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OVERVIEW <br /> <br />This report describes the proposed plan for the Economic Development Authority of the City <br />of Elk River, Minnesota (the "EDA") to issue $1,695,000 City Hall Expansion Revenue <br />Bonds, Series 2002B (City of Elk River Lease Purchase Obligation) (the "Series 2002B <br />Bonds"). This report has been prepared by Ehlers & Associates, Inc. in consultation with <br />EDA Staff and bond counsel. This report deals with: <br /> <br />· Purpose and components of bond issue. <br /> <br />Structure. <br /> <br />· Other considerations in issuing bonds. <br /> <br />· Market conditions. <br /> <br />· Issuing process. <br /> <br />PURPOSE <br /> <br />The Series 2002B Bonds are being issued by the Authority to provide funds to construct an <br />8,588 square addition to the City Hall which will house the Elk River Municipal Utilities <br />offices (the "Project"). Construction on the Project is expected to begin Summer, 2002 and <br />be completed by Summer of 2003. <br /> <br />The Series 2002B Bonds are being issued pursuant to the powers provided or referenced in <br />Minnesota Statutes, Sections 469.090 - 469.1081, a Supplement to Lease Purchase <br />Agreement to be dated September 1, 2002, a Supplement to Lease Purchase Agreement dated <br />December 1, 1997, and the original Lease Purchase Agreement dated November 1, 1991 <br />(collectively referred to as the "Lease") between the Authority and the City of Elk River (the <br />"City"), and a Supplement to Trust Indenture to be dated September 1, 2002 and Supplement <br />to Trust Indenture dated December 1, 1997 to the original Trust Indenture dated November 1, <br />1991 (collectively referred to as the "Indenture") between the Authority and U. S. Bank <br />National Association, St. Paul, Minnesota (the "Trustee"). The original City Hall building <br />was financed through a similar lease purchase financing structure in 1991. The Series 2002B <br />Bonds are considered to be "additional bonds" to the 1991 financing, which means that the <br />two bond issues share rights to lease income and security on a parity basis. <br /> <br />The Lease: Pursuant to the Lease, the Authority will lease the facility to the City, subject to <br />the City's right to terminate the Lease at the end of any Fiscal Year. Lease Payments are to <br />be made by the City in amounts sufficient to pay the principal of and interest on the Bonds <br />when due. <br /> <br />Page 1 <br /> <br /> <br />