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<br />City of Elk River, Minnesota <br />Recommendations for Issuance of Bonds <br /> <br />$10,000,000 Electric Revenue Bonds, Series 2018A <br />The City Council and Utilities Commission have under consideration the issuance of bonds (the “Bonds”) to finance <br />the Elk River Municipal Utilities’s (the “Utility”) buy-in to become a member of the Minnesota Municipal Power <br />Agency. This document provides information relative to the proposed issuance. <br />KEY EVENTS: The following summary schedule includes the timing of some of the key events that will occur <br />relative to the bond issuance. <br /> <br />July 10, 2018 Utilities Commission sets sale date and terms <br />July 16, 2018 City Council sets sale date and terms and authorizes <br />Utilities Commission to award Bonds <br />Week of August 13, 2018 Rating conference is conducted <br />August 29, 2018, 9:30 AM Competitive bids are received <br />August 29, 2018, 3:00 PM Utilities Commission considers award of Bonds <br />September 26, 2018 Proceeds are received <br />September 28, 2018 Payment to MMPA <br /> <br />RATING: An application will be made to Moody’s Investors Service for a rating on the Bonds. The City’s <br />electric revenue supported debt is currently rated 'Aa3' by Moody’s. <br />THE MARKET: General performance of the tax-exempt market is often measured by the Bond Buyer’s Index <br />(“BBI”) which measures the yield of high grade municipal bonds in the 20th year for general <br />obligation bonds (the BBI 20 Bond Index) and the 30th year for revenue bonds (the BBI <br />Revenue Bond Index). The following chart illustrates these two indices over the past five <br />years. <br />2.0% <br />3.0% <br />4.0% <br />5.0% <br />6.0%Index RateBBI 20-bond (G.O.) and Revenue Indices for 5 Years Ending <br />6/28/2018 <br />BBI Revenue Bond <br />BBI 20 Bond <br />6/28/2018 <br />Revenue: 4.36% <br />20 bond: 3.87% <br />Data Source: The Bond Buyer <br /> Study No.: 00894.129 July 5, 2018