4.1. ERMUSR 02-11-2014 - Laserfiche WebLink

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A number of electrical industry and other studies have been conducted regarding the potential long-term health effects resulting from exposure to electromagnetic fields ("EMF") created by transmission and distribution lines and equipment. At this time, any relationship between EMF and certain adverse health effects remains inconclusive; however, electric utilities have been experiencing challenges in various forms claiming financial damages associated with electric equipment and EMF. At this time, it is not possible to predict the extent of the cost, if any, and other impacts which the EMF concern may have on electric utilities, including the Utility. Up to this point there have been no claims against the Utility related to EMF exposure. Litigation claiming personal or property injury arising from alleged stray voltage has resulted in some damage awards against some electric utilities (other than the Utility). In 1993, the Minnesota Legislature extended service requirements governing grounding and stray voltage to electric utilities that provide or furnish retail electric service to agricultural customers in Minnesota. It cannot be predicted at this time whether such legislation or litigation may affect the operations and costs of the Utility. The Utility cannot predict at this time whether any additional legislation or rules will be enacted which will affect the Utility's operations, and if such laws or rules are enacted, what the costs to the Utility might be in the future because of such action. Secondary Markets and Prices Neither the City, the Commission, nor the Purchaser will be obligated to repurchase any of the Bonds, and no representation is made concerning the existence of any secondary market for the Bonds. No assurance can be given that any secondary market will develop following the completion of the offering of the Bonds and no assurance can be given that the initial offering prices for the Bonds will continue for any period of time. AUTHORITY AND PURPOSE The Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 453, all as amended, the City Resolution, and the Awarding Resolution. The proceeds of the Bonds, along with available City funds, will be used to refund the August 1, 2014 through August 1, 2021 maturities (the "Refunded Maturities") of the City's Electric Revenue Bonds, Series 2006A, dated March 2, 2006 (the "Series 2006A Bonds"). The Bonds have been structured as a current refunding, which are being issued to achieve debt service savings and to restructure the Utility's debt. It is anticipated that the Refunded Maturities will be called and prepaid at a price of par plus accrued interest on May 1, 2014, which is within 90 days of settlement of the Bonds. - 10 - 91