5.5. ERMUSR 05-10-2016 - Laserfiche WebLink

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SALE TERMS AND Variability of Issue Size: A specific provision in the sale terms permits modifications to the MARKETING: issue size and/or maturity structure to customize the issue once the price and interest rates are set on the day of sale. Prepayment Provisions: • Series 2016A Bonds maturing on or after February 1, 2026 will be subject to optional redemption on February 1, 2025 and any date thereafter, at a price of par plus accrued interest. • Based on the short duration of the Series 2016B Bonds, and to avoid possible negative pricing impacts, the Series 2016B Bonds will not be subject to redemption prior to their stated maturities. Bank Qualification: • The City does not expect to issue more than $10 million in tax-exempt obligations that count against the $10 million limit for this calendar year; therefore, the Series 2016A Bonds are designated as bank qualified. • The Series 2016B Bonds will refund an issue that is not bank qualified and therefore the Series 2016B Bonds will not be designated as bank qualfied. RISKS/SPECIAL The outcome of this financing will rely on the market conditions at the time of the sale. Any CONSIDERATION: projections included herein are estimates based on current market conditions. SUPPLEMENTAL Supplementary information will be available to staff including detailed terms and conditions of INFORMATION sale, comprehensive structuring schedules and information to assist in meeting post- AND issuance compliance responsibilities. BOND RECORD: Upon completion of the financing, a bond record will be provided that contains pertinent documents and final debt service calculations for the transaction. $10,000,000 Electric Revenue Bonds, Series 2016A Description of Issue PURPOSE: Proceeds of the Series 2016A Bonds will be used to finance the Utility's buy-in to become a member of the Minnesota Municipal Power Agency (the "MMPA"). The City and the MMPA will execute a Power Sales Agreement under which the City will purchase electric power and energy from the MMPA from and after October 1 2018. The City agrees to a buy in equal to 120% of its proportionate share of the net position (equity) and related rate accruals of MMPA through an agreed upon formula. The amount of the buy in will be at least $10,000,000 and will be determined in 2018. At that time, any additional amounts owed may result in additional bonds. We have attached the buy-in analysis for the Utility's membership prepared by the MMPA. Springsted Page4 169