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leases the City Facility pursuant to a Lease Purchase Agreement, dated November 1, 1991 as supplemented by a Supplement to Lease Purchase Agreement dated December 1, 1997, as further supplemented by a Supplement to Lease Purchase Agreement dated September 1, 2002 (collectively the "Lease Purchase Agreement"), between the Authority, as lessor, and the City, as lessee. The City has determined to terminate the Lease Purchase Agreement and purchase the City Hall Facility from the Authority by refunding the Series 2002B Bonds, which are currently outstanding in the principal amount of $1,270,000. (c) The City is authorized by Minnesota Statutes, Section 475.521 (the "CIP Act") to finance certain capital improvements under an approved capital improvement plan by the issuance of general obligation bonds of the City payable from ad valorem taxes. Capital improvements include acquisition or betterment of public lands, buildings or other improvements for the purpose of a city hall, public safety facility and public works facilities. Further, the City is authorized by the provisions of Minnesota Statutes, Chapter 475 (the "Municipal Debt Act"), and specifically Section 475.67, Subdivisions 3 through 12 of the Municipal Debt Act, to issue and sell its general obligation bonds to refund outstanding bonds when determined by the City Council to be necessary and desirable for the reduction of debt service or interest cost and the adjustment of maturities of outstanding issues of bonds. (d) On December 21, 2009 the City held a public hearing regarding (i) the adoption of a five-year capital improvement plan for the City prepared in compliance with, Minnesota Statutes, Section 475.521 (the "CIP Plan"); and (ii) the issuance of general obligation bonds (the "CIP Bonds") in the maximum amount of $8,000,000, to acquire the City's Safety Facility and the City Hall Facility from the Authority by refunding the outstanding Series 2002A Bonds and Series 2002B Bonds issued by the Authority. (e) The City Council has determined that, within 30 days after the public hearing, no petition for a referendum on issuance of bonds pursuant to the Plan was received by the City in accordance with the CIP Act. (f) As required by the CIP Act, the City has determined that: (i) the expected useful life of the City Hall will be at least five years; and (ii) the amount of principal and interest due in any year on all outstanding bonds issued by the City under the CIP Act, including the CIP Bonds, will not exceed 0.16 percent of the taxable market value of property in the City for taxes payable in 2011. 1.02. Authorization to Issue Bonds. It is determined that the City is authorized by Section 475.67, Subdivision 3 of the Municipal Debt Act, to issue and sell its general obligation bonds to refund obligations and the interest thereon before the due date of the obligations, if consistent with covenants made with the holders thereof, when determined by the City Council to be necessary or desirable for the reduction of debt service cost to the City or for the extension or adjustment of maturities in relation to the resources available for their payment. Further, Minnesota Statutes, Section 475.67, subdivision 4 permits the sale of refunding obligations • 365125v1 JSB EL185-11 3