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City of Hastings, Minnesota September 26, 2005 Based on current interest rate estimates, the refunding is projected to produce cash flow savings averaging approximately $4,000 annually beginning in 2006. This results in future value savings of approximately $51,000 with a net present value benefit to the City of approximately $43,000. These estimates are net of all costs associated with the refunding. The City will begin to realize cash flow savings beginning with the August 1, 2006 interest payment. We have attached a set of schedules that summarize the refunding statistics and the projected savings resulting from the sale of the Refunding Portion related to the Refunding of the Series 1997B Bonds. These schedules include the following information: . Prior Original Debt Service: shows the existing debt service requirements for the Series 1997B Bonds without a refunding - Page 20 . Debt Service to Call and to Maturity: shows remaining debt service to maturity and to the call date for the Series 1997B Bonds - Page 21 . Debt Service Schedule: shows the new debt service on the Refunding Portion related to the Refunding of the Series 1997B Bonds based on current estimated interest rates - Page 22 . Debt Service Comparison: shows the projected annual cash flow savings of the Refunding Portion related to the Refunding of the Series 1997B - Page 23 Springsted's current estimates show the Refunding of the Series 1997B Bonds will generate approximately 6.144% present value savings. The Series 2005B Bonds The proceeds of the Series 2005B Bonds along with City funds on hand, will be used on February 1, 2006 to redeem the February 1, 2006 through 2016 maturities of the Municipal Building Revenue Refunding Bonds, Series 1998A (the "HRA Bonds"), dated August 1, 1998, obligations of the Housing and Redevelopment Authority of the City of Hastings (the "Authority"). The issuance of the Series 2005B Bonds is being undertaken to achieve interest cost savings. The Series 2005B Bonds will be general obligations of the City and paid with ad valorem property tax levies. The HRA Bonds were originally issued to refund the February 1, 2004 through February 1, 2014 maturities of the Authority's Municipal Building Revenue Bonds, Series 1993A (the "Series 1993A Bonds"). The Series 1993A Bonds were issued by the Authority to finance a building for use as a government center facility and leased by the Authority to the City of Hastings under a lease agreement, with option to purchase between the Authority and the City of Hastings. By refunding the HRA Bonds, the City will satisfy the purchase price under the lease agreement and get title to the facility. The issuance of the Series 2005B Bonds is being conducted as a "current" refunding, in which the proceeds of the Series 2005B Bonds (new issue) are used within ninety days of bond settlement to redeem principal of the HRA Bonds (old issue). The City will need to invest the proceeds of the Series 2005B Bonds for the period Page 10