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IX-02 Updated: Issuance and Sale of GO Bonds, Series 2022A
To: Mayor Fasbender & City Councilmembers From: Chris Eitemiller, Finance Manager Date: May 2, 2022 Item: General Obligation Bonds, Series 2022A City Council Memorandum Council Action Requested: Adopt the resolution approving the issuance and sale of general obligation bonds to finance the 2022 Neighborhood Project, the Water Tower Reconditioning Project and the Public Works Storage Building. Background Information: The City has initiated proceedings to sell general obligation bonds to finance the 2022 Neighborhood Project, the Water Tower Reconditioning Project and the Public Works Storage Building. A portion of the bonds would be repaid through special assessments on benefitting properties. The City has retained financial advisor Northland Securities to assist in the bond sale. The bond sale is scheduled for May 2. Results of the bond sale as well as an updated resolution will be provided to the City Council prior to the City Council meeting that evening. Jessica Green of Northland Securities will attend the City Council meeting to review the results of the bond sale. Financial Impact: Debt service payments will be due 2024 through 2032, amounts will depend on debt structure and interest amount pending bond sale on May 2. Committee Discussion: Not Applicable Attachments: • Resolution Providing for Issuance and Sale of $5,815,000 General Obligation Bonds, series 2022A • 2022A Bond Sale Summary Plan • S&P rating assessment document 73181402v1 EXTRACT OF MINUTES OF A MEETING CITY COUNCIL OF THE CITY OF HASTINGS, MINNESOTA HELD: MAY 2, 2022 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 on May 2, 2022, at 7:00 P.M., for the purpose, in part of authorizing the issuance and awarding the sale of $5,815,000 General Obligation Bonds, Series 2022A. 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 ISSUANCE AND SALE OF $5,815,000 GENERAL OBLIGATION BONDS, SERIES 2022A, PLEDGING FOR THE SECURITY THEREOF SPECIAL ASSESSMENTS AND NET REVENUES AND LEVYING A TAX FOR THE PAYMENT THEREOF A. WHEREAS, the City Council of the City of Hastings (the City) has heretofore determined and declared that it is necessary and expedient to issue $5,815,000 General Obligation Bonds, Series 2022A (the "Bonds" or individually a "Bond"), pursuant to Minnesota Statutes, Chapter 475; and 1. Chapter 429 to finance the construction of various public improvements within the City (the "Improvements"); 2. Section 444.075 to finance improvements to the municipal water system (the "Water System Improvements"); 3. Section 444.075 to finance improvements to the municipal sewer system (the "Sewer System Improvements"); and 4. Section 475.521 to finance the acquisition and betterment of a public works facility (the "Capital Improvements"). B. WHEREAS, the Improvements and all their components have been ordered prior to the date hereof, after a hearing thereon for which notice was given describing the Improvements or all their components by general nature, estimated cost, and area to be assessed; and 73181402v1 2 C. WHEREAS, the City owns and operates a municipal water utility system (the "Water System") and a municipal sanitary sewer utility system (the "Sewer System" and, together with the Water System, the "System"), as separate revenue producing public utilities; D. WHEREAS, the net revenues of the Water System are pledged to the payment of the City's outstanding (i) "Water Revenue Refunding Portion" of General Obligation Refunding Bonds, Series 2013A in the original principal amount of $5,805,000, dated February 21, 2013; (ii) "Water Portion" of General Obligation Bonds, Series 2019A in the original principal amount of $3,270,000, dated August 8, 2019; (iii) "Water Portion" of General Obligation Bonds, Series 2020A in the original principal amount of $3,180,000, dated October 1, 2020; and (iv) "Water Portion" of General Obligation Bonds, Series 2021A in the original principal amount of $2,070,000, dated August 26, 2021 (collectively, the "Outstanding Water Bonds"); and E. WHEREAS, the net revenues of the Sewer System are pledged to the payment of the City's outstanding (i) "Sewer Portion" of General Obligation Bonds, Series 2020A in the original principal amount of $3,180,000, dated October 1, 2020; and (ii) "Sewer Portion" of General Obligation Bonds, Series 2021A in the original principal amount of $2,070,000, dated August 26, 2021 (together, the "Outstanding Sewer Bonds"); and F. WHEREAS, the net revenues of the System are pledged to the payment of the City's outstanding "Utility Portion" of General Obligation Bonds, Series 2018A in the original principal amount of $3,820,000, dated July 18, 2018 (the "Outstanding Utility Bonds"); and G. WHEREAS, on February 22, 2022, the City Council held a public hearing on the proposed issuance of general obligation capital improvement plan bonds and, pursuant to resolution approved and adopted the 2022 through 2026 Five-Year Capital Improvement Plan (the "Plan"), and approved the issuance of general obligation capital improvement plan bonds to finance the acquisition and betterment of the Capital Improvements all pursuant to the Plan and in accordance with the provisions of Minnesota Statutes, Section 475.521; and H. WHEREAS, no petition signed by voters equal to five percent of the votes cast in the City in the last general election requesting a vote on the issuance of the general obligation capital improvement plan bonds has been filed with the City Administrator within 30 days after the public hearing on the Plan and on the issuance of the general obligation capital improvement plan bonds; and I. WHEREAS, there are currently no other capital improvement plan bonds outstanding; and J. WHEREAS, the maximum principal and interest to become due in any year on the Capital Improvements Portion of the Bonds issued under Minnesota Statutes, Section 475.521 is less than 0.16 percent of the estimated market value of property in the City. K. WHEREAS, the City has retained Northland Securities, Inc., in Minneapolis, Minnesota ("Northland"), as its independent municipal advisor for the sale of the Bonds and was therefore authorized to sell the Bonds by private negotiation in accordance with Minnesota Statutes, Section 475.60, Subdivision 2(9) and proposals to purchase the Bonds have been solicited by Northland; and 73181402v1 3 L. WHEREAS, the proposals set forth on Exhibit A attached hereto were received by the Finance Manager, or designee, at the offices of Northland at 10:00 A.M. on the date hereof, pursuant to the Notice of Sale established for the Bonds; and M. WHEREAS, it is in the best interests of the City that the Bonds be issued in book-entry form as hereinafter provided; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Hastings, Minnesota, as follows: 1. Acceptance of Proposal. The proposal of Robert W. Baird & Co., Inc. (the "Purchaser"), to purchase the Bonds, in accordance with the Notice of Sale, at the rates of interest hereinafter set forth, and to pay therefor the sum of $6,198,421.96, plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received, is hereby accepted and the Bonds are hereby awarded to the Purchaser. 2. Bond Terms. (a) Original Issue Date; Denominations; Maturities; Term Bond Option. The Bonds shall be dated June 1, 2022, as the date of original issue and shall be issued forthwith on or after such date in fully registered form, shall be numbered from R-1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity (the "Authorized Denominations") and shall mature on February 1 in the years and amounts as follows: Year Amount Year Amount 2024 $470,000 2029 $595,000 2025 490,000 2030 625,000 2026 510,000 2031 650,000 2027 535,000 2032 680,000 2028 565,000 2033 695,000 As may be requested by the Purchaser, one or more term Bonds may be issued having mandatory sinking fund redemption and final maturity amounts conforming to the foregoing principal repayment schedule, and corresponding additions may be made to the provisions of the applicable Bond(s). (b) Allocation. The aggregate principal amount of $3,135,000 maturing in each of the years and amounts hereinafter set forth are issued to finance the Improvements (the "Improvement Portion"). The aggregate principal amount of $1,420,000 maturing in each of the years and amounts hereinafter set forth are issued to finance the Water System Improvements (the "Water Portion"). The aggregate principal amount of $285,000 maturing in each of the years and amounts hereinafter set forth are issued to finance the Sewer System Improvements (the "Sewer Portion"). The aggregate principal amount of $975,000 maturing in each of the years and amounts hereinafter set forth are issued to finance the Capital Improvements (the " Capital Improvements Portion of the Bonds "). 73181402v1 4 Year Improvement Portion Water Portion Sewer Portion Capital Improvements Portion Total 2024 $250,000 $115,000 $25,000 $80,000 $470,000 2025 265,000 120,000 25,000 80,000 490,000 2026 275,000 125,000 25,000 85,000 510,000 2027 290,000 130,000 25,000 90,000 535,000 2028 305,000 140,000 25,000 95,000 565,000 2029 320,000 145,000 30,000 100,000 595,000 2030 335,000 155,000 30,000 105,000 625,000 2031 355,000 155,000 30,000 110,000 650,000 2032 365,000 165,000 35,000 115,000 680,000 2033 375,000 170,000 35,000 115,000 695,000 If Bonds are prepaid, the prepayments shall be allocated to the portions of debt service (and hence allocated to the payment of Bonds treated as relating to a particular portion of debt service) as provided in this paragraph. If the source of prepayment moneys is the general fund of the City, or other generally available source, including the levy of taxes, the prepayment may be allocated to any portions of debt service in such amounts as the City shall determine. If the source of the prepayment is special assessments pledged to the Improvements, the prepayment shall be allocated to the Improvement Portion of debt service. If the source of a prepayment is excess net revenues of the Water System pledged to the Water System Improvements, the prepayment shall be allocated to the Water Portion of debt service. If the source of a prepayment is excess net revenues of the Sewer System pledged to the Sewer System Improvements, the prepayment shall be allocated to the Sewer Portion of debt service. (c) Book Entry Only System. The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York or any of its successors or its successors to its functions hereunder (the "Depository") will act as securities depository for the Bonds, and to this end: (i) The Bonds shall be initially issued and, so long as they remain in book entry form only (the "Book Entry Only Period"), shall at all times be in the form of a separate single fully registered Bond for each maturity of the Bonds; and for purposes of complying with this requirement under paragraphs 5 and 10 Authorized Denominations for any Bond shall be deemed to be limited during the Book Entry Only Period to the outstanding principal amount of that Bond. (ii) Upon initial issuance, ownership of the Bonds shall be registered in a bond register maintained by the Bond Registrar (as hereinafter defined) in the name of CEDE & CO., as the nominee (it or any nominee of the existing or a successor Depository, the "Nominee"). (iii) With respect to the Bonds neither the City nor the Bond Registrar shall have any responsibility or obligation to any broker, dealer, bank, or any other financial institution for which the Depository holds Bonds as securities depository (the 73181402v1 5 "Participant") or the person for which a Participant holds an interest in the Bonds shown on the books and records of the Participant (the "Beneficial Owner"). Without limiting the immediately preceding sentence, neither the City, nor the Bond Registrar, shall have any such responsibility or obligation with respect to (A) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Bonds, or (B) the delivery to any Participant, any Owner or any other person, other than the Depository, of any notice with respect to the Bonds, including any notice of redemption, or (C) the payment to any Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the principal of or premium, if any, or interest on the Bonds, or (D) the consent given or other action taken by the Depository as the Registered Holder of any Bonds (the "Holder"). For purposes of securing the vote or consent of any Holder under this Resolution, the City may, however, rely upon an omnibus proxy under which the Depository assigns its consenting or voting rights to certain Participants to whose accounts the Bonds are credited on the record date identified in a listing attached to the omnibus proxy. (iv) The City and the Bond Registrar may treat as and deem the Depository to be the absolute owner of the Bonds for the purpose of payment of the principal of and premium, if any, and interest on the Bonds, for the purpose of giving notices of redemption and other matters with respect to the Bonds, for the purpose of obtaining any consent or other action to be taken by Holders for the purpose of registering transfers with respect to such Bonds, and for all purpose whatsoever. The Bond Registrar, as paying agent hereunder, shall pay all principal of and premium, if any, and interest on the Bonds only to the Holder or the Holders of the Bonds as shown on the bond register, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. (v) Upon delivery by the Depository to the Bond Registrar of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the existing Nominee, and subject to the transfer provisions in paragraph 10 hereof, references to the Nominee hereunder shall refer to such new Nominee. (vi) So long as any Bond is registered in the name of a Nominee, all payments with respect to the principal of and premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, by the Bond Registrar or City, as the case may be, to the Depository as provided in the Letter of Representations to the Depository required by the Depository as a condition to its acting as book-entry Depository for the Bonds (said Letter of Representations, together with any replacement thereof or amendment or substitute thereto, including any standard procedures or policies referenced therein or applicable thereto respecting the procedures and other matters relating to the Depository's role as book-entry Depository for the Bonds, collectively hereinafter referred to as the "Letter of Representations"). (vii) All transfers of beneficial ownership interests in each Bond issued in book-entry form shall be limited in principal amount to Authorized Denominations and 73181402v1 6 shall be effected by procedures by the Depository with the Participants for recording and transferring the ownership of beneficial interests in such Bonds. (viii) In connection with any notice or other communication to be provided to the Holders pursuant to this Resolution by the City or Bond Registrar with respect to any consent or other action to be taken by Holders, the Depository shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action; provided, that the City or the Bond Registrar may establish a special record date for such consent or other action. The City or the Bond Registrar shall, to the extent possible, give the Depository notice of such special record date not less than fifteen calendar days in advance of such special record date to the extent possible. (ix) Any successor Bond Registrar in its written acceptance of its duties under this Resolution and any paying agency/bond registrar agreement, shall agree to take any actions necessary from time to time to comply with the requirements of the Letter of Representations. (d) Termination of Book-Entry Only System. Discontinuance of a particular Depository's services and termination of the book-entry only system may be effected as follows: (i) The Depository may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the City and discharging its responsibilities with respect thereto under applicable law. The City may terminate the services of the Depository with respect to the Bond if it determines that the Depository is no longer able to carry out its functions as securities depository or the continuation of the system of book-entry transfers through the Depository is not in the best interests of the City or the Beneficial Owners. (ii) Upon termination of the services of the Depository as provided in the preceding paragraph, and if no substitute securities depository is willing to undertake the functions of the Depository hereunder can be found which, in the opinion of the City, is willing and able to assume such functions upon reasonable or customary terms, or if the City determines that it is in the best interests of the City or the Beneficial Owners of the Bond that the Beneficial Owners be able to obtain certificates for the Bonds, the Bonds shall no longer be registered as being registered in the bond register in the name of the Nominee, but may be registered in whatever name or names the Holder of the Bonds shall designate at that time, in accordance with paragraph 10. To the extent that the Beneficial Owners are designated as the transferee by the Holders, in accordance with paragraph 10, the Bonds will be delivered to the Beneficial Owners. (iii) Nothing in this subparagraph (d) shall limit or restrict the provisions of paragraph 10. (e) Letter of Representations. The provisions in the Letter of Representations are incorporated herein by reference and made a part of the resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Letter of Representations shall control. 73181402v1 7 3. Purposes. The Improvement Portion of the Bonds shall provide funds to finance the Improvements. The Water Portion of the Bonds shall provide funds to finance the Water System Improvements. The Sewer Portion of the Bonds shall provide funds to finance the Sewer System Improvements. The Capital Improvements Portion of the Bonds shall provide funds to finance the acquisition and betterment of the Capital Improvements. The Improvements, the Water System Improvements, the Sewer System Improvements and the Capital Improvements are herein referred to together as the Project. The total cost of the Project, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at least equal to the amount of the Bonds. The City covenants that it shall do all things and perform all acts required of it to assure that work on the Project proceeds with due diligence to completion and that any and all permits and studies required under law for the Project are obtained. 4. Interest. The Bonds shall bear interest payable semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing February 1, 2023, calculated on the basis of a 360-day year of twelve 30-day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturity Year Interest Rate Maturity Year Interest Rate 2024 5.00% 2029 5.00% 2025 5.00 2030 5.00 2026 5.00 2031 3.00 2027 5.00 2032 3.00 2028 5.00 2033 3.00 5. Redemption. All Bonds maturing on February 1, 2031 and thereafter, shall be subject to redemption and prepayment at the option of the City on February 1, 2030, and on 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 the principal amounts within each maturity to be redeemed shall be determined by the City; 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. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected registered holder of the Bonds at least thirty (30) days prior to the date fixed for redemption. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar prior to giving notice of redemption shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers so assigned to such Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of each such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the 73181402v1 8 City or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the City and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the City shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. 6. Bond Registrar. U.S. Bank Trust Company, National Association, in St. Paul, Minnesota, is appointed to act as bond registrar and transfer agent with respect to the Bonds (the "Bond Registrar"), and shall do so unless and until a successor Bond Registrar is duly appointed, all pursuant to any contract the City and Bond Registrar shall execute which is consistent herewith. The Bond Registrar shall also serve as paying agent unless and until a successor- paying agent is duly appointed. Principal and interest on the Bonds shall be paid to the registered holders (or record holders) of the Bonds in the manner set forth in the form of Bond and paragraph 12. 7. Form of Bond. The Bonds, together with the Bond Registrar's Certificate of Authentication, the form of Assignment and the registration information thereon, shall be in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA DAKOTA AND WASHINGTON COUNTIES CITY OF HASTINGS R-_______ $_________ GENERAL OBLIGATION BOND, SERIES 2022A Interest Rate Maturity Date Date of Original Issue CUSIP ______% February 1, 20__ June 1, 2022 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: The City of Hastings, Dakota and Washington Counties, Minnesota (the "Issuer"), certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, unless called for earlier redemption, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, and to pay interest thereon semiannually on February 1 and August 1 of each year (each, an "Interest Payment Date"), commencing February 1, 2023, at the rate per annum specified above (calculated on the basis of a 360-day year of twelve 30-day months) until the principal sum is paid or has been provided for. This Bond will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The principal of and premium, if any, on this Bond are payable upon 73181402v1 9 presentation and surrender hereof at the principal office of U.S. Bank Trust Company, National Association, in St. Paul, Minnesota (the "Bond Registrar"), acting as paying agent, or any successor paying agent duly appointed by the Issuer. Interest on this Bond will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Bond is registered (the "Holder" or "Bondholder") on the registration books of the Issuer maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Bondholders not less than ten days prior to the Special Record Date. The principal of and premium, if any, and interest on this Bond are payable in lawful money of the United States of America. So long as this Bond is registered in the name of the Depository or its Nominee as provided in the Resolution hereinafter described, and as those terms are defined therein, payment of principal of, premium, if any, and interest on this Bond and notice with respect thereto shall be made as provided in the Letter of Representations, as defined in the Resolution, and surrender of this Bond shall not be required for payment of the redemption price upon a partial redemption of this Bond. Until termination of the book-entry only system pursuant to the Resolution, Bonds may only be registered in the name of the Depository or its Nominee. Optional Redemption. All Bonds of this issue (the "Bonds") maturing on February 1, 2031, and thereafter, are subject to redemption and prepayment at the option of the Issuer on February 1, 2030, and on 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 the 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. Bonds or portions thereof called for redemption shall be due and payable on the redemption date, and interest thereon shall cease to accrue from and after the redemption date. Mailed notice of redemption shall be given to the paying agent and to each affected registered holder of the Bonds at least thirty (30) days prior to the date fixed for redemption. Prior to the date on which any Bond or Bonds are directed by the Issuer to be redeemed in advance of maturity, the Issuer will cause notice of the call thereof for redemption identifying the Bonds to be redeemed to be mailed to the Bond Registrar and all Bondholders, at the addresses shown on the Bond Register. All Bonds so called for redemption will cease to bear interest on the specified redemption date, provided funds for their redemption have been duly deposited. Selection of Bonds for Redemption; Partial Redemption. To effect a partial redemption of Bonds having a common maturity date, the Bond Registrar shall assign to each Bond having a common maturity date a distinctive number for each $5,000 of the principal amount of such Bond. The Bond Registrar shall then select by lot, using such method of selection as it shall deem proper in its discretion, from the numbers assigned to the Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The 73181402v1 10 Bonds to be redeemed shall be the Bonds to which were assigned numbers so selected; provided, however, that only so much of the principal amount of such Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. If a Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the Issuer or Bond Registrar so requires, a written instrument of transfer in form satisfactory to the Issuer and Bond Registrar duly executed by the Holder thereof or the Holder's attorney duly authorized in writing) and the Issuer shall execute (if necessary) and the Bond Registrar shall authenticate and deliver to the Holder of the Bond, without service charge, a new Bond or Bonds having the same stated maturity and interest rate and of any Authorized Denomination or Denominations, as requested by the Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond so surrendered. Issuance; Purpose; General Obligation. This Bond is one of an issue in the total principal amount of $5,815,000, all of like date of original issue and tenor, except as to number, maturity, interest rate, denomination and redemption privilege, issued pursuant to and in full conformity with the Constitution, Charter of the Issuer and laws of the State of Minnesota and pursuant to a resolution adopted by the City Council on May 2, 2022 (the "Resolution"), for the purpose of providing money to finance various municipal improvement projects and the acquisition and betterment of a public works facility within the jurisdiction of the Issuer. This Bond is payable out of the General Obligation Bonds, Series 2022A Fund of the Issuer. This Bond constitutes a general obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denominations; Exchange; Resolution. The Bonds are issuable solely in fully registered form in Authorized Denominations (as defined in the Resolution) and are exchangeable for fully registered Bonds of other Authorized Denominations in equal aggregate principal amounts at the office of the Bond Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Bond Registrar. Copies of the Resolution are on file in the office of the Bond Registrar. Transfer. This Bond is transferable by the Holder in person or the Holder's attorney duly authorized in writing at the office of the Bond Registrar upon presentation and surrender hereof to the Bond Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with the Bond Registrar. Thereupon the Issuer shall execute and the Bond Registrar shall authenticate and deliver, in exchange for this Bond, one or more new fully registered Bonds in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an Authorized Denomination or Denominations, in aggregate principal amount equal to the principal amount of this Bond, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Bond and any legal or unusual costs regarding transfers and lost Bonds. Treatment of Registered Owners. The Issuer and Bond Registrar may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as 73181402v1 11 herein provided (except as otherwise provided herein with respect to the Record Date) and for all other purposes, whether or not this Bond shall be overdue, and neither the Issuer nor the Bond Registrar shall be affected by notice to the contrary. Authentication. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Bond Registrar. Qualified Tax-Exempt Obligation. This Bond has been designated by the Issuer as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution, Charter of the Issuer and laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Bond, have been done, have happened and have been performed, in regular and due form, time and manner as required by law; that the Issuer has covenanted and agreed with the Holders of the Bonds that it will impose and collect charges for the service, use and availability of its municipal water utility system (the "Water System") at the times and in amounts necessary to produce net revenues, together with other sums pledged to the payment of the Water Portion of the Bonds, as defined in the Resolution, adequate to pay all principal and interest when due on the Water Portion of the Bonds; and that the Issuer will levy a direct, annual, irrepealable ad valorem tax upon all of the taxable property of the Issuer, without limitation as to rate or amount, for the years and in amounts sufficient to pay the principal and interest on Water Portion of the Bonds as they respectively become due, if the net revenues from the Water System, and any other sums irrevocably appropriated to the Debt Service Account are insufficient therefor; that the Issuer has covenanted and agreed with the Holders of the Bonds that it will impose and collect charges for the service, use and availability of its municipal sanitary sewer utility system (the "Sewer System") at the times and in amounts necessary to produce net revenues, together with other sums pledged to the payment of the Sewer Portion of the Bonds, as defined in the Resolution, adequate to pay all principal and interest when due on the Sewer Portion of the Bonds; and that the Issuer will levy a direct, annual, irrepealable ad valorem tax upon all of the taxable property of the Issuer, without limitation as to rate or amount, for the years and in amounts sufficient to pay the principal and interest on Sewer Portion of the Bonds as they respectively become due, if the net revenues from the Sewer System, and any other sums irrevocably appropriated to the Debt Service Account are insufficient thereforand that this Bond, together with all other debts of the Issuer outstanding on the date of original issue hereof and the date of its issuance and delivery to the original purchaser, does not exceed any constitutional, charter or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Hastings, Dakota and Washington Counties, Minnesota, by its City Council has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and its Clerk, the corporate seal of the Issuer having been intentionally omitted as permitted by law. 73181402v1 12 Date of Registration: BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the Resolution mentioned within. U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION St. Paul, Minnesota, Bond Registrar By: Authorized Signature Registrable by: U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION Payable at: U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION CITY OF HASTINGS, DAKOTA AND WASHINGTON COUNTIES, MINNESOTA /s/ Facsimile Mayor /s/ Facsimile Clerk 73181402v1 13 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common UTMA - ___________ as custodian for ______________ (Cust) (Minor) under the _____________________ Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. ___________________________________________________________ ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto ________________________________________________________________ the within Bond and does hereby irrevocably constitute and appoint _________________ attorney to transfer the Bond on the books kept for the registration thereof, with full power of substitution in the premises. Dated:_____________________ ______________________________ Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: ___________________________ Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad-15(a)(2). The Bond Registrar will not affect transfer of this Bond unless the information concerning the transferee requested below is provided. Name and Address: ________________________________________ ________________________________________ ________________________________________ (Include information for all joint owners if the Bond is held by joint account.) 73181402v1 14 8. Execution. The Bonds shall be in typewritten form, shall be executed on behalf of the City by the signatures of its Mayor and Clerk and be sealed with the seal of the City; provided, as permitted by law, both signatures may be photocopied facsimiles and the corporate seal has been omitted. In the event of disability or resignation or other absence of either officer, the Bonds may be signed by the manual or facsimile signature of the officer who may act on behalf of the absent or disabled officer. In case either officer whose signature or facsimile of whose signature shall appear on the Bonds shall cease to be such officer before the delivery of the Bonds, the signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. 9. Authentication. No Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on such Bond, substantially in the form hereinabove set forth, shall have been duly executed by an authorized representative of the Bond Registrar. Certificates of Authentication on different Bonds need not be signed by the same person. The Bond Registrar shall authenticate the signatures of officers of the City on each Bond by execution of the Certificate of Authentication on the Bond and by inserting as the date of registration in the space provided the date on which the Bond is authenticated, except that for purposes of delivering the original Bonds to the Purchaser, the Bond Registrar shall insert as a date of registration the date of original issue of June 1, 2022. The Certificate of Authentication so executed on each Bond shall be conclusive evidence that it has been authenticated and delivered under this resolution. 10. Registration; Transfer; Exchange. The City will cause to be kept at the principal office of the Bond Registrar a bond register in which, subject to such reasonable regulations as the Bond Registrar may prescribe, the Bond Registrar shall provide for the registration of Bonds and the registration of transfers of Bonds entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Bond at the principal office of the Bond Registrar, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration (as provided in paragraph 9) of, and deliver, in the name of the designated transferee or transferees, one or more new Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Bond may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder, Bonds may be exchanged for Bonds of any Authorized Denomination or Denominations of a like aggregate principal amount and stated maturity, upon surrender of the Bonds to be exchanged at the principal office of the Bond Registrar. Whenever any Bonds are so surrendered for exchange, the City shall execute (if necessary), and the Bond Registrar shall authenticate, insert the date of registration of, and deliver the Bonds which the Holder making the exchange is entitled to receive. All Bonds surrendered upon any exchange or transfer provided for in this resolution shall be promptly canceled by the Bond Registrar and thereafter disposed of as directed by the City. 73181402v1 15 All Bonds delivered in exchange for or upon transfer of Bonds shall be valid general obligations of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Bonds surrendered for such exchange or transfer. Every Bond presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Bond Registrar, duly executed by the Holder thereof or his, her or its attorney duly authorized in writing. The Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Bond and any legal or unusual costs regarding transfers and lost Bonds. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with the Bond Registrar, including regulations which permit the Bond Registrar to close its transfer books between record dates and payment dates. The Finance Manager is hereby authorized to negotiate and execute the terms of said agreement. 11. Rights Upon Transfer or Exchange. Each Bond delivered upon transfer of or in exchange for or in lieu of any other Bond shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Bond. 12. Interest Payment; Record Date. Interest on any Bond shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Bond is registered (the "Holder") on the registration books of the City maintained by the Bond Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date"). Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date") fixed by the Bond Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given by the Bond Registrar to the Holders not less than ten days prior to the Special Record Date. 13. Treatment of Registered Owner. The City and Bond Registrar may treat the person in whose name any Bond is registered as the owner of such Bond for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 12) on, such Bond and for all other purposes whatsoever whether or not such Bond shall be overdue, and neither the City nor the Bond Registrar shall be affected by notice to the contrary. 14. Delivery; Application of Proceeds. The Bonds when so prepared and executed shall be delivered by the Finance Manager to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 15. Fund and Accounts. There is hereby established a special fund to be designated "General Obligation Bonds, Series 2022A Fund" (the "Fund") to be administered and maintained by the Finance Manager as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the 73181402v1 16 manner herein specified until all of the Bonds and the interest thereon have been fully paid. The Operation and Maintenance Account for the Water System and the Operation and Maintenance Account for the Sewer System (together, the "Operation and Maintenance Accounts") heretofore established by the City shall continue to be maintained in the manner heretofore and herein provided by the City. All moneys remaining after paying or providing for the items set forth in the resolution(s) establishing the Operation and Maintenance Accounts shall constitute and are referred to as "net revenues" until the Water Portion of the Bonds and the Sewer Portion of the Bonds have been paid. In such records there shall be established accounts of the Fund for the purposes and in the amounts as follows: (a) Construction Account. To the Construction Account there shall be credited the proceeds of the sale of the Bonds, less capitalized interest, plus any special assessments levied with respect to the Improvements and collected prior to completion of the Improvements and payment of the costs thereof. From the Construction Account there shall be paid all costs and expenses of making the Project, including the cost of any construction or other contracts heretofore let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65. Moneys in the Construction Account shall be used for no other purpose except as otherwise provided by law; provided that the proceeds of the Bonds may also be used to the extent necessary to pay interest on the Bonds due prior to the anticipated date of commencement of the collection of taxes, special assessments or net revenues herein levied or covenanted to be levied; and provided further that if upon completion of the Project there shall remain any unexpended balance in the Construction Account, the balance (other than any special assessments) shall be transferred to the Debt Service Account provided that any funds attributable to the Improvement Portion of the Bonds may be transferred to the fund of any other improvement instituted pursuant to Minnesota Statutes, Chapter 429, and provided further that any special assessments credited to the Construction Account shall only be applied towards payment of the costs of the Improvements upon adoption of a resolution by the City Council determining that the application of the special assessments for such purpose will not cause the City to no longer be in compliance with Minnesota Statutes, Section 475.61, Subdivision 1. (b) Debt Service Account. There shall be maintained separate subaccounts in the Debt Service Account to be designated the "Improvements Debt Service Subaccount", "Water System Improvements Debt Service Subaccount", the "Sewer System Improvements Debt Service Subaccount" and the Capital Improvements Debt Service Subaccount." There are hereby irrevocably appropriated and pledged to, and there shall be credited to the separate subaccounts of the Debt Service Account: (i) Improvements Debt Service Subaccount. To the Improvements Debt Service Subaccount there shall be credited: : (A) capitalized interest in the amount of $89,900.00 (together with interest earnings thereon and subject to such other adjustments as are appropriate to provide sufficient funds to pay interest due on the Improvement Portion of the Bonds on or before February 1, 2023; (B) all collections of special assessments herein covenanted to be levied with respect to the Improvements and either initially credited to the Construction Account and not already spent as permitted above and required to pay any principal and interest due on the Improvement Portion of the Bonds or collected subsequent to the completion of the Improvements and payment of the costs thereof; (C) any collections of all taxes herein or hereinafter levied for the payment 73181402v1 17 of the Improvement Portion of the Bonds and interest thereon; (D) a pro rata share of all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (E) all investment earnings on funds held in the Improvements Debt Service Subaccount; and (F) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Improvements Debt Service Subaccount. The Improvements Debt Service Subaccount shall be used solely to pay the principal and interest and any premium for redemption of the Improvement Portion of the Bonds and any other General Obligation Bonds of the City hereafter issued by the City and made payable from said subaccount as provided by law. (ii) Water System Improvements Debt Service Subaccount . To the Water System Improvements Debt Service Subaccount there shall be credited: (A) the net revenues of the Water System not otherwise pledged and applied to the payment of other obligations of the City, in an amount, together with other funds which may herein or hereafter from time to time be irrevocably appropriated to the Water System Improvements Debt Service Subaccount , sufficient to meet the requirements of Minnesota Statutes, Section 475.61 for the payment of the principal and interest of the Water Portion of the Bonds; (B) any collections of all taxes which may hereafter be levied in the event that the net revenues of the Water System and other funds herein pledged to the payment of the principal and interest on the Water Portion of the Bonds are insufficient therefore; (C) a pro rata share of all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (D) all investment earnings on funds held in the Water System Improvements Debt Service Subaccount; and (E) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Water System Improvements Debt Service Subaccount . The Water System Improvements Debt Service Subaccount shall be used solely to pay the principal and interest and any premium for redemption of the Water Portion of the Bonds and any other General Obligation Bonds of the City hereafter issued by the City and made payable from said subaccount as provided by law. (iii) Sewer System Improvements Debt Service Subaccount . To the Sewer System Improvements Debt Service Subaccount there shall be credited: (A) the net revenues of the Sewer System not otherwise pledged and applied to the payment of other obligations of the City, in an amount, together with other funds which may herein or hereafter from time to time be irrevocably appropriated to the Sewer System Improvements Debt Service Subaccount , sufficient to meet the requirements of Minnesota Statutes, Section 475.61 for the payment of the principal and interest of the Sewer Portion of the Bonds; (B) any collections of all taxes which may hereafter be levied in the event that the net revenues of the Sewer System and other funds herein pledged to the payment of the principal and interest on the Sewer Portion of the Bonds are insufficient therefore; (C) a pro rata share of all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (D) all investment earnings on funds held in the Sewer System Improvements Debt Service Subaccount; and (E) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Sewer System Improvements Debt Service Subaccount . The Sewer System Improvements Debt Service Subaccount shall be used solely to pay the principal and interest and any premium for redemption of the 73181402v1 18 Sewer Portion of the Bonds and any other General Obligation Bonds of the City hereafter issued by the City and made payable from said subaccount as provided by law. (iv) Capital Improvements Debt Service Subaccount. To the Capital Improvements Debt Service Subaccount there shall be credited: (A) capitalized interest in the amount of $27,966.67 (together with interest earnings thereon and subject to such other adjustments as are appropriate to provide sufficient funds to pay interest due on the Capital Improvements Portion of the Bonds on or before February 1, 2023; (B) all collections of all taxes which herein or hereafter levied for the payment of the principal and interest on the Capital Improvements Portion of the Bonds; (C) a pro rata share of all funds remaining in the Construction Account after completion of the Project and payment of the costs thereof; (D) all investment earnings on funds held in the Capital Improvements Debt Service Subaccount; and (E) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Capital Improvements Debt Service Subaccount. The Capital Improvements Debt Service Subaccount shall be used solely to pay the principal and interest and any premium for redemption of the Capital Improvements Portion of the Bonds and any other general obligation bonds of the City hereafter issued by the City and made payable from said subaccount as provided by law. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued and (2) in addition to the above in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Construction Account, Operation and Maintenance Accounts or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the bonds payable therefrom) in excess of amounts which under then applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code"). 16. Covenants Relating to the Improvement Portion of the Bonds. (a) Special Assessments. It is hereby determined that no less than twenty percent of the cost to the City of each Improvement financed hereunder within the meaning of Minnesota Statutes, Section 475.58, Subdivision 1(3), shall be paid by special assessments to be levied against every assessable lot, piece and parcel of land benefited by any of the Improvements. The City hereby covenants and agrees that it will let all construction contracts not heretofore let within one year after ordering each Improvement financed hereunder unless the resolution ordering the Improvement specifies a different time limit for the letting of construction contracts. The City hereby further covenants and agrees that it will do and perform as soon as they may be 73181402v1 19 done all acts and things necessary for the final and valid levy of such special assessments, and in the event that any such special assessment be at any time held invalid with respect to any lot, piece or parcel of land due to any error, defect, or irregularity in any action or proceedings taken or to be taken by the City or the City Council or any of the City officers or employees, either in the making of the special assessments or in the performance of any condition precedent thereto, the City and the City Council will forthwith do all further acts and take all further proceedings as may be required by law to make the special assessments a valid and binding lien upon such property. The special assessments have heretofore been authorized. Subject to such adjustments as are required by conditions in existence at the time the assessments are levied, it is hereby determined that the assessments shall be payable in equal, consecutive, annual installments, including both principal and interest, with interest at a rate per annum set forth below: Improvement Designation Levy Years Collection Years Amount See Attached Schedule in Exhibit B At the time the assessments are in fact levied the City Council shall, based on the then- current estimated collections of the assessments, make any adjustments in any ad valorem taxes required to be levied in order to assure that the City continues to be in compliance with Minnesota Statutes, Section 475.61, Subdivision 1. (b) Tax Levy. To provide moneys for payment of the principal and interest on the Improvement Portion of the Bonds there is hereby levied upon all of the taxable property in the City a direct annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the City for the years and in the amounts as follows: Levy Years Collection Years Amount See Attached Schedule in Exhibit B (c) Coverage Test. The tax levies are such that if collected in full they, together with estimated collections of special assessments and other revenues herein pledged for the payment of the Improvement Portion of the Bonds, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Improvement Portion of the Bonds. The tax levies shall be irrepealable so long as any of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, Subdivision 3. 17. Covenants Relating to the Water Portion of the Bonds. (a) Sufficiency of Net Revenues; Coverage Test. It is hereby found, determined and declared that the net revenues of the Water System are sufficient in an amount to pay when due the principal and interest on the Water Portion of the Bonds and the Outstanding Water Bonds 73181402v1 20 and a sum at least five percent in excess thereof. It is hereby found, determined and declared that the net revenues of the System are sufficient in an amount to pay when due the principal and interest on the Outstanding Utility Bonds and a sum at least five percent in excess thereof. The net revenues of the Water System are hereby pledged on a parity lien with the Outstanding Water Bonds and the Outstanding Utility Bonds and shall be applied for that purpose, but solely to the extent required to meet, together with other pledged sums, the principal and interest requirements of the Water Portion of the Bonds. As used herein the term net revenues means the gross revenues derived by the City from the operation of the Water System, including all charges for service, use, availability, and connection to the Water System, and all monies received from the sale of any facilities or equipment of the Water System or any by-products thereof, less all normal, reasonable, or current costs of owning, operating, and maintaining the Water System. Nothing contained herein shall be deemed to preclude the City from making further pledges and appropriations of the net revenues of the Water System for the payment of other or additional obligations of the City, provided that it has first been determined by the City Council that the estimated net revenues of the Water System will be sufficient in addition to all other sources, for the payment of the Water Portion of the Bonds and such additional obligations and any such pledge and appropriation of the net revenues may be made superior or subordinate to, or on a parity with the pledge and appropriation herein. (b) Excess Net Revenues. Net revenues of the Water System in excess of those required for the foregoing may be used for any proper purpose. (c) Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes, Section 444.075, the City hereby covenants and agrees with the Holders of the Bonds that it will impose and collect charges for the service, use, availability and connection to the Water System at the times and in the amounts required to produce net revenues adequate to pay all principal and interest when due on the Water Portion of the Bonds. Minnesota Statutes, Section 444.075, Subdivision 2, provides as follows: "Real estate tax revenues should be used only, and then on a temporary basis, to pay general or special obligations when the other revenues are insufficient to meet the obligations." 18. Covenants Relating to the Sewer Portion of the Bonds. (a) Sufficiency of Net Revenues; Coverage Test. It is hereby found, determined and declared that the net revenues of the Sewer System are sufficient in an amount to pay when due the principal and interest on the Sewer Portion of the Bonds and the Outstanding Sewer Bonds and a sum at least five percent in excess thereof. It is hereby found, determined and declared that the net revenues of the System are sufficient in an amount to pay when due the principal and interest on the Outstanding Utility Bonds and a sum at least five percent in excess thereof. The net revenues of the Sewer System are hereby pledged on a parity lien with the Outstanding Sewer Bonds and the Outstanding Utility Bonds and shall be applied for that purpose, but solely to the extent required to meet, together with other pledged sums, the principal and interest requirements of the Sewer Portion of the Bonds. As used herein the term net revenues means the gross revenues derived by the City from the operation of the Sewer System, including all charges for service, use, availability, and connection to the Sewer System, and all monies received from 73181402v1 21 the sale of any facilities or equipment of the Sewer System or any by-products thereof, less all normal, reasonable, or current costs of owning, operating, and maintaining the Sewer System. Nothing contained herein shall be deemed to preclude the City from making further pledges and appropriations of the net revenues of the Sewer System for the payment of other or additional obligations of the City, provided that it has first been determined by the City Council that the estimated net revenues of the Sewer System will be sufficient in addition to all other sources, for the payment of the Sewer Portion of the Bonds and such additional obligations and any such pledge and appropriation of the net revenues may be made superior or subordinate to, or on a parity with the pledge and appropriation herein. (b) Excess Net Revenues. Net revenues of the Sewer System in excess of those required for the foregoing may be used for any proper purpose. (c) Covenant to Maintain Rates and Charges. In accordance with Minnesota Statutes, Section 444.075, the City hereby covenants and agrees with the Holders of the Bonds that it will impose and collect charges for the service, use, availability and connection to the Sewer System at the times and in the amounts required to produce net revenues adequate to pay all principal and interest when due on the Sewer Portion of the Bonds. Nothing herein shall preclude the City for levying taxes for the payment of the Sewer Portion of the Bonds as permitted by Minnesota Statutes, Section 115.46. 19. Covenants Relating to the Capital Improvements Portion of the Bonds. (a) Tax Levy. To provide moneys for payment of the principal and interest on the Capital Improvements Portion of the Bonds there is hereby levied upon all of the taxable property in the City a direct annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the City for the years and in the amounts as follows: Year of Tax Levy Year of Tax Collection Amount See Attached Schedule in Exhibit B (b) Coverage Test. The tax levies are such that if collected in full they, together with other revenues herein pledged for the payment of the Capital Improvements Portion of the Bonds, will produce at least five percent in excess of the amount needed to meet when due the principal and interest payments on the Capital Improvements Portion of the Bonds. The tax levies shall be irrepealable so long as any of the Capital Improvements Portion of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, Subdivision 3. 20. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged. If the net revenues of the Water System appropriated and pledged to the payment of principal and interest on the Water Portion of the Bonds, together with other funds irrevocably appropriated to the Water System 73181402v1 22 Improvements Debt Service Subaccount herein established, shall at any time be insufficient to pay such principal and interest when due, the City covenants and agrees to levy, without limitation as to rate or amount an ad valorem tax upon all taxable property in the City sufficient to pay such principal and interest as it becomes due. If the net revenues of the Sewer System appropriated and pledged to the payment of principal and interest on the Sewer Portion of the Bonds, together with other funds irrevocably appropriated to the Sewer System Improvements Debt Service Subaccount herein established, shall at any time be insufficient to pay such principal and interest when due, the City covenants and agrees to levy, without limitation as to rate or amount an ad valorem tax upon all taxable property in the City sufficient to pay such principal and interest as it becomes due. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. 21. Continuing Disclosure. The City is the sole obligated person with respect to the Bonds. The City hereby agrees, in accordance with the provisions of Rule 15c2-12 (the "Rule"), promulgated by the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking") hereinafter described to: (a) Provide or cause to be provided to the Municipal Securities Rulemaking Board (the "MSRB") by filing at www.emma.msrb.org in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. The City reserves the right to modify from time to time the terms of the Undertaking as provided therein. (b) Provide or cause to be provided to the MSRB notice of the occurrence of certain events with respect to the Bonds in not more than ten (10) business days after the occurrence of the event, in accordance with the Undertaking. (c) Provide or cause to be provided to the MSRB notice of a failure by the City to provide the annual financial information with respect to the City described in the Undertaking, in not more than ten (10) business days following such occurrence. (d) The City agrees that its covenants pursuant to the Rule set forth in this paragraph and in the Undertaking is intended to be for the benefit of the Holders of the Bonds and shall be enforceable on behalf of such Holders; provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants. The Mayor and Clerk of the City, or any other officer of the City authorized to act in their place (the "Officers") are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (ii) required by the Purchaser of the Bonds, and (iii) acceptable to the Officers. 73181402v1 23 22. Defeasance. When all Bonds have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Bonds shall, to the extent permitted by law, cease. The City may discharge its obligations with respect to any Bonds which are due on any date by irrevocably depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Bond Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the Bond Registrar on or before that date a sum sufficient for the payment thereof in full, provided that notice of redemption thereof has been duly given. The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law as an escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without regard to sale and/or reinvestment, to pay all amounts to become due thereon to maturity or, if notice of redemption as herein required has been duly provided for, to such earlier redemption date. 23. Compliance With Reimbursement Bond Regulations. The provisions of this paragraph are intended to establish and provide for the City's compliance with United States Treasury Regulations Section 1.150-2 (the "Reimbursement Regulations") applicable to the "reimbursement proceeds" of the Bonds, being those portions thereof which will be used by the City to reimburse itself for any expenditure which the City paid or will have paid prior to the Closing Date (a "Reimbursement Expenditure"). The City hereby certifies and/or covenants as follows: (a) Not later than sixty days after the date of payment of a Reimbursement Expenditure, the City (or person designated to do so on behalf of the City) has made or will have made a written declaration of the City's official intent (a "Declaration") which effectively (i) states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional description of the property, project or program to which the Declaration relates and for which the Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the general functional purpose thereof from which the Reimbursement Expenditure was to be paid (collectively the "Project"); and (iii) states the maximum principal amount of debt expected to be issued by the City for the purpose of financing the Project; provided, however, that no such Declaration shall necessarily have been made with respect to: (i) "preliminary expenditures" for the Project, defined in the Reimbursement Regulations to include engineering or architectural, surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not exceed twenty percent of the "issue price" of the Bonds, and (ii) a de minimis amount of Reimbursement Expenditures not in excess of the lesser of $100,000 or five percent of the proceeds of the Bonds. 73181402v1 24 (b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of the Bonds or any of the other types of expenditures described in Section 1.150-2(d)(3) of the Reimbursement Regulations. (c) The "reimbursement allocation" described in the Reimbursement Regulations for each Reimbursement Expenditure shall and will be made forthwith following (but not prior to) the issuance of the Bonds, and not later than three years after the later of (i) the date of the payment of the Reimbursement Expenditure, or (ii) the date on which the Project to which the Reimbursement Expenditure relates is first placed in service. (d) Each such reimbursement allocation will be made in a writing that evidences the City's use of Bond proceeds to reimburse the Reimbursement Expenditure and, if made within 30 days after the Bonds are issued, shall be treated as made on the day the Bonds are issued. Provided, however, that the City may take action contrary to any of the foregoing covenants in this paragraph upon receipt of an opinion of its Bond Counsel for the Bonds stating in effect that such action will not impair the tax-exempt status of the Bonds. 24. Certificate of Registration. The Clerk is hereby directed to file a certified copy of this resolution with the County Auditors of Dakota and Washington Counties, Minnesota, together with such other information as each of the County Auditors shall require, and to obtain from each County Auditor their certificate that the Bonds have been entered in their Bond Register, and that the tax levy required by law has been made. 25. Negative Covenant as to Use of Bond Proceeds and Project. The City hereby covenants not to use the proceeds of the Bonds or to use the Project, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Project, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 26. Tax-Exempt Status of the Bonds; Rebate. The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Bonds, including without limitation (i) requirements relating to temporary periods for investments, (ii) limitations on amounts invested at a yield greater than the yield on the Bonds, and (iii) the rebate of excess investment earnings to the United States. The City expects to satisfy the 18-month expenditure exemption for gross proceeds of the Bonds as provided in Section 1.148-7(d)(1) of the Regulations. The Mayor and/or City Clerk are hereby authorized and directed to make such elections as to arbitrage and rebate matters relating to the Bonds as they deem necessary, appropriate or desirable in connection with the Bonds, and all such elections shall be, and shall be deemed and treated as, elections of the City. 27. Designation of Qualified Tax-Exempt Obligations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: (a) the Bonds are issued after August 7, 1986; 73181402v1 25 (b) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 2022 will not exceed $10,000,000; (e) not more than $10,000,000 of obligations issued by the City during this calendar year 2022 have been designated for purposes of Section 265(b)(3) of the Code; and (f) the aggregate face amount of the Bonds does not exceed $10,000,000. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 28. Official Statement. The Official Statement relating to the Bonds prepared and distributed by Northland is hereby approved and the officers of the City are authorized in connection with the delivery of the Bonds to sign such certificates as may be necessary with respect to the completeness and accuracy of the Official Statement. 29. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution 30. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. The motion for the adoption of the foregoing resolution was duly seconded by member _____________ and, after a 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. 73181402v1 26 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 authorizing the issuance and awarding the sale of $5,815,000 General Obligation Bonds, Series 2022A. WITNESS my hand on May 2, 2022. _______________________________________ Clerk 73181402v1 A-1 EXHIBIT A PROPOSALS 73181402v1 B-1 EXHIBIT B LEVY & ASSESSMENTS SCHEDULES Street Improvements Portion **Special assessment revenue is based on assessments totaling $1,400,000 assessed at a rate of 4.35% (1.50% over the TIC, rounded to the nearest 0.05%), with equal annual payments spread over 10 years. Capital Improvements Portion Levy Year Collection Year Special Assessment Revenue*Tax Levy --2022 2023 176,563.35 227,529.15 2023 2024 176,563.34 230,154.1620242025176,563.36 226,741.6420252026176,563.36 228,054.14 2026 2027 176,563.35 228,579.1520272028176,563.35 228,316.65 2028 2029 176,563.34 227,266.6620292030176,563.35 230,679.15 2030 2031 176,563.35 229,996.6520312032176,563.36 228,999.14 $1,765,633.51 $2,286,316.49 Levy Year Collection Year Tax Levy -2022 2023 128,047.5020232024123,847.50 2024 2025 124,897.50 2025 2026 125,685.00 2026 2027 126,210.00 2027 2028 126,472.5020282029126,472.5020292030126,210.0020302031127,995.0020312032124,372.50 $1,260,210.00 Bond Sale Summary City of Hastings, Minnesota $5,815,000 General Obligation Bonds, Series 2022A May 2, 2022 150 South 5th Street, Suite 3300 Minneapolis, MN 55402 612-851-5900 800-851-2920 www.northlandsecurities.com Member FINRA and SIPC | Registered with SEC and MSRB Page 2 PURPOSE: Proceeds from the Bonds will be used to finance the 2022 street improvement and utility projects; to finance a Public Works storage facility; and to pay the costs associated with the issuance of the Bonds. FINANCE PLAN: The Bonds have been structured over 10 years, with relatively level annual debt service payments. SECURITY: Special assessments, net revenues of the City’s water utility and sewer utility and ad valorem taxes. RESULTS: • Method of Sale: Public Sale. • City received 7 bids. • Bonds were purchased by Robert W. Baird& Co., Inc., Milwaukee, Wisconsin. • Ratings: S&P “AA” • Final Maturity: February 1, 2033 • Optional Call: February 1, 2030 Final on 05/02/2022 Par Amount $5,815,000* All Inclusive Cost (AIC) 3.04% True Interest Cost (TIC) 2.86% *The par amount of the Bonds was reduced by lower than anticipated project costs, premium and unused discount on the Bonds. Page 3 EXHIBIT A – BID TAB $6,215,000† GENERAL OBLIGATION BONDS, SERIES 2022A AWARD: ROBERT W. BARID & CO., INC. DATE OF SALE: MONDAY, MAY 2, 2022 STANDARD & POOR’S UNDERLYING RATING AA BIDDER PURCHASE PRICE NET INTEREST COST TRUE INTEREST COST (TIC) ROBERT W. BAIRD & CO., INC. $6,628,011.50 $1,171,405.17 2.8612683% Milwaukee, WI Syndicate: C.L. King & Associates; Colliers Securities LLC; Fidelity Capital Markets; Crews & Associates, Inc.; Duncan-Williams, Inc.; Loop Capital Markets; Country Club Bank; Oppenheimer & Co.; SumRidge Partners; Sierra Pacific Securities; Celadon Financial Group, LLC; Isaak Bond Investments, Inc.; UMB Bank, N.A.; United Bankers Bank; Wintrust Investments, LLC; FMS Bonds Inc.; First Kentucky Securities Corp.; Midland Securities; First Southern LLC; Dinosaur Securities; First Bankers’ Banc Securities, Inc.; Mountainside Securities LLC; StoneX Financial Inc.; Commerce Bank, N.A.; and Seaport Global Holdings PIPER SANDLER & CO. $6,617,850.70 $1,181,565.97 2.8890518% Minneapolis, MN D.A. DAVIDSON & CO. $6,424,766.40 $1,183,680.27 2.9375412% Denver, CO HILLTOP SECURITIES $6,584,123.60 $1,215,293.07 2.9816953% Dallas, TX THE BAKER GROUP $6,580,571.54 $1,218,845.13 2.9914902% Oklahoma City, OK STIFEL, NICOLAUS & CO., INC. $6,368,330.30 $1,232,703.03 3.0779949% Birmingham, AL BERNARDI SECURITIES, INC. $6,471,137.50 $1,327,395.83 3.2629481% Chicago, IL † Par amount decreased from $6,215,000 to $5,815,000. For Robert W Baird & Co., Inc., the adjusted purchase price is $6,198,421.96, plus accrued interest from the date of issue to the date of delivery, and the adjusted TIC is 2.8644181%. Page 4 EXHIBIT B – SOURCES AND USES Street Improvement Water Sewer Water Tower Project CIP Issue Summary Sources Of Funds Par Amount of Bonds $3,135,000.00 $600,000.00 $285,000.00 $820,000.00 $975,000.00 $5,815,000.00 Planned Issuer Equity Contribution ----600,000.00 600,000.00 Reoffering Premium 235,230.35 45,320.35 21,107.95 61,849.80 73,243.80 436,752.25 Total Sources $3,370,230.35 $645,320.35 $306,107.95 $881,849.80 $1,648,243.80 $6,851,752.25 Uses Of Funds Deposit to Project Construction Fund 3,215,000.00 633,000.00 305,000.00 862,300.00 1,600,000.00 6,615,300.00 Deposit to Capitalized Interest (CIF) Fund 89,900.00 ---27,966.67 117,866.67 Costs of Issuance 32,641.19 6,247.11 2,967.39 8,537.73 10,151.58 60,545.00 Total Underwriter's Discount (0.917%)28,751.58 5,502.70 2,613.78 7,520.35 8,941.88 53,330.29 Rounding Amount 3,937.58 570.54 (4,473.22)3,491.72 1,183.67 4,710.29 Total Uses $3,370,230.35 $645,320.35 $306,107.95 $881,849.80 $1,648,243.80 $6,851,752.25 EXHIBIT C – PRICING SUMMARY Maturity Type of Bond Coupon Yield Maturity Value Price YTM Call Date Call Price Dollar Price 02/01/2024 Serial Coupon 5.000%2.300%470,000.00 104.386% ---490,614.20 02/01/2025 Serial Coupon 5.000%2.450%490,000.00 106.540% ---522,046.00 02/01/2026 Serial Coupon 5.000%2.500%510,000.00 108.703% ---554,385.30 02/01/2027 Serial Coupon 5.000%2.550%535,000.00 110.711% ---592,303.85 02/01/2028 Serial Coupon 5.000%2.600%565,000.00 112.566% ---635,997.90 02/01/2029 Serial Coupon 5.000%2.650%595,000.00 114.270% ---679,906.50 02/01/2030 Serial Coupon 5.000%2.700%625,000.00 115.828% ---723,925.00 02/01/2031 Serial Coupon 3.000%2.750%650,000.00 101.715%c 2.776%02/01/2030 100.000%661,147.50 02/01/2032 Serial Coupon 3.000%2.800%680,000.00 101.369%c 2.837%02/01/2030 100.000%689,309.20 02/01/2033 Serial Coupon 3.000%2.850%695,000.00 101.024%c 2.888%02/01/2030 100.000%702,116.80 Total ---$5,815,000.00 -----$6,251,752.25 Bid Information Par Amount of Bonds $5,815,000.00 Reoffering Premium or (Discount)436,752.25 Gross Production $6,251,752.25 Total Underwriter's Discount (0.917%)$(53,330.29) Bid (106.594%)6,198,421.96 Total Purchase Price $6,198,421.96 Bond Year Dollars $38,036.67 Average Life 6.541 Years Average Coupon 3.9683639% Net Interest Cost (NIC)2.9603314% True Interest Cost (TIC)2.8644181% Page 5 EXHIBIT D – DEBT SERVICE SCHEDULE Combined Date Principal Coupon Interest Total P+I Fiscal Total 06/01/2022 ----- 02/01/2023 --166,833.34 166,833.34 166,833.34 08/01/2023 --125,125.00 125,125.00 - 02/01/2024 470,000.00 5.000%125,125.00 595,125.00 720,250.00 08/01/2024 --113,375.00 113,375.00 - 02/01/2025 490,000.00 5.000%113,375.00 603,375.00 716,750.00 08/01/2025 --101,125.00 101,125.00 - 02/01/2026 510,000.00 5.000%101,125.00 611,125.00 712,250.00 08/01/2026 --88,375.00 88,375.00 - 02/01/2027 535,000.00 5.000%88,375.00 623,375.00 711,750.00 08/01/2027 --75,000.00 75,000.00 - 02/01/2028 565,000.00 5.000%75,000.00 640,000.00 715,000.00 08/01/2028 --60,875.00 60,875.00 - 02/01/2029 595,000.00 5.000%60,875.00 655,875.00 716,750.00 08/01/2029 --46,000.00 46,000.00 - 02/01/2030 625,000.00 5.000%46,000.00 671,000.00 717,000.00 08/01/2030 --30,375.00 30,375.00 - 02/01/2031 650,000.00 3.000%30,375.00 680,375.00 710,750.00 08/01/2031 --20,625.00 20,625.00 - 02/01/2032 680,000.00 3.000%20,625.00 700,625.00 721,250.00 08/01/2032 --10,425.00 10,425.00 - 02/01/2033 695,000.00 3.000%10,425.00 705,425.00 715,850.00 Total $5,815,000.00 -$1,509,433.34 $7,324,433.34 - Yield Statistics Bond Year Dollars $38,036.67 Average Life 6.541 Years Average Coupon 3.9683639% Net Interest Cost (NIC)2.9603314% True Interest Cost (TIC)2.8644181% Bond Yield for Arbitrage Purposes 2.7133248% All Inclusive Cost (AIC)3.0381039% IRS Form 8038 Net Interest Cost 2.6436379% Weighted Average Maturity 6.490 Years Optional Redemption 02/01/2030 @100.000% Page 6 EXHIBIT E – 105% LEVY Improvement Portion Date Total P+I CIF 105% Levy Less: Special Assessment Revenue*Net Levy Levy Year Collection Year 02/01/2023 89,900.00 (89,900.00)--- 02/01/2024 384,850.00 -404,092.50 176,563.35 227,529.15 2022 2023 02/01/2025 387,350.00 -406,717.50 176,563.34 230,154.16 2023 2024 02/01/2026 384,100.00 -403,305.00 176,563.36 226,741.64 2024 2025 02/01/2027 385,350.00 -404,617.50 176,563.36 228,054.14 2025 2026 02/01/2028 385,850.00 -405,142.50 176,563.35 228,579.15 2026 2027 02/01/2029 385,600.00 -404,880.00 176,563.35 228,316.65 2027 2028 02/01/2030 384,600.00 -403,830.00 176,563.34 227,266.66 2028 2029 02/01/2031 387,850.00 -407,242.50 176,563.35 230,679.15 2029 2030 02/01/2032 387,200.00 -406,560.00 176,563.35 229,996.65 2030 2031 02/01/2033 386,250.00 -405,562.50 176,563.36 228,999.14 2031 2032 Total $3,948,900.00 (89,900.00)$4,051,950.00 $1,765,633.51 $2,286,316.49 *Special assessment revenue is based on assessments totaling $1,400,000 assessed at a rate of 4.35% (1.50% over the TIC, rounded to the nearest 0.05%), with equal annual payments spread over 10 years. CIP Portion Date Total P+I CIF 105% Levy Levy Year Collection Year 02/01/2023 27,966.67 (27,966.67)- 02/01/2024 121,950.00 -128,047.50 2022 2023 02/01/2025 117,950.00 -123,847.50 2023 2024 02/01/2026 118,950.00 -124,897.50 2024 2025 02/01/2027 119,700.00 -125,685.00 2025 2026 02/01/2028 120,200.00 -126,210.00 2026 2027 02/01/2029 120,450.00 -126,472.50 2027 2028 02/01/2030 120,450.00 -126,472.50 2028 2029 02/01/2031 120,200.00 -126,210.00 2029 2030 02/01/2032 121,900.00 -127,995.00 2030 2031 02/01/2033 118,450.00 -124,372.50 2031 2032 Total $1,228,166.67 (27,966.67)$1,260,210.00 Page 7 EXHIBIT F – LOCAL ISSUANCE Date Issuer Description State Amt (MM)Tax Type Industry Moody's S&P Enhanced 05/02/2022 CAMBRIDGE-A MN 4.105 Q COMP General Obligation AA No 05/02/2022 HASTINGS-A MN 6.215 Q COMP General Obligation AA No 05/03/2022 REDWOOD FALLS -A MN 3.495 N COMP General Obligation AA-No 05/03/2022 REDWOOD FALLS -B MN 8 N COMP General Obligation AAA Yes 05/03/2022 MAPLETON -A MN 4.715 Q NEGT General Obligation A+No Page 8 EXHIBIT G – MUNICIPAL MARKET CONDITIONS Bond Buyer Index as of April 28, 2022 (3.21%) 2022 2021 2020 2019 2018 150 South 5th Street, Suite 3300, Minneapolis, MN 55402 Main 612-851-5900 / www.northlandsecurities.com Member FINRA and SIPC, Registered with SEC and MSRB Page 9 3.21% 2.00% 2.25% 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 6.00% 6.25% 20 0 0 20 0 1 20 0 2 20 0 3 20 0 4 20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 20 1 3 20 1 4 20 1 5 20 1 6 20 1 7 20 1 8 20 1 9 20 2 0 20 2 1 20 2 2 20 -Ye a r / G . O . / A A -Ra t e d Bond Buyer's Index 2000 to Present Summary: Hastings, Minnesota; General Obligation Primary Credit Analyst: Coral Schoonejans, Centennial + 1 (303) 721-4948; coral.schoonejans@spglobal.com Secondary Contact: Scott Nees, Chicago + 1 (312) 233 7064; scott.nees@spglobal.com Table Of Contents Rating Action Stable Outlook Credit Opinion Related Research WWW.STANDARDANDPOORS.COM/RATINGSDIRECT APRIL 11, 2022 1 Draft Summary: Hastings, Minnesota; General Obligation Credit Profile US$6.78 mil GO bnds ser 2022A due 02/01/2033 Long Term Rating AA/Stable New Rating Action S&P Global Ratings assigned its 'AA' long-term rating to Hastings, Minn.'s approximately $6.8 million series 2022A general obligation (GO) bonds. The outlook is stable. Securing the bonds is the city's full faith and credit pledge and ability to levy unlimited ad valorem property taxes. The bonds are payable from special assessments and net revenue from the city's sewer and water systems, but the rating is based on the unlimited ad valorem tax pledge. The bond proceeds will finance various street and utility improvements throughout the city. Credit overview Hastings is a predominantly residential community south of the Twin Cities that is well positioned for continuous residential growth due to its proximity to the metropolitan statistical area (MSA). In our view, the city's steadily growing valuations, supported by strong new housing development over past decades, offset its comparatively weaker income and wealth metrics. Hastings has consistently reported positive financial operations, enabling the city to build substantial operating reserves. The city has preliminary plans to issue additional debt, but given its rapid amortization and modest debt profile these additional plans will not materially worsen our view of the debt profile. As a result, we anticipate rating stability over the outlook horizon. The 'AA' rating reflects our assessment of the city's: • Access to the broad and diverse Minneapolis-St. Paul MSA, which supports continuous new residential development and steadily growing valuations; • Consecutive operating surpluses supporting very strong reserves well above the ceiling of the formal reserve policy; • Strong management, with conservative budgeting, good financial policies and practices, and an institutional framework we consider strong; and • Manageable debt and contingent liability profile, which we do not expect to materially worsen with additional debt plans. Environmental, social, and governance We view Hastings' environmental risk as elevated compared with the sector due to its location on the Mississippi River, which exposes it to elevated flood risk. We note that the city recently experienced an attempted cybersecurity breach but was able to thwart the attempt. As a result of the attempt, officials have taken further steps to strengthen WWW.STANDARDANDPOORS.COM/RATINGSDIRECT APRIL 11, 2022 2 Draft cybersecurity defenses. We view Hastings' social and governance risks as being in line with our view of the sector standard. Stable Outlook Upside scenario We could consider a positive rating action if the city's income indicators and market value per capita increase significantly. The adoption of a long-term financial plan could increase the likelihood of a positive rating action. Downside scenario We could consider a negative rating action if financial performance and reserves experience sustained deterioration, resulting in much lower reserve levels or weakened liquidity. Credit Opinion Strong economy, with access to the broad and diverse Minneapolis-St. Paul MSA supporting continuous new housing development Hastings' tax base is primarily residential (80% net tax capacity), with a sizable commercial/industrial component (18% net tax capacity). The city is in Dakota County and encompasses 11.4 square miles in the Minneapolis-St. Paul-Bloomington MSA, which we consider to be broad and diverse. Officials report of ongoing renovations in its historic downtown area and expansion in its industrial park. The tax base has grown steadily, with continued growth expected. Strong management, with strong reserves and conservative budget assumptions Highlights to the city's financial management policies and practices include: • The city prepares its budget on a line-by-line item basis and uses at least three years of historical information to assist in the process; • The council members are updated on a quarterly basis with a budget-to-actual report; • Management has a five-year capital plan, updated annually, that identifies cost estimates and sources of funding; • The city has its own investment policy and council is updated quarterly on the holdings and investment performance; • It also has a debt management policy that details limitations and restrictions; • Management has a reserve policy that aims to maintain between 35%-45% of the subsequent year's budgeted operating expenditures in the general fund; this was developed for cash-flow purposes due to collection times of property tax revenues; and • The city does not currently maintain any formalized long-term plan for the budget. Conservative budgeting supports routine surpluses and a very strong cash position For fiscal 2021, officials estimate an ending operating surplus of $2.2 million, largely the result of $1.3 million in unspent American Rescue Plan Act fund proceeds, positive variances in building and inspection revenue, and WWW.STANDARDANDPOORS.COM/RATINGSDIRECT APRIL 11, 2022 3 Summary: Hastings, Minnesota; General Obligation Draft conservative budgeting. The city's primary revenue sources have been stable; property taxes make up about 64% of general fund revenue. Hastings was allocated a total of $2.4 million under the American Rescue Plan Act (half received in fiscal 2021 and half to be received in fiscal 2022), which the city plans to use on nonrecurring costs over the next several years. Given the city's history of balanced operations, we expect performance will remain at least strong. Hastings has reported positive operations in recent years as a result of its conservative approach to budgeting. To assess the city's budgetary flexibility, we combined the available general fund balance ($8.3 million) and fire and ambulance fund balance ($1.5 million), as of fiscal 2020. The city states that the growth in the general fund balance in fiscal 2020 was due to halted spending for capital projects as a result of the pandemic. Management indicates the city might use general fund reserves for a public works storage building in fiscal 2022. Given the high level of current reserves, we do not expect this planned drawdown will materially weaken the city's budgetary flexibility, and we expect the city's available fund balance as a percent of expenditures will remain above its fund balance policy ceiling of 45%. At fiscal year-end 2020, Hastings had approximately $25.6 million in available cash, after adjusting for restricted funds. The city does not have any direct-purchase or private-placement debt. Overall, we expect the reserve and liquidity position to remain very strong for the foreseeable future. Adequate debt and contingent liability profile, with no significant further debt plans In assessing the city's debt profile, we reduced its overall debt burden by the amount of revenue-source bonds that we deem partially self-supported with water and sewer enterprise revenue. The city plans to issue $4.5 million for street projects annually and $1.0 million for a utility project. However, given the city's rapid amortization we do not believe these plans will materially weaken its debt burden. Manageable pension and other postemployment benefits (OPEB) profile We do not believe that pension and OPEB liabilities represent a medium-term credit pressure, as contributions are only a modest share of the budget, and we believe the city has the capacity to absorb higher costs without pressuring operations. The city participates in the following plans: • Minnesota General Employees Retirement Fund (GERF): 79.1% funded (as of June 30, 2020), with a city proportionate share of the plan's net pension liability of $4.26 million; • Minnesota Police and Fire Fund (PEPFF): 87.2% funded (as of June 30, 2020), with a proportionate share of $4.95 million; and • A single-employer, defined-benefit OPEB plan: funded on a pay-as-you-go basis with a net OPEB liability of $4.3 million, measured as of January 1, 2020. The city's two largest pension plans have seen improvements in funded status in recent years, although plan statutory formula contributions have regularly fallen short of actuarial recommendations. Along with certain plan-specific actuarial assumptions and methods, this introduces some long-term risk of funding volatility and cost acceleration over WWW.STANDARDANDPOORS.COM/RATINGSDIRECT APRIL 11, 2022 4 Summary: Hastings, Minnesota; General Obligation Draft time, if future funding shortfalls are not met with offsetting adjustments by the state legislature. Regardless, costs remain only a modest share of total spending, and we believe they are unlikely to pressure the city's medium-term operational health. Strong institutional framework The institutional framework score for Minnesota cities with a population greater than 2,500 is strong. Hastings, MN: Key Credit Metrics Most recent Historical information 2020 2019 2018 Strong economy Projected per capita EBI % of U.S.103.80 Market value per capita ($)98,099 Population 23,971 23,810 23,618 County unemployment rate (%)6.20 Market value ($000)2,351,534 2,234,924 2,118,261 1,988,653 Top 10 taxpayers % of taxable value 6.90 Very strong budgetary performance Operating fund result % of expenditures 11.40 2.90 0.90 Total governmental fund result % of expenditures 1.90 9.50 0.90 Very strong budgetary flexibility Available reserves % of operating expenditures 67.90 50.90 44.80 Total available reserves ($000)10,374 7,783 7,025 Very strong liquidity Total government cash % of governmental fund expenditures 102.20 103.20 87.70 Total government cash % of governmental fund debt service 701.30 585.50 526.50 Strong management Financial Management Assessment Good Strong debt & long-term liabilities Debt service % of governmental fund expenditures 14.60 17.60 16.60 Net direct debt % of governmental fund revenue 83.90 Overall net debt % of market value 2.20 Direct debt 10-year amortization (%)92.90 Required pension contribution % of governmental fund expenditures 4.50 OPEB actual contribution % of governmental fund expenditures 1.50 Strong institutional framework EBI--Effective buying income. OPEB--Other postemployment benefits. Related Research • Criteria Guidance: Assessing U.S. Public Finance Pension And Other Postemployment Obligations For GO Debt, WWW.STANDARDANDPOORS.COM/RATINGSDIRECT APRIL 11, 2022 5 Summary: Hastings, Minnesota; General Obligation Draft Local Government GO Ratings, And State Ratings, Oct. 7, 2019 • Through The ESG Lens 3.0: The Intersection Of ESG Credit Factors And U.S. Public Finance Credit Factors, March 2, 2022 • 2021 Update Of Institutional Framework For U.S. Local Governments Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. 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