Line of Credit Origination
and Interest
Loan Reserves
Bond Counsel and Related
Costs of
Preliminary Engineering
and Design
Final Engineering Design
Construction Inspection
Eng.
Construction
Contingency
City Water
Connection/Impact Fees
Total

Estimated Estimated
Cost paid
Cost paid Estimated
from Series from Series Costs from
2026C Bond 2026D Bond MCEP
proceeds
proceeds
Grant

$ 12,650

Estimated
Cost paid
from WiiN
Funds

Estimated
Cost paid
from
Morning
CDBG
Funds Star Equity

$ 36,333

$ 36,333

38,400

38,400
12,650

10,000

$ 76,693
108,307

54,043
108,307

$185,000

$185,000

Total

10,000
$12,500

12,175

$120,550

40,303
224,847

89,484
289,966

$428,609

127,060
$479,118

$500,000

$428,609

12,500
132,725
129,787
1,074,158
216,614

$12,500

127,060
$1,790,227

The City currently estimates that the costs and expenses to be specially assessed against the
Morning Star Community, which is the only property benefited by the Improvements in the District, for
which the City has not already received payment, including costs of preparation of plans, specifications,
maps, profiles, engineering superintendence and inspection, preparation of assessment rolls, expenses of
making the special assessments, the cost of work and materials under the construction contracts and all
other costs and expenses, are not less than $780,000. Such amount will be levied and assessed upon Morning
Star’s assessable real property within the District on the basis described in the Intent Resolution.
This City Council has jurisdiction and is required by law to levy and assess $780,000, together with
interest thereon, to collect such special assessments and credit the same to the District Account (defined
herein) created for the District, which District Account is to be maintained on the official books and records
of the City separate from all other City funds, for the payment of principal and interest due on the Series
2026 Bonds.
2.04

The 2026 Loans; Disbursement of the 2026 Loans.

(a)
The Department of Natural Resources and Conservation of the State of Montana, an agency
of the State of Montana (the “DNRC”), has agreed to lend to the City, from time to time as the requirements
of this Section are met, an amount up to: (i) $185,000 (the “2026A Committed Amount”); and (ii) $185,000
(the “2026B Committed Amount,” and together with the 2026A Committed Amount, the “Committed
Amounts”) for the purposes of financing, refinancing or reimbursing the City for costs of the Improvements
in the District, funding a deposit (the “Reserve Requirement”) to the Reserve Subaccount (defined herein),
and paying costs of issuance of the Series 2026 Bonds; provided the DNRC shall not be required to disburse
any proceeds of the 2026 Loans after December 31, 2028. The Committed Amounts may be reduced as
provided in this Resolution. If the City complies with certain conditions for principal forgiveness, the City’s
obligation to repay the Series 2026C Bond will be forgiven by the DNRC and the City will cancel the
associated special assessments.
(b)
The DNRC intends to disburse the 2026 Loans through U.S. Bank Trust Company,
National Association, as trustee (the “Trustee”) under the State of Montana’s General Obligation Bonds

2

(Drinking Water State Revolving Fund Program), issued or to be issued pursuant to the Indenture of Trust,
dated as of May 1, 1998, between the Board of Examiners of the State and the Trustee, as such may be
supplemented or amended from time to time. In consideration of the issuance of the Series 2026 Bonds by
the City, the DNRC shall make, or cause the Trustee to make, a disbursement of all or a portion of the 2026
Loans upon receipt of the following documents;
(i)
an Opinion of Bond Counsel as to the validity and enforceability of the Series 2026
Bonds and the security therefor and stating in effect that interest on the Series 2026D Bond, and if
the City has met the requirements for the forgiveness of the Series 2026C Loan, the Series 2026C
Bond, is not includable in gross income of the owner thereof for purposes of federal income
taxation, in form and substance satisfactory to the DNRC;
(ii)
the Series 2026C Bond and the Series 2026D Bond, fully executed and
authenticated in substantially the forms attached hereto as Exhibit A-l and Exhibit A-2,
respectively;
(iii)

a certified copy of this Resolution;

(iv)
any other security instruments or documents required by the DNRC or DEQ as a
condition to their approval of the 2026 Loans;
(v)
if all or part of a 2026 Loan is being made to refinance the Improvements or
reimburse the City for costs of the Improvements paid prior to the date of delivery of the Series
2026 Bonds (the “Closing”), evidence, satisfactory to the DNRC and Bond Counsel, (A) that the
acquisition or construction of the Improvements was begun no earlier than March 7, 1985 or the
debt was incurred no earlier than March 7, 1985, (B) of the City’s title to the Improvements, (C) of
costs of such Improvements and that such costs have been paid by the City, and (D) if such costs
were paid before adoption of this Resolution that the City has complied with Section 1.150-2 of the
Regulations; and
(vi)
such other certificates, documents and other information as the DNRC, the
Department of Environmental Quality of the State of Montana, an agency of the State (the “DEQ”),
or the Opinion of Bond Counsel referred to in subparagraph (1) may require (including any
necessary arbitrage rebate instructions).
(c)
In order to obtain a disbursement of a portion of the 2026 Loans to pay a portion of the
costs of the Improvements, the City shall submit to the DNRC and the Trustee a signed request for
disbursement on the form prescribed by the DNRC, with all attachments required by such form. The City
may obtain disbursements only for costs which have been legally incurred and are due and payable. All
2026 Loan disbursements will be made to the City only upon proof that cost was incurred.
(d)
From and after the first advance of funds of the Series 2026D Loan by the DNRC to the
City in an amount of at least $9,250 (the “2026B First Advance”), the 2026 Loans shall be disbursed, subject
to the other terms and conditions of this Resolution, in the following order;
(i)
First, the total amount of each advance will be split equally between the Series
2026C Loan and the Series 2026D Loan, until the entire amount of the Series 2026C Loan is
advanced; provided that the initial advance shall include the 2026B First Advance.
(ii)
Second, after the Series 2026C Loan is advanced in full, all advances will be from
the Series 2026D Loan.

3

(e)
The City shall not be entitled to, and the DNRC shall have no obligation to make, the
2026B First Advance or any subsequent advance of any amounts under the Series 2026D Loan until such
time as the City shall have funded the Reserve Subaccount in an amount then required to satisfy the Reserve
Requirement for the applicable issue.
(f)
The City shall submit the request for the 2026B First Advance in the form required by the
DNRC so that it is received in sufficient time for the DNRC to process the information by the date desired
by the City for the making of the 2026B First Advance.
(g)
For refinancings, a disbursement schedule complying with the requirements of the Federal
Drinking Water Act (the “Safe Drinking Water Act”) shall be established by the DNRC and the City at
Closing.
(h)
If all or a portion of the 2026 Loans are made to reimburse a City for Improvement costs
paid by it prior to Closing, the City shall present at Closing the items required by (b) above relating to such
costs.
(i)
Notwithstanding anything herein to the contrary, the Trustee shall not be obligated to
disburse the 2026 Loans any faster or to any greater extent than it has available Series 2026 Bond proceeds
and other amounts available therefor in the Reserve Subaccount. The City acknowledges that if
Improvement costs are incurred faster than the City projected at Closing, there may be delays in making
2026 Loan disbursements for such costs. The DNRC will use its reasonable best efforts to obtain an
acceleration of such schedule if necessary.
(j)
Upon making each Series 2026C Loan disbursement and Series 2026D Loan disbursement,
the Trustee shall note such disbursement on Schedule A to the Series 2026C Bond and the Series 2026D
Bond, respectively. At Closing, Schedule A to the Series 2026D Bond shall note the 2026B First Advance
that is made.
(k)
The City agrees that it will deposit in the Reserve Subaccount upon receipt thereof, on the
date of the 2026B First Advance and any subsequent disbursement dates, any proceeds of the 2026B Loan
borrowed for the purpose of increasing the balance in the Reserve Subaccount to equal the Reserve
Requirement. The City further acknowledges and agrees that any portion of the 2026 Loans representing
capitalized interest shall be advanced only on January 1 and July 1 (each a “Payment Date”) and shall be
transferred by the Trustee on the Payment Date directly to the Revenue Bond Account. The amount of any
such transfer shall be a credit against the interest payments due on the Bonds and interest thereon shall
accrue only from the date of transfer.
(l)
Compliance by the City with its representations, covenants and agreements contained in
this Resolution and any security agreement, guaranty or other document or agreement delivered to the
DNRC securing the obligations of the City under this Resolution and the Series 2026 Bonds (the “Collateral
Documents”) shall be a further condition precedent to the disbursement of the 2026 Loans in whole or in
part. The DNRC and the Trustee, in their sole and absolute discretion, may make one or more
disbursements, in whole or in part, notwithstanding such noncompliance, and without liability to make any
subsequent disbursement of the 2026 Loans.
(m)
The determination of the pro-ration of the percentage of each disbursement between the
2026 Loans shall be made by the DNRC. It is the understanding of the City that the 2026 Loans are
anticipated to be disbursed with an intended allocation of 50% to the Series 2026C Loan and 50% to the
Series 2026D Loan.

4

2.05
Commencement of Loan Term. The City’s obligations under this Resolution shall
commence on the date hereof unless otherwise provided in this Resolution. However, the obligation to
make payments under Article I hereof shall commence only upon the first disbursement of the 2026B First
Advance.
2.06
Termination of Loan Term. The City’s obligations under this Resolution with respect to
the Series 2026 Bonds shall terminate upon payment in full of all amounts due under the Series 2026 Bonds
and this Resolution; provided, however, that the covenants and obligations provided in Section 8 of this
Resolution shall survive the termination of this Resolution.
2.07
Compliance with the Montana Constitution and Statutes. All acts, conditions and things
required by the Constitution and laws of the State of Montana, including the Act, in order to make the Series
2026 Bonds valid and binding special obligations in accordance with their terms and in accordance with
the terms of this Resolution have been done, do exist, have happened and have been performed in regular
and due form, time and manner as so required.
Section 3.

The Series 2026 Bonds.

3.01
Issuance and Sale of the Series 2026 Bonds. The City Council has investigated the facts
necessary and hereby finds, determines and declares it to be necessary and desirable for the City to issue
the Series 2026 Bonds to evidence the 2026 Loans. The Series 2026 Bonds are issued to the DNRC without
public sale as authorized under Montana law,
3.02
Terms. The Series 2026C Bond and the Series 2026D Bond shall be in the maximum
principal amount equal to the original 2026A Committed Amount and the 2026B Committed Amount,
respectively, shall each be issued as a single, fully registered bond numbered R-l, shall be dated as of the
date of delivery to the DNRC, and shall each bear interest at the rate charged by the DNRC on the 2026A
Loan and the 2026B Loan, respectively.
3.03
Interest and Surcharges. Until a written statement delivered to the City by the DNRC
(i) that the City’s obligation to repay the principal of the Series 2026C Bond is not forgiven (the
“Noncompliance Statement”) or (ii) in response to a Compliance Certificate and Request (in the form
attached hereto as Exhibit B) that the City’s obligation to repay the principal of the Series 2026C Bond is
forgiven (the “Forgiveness Statement,” and together with the Noncompliance Statement, the
“Determination Statement”), and so long as the City’s obligation to repay the principal of the 2026A Loan
is forgiven as provided in Section 3.04 below, amounts disbursed by the DNRC under this Resolution that
are evidenced by the Series 2026C Bond bear interest at the rate of zero percent (0.00%) per annum from
the date of each advance; provided, however, if the DNRC delivers to the City a Noncompliance Statement,
then all principal of the Series 2026C Bond advanced by the DNRC shall he payable and amounts disbursed
by the DNRC under this Resolution that are evidenced by the Series 2026C Bond shall bear interest at the
rate of two percent (2.00%) per annum, and in addition the City shall pay the Administrative Expense
Surcharge and the Loan Loss Reserve Surcharge from the date of each advance under the Series 2026C
Bond, each at the rate of twenty-five hundredths of one percent (0.25%) per annum. The 2026B Loan shall
each bear interest at the rate of two percent (2.00%) per annum and the City shall pay the Administrative
Expense Surcharge and Loan Loss Reserve Surcharge on the outstanding principal amounts of the 2026B
Loan at the rate of twenty-five hundredths of one percent (0.25%) per annum. For purposes of this
Resolution and the DNRC’s program, with respect to the 2026A Loan and the 2026B Loan, the term
“interest on the 2026 Loans” or “interest on the 2026A Loan” or “interest on the 2026B Loan”, when not
used in conjunction with a reference to any surcharges, shall include the Administrative Expense Surcharge
and the Loan Loss Reserve Surcharge, if applicable. The City shall pay all Loan Repayments and surcharges
in lawful money of the United States of America to the DNRC. Interest, Administrative Expense Surcharge,

5

and Loan Loss Reserve Surcharge shall be calculated on the basis of a year of 360 days comprising 12
months of 30 days each.
3.04

Repayment of 2026A Loan: Principal Forgiveness.

(a)
The City is obligated to repay the principal and interest and Administrative Expense
Surcharge and Loan Loss Reserve Surcharge on the 2026A Loan, unless the DNRC forgives the City’s
obligation to repay the principal of the 2026A Loan as provided below. Subject to the provisions of (b)
below, the Loan Repayments and the Administrative Expense Surcharge and Loan Loss Reserve Surcharge
on the 2026A Loan shall be due on each Payment Date as follows:
(i)
Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge
on the outstanding principal balance of the 2026A Loan shall be payable on each Payment Date
following the date of delivery of the DNRC of a Noncompliance Statement and concluding on
July 1, 2046; and
(ii)
The principal of the 2026A Loan shall be payable on each Payment Date beginning
on the Payment Date that is the first to occur following delivery by the DNRC of Noncompliance
Statement and concluding on July 1, 2046, and the amount of each principal payment shall be
calculated on the basis of a substantially level debt service at the rate of 2.00% per annum; provided
that principal of the 2026A Loan is payable only in amounts that are multiples of $1.
(b)
Notwithstanding (a) above, so long as the City is proceeding diligently to completion of
the Improvements and the City has executed and delivered the Compliance Certificate and Request to the
DNRC and DEQ in substantially the form attached hereto as Exhibit B within thirty (30) days after the date
that the Compliance Certificate and Request provided to the City by the DNRC, the DNRC will, following
review and approval of the Compliance Certificate and Request, deliver to the City a Forgiveness Statement
and the City will thereafter have no obligation to repay amounts advanced under the Series 2026C Bond or
interest or surcharges thereon and the Series 2026C Bond will be marked “CANCELLED” and returned by
the DNRC to the City. However, in the event the City fails to deliver timely the Compliance Certificate and
Request, or the City cannot submit the Compliance Certificate and Request because it cannot make the
certifications required therein, or the Compliance Certificate and Request is delivered in a form that deviates
materially from the attached hereto as Exhibit B as determined in the sole and absolute discretion of the
DNRC and the DEQ, or the DNRC or the DEQ determines at any time that the Improvements or any portion
thereof or of the work relating thereto fails to comply with DNRC program requirements, then the DNRC
will deliver to the City a Noncompliance Statement. Upon delivery of a Noncompliance Statement by the
DNRC to the City, all principal advanced or to be advanced under the Series 2026C Bond, together with
interest, Administrative Expense Surcharge, and Loan Loss Reserve Surcharge thereon from the date of
each advance, shall be payable as provided in (a) above.
(c)
In addition, in the event the DNRC delivers a Noncompliance Statement, the Series 2026
A Bond will continue in effect as a subordinate obligation.
3.05
Repayment of 2026B Loan. The Loan Repayments and surcharges on the 2026B Loan
required by this Section shall be due on each Payment Date, as follows:
(i)
interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge
on the outstanding principal balance of the 2026B Loan shall be payable on each January 1 and
July 1, beginning on January 1, 2027 and concluding on July 1, 2046; and
(ii)
the principal of the 2026B Loan shall be repayable on each Payment Date,
beginning on January 1, 2027, and concluding on July 1, 2046, and the amount of each principal
6

payment shall be calculated on the basis of a substantially level debt service at a rate of 2.50% per
annum; provided that principal of the 2026B Loan is payable only in amounts that are multiples of
$1,000.
3.06
Details Regarding 2026 Loan Repayments. Upon each disbursement of the 2026 Loans to
the City pursuant to this Resolution, the Trustee shall enter or cause to be entered the amount advanced on
Schedule A to the Series 2026C Bond and the Series 2026D Bond, as applicable, under “Advances” and
the total amount advanced under this Resolution, including such disbursement, under “Total Amount
Advanced.” Loan Repayments and the Administrative Expense Surcharge and the Loan Loss Reserve
Surcharge on the 2026B Loan and, if applicable, on the 2026A Loan, accrue on each such advance from
the date of disbursement and shall be due and payable on the dates and in the amounts shown in Schedule
B to the Series 2026C Bond and the Series 2026D Bond, as such Schedule B shall be modified from time
to time as provided in this Resolution. The portion of each such Loan Repayment consisting of principal,
of interest, of Administrative Expense Surcharge and of Loan Loss Reserve Surcharge shall be set forth in
Schedule B to the Series 2026C Bond and the Series 2026D Bond.
If DNRC shall have delivered a Noncompliance Statement, then Schedule B to the Series 2026C
Bond shall continue to reflect interest and surcharges on amounts advanced under the Series 2026C Bond
at the rate of 2.00% per annum. If the DNRC delivers a Forgiveness Statement, Schedule B to the Series
2026C Bond will be disregarded and of no effect.
Past-due Loan Repayments and the Administrative Expense Surcharge and the Loan Loss Reserve
Surcharge shall bear interest at the rate of ten percent (10.00%) per annum, until paid.
Any payment of principal and interest as to the Series 2026D Bond and, if applicable, the Series
2026C Bond, and the Administrative Expense Surcharge and the Loan Loss Reserve Surcharge as to the
Series 2026D Bond and, if applicable, the Series 2026C Bond under this Resolution shall be credited against
the same payment obligation under the Series 2026D Bond and, as applicable, the Series 2026C Bond.
3.07

Redemption of the Series 2026 Bonds.

(a)
Mandatory Redemption – Series 2026D Bonds. If on any Payment Date there will be a
balance in the Debt Service Fund after payment of the principal and interest due on all Series 2026D Bonds
drawn against it, either from (i) the prepayment of special assessments levied in the District or (ii) the
transfer of surplus proceeds from the Project Subaccount to the District Account and, subsequently, to the
Debt Service Fund, as provided in Section 4 hereof, then the Finance Director shall call for redemption on
the Payment Date outstanding Series 2026D Bonds, or portions thereof, in an amount which, together with
the interest thereon to the Payment Date, will equal the amount of such funds on deposit in the Debt Service
Fund on that date. The redemption price of the Series 2026D Bonds on such Payment Date shall equal the
amount of the principal amount of the Series 2026 B Bonds to be redeemed, plus interest accrued to the
date of redemption on the applicable Payment Date.
(b)
Optional Redemption – Series 2026D Bonds. The City may not prepay all or any part of
the outstanding principal amount of the Series 2026D Bond and, if applicable, the Series 2026C Bond,
unless (i) a Determination Statement has been delivered, (ii) it obtains the prior written consent of the
DNRC thereto, and (iii) no Loan Repayment or Administrative Expense Surcharge or Loan Loss Reserve
Surcharge is then delinquent. Any prepayment permitted by the DNRC must be accompanied by payment
of accrued interest, Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of
prepayment on the amount of principal prepaid. If the Series 2026 Bonds are prepaid in part pursuant to
this Section, such prepayments shall be applied to principal payments in inverse order of maturity.

7

(c)
Selection of Series 2026D Bonds for Redemption; Partial Redemption. If less than all of
the Series 2026D Bonds are to be redeemed, Series 2026D Bonds shall be redeemed in order of the stated
maturities thereof. If less than all Series 2026D Bonds of a stated maturity are to be redeemed, the Series
2026D Bonds of such maturity shall be selected for redemption in $1 principal amounts selected by the
Registrar by lot or other manner it deems fair. Upon partial redemption of a Series 2026D Bond, a new
Series 2026D Bond or Series 2026D Bonds will be delivered to the registered owner without charge,
representing the remaining principal amount thereof outstanding.
(d)
Notice and Effect of Redemption. The date of redemption and the principal amount of the
Series 2026D Bonds to be redeemed shall be fixed by the Finance Director, who shall give notice thereof
to the Registrar forty-five (45) days in advance in order for the Registrar to give notice, by first class mail,
postage prepaid, or by other means required by DTC (hereafter defined), to the owner or owners of such
Series 2026D Bonds at their addresses appearing in the Bond register, of the numbers of the Series 2026D
Bonds or portions thereof to be redeemed and the date on which payment will be made, which date shall be
not less than thirty (30) days after the date of mailing notice. On the date so fixed interest on the Series
2026D Bonds or portions thereof so redeemed shall cease.
3.08
Negotiability. Transfer and Registration. The Series 2026 Bonds shall be fully registered
as to both principal and interest, shall be initially registered in the name of and payable to the DNRC, and
shall be dated the date of delivery. While so registered, principal of and interest on the Series 2026 Bonds
shall be payable to the DNRC at the Office of the Department of Natural Resources and Conservation, 1625
Eleventh Avenue, Helena, Montana 59620 or such other place as may be designated by the DNRC in writing
and delivered to the City. The Series 2026 Bonds shall be negotiable, subject to the provisions for
registration and transfer contained in this Section. No transfer of the Series 2026 Bonds shall be valid unless
and until (1) the holder, or his duly authorized attorney or legal representative, has executed the form of
assignment appearing on the Series 2026 Bonds, and (2) the Finance Director of the City or their successor,
as bond registrar (the “Registrar”), has duly noted the transfer on the Series 2026 Bonds and recorded the
transfer on the registration books of the Registrar. The Registrar may, prior to noting and recording the
transfer, require appropriate proof of the transferor’s authority and the genuineness of the transferor’s
signature. The City shall be entitled to deem and treat the Person in whose name the Series 2026 Bonds are
registered as the absolute owner of the Series 2026 Bonds for all purposes, notwithstanding any notice to
the contrary, and all payments to the registered holder shall be valid and effectual to satisfy and discharge
the City’s liability upon such Series 2026 Bonds to the extent of the sum or sums so paid.
3.09
Execution, Registration and Delivery. The Series 2026 Bonds shall be prepared under the
direction of the Finance Director, or his or her designee, and shall be executed on behalf of the City by the
signatures of the Mayor, the City Manager, and Finance Director, provided that the signatures and the
corporate seal may be printed, engraved or lithographed facsimiles of the originals. The seal of the City
need not be impressed or imprinted on any Series 2026 Bond. In case any officer whose signature or a
facsimile of whose signature shall appear on the Series 2026 Bonds shall cease to be such officer before the
delivery of any Series 2026 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 2026 Bond shall be valid or obligatory for any purpose or entitled to any security or
benefit under this Resolution unless a certificate of authentication and registration on such Series 2026
Bond has been duly executed by the manual signature of an authorized representative of the Registrar.
Certificates of authentication and registration on different Series 2026 Bonds need not be signed by the
same representative. The executed certificate of authentication and registration on each Series 2026 Bond
shall be conclusive evidence that it has been authenticated and delivered under this Resolution. The Series
2026 Bonds shall be registered in order of their serial numbers by the Registrar, as attested by the Certificate
of Authentication, as of the date of issuance of the Series 2026 Bonds. When the Series 2026 Bonds have
been so executed, authenticated and registered, they shall be delivered by the Registrar to DNRC.

8

3.10
Form. The Series 2026C Bond shall be prepared in substantially the form attached hereto
as Appendix A-l. The Series 2026D Bond shall be prepared in substantially the form attached as Appendix
A-2.
3.11
Application of Bond Proceeds. The Finance Director shall credit the proceeds of the Series
2026 Bonds, when disbursed, as follows:
(a)
the District;
(b)

Up to $0 to the General Fund of the City for the City’s administrative fees with respect to
Up to $12,650 of the proceeds of the Series 2026D Bond to the Reserve Subaccount;

(c)
Up to $357,350 to the Project Subaccount in the District Account of the Debt Service Fund
for the cost of the Improvements and the payment of costs of issuance of the Series 2026 Bonds.
Section 4.

Debt Service Fund; Accounts Created Therein; Special Assessments.

4.01
Debt Service Fund. There is created and established a fund designated as the “Special
Improvement District No. 347 Fund” (the “Debt Service Fund”), which fund shall be maintained by the
Finance Director on the books and records of the City separate and apart from all other funds of the City.
Within the Debt Service Fund there shall be created and maintained a separate account of the District
designated as the “Special Improvement District No. 347 Account” (the “District Account”). Within the
District Account there shall be maintained three separate subaccounts, designated as the “Project
Subaccount,” the “Principal Subaccount,” and the “Interest Subaccount,” respectively.
4.02
Project Subaccount. There shall be credited to the Project Subaccount in the District
Account the sale proceeds of the Series 2026 Bonds as provided in this Resolution. Any earnings on
investment of money in the Project Subaccount shall be retained therein. All costs and expenses of
constructing the Improvements to be paid from proceeds of the Series 2026 Bonds shall be paid from time
to time as incurred and allowed from the Project Subaccount in accordance with the provisions of applicable
law, and money in the Project Subaccount shall be used for no other purpose; provided that upon completion
of the Improvements and after all claims and expenses with respect to the Improvements have been fully
paid and satisfied, any money remaining in the Project Subaccount shall be transferred to the Principal
Subaccount and then to the Debt Service Fund and used to redeem Series 2026 Bonds as provided in Section
3.07 hereof.
4.03

Principal Subaccount and Interest Subaccount.

(a)
Principal Subaccount and Interest Subaccount Generally. Money in the Principal
Subaccount and Interest Subaccount shall be used only for (i) payment of the principal of the Series 2026D
Bonds from the Principal Subaccount and interest on the Series 2026D Bonds from the Interest Subaccount
as such payments become due or (ii) to redeem Series 2026D Bonds. If the Series 2026C Bonds are not
forgiven, then principal and interest of the Series 2026C Bonds will be paid as set forth in this subsection.
(b)
Deposits to Principal Subaccount and Interest Subaccount. Upon the collection of the
installment of principal and interest due each year on the special assessments to be levied with respect to
the Improvements in the District, the Finance Director shall credit to the Interest Subaccount the District
Account so much of said special assessments as are collected as interest payments, and the balance thereof
to the Principal Subaccount. Interest income on money in the Principal Subaccount and the Interest
Subaccount shall be retained therein and used as any other funds therein. Any installment of a special
assessment paid prior to its due date with interest accrued thereon to the next succeeding Payment Date
shall be credited with respect to principal and interest payments in the same manner as other special

9

assessments are credited to the Principal Subaccount and the Interest Subaccount. All money in each
Interest Subaccount and Principal Subaccount shall be used to, respectively, (i) pay interest on the Series
2026 Bonds then due, then to (ii) pay principal on the Series 2026 Bonds then due. Prior to the applicable
Payment Date, the Finance Director shall transfer the applicable amount from the Principal Subaccount and
the Interest Subaccount to the Debt Service Fund to make the payment due on the Series 2026 Bonds on
such Payment Date. Subsequently, if any money is available, it may be used to redeem Series 2026 Bonds,
in accordance with Section 3.07 hereof. Redemption of the Series 2026 Bonds shall be in order of the
principal amounts they represent as provided in Section 3.07 hereof and interest shall be paid as accrued
thereon to the date of redemption, in accordance with the provisions of Section 7-12-4206 of the Act. In
addition, on the date of issuance of the Series 2026 Bonds, the accrued interest of the Series 2026 Bonds
shall be deposited in the Interest Subaccount.
4.04
Reserve Subaccount. The City hereby establishes the Special Improvement District No.
347 Reserve Subaccount (the “Reserve Subaccount”) to which the City will deposit a portion of the
proceeds of the Series 2026D Bonds in the amount of the Reserve Requirement on the date of the 2026B
First Advance. Amounts in the Reserve Subaccount may be used to pay principal of and interest on the
Series 2026D Bond if amounts in the Debt Service Fund are insufficient for such purpose on a payment
date.
Section 5.
City Covenants. The City covenants and agrees with the owners from time to time
of each of the Series 2026 Bonds that until all the Series 2026 Bonds and interest thereon are fully paid:
5.01
Compliance with Resolution. The City will hold the Debt Service Fund and the Reserve
Subaccount as trust funds, separate and apart from all of its other funds, and the City, its officers and agents,
will comply with all covenants and agreements contained in this Resolution.
5.02
Construction of Improvements. The City will do all acts and things necessary to enforce
the provisions of the construction contracts referred to herein and to ensure the completion of the
Improvements for the benefit of the District in accordance with the plans and specifications and within the
time therein provided and will pay all costs thereof promptly as incurred and allowed, out of Project
Subaccount of the Debt Service Fund and within the amount of the proceeds of the Series 2026 Bonds
appropriated thereto.
5.03
Levy of Assessments. The City will do all acts and things necessary for the final and valid
levy of special assessments upon all assessable real property of the District within the boundaries of the
District in accordance with the Constitution and laws of the State and the Constitution of the United States,
in an aggregate principal amount not less than $780,000.
The special assessments shall be levied on the basis set forth in the Intent Resolution and shall be
payable in equal, semiannual installments over a period not to exceed twenty (20) years, with interest on
the whole amount remaining unpaid at an annual rate equal to the sum of: (i) the average annual interest
rate borne by the Series 2026D Bonds, plus, (ii) in the discretion of the City, one-half of one percent (0.50%)
per annum. The special assessments to be levied will be payable on the 30th day of November in each of
the years 2026 through 2045, and on the 31st day of May in the years 2027 through 2046, inclusive, if not
theretofore paid, and shall become delinquent on such dates unless paid in full. The first partial payment of
each assessment shall include interest on the entire assessment from the date of original registration of the
Series 2026 Bonds, and each subsequent partial payment shall include interest for six (6) months on that
payment and the then remaining balance of the special assessment. The special assessments shall constitute
a lien upon and against the property against which they are made and levied, which lien may be extinguished
only by payment of the assessment with all penalties, cost and interest as provided in Section 7-12-4191 of
the Act. No tax deed issued with respect to any lot or parcel of land shall operate as payment of any
installment of the assessment thereon which is payable after the execution of such deed, and any tax deed
10

so issued shall convey title subject only to the lien of said future installments, as provided in Montana Code
Annotated, Section 15-18-214.
5.04
Reassessment. If at any time and for whatever reason any special assessment or tax herein
agreed to be levied is held invalid or determined by the City in its sole discretion needed to be reassessed
(including the forgiveness of the Series 2026C Bond), the City and this City Council, its officers and
employees, will take all steps necessary to correct the same and to reassess and re-levy the same, including
the ordering of work, with the same force and effect as if made at the time provided by law, ordinance or
resolution relating thereto, and will reassess and re-levy the same with the same force and effect as an
original levy thereof, as authorized in Section 7-12-4186 of the Act. Any special assessment, or
reassessment or re-levy shall, so far as is practicable, be levied and collected as it would have been if the
first levy had been enforced including the levy and collection of any interest accrued on the first levy.
If proceeds of the Series 2026 Bonds, including investment income thereon, are applied to the
redemption of such Series 2026 Bonds, as provided in Sections 7-12-4205 and 7-12-4206 of the Act, or if
refunding bonds are issued and the principal amount of the outstanding Series 2026 Bonds of the District
is decreased or increased, the City will reduce or increase, respectively, the special assessments levied in
the District and then outstanding pro rata by the principal amount of such prepayment or the amount above
or below the outstanding principal amount of bonds represented by the refunding bonds. The City and this
City Council, its officers and employees will reassess and re-levy such special assessments, with the same
effect as an original levy, in such reduced or increased amounts in accordance with the provisions of
Sections 7-12-4176 through 7-12-4178 of the Act.
5.05
Absence of Litigation. There is now no litigation pending or, to the knowledge of the City,
threatening or questioning: (i) the validity or regularity of the creation of the District, the contracts for
construction of the Improvements or the undertaking and agreement of the City to levy special assessments
therefor and to make good any deficiency in the collection thereof through the making of advances from
the Reserve Subaccount as security for the Series 2026 Bonds; the right and power of the City to issue the
Series 2026 Bonds; or (iii) in any manner questioning the existence of any condition precedent to the
exercise of the City’s powers in these matters. If any such litigation should be initiated or threatened, the
City will forthwith notify in writing the DNRC and will furnish the DNRC a copy of all documents,
including pleadings, in connection with such litigation.
5.06
Waiver of Penalty and Interest. The City covenants not to waive the payment of penalty or
interest on delinquent special assessments levied on Morning Star property in the District, unless the City
determines, by resolution of this City Council, that such waiver is in the best interest of the owners of the
outstanding Series 2026 Bonds.
Section 6.

Tax Matters.

6.01
Use of Improvements. The Improvements will be owned 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
Improvements or security for the payment of the Series 2026 Bonds which might cause the Series 2026
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”) and the applicable Regulations.
6.02
General Covenant. The City covenants and agrees with the owners from time to time of the
Series 2026 Bonds that it will not take or permit to be taken by any of its officers, employees or agents any
action which would cause the interest on the Series 2026 Bonds to become includable in gross income for
federal income tax purposes under the Code and applicable Treasury Regulations. By this Resolution, the
City covenants to take any and all actions within its powers to ensure that the interest on the Series 2026
11

Bonds will not become includable in gross income for federal income tax purposes under the Code and
applicable Regulations.
6.03
Arbitrage Certification. The Mayor, the City Manager and the Finance Director, being the
officers of the City charged with the responsibility for issuing the Series 2026 Bonds pursuant to this
Resolution, are authorized and directed to execute and deliver to the DNRC a certificate in accordance with
the provisions of Section 148 of the Code and the Regulations, stating that on the basis of facts, estimates
and circumstances in existence on the date of issue and delivery of the Series 2026D Bonds, it is reasonably
expected that the proceeds of the Series 2026D Bonds will be used in a manner that would not cause the
Series 2026 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code and the
Regulations.
6.04
Not Qualified Tax-Exempt Obligations. The Series 2026D Bonds do not qualify as
“qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code.
Section 7.
Authentication of Transcript. The officers of the City are authorized and directed
to furnish to DNRC and to bond counsel certified copies of all proceedings relating to the issuance of the
Series 2026 Bonds and such other certificates and affidavits as may be required to show the right, power
and authority of the City to issue the Series 2026 Bonds, and all statements contained in and shown by such
instruments, including any heretofore furnished, shall constitute representations of the City as to the truth
of the statements purported to be shown thereby.
Section 8.

Defeasance.

8.01
General. When the liability of the City on all Series 2026 Bonds issued under and secured
by this Resolution has been discharged as provided in this Section, all pledges, covenants and other rights
granted by this Resolution to the owners of such obligations shall cease.
8.02
Payment. The City may discharge its liability with reference to any Series 2026 Bond or
installment of interest thereon which is due on any date by on or before that date depositing with the
Registrar funds sufficient and providing proceeds available for the payment thereof in full, or if any Series
2026 Bond or installment of interest thereon shall not be paid when due, the City may nevertheless discharge
its liability with reference thereto by depositing with the Registrar funds sufficient and providing proceeds
available for the payment thereof in full with interest accrued to the date of such deposit or mailing.
8.03
Prepayment. The City may also discharge its liability with reference to any prepayable
Series 2026 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 and interest which are then due
thereon, provided that notice of such redemption has been duly given as provided in this Resolution.
8.04
Escrow. The City may also at any time discharge its liability in its entirety with reference
to the Series 2026 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 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 and interest to become due on all Series 2026 Bonds on or before
maturity or, if any Series 2026 Bond has been duly called for redemption or notice of such redemption has
been irrevocably provided for, on or before the designated redemption date.
8.05
Irrevocable Deposits. If an officer of the City is the Registrar, any deposit made under this
Section with the Registrar shall be irrevocable and held for the benefit of the owners of the Series 2026
Bonds in respect of which such deposits have been made.
12

Section 9.

Indemnification of DNRC and DEQ.

The City shall, to the extent permitted by law, indemnify and save harmless the DNRC and the
DEQ and their officers, employees and agents (each an ‘‘Indemnified Party” or, collectively, the
‘‘Indemnified Parties”) against and from any and all claims, damages, demands, expenses, liabilities and
losses of every kind asserted by or on behalf of any Person arising out of the acts or omissions of the City
or its employees, officers, agents, contractors, subcontractors, or consultants in connection with or with
regard or in any way relating to the condition, use, possession, conduct, management, planning, design,
acquisition, construction, installation or financing of the Improvements. The City shall, to the extent
permitted by law, also indemnify and save harmless the Indemnified Parties against and from all costs,
reasonable attorneys’ fees, expenses and liabilities incurred in any action or proceeding brought by reason
of any such claim or demand. If any proceeding is brought against an Indemnified Party by reason of such
claim or demand, the City shall, upon notice from an Indemnified Party, defend such proceeding on behalf
of the Indemnified Party.
Section 10.

Repeals and Effective Date.

10.01 Repeal. All provisions of other resolutions and other actions and proceedings of the City
and this City Council 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.
10.02 Effective Date. This Resolution shall take effect immediately upon its passage and adoption
by this City Council.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY
OF KALISPELL, THIS 21ST DAY OF SEPTEMBER. 2026.

ATTEST:

Kyle Waterman
Council President

Aimee Brunckhorst
City Clerk

13

APPENDIX A-1
[FORM OF THE SERIES 2026C BOND]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL
CITY OF KALISPELL
SPECIAL IMPROVEMENT DISTRICT BOND
(SPECIAL IMPROVEMENT DISTRICT NO. 347
(MORNING STAR COMMUNITY WATER IMPROVEMENTS))
SUBORDINATE LIEN TAXABLE SERIES 2026C
No.R-1
Dated: October ___, 2026

$185,000

FOR VALUE RECEIVED, the City of Kalispell, Montana (the “City”), a duly organized and
existing municipal corporation in Flathead County, Montana, acknowledges itself to be specially indebted
and hereby promises to pay to the Department of Natural Resources and Conservation of the State of
Montana (the “DNRC”), or its registered assigns, solely out of available funds in the District Account (the
“District Account”), the principal sum equal to the sum of the amounts entered on Schedule A attached
hereto under “Total Amount Advanced,” with interest on each such amount from the date such amount is
advanced hereunder at the rate of two percent (2.00%) per annum on the unpaid balance until paid, together
with an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge on the outstanding principal
amount of this Series 2026C Bond from the date of each advance of principal, each at the rate of twenty-five
hundredths of one percent (0.25%) per annum, all subject to the effect of the immediately following
paragraph. Principal, interest, Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall
be payable in semiannual installments payable on each January 1 and July 1 (each a “Loan Repayment
Date”) commencing with the Payment Date that is the first to occur following delivery by the DNRC to the
City of a statement that the City’s obligation to repay the principal amount of the 2026A Loan is not forgiven
and ending on July 1, 2046, all as described in the Resolution (as hereinafter defined), subject to earlier
redemption. Each installment shall be in the amount set forth opposite its due date in Schedule B attached
hereto under “Total Loan Payment.” The portion of each such payment consisting of principal, of interest,
of Administrative Expense Surcharge, and of Loan Loss Reserve Surcharge shall be as set forth in Schedule
B hereto. Upon each disbursement of 2026A Loan, the DNRC shall enter (or cause to be entered) the
principal amount advanced on Schedule A under “Advances” and the total amount advanced under the
Resolution, including such advance, under “Total Amount Advanced.” The DNRC shall prepare Schedule
B and any revised Schedule B, or cause Schedule B and any revised Schedule B to be prepared, as provided
in the Resolution, and the final Schedule B will reflect repayments under the Resolution. Schedule B shall
be calculated and recalculated on a level debt service basis assuming an interest rate of 2.50% per annum.
Past-due payments of principal and interest and Administrative Expense Surcharge and Loan Loss Reserve
Surcharge shall bear interest at the rate of ten percent (10.00%) per annum, until paid. Interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge shall be calculated on the basis of a
360-day year comprising 12 months of 30 days each. All payments under this Series 2026C Bond shall be
made to the registered holder of this Series 2026C Bond, at its address as it appears on the Bond register,
in lawful money of the United States of America.
NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SERIES 2026C BOND, IN
THE EVENT THAT THE CITY TIMELY DELIVERS A COMPLIANCE CERTIFICATE AND REQUEST
A-1-1

(AS DEFINED IN THE RESOLUTION) IN FORM AND SUBSTANCE SATISFACTORY TO THE
DNRC AND THE DNRC IN RESPONSE THERETO SUPPLIES TO THE CITY A FORGIVENESS
STATEMENT, THEN THEREUPON INTEREST SHALL BE DEEMED TO ACCRUE ON THE
PRINCIPAL ON THIS SERIES 2026C BOND FROM THE DATE OF EACH ADVANCE AT THE RATE
OF ZERO PERCENT (0.00%) PER ANNUM AND THE CITY’S OBLIGATION TO REPAY PRINCIPAL
ADVANCED HEREUNDER SHALL BE FORGIVEN, AND THE CITY SHALL HAVE NO
OBLIGATION TO REPAY THE DNRC OR ITS REGISTERED ASSIGNS ANY AMOUNTS
ADVANCED HEREUNDER OR INTEREST OR ANY SURCHARGE THEREON. THIS SERIES 2026C
BOND SHALL THEREUPON BE MARKED “CANCELLED” AND RETURNED BY THE HOLDER
TO THE CITY, AND THIS SERIES 2026C BOND SHALL NO LONGER CONSTITUTE AN
OBLIGATION OF THE CITY. IN ADDITION, UNTIL THE DELIVERY OF A DETERMINATION
STATEMENT BY THE DNRC TO THE CITY, THE OBLIGATION OF THE CITY TO REPAY THE
OUTSTANDING PRINCIPAL AMOUNT HEREOF SHALL BE DEFERRED UNTIL THE PAYMENT
DATE FIRST OCCURRING AFTER DELIVERY OF A NONCOMPLIANCE STATEMENT AND
INTEREST SHALL BE DEEMED TO ACCRUE ON THE PRINCIPAL OF THIS SERIES 2026C BOND
FROM THE DATE OF EACH ADVANCE UNTIL DELIVERY OF SUCH NONCOMPLIANCE
STATEMENT AT THE RATE OF ZERO PERCENT (0.00%) PER ANNUM.
This Series 2026C Bond is one of an issue of Special Improvement District No. 347 (Morning Star
Community Water Improvements)), Series 2026 Bonds of the City authorized to be issued in one or more
series from time to time, and constitutes a series in the maximum authorized principal amount of $185,000
(the “Series 2026C Bond”). The Series 2026C Bond is issued to finance a portion of costs of local water
improvements (the “Improvements”) to benefit the property located at 1717 South Woodland Drive in the
City (“Morning Star Community”) and to pay costs of issuance of the Series 2026 Bonds (as defined herein).
The Series 2026C Bond is issued pursuant to and in full conformity with the Constitution and laws of the
State of Montana thereunto enabling, including Montana Code Annotated, Title 7, Chapter 7, Part 44 and
45, as amended, and a Resolution No. _____ duly adopted by the City Council of the City on September 21,
2026 (the “Resolution”). Terms used with initial capital letters but not defined herein have the meanings
given to them in the Resolution. This Series 2026C Bond is issuable only as a single, fully registered bond.
This Series 2026C Bond is issued as a Subordinate Obligation payable out of District Fund. Simultaneously
herewith, the City is issuing its $185,000 Special Improvement District No. 347 (Morning Star Community
Water Improvements)), Tax-Exempt Series 2026D (the “Series 2026D Bond,” and together with the Series
2026C Bond, the “Series 2026 Bonds”), which is payable from the District Fund. Following the 2026B
First Advance, the total amount of each advance will be split equally between the Series 2026C Bond and
the Series 2026D Bond, until the entire amount of the Series 2026C Bond is advanced.
Reference is made to the Resolution for a more complete statement of the terms and conditions
upon which this Series 2026C Bond has been issued, the conditions upon which the Resolution may be
amended, the rights, duties and obligations of the City, and the rights of the owners of this Series 2026C
Bond.
The City may prepay the principal of this Series 2026C Bond only if (i) a Determination Statement
has been delivered, (ii) it obtains the prior written consent of the DNRC thereto, and (iii) no Loan
Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. Any
prepayment permitted by the DNRC must be accompanied by payment of accrued interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the
amount of principal prepaid. If this Series 2026C Bond is prepaid in part, such prepayments shall be applied
to principal payments in inverse order of maturity.

A-1-2

This Series 2026C Bond, including interest and any premium, is payable solely from the District
Fund and does not constitute a debt of the City within the meaning of any constitutional or statutory
limitation or provision.
The City may deem and treat the person in whose name this Series 2026C Bond is registered as the
absolute owner hereof, whether this Series 2026C Bond is overdue or not, for the purpose of receiving
payment and for all other purposes, and the City shall not be affected by any notice to the contrary. This
Subordinate Series 2026C Bond may be transferred as hereinafter provided.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that the City has duly
authorized and will forthwith construct and complete the Improvements to the Morning Star Community
described in the Resolution, that it will levy special assessment against property located in the District; that
all acts, conditions and things required by the Constitution and laws of the State of Montana and the
ordinances and resolutions of the City to be done, to exist, to happen and to be performed in order to make
this Series 2026C Bond a valid and binding special obligation of the City according to its terms have been
done, do exist, have happened and have been performed as so required; and that this Series 2026C Bond
and the premium, if any, and interest hereon are payable solely out of the District Fund and do not constitute
a debt of the City within the meaning of any constitutional or statutory limitation or provision and the
issuance of this Series 2026C Bond does not cause either the general or the special indebtedness of the City
to exceed any constitutional or statutory limitation.
IN WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana, by its City Council,
has caused this Series 2026C Bond to be executed on its behalf by the facsimile or manual signatures of the
Mayor, City Manager and Finance Director and has caused this Series 2026C Bond to be dated as of the
date first written above.
CITY OF KALISPELL, MONTANA

Mayor

City Manager

ATTEST:

Finance Director

City Clerk

A-1-3

REGISTRATION AND TRANSFER
The Series 2026C Bond shall be fully registered as to both principal and interest. No transfer of the
Series 2026C Bond shall be valid unless and until (1) the registered holder of the Series 2026C Bond, or
his duly authorized attorney or legal representative, executes the form of assignment appearing on the Series
2026C Bond, and (2) the Finance Director as bond registrar (the “Registrar”), has duly noted the transfer
on the Series 2026C Bond and recorded the transfer on the Registrar’s registration books. The City shall be
entitled to deem and treat the person in whose name the Series 2026C Bond is registered as absolute owner
thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the Series
2026C Bond shall be made only to the order of the registered holder thereof, and all such payments shall
be valid and effectual to satisfy and discharge the City’s liability upon the Bond to the extent of the sum or
sums so paid.
REGISTER
The ownership of the outstanding principal balance of the Series 2026C Bond and the interest
accruing thereon is registered on the books of City of Kalispell, Montana in the name of the registered
holder appearing on the first page hereof or as last noted below:
Date of
Registration

October ___, 2026

Name and Address
of Registered Holder
Department of Natural
Resources and Conservation
1625 Eleventh Avenue
Helena, MT 59620

Signature of
Finance Director

THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The Finance Director of the City of Kalispell, Montana, acting as Bond Registrar, has transferred,
on the books of the City, on the date last noted below, ownership of the principal amount of and the accrued
interest on the Series 2026C Bond to the new registered holder noted next to such date, except for amounts
of principal and interest theretofore paid.
Date of Transfer

Name of New
Registered Holder

A-1-4

Signature of
Bond Registrar

FORM OF ASSIGNMENT
For value received, the Series 2026C Bond is hereby transferred and assigned by the undersigned
holder, without recourse, to _____________________________________________________________
on this _____ day of ___________________________, _____.

By:

For:

A-1-5

(Authorized Signature)

(Holder)

SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED

Date

Advances

Total Amount
Advanced

A-1-6

Notation Made by

SCHEDULE B

Date

Principal

Interest

Administrative
Expense
Surcharge

A-1-7

Loan Loss
Reserve
Surcharge

Total Loan
Payment

EXHIBIT A-2
[FORM OF SERIES 2026D BOND]
UNITED STATES OF AMERICA
STATE OF MONTANA
COUNTY OF FLATHEAD
CITY OF KALISPELL, MONTANA
SPECIAL IMPROVEMENT DISTRICT BOND
(SPECIAL IMPROVEMENT DISTRICT NO. 347
(MORNING STAR COMMUNITY WATER IMPROVEMENTS))
TAX-EXEMPT SERIES 2026D
No. R-__
Dated: October ___, 2026

$185,000

FOR VALUE RECEIVED, CITY OF KALISPELL, MONTANA (the “Borrower”), a duly
organized municipal corporation and political subdivision of the State of Montana, acknowledges itself to
be specially indebted and, for value received, hereby promises to pay to the Department of Natural
Resources and Conservation of the State of Montana (the “DNRC”), or its registered assigns, solely from
the Debt Service Fund, the principal sum equal to the sum of the amounts entered on Schedule A attached
hereto under “Total Amount Advanced,” with interest on each such amount from the date such amount is
advanced hereunder at the rate of two percent (2.00%) per annum on the unpaid balance until paid. In
addition, the Borrower shall pay an Administrative Expense Surcharge and a Loan Loss Reserve Surcharge
on the outstanding principal amount of this Bond, each at the rate of twenty-five hundredths of one percent
(0.25%) per annum. Principal, interest and Administrative Expense Surcharge and Loan Loss Reserve
Surcharge shall be payable in semiannual installments payable on each January 1 and July 1, commencing
on January 1, 2027 and concluding on July 1, 2046. Each installment shall be in the amount set forth
opposite its due date in Schedule B attached hereto under “Total Loan Payment.” The portion of each such
payment consisting of principal, the portion consisting of interest, the portion consisting of Administrative
Expense Surcharge, and the portion consisting of Loan Loss Reserve Surcharge shall be as set forth in
Schedule B attached hereto. Upon each disbursement of 2026B Loan amounts to the Borrower pursuant to
the Resolution described below, the DNRC shall enter (or cause to be entered) the amount advanced on
Schedule A under “Advances” and the total amount advanced under the Resolution, including such
disbursement, under “Total Amount Advanced.” The DNRC shall prepare Schedule B and any revised
Schedule B, or cause Schedule B and any revised Schedule B to be prepared, as provided in Section 3.06
of the Resolution. Schedule B shall be calculated and recalculated on a level debt service basis assuming
an interest rate of 2.50% per annum. Past-due payments of principal and interest and Administrative
Expense Surcharge and Loan Loss Reserve Surcharge shall bear interest at the rate of ten percent (10.00%)
per annum, until paid. Interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge
shall be calculated on the basis of a 360-day year comprising 12 months of 30 days each. All payments
under this Series 2026D Bond shall be made to the registered holder of this Series 2026D Bond, at its
address as it appears on the Bond register, in lawful money of the United States of America.
This Series 2026D Bond is one of an issue of Special Improvement District Bond (Special
Improvement District No. 347 (Morning Star Community Water Improvements)), Series 2026 of the City
authorized to be issued in one or more series from time to time, and constitutes a series in the maximum
authorized principal amount of $185,000 (the “Series 2026D Bond”). The Series 2026D Bond is issued to
finance a portion of costs of local water improvements (the “Improvements”) to benefit the property located
at 1717 South Woodland Drive in the City (“Morning Star Community”) and to pay costs of issuance of the

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Series 2026 Bonds (as defined herein). The Series 2026D Bond is issued pursuant to and in full conformity
with the Constitution and laws of the State of Montana thereunto enabling, including Montana Code
Annotated, Title 7, Chapter 7, Part 44 and 45, as amended, and the Resolution. Terms used with initial
capital letters but not defined herein have the meanings given to them in the Resolution. This Series 2026D
Bond is issuable only as a single, fully registered bond. Simultaneously herewith, the City is issuing its
$185,000 Special Improvement District Bond (Special Improvement District No. 347 (Morning Star
Community Water Improvements)), Subordinate Lien Taxable Series 2026C (the “Series 2026C Bond,” and
together with the Series 2026D Bond, the “Series 2026 Bonds”), which is a subordinate obligation payable
out of District Fund. Following the 2026B First Advance, the total amount of each advance will be split
equally between the Series 2026C Bond and the Series 2026D Bond, until the entire amount of the Series
2026C Bond is advanced.
The Series 2026 Bonds are issuable only as fully registered bonds of single maturities in
denominations of $l or any integral multiple thereof.
This Series 2026D Bond is payable from the collection of an assessment levied upon all assessable
real property within the boundaries of the District, in an aggregate principal amount of not less than
$780,000, except as such amount may be reduced or increased in accordance with provisions of Montana
law. Such special assessments constitute a lien against the assessable real estate within the District and are
to be deposited into the Special Improvement District No. 347 Fund of the City (the “Debt Service Fund”)
and the Principal Subaccount and Interest Subaccount of the District Account established therein. This
Series 2026D Bond is a special, limited obligation of the City and is not a general obligation of the City.
The City has also validly established a Special Improvement District No. 347 Reserve Subaccount
(the “Reserve Subaccount”) to secure the payment of this Series 2026D Bond. The City has agreed, to the
extent permitted by the Act, to issue orders authorizing loans or advances from the Reserve Subaccount to
Debt Service Fund in amounts sufficient to make good any deficiency in the Debt Service Fund to pay
principal of or interest on the Series 2026D Bond to the extent that funds are available in the Reserve
Subaccount, and to provide funds for the Reserve Subaccount by an initial deposit of proceeds of the Series
2026D Bond in the Reserve Subaccount. In addition, the City has covenanted to comply with the
requirements of the Code and the Regulations in order that the Reserve Subaccount comply and continue
to qualify as “reasonably required” debt service Reserve Subaccount for the Series 2026D Bond.
The Borrower may prepay the principal of the Series 2026D Bond only if (i) a Determination
Statement has been delivered, (ii) it obtains the prior written consent of the DNRC thereto, and (iii) no Loan
Repayment or Administrative Expense Surcharge or Loan Loss Reserve Surcharge is then delinquent. Any
prepayment permitted by the DNRC must be accompanied by payment of accrued interest and
Administrative Expense Surcharge and Loan Loss Reserve Surcharge to the date of prepayment on the
amount of principal prepaid. If the Series 2026D Bond is prepaid in part, such prepayments shall be applied
to principal payments in inverse order of maturity.
As provided in the Resolution and subject to certain limitations set forth therein, this Series 2026D
Bond is transferable upon the books of the City at the operations center of the Registrar, by the registered
owner hereof in person or by the owner’s 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
the owner’s attorney, and may also be surrendered in exchange for Series 2026D Bonds of other authorized
denominations. Upon such transfer or exchange, the City will cause a new Series 2026D Bond or Series
2026D 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.

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The City and the Registrar may deem and treat the person in whose name this Series 2026D Bond
is registered as the absolute owner hereof, whether this Series 2026D Bond is overdue or not, for the 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.
The City has not designated this Series 2026D Bond as a “qualified tax-exempt obligation” for
purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.
IT IS CERTIFIED, RECITED, COVENANTED AND AGREED that all things required to be done
precedent to the issuance of this Series 2026D Bond have been properly done, happened and been
performed in the manner prescribed by the laws of the State of Montana and the resolutions and ordinances
of the City of Kalispell, Montana, relating to the issuance thereof; and that the opinion attached hereto is a
true copy of the legal opinion given by Bond Counsel with reference to the Series 2026D Bonds, dated the
date of original issuance and delivery of the Series 2026D Bonds.
This Series 2026D 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 and Registration herein
shall have been executed by the Registrar by the manual signature of one of its authorized representatives.

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IN WITNESS WHEREOF, the City of Kalispell, Flathead County, Montana, by its City Council,
has caused this Series 2026D Bond to be executed on its behalf by the facsimile or manual signatures of
the Mayor, City Manager and Finance Director and has caused this Series 2026D Bond to be dated as of
the date first written above.
CITY OF KALISPELL, MONTANA

Mayor

City Manager

ATTEST:

Finance Director

City Clerk

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REGISTRATION AND TRANSFER
The Series 2026D Bond shall be fully registered as to both principal and interest. No transfer of the
Series 2026D Bond shall be valid unless and until (1) the registered holder of the Series 2026D Bond, or
his duly authorized attorney or legal representative, executes the form of assignment appearing on the Series
2026D Bond, and (2) the Finance Director as bond registrar (the “Registrar”), has duly noted the transfer
on the Series 2026D Bond and recorded the transfer on the Registrar’s registration books. The City shall be
entitled to deem and treat the person in whose name the Series 2026D Bond is registered as absolute owner
thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the Series
2026D Bond shall be made only to the order of the registered holder thereof, and all such payments shall
be valid and effectual to satisfy and discharge the City’s liability upon the Bond to the extent of the sum or
sums so paid.
REGISTER
The ownership of the outstanding principal balance of the Series 2026D Bond and the interest
accruing thereon is registered on the books of City of Kalispell, Montana in the name of the registered
holder appearing on the first page hereof or as last noted below:
Date of
Registration

October ___, 2026

Name and Address
of Registered Holder
Department of Natural
Resources and Conservation
1625 Eleventh Avenue
Helena, MT 59620

Signature of
Finance Director

THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND
REGISTRAR UPON REGISTRATION OF EACH TRANSFER
The Finance Director of the City of Kalispell, Montana, acting as Bond Registrar, has transferred,
on the books of the City, on the date last noted below, ownership of the principal amount of and the accrued
interest on the Series 2026D Bond to the new registered holder noted next to such date, except for amounts
of principal and interest theretofore paid.
Date of Transfer

Name of New
Registered Holder

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Signature of
Bond Registrar

FORM OF ASSIGNMENT
For value received, the Series 2026D Bond is hereby transferred and assigned by the undersigned
holder, without recourse, to _____________________________________________________________
on this _____ day of ___________________________, _____.

By:

For:

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(Authorized Signature)

(Holder)

SCHEDULE A
SCHEDULE OF AMOUNTS ADVANCED

Date

Advances

Total Amount
Advanced

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Notation Made by

SCHEDULE B
PAYMENT SCHEDULE

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EXHIBIT B
City of Kalispell, Montana
Special Improvement District Bonds
(Special Improvement District No. 347 (Morning Star Community Water Improvements))
$185,000 Subordinate Lien Taxable Series 2026C
$185,000 Series 2026D
COMPLIANCE CERTIFICATE AND REQUEST
We, Mayor, City Manager and Finance Director, hereby certify that we are on the date hereof the
duly qualified and acting Mayor, City Manager and Finance Director, respectively, of the City of Kalispell,
Montana (the “City”), and that:
1.
Pursuant to a Resolution adopted on September 21, 2026 (the “Resolution”), the City issued
its (i) Special Improvement District Bond (Special Improvement District No. 347 (Morning Star
Community Water Improvements)), Subordinate Lien Taxable Series 2026C, dated, as originally issued, as
of October ____, 2026, in the maximum aggregate principal amount of $185,000 (the “Series 2026C
Bond”), and (ii) Special Improvement District Bond (Special Improvement District No. 347 (Morning Star
Community Water Improvements)), Tax-Exempt Series 2026D, dated, as originally issued, as of
October ____, 2026, in the maximum aggregate principal amount of $185,000 (the “Series 2026D Bond,”
and together with the Series 2026C Bond, the “Series 2026 Bonds”). The City has reviewed the Resolution,
including, without limitation, Section 3 thereof. The City acknowledges and agrees that the Series 2026C
Bond evidences a loan made to the City from the DNRC from funds made available to the DNRC, and that
this Certificate is being relied upon by the DNRC for ensuring compliance with requirements applicable to
the City, the DNRC, and the Improvements (as hereinafter defined). Capitalized terms used herein without
definition shall have the meanings given them in the Resolution.
2.
The Series 2026C Bond is issued to finance costs of local water improvements (the
“Improvements”) to benefit the property located at 1717 South Woodland Drive in the City, generally
described in the Resolution and to pay costs of issuing the Series 2026 Bonds. Construction of the
Improvements have complied with all federal and state standards, including, without limitation, EPA
regulations and standards. The Improvements have been completed.
3.
Costs of the Improvements in the amount of $__________ have been paid as of the date of
delivery of this Certificate. The City hereby waives its right to any remaining 2026B Committed Amount
not advanced or to be advanced upon delivery hereof. The City specifically confirms and agrees that any
remaining amounts of the 2026 Loans to be lent to the City, if any, shall be evidenced by the Series 2026D
Bond.
4.
As of the date hereof, the City has spent the following amounts in connection with the
Improvements and costs related thereto:
Professional Services
Debt Service Reserve
Bond Counsel & Related costs
Construction Engr. Services
Construction
TOTAL PROJECT COSTS

$

$

Of such amounts, $__________ were paid from advances of proceeds of the Series 2026C Bond.

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5.
The Trustee has delivered to the City a copy of Schedule B to be attached to the Series
2026C Bond, which reflects the amortization of all advances made or to be made on the date hereof of
proceeds of the Series 2026C Bond (i.e., $__________). The City hereby acknowledges and agrees that
Schedule B has been calculated in accordance with the provisions of the Resolution, and that the Series
2026C Bond, with said Schedule B attached to each thereto, have been duly issued pursuant to the
Resolution and are a valid and binding obligation of the City in accordance with its terms and the terms of
the Resolution; provided, however, if the DNRC delivers a Forgiveness Statement, the City’s obligation to
repay the principal of the Series 2026C Bond and interest and surcharges thereon is thereupon forgiven,
and if the DNRC delivers a Noncompliance Certificate, amounts advanced under the Series 2026C Loan
evidenced by the Series 2026C Bond at the rate of two percent (2.00%) per annum and the City shall pay
currently with interest and the Administrative Expense Surcharge and the Loan Loss Reserve Surcharge, all
as described in the Resolution authorizing the Series 2026C Bond.
6.
The representations of the City contained in Sections 2 and 3 of the Resolution are true and
complete as of the date hereof as if made on this date, except to the extent that the City has specifically
advised the DEQ and the DNRC otherwise in writing.
7.
No default in any covenant or agreement on the part of the City contained in the Resolution
has occurred and is continuing.
8.
The City is delivering this Certificate to the DNRC, in part, to ensure compliance with EPA
regulations and standards. The City certifies that all laborers and mechanics employed by contractors and
subcontractors on the Improvements have been and will be paid wages at rates not less than those prevailing
on projects of a character similar in the locality as determined by the United States Secretary of Labor in
accordance with Subchapter IV of Chapter 31 of Title 40, United States Code, and that the iron and steel
products used in the Improvements comply with the “American Iron and Steel” requirements of Section
436 of the Consolidated Appropriations Act of 2016 (P.L. 113-76), as those requirements are further
interpreted by applicable EPA guidance.
9.
The City acknowledges and agrees that this Certificate completed by the City in form
satisfactory to the DNRC must be executed and delivered to the DNRC by the date that is 30 days after
receipt of the form of this Certificate from the DNRC. By submitting this Certificate, the City requests that
the DNRC forgive the obligation of the City to repay the principal of the Series 2026C Bond, together with
interest and surcharges thereon. The City acknowledges and agrees that (i) the forgiveness of principal of
and interest and surcharges on the Series 2026C Bond by the DNRC is contingent on the timely delivery of
this Certificate by the City in satisfactory form as determined in the DNRC’s sole and complete discretion,
(ii) the DNRC has no obligation to grant such forgiveness, and (iii) if the DNRC delivers to the City a
Noncompliance Certification, the obligation of the City to repay the principal of the Series 2026C Bond
plus interest and Administrative Expense Surcharge and Loan Loss Reserve Surcharge thereon shall
continue in full force and effect until the principal of the Series 2026C Bond advanced and interest,
Administrative Expense Surcharge and Loan Loss Reserve Surcharge thereon are paid in full, as set forth
in Schedule B delivered pursuant to paragraph 5 above, and as provided in the Series 2026C Bond and the
Resolution.

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WITNESS our hands on behalf of the City as of this _____ day of _______________, 20___.
CITY OF KALISPELL, MONTANA

Mayor

City Manager

Finance Director

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