2.0. ERMUSR 08-29-2018 - Laserfiche WebLink

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Li ligation claiming personal or property injury arising from alleged stray voltage has resulted in some day age awards against some electric utilities (other than the Utility). In 1993, the Minnesota Legislature expended service requirements governing grounding and stray voltage to electric utilities that provide or fu ish retail electric service to agricultural customers in Minnesota. It cannot be predicted at this time w ether such legislation or litigation may affect the operations and costs of the Utility. Th- Utility cannot predict at this time whether any additional legislation or rules will be enacted which wi 1 affect the Utility's operations, and if such laws or rules are enacted, what the costs to the Utility mi•ht be in the future because of such action. Se ondary Markets and Prices N:ither the City nor the Commission 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 ca be given that any secondary market will develop following the completion of the offering of the Bends and no assurance can be given that the initial offering prices for the Bonds will continue for any pe iod of time. AUTHORITY AND PURPOSE Th- Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 453, and Sections 412.321 t eugh 412.391, all as amended, the City Resolution, and the Awarding Resolution. The proceeds of the Bends, along with available City funds, will be used to finance the remaining cost of acquisition of the Commission's membership interest in the Minnesota Municipal Power Agency (MMPA). Th- Commission, on behalf of the City, entered into a New Member Agreement with MMPA dated M.y 14, 2013 (the "Agreement") under which the City became a member of MMPA effective June 4, 2013. Pursuant to the Agreement, to become a member of MMPA, the Commission is required to pay a buy-in fee to MMPA prior to October 1, 2018, the date on which the City will begin purchasing electric pover and energy from MMPA. The City issued its Series 2016A Bonds to finance an initial buy-in deposit, and the proceeds of the Bonds will finance the remaining cost of acquisition of the Commission's membership interest in the MMPA. The City has agreed to a buy in equal to 120% of the Commission's proportionate share of MMPA's net position (equity) and related rate accruals of MMPA through an ag eed upon formula. SOURCES AND USES OF FUNDS T e composition of the Bonds is estimated to be as follows: Sources of Funds: Principal Amount $10,000,000 Available City Funds 2,217,869 Total Sources of Funds $12,217,869 Uses of Funds: Deposit to Project Account $11,708,025 Deposit to Reserve Account 275,819 Allowance for Discount Bidding 150,000 Costs of Issuance 84,025 Total Uses of Funds $12,217,869 - 10 - 19