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$1,600,000 General Obligation Tax Abatement Refunding Bonds, Series 2016C Description of Issue PURPOSE: Proceeds of the 2016C Bonds will be used to refund the February 1, 2018 through 2023 maturities of the City's General Obligation Tax Abatement Bonds, Series 2006C, dated August 15, 2006 (the "20060 Bonds"). The aggregate principal amount of the maturities being refunded is $1,565,000. This refunding transaction is being conducted as a current refunding in which the proceeds of the 2016C Bonds will be used within 90 days to redeem the 2006C Bonds and is being done to provide interest cost savings to the City. Because the original financing is a joint project between the City and the YMCA, a Minnesota non-profit organization, the 2016C Bonds are a 501(c)(3) qualified private activity bond. A 501(c)(3) is a type of private activity bond that can be issued as tax- exempt and are subject to general rules applicable to all tax-exempt bonds. SERIES 2006C The 2006C Bonds were originally issued to finance a joint project between the City and the BONDS: YMCA of Greater St. Paul ("YMCA"), as per a Development Agreement dated March 13, 2006. The project consisted of the construction of a YMCA facility within the City. The YMCA facility is approximately 50,000 square feet and includes a teen center, gym, indoor pool, cardiovascular/strength training area, aerobic studio, family program space and Kids Stuff. AUTHORITY: The 2016C Bonds are being issued pursuant to Minnesota Statutes, Chapters 469 and 475. SECURITY AND The 2016C Bonds are a general obligation of the City, secured by its full faith and credit SOURCE OF and taxing power. In addition, the City will pledge tax abatement revenues against PAYMENT: identified properties as previously pledged to the 20060 Bonds. On February 1, 2017, the call date of the 2006C Bonds, the City will (i) make their regularly scheduled principal and interest payment due on the 2006C Bonds in the amount of $227,447.50 with previously collected tax abatement revenue and (ii) use proceeds of the 2016C Bonds to redeem the remaining maturities of the 2006C Bonds. Debt service on the 2016C Bonds will be repaid from the City levy portion of tax abatements derived from specified properties within the Tax Abatement District in Legacy at Woods Edge as stated in the Resolution approving the property tax abatements (the "Tax Abatement Parcels") for the Project. Taxes may be abated within the Tax Abatement Parcels for a period of 15 years, commencing in levy year 2007 payable 2008. The City anticipates that the tax abatement revenue will be sufficient to pay 105% of the debt service on the 2016C Bonds and does not anticipate the need to levy general ad valorem tax levies. Each year's collection of tax abatement revenue will be used to make the interest payment due on August 1 in the collection year and the principal and interest payment due on February 1 in the following year. Springsted Page 6