HomeMy WebLinkAboutVIII-08 Providing for Competitive Negotiated Sale of $4,500,000 General Obligation Bonds, Series 2025ACity Council Memorandum To:Mayor Fasbender & City Councilmembers From:Chris Eitemiller, Finance Manager Date:May 5, 2025 Item:Set Sale Date and approve Issuance of Bonds Council Action Requested: Approve the sale date as June 2, 2025,for $4,500,000 General Obligation Bonds, Series 2025A, as well as corresponding resolutions. Background Information: These bonds will finance the 2025 street and utility improvement project. These obligations will be sold by a competitive,negotiated sale in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9).City staff will participate in a rating call with S&P Global Ratings for the bonds during the week of May 5th, 2025. The accompanying resolution provides for the City’s preliminary approval of the bonds and sets the sale date and time for June 2nd, 2025,at 10:00a.m. Following the sale, bid results will be presented to the Council, with final approval for the bonds considered via an authorizing resolution to be considered during the June 2nd, 2025,City Council meeting. Financial Impact: Bond and interest payments are factored into the City’s debt structure. Advisory Commission Discussion: N/A Council Committee Discussion: N/A Attachments: Resolution Finance Plan Municipal Advisory Agreement VIII-08 172479697v1 EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL CITY OF HASTINGS, MINNESOTA HELD: May 5, 2025 Pursuant to due call and notice thereof, a regular or special meeting of the City Council of the City of Hastings, Dakota and Washington Counties, Minnesota, was duly held at the City Hall in said City on May 5, 2025, at 7:00 P.M. for the purpose in part of authorizing the competitive negotiated sale of the $4,500,000 General Obligation Bonds, Series 2025A of said City. The following members were present: and the following were absent: Member _______________ introduced the following resolution and moved its adoption: RESOLUTION NO. _______________ RESOLUTION PROVIDING FOR THE COMPETITIVE NEGOTIATED SALE OF $4,500,000 GENERAL OBLIGATION BONDS, SERIES 2025A A.WHEREAS, the City Council of the City of Hastings, Minnesota (the "City"), has heretofore determined that it is necessary and expedient to issue General Obligation Bonds, Series 2025A (the "Bonds") to finance the City's 2025 street improvement and utility projects (the "Project"); and B.WHEREAS, the City has retained Northland Securities, Inc., in Minneapolis, Minnesota ("Northland"), as its independent municipal advisor and is therefore authorized to sell the Bonds by competitive negotiated sale in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9); and C.WHEREAS, the City has retained Taft Stettinius & Hollister LLP, in Minneapolis, Minnesota as its bond counsel for purposes of this financing. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hastings, Minnesota, as follows: 1.Authorization. The City Council hereby authorizes Northland to solicit proposals for the competitive negotiated sale of the Bonds. 2.Meeting; Proposal Opening. The City Council shall meet at the time and place specified in the Notice of Sale, in substantially the form attached hereto as Attachment A, for the purpose of considering sealed proposals for and awarding the sale of the Bonds. The Finance Manager, or designee, shall open proposals at the time and place specified in the Notice of Sale. 3.Notice of Sale. The terms and conditions of the Bonds and the negotiation thereof are in substantially in the form set forth in the Notice of Sale attached hereto as Attachment A and hereby approved and made a part hereof. VIII-08 172479697v1 2 4.Official Statement. In connection with the competitive negotiated sale of the Bonds, the Finance Manager and other officers or employees of the City are hereby authorized to cooperate with Northland and participate in the preparation of an official statement for the Bonds, and to execute and deliver it on behalf of the City upon its completion. The motion for the adoption of the foregoing resolution was duly seconded by member _______________ and, after full discussion thereof and upon a vote being taken thereon, the following voted in favor thereof: and the following voted against the same: Whereupon the resolution was declared duly passed and adopted. VIII-08 172479697v1 3 STATE OF MINNESOTA COUNTIES OF DAKOTA AND WASHINGTON CITY OF HASTINGS I, the undersigned, being the duly qualified and acting Clerk of the City of Hastings, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council duly called and held on the date therein indicated, insofar as such minutes relate to the City's $4,500,000 General Obligation Bonds, Series 2025A. WITNESS my hand on May 5, 2025. __________________________________ Clerk VIII-08 A-1 ATTACHMENT A NOTICE OF SALE $4,500,000* GENERAL OBLIGATION BONDS, SERIES 2025A CITY OF HASTINGS, MINNESOTA (Book-Entry Only) NOTICE IS HEREBY GIVEN that these Bonds will be offered for sale according to the following terms: TIME AND PLACE: Proposals (also referred to herein as "bids") will be opened by the City's Finance Manager, or designee, on Monday, June 2, 2025, at 10:00 A.M., CT, at the offices of Northland Securities, Inc. (the Issuer's "Municipal Advisor"), 150 South 5th Street, Suite 3300, Minneapolis, Minnesota 55402. Consideration of the Proposals for award of the sale will be by the City Council at its meeting at the City Offices beginning Monday, June 2, 2025 at 7:00 P.M., CT. SUBMISSION OF PROPOSALS Proposals may be: a)submitted to the office of Northland Securities, Inc., b)emailed to PublicSale@northlandsecurities.com c)for proposals submitted prior to the sale, the final price and coupon rates may be submitted to Northland Securities, Inc. by telephone at 612-851-5900 or 612-851-4945, or d)submitted electronically. Notice is hereby given that electronic proposals will be received via PARITY™, or its successor, in the manner described below, until 10:00 A.M., CT, on Monday, June 2, 2025. Proposals may be submitted electronically via PARITY™or its successor, pursuant to this Notice until 10:00 A.M., CT, but no Proposal will be received after the time for receiving Proposals specified above. To the extent any instructions or directions set forth in PARITY™, or its successor, conflict with this Notice, the terms of this Notice shall control. For further information about PARITY™, or its successor, potential bidders may contact Northland Securities, Inc. or i-Dealat 1359 Broadway, 2nd floor, New York, NY 10018, telephone 212-849-5021. *The City reserves the right to increase or decrease the principal amount of the Bonds. Any such increase or decrease will be made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted, the purchase price will also be adjusted to maintain the same gross spread. VIII-08 172479697v1 A-2 Neither the Issuer nor Northland Securities, Inc. assumes any liability if there is a malfunction of PARITY™or its successor. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder and the Issuer to purchase the Bonds regardless of the manner in which the Proposal is submitted. BOOK-ENTRY SYSTEM The Bonds will be issued by means of a book-entry system with no physical distribution of bond certificates made to the public. The Bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the Issuer through U.S. Bank Trust Company, National Association, St. Paul, Minnesota (the "Paying Agent/Registrar"), to DTC, or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The successful bidder, as a condition of delivery of the Bonds, will be required to deposit the bond certificates with DTC. The Issuer will pay reasonable and customary charges for the services of the Paying Agent/Registrar. DATE OF ORIGINAL ISSUE OF BONDS Date of Delivery (Estimated to be June 26, 2025) AUTHORITY/PURPOSE/SECURITY The Bonds are being issued pursuant to Minnesota Statutes, Chapters 429, 444 and 475, as amended. Proceeds will be used to finance the City's 2025 street improvement and utility projects and to pay costs associated with the issuance of the Bonds. The Bonds are payable from special assessments levied against benefited properties, net revenues of the City's sanitary sewer, water and storm sewer utilities and additionally secured by ad valorem taxes on all taxable property within the City. The full faith and credit of the Issuer is pledged to their payment and the Issuer has validly obligated itself to levy ad valorem taxes in the event of any deficiency in the debt service account established for this issue. INTEREST PAYMENTS Interest is due semiannually on each February 1 and August 1, commencing February 1, 2026, to registered owners of the Bonds appearing of record in the Bond Register as of the close of business on the fifteenth day (whether or not a business day) of the calendar month next preceding such interest payment date. VIII-08 172479697v1 A-3 MATURITIES Principal is due annually on February 1, inclusive, in each of the years and amounts as follows: Year Amount Year Amount Year Amount 2026 $200,000 2030 $445,000 2034 $515,000 2027 410,000 2031 470,000 2035 530,000 2028 425,000 2032 475,000 2036 315,000 2029 435,000 2033 495,000 Proposals for the Bonds may contain a maturity schedule providing for any combination of serial bonds and term bonds, subject to mandatory redemption, so long as the amount of principal maturing or subject to mandatory redemption in each year conforms to the maturity schedule set forth above. INTEREST RATES All rates must be in integral multiples of 1/20th or 1/8th of 1%. The rate for any maturity may not be more than 2.00% less than the rate for any preceding maturity. All Bonds of the same maturity must bear a single uniform rate from date of issue to maturity. ESTABLISHMENT OF ISSUE PRICE (HOLD-THE-OFFERING-PRICE RULE MAY APPLY –BIDS NOT CANCELLABLE) The winning bidder shall assist the Issuer in establishing the issue price of the Bonds and shall execute and deliver to the Issuer at closing an "issue price" or similar certificate setting forth the reasonably expected initial offering price to the public or the sales price or prices of the Bonds, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit A, with such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder, the Issuer and Bond Counsel. All actions to be taken by the Issuer under this Notice of Sale to establish the issue price of the Bonds may be taken on behalf of the Issuer by the Issuer 's Municipal Advisor and any notice or report to be provided to the Issuer may be provided to the City's Municipal Advisor. The City intends that the provisions of Treasury Regulation Section 1.148-1(f)(3)(i) (defining "competitive sale" for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the "competitive sale requirements") because: (1)the Issuer shall disseminate this Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters; (2)all bidders shall have an equal opportunity to bid; (3)the Issuer may receive bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and (4)the Issuer anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the highest price (or lowest cost), as set forth in this Notice of Sale. VIII-08 172479697v1 A-4 Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. In the event that the competitive sale requirements are not satisfied, the Issuer shall promptly so advise the winning bidder. The Issuer may then determine to treat the initial offering price to the public as of the award date of the Bonds as the issue price of each maturity by imposing on the winning bidder the Hold-the-Offering-Price Rule as described in the following paragraph (the "Hold-the-Offering-Price Rule"). Bids will not be subject to cancellation in the event that the Issuer determines to apply the Hold-the-Offering-Price Rule to the Bonds. Bidders should prepare their bids on the assumption that the Bonds will be subject to the Hold-the-Offering- Price Rule in order to establish the issue price of the Bonds. By submitting a bid, the winning bidder shall (i) confirm that the underwriters have offered or will offer the Bonds to the public on or before the date of award at the offering price or prices (the "Initial Offering Price"), or at the corresponding yield or yields, set forth in the bid submitted by the winning bidder and (ii) agree, on behalf of the underwriters participating in the purchase of the Bonds, that the underwriters will neither offer nor sell unsold Bonds of any maturity to which the Hold-the-Offering Price Rule shall apply to any person at a price that is higher than the Initial Offering Price to the public during the period starting on the award date for the Bonds and ending on the earlier of the following: (1)the close of the fifth (5th) business day after the award date; or (2)the date on which the underwriters have sold at least 10% of a maturity of the Bonds to the public at a price that is no higher than the Initial Offering Price to the public (the "10% Test"), at which time only that particular maturity will no longer be subject to the Hold- the-Offering-Price Rule. The Issuer acknowledges that, in making the representations set forth above, the winning bidder will rely on (i) the agreement of each underwriter to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the Hold-the- Offering-Price Rule, if applicable to the Bonds, as set forth in an agreement among underwriters and the related pricing wires, (ii) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including but not limited to, its agreement to comply with the Hold-the-Offering-Price Rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (iii) in the event that an underwriter or dealer who is a member of the selling group is a party to a third-party distribution agreement that was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the Hold-the-Offering-Price Rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Issuer further acknowledges that each underwriter shall be solely liable for its failure to comply with its agreement regarding the requirements for establishing issue price of the Bonds, including but not limited to, its agreement to comply with the Hold-the-Offering-Price Rule, if applicable to the Bonds, and that no underwriter shall be liable for the failure of any other underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution VIII-08 172479697v1 A-5 agreement to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds,including, but not limited to, its agreement to comply with the Hold-the-Offering-Price Rule if applicable to the Bonds. By submitting a bid, each bidder confirms that: (i) any agreement among underwriters, any selling group agreement and each third-party distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such third-party distribution agreement, as applicable, (A) to comply with the Hold-the-Offering-Price Rule, if applicable if and for so long as directed by the winning bidder and as set forth in the related pricing wires, (B) to promptly notify the winning bidder of any sales of Bonds that to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the underwriter, dealer or broker-dealer,the winning bidder shall assume that each order submitted by the underwriter, dealer or broker-dealer is a sale to the public, and (ii) any agreement among underwriters or selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter or dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to comply with the Hold-the-Offering-Price Rule, if applicable, in each case if and for so long as directed by the winning bidder or the underwriter and as set forth in the related pricing wires. Notes: Sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale: (1)"public" means any person other than an underwriter or a related party, (2)"underwriter" means (A) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public). (3)a purchaser of any of the Bonds is a "related party" to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation or another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and VIII-08 172479697v1 A-6 (4)"sale date" means the date that the Bonds are awarded by the Issuer to the winning bidder. ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER PROPOSALS The Issuer y reserves the right to increase or decrease the principal amount of the Bonds. Any such increase or decrease will be made in multiples of $5,000 and may be made in any maturity. If any maturity is adjusted, the purchase price will also be adjusted to maintain the same gross spread. Such adjustments shall be made promptly after the sale and prior to the award of Proposals by the Issuer and shall be at the sole discretion of the Issuer. The successful bidder may not withdraw or modify its Proposal once submitted to the Issuer for any reason, including post-sale adjustment. Any adjustment shall be conclusive and shall be binding upon the successful bidder. OPTIONAL REDEMPTION Bonds maturing on and after February 1, 2034 are subject to redemption and prepayment at the option of the Issuer on February 1, 2033 and any date thereafter, at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the maturities and principal amounts within each maturity to be redeemed shall be determined by the Issuer and if only part of the Bonds having a common maturity date are called for prepayment, the specific Bonds to be prepaid shall be chosen by lot by the Bond Registrar. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the successful bidder thereof to accept delivery of and pay for the Bonds in accordance with terms of the purchase contract. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the successful bidder. DELIVERY Delivery of the Bonds will be within thirty days after award, subject to an approving legal opinion by Taft Stettinius & Hollister LLP, Bond Counsel. The legal opinion will be paid by the Issuer and delivery will be anywhere in the continental United States without cost to the successful bidder at DTC. TYPE OF PROPOSAL Proposals of not less than $4,656,062.50 (98.75%) and accrued interest on the principal sum of $4,500,000 must be filed with the undersigned prior to the time of sale. Proposals must be unconditional except as to legality. Proposals for the Bonds should be delivered to Northland Securities, Inc. and addressed to: Chris Eitemiller, Finance Manager 101 4th Street East Hastings, Minnesota 55033 VIII-08 172479697v1 A-7 A good faith deposit (the "Deposit") in the amount of $94,300 in the form of a federal wire transfer (payable to the order of the Issuer) is only required from the apparent winning bidder, and must be received within two hours after the time stated for the receipt of Proposals. The apparent winning bidder will receive notification of the wire instructions from the Municipal Advisor promptly after the sale. If the Deposit is not received from the apparent winning bidder in the time allotted, the Issuer may choose to reject their Proposal and then proceed to offer the Bonds to the next lowest bidder based on the terms of their original proposal, so long as said bidder wires funds for the Deposit amount within two hours of said offer. The City will retain the Deposit of the successful bidder, the amount of which will be deducted at settlement and no interest will accrue to the successful bidder. In the event the successful bidder fails to comply with the accepted Proposal, said amount will be retained by the City. No Proposal can be withdrawn after the time set for receiving Proposals unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. AWARD The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis. The Issuer 's computation of the interest rate of each Proposal, in accordance with customary practice, will be controlling. In the event of a tie, the sale of the Bonds will be awarded by lot. The Issuer will reserve the right to: (i) waive non-substantive informalities of any Proposal or of matters relating to the receipt of Proposals and award of the Bonds, (ii) reject all Proposals without cause, and (iii) reject any Proposal which the Issuer determines to have failed to comply with the terms herein. INFORMATION FROM SUCCESSFUL BIDDER The successful bidder will be required to provide, in a timely manner, certain information relating to the initial offering price of the Bonds necessary to compute the yield on the Bonds pursuant to the provisions of the Internal Revenue Code of 1986, as amended. OFFICIAL STATEMENT By awarding the Bonds to any underwriter or underwriting syndicate submitting a Proposal therefor, the Issuer agrees that, no more than seven business days after the date of such award, it shall provide to the senior managing underwriter of the syndicate to which the Bonds are awarded, the Final Official Statement in an electronic format as prescribed by the Municipal Securities Rulemaking Board (MSRB). FULL CONTINUING DISCLOSURE UNDERTAKING The Issuer will covenant in the resolution awarding the sale of the Bonds and in a Continuing Disclosure Undertaking to provide, or cause to be provided, annual financial information, including audited financial statements of the Issuer, and notices of certain material events, as VIII-08 172479697v1 A-8 required by SEC Rule 15c2-12. NOT BANK QUALIFIED The Issuer will not designate the Bonds as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. BOND INSURANCE AT UNDERWRITER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the successful bidder, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the successful bidder of the Bonds. Any increase in the costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the successful bidder, except that, if the Issuer has requested and received a rating on the Bonds from a rating agency, the Issuer y will pay that rating fee. Any other rating agency fees shall be the responsibility of the successful bidder. Failure of the municipal bond insurer to issue the policy after the Bonds have been awarded to the successful bidder shall not constitute cause for failure or refusal by the successful bidder to accept delivery on the Bonds. The Issuer reserves the right to reject any and all Proposals, to waive informalities and to adjourn the sale. Dated: May 5, 2025 BY ORDER OF THE HASTINGS CITY COUNCIL /s/Chris Eitemiller Finance Manager Additional information may be obtained from: Northland Securities, Inc. 150 South 5th Street, Suite 3300 Minneapolis, Minnesota 55402 Telephone No.: 612-851-5900 VIII-08 A-1 EXHIBIT A [FORM OF ISSUE PRICE CERTIFICATE –COMPETITIVE SALE SATISFIED] The undersigned, on behalf of ______________________________ (the "Underwriter"), hereby certifies as set forth below with respect to the sale of the General Obligation Bonds, Series 2025A (the "Bonds") of the City of Hastings, Minnesota (the "Issuer"). 1.Reasonably Expected Initial Offering Price. (a)As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by the Underwriter are the prices listed in Schedule A (the "Expected Offering Prices"). The Expected Offering Prices are the prices for the Maturities of the Bonds used by the Underwriter in formulating its bid to purchase the Bonds. Attached as Schedule B is a true and correct copy of the bid provided by the Underwriter to purchase the Bonds. (b)The Underwriter was not given the opportunity to review other bids prior to submitting its bid. (c)The bid submitted by the Underwriter constituted a firm offer to purchase the Bonds. 2.Defined Terms. (a)"Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (b)"Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (c)"Sale Date" means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is _______________. (d)"Underwriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Underwriter's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Nonarbitrage Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Taft Stettinius & Hollister LLP, Bond Counsel in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal VIII-08 172479697v1 A-2 Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: June 26, 2025. VIII-08 172479697v1 A-3 [FORM OF ISSUE PRICE CERTIFICATE –HOLD-THE-OFFERING-PRICE RULE APPLIES] The undersigned, on behalf of ________________________________(the "Underwriter"), on behalf of itself, hereby certifies as set forth below with respect to the sale and issuance of General Obligation Bonds, Series 2025A (the "Bonds") of the City of Hastings, Minnesota (the "Issuer"). 1.Initial Offering Price of the Bonds. (a)The Underwriter offered each Maturity of the Bonds to the Public for purchase at the respective initial offering prices listed in Schedule A (the "Initial Offering Prices") on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b)As set forth in the Notice of Sale and bid award, the Underwriter has agreed in writing that, (i) for each Maturity of the Bonds, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the "hold-the-offering-price rule"), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Bonds at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period. 2.Defined Terms. (a)"Holding Period" means, for each Maturity of the Bonds, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date (________________), or (ii) the date on which the Underwriter has sold at least 10% of such Maturity of the Bonds to the Public at prices that are no higher than the Initial Offering Price for such Maturity. (b)"Maturity" means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (c)"Public" means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term "related party" for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d)"Sale Date" means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is ________________. (e)"Underwriter" means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the VIII-08 172479697v1 A-4 Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Representative's interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Nonarbitrage Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Taft Stettinius & Hollister LLP, Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: June 26, 2025. VIII-08 Finance Plan City of Hastings, Minnesota $4,500,000 General Obligation Bonds, Series 2025A May 5, 2025 150 South 5th Street, Suite 3300 Minneapolis, MN 55402 612-851-5900 800-851-2920 www.northlandsecurities.com Member FINRA and SIPC | Registered MSRB and SEC VIII-08 Q northland Northland Securities, Inc.Page 1 Contents Executive Summary ...............................................................................................................................2 Issue Overview .......................................................................................................................................3 Purpose........................................................................................................................................................3 Authority.....................................................................................................................................................3 Structure......................................................................................................................................................3 Security and Source of Repayment ...................................................................................................4 Plan Rationale............................................................................................................................................4 Issuing Process..........................................................................................................................................4 Attachment 1 –Preliminary Debt Service Schedules........................................................................5 Attachment 2 –Estimated Levy Schedules .........................................................................................8 Attachment 3 –Related Considerations ..............................................................................................9 Not Bank Qualified..........................................................................................................................9 Arbitrage Compliance ....................................................................................................................9 Continuing Disclosure....................................................................................................................9 Premiums.............................................................................................................................................9 Rating..................................................................................................................................................10 Attachment 4 –Calendar of Events ....................................................................................................11 Attachment 5 -Risk Factors.................................................................................................................13 VIII-08 Northland Securities, Inc.Page 2 Executive Summary The following is a summary of the recommended terms for the issuance of $4,500,000 General Obligation Bonds, Series 2025A (the “Bonds”).Additional information on the proposed finance plan and issuing process can be found after the Executive Summary, in the Issue Overview and Attachment 3 –Related Considerations. Purpose Proceeds from the Bonds will be used to finance the City’s 2025 street improvement and utility projects,and to pay the costs associated with the issuance of the Bonds. Security The Bonds will be a general obligation of the City. The City will pledge special assessments collected from benefitted properties,net revenues of the City’s sanitary sewer, water, and storm sewer utilities.In addition, the Bonds will be secured by ad valorem taxes. Repayment Term The Bonds will mature annually each February 1 in the years 2026 through 2036. Interest on the Bonds will be payable on February 1, 2026 and semiannually thereafter on each February 1 and August 1. Estimated Interest Rate True interest cost (TIC):4.02% Prepayment Option Bonds maturing on and after February 1, 2034 will be subject to redemption on February 1, 2033 and any day thereafter at a price of par plus accrued interest. Rating A rating will be requested from Standard & Poor’s (“S&P”). The City’s general obligation debt is currently rated “AA+”by S&P. Tax Status The Bonds will be tax-exempt, non-bank qualified obligations. Risk Factors There are certain risks associated with all debt. Risk factors related to the Bonds are discussed in Attachment 5. Type of Bond Sale Public Sale –Competitive Bids Proposals Received Monday,June 2 @ 10:00 A.M. Council Consideration Monday, June 2 @ 7:00 P.M. VIII-08 Northland Securities, Inc.Page 3 Issue Overview Purpose Proceeds from the Bonds will be used to finance the City’s 2025 street improvement (the “Improvement Portion”) and utility (the “Revenue Portions”) projects and to pay costs associated with issuing the Bonds.The Bonds have been sized based on estimates provided by City staff. The table below contains the sources and uses of funds for the bond issue. Authority The Bonds will be issued pursuant to the authority of Minnesota Statutes Chapters 429, 444,and 475. Improvement Portion Under Chapter 429, an Improvement means any type of improvement made under authority granted by section 429.021, which includes, but is not limited to, improvements to streets and sidewalks, storm and sanitary sewer systems, and street lighting systems. Before issuing bonds under Chapter 429, the City must hold a public hearing on the Improvements and the proposed bonds and must pass a resolution ordering the improvements by at least a 4/5 majority.The public hearing has been held for the Improvement Portion and all corresponding resolutions have passed with at least a 4/5 majority. Revenue Portions Under Chapter 444, general obligation utility revenue bonds may be issued to build, construct, reconstruct, repair, enlarge, improve, or in any other manner obtain sanitary sewer, water and storm sewer facilities, and maintain and operate the facilities inside or outside a city’s corporate limits. Structure The Improvement Portion of the Bonds have been structured over 10 years, with relatively level annual debt service payments beginning on February 1, 2027.The Revenue Portions of the bonds have been structured over 10 years, with relatively level annual debt service payments beginning on February 1, 2026. The proposed structure for the bond issue and preliminary debt service projections for each portion of the issue are illustrated in Attachment 1 and the estimated levies are illustrated in Attachment 2. Street Improvement Sanitary Sewer Water Storm Sewer Issue Summary Sources Of Funds Par Amount of Bonds $2,280,000.00 $885,000.00 $805,000.00 $530,000.00 $4,500,000.00 Total Sources $2,280,000.00 $885,000.00 $805,000.00 $530,000.00 $4,500,000.00 Uses Of Funds Deposit to Project Construction Fund 2,169,949.00 861,385.00 783,977.00 515,222.00 4,330,533.00 Costs of Issuance 30,686.11 11,911.06 10,834.36 7,133.17 60,564.70Total Underwriter's Discount (1.250%)28,500.00 11,062.50 10,062.50 6,625.00 56,250.00Deposit to Capitalized Interest (CIF) Fund 50,551.88 ---50,551.88 Rounding Amount 313.01 641.44 126.14 1,019.83 2,100.42 Total Uses $2,280,000.00 $885,000.00 $805,000.00 $530,000.00 $4,500,000.00 VIII-08 Northland Securities, Inc.Page 4 Security and Source of Repayment The Bonds will be general obligations of the City. The finance plan relies on the following assumptions for the revenues used to pay debt service, as provided by City staff: •Special Assessments. The City is expected to levy special assessments against benefited properties in the amount of $724,462.50 for the Improvement Portion of the Bonds. The assessments will be payable over 10 years, with an interest rate of 1.50% over the true interest cost on the Improvement Portion of the Bonds (currently estimated to be 5.50%) and structured for level annual payments of principal and interest. The plan assumes that the assessments will be levied in 2025 for initial payment in 2026. •Utility Revenues. Net revenues of the City’s sanitary sewer, water and storm sewer utilities (operating funds) will be pledged for payment of the Revenue Portions of the Bonds. The City will covenant to adopt storm sewer and water rates and charges that are sufficient to produce net revenues equal to at least 105% of the debt service requirements on the Revenue Portions of the Bonds. In the event there is a deficiency in the amount of net revenues available for payment of debt service, the City may levy taxes to cover the insufficiency, but only on a temporary basis until rates are adjusted. •Property Taxes. The remaining revenues needed to pay debt service on the Bonds are expected to come from property tax levies. The initial projections show a tax levy of approximately $196,145 is needed to produce the statutory requirement of 105% of debt service,after accounting for assessments and utility revenues. The levy may be adjusted annually based on actual special assessment collections and additional monies in the debt service fund. The initial tax levy will be made in 2025 for taxes payable in 2026. Given the timing of the initial revenue from the tax levy and special assessments the structure includes capitalized interest for the Improvement Portion of the Bonds to cover the first interest payment due on February 1, 2026, before the first tax collections are received. Revenues from the City’s sanitary sewer,water and storm sewer utilities will also be used to cover the first principal and interest payment due on February 1, 2026. Plan Rationale The Finance Plan recommended in this report is based on a variety of factors and information provided by the City related to the financed project and City objectives, Northland’s knowledge of the City and our experience in working with similar cities and projects. The issuance of General Obligation Bonds provides the best means of achieving the City’s objectives and cost-effective financing. The City has successfully issued and managed this type of debt for previous projects. Issuing Process Northland will receive bids to purchase the Bonds on Monday, June 2, 2025 at 10:00 AM. Market conditions and the marketability of the Bonds support issuance through a competitive sale. This process has been chosen as it is intended to produce the lowest combination of interest expense and underwriting expense on the date and time set to receive bids.The calendar of events for the issuing process can be found in Attachment 4. Municipal Advisor:Northland Securities, Inc., Minneapolis, Minnesota Bond Counsel:Taft Stettinius & Hollister LLP,Minneapolis, Minnesota Paying Agent:U.S.Bank, National Association, St. Paul, Minnesota VIII-08 Northland Securities, Inc.Page 5 Attachment 1 –Preliminary Debt Service Schedules Combined Date Principal Coupon Interest Total P+I Fiscal Total 06/26/2025 -----02/01/2026 215,000.00 3.400%98,829.83 313,829.83 313,829.8308/01/2026 --79,086.25 79,086.25 -02/01/2027 385,000.00 3.400%79,086.25 464,086.25 543,172.5008/01/2027 --72,541.25 72,541.25 -02/01/2028 400,000.00 3.450%72,541.25 472,541.25 545,082.5008/01/2028 --65,641.25 65,641.25 -02/01/2029 415,000.00 3.500%65,641.25 480,641.25 546,282.5008/01/2029 --58,378.75 58,378.75 -02/01/2030 425,000.00 3.550%58,378.75 483,378.75 541,757.5008/01/2030 --50,835.00 50,835.00 - 02/01/2031 445,000.00 3.600%50,835.00 495,835.00 546,670.0008/01/2031 --42,825.00 42,825.00 -02/01/2032 460,000.00 3.700%42,825.00 502,825.00 545,650.0008/01/2032 --34,315.00 34,315.00 - 02/01/2033 475,000.00 3.800%34,315.00 509,315.00 543,630.0008/01/2033 --25,290.00 25,290.00 -02/01/2034 500,000.00 3.900%25,290.00 525,290.00 550,580.0008/01/2034 --15,540.00 15,540.00 -02/01/2035 510,000.00 3.950%15,540.00 525,540.00 541,080.0008/01/2035 --5,467.50 5,467.50 -02/01/2036 270,000.00 4.050%5,467.50 275,467.50 280,935.00 Total $4,500,000.00 -$998,669.83 $5,498,669.83 - Yield Statistics Bond Year Dollars $26,417.50 Average Life 5.871 YearsAverage Coupon 3.7803344% Net Interest Cost (NIC)3.9932614% True Interest Cost (TIC)4.0182774%Bond Yield for Arbitrage Purposes 3.7712622%All Inclusive Cost (AIC)4.2892506% IRS Form 8038 Net Interest Cost 3.7803344%Weighted Average Maturity 5.871 Years Optional Redemption 02/01/2033 @100.000% VIII-08 Northland Securities, Inc.Page 6 Improvement Portion Sanitary Sewer Date Principal Coupon Interest Total P+I Fiscal Total 06/26/2025 -----02/01/2026 --50,551.88 50,551.88 50,551.8808/01/2026 --42,322.50 42,322.50 -02/01/2027 195,000.00 3.400%42,322.50 237,322.50 279,645.00 08/01/2027 --39,007.50 39,007.50 -02/01/2028 200,000.00 3.450%39,007.50 239,007.50 278,015.0008/01/2028 --35,557.50 35,557.50 -02/01/2029 205,000.00 3.500%35,557.50 240,557.50 276,115.0008/01/2029 --31,970.00 31,970.00 -02/01/2030 215,000.00 3.550%31,970.00 246,970.00 278,940.0008/01/2030 --28,153.75 28,153.75 - 02/01/2031 220,000.00 3.600%28,153.75 248,153.75 276,307.5008/01/2031 --24,193.75 24,193.75 -02/01/2032 230,000.00 3.700%24,193.75 254,193.75 278,387.5008/01/2032 --19,938.75 19,938.75 -02/01/2033 240,000.00 3.800%19,938.75 259,938.75 279,877.5008/01/2033 --15,378.75 15,378.75 -02/01/2034 250,000.00 3.900%15,378.75 265,378.75 280,757.50 08/01/2034 --10,503.75 10,503.75 -02/01/2035 255,000.00 3.950%10,503.75 265,503.75 276,007.5008/01/2035 --5,467.50 5,467.50 -02/01/2036 270,000.00 4.050%5,467.50 275,467.50 280,935.00 Total $2,280,000.00 -$555,539.38 $2,835,539.38 - Date Principal Coupon Interest Total P+I Fiscal Total 06/26/2025 -----02/01/2026 85,000.00 3.400%19,243.99 104,243.99 104,243.99 08/01/2026 --14,666.25 14,666.25 -02/01/2027 75,000.00 3.400%14,666.25 89,666.25 104,332.5008/01/2027 --13,391.25 13,391.25 -02/01/2028 80,000.00 3.450%13,391.25 93,391.25 106,782.5008/01/2028 --12,011.25 12,011.25 -02/01/2029 85,000.00 3.500%12,011.25 97,011.25 109,022.5008/01/2029 --10,523.75 10,523.75 - 02/01/2030 85,000.00 3.550%10,523.75 95,523.75 106,047.5008/01/2030 --9,015.00 9,015.00 -02/01/2031 90,000.00 3.600%9,015.00 99,015.00 108,030.0008/01/2031 --7,395.00 7,395.00 - 02/01/2032 90,000.00 3.700%7,395.00 97,395.00 104,790.0008/01/2032 --5,730.00 5,730.00 -02/01/2033 95,000.00 3.800%5,730.00 100,730.00 106,460.0008/01/2033 --3,925.00 3,925.00 -02/01/2034 100,000.00 3.900%3,925.00 103,925.00 107,850.0008/01/2034 --1,975.00 1,975.00 -02/01/2035 100,000.00 3.950%1,975.00 101,975.00 103,950.00 Total $885,000.00 -$176,508.99 $1,061,508.99 - VIII-08 Northland Securities, Inc.Page 7 Water Portion Storm Sewer Portion Date Principal Coupon Interest Total P+I Fiscal Total 06/26/2025 -----02/01/2026 80,000.00 3.400%17,510.56 97,510.56 97,510.5608/01/2026 --13,300.00 13,300.00 -02/01/2027 70,000.00 3.400%13,300.00 83,300.00 96,600.00 08/01/2027 --12,110.00 12,110.00 -02/01/2028 70,000.00 3.450%12,110.00 82,110.00 94,220.0008/01/2028 --10,902.50 10,902.50 -02/01/2029 75,000.00 3.500%10,902.50 85,902.50 96,805.0008/01/2029 --9,590.00 9,590.00 -02/01/2030 75,000.00 3.550%9,590.00 84,590.00 94,180.0008/01/2030 --8,258.75 8,258.75 - 02/01/2031 80,000.00 3.600%8,258.75 88,258.75 96,517.5008/01/2031 --6,818.75 6,818.75 -02/01/2032 85,000.00 3.700%6,818.75 91,818.75 98,637.5008/01/2032 --5,246.25 5,246.25 -02/01/2033 85,000.00 3.800%5,246.25 90,246.25 95,492.5008/01/2033 --3,631.25 3,631.25 -02/01/2034 90,000.00 3.900%3,631.25 93,631.25 97,262.50 08/01/2034 --1,876.25 1,876.25 -02/01/2035 95,000.00 3.950%1,876.25 96,876.25 98,752.50 Total $805,000.00 -$160,978.06 $965,978.06 - Date Principal Coupon Interest Total P+I Fiscal Total 06/26/2025 -----02/01/2026 50,000.00 3.400%11,523.40 61,523.40 61,523.40 08/01/2026 --8,797.50 8,797.50 -02/01/2027 45,000.00 3.400%8,797.50 53,797.50 62,595.0008/01/2027 --8,032.50 8,032.50 -02/01/2028 50,000.00 3.450%8,032.50 58,032.50 66,065.00 08/01/2028 --7,170.00 7,170.00 -02/01/2029 50,000.00 3.500%7,170.00 57,170.00 64,340.0008/01/2029 --6,295.00 6,295.00 - 02/01/2030 50,000.00 3.550%6,295.00 56,295.00 62,590.0008/01/2030 --5,407.50 5,407.50 -02/01/2031 55,000.00 3.600%5,407.50 60,407.50 65,815.0008/01/2031 --4,417.50 4,417.50 - 02/01/2032 55,000.00 3.700%4,417.50 59,417.50 63,835.0008/01/2032 --3,400.00 3,400.00 -02/01/2033 55,000.00 3.800%3,400.00 58,400.00 61,800.0008/01/2033 --2,355.00 2,355.00 -02/01/2034 60,000.00 3.900%2,355.00 62,355.00 64,710.0008/01/2034 --1,185.00 1,185.00 -02/01/2035 60,000.00 3.950%1,185.00 61,185.00 62,370.00 Total $530,000.00 -$105,643.40 $635,643.40 - VIII-08 Northland Securities, Inc.Page 8 Attachment 2 –Estimated Levy Schedules Improvement Portion Date Total P+I CIF 105% Levy *Less: Special Assessment Revenue*Net Levy Levy Year Collection Year 02/01/2026 50,551.88 (50,551.88)---02/01/2027 279,645.00 -293,627.25 96,990.78 196,636.47 2025 202602/01/2028 278,015.00 -291,915.75 96,990.77 194,924.98 2026 202702/01/2029 276,115.00 -289,920.75 96,990.77 192,929.98 2027 2028 02/01/2030 278,940.00 -292,887.00 96,990.77 195,896.23 2028 202902/01/2031 276,307.50 -290,122.88 96,990.78 193,132.10 2029 203002/01/2032 278,387.50 -292,306.88 96,990.77 195,316.11 2030 203102/01/2033 279,877.50 -293,871.38 96,990.77 196,880.61 2031 203202/01/2034 280,757.50 -294,795.38 96,990.78 197,804.60 2032 203302/01/2035 276,007.50 -289,807.88 96,990.78 192,817.10 2033 203402/01/2036 280,935.00 -294,981.75 96,990.77 197,990.98 2034 2035 Total $2,835,539.38 (50,551.88)$2,924,236.88 $969,907.74 $1,954,329.14 *Special assessment revenue is based on assessments totaling $724,462.50 assessed at a rate of 5.55% (1.50% over the True Interest Cost, rounded to the nearest 0.05%), with equal annual payments spread over 10 years. VIII-08 Northland Securities, Inc.Page 9 Attachment 3 –Related Considerations Not Bank Qualified We understand the City (in combination with any subordinate taxing jurisdictions or debt issued in the City’s name by 501(c)3 corporations) anticipates issuing more than $10,000,000 in tax- exempt debt during this calendar year. Therefore,the Bonds will not be designated as “bank qualified” obligations pursuant to Federal Tax Law. Arbitrage Compliance Project/Construction Fund.All tax-exempt bond issues are subject to federal rebate requirements which require all arbitrage earned to be rebated to the U.S. Treasury. A rebate exemption the City expects to qualify for is the “24-month exemption.” Debt Service Fund.The City must maintain a bona fide debt service fund for the Bonds or be subject to yield restriction in the debt service fund. A bona fide debt service fund involves an equal matching of revenues to debt service expense with a balance forward permitted equal to the greater of the investment earnings in the fund during that year or 1/12 of the debt service of that year. The City should become familiar with the various Arbitrage Compliance requirements for this bond issue. The Resolution for the Bonds prepared by Bond Counsel explains the requirements in greater detail. Continuing Disclosure Type: Full Dissemination Agent: Northland Securities, Inc. The requirements for continuing disclosure are governed by SEC Rule 15c2-12. The primary requirements of Rule 15c2-12 actually fall on underwriters. The Rule sets forth due diligence needed prior to the underwriter’s purchase of municipal securities. Part of this requirement is obtaining commitment from the issuer to provide continuing disclosure. The document describing the continuing disclosure commitments (the “Undertaking”) is contained in the Official Statement that will be prepared to offer the Bonds to investors. The City has more than $10,000,000 of outstanding debt and is required to undertake “full” continuing disclosure. Full disclosure requires annual posting of the audit and a separate continuing disclosure report,as well as the reporting of certain “material events.”Material events set forth in the Rule, including, but not limited to, bond rating changes, call notices, and issuance of “financial obligations” (such as USDA loans, Public Finance Authority loans and lease agreements) must be reported within ten days of occurrence. Northland currently serves as dissemination agent for the City. We will assist with getting your annual report filed in compliance with full continuing disclosure regulations. Premiums In the current market environment, it is likely that bids received from underwriters will include premiums. A premium bid occurs when the purchaser pays the City an amount in excess of the par amount of a maturity in exchange for a higher coupon (interest rate). The use of premiums reflects the bidder’s view on future market conditions, tax considerations for investors and other factors. Ultimately, the true interest cost (“TIC”) calculation will determine the lowest bid, regardless of premium. VIII-08 Northland Securities, Inc.Page 10 A premium bid produces additional funds that can be used in several ways: •The premium means that the City needs less bond proceeds and can reduce the size of the issue by the amount of the premium. •The premium can be deposited in the Construction Fund and used to pay additional project costs, rather than used to reduce the size of the issue. •The premium can be deposited in the Debt Service Fund and used to pay principal and interest. Northland will work with City staff prior to the sale day to determine use of premium (if any).A consideration for use of premium is the bank qualification of the Bonds. Rating A rating will be requested from Standard & Poor’s (S&P). The City’s general obligation debt is currently rated "AA+" by S&P.The rating process will include a conference call with the rating analyst from S&P. Northland will assist City staff in preparing for and conducting the rating calls. VIII-08 Northland Securities, Inc.Page 11 Attachment 4 –Calendar of Events The following checklist of items denotes each milestone activity as well as the members of the finance team who will have the responsibility to complete it. Please note this proposed timetable assumes regularly scheduled City Council meetings. Date Action Responsible Party March 20 Project costs and sources of repayment provided by City to Northland. City Staff March 27 General Information Certificate relating to the Bonds sent to City for completion Northland April 10 City returns General Information Certificate to Northland City Staff April 24 Rating Request sent to S&P Preliminary Official Statement Sent to City for Sign Off Northland, City Staff April 28 Set Sale Resolution and Finance Plan Sent to City Northland, Bond Counsel Week of May 5 or May 12 Rating Call with S&P Northland, City Staff, Rating Agency May 5 Set Sale Resolution Adopted and Review of Finance Plan –7:00 p.m. Northland, Bond Counsel, City Council Action May 8 Comments on Preliminary Official Statement due to Northland City Staff April 2025 May 2025 Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat 1 2 3 4 5 1 2 3 6 7 8 9 10 11 12 4 5 6 7 8 9 10 13 14 15 16 17 18 19 11 12 13 14 15 16 17 20 21 22 23 24 25 26 18 19 20 21 22 23 24 27 28 29 30 25 26 27 28 29 30 31 June 2025 July 2025 Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat 1 2 3 4 5 6 7 1 2 3 4 5 8 9 10 11 12 13 14 6 7 8 9 10 11 12 15 16 17 18 19 20 21 13 14 15 16 17 18 19 22 23 24 25 26 27 28 20 21 22 23 24 25 26 29 30 27 28 29 30 31 Holiday VIII-08 Northland Securities, Inc.Page 12 Date Action Responsible Party May 22 Rating Received Northland, City Staff, Rating Agency May 27 Awarding Resolution sent to City Northland, Bond Counsel June 2 Bond Sale at 10:00 a.m. Bond Proposal Signed and Awarding Resolution adopted –7:00 p.m. Northland, City Council Action June 26 Closing on the Bonds (Proceeds Available)Northland, City Staff, Bond Counsel VIII-08 Northland Securities, Inc.Page 13 Attachment 5 -Risk Factors Property Taxes: Property tax levies shown in this Finance Plan are based on projected debt service and other revenues. Final levies will be set based on the results of sale. Levies should be reviewed annually and adjusted as needed. The debt service levy must be included in the preliminary levy for annual Truth in Taxation hearings. Future Legislative changes in the property tax system, including the imposition of levy limits and changes in calculation of property values,would affect plans for payment of debt service. Delinquent payment of property taxes would reduce revenues available to pay debt service. Special Assessments: Special assessments for the financed projects have not been levied at this time. This Finance Plan is based on the assumptions listed earlier in this report. Changes in the terms and timing for the actual assessments will alter the projected flow of funds for payment of debt service on the Improvement Portion of the Bonds. Also, special assessments may be prepaid. It is likely that the income earned on the investment of prepaid assessments will be less than the interest paid if the assessments remained outstanding. Delinquencies in assessment collections would reduce revenues needed to pay debt service. The collection of deferred assessments, if any, has not been included in the revenue projections. Projected assessment income should be reviewed annually and adjusted as needed. Utility Revenues: The City pledges the net revenues of the sanitary sewer, water and storm sewer utilities to the payment of principal and interest on the Revenue Portions of the Bonds. The failure to adjust rates and charges as needed and the loss of significant customers will affect available net revenues. If the net revenues are insufficient, the City is required to levy property taxes or use other revenues to cover the deficiency. Property taxes can only be used on a temporary basis and may not be an ongoing source of revenue to pay debt service. General: In addition to the risks described above, there are certain general risks associated with the issuance of bonds. These risks include, but are not limited to: •Failure to comply with covenants in bond resolution. •Failure to comply with Undertaking for continuing disclosure. •Failure to comply with IRS regulations,including regulations related to use of the proceeds and arbitrage/rebate.The IRS regulations govern the ability of the City to issue its bonds as tax-exempt securities and failure to comply with the IRS regulations may lead to loss of tax- exemption. VIII-08