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Security and Source of Repayment
<br />The Bonds will be general obligations of the City. The finance plan relies on the following
<br />assumptions for the revenues used to pay debt service, as provided by City staff:
<br /> Special Assessments (no longer pledged). The City originally levied special assessments
<br />against benefited properties in the amount of $182,138 for Area A and $120,000 for Area B
<br />to secure the payment of the Refunded Bonds. The assessments were payable over 15 years
<br />and 10 years for Area A and Area B, respectively, with an interest rate of 4.00%, and
<br />structured for level annual payments of principal and interest over their respective terms.
<br />It is our understanding that all of the collections for these assessments have occurred ahead
<br />of schedule and there are no outstanding collections due on these special assessments.
<br /> Property Taxes. The revenues needed to pay debt service on the Bonds are expected to
<br />come from property tax levies. The below table shows initial projections of an annual tax
<br />levy varying from year-to-year, which includes the statutory requirement of 105% of debt
<br />service. The levy will be adjusted annually based on any additional monies in the debt
<br />service fund. A tax levy was made in 2020 for repayment of the Refunded Bonds. 2021
<br />collections of that levy will be used to pay the February 1, 2022 debt service payment on
<br />the Bonds. The initial tax levy related to the Bonds will be made in 2021 for taxes payable
<br />in 2022. The below table shows the estimated flow of funds, including the 5% overlevy.
<br />Levy Collection
<br />DateTotal P+I105% LevyNet LevyYearYear
<br />02/01/2022131,599.01138,178.96138,178.9620202021
<br />02/01/2023132,392.50139,012.13139,012.1320212022
<br />02/01/2024116,892.50122,737.13122,737.1320222023
<br />02/01/2025111,397.50116,967.38116,967.3820232024
<br />02/01/2026255,872.50268,666.13268,666.1320242025
<br />02/01/2027229,497.50240,972.38240,972.3820252026
<br />02/01/2028213,147.50223,804.88223,804.8820262027
<br />02/01/2029186,572.50195,901.13195,901.1320272028
<br />Total$1,377,371.51$1,446,240.09$1,446,240.09
<br />Plan Rationale
<br />The Finance Plan recommended in this report is based on a variety of factors and information
<br />provided by the City related to the financed pr
<br />of the City and our experience in working with similar cities and projects. The issuance of General
<br />Obligation Improvement Refunding Bonds provides
<br />objectives and cost-effective financing. The City has successfully issued and managed this type
<br />of debt for previous projects.
<br />Issuing Process
<br />Northland will receive bids to purchase the Bonds on Wednesday, February 24, 2021 at 10:30 AM.
<br />Market conditions and the marketability of the Bonds support issuance through a competitive
<br />sale. This process has been chosen as it is intended to produce the lowest combination of interest
<br />expense and underwriting expense on the date and time set to receive bids. The calendar of events
<br />for the issuing process can be found in Attachment 4.
<br />Municipal Advisor: Northland Securities, Inc., Minneapolis, Minnesota
<br />Bond Counsel: Kennedy & Graven, Chartered, Minneapolis, Minnesota
<br />Paying Agent: Northland Trust Services, Inc., Minneapolis, Minnesota
<br />Northland Securities, Inc. Page 3
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