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Proposed Issue: .$515,000 General. Obligation Tax Abatement Bonds, Series 2017A Purpose: To finance the acquisition of land. to be used as a public park which will benefit certain property in the City. Debt service will be paid from tax abatement revenues and property. taxes. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapters: • 475. (general bonding authority) • 4.69 (tax.abatement revenue pledge) Tax Abatement Delft limits. the annual .tax abatement for the Bonds to be issued; together with any outstanding annual.abatements, cannot -exceed :10% of the Cityls estimated market value or $200,000,.whichever is greater. The Bonds will be general obligations of the City for which its full faith, .credit and taxing.powers are pledged.. Term/Call Feature: The Bonds are being issued for a 15-year term. Principal on the Bonds will be due on February Y in.the years 2019'through 2033. Interest is payable every six months. beginning. August 1, 20:18, The Bonds. maturing on and affter February 1, 2027 will be subject to prepayment at the discretion of the City on February 1, 2026 or any date thereafter. Batik Qualification; Because the. City is expecting to issue no more. than $10,000,000 in .tax exempt debt. during.the calendar year, the City will be:able to designate.the Bonds as "bank qualified" :obligations.. Bank qualified. status broadens the market for the Bonds, whichcan result in lower interest rates. Rating: We.recornmend..selling. this issue. non -rated as the cost .of the rating would.not be expected to be offset by the potential lower interest: rata resulting from obtaininig a rating: For a larger bond issue, or a .longerAerin bond issue, a rating might broaden the market for the:Bonds and result in an overall reduction in interest. costs: Presale Report June 20, 2017 City of Gem Lake, Minnesota Page 0 . 1