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Official Statement: The Preliminary Official Statement will be delivered to the Underwriter prior to the pricing date. The Final Official Statement will be delivered to the Underwriter no more than seven business days after the date of award of the Bonds. Authority and Purpose: The Bonds are being issued pursuant to Minnesota Statutes, Section 471.191. The proceeds will be used to construct, furnish and equip a new clubhouse (to replace the existing structure) at the City owned Brightwood Hills Golf Course. The City has owned and operated Brightwood Hills Golf Course since 1978. Construction of the new clubhouse is expected to begin in August of 1999 and be completed in the spring of 2000. Security: The Bonds are special obligations of the City payable solely from gross revenues of the City's Golf Course Enterprise Fund and shall not constitute a debt for which the faith and credit or taxing powers of the City will be pledged. The City has no other debt outstanding which is payable from its Golf Course Enterprise Fund. Included in the principal amount of the Bonds, is an amount sufficient to fund a reserve fund, which is equal to the maximum annual principal and interest payment due on the Bonds. The City will covenant to: continue its ownership and operation of its golf course facilities as a revenue-producing entity so long as the Bonds are outstanding; keep proper books and records; have an annual audit prepared by and independent certified public accountant; and carry insurance. Bank Qualified: The Bonds. will be bank qualified tax-exempt obligations pursuant to Section 265(b)(3) of the Internal Revenue Code of 1996, as amended, and will not be subject to the alternative minimum tax for individuals. Continuing Disclosure: This issue is subject to the SEC's continuing disclosure rules. However, since the principal amount of the Bonds is under $1,000,000, the City is exempt from complying with this regulation. G:\WORK\RECOMMENlMNlNEWBRIG7.CIC Page 4