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RECOMMENDATIONS • Re: Recommendations for the Issuance of $725,000 General Obligation Improvement Bonds, Series 1998A (the "Bonds") 1. Sale Date and Time Tuesday, March 10, 1998 at 12:00 Noon with award by the City Council at 7:00 P.M. on that same day. 2. Authority and Purpose for the Bond Issue The Series 1998A Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475. The proceeds are being used to finance various improvement projects within the City. 3. Principal Amount of Offering $725,000, including $17,325 for issuance costs and $9,425 for the underwriter's discount. Net proceeds available for construction costs will be approximately $698,250. 4. Repayment Tenn Interest payments on the Bonds are due on February 1 and August 1, commencing February 1, 1999. Principal will be due February 1, 2000 through 2014. • 5. Term Bonds For the Bonds, we have included a provision in the attached Terms of Proposal to permit the underwriters to combine multiple maturity years into a term bond, subject to mandatory redemption on the same maturity schedule provided in the Terms of Proposal. The advantage to the underwriter is that it provides a large block of bonds which is more attractive to bond funds and certain pension funds which deal with only large blocks of bonds. This in turn is a benefit to the City since selling larger blocks of bonds reduces the risk to the underwriter, allowing them to lower their costs and the interest coupons. Since the bonds are being offered on a competitive bid basis and awarded on the lowest true interest cost,the City will award the bonds to the best bid regardless of whether term bonds are chosen or not 6. Sources of Payment and Payment Cycle The Bonds will be paid from special assessments.against benefited property and general ad valorem tax levies. 7. Prepayment Provisions The Bonds maturing on or after February 1, 2007 will be callable on February 1, 2006 at a price of par plus accrued interest.