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<br />Northland Securities, Inc. Page 3
<br />Issue Overview
<br />Purpose
<br />Proceeds from the Bonds will be used to finance the City’s 2023 street (the “Improvement
<br />Portion”) and utility (the “Revenue Portions”) projects and to pay costs associated with issuing
<br />the Bonds. The Revenue Portions consist of a Sewer Portion and a Water Portion. The Bonds
<br />have been sized based on estimates provided by City staff and the City Engineer. The table
<br />below contains the sources and uses of funds for the bond issue.
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<br />Authority
<br />The Bonds will be issued pursuant to the authority of Minnesota Statutes, Chapters 429, 444,
<br />and 475.
<br />Under Chapter 429, an Improvement means any type of improvement made under authority
<br />granted by section 429.021, which includes, but is not limited to, improvements to streets and
<br />sidewalks, storm and sanitary sewer systems, and street lighting systems.
<br />Before issuing bonds under Chapter 429, the City must hold a public hearing on the
<br />Improvements and the proposed bonds, and must then pass a resolution ordering the
<br />improvements by at least a 4/5 majority. Public hearings have been held for the Improvement
<br />Portion and all corresponding resolutions have passed with at least a 4/5 majority.
<br />Under Chapter 444, general obligation utility revenue bonds may be issued to build, construct,
<br />reconstruct, repair, enlarge, improve, or in any other manner obtain sanitary sewer, water and
<br />storm sewer facilities, and maintain and operate the facilities inside or outside a city’s corporate
<br />limits.
<br />Structure
<br />The Improvement Portion has been structured over 10 years, with relatively level annual debt
<br />service payments. The Revenue Portions have been structured over 15 years, with relatively
<br />level annual debt service payments.
<br />The proposed structure for the bond issue and preliminary debt service projections are
<br />illustrated in Attachment 1 and the estimated levy is illustrated in Attachment 2.
<br />Security and Source of Repayment
<br />The Bonds will be general obligations of the City. The finance plan relies on the following
<br />assumptions for the revenues used to pay debt service, as provided by City staff:
<br />Improvement Sewer Water
<br />Issue
<br />Summary
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<br />Sources Of Funds
<br />Par Amount of Bonds $3,725,000.00 $1,620,000.00 $530,000.00 $5,875,000.00
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<br />Total Sources $3,725,000.00 $1,620,000.00 $530,000.00 $5,875,000.00
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<br />Uses Of Funds
<br />Deposit to Project Construction Fund 3,568,318.00 1,581,095.00 518,546.00 5,667,959.00
<br />Total Underwriter's Discount (1.300%)48,425.00 21,060.00 6,890.00 76,375.00
<br />Deposit to Capitalized Interest (CIF) Fund 67,005.10 --67,005.10
<br />Costs of Issuance 40,068.32 17,425.68 5,701.00 63,195.00
<br />Rounding Amount 1,183.58 419.32 (1,137.00)465.90
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<br />Total Uses $3,725,000.00 $1,620,000.00 $530,000.00 $5,875,000.00
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