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Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101-2887 Tel: [PHONE REDACTED] Fax: [PHONE REDACTED] www.springsted.com June 11, 2009 Mr. Brentt Ramharter Finance Director/Treasurer City of Missoula 435 Ryman Street Missoula, MT 59802-4297 Re: Recommendations for the Issuance of: $645,000 Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds, Series 2009 $750,000 Special Improvement District No. 541 Bonds Dear Mr. Ramharter: We have enclosed an electronic copy of our recommendations for the above-captioned issues for distribution to Council members and City staff prior to your meeting on Monday, June 15, 2009. If you should have any questions pertaining to the enclosed documents, or if you require additional copies, please do not hesitate to contact us. Sincerely, David R. Jaye David R. Jaye, Vice President Project Manager smc Enclosures ---PAGE BREAK--- *Preliminary; subject to change Presented to: Honorable John Engen, Mayor Members, City Council Mr. Bruce Bender, Chief Administrative Officer Mr. Brentt Ramharter, Finance Director/Treasurer City of Missoula City Hall 435 Ryman Missoula, Montana 59802 Study No.: 001286110108 SPRINGSTED Incorporated June 11, 2009 Recommendations For City of Missoula, Montana $645,000* Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds Series 2009 $750,000* Special Improvement District No. 541 Bonds ---PAGE BREAK--- RECOMMENDATIONS Re: Recommendations for the Issuance of: $645,000* Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds, Series 2009 (the “Sidewalk Bonds” or “Issue”) $750,000* Special Improvement District No. 541 Bonds (the “SIDs Bonds” or “Issue”) (collectively, the “Bonds” or “Issues”) We respectfully request your consideration of our recommendations for the above-named Issue. Sidewalk Bond proceeds will be used to finance the cost of installing curbs, gutters, sidewalks and alley approach projects in certain areas of the City. SIDs Bond proceeds will be used to finance Pine View park improvements. We recommend the following for the Bonds: 1. Action Requested To establish the date and time of receiving bids and establish the terms and conditions of the offering. 2. Sale Date and Time Monday, July 13, 2009 at 12:00 Noon Central - 11:00 A.M. Mountain, with consideration for award by the City Council at 7:00 P.M. that same day. 3. Method of Sale The Bonds will be sold using a competitive bidding process. In the interest of obtaining as many bids as possible, we have included a provision in the Notice of Bond Sale for underwriters to submit their bid electronically through the electronic bidding platform of PARITY®. In addition, physical bids (by phone or fax) will be accepted at the offices of Springsted. In the past we have permitted two means of providing the good faith deposits; either by certified/cashier’s check or a financial surety bond. Recently the sole provider of the financial surety bond for this purpose has imposed additional restrictions on its participants. In response, we are allowing an additional means of providing the good faith deposits, whereby Springsted would serve as your agent for the purpose of receiving good faith deposits submitted by wire transfer. 4. Authority for the Bond Issue The Bonds are being issued pursuant to Montana Code Title 7, Chapter 12, Parts 41 and 42. The Sidewalk Bonds are further authorized pursuant to Montana Code Title 7, Chapter 14, Part 41. * Preliminary; subject to change ---PAGE BREAK--- City of Missoula, Montana June 11, 2009 5. Principal Amount of Offering Sidewalk Bonds $645,000* SIDs Bonds $750,000* * Included in the Notices of Bond Sale for the Bonds is a provision that permits the City to increase or reduce the principal amount of the Bonds in any of the maturities. This allows for any necessary adjustments required based on final interest rates and issuance costs. 6. Repayment Term The Bonds will mature annually July 1, 2010 through July 1, 2029. Interest will be payable semi-annually each January 1, 2010 and July 1, commencing January 1, 2010. 7. Security, Source of Payment and Payment Cycle Security The Bonds will not be general obligations of the City but will be special limited obligations of the City. Source of Payment The Bonds will be repaid with special assessments spread against benefited properties. Each year’s first- half collection of assessments will be used to pay the interest payment due January 1 in the year following collection. Second-half collections of assessments plus surplus first-half collections will be used to pay the subsequent July 1 principal and interest payment. To the extent assessment income is insufficient, the Bonds are payable from a special revolving fund reserved for all such bonds of the City. Payment Cycle Interest on the assessments will commence accruing August 1, 2009. The City will collect sufficient assessment income to pay the January 1, 2010 and July 1, 2010 debt service payments. 8. Prepayment Provisions The City may elect on July 1, 2019, and on any date thereafter, to prepay the Bonds due on or after July 1, 2020, at a price of par plus accrued interest. In addition, the Bonds will be subject to extraordinary redemption, at any time, from prepayments of assessments. *Preliminary; subject to change Page 2 ---PAGE BREAK--- City of Missoula, Montana June 11, 2009 9. Credit Rating Comments An application will be made to Standard & Poor’s Ratings Services for ratings on the Bonds. In 2008 the City’s received a credit rating upgrade for its pooled assessment backed bonds. The City’s pooled curb and gutter debt and its special improvement district debt are currently rated “BBB+” by S&P. 10. Term Bonds We have included a provision that permits the underwriters to combine multiple maturity years into a term bond, subject to mandatory redemption on the same maturity schedule provided in the Notice of Bond Sale. The advantage to the underwriter is that it provides large blocks of bonds, which are more attractive to bond funds, and certain pension funds. This in turn is a benefit to the City since selling larger blocks of bonds reduces the risk to the underwriter, allowing them to lower their costs and the interest coupons. Since the Bonds are being offered on a competitive bid basis and awarded on the lowest true interest cost, the City will award the Bonds to the best bid regardless of whether term bonds are chosen or not. 11. Federal Treasury Regulations Concerning Tax- Exempt Obligations Bank Qualification Under Federal Tax Law, financial institutions cannot deduct from income for federal income tax purposes, expense that is allocable to carrying and acquiring tax- exempt bonds. There is an exemption to this for “bank qualified” bonds, which can be so designated if the issuer does not issue more than $30 million of tax exempt bonds in a calendar year. Issues that are bank qualified generally receive lower interest rates than issues that are not bank qualified. Since the City expects to issue less than $30 million of tax exempt obligations in 2009, these Issues are designated as bank qualified. The American Recovery and Reinvestment Tax Act of 2009 increased the previous bank qualification limit of $10 million to $30 million for tax-exempt bonds issued in 2009 and 2010. Page 3 ---PAGE BREAK--- City of Missoula, Montana June 11, 2009 Arbitrage Compliance All tax-exempt issues are subject to the federal arbitrage and rebate requirements, which require all excess earnings created by the financing to be rebated to the U.S. Treasury. The requirements generally cover two categories: bond proceeds and debt service funds. There are exemptions from rebate that may apply in both of these categories in regards to the Bonds. Rebate Bond proceeds, defined generally as both the original principal of the issue and the investment earnings on the principal, have 6, 18 and 24 month spend down exemption periods. If all of the proceeds are expended during one of those exemption periods, the issuer is exempt from rebate and may retain the excess earnings. Since the City is reimbursing itself from Sidewalk Bond proceeds for expenditure previously made, there should be no rebatable investment income earned on the Sidewalk Bond proceeds deposited into the construction fund. However, the deposit to the Revolving Fund will be subject to rebate. Although the Issues may be exempt from rebate, the City must still comply with the arbitrage regulations which require yield restriction of proceeds remaining in a project fund after the three-year temporary period. (ii) Yield Restriction The City must maintain a bona fide debt service fund for the Bonds or be subject to yield restriction. Yield restriction requires restricting the investment return in the debt service fund to the yield on the Bonds. A bona fide debt service fund is a fund for which there is an equal matching of revenue to debt service expense, with the fund spent down each year to a carry over permitted equal to the greater of the investment earnings in the fund during the prior year or 1/12 the debt service of the prior year. Additionally, all original proceeds of bonds and interest earnings on those proceeds must be expended within three years, or the remaining proceeds will be subject to yield restriction. Page 4 ---PAGE BREAK--- City of Missoula, Montana June 11, 2009 With issues having special assessments pledged as a source of repayment, such as the Bonds, additional diligence should be exercised in monitoring the debt service fund due to the potential accumulation of assessment prepayments which could cause the fund to become non-bona fide. The extraordinary redemption provision will allow the City to prepay Bonds and avoid a problem in this regard. The City should monitor both the project fund and the debt service fund of the Bonds to ensure yield restriction provisions of the federal arbitrage rules are met. Economic Life The average life of the Bonds cannot exceed 120% of the economic life of the projects to be financed. The economic life of the improvements exceeds 20 years. The average life of the Sidewalk Bonds is 7.475 years; the average life of the SIDs Bonds is 11.590 years; therefore the Issues are within the economic life requirements. Federal Reimbursement Regulations Federal reimbursement regulations require the City to make a declaration, within 60 days of the actual payment, of its intent to reimburse itself from expenses paid prior to the receipt of Bond proceeds. It is our understanding the City has taken whatever actions are necessary to comply with the federal reimbursement regulations in regards to the Bonds. 12. Continuing Disclosure The Bonds are subject to continuing disclosure requirements set forth by the Securities and Exchange Commission. The SEC rules require the underwriter of the Bonds to provide an annual update of certain Official Statement information and report any material events to bond holders. The purchaser therefore requires the City to commit to providing such information under a continuing disclosure agreement or “undertaking”. If the City does not enter into such an agreement prior to the offering of the debt, underwriters will not offer a bid to purchase the Issue. We understand that the City manages its own continuing disclosure matters and will continue that practice with these Issues. Page 5 ---PAGE BREAK--- City of Missoula, Montana June 11, 2009 13. Attachments • Sidewalk Bonds Sources and Uses of Funds Assessment Income Schedules Debt Service Schedules • SIDs Bonds Sources and Uses of Funds Assessment Income Schedule Debt Service Schedule • Notice of Bond Sale Parameters DISCUSSION The Sidewalk Bonds Proceeds of the Sidewalk Bonds will be used to finance several projects in various areas of the City. In all cases the proceeds will be used to reimburse the City for internally funded expenditures. Page 9 shows the sources and uses of funds for the Sidewalk Bonds, including the various project costs, a five percent deposit to the City’s Revolving Fund, costs of issuance and allowance for underwriter’s compensation through discount bidding. Capitalized interest as calculated by the City and represents the added cost to the City of internally funding the expenditures. w The Sidewalk Bonds are not general obligations of the City. Debt service on the Sidewalk Bonds will be paid with special assessments. All assessments, totaling $645,000, will be filed as of August 1, 2009 and spread over periods of eight, twelve and 20 years, depending on the project, with even annual payments of principal. Interest will be charged on the unpaid principal balance of the assessments at a rate 0.5% above the average coupon rate on the Sidewalk Bonds, or approximately 4.75%. Interest on the assessments will start to accrue on August 1, 2009. Pages 10 through 13 show the projection of assessment income. Each year’s first-half collection of assessments will be used to pay the interest payment due January 1 in the year following collection. Second-half collections of assessments, plus surplus first-half collections, will be used to pay the subsequent July 1 principal and interest payment. The Revolving Fund consists of a 5% deposit with respect to all special improvement district bonds of the City. The Revolving Fund is to be used to make loans, on an equal and ratable basis, to secure payments of principal and interest on special improvement bonds in the event assessment receipts are insufficient for that purpose. A loan from the Revolving Fund to pay bond debt service creates a lien on future revenue receipts in the amount of the loan plus interest at the bond rate. Proceeds of the Sidewalk Bonds equal to five percent of the face amount of the Issue, or $32,250, will be deposited into the Revolving Fund. Our recommended principal structure for the Sidewalk Bonds is shown in the projected net debt service schedule on page 14. Principal repayment has been structured as directed by the City to provide debt service requirements atching assessment receipts. m • Columns 1 through 4 show the annual principal, estimated interest rates and projected total principal and interest payments, given the current market environment. • Column 5 shows the total projected assessment income developed on pages 10 through 13. Page 6 ---PAGE BREAK--- City of Missoula, Montana June 11, 2009 • Column 6 shows the difference between columns 4 and 5. It is assumed that annual surplus income will be accumulated in the debt service fund and will be available to either cover anticipated subsequent shortfalls or call Sidewalk Bonds, to the extent available. • Column 7 shows the cumulative debt service fund balance, beginning with the Issue’s rounding amount deposited when the Sidewalk Bonds are issued. The SIDs Bonds Proceeds of the SIDs Bonds will be used to finance various local improvements within Special Improvement District No. 541, Pineview Park. Neighborhood residents requested funding to construct a park restroom and to replace failing playground equipment and tennis and basketball courts in the 4.5-acre park. The property owners will be assessed an amount sufficient to pay the debt service on the SIDs Bonds. Page 16 shows the sources and uses of funds for the SIDs Bonds, including the costs of the improvements and related expenses, a five percent deposit to the City’s Revolving Fund, costs of issuance and allowance for underwriter’s discount. The SIDs Bonds are not general obligations of the City. Annual principal and interest payments will be paid with special assessments. All assessments, totaling $750,000, will be established as of August 1, 2009. Assessments will be spread over a term of 20 years with even annual payments of principal and interest commencing November, 2009. This method of assessing property owners is an exception to the City’s normal practice of amortizing with equal annual installments of principal and is being used to minimize the cash flow impact on property owners. Interest will be charged on the unpaid principal balance of the assessments at a rate 0.5% above the average coupon rate on the SIDs Bonds, or approximately 5.35%. Interest on the assessments will start to accrue on August 1, 2009. Page 17 shows our projection of assessment income. Each year’s first-half collection of assessments will be used to pay the interest payment due January 1 in the year following collection. Second-half collections of assessments, plus surplus first-half collections, will be used to pay the subsequent July 1 principal and interest payment. The Revolving Fund consists of a 5% deposit with respect to all special improvement district bonds of the City, and is to be used to make loans, on an equal and ratable basis, to secure payments of principal and interest on special improvement bonds in the event assessment receipts available therefore are insufficient for that purpose. A loan from the Revolving Fund to pay bond debt service creates a lien on future revenue receipts in the amount of the loan plus interest at the bond rate. Proceeds of the SIDs Bonds equal to five percent of the face amount of the issue, or $37,500, will be deposited into the Revolving Fund. Our recommended principal structure for the SIDs Bonds is shown in the projected net debt service schedule on page 18. As directed by the City, principal repayment has been structured to provide debt service requirements atching assessment receipts. m • Columns 1 through 4 shows the annual principal, estimated interest rates and projected total principal and interest payments, given the current market environment. • Column 5 shows the total projected assessment income developed on page 17. • Column 6 shows the difference between columns 4 and 5. Page 7 ---PAGE BREAK--- City of Missoula, Montana June 11, 2009 Market Conditions The disruptions being experienced by the market are well documented. At the same time, the market is also showing that it is receptive to sales such as you propose. Good municipal credits in reasonably sized transactions are receiving bidding interest from multiple bidders. Springsted will continue to monitor market conditions and advise staff prior to your sale if those conditions warrant action on your part or suggest an alternate course. Springsted is pleased to again be of service to the City of Missoula. Respectfully submitted, SPRINGSTED Incorporated DRJ smc Page 8 ---PAGE BREAK--- Page 9 $645,000 City of Missoula, Montana Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds Series 2009 Total Issue Sources And Uses Dated 08/01/2009 I Delivered 08/01/2009 8 Year Projects 12 Year Projects 20 Year Projects Issue Summary Sources Of Funds Par Amount of $170,000.00 $160,000.00 $315,000.00 $645,000.00 Total $170,000.00 $160,000.00 $315,000.00 $645,000.00 Uses Of Funds Primary Purpose 142,236.22 136,050.31 266,347.30 544,633.83 Costs of 9,224.81 8,682.17 17,093.02 35,000.00 Deposit to Debt Service Reserve Fund 8,500.00 8,000.00 15,750.00 32,250.00 Capitalized Interest 5,112.15 4,579.92 10,361.61 20,053.68 Total Underwriter's Discount 2,380.00 2,240.00 4,410.00 9,030.00 Rounding 2,546.82 447.60 1,038.07 4,032.49 Total $170,000.00 $160,000.00 $315,000.00 $645,000.00 Series 2009 Curb & Gutte I Issue Summary I 6/ 2/2009 I 1:09 PM ---PAGE BREAK--- Page 10 $645,000 City of Missoula, Montana Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds Series 2009 Assessments Aggregate Assessment Income DATE Series 2009 Curb & Gutter Assessments 8 Year Projects Series 2009 Curb & Gutter Assessments 12 Year Projects Series 2009 Curb & Gutter Assessments 20 Year Projects TOTAL 07/01/2010 28,652.08 20,300.01 29,465.63 78,417.72 07/01/2011 28,315.62 20,300.00 29,964.38 78,580.00 07/01/2012 27,306.26 19,666.68 29,216.26 76,189.20 07/01/2013 26,296.88 19,033.34 28,468.12 73,798.34 07/01/2014 25,287.50 18,399.99 27,720.00 71,407.49 07/01/2015 24,278.12 17,766.67 26,971.88 69,016.67 07/01/2016 23,268.76 17,133.33 26,223.76 66,625.85 07/01/2017 22,259.38 16,499.99 25,475.62 64,234.99 07/01/2018 - 15,866.67 24,727.50 40,594.17 07/01/2019 - 15,233.33 23,979.38 39,212.71 07/01/2020 - 14,599.99 23,231.26 37,831.25 07/01/2021 - 13,966.67 22,483.12 36,449.79 07/01/2022 - - 21,735.00 21,735.00 07/01/2023 - - 20,986.88 20,986.88 07/01/2024 - - 20,238.76 20,238.76 07/01/2025 - - 19,490.62 19,490.62 07/01/2026 - - 18,742.50 18,742.50 07/01/2027 - - 17,994.38 17,994.38 07/01/2028 - - 17,246.26 17,246.26 07/01/2029 - - 16,498.12 16,498.12 Total $205,664.60 $208,766.67 $470,859.43 $885,290.70 Par Amounts Of Selected Issues Series 2009 Cu-8 Year 170,000.00 Series 2009 Cu-12 Year 160,000.00 Series 2009 Cu-20 Year 315,000.00 645,000.00 Aggregate I 6/ 2/2009 I 1:07 PM ---PAGE BREAK--- Page 11 $170,000 City of Missoula, Montana Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds Series 2009 Assessments - 8 Year ASSESSMENT INCOME Date Principal Coupon Interest Total P+I 07/01/2010 21,250.00 4.750% 7,402.08 28,652.08 07/01/2011 21,250.00 4.750% 7,065.62 28,315.62 07/01/2012 21,250.00 4.750% 6,056.26 27,306.26 07/01/2013 21,250.00 4.750% 5,046.88 26,296.88 07/01/2014 21,250.00 4.750% 4,037.50 25,287.50 07/01/2015 21,250.00 4.750% 3,028.12 24,278.12 07/01/2016 21,250.00 4.750% 2,018.76 23,268.76 07/01/2017 21,250.00 4.750% 1,009.38 22,259.38 Total $170,000.00 - $35,664.60 $205,664.60 SIGNIFICANT DATES Filing 8/01/2009 First Payment 1/01/2010 Series 2009 Curb & Gutte I 8 Year Projects I 6/ 2/2009 I 1:07 PM ---PAGE BREAK--- Page 12 $160,000 City of Missoula, Montana Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds Series 2009 Assessments - 12 Year ASSESSMENT INCOME Date Principal Coupon Interest Total P+I 07/01/2010 13,333.34 4.750% 6,966.67 20,300.01 07/01/2011 13,333.34 4.750% 6,966.66 20,300.00 07/01/2012 13,333.34 4.750% 6,333.34 19,666.68 07/01/2013 13,333.34 4.750% 5,700.00 19,033.34 07/01/2014 13,333.33 4.750% 5,066.66 18,399.99 07/01/2015 13,333.33 4.750% 4,433.34 17,766.67 07/01/2016 13,333.33 4.750% 3,800.00 17,133.33 07/01/2017 13,333.33 4.750% 3,166.66 16,499.99 07/01/2018 13,333.33 4.750% 2,533.34 15,866.67 07/01/2019 13,333.33 4.750% 1,900.00 15,233.33 07/01/2020 13,333.33 4.750% 1,266.66 14,599.99 07/01/2021 13,333.33 4.750% 633.34 13,966.67 Total $160,000.00 - $48,766.67 $208,766.67 SIGNIFICANT DATES Filing 8/01/2009 First Payment 1/01/2010 Series 2009 Curb & Gutte I 12 Year Projects I 6/ 2/2009 I 1:07 PM ---PAGE BREAK--- Page 13 $315,000 City of Missoula, Montana Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds Series 2009 Assessments - 20 Year ASSESSMENT INCOME Date Principal Coupon Interest Total P+I 07/01/2010 15,750.00 4.750% 13,715.63 29,465.63 07/01/2011 15,750.00 4.750% 14,214.38 29,964.38 07/01/2012 15,750.00 4.750% 13,466.26 29,216.26 07/01/2013 15,750.00 4.750% 12,718.12 28,468.12 07/01/2014 15,750.00 4.750% 11,970.00 27,720.00 07/01/2015 15,750.00 4.750% 11,221.88 26,971.88 07/01/2016 15,750.00 4.750% 10,473.76 26,223.76 07/01/2017 15,750.00 4.750% 9,725.62 25,475.62 07/01/2018 15,750.00 4.750% 8,977.50 24,727.50 07/01/2019 15,750.00 4.750% 8,229.38 23,979.38 07/01/2020 15,750.00 4.750% 7,481.26 23,231.26 07/01/2021 15,750.00 4.750% 6,733.12 22,483.12 07/01/2022 15,750.00 4.750% 5,985.00 21,735.00 07/01/2023 15,750.00 4.750% 5,236.88 20,986.88 07/01/2024 15,750.00 4.750% 4,488.76 20,238.76 07/01/2025 15,750.00 4.750% 3,740.62 19,490.62 07/01/2026 15,750.00 4.750% 2,992.50 18,742.50 07/01/2027 15,750.00 4.750% 2,244.38 17,994.38 07/01/2028 15,750.00 4.750% 1,496.26 17,246.26 07/01/2029 15,750.00 4.750% 748.12 16,498.12 Total $315,000.00 - $155,859.43 $470,859.43 SIGNIFICANT DATES Filing 8/01/2009 First Payment 1/01/2010 Series 2009 Curb & Gutte I 20 Year Projects I 6/ 2/2009 I 1:07 PM ---PAGE BREAK--- Page 14 $645,000 City of Missoula, Montana Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds Series 2009 - Issue Summary NET DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+I Assessment Income Surplus (Shortfall) Cumulative Rounding 4,032.49 07/01/2010 60,000.00 1.700% 20,267.50 80,267.50 78,417.72 (1,849.78) 2,182.71 07/01/2011 60,000.00 2.100% 21,090.00 81,090.00 78,580.00 (2,510.00) (327.29) 07/01/2012 55,000.00 2.400% 19,830.00 74,830.00 76,189.20 1,359.20 1,031.91 07/01/2013 50,000.00 2.700% 18,510.00 68,510.00 73,798.34 5,288.34 6,320.25 07/01/2014 50,000.00 2.850% 17,160.00 67,160.00 71,407.49 4,247.49 10,567.74 07/01/2015 50,000.00 3.200% 15,735.00 65,735.00 69,016.67 3,281.67 13,849.41 07/01/2016 50,000.00 3.450% 14,135.00 64,135.00 66,625.85 2,490.85 16,340.26 07/01/2017 50,000.00 3.700% 12,410.00 62,410.00 64,234.99 1,824.99 18,165.25 07/01/2018 25,000.00 3.900% 10,560.00 35,560.00 40,594.17 5,034.17 23,199.42 07/01/2019 25,000.00 4.100% 9,585.00 34,585.00 39,212.71 4,627.71 27,827.13 07/01/2020 25,000.00 4.450% 8,560.00 33,560.00 37,831.25 4,271.25 32,098.38 07/01/2021 25,000.00 4.650% 7,447.50 32,447.50 36,449.79 4,002.29 36,100.67 07/01/2022 15,000.00 4.800% 6,285.00 21,285.00 21,735.00 450.00 36,550.67 07/01/2023 15,000.00 4.950% 5,565.00 20,565.00 20,986.88 421.88 36,972.55 07/01/2024 15,000.00 5.050% 4,822.50 19,822.50 20,238.76 416.26 37,388.81 07/01/2025 15,000.00 5.250% 4,065.00 19,065.00 19,490.62 425.62 37,814.43 07/01/2026 15,000.00 5.350% 3,277.50 18,277.50 18,742.50 465.00 38,279.43 07/01/2027 15,000.00 5.450% 2,475.00 17,475.00 17,994.38 519.38 38,798.81 07/01/2028 15,000.00 5.500% 1,657.50 16,657.50 17,246.26 588.76 39,387.57 07/01/2029 15,000.00 5.550% 832.50 15,832.50 16,498.12 665.62 40,053.19 Total $645,000.00 - $204,270.00 $849,270.00 $885,290.70 $36,020.70 8/01/2009 Delivery 8/01/2009 First Coupon 1/01/2010 Yield Statistics Bond Year $4,821.25 Average 7.475 Years Average 4.2368680% Net Interest Cost 4.4241639% True Interest Cost 4.3634361% Bond Yield for Arbitrage 4.1319411% All Inclusive Cost 5.3147106% IRS Form 8038 Net Interest 4.2368680% Weighted Average 7.475 Years Series 2009 Curb & Gutte I Issue Summary I 6/ 2/2009 I 1:09 PM ---PAGE BREAK--- Page 15 $645,000 City of Missoula, Montana Pooled Special Sidewalk, Curb, Gutter and Alley Approach Bonds Series 2009 FACTS FOR NOTICE OF SALE Scheduled Date of Sale: Monday, July, 13, 2009 at 12:00 Noon Central-11:00 A.M. Mountain Award: 7:00 PM that same day Permit Electonic Bidding Using PARITY Par Amount of $645,000.00 Permit size adjustment after receipt of bids. August 1, 2009 First Coupon January 1, 2010 Frequency of Interest 2 Per Year Jan. 1 and July 1 Frequency of Principal Amortization 1 Per Year July 1 First Serial Maturity July 1, 2010 Final Serial Maturity July 1, 2029 Term Bonds Term Bonds Permitted First optional call July 1, 2019 For Bonds Maturing on or July 1, 2020 Call 100% Minimum Bid $635,970.00 Good Faith Deposit $12,900.00 2% Couponing Level or ascending interest rates Continuing Disclosure Full Bank Qualification Election Issue is Bank Qualified Bond Insurance No Bond Insurance Maturity Schedule 07/01/10 60,000.00 07/01/17 50,000.00 07/01/24 15,000.00 07/01/11 60,000.00 07/01/18 25,000.00 07/01/25 15,000.00 07/01/12 55,000.00 07/01/19 25,000.00 07/01/26 15,000.00 07/01/13 50,000.00 07/01/20 25,000.00 07/01/27 15,000.00 07/01/14 50,000.00 07/01/21 25,000.00 07/01/28 15,000.00 07/01/15 50,000.00 07/01/22 15,000.00 07/01/29 15,000.00 07/01/16 50,000.00 07/01/23 15,000.00 Use of Proceeds Source of Payment Proceeds of the Bonds will be used to finance the cost of installing curbs, gutters, sidewalks and alley approach projects in certain areas of the City. In addtion, the City will pledge special assessments against benefited properties. Springsted Incorporated Advisors to the Public Sector ---PAGE BREAK--- Page 16 $750,000 City of Missoula, Montana Special Improvement District No. 541 Bonds SID No. 541 - Pine View Sources & Uses Dated 08/01/2009 I Delivered 08/01/2009 Sources Of Funds Par Amount of $750,000.00 Total $750,000.00 Uses Of Funds Available for Project 665,000.00 Deposit to Debt Service Reserve Fund 37,500.00 Costs of 37,000.00 Total Underwriter's Discount 10,500.00 Total $750,000.00 SID No. 541 - Pine View I SINGLE PURPOSE I 6/ 3/2009 I 10:40 AM ---PAGE BREAK--- Page 17 $750,000 City of Missoula, Montana Special Improvement District No. 541 Bonds SID No. 541 - Pine View Assessments ASSESSMENT INCOME Date Principal Coupon Interest Total P+I 07/01/2010 25,000.00 5.350% 36,781.25 61,781.25 07/01/2011 25,000.00 5.350% 38,787.50 63,787.50 07/01/2012 25,000.00 5.350% 37,450.00 62,450.00 07/01/2013 25,000.00 5.350% 36,112.50 61,112.50 07/01/2014 25,000.00 5.350% 34,775.00 59,775.00 07/01/2015 30,000.00 5.350% 33,437.50 63,437.50 07/01/2016 30,000.00 5.350% 31,832.50 61,832.50 07/01/2017 30,000.00 5.350% 30,227.50 60,227.50 07/01/2018 35,000.00 5.350% 28,622.50 63,622.50 07/01/2019 35,000.00 5.350% 26,750.00 61,750.00 07/01/2020 35,000.00 5.350% 24,877.50 59,877.50 07/01/2021 40,000.00 5.350% 23,005.00 63,005.00 07/01/2022 40,000.00 5.350% 20,865.00 60,865.00 07/01/2023 45,000.00 5.350% 18,725.00 63,725.00 07/01/2024 45,000.00 5.350% 16,317.50 61,317.50 07/01/2025 45,000.00 5.350% 13,910.00 58,910.00 07/01/2026 50,000.00 5.350% 11,502.50 61,502.50 07/01/2027 50,000.00 5.350% 8,827.50 58,827.50 07/01/2028 55,000.00 5.350% 6,152.50 61,152.50 07/01/2029 60,000.00 5.350% 3,210.00 63,210.00 Total $750,000.00 - $482,168.75 $1,232,168.75 SIGNIFICANT DATES Filing 8/01/2009 First Payment 1/01/2010 SID No. 541 - Pine View A I SINGLE PURPOSE I 6/ 3/2009 I 10:40 AM ---PAGE BREAK--- Page 18 $750,000 City of Missoula, Montana Special Improvement District No. 541 Bonds SID No. 541 - Pine View NET DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+I Assessment Income Surplus 07/01/2010 30,000.00 1.700% 29,470.83 59,470.83 61,781.25 2,310.42 07/01/2011 30,000.00 2.100% 31,640.00 61,640.00 63,787.50 2,147.50 07/01/2012 30,000.00 2.400% 31,010.00 61,010.00 62,450.00 1,440.00 07/01/2013 30,000.00 2.700% 30,290.00 60,290.00 61,112.50 822.50 07/01/2014 25,000.00 2.850% 29,480.00 54,480.00 59,775.00 5,295.00 07/01/2015 30,000.00 3.200% 28,767.50 58,767.50 63,437.50 4,670.00 07/01/2016 30,000.00 3.450% 27,807.50 57,807.50 61,832.50 4,025.00 07/01/2017 30,000.00 3.700% 26,772.50 56,772.50 60,227.50 3,455.00 07/01/2018 35,000.00 3.900% 25,662.50 60,662.50 63,622.50 2,960.00 07/01/2019 35,000.00 4.100% 24,297.50 59,297.50 61,750.00 2,452.50 07/01/2020 35,000.00 4.450% 22,862.50 57,862.50 59,877.50 2,015.00 07/01/2021 40,000.00 4.650% 21,305.00 61,305.00 63,005.00 1,700.00 07/01/2022 40,000.00 4.800% 19,445.00 59,445.00 60,865.00 1,420.00 07/01/2023 45,000.00 4.950% 17,525.00 62,525.00 63,725.00 1,200.00 07/01/2024 45,000.00 5.050% 15,297.50 60,297.50 61,317.50 1,020.00 07/01/2025 45,000.00 5.250% 13,025.00 58,025.00 58,910.00 885.00 07/01/2026 45,000.00 5.350% 10,662.50 55,662.50 61,502.50 5,840.00 07/01/2027 45,000.00 5.450% 8,255.00 53,255.00 58,827.50 5,572.50 07/01/2028 50,000.00 5.500% 5,802.50 55,802.50 61,152.50 5,350.00 07/01/2029 55,000.00 5.550% 3,052.50 58,052.50 63,210.00 5,157.50 Total $750,000.00 - $422,430.83 $1,172,430.83 $1,232,168.75 $59,737.92 8/01/2009 Delivery 8/01/2009 First Coupon 1/01/2010 Yield Statistics Bond Year $8,692.50 Average 11.590 Years Average 4.8597162% Net Interest Cost 4.9805100% True Interest Cost 4.9472555% Bond Yield for Arbitrage 4.7804764% All Inclusive Cost 5.5642321% IRS Form 8038 Net Interest 4.8597162% Weighted Average 11.590 Years SID No. 541 - Pine View I SINGLE PURPOSE I 6/ 3/2009 I 10:40 AM ---PAGE BREAK--- Page 19 $750,000 City of Missoula, Montana Special Improvement District No. 541 Bonds SID No. 541 - Pine View FACTS FOR NOTICE OF SALE Scheduled Date of Sale: Monday, July, 13, 2009 at 12:00 Noon Central-11:00 A.M. Mountain Award: 7:00 PM that same day Permit Electonic Bidding Using PARITY Par Amount of $750,000.00 Permit issue size to be adjusted after taking bids. August 1, 2009 First Coupon January 1, 2010 Frequency of Interest 2 Per Year Jan. 1 and July 1 Frequency of Principal Amortization 1 Per Year July 1 First Serial Maturity July 1, 2010 Final Serial Maturity July 1, 2029 Term Bonds Term Bonds Permitted First optional call July 1, 2019 For Bonds Maturing on or July 1, 2020 Call 100% Minimum Bid $739,500.00 Good Faith Deposit $15,000.00 2% Couponing Level or ascending interest rates Continuing Disclosure Full Bank Qualification Election Issue is Bank Qualified Bond Insurance No Bond Insurance Maturity Schedule 07/01/10 30,000.00 07/01/17 30,000.00 07/01/24 45,000.00 07/01/11 30,000.00 07/01/18 35,000.00 07/01/25 45,000.00 07/01/12 30,000.00 07/01/19 35,000.00 07/01/26 45,000.00 07/01/13 30,000.00 07/01/20 35,000.00 07/01/27 45,000.00 07/01/14 25,000.00 07/01/21 40,000.00 07/01/28 50,000.00 07/01/15 30,000.00 07/01/22 40,000.00 07/01/29 55,000.00 07/01/16 30,000.00 07/01/23 45,000.00 Use of Proceeds Source of Payment Springsted Incorporated Advisors to the Public Sector Proceeds of the Bonds will be used to Pine View park improvements In addtion, the City will pledge special assessments against benefited properties.