BOI Board Room

City/Town INTERCAP Loans

  • JUDGMENT
Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 2-9-316 15 year No None
General Obligation** 2-9-316 & 7-7-42 15 year No Full faith, credit & taxing power pledge

  • ENERGY RETROFIT PROJECTS
Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment
General Fund 7-7-4101 & 7-7-4104 15 year No Applicable Equipment
General Obligation** 7-7-4101 & 7-7-42 15 year Yes Full faith, credit & taxing power pledge
Certified Engineer Cost Savings 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment

  • REAL PROPERTY PURCHASE & EQUIPMENT
Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment
General Fund 7-7-4101 & 7-7-4104 15 year No Applicable Equipment
General Obligation** 7-7-4101 & 7-7-42 15 year Yes Full faith, credit & taxing power pledge

  • NEW & USED VEHICLE/EQUIPMENT OF ALL KINDS
Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
General Fund 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment
General Fund 7-7-4101 & 7-7-4104 15 year No Applicable Equipment
General Obligation** 7-7-4101 & 7-7-42 15 year Yes Full faith, credit & taxing power pledge

  • WATER, WASTEWATER, AND SOLID WASTE PROJECTS
Repayment Option Borrowing Statutes Loan Term* Vote Req'd? Collateral
Revenue Bond*** 7-7-44 & 7-7-45 15 year No Revenue Pledge
General Fund 7-5-4306, 7-7-4101 & 7-7-4201 10 year No Applicable Equipment
General Fund 7-7-4101 & 7-7-4104
Solid Waste 75-10-112
15 year No Applicable Equipment
General Obligation** 7-7-4101 & 7-7-42
Solid Waste 75-10-112
15 year Yes Full faith, credit & taxing power pledge

  • INTERIM FINANCING FOR CONSTRUCTION OR CASH-FLOW LOANS
Repayment Option Borrowing Statutes Loan Term

Bond Counsel Req'd?

Collateral
Revenue Anticipation 7-6-11 Up to 1 year* No Tax/Revenue Pledge
Bond Anticipation 7-7-109 Up to 3 years Yes Written commitment**
Grant Application 7-7-109 Up to 3 years No Written commitment**

* Revenue anticipation notes (RAN) must be repaid within the year they are borrowed.

**7-7-109(2)(b) Before the notes are issued, the political subdivision must receive a written commitment for the purchase of the bonds or for the grant or loan in an amount that in the aggregate is not less than the principal amount of the notes and shall by resolution agree to fulfill any conditions of the commitment.


SPECIAL IMPROVEMENT DISTRICTS (SID) BONDS

  • Special Improvement District (SID) loans are payable from special assessments levied against the real property in the district.
  • SIDs are not full faith and credit obligations of the city.
  • All statutory requirements for establishing the Special Improvement District must be met prior to the loan.
  • City funds must secure the SID with a pledge to levy for and maintain their revolving fund to the maximum amount permitted by law.
  • All local government SIDs and the balance in the revolving fund are subject to review as part of the loan process.
  • Maximum loan limit is $500,000.
  • Subject to 7-12-4203(1)(b), loans in excess of $250,000 require underwriter opinions that the bonds are not marketable through competitive bond sale.  (Two opinions are sufficient)
  • Maximum loan term is 15 years or useful life of the project, whichever is less.

 


 

STREET MAINTENANCE DISTRICT BONDS

  • Street Maintenance District loans are payable from assessment revenue levied against the real property in the district in accordance with 7-7-44 and 7-12-44, MCA.
  • The City must pledge the assessment revenues and ensure adequate annual assessments are maintained.
  • The obligation does not require voter approval.  However, the appropriate steps to create the street maintenance district and set the annual assessments must comply with 7-12-44, MCA.
  • The City must provide documentation of the street assessments currently in effect, any proposed adjustments, and evidence of the process followed to create the district and set annual assessments.
  • Assessment revenue must be set to generate net revenues to cover debt service by a factor of 1.25.
  • If the district has other outstanding debt, bond counsel is required.
  • Reserve requirement is one year debt service, or 10% of the loan, whichever is less.
  • Maximum loan term is 15 years or useful life of the project, whichever is less.

 

* Eligible governments must adhere to State law when financing capital projects and cannot finance projects for a longer term than allowed. Board staff will consider the maximum loan term authorized in statute, as well as the repayment ability of the eligible borrower, when reviewing loan requests.  In addition, loan terms cannot exceed the useful life of the project being financed.

** Bond Counsel required.

*** Rates and charges must be set to generate net revenues to cover debt service by a factor of 1.25. The Board will require a reserve account (one year debt service or 10% of the loan, whichever is less).  Bond Counsel will be required to ensure parity bonds if Borrower has existing outstanding debt with the same revenue pledge


MONTANA BOARD OF INVESTMENTS | MONTANA DEPARTMENT OF COMMERCE
2401 COLONIAL DR, 3RD FLOOR | PO BOX 200126 | HELENA, MT 59620-0126 | P: 406-444-0001 | F: 406-449-6579 | TDD: 406-841-2702