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City of Hastings, Minnesota September 26, 2005 . Debt Service to Call and to Maturity: shows remaining debt service to maturity and to the call date for the Series 1998A Bonds - Page 17 . Debt Service Schedule: shows the new debt service on the Refunding Portion related to the Refunding of the Series 1998A Bonds based on current estimated interest rates - Page 18 . Debt Service Comparison: shows the projected annual cash flow savings of the Refunding Portion related to the Refunding of the Series 1998A- Page 19 Springsted's current estimates show the Refunding of the Series 1998A Bonds will generate approximately 5.396% present value savings. Refunding of the Series 19978 Bonds The remaining proceeds of the Refunding Portion of the Series 2005A Bonds will be used to refund the February 1, 2007 through February 1, 2017 maturities of the City's General Obligation Water Revenue Bonds, Series 1997B (the .Series 1997B Bonds"), dated August 1, 1997. The Series 1997B Bonds were originally issued to finance a water tower ground storage tank for the City's water utility. On February 1, 2006, the City will use (i) funds on hand to pay the scheduled principal and interest due on the Series 1997 A Bonds; and (ii) the proceeds of the Refunding Portion to redeem the remaining $640,000 of outstanding principal on the Series 1997B Bonds. The Refunding Portion related to the refunding of the Series 1997B Bonds will be repaid from net revenues of the City's Water Utility. Pursuant to Minnesota Statutes, Chapter 444 and the resolution awarding the Refunding Portion related to the Refunding of the Series 1997B Bonds, the City will covenant to maintain water rates in an amount sufficient to generate revenues to support the operation of the water utility and to pay debt service. The City is required to annually review the budget of the utility to determine whether current rates and charges are sufficient and to adjust them as necessary. The City currently does not have any other outstanding bond issues for which the net revenues of the Water Utility are also pledged. The table below shows the net revenues available for debt service of the City's Water Utility for fiscal year ending December 31, 2003. The maximum annual debt service payment for the Refunding Portion related to the Refunding of the Series 1997B is projected to be $76,445. 2003 Net Revenues of the Water Utility Operating Revenues $ 2,152,479 Less: Operating Expenses (1 ,287,841 ) Add Back: Depreciation 449,274 Investment Income 50,541 Special Assessments 17,767 Other 2.187 Net Revenues Available for Debt Service $ 1,384,407 Less: Projected Maximum Annual Debt Service (76,445) Remaining Capacity for Annual Debt Service $ 1,307,962 Page 9