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28 CITY OF ST. ANTHONY, MINNESOTA PRE-SALE REPORT AUGUST 12, 2003 Proposed Issues: $630,000 General Obligation Refunding Improvement Bonds, Series 2003D Purpose: To achieve cost savings by refinancing bonds eligible for refunding at lower interest rates by the issuance of the Series 2003D Bonds in order to provide for the current refunding of the outstanding portion of the City's $525,000 General Obligation Improvement Bonds of 1994B; $470,000 General Obligation Improvement Bonds of 1993A; and $825,000 General Obligation Improvement Bonds of 1995 (the"Refunded Bonds"). Description: Ehlers&Associates routinely reviews outstanding bond issues to assess potential for cost savings. This review indicated cost savings could be achieved by refunding the above-named issues. Ehlers has established criteria that provide guidance regarding the level of savings, which should be achieved prior to recommending refunding. In addition, State and Federal regulations provide criteria for refunding of existing debt. This issue meets both criteria. Term/Call Feature: The Series 2003D Bonds will combine the Refunded Bonds and will retain the debt repayment period within those original issues. The term of the Series 2003D Bonds will be 7 years and will be callable in February 2008 for bonds maturing in 2009. Funding Sources: The Series 2003D Bonds will be paid from the same sources as the original debt, which includes assessments and debt levy. The savings from the refunding will reduce the debt levy requirements. Discussion Issues: Bond interest rates have been at near record lows but are rising. A number of factors, including world events and economic conditions in general, may impact rates prior to the sale date scheduled for September 9. Ehlers will review market conditions prior to sale and will advise the City if it appears minimum savings will be achieved. If it appears that the City will not be in a position to achieve the savings necessary to justify the refunding, Ehlers will recommend that the sale be delayed or cancelled. Given current interest rates, the Series 2003D Bonds are projected to achieve a net current value savings of about 5.6%or$50,000 over the life of the issue. This estimated savings does not reflect the benefit of"pre-paying"bonds with cash received from advanced payment of assessments. A revised debt levy reflecting the remaining assessment and the new rates is expected to reflect reduced impact on taxpayers. The net impact of the reduced interest rate on the new bonds and prepayment is shown in the table below. Prepared by Ehlers & Associates, Inc.