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City of Blaine, Minnesota <br /> August 13, 1997 <br /> Cities' current contracts with the Fire <br /> • Department provide a formula for allocating <br /> between the Cities the annual capital, debt <br /> service, and operating costs of the Fire <br /> Department's fire protection services. <br /> The percentage of total annual Fire <br /> Department costs each city is responsible <br /> for is adjusted each year, since the formula <br /> is based on each city's proportionate number <br /> of fire calls to the total number of calls made, <br /> and each city's proportionate tax capacity to <br /> the total combined tax capacity of all three <br /> Cities. The pro-rata share of debt service <br /> costs that the Cities pay will thus be <br /> adjusted each year. Mounds View and <br /> Spring Lake Park remit their respective debt <br /> service payments to the City of Blaine for <br /> payment on the Fire Improvement Bonds. <br /> For 1997, the respective percentage are: <br /> Blaine - 69.55%; Mounds View- 19.40%; <br /> and Spring Lake Park- 11.05%. <br /> Each City will make its first levy for this issue <br /> in 2000 for collection in 2001. The escrow <br /> account, established with the proceeds of <br /> the new issue, will cover payments due on <br /> the new bonds through February 1, 2001. <br /> Beginning with the August 1, 2001 interest <br /> payment, each August 1 interest payment <br /> will be made from first-half collections of <br /> taxes and each subsequent February 1 <br /> principal and interest payment will be made <br /> from second-half tax collections, and surplus <br /> first-half collections. <br /> 7. Prepayment Provisions The City may elect on February 1, 2006 and <br /> on any day thereafter, to prepay the bonds <br /> due on or after February 1, 2007 at a price <br /> of par plus accrued interest. <br /> 8. Credit Rating Comments We recommend the City apply to <br /> Moody's Investors Service for a rating. The <br /> City is currently rated Al. <br /> 9. Bank Qualification This issue will be bank-qualified since all <br /> three cities expect to issue under <br /> $10,000,000 in 1997. Issues which are not <br /> bank-qualified typically receive higher <br /> interest rates than bank-qualified financings. <br /> We have taken this into account in the <br /> projected rates shown on page 9 of these <br /> recommendations. <br /> 10. Rebate Requirements Tax-exempt bond issues are subject to the <br /> federal rebate and yield restriction <br /> Page 2 <br />