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Presale Report City of St. Anthony, Minnesota March 22, 2016 Page 3 to the investor, resulting in a price paid that is greater than the face value of the bonds. The sum of the amounts paid in excess of face value is considered “reoffering premium.” The amount of the premium varies, but it is not uncommon to see premiums for new issues in the range of 2.00% to 10.00% of the face amount of the issue. This means that an issuer with a $2,000,000 offering may receive bids that result in proceeds of $2,040,000 to $2,200,000. For this issue of Bonds we have been directed to use the premium to reduce the size of the issue/increase the net proceeds for the project. The adjustments may slightly change the true interest cost of the original bid, either up or down. You have the choice to limit the amount of premium in the bid specifications. This may result in fewer bids, but it may also eliminate large adjustments on the day of sale and other uncertainties. Other Considerations: Columbia Heights Funding: For the 2016A Bonds, the City of Columbia Heights will be paying for their portion which is anticipated to be $1,228,079 and therefore the City does not need to bond for this portion of the project. Grant Funds: For the 2016B Bonds, the City has applied for $175,000 in grant funds from Hennepin County and $150,000 from Ramsey County. If these funds are received, the City will be able to reduce the debt levy in future years by these amounts. If these funds are awarded prior to the sale of the bonds, we will restructure the bonds prior to the sale to account for the funds. Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and have discussed it with the City’s Finance Director and find that there are no refunding opportunities at this time. We will continue to monitor the market and the call dates for the City’s outstanding debt and will alert you to any future refunding opportunities. Continuing Disclosure: Because the City has more than $10,000,000 in outstanding debt (including this issue) and this issue is over $1,000,000, the City will be agreeing to provide certain updated Annual Financial Information and its Audited Financial Statement annually as well as providing notices of the occurrence of certain reportable events to the Municipal Securities Rulemaking Board (the “MSRB”), as required by rules of the Securities and Exchange Commission (SEC). The City is already obligated to provide such reports for its existing bonds, and has contracted with Ehlers to prepare and file the reports. Arbitrage Monitoring: Because the Bonds are tax-exempt securities/tax credit securities, the City must ensure compliance with certain Internal Revenue Service (IRS) rules throughout the life of the issue. These rules apply to all gross proceeds of the issue, including initial bond proceeds and investment earnings in construction, escrow, debt service, and any reserve funds. How issuers spend bond proceeds and how they track interest earnings on funds (arbitrage/yield restriction compliance) are common subjects of IRS inquiries. Your specific 24