5.2a ERMUSR 04-13-2021 - Laserfiche WebLink

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AUTHORITY AND PURPOSE The Series 2021B Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 453, the City Resolution, and the Awarding Resolution. The proceeds of the Series 2021B Bonds will be used to finance the construction of a field house facility to accommodate service trucks, inventory and offices. SOURCES AND USES OF FUNDS The composition of the Series 2021B Bonds is estimated to beas follows: Sources of Funds: Principal Amount $12,620,000 Total Sources of Funds $12,620,000 Uses of Funds: Deposit to Project Fund$11,812,500 Deposit to Reserve Account 535,661 Allowance for Discount Bidding 201,920 Costs of Issuance69,919 Total Uses of Funds $12,620,000 SECURITY AND FINANCING The Series 2021B Bonds are special limited obligations of the City payable, together with the Outstanding Bonds, solely from Net Revenues of the Electric System. Net Revenues of the Electric System are defined as Gross Revenues less Operating Expenses. Operating Expenses are defined as the current expenses of operation, maintenance and minor or current repair of the Electric System for any specified period. Operating Expenses include, without limitation, administrativeexpenses of the Commission relating to the Electric System, franchise fees, premiums for insurance relating to the Electric System, and amounts necessary to accumulate and maintain the Operating Reserve Requirement. Operating Expenses do not include depreciation, amortization, or interest expense. Gross Revenues are defined as all revenues and receipts from rates, fees, charges, and rentals imposed by the Commission for the availability, benefit, use and products of the Electric System or any part thereof, and any penalties and interest thereon, and income from the investment thereof. Gross Revenues do not include amounts received from the sale of property which is part of the Electric System or amounts borrowed with respect to the Electric System. The Series 2021B Bonds have a first charge and lien on the Net Revenues of the Electric System and are issued on a parity with the Outstanding Bonds. Rate Covenant The Commission has pledged to establish user rates and charges for the Electric System sothat annual Net Revenues shall not be less than 110% of the annual debt service on the Parity Bonds and any additional parity bonds in each fiscal year. The City and the Commission covenant: to charge reasonable and just rates; to maintain the ElectricSystem in efficient operating condition; to keep proper books and records; to have an annual audit prepared by an independent auditor in accordance with generally accepted accounting principles; to maintain proper billing procedures; to carry insurance; and not to dispose of the Electric System until all Parity Bonds are paid in full or otherwise discharged. - 11 - 276