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Calendar year debt service paymentson the City’s outstanding CIPbonds <br />andthe 2020A Bonds <br />SALE TERMS ANDVariability of Issue Size:A specific provision in the sale terms permits modifications to <br />the issue size and/or maturity structure to customize the issue once the price and <br />MARKETING: <br />interest rates are set on the day of sale. <br />Prepayment Provisions:The 2020A Bonds maturing on or after February 1, 2031may <br />be prepaid at a price of par plus accrued interest on or after February 1, 2030. <br />Bank Qualification:The City does not expect to issue more than $10 million in tax- <br />exempt obligations that countagainst the $10 million limit for thiscalendar year; <br />therefore, the 2020ABonds are designated as bank qualified. <br />A portion of the 2020B Bonds will count toward the $10 million bank qualification <br />limitation. <br />Premium Bidding:Any excess proceeds generated on the 2020A Bonds as original <br />issue premium and/orunused discount will be used to increase the deposit to <br />construction fund for Fire Station #3, to the extent the total borrowing of the 2020A <br />Bonds is within the required limitations to be designated as bank qualified. <br />$5,970,000 General Obligation Capital Improvement Plan Refunding Bonds, Series 2020B <br />Description of Issue <br />PURPOSE:Proceeds of the 2020B Bonds will be used to refund (i)the February 1, 2022and <br />February 1, 2023maturities of the City’s General Obligation Capital Improvement Plan <br />Bonds, Series 2010A (the “2010A Bonds”), datedApril 21,2010;and(ii)theFebruary <br />1, 2022 through February 1, 2033maturities of the City’s General Obligation Capital <br />Improvement Plan Bonds, Series 2012A (the “2012A Bonds”), dated March 15, 2012 <br />(the 2010A Bonds and the 2012A Bonds together the “Prior CIP Bonds”).The maturities <br />to be refunded are currently outstanding in the aggregate principal amount of <br />$5,865,000.The purpose of the refunding is to achieve interest cost savings. <br />Proceeds of the 2010A were originally issued to acquire the City Health and Public <br />Safety Building by refunding the Elk River Economic Development Authority’s Public <br />Safety Building Lease Revenue Bonds, Series 2002A, and City Hall Expansion <br />Revenue Bonds, Series 2002B. <br />Proceeds of the 2012A Bonds were originally issued to finance a Public Works facility <br />expansion and renovation. <br />AUTHORITY: <br />Statutory Authority:The 2020B Bonds are being issued pursuant to Minnesota <br />Statutes, Chapter 475. <br />Statutory Requirements:Pursuant to Minnesota Statutes, Section 475.521, the <br />maximum calendar year debt service on all outstanding bonds issues under a capital <br />improvement plancannot exceed an amount equal to 0.16% of the estimated market <br />value of the property within the City for taxes payable in the year the bonds are issued <br />or sold. This test was met at the time the Prior CIP Bonds were issued. <br />Page 4 <br />