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BE IT RESOLVED By the City Council of the City of Elk River, Sherburne County, • Minnesota (the "City") as follows: Section 1. Background. 1.01. Statutory Authorization. The City is authorized by Minnesota Statutes, Section 475.521 (the "Act") to finance certain capital improvements under an approved capital improvement plan by the issuance of general obligation bonds of the City payable from ad valorem taxes. Capital improvements include acquisition or betterment of public lands, buildings or other improvements for the purpose of a city hall, library, public safety facility and public works facilities (excluding light rail transit or any activity related to it, or a park, road, bridge, administrative building other than a city hall, or land for any of those activities). 1.02. Capital Improvement Plan Authorizing Issuance of Bonds. On January 17, 2012 the City held a public hearing regarding a five year capital improvement plan (the "Plan"), and regarding issuance of bonds in the maximum principal amount of $6,975,000 to finance planned capital improvements, all in accordance with the Act. The Plan authorizes issuance of bonds to pay the cost of certain capital improvements identified in the capital improvement plan, including but not limited to the acquisition and construction of a public works facility (the "Improvement"). 1.03. No Petition for a Referendum Received. The City Council has determined that, • within 30 days after the hearing, no petition for a referendum on issuance of bonds pursuant to the Plan was received by the City in accordance with the Act. 1.04. Estimated Total Cost of Capital Improvement. The City estimates that the total cost of the Improvement is approximately $9,500,000, including capitalized interest, costs of issuance and bond discount. 1.05. Determinations of the City in Compliance with the Act. As required by the Act, the City has determined that: (i) the expected useful life of the Improvement will be at least five years; and (ii) the amount of principal and interest due in any year on all outstanding bonds issued by the City under the Act, including the Bonds, is less than .16% of the taxable market value of property in the City for taxes payable in 2012. 1.06. Issuance of the Bonds. It is necessary and expedient to the sound financial management of the affairs of the City to issue its $6,975,000 General Obligation- Capital Improvement Plan Bonds, Series 2012A (the "Bonds") pursuant to the Act to provide financing for the Improvement. • 398211v3 JSB EL185-IS 2