Loading...
2008-2506 RSID BONDSHORSEY DAN SEMMENS semmens.dan@dorsey.com September 15, 2008 Ms. Helen Auch Via Federal Express Jefferson County 201 Centennial P.O. Box H Boulder, Montana 59632 Re: $80,000 Rural Special Improvement District No. 2506 Bonds Jefferson County, Montana Dear Helen: In anticipation of the closing of the above referenced bond issue scheduled for Friday, September 19, 2008, we enclose the following documents: 1. One blue-backed bond that should be executed by the Chair of the Board of County Commissioners, the County Treasurer, and the County Clerk and Recorder on page 4 and sealed. The County Treasurer should also execute the registration signature line prepared on page 4. This is the only page that requires signatures. Also enclosed is a copy of the bond, marked "Specimen," for the County's files; 2. Officers' Certificate, which should be executed by the Chair, the County Treasurer, and the County Clerk and Recorder; 3. Affidavit as to Signatures of Officers, which should be executed by the Chair, the County Treasurer, and the County Clerk and Recorder; 4. Certificate Showing Due Execution of Construction Contract, which should be executed by the County Clerk and Recorder; 5. County Treasurer's Certificate and Receipt, which should be executed by the County Treasurer; 6. Certificate of Bond Registrar, which should be executed by the County Treasurer; 7. IRS Form 8038-GC, which should be executed by the Chair; and 8. Certificate as to Organization, which should be executed by the County Clerk and Recorder. We would appreciate it if you would return the original Bond and four copies of documents 2-8, above, to our office for receipt no later than Thursday, September 18, 2008 for review and approval prior to closing. We will then be able to release the bonds upon verification with you of receipt of the funds on Friday morning. If you have any questions, please do not hesitate to call. Very ly yours, ,.. Dan Semmen DPS/te Enclosures DORSEY & WHITNEY LLP • WWW.DORSEY.COM • T 406.721.6025 • F 406.543.0863 MILLENNIUM BUILDING • 125 BANK STREET • SUITE 600 • MISSOULA, MONTANA 59802-4407 USA CANAOA EUROPE ASIA ~_, UNITED STATES OF AMERICA STATE OF MONTANA JEFFERSON COUNTY RURAL SPECIAL IMPROVEMENT DISTRICT NO.2506 BOND Interest at the rate per annum specified below Payable February 15, 2009 and semiannually thereafter on the 15th day of February and the 15th day of August in each year No. R-1 Rate Variable REGISTERED OWNER: PRINCIPAL AMOUNT: $80,000 Date of Original Issue September 19, 2008 BOARD OF INVESTMENTS EIGHTY THOUSAND DOLLARS Jefferson County, Montana, through the County Treasurer, will pay to the Board of Investments of the State of Montana, or registered assigns, on the maturity date specified above the principal amount of EIGHTY THOUSAND DOLLARS ($80,000), in principal installments on each February 15 and August 15 in the years and in the principal amounts set forth below, solely from the revenues hereinafter specified, as authorized by Resolution No. 33-2008 adopted August 19, 2008 (the "Resolution"), all subject to the provisions hereinafter described relating to the redemption of this Bond before maturity: Final Maturity Date August 15, 2023 [See principal installment schedule on following page] Installment No. Month and Year Principal Amount Installment No. Month and Year Principal Amount 1 February 15, 2009 $2,184.50 16 August 15, 2016 $2,663.32 2 August 15, 2009 1,993.69 17 February 15, 2017 2,709.56 3 February 15, 2010 2,009.22 18 August 15, 2017 2,779.24 4 August 15, 2010 2,078.05 19 February 15, 2018 2,824.62 5 February 15, 2011 2,096.79 20 August 15, 2018 2,897.35 6 August 15, 2011 2,166.05 21 February 15, 2019 2,947.22 7 February 15, 2012 2,188.13 22 August 15, 2019 3,020.52 8 August 15, 2012 2,253.98 23 February 15, 2020 3,075.07 9 February 15, 2013 2,286.98 24 August 15, 2020 3,147.64 10 August 15, 2013 2,353.51 25 February 15, 2021 3,209.55 11 February 15, 2014 2,382.71 26 August 15, 2021 3,282.97 12 August 15, 2014 2,453.33 27 February 15, 2022 3,347.49 13 February 15, 2015 2,486.32 28 August 15, 2022 3,422.72 14 August 15, 2015 2,557.43 29 February 15, 2023 3,492.54 15 February 15, 2016 2,594.38 30 August 15, 2023 3,095.12 Unpaid principal installments of this Bond shall bear interest from the date of delivery of the Bond at the rate per annum equal to the Loan Rate (as hereinafter defined), as determined from time to time, for the periods hereinafter described. Interest shall be payable on each February 15 and August 15, commencing February 15, 2009, to the owners of record of this Bond as such appear on the bond register on the date of payment, whether or not such day is a business day. This Bond represents all the principal installments of the issue. Principal installments of the issue are numbered from 1 through 30, each in the amount described in the schedule above. For purposes of this Bond, "Loan Rate" shall mean, for the period from the date of original registration of the Bond until February 15, 2009, the rate of 4.25% per annum, and, for each twelve-month or shorter period thereafter during the term of this Bond commencing on February 16 and concluding on February 15 in the next succeeding year an annual interest rate specified by the Trustee and calculated as provided under the Indenture (each as defined in the Resolution), which rate generally shall be equal to the sum of (i) the interest rate on the Board Bond (as defined in the Resolution) during such period which interest rate may not exceed fifteen percent (15 %) per annum plus (ii) a rate, not to exceed one and one-half percent (1.50%) per annum, sufficient to produce the amount necessary to pay the County's share of Program Expenses (as defined in the Resolution). The principal of and interest on this Bond are payable in lawful money of the United States of America. This Bond comprises an issue in the aggregate principal amount of $80,000 and 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 12, Part 21, to finance the costs of certain local improvements (the "Improvements") for the special benefit of property located in Rural Special Improvement District No. 2506 of the County (the "District"), to make a deposit to the County's Revolving Fund, and to pay costs of issuing the Bond. Reference is 2 ~+~r made to the Resolution for a more complete statement of the terms and conditions upon which this Bond has been issued. The Bond is issuable only as a single, fully registered bond. This Bond is payable from the collection of a special tax or assessment levied upon all assessable real property within the boundaries of the District, in an aggregate principal amount of not less than $80,000, except as such amount may be reduced or increased in accordance with provisions of Montana law. Such assessments constitute a lien against the assessable real estate within the District, and this Bond is not a general obligation of the County. The County has also validly established a Rural Special Improvement District Revolving Fund (the "Revolving Fund") to secure the payment of certain of its rural special. improvement district bonds, including the Bond. The County has also agreed, to the extent permitted by the Act, to issue orders annually authorizing loans or advances from the Revolving Fund to the District Fund, in amounts sufficient to make good any deficiency in the District Fund to pay principal of or interest on the Bond, to the extent that funds are available in the Revolving Fund, and to provide funds for the Revolving Fund by annually making a tax levy or loan from its general fund in an amount sufficient for that purpose, subject to the limitation that no such tax levy or loan may in any year cause the balance in the Revolving Fund to exceed five percent of the principal amount of the County's then outstanding rural special improvement district bonds secured thereby and the durational limitations specified in the Act. While any property tax levy to be made by the County to provide funds for the Revolving Fund is subject to levy limits under current law, the County has agreed in the Resolution to levy property taxes to provide funds for the Revolving Fund to the extent described in this paragraph and, if necessary, to reduce other property tax levies correspondingly to meet applicable levy limits. The principal installments of this Bond are subject to mandatory redemption in order of registration on any interest payment date if, after paying all principal and interest then currently due on this Bond, there are monies available in or to the credit of the Rural Special Improvement District No. 2506 Fund of the County, either from the prepayment of assessments levied in the District or from surplus proceeds of the Bond not required to pay costs of the Improvements, for the redemption thereof, and in the manner provided for the redemption of the same. The principal installments of this Bond are subject to redemption at the option of the County from other sources of funds available therefor on any interest payment date. The redemption price is equal to the amount of the principal installment or installments of the Bond to be redeemed plus interest accrued thereon to the date of redemption, without premium. The date of redemption shall be fixed by the County Treasurer, who shall give notice by first class mail, postage prepaid, to the owner or owners of this Bond at their addresses shown on the bond register, of the numbers of the principal installments to be redeemed and the date on which payment will be made, which date shall not be less than ten days after the date of mailing of notice, on which date so fixed interest shall cease. On the date so fixed interest on the principal installments of this Bond so redeemed shall cease to accrue. The Bond have been designated by the County as "qualified tax-exempt obligations" pursuant to Section 265 of the Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all things required to be done precedent to the issuance of this 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 Jefferson County, Montana, relating to the issuance thereof. IN WITNESS WHEREOF, Jefferson County, Montana, by its Board of County Commissioners, has caused this Bond to be executed by the signatures of the Chair of the Board of County Commissioners and the County Clerk, and the County Treasurer, and by the official seal of the County. Chair, Board of County Commissioners (Seal) County Treasurer Dated: q- CERTIFICATE OF REGISTRATION This Bond and the principal installments hereof have been registered as required bylaw on the books of the County as of the 19th day of Septemb 008. ~f~ County Treasurer 4 REGISTRATION AND TRANSFER This Bond shall be fully registered as to both principal and interest. No transfer of this Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized attorney or legal representative, executes the form of assignment appearing on this Bond, and (2) the County Treasurer, or any successor appointed by the County, as bond registrar (the "Registrar"), has duly noted the transfer on the Bond and recorded the transfer on the Registrar's registration books. The County shall be entitled to deem and treat the person in whose name this Bond is registered as absolute owner thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the 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 County's liability upon the Bond to the extent of the suin or sums so paid. THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND REGISTRAR UPON REGISTRATION OF EACH TRANSFER The County Treasurer of Jefferson County, Montana, or any successor appointed by the County, acting as Bond Registrar, has transferred, on the books of the County, on the date last noted below, ownership of the principal amount of and the accrued interest on this Bond to the new registered holder noted next to such date, except for amounts of principal and interest theretofore paid. Date of Name of New Signature of Transfer Registered Holder Bond Re 'si trar FORM OF ASSIGNMENT For value received, this Bond is hereby transferred and assigned by the undersigned holder, without recourse, to on this day of By: (authorized signature) For: (Holder) 6 UNITED STATES OF AMERICA STATE OF MONTANA JEFFERSON COUNTY RURAL SPECIAL IMPROVEMENT DISTRICT NO. 2506 BOND Interest at the rate per annum specified below Payable February I5, 2009 and semiannually thereafter on the 15th day of February and the 15th day of August in each year No. R-1 Rate Final Maturity Date Variable REGISTERED OWNER: PRINCIPAL AMOUNT: August 1 ~, 20?3 $80,000 Date of Original Issue September 19, 2008 BOARD OF INVESTMENTS EIGHTY THOUSAND DOLLARS Jefferson County, Montana, through the County Treasurer, will pay to the Board of Investments of the State of Montana, or registered assigns, on the maturity date specified above the principal amount of EIGHTY THOUSAND DOLLARS ($80,000), in principal installments on each February 15 and August 15 in the years and in the principal amounts set forth below, solely from the revenues hereinafter specified, as authorized by Resolution No. 33-2008 adopted August 19, 2008 (the "Resolution"), all subject to the provisions hereinafter described relating to the redemption of this Bond before maturity: [See principal installment schedule on following page] Installment No. Month and Year Principal Amount Installment No. Month and Year Principal Amount 1 February 15, 2009 $2,184.50 16 August 15, 2016 $2,663.32 2 August 15, 2009 1,993.69 17 February 15, 2017 2,709.56 3 February 15, 2010 2,009.22 18 August 15, 2017 2,779.24 4 August 15, 2010 2,078.05 19 February 15, 2018 2,824.62 5 February 15, 2011 2,096.79 20 August 15, 2018 2,897.35 6 August 15, 2011 2,166.05 21 February 15, 2019 2,947.22 7 February 15, 2012 2,188.13 22 August 15, 2019 3,020.52 8 August 15, 2012 2,253.98 23 February 15, 2020 3,075.07 9 February 15, 2013 2,286.98 24 August 15, 2020 3,147.64 10 August 15, 2013 2,353.51 25 February 15, 2021 3,209.55 11 February 15, 2014 2,382.71 26 August 15, 2021 3,282.97 12 August 15, 2014 2,453.33 27 February 15, 2022 3,347.49 13 February 15, 2015 2,486.32 28 August 15, 2022 3,422.72 14 August 15, 2015 2,557.43 29 February 15, 2023 3,492.54 15 February 15, 2016 2,594.38 ~0 August 15, 2023 3,095.12 Unpaid principal installments of this Bond=shall bear interest from the date of delivery of the Bond at the rate per annum equal to the Load Rate (as hereinafter defined), as determined from time to time, for the periods hereinafter described. Interest shall be payable on each February 15 and August 15, commencing February 15, 2009, to the owners of record of this Bond as such appear on the bond register on the date of payment, whether or not such day is a business day. This Bond represents all the principal installments of the issue. Principal installments of the issue are numbered from 1 through 30, each in the amount described in the schedule above. For purposes of this Bond, "Loan Rate" shall mean, for the period from the date of original registration of the Bond until February 15, 2009, the rate of 4.25% per annum, and, for each twelve-month or shorter period thereafter during the term of this Bond commencing on February 16 and concluding on February 15 in the next succeeding year an annual interest rate specified by the Trustee and calculated as provided under the Indenture (each as defined in the Resolution), which rate generally shall be equal to the sum of (i) the interest rate on the Board Bond (as defined in the Resolution) during such period which interest rate may not exceed fifteen percent (15%) per annum plus (ii) a-rate, not to exceed one and one-half percent (1.50%) per annum, sufficient to produce the amount necessary to pay the County's share of Program Expenses (as defined in the Resolution). The principal of and interest on this Bond are payable in lawful money of the United States of America. This Bond comprises an issue in the aggregate principal amount of $80,000 and 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 12, Part 21, to finance the costs of certain local improvements (the "Improvements") for the special benefit of property located in Rural Special Improvement District No. 2506 of the County (the "District"), to make a 2 deposit to the County's Revolving Fund, and to pay costs of issuing the Bond. Reference is made to the Resolution for a more complete statement of the terms and conditions upon which this Bond has been issued. The Bond is issuable only as a single, fully registered bond. This Bond is payable from the collection of a special tax or assessment levied upon all assessable real property within the boundaries of the District, in an aggregate principal amount of not less than $80,000, except as such amount may be reduced or increased in accordance with provisions of Montana law. Such assessments constitute a lien against the assessable real estate within the District, and this Bond is not a general obligation of the County. The County has also validly established a Rural Special Improvement District Revolving Fund (the "Revolving Fund") to secure the payment of certain of its rural special improvement district bonds, including the Bond. The County has also agreed, to the extent permitted by the Act, to issue orders annually authorizing loans or advances from the Revolving Fund to the District Fund, in amounts sufficient to make good any deficiency in the District Fund to pay principal of or interest on the Bond, to the extent that fiends are available in the Revolving Fund, and to provide funds for the Revolving Fund by annually making a tax levy or loan from its general fund in an amount sufficient for that purpose, subject to the limitation that no such tax levy or loan may in any year cause the balance ~in the Rcvolving Fund to exceed five percent of the principal amount of the County's then outstanding rural special improvement district bonds secured thereby and the durational limitations specified in the Act. While any property tax levy to be made by the County to provide funds for the Revolving Fund is subject to levy limits under current law, the County has agreed in the Resolution to levy property taxes to provide funds for the Revolving Fund to the extent described in this paragraph and, if necessary, to reduce other property tax levies corresp©ndingly to meet applicable levy limits. The principal installments of this Bond are subject to mandatory redemption in order of registration on any interest payment date if, after paying all principal and interest then currently due on this Bond, there are monies available in or to the credit of the Rural Special Improvement District No. 2506 Fund of the County, either from the prepayment of assessments levied in the District or from surplus proceeds of the Bond not required to pay costs of the Improvements, for the redemption thereof, and in the manner provided for the redemption of the same. The principal installments of this Bond are subject to redemption at the option of the County from other sources of funds available therefor on any interest payment date. The redemption price is equal to the amount of the principal installment or installments of the Bond to be redeemed plus interest accrued thereon to the date of redemption, without premium. The date of redemption shall be fixed by the County Treasurer, who shall give notice by first class mail, postage prepaid, to the owner or owners of this Bond at their addresses shown on the bond register, of the numbers of the principal installments to be redeemed and the date on which payment will be made, which date shall not be less than ten days after the date of mailing of notice, on which date so fixed interest shall cease. On the date so fixed interest on the principal installments of this Bond so redeemed shall cease to accrue. The Bond have been designated by the County as "qualified tax-exempt obligations" pursuant to Section 265 of the Internal Revenue Code of 1986, as amended. 3 IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all things required to be done precedent to the issuance of this 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 Jefferson County, Montana, relating to the issuance thereof. IN WITNESS WHEREOF, Jefferson County, Montana, by its Board of County Commissioners, has caused this Bond to be executed by the signatures of the Chair of the Board of County Commissioners and the County Clerk, and the County Treasurer, and by the official seal of the County. Chair, Board of County Commissioners County Clerk and Recorder (Seal) County Treasurer Dated: CERTIFICATE OF REGISTRATION This Bond and the principal installments hereof have been registered as required by law on the books of the County as of the 19th day of September, 2008. County Treasurer 4 REGISTRATION AND TRANSFER This Bond shall be fully registered as to both principal and interest. No transfer of this Bond shall be valid unless and until (1) the registered holder of the Bond, or his duly authorized attorney or legal representative, executes the form of assignment appearing on this Bond, and (2) the County Treasurer, or any successor appointed by the County, as bond registrar (the "Registrar"), has duly noted the transfer on the Bond and recorded the transfer on the Registrar's registration books. The County shall be entitled to deem and treat the person in whose name this Bond is registered as absolute owner thereof for all purposes, notwithstanding any notice to the contrary. Payments on account of the 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 County's liability upon the Bond to the extent of the sum or sums so paid. THE FOLLOWING ENTRIES ARE TO BE MADE ONLY BY THE BOND REGISTRAR UPON REGISTRATION OF EACH TRANSFER The County Treasurer of Jefferson County. Montana, or any successor appointed by the County, acting as Bond Registrar, has transferred, an the books of the County, on the date last noted below, ownership of the principal amount of and the accrued interest on this Bond to the new registered holder noted next to such date, except for amounts of principal and interest theretofore paid. - Date of Name ofNew Signature of Transfer Registered Holder Bond Re ig~strar 5 FORM OF ASSIGNMENT For value received, this Bond is hereby transferred and assigned by the undersigned holder, without recourse, to on this day of , By: (authorized signature) For: (Holder) 6 1 $80,000 Rural Special Improvement District No. 2506 Bond Jefferson County, Montana OFFICERS' CERTIFICATE We, Ken Weber, Patty O'Neill, and Bonnie Ramey, hereby certify that we are on the date hereof the duly qualified and acting Chair of the Board of County Commissioners, the County Treasurer, and the County Clerk and Recorder, respectively, of Jefferson County, Montana (the "County"), and, on behalf of the County, that: 1. In our official capacities as such officers, we have executed the County's $80,000 Rural Special Improvement District No. 2506 Bond, of the County, dated, as originally issued, as of September 19, 2008 (the "Bond"). The Bond matures on the dates, bears interest at the rates and is substantially in the form prescribed by a resolution duly adopted by the Board of County Commissioners on August 19, 2008, entitled "Resolution Relating to $80,000 Rural Special Improvement District No. 2506 Bond; Fixing the Form and Details and Providing for the Execution and Delivery Thereof and Security Therefor" (the "Resolution"). The Resolution is in full force and effect in the form it was adopted. The County Treasurer, as Registrar, will authenticate and deliver the Bond to the Board of Investments of the State of Montana, of Helena, Montana (the "Purchaser") upon payment therefor. The Bond is in fully registered form pursuant to a system of registration established by the Resolution. 2. The Bond has been in all respects duly executed for delivery pursuant to authority conferred upon such officers; that no obligations other than those described above have been issued pursuant to such authority; that none of the proceedings or records which has been certified to the Purchaser or to the attorneys approving the legality of the issuance of the Bond has been in any manner repealed, amended or changed except as shown by additional proceedings or records furnished each of them; and that there has been no material adverse change in the financial condition of the County or the circumstances affecting the Bond, except as shown by the materials so furnished. 3. No litigation or other judicial or administrative proceeding is now pending, or, to the best of our knowledge, threatened, (i) restraining or enjoining the sale, issuance or delivery of the Bond, (ii) questioning the organization of the County or the right of any officers of the County to their respective offices, (iii) questioning the right and power of officers of the County to deliver the Bond, (iv) questioning the validity of the creation or extension of Rural Special Improvement District No. 2506 (the "District"), boundaries of the District, or the work to be undertaken therein or for the special benefit thereof or any contract relating thereto, or (v) challenging the validity of the levy of any special assessments to pay the principal of or interest on the Bond. No sufficient petition requesting a referendum has been filed with respect to the Resolution or any of the resolutions of the Board of County Commissioners authorizing the issuance and sale of the Bond or any proceedings preliminary thereto, including the resolutions creating the District. 4. The terms used in this Certificate have the same meanings given them in the Resolution. 5. The Bond is being delivered to the Purchaser on the date hereof and $40,797.42 of the principal amount thereof is being advanced on the date hereof. 6. Pursuant to Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations applicable thereunder (the "Regulations"), we, as the officers of the County responsible for issuing the Bond, hereby certify the present expectations of the County on the date hereof with respect to the Bond are as follows: (a) The Bond is being issued to finance the cost of constructing certain local improvements described in the Resolution (the "Improvements") in or for the benefit of the District and the County and to pay costs incidental thereto. The Improvements are intended for use by members of the general public. (b) Based upon the most recent estimate of costs by Great West Engineering, Inc., the engineer retained by the County in connection with the Improvements, the County expects to expend the following sums from bond proceeds in connection with the Improvements and incidental costs associated with the issuance of the Bond: Construction $45,992.00 Preliminary Engineering and Planning 3,500.00 Contingency 9,362.00 County Administration 963.00 Engineering Design/Construction Mgmt 8,183.00 Revolving Fund Deposit 4,000.00 Costs of Issuance 8,000.00 Total $ 80,000.00 (c) The County has heretofore entered into contracts for the Improvements, in the form of architectural or engineering services, site development or construction, in the sum of at least $4,000, which sum is not less than five percent of the net sale proceeds of the Bond. (d) Work on the Improvements has commenced, will proceed with due diligence to completion, and the Improvements are expected to be completed by October 1, 2008. (e) The Bond will be purchased by the Purchaser at an aggregate purchase price equal to the principal amount of the Bond advanced thereunder. Pursuant to the Resolution and the Bond, the Purchaser has agreed to advance to the County principal amounts of the Bond from time to time upon satisfaction of certain conditions precedent set forth in the Resolution, up to the maximum principal amount of $80,000.00. No interest accrues on principal of the Bond, and the County is not entitled to any investment income thereon until the principal amount is advanced. 2 (f) Of the amount the County will receive from the Purchaser, assuming the full amount of the Bond is advanced, $67,037 will be used to pay the engineering and construction costs of the Improvements; $963 representingthe County's Administrative Fee will be deposited into the County's General Fund; $4,000 will be deposited in the Revolving Fund; and $8,000 will be used to pay costs of issuance of the Bond (representing costs of financial advisors, legal services, bond registration, advertising and printing and similar terms). (g) The amount to be received by the County from the Purchaser, less the County's Administrative Fee, the fee for bond counsel, and the amounts deposited in the Revolving Fund, plus investment earnings thereon (which will be applied to costs of the Improvements or interest on the Bond during construction of the Improvements), does not exceed the amount to be spent by the County with respect to the Improvements. (h) The County expects to spend on costs of the Improvements or costs of issuance of the Bond by December 1, 2008, all of the sale proceeds of the Bond, except the amounts deposited in the Revolving Fund. (i) The Bond is not a "hedge bond" within the meaning of Section 149(g) of the Code. The County expects to spend not less than 85% of the sale proceeds of the Bond within three years after the date hereof and less than 50 percent of the proceeds of the Bond are invested in nonpurpose investments having a substantially guaranteed yield for four years or more. (j) Proceeds of the Bond and investment income thereon to be used to finance the costs of the Improvements and pay costs of issuance of the Bond will be invested for a temporary period pursuant to Section 1.148-2(e)(2) of the Regulations ending on the earlier o£ (i) three years from the date hereof (September 19, 2011), or (ii) the date that the Improvements would be completed in the exercise of due diligence and all costs thereof promptly paid. If, at the conclusion of such temporary period, proceeds of the Bond and investment income thereon have not been allocated to the governmental purposes of the Bond, such amounts will not be invested at a yield greater than the yield of the Bond, if and to the extent such restriction is necessary to prevent the Bond from being arbitrage bonds within the meaning of Section 148 of the Code and Regulations. (k) The Improvements have not been and are not expected to be sold or otherwise disposed of by the County during the term of the Bond. The County expects that the Improvements will remain owned and operated by the County substantially in the manner in which they are now owned and operated for the indefinite future, at least during the term of the Bond. The County reasonably expects that during the term of the Bond no private business use will be made of the Improvements and that no private payments or security will be made or furnished that would cause the Bond to be "private activity bonds" within the meaning of Section 141 of the Code and applicable Regulations. No proceeds of the Bond are being or will be loaned to any nongovernmental person and the special assessments levied in respect of the Improvements meet the exception for tax assessment loans contained in Section 1.141-5(d) of the Regulations. The County reasonably expects that the Bond will not be private activity bonds within the meaning of Section 141 of the Code. (1) No other obligations of the County (a) are being issued at substantially the same time as the Bond, (b) are being sold pursuant to the same plan of financing as the Bond, and (c) are reasonably expected to be paid from substantially the same source of funds (determined without regard to guarantees from unrelated parties) as will be used to pay the Bond, within the meaning of Section 1.150-1(c) of the Regulations. (m) The Bond is a "variable yield issue," as defined in Section 1.148-1(b) of the Regulations. Accordingly, the yield of the Bond will be computed separately for each computation period. As provided in Section 1.148-4(c) of the Regulations, the yield of the Bond for each computation period will be the discount rate that, when used in computing the present value, as of the first day of the computation period, of all the payments of principal and interest that are attributable to the computation period, produces an amount equal to the present value, using the same discount rate, of the aggregate issue price of the Bond as of the first day of the computation period. (n) The principal of and interest on the Bond are payable from the Rural Special Improvement District No. 2506 Fund (the "District Fund") of the County. The County expects to use only the District Fund to pay the principal of and interest on the Bond. The special assessments .appropriated to the Principal and Interest Accounts within the District Fund are expected to produce amounts sufficient to pay all principal of and interest on the Bond when due. Whenever there will be money in the Principal and Interest Accounts in the District Fund on any interest payment date, after paying interest on all Bond then due, either from the prepayment of special assessments levied in the District or from the transfer of surplus money from the Construction Account to the Principal Account, the County Treasurer is required by law to call for redemption outstanding Bond or principal installments thereof which, together with the interest thereon to the date of redemption, will equal the amount on hand in the Principal and Interest Accounts on that date. It is expected that amounts in the District Fund to be used to pay the principal of and interest on the Bond will be fully expended on each August 15 (except for an amount not exceeding one-twelfth of the debt service on the Bond payable in the 12-month period ending on such date). The amounts on hand in the District Fund from time to time to pay principal of and interest on the Bond are expected to be expended within twelve months after receipt. Therefore, amounts on deposit in the District Fund are expected to qualify as a "bona fide debt service fund" within the meaning of Section 1.148-1(b) of the Regulations. Consequently, such amounts maybe invested at an unrestricted yield for a temporary period of 13 months. (o) As of the first day of each month commencing October I, 2008, the County Treasurer will determine the balances in the Principal and Interest Accounts in the District Fund. If the balances therein in the aggregate exceed the amount described in paragraph 5(n), the amount in excess thereof, except as provided in paragraph 5(t), will be applied to redeem Bond or will not be invested at a yield greater than the yield of the 4 Bond, if and to the extent such use or restriction is necessary to prevent the Bond from being arbitrage bonds within the meaning of Section 148 of the Code and the Regulations. (p) The County has established the Revolving Fund pursuant to Montana Code Annotated, Sections 7-12-4221 to 7-12-4229, as amended, to secure certain special improvement district bonds and warrants of the County, including the Bond. The amount on deposit therein, after giving effect to the deposit from the proceeds of the Bond, is $70,000. This amount secures rural special improvement district bonds and warrants of the County, including the Bond, issued in the. original aggregate principal amount of $1,400,000. Unless the Regulations otherwise require, the County will allocate amounts on hand in the Revolving Fund, as a commingled reserve fund as provided in Section 1.148-6(e)(6)(i) of the Regulations, to outstanding issues of special improvement district bonds or warrants secured thereby in proportion to their respective original principal amounts. The County shall reallocate funds on deposit in the Revolving Fund to outstanding issues of bonds or warrants secured thereby upon the issuance or retirement of a series of bonds or warrants secured thereby and, if not done otherwise, at least every three years. (r) The Revolving Fund is required for the marketability of the Bond and constitutes a "reasonably required reserve" for the Bond within the meaning of Section 148(d) of the Code and Section 1.148-2(f) of the Regulations to the extent that the amount on deposit in the Revolving Fund allocable to the Bond (the "Reserve Amount") does not exceed the Reserve Limitation (as hereinafter defined). For purposes of this paragraph 5(r), the "Reserve Limitation" is equal, as of the date of calculation, to the least of: (i) ten percent (10%) of the proceeds of the Bond ($8,000.00); (ii) the maximum amount of principal and interest payable on the Bond in the current or any future calendar year of the County (initially, $7,178.41, assuming the interest rate per annum 4.070%, the current five-year average rate of interest under the INTERCAP Program), and (iii) 125% of the average debt service on the Bond payable in any calendar year of the County during the term of the Bond (initially, $8,973.01, assuming the interest rate per annum is 4.070%, the current five-year average rate of interest under the INTERCAP Program). Any portion of the Reserve Amount that is in excess of the Reserve Limitation shall not be invested at a yield in excess of the yield of the Bond, except as permitted by paragraph 5(t) hereof. As of the date hereof, the Reserve Amount is $4,000.00. All of the Reserve Amount, determined as of the date hereof, maybe invested at an unrestricted yield pursuant to this paragraph 5(r). (s) Except as described in this Section 5, the County has not created or established, and does not expect to create or establish, any sinking or similar fund which is reasonably expected to be used to pay debt service on the Bond or which is pledged as collateral to secure the Bond. No amounts in any other funds or accounts of the County are reserved for or pledged to the payment of debt service on the Bond or will be used to replace funds that will be used to pay debt service on the Bond. (t) An aggregate amount not to exceed the Minor Portion Amount permitted by Section 148(e) of the Code ($4,000.00) maybe invested without restriction as to yield throughout the term of the Bond. To the extent that the sum of (i) proceeds of the Bond on deposit in the Construction Account in the District Fund remain on hand therein after the earlier of three years from the date hereof or completion of the Improvements with due diligence and payment of all costs thereof, whichever is earlier; (ii) the special assessments or other money on hand in the Principal and Interest Accounts in the District Fund in excess of the limitation described in paragraphs 5(n) and (o) (except amounts held therein for less than 13 months); and (iii) the Reserve Amount in excess of the Reserve Limitation, exceeds the Minor Portion Amount, such excess will thereafter be invested at a yield not exceeding the yield of the Bond. (u) The Bond will not be outstanding longer than necessary, within the meaning of Section 1.148-1(c)(4) of the Regulations. The weighted average maturity of the Bond (8.374 years) does not exceed 120 percent of the average reasonably expected economic life of the Improvements. Such average reasonably expected economic life is not less than 15 years. (v) We have investigated the facts, estimates and circumstances surrounding the issuance of the Bond, which are described summarily in this Certificate. To the best of our knowledge and belief, such facts, estimates and circumstances are correct and complete and the County's expectations as to future events, which are based thereon, are in all respects reasonable and made in good faith. To the extent that the expectations of the County are based upon estimates and representations made by others, including the Purchaser, we have examined such estimates and representations and consider them to be reasonable and correct. Any statements in this Certificate involving future events, whether or not expressly so stated, are intended as expectations of the County and not as representations of fact. On the basis of such facts, estimates and circumstances, it is expected that the proceeds of the Bond will be used in a manner that would not cause the Bond to be considered "arbitrage bonds" within the meaning of Section 148 of the Code, and there are no present facts, estimates or circumstances which would change the foregoing conclusion. 7. The provisions of this Section 7 are intended to establish and provide for compliance by the County with Treasury Regulations, Section 1.150-2 (the "Reimbursement Regulations") applicable to the "reimbursement proceeds" of the Bond, being those proceeds which will be used by the County to reimburse itself for any expenditure with respect to the Improvements which the County paid or will have paid prior to the issuance of the Bond (a "Reimbursement Expenditure"). The County hereby certifies and covenants as follows: (a) Except as hereinafter provided, on or before the date of payment of any Reimbursement Expenditure, the County made or will have made a written declaration of the County's official intent (the "Declaration") which complies with the provisions of Section 1.150-2(d) and (e) of the Reimbursement Regulations. The Declaration need not cover, however, Reimbursement Expenditures: (i) to be paid or reimbursed from sources other than the Bond, (ii) constituting "preliminary expenditures" 6 (within the meaning of Section 1.150-2(f)(2) of the Regulations) for the Improvements, including engineering or architectural expenses and similar preparatory expenses, which in the aggregate do not exceed 20% of the "issue price" of the Bond, (iii) in a "de minimus" amount (as defined in Section 1.150-2(f)(1) of the Regulations), i.e., $4,000; or (iv) Reimbursement Expenditures paid not more than 60 days before the date of the Declaration. (b) As of the date of the Declaration, no funds from sources other than the Bond were, or were reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside by the County to provide financing for the Reimbursement Expenditure to be reimbursed from proceeds of the Bond. (c) Each Reimbursement Expenditure to be reimbursed from proceeds of the Bond, other than costs of issuing the Bond, is a capital expenditure (i.e., a cost that is properly chargeable to capital account (or would be with a proper election) under general federal income tax principles). (d) The "reimbursement allocation" described in the Reimbursement Regulations for each Reimbursement Expenditure to be reimbursed from proceeds of the Bond shall be made forthwith following (but not prior to) the issuance of the Bond and in all events within the period ending on the date which is 18 months after the later o£ (i) the date of payment of the Reimbursement Expenditure or (ii) the Improvements are first placed in service or abandoned, but in no event more than three years after the Reimbursement Expenditure is paid. (e) Each such reimbursement allocation will be evidenced by an entry on the official books or records of the County maintained for and in connection with the Bond and will specifically identify the actual prior Reimbursement Expenditure to be reimbursed from proceeds of the Bond. (f) The County is unaware of any facts or circumstances which would cause it to question the reasonableness or accuracy of this Section 7 or of the Declaration, or its compliance with any of the covenants herein contained. 7 of the County. 8. The seal impressed below and printed on the Bond is the true and official seal Dated: September 19, 2008. JEFFERSON COUNTY, MONTANA (SEAL) ~-~,-'~ Chair, Board of County Commissioners ~i ~~ County Treasurer County Clerk and Recorder STATE OF MONTANA ) ss. COUNTY OF JEFFERSON ) AFFIDAVIT AS TO SIGNATURES OF OFFICERS Affiants, being first duly sworn, upon oath depose and say that affiant KEN WEBER is the duly qualified and acting Chair of the Board of County Commissioners, that affiant PATTY O'NEILL is the duly qualified and acting County Treasurer, and that affiant BONNIE RAMEY is the duly qualified and acting County Clerk and Recorder of Jefferson County, Montana (the "County"); that in such capacities, respectively, we have been authorized to execute $80,000 in aggregate principal amount of Rural Special Improvement District No. 2506 Bond of the County, dated, as originally issued, as of September 19, 2008; that the signatures subscribed to this affidavit are the proper signatures of such affiants as such Chair of the Board of County Commissioners, County Treasurer, and County Clerk and Recorder, respectively; that all facsimile signatures affixed to the Bond are true and correct engraved, printed or stamped facsimiles of affiants' proper signatures; and that a duplicate original of this affidavit has been filed with the undersigned County Clerk and Recorder in accordance with the provisions of Montana Code Annotated, Section 2-16-114(2). County Treasurer County Clerk and R corder -~ Subscribed and sworn to before me this ~ day of September, 2008. Printed Name: ~, ~` Notary Public for the State of Montanzt' Residing at Jefferson, Montana (Notarial Seal) My Commission Expires: ~~ ~\~ _ ~\~ CERTIFICATE SHOWING DUE EXECUTION OF CONSTRUCTION CONTRACT I, Bonnie Ramey, the duly qualified and acting County Clerk and Recorder of Jefferson County, Montana, do hereby certify that the following construction contract for the construction of the improvements in Rural Special Improvement District No. 2506 has been duly executed by the Chair of the Board of County Commissioners and the County Clerk and Recorder on behalf of the County: Work Bidder Contract Price Shaping and base course reconstruction of Big Dipper Drive, drainage improvements, and applying a hard surfacing to consist of a double shot chip seal Bullock Contracting LLC, Boulder, Montana $45,992.00 The contract was placed on file in the office of the County Clerk and Recorder after being signed by the contractors, and the contractors have submitted executed payment and performance bonds in the form and manner provided for in Title 18, Chapter 1, Part 2, and Title 18, Chapter 2, Part 2, Montana Code Annotated. WITNESS my hand and the seal of the County this 19th day of September, 2008. County Clerk and Recorder (SEAL) $80,000 Rural Special Improvement District No. 2506 Bond Jefferson County, Montana COUNTY TREASURER'S CERTIFICATE AND RECEIPT I, the undersigned, being the duly qualified and acting County Treasurer of Jefferson County, Montana, hereby certify and acknowledge that on the date of this instrument I received from the Board of Investments of the State of Montana, as purchaser thereof (the "Purchaser"), the amount of $40,797.42, as the first advance of principal of the Rural Special Improvement District No. 2506 Bond (the "Bond"), of Jefferson County, Montana, originally dated as of the date hereof, and issued in the maximum principal amount of $80,000. As Bond Registrar designated under Resolution No. 33-2008, adopted by the Jefferson County Board of County Commissioners, on August 19, 2008, authorizing the issuance of the Bond, I further certify that on the date hereof the Bond Registrar has authenticated and delivered the Bond to the Purchaser. I further certify that the Bond so authenticated and delivered was registered, on the face thereof and also in the bond register maintained by the Bond Registrar, in the name of the Purchaser. WITNESS my hand officially as such County Treasurer and the seal of said County this 19th day of September, 2008. ,~c~i~ County Treasurer (SEAL) $80,000 Rural Special Improvement District No. 2506 Bond Jefferson County, Montana CERTIFICATE OF BOND REGISTRAR I, the undersigned, being the duly qualified and acting County Treasurer, of Jefferson County, Montana, who is designated as Bond Registrar under the resolution adopted by the Board of County Commissioners of Jefferson County, Montana (the "County"), on August 19, 2008, authorizing the issuance of the Bond described above, do hereby certify that the Registrar has authenticated and delivered to the Board of Investments of the State of Montana, of Helena, Montana (the "Purchaser"), one fully executed Rural Special Improvement District No. 2506 Bond of the County in the maximum authorized principal amount of $80,000, maturing finally on August 15, 2023 and first bearing interest on amounts advanced thereunder from September 19, 2008 until paid or duly called for redemption. I further certify that the Bond so authenticated and delivered was registered, on the face thereof and also in the bond register maintained by the Registrar, in the name of the Purchaser. WITNESS my hand and the seal of the Bond Registrar this 19th day of September, 2008. JEFFERSON COUNTY, MONTANA as Bond Registrar ~i.~.~.~ By County reasurer Form 8~38-GC I Information Return for Small Tax-Exempt Governmental Bond Issues, Leases, and Installment Sales (Rev. November 2000) I - Under Internal Revenue Code section 149(e) Department of the Treasury I Caution: If the issue price of the issue is $100,000 or more, use Form 8038-G. Internal Revenue Service OMB No. 1545-0720 Reporting Authority Check box if Amended Return - ^ 1 Issuer's name 2 Issuer's employer identification number Jefferson County, Montana 81 ; 6001377 3 Number and street (or P.O. box if mail is no[ delivered to street address) Room/suite 201 Centennial, P.O. Box H 4 City, town, or post office, state, and ZIP code 5 Report number Boulder, MT 59632 5 2008-1 6 Name and title of officer or legal representative whom the IRS may call for more information 7 Telephone number of officer or legal representative Bonnie Ramey, County Clerk and Recorder ( 406 ) 225-4020 Descri tion of Obli ations Check if re ortin : a sin le issue ^ or on a consolidated basis ^ . 8a Issue price of obligation(s) (see instructions) . ga $80,000.00 b Issue date (single issue) or calendar year (consolidated) (see instructions) - _ Sept. 19, 2008 9 Amount of the reported obligation(s) on line 8a: a Used to refund prior issue(s) 9a 0 b Representing a loan from the proceeds of another tax-exempt obligation (e.g., bond bank) 9b $80,000.00 10 If the issuer has designated any issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check this box - 11 If any obligation is in the form of a lease or installment sale, check this box - ^ 12 If the issuer has elected to a a enalt in lieu of arbitra e rebate, check this box - ^ Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge Sign and belief, they are true, correct, and complete. Here --~ ' September 19, 2008' Ken Weber, Chair, Bd of Commissiot Issuer's authorized representative Date Type or print name and title General Instructions Section references are to the Internal Revenue Code unless otherwise noted Purpose of Form Form 8038-GC is used by the issuers of tax-exempt governmental obligations to provide the IRS with the information required by section 149(e) and to monitor the requirements of sections 141 through 150. Who Must File Issuers of tax-exempt governmental obligations with issue prices of less than $100,000 must file Form 8038-GC. Issuers of atax-exempt governmental obligation with an issue price of $100,000 or more must file Form 8038-G, Information Return for Tax-Exempt Governmental Obligations. Filing a separate return. Issuers have the option to file a separate Form 8038-GC for any tax-exempt governmental obligation with an issue price of less than $100,000. An issuer of atax-exempt bond used to finance construction expenditures must file a separate Form 8038-GC for each issue to give notice to the IRS that an election was made to pay a penalty in lieu of arbitrage rebate (see the line 12 instructions). Filing a consolidated return. For all tax-exempt governmental obligations with issue prices of less than $100,000 that are not reported on a separate Form 8038-GC, an issuer must file a consolidated information return including all such issues issued within the calendar year. Thus, an issuer may file a separate Form 8038-GC for each of a number of small issues and report the remainder of small issues issued during the calendar year on one consolidated Form 8038-GC. However, a separate Form 8038-GC must be filed to give the IRS notice of the election to pay a penalty in lieu of arbitrage rebate. When To File To file a separate return, file Form 8038-GC on or before the 15th day of the second calendar month after the close of the calendar quarter in which the issue is issued. To file a consolidated return, file Form 8038-GC on or before February 15th of the calendar year following the year in which the issue is issued. Late filing- An issuer may be granted an extension of time to file Form 8038-GC under Section 3 of Rev. Proc. 88-10, 1988-1 C.B. 635, if it is determined that the failure to file on time is not due to willful neglect. Type or print at the top of the form, "This Statement Is Submitted in Accordance with Rev. Proc. 88-10." Attach to the Form 8038-GC a letter briefly stating why the form was not submitted to the IRS on time. Also indicate whether the obligation in question is under examination by the IRS. Do not submit copies of any bond documents, leases, or installment sale documents. See Where To File below. Where To File File Form 8038-GC, and any attachments, with the Internal Revenue Service Center, Ogden, UT 84201. Other Forms That May Be Required For rebating arbitrage (or paying a penalty in lieu of arbitrage rebate) to the Federal government, use Form 8038-T, Arbitrage Rebate and Penalty in Lieu of Arbitrage Rebate. For private activity bonds, use Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues. Rounding to Whole Dollars You may show the money items on this return as whole-dollar amounts. To do so, drop any amount less than 50 cents and increase any amount from 50 to 99 cents to the next higher dollar. Definitions Obligations. This refers to a single tax-exempt governmental obligation if Form 8038-GC is used for separate reporting or to multiple tax-exempt governmental obligations if the form is used for consolidated reporting. Tax-exempt obligation. This is a bond, installment purchase agreement, or financial lease, on which the interest is excluded from income under section 103. Tax-exempt governmental obligation. A tax-exempt obligation that is not a private activity bond (see below) is atax-exempt governmental obligation. This includes a bond issued by a qualified volunteer fire department under section 150(e). Private activity bond. This includes an obligation issued as part of an issue in which: • More than 10% of the proceeds are to be used for any private activity business use, and Cat. No. 641088 Form 8038-GC (Rev. 11-2000) Form 8038-GC (Rev. 11-2000) Page 2 • More than 10% of the payment of principal or interest of the issue is either (a) secured by an interest in property to be used for a private business use (or payments for such property) or (b) to be derived from payments for property (or borrowed money) used for a private business use. It also includes a bond, the proceeds of which (a) are to be used to make or finance loans (other than loans described in section 141(c)(2)) to persons other than governmental units and (b) exceeds the lesser of 5% of the proceeds or $5 million. Issue. Generally, obligations are treated as part of the same issue only if they are issued by the same issuer, on the same date, and as part of a single transaction, or a series of related transactions. However, obligations issued during the same calendar year (a) under a loan agreement under which amounts are to be advanced periodically (a "draw-down loan") or (b) with a term not exceeding 270 days, may be treated as part of the same issue if the obligations are equally and ratably secured under a single indenture or loan agreement and are issued under a common financing arrangement (e.g., under the same official statement periodically updated to reflect changing factual circumstances). Also, for obligations issued under adraw-down loan that meets the requirements of the preceding sentence, obligations issued during different calendar years may be treated as part of the same issue if all of the amounts to be advanced under the draw-down loan are reasonably expected to be advanced within 3 years of the date of issue of the firs[ obligation. Likewise, obligations (other than private activity bonds) issued under a single agreement that is in the form of a lease or installment sale may be treated as part of the same issue if all of the property covered by that agreement is reasonably expected to be delivered within 3 years of the date of issue of the first obligation. Arbitrage rebate. Generally, interest on a state or local bond is not tax exempt unless the issuer of the bond rebates to the United States arbitrage profits earned from investing proceeds of the bond in higher yielding nonpurpose investments. See section 148(f). Construction issue. This is an issue of tax-exempt bonds that meets both of the following conditions: 1. At least 75% of the available construction proceeds of the issue are to be used for construction expenditures with respect to property to be owned by a governmental unit or a 501(c)(3) organization, and 2. All of the bonds that are part of the issue are qualified 501(c)(3) bonds, bonds that are not private activity bonds, or private activity bonds issued to finance property to be owned by a governmental unit or a 501(c)(3) organization. In lieu of rebating any arbitrage that may be owed to the United States, the issuer of a construction issue may make an irrevocable election to pay a penalty. The penalty is equal to 1 Yz % of the amount of construction proceeds that do not meet certain spending requirements. See section 148(f)(4)(C) and the Instructions for Form 8038-T. Specific Instructions In general, a Form 8038-GC must be completed on the basis of available information and reasonable expectations as of the date the issue is issued. However, forms that are filed on a consolidated basis may be completed on the basis of information readily available to the issuer at the close of the calendar year to which the form relates, supplemented by estimates made in good faith. Part I-Reporting Authority Amended return. If this is an amended Form 8038-GC, check the amended return box. Complete Part I and only those lines of Form 8038-GC that are being amended. Do not amend estimated amounts previously reported once the actual amounts are determined. (See the Part II instructions below.) Line 1. The issuer's name is the name of the entity issuing the obligations, not the name of the entity receiving the benefit of the financing. In the case of a lease or installment sale, the issuer is the lessee or purchaser. Line 2. An issuer that does not have an employer identification number (EIN) should apply for one on Form SS-4, Application for Employer Identification Number. This form may be obtained at Social Security Administration offices or by calling 1-800-TAX-FORM. If the EIN has not been received by the due date for Form 8038-GC, write "Applied for" in the space for the EIN. Line 5. After the preprinted 5, enter two self-designated numbers. Number reports consecutively during any calendar year (e.g., 534, 535, etc.). Part II-Description of Obligations Line 8a. The issue price of obligations is generally determined under Regulations section 1.148-1(b). Thus, when issued for cash, the issue price is the price at which a substantial amount of the obligations are sold to [he public. To determine [he issue price of an obligation issued for property, see sections 1273 and 1274 and the related regulations. Line 8b. For a single issue, enter the date of issue, generally the date on which the issuer physically exchanges the bonds that are part of the issue for the underwriter's (or other purchaser's) funds; for a lease or installment sale, enter the date interest starts to accrue. For issues reported on a consolidated basis, enter the calendar year during which the obligations were issued. Lines 9a and 9b. For line 9a, enter the amount of the proceeds that will be used to pay principal, interest, or call premium on any other issue of bonds, including proceeds that will be used to fund an escrow account for this purpose. Both line 9a and 9b may apply to a particular obligation. For example, report on line 9a and 9b obligations used to refund prior issues which represent loans from the proceeds of another tax-exempt obligation. Line 11. Check this box if property other than cash is exchanged for the obligation, e.g., acquiring a police car, a fire truck, or telephone equipment through a series of monthly payments. (This type of obligation is sometimes referred to as a "municipal lease.") Also check this box if real property is directly acquired in exchange for an obligation to make periodic payments of interest and principal. Do not check this box if the proceeds of the obligation are received in the form of cash, even if the term "lease" is used in the title of the issue. Line 12. Check this box if the issue is a construction issue and an irrevocable election to pay a penalty in lieu of arbitrage rebate has been made on or before the date the bonds were issued. The penalty is payable with a Form 8038-T for each 6-month period after the date the bonds are issued. Do not make any payment of penalty in lieu of rebate with Form 8038-GC. See Rev. Proc. 92-22, 1992-1 C.B. 736, for rules regarding the "election document." Paperwork Reduction Act Notice We ask for the information on this form to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws. You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as [heir contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103. The time needed to complete and file this form varies depending on individual circumstances. The estimated average time is: Learning about the law or the form 1 hr., 58 min. Preparing the form . 3 hr., 3 min. Copying, assembling, and sending the form to the IRS 16 min. If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Tax Forms Committee, Western Area Distribution Center, Rancho Cordova, CA 95743-0001. Do not send the form to this address. Instead, see Where To File on page 1. CERTIFICATE AS TO ORGANIZATION OF JEFFERSON COUNTY, MONTANA I, the undersigned, being the duly qualified and acting Clerk and Recorder of Jefferson County, Montana (the "County"), and, as such, having custody of and access to the official records relating to the facts stated below, hereby certify that, according to such records and as known to me, the following statements are true and correct: 1. The County is a political subdivision of the State of Montana (the "State") and is now governed by the general laws of the State relating to counties with a commissioner form of government. Its population, according to the 2000 United States census, was 10,049, and its current population is 10,499. 2. The County is governed by a Board of County Commissioners. The following named persons hold the offices set opposite their names and for the terms stated below: Name Office Term Began Term Ends Ken Weber Commissioner, Chair 01/01/2005 12/31/2010 Tom Lythgoe Commissioner 01/01/2007 12/31/2012 Chuck Notbohm Commissioner 01/01/2003 12/31/2008 Mathew Johnson County Attorney 01/01/2007 12/31/2010 Bonnie Ramey Clerk and Recorder 01/01/2007 12/31/2010 Patty O'Neill County Treasurer 01/01/2007 12/31/2010 3. Regular meetings of the Board of County Commissioners are held on Tuesday of each week at 1:30 p.m. 4. The following are all of the newspapers published in the County and the days of their publication: Name Davs of Publication Whitehall Ledger Wednesday Boulder Monitor Wednesday Jefferson County Courier Wednesday 5. There is no litigation threatened or pending questioning the organizational boundaries of the County or the right of any of the above-named persons to their respective offices or questioning the right and power of the County and its officers to issue bonds for any purpose or to levy, collect and apply taxes or other revenues for the payment of any bonds of the County. 6. The seal affixed below is the official corporate seal of the County. WITNESS my hand and the official seal this 19th day of September, 2008. (SEAL) County Clerk an Recorder 2