The URL can be used to link to this page

Home My WebLink AboutItem 07a� C Date July 16, 2012 � Item RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $6,805,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2012A Proposed Action Staff recommends adoption of the following motion: Move to approve the Resolution Authorizing Issuance, Awarding Sale, Prescribing the form and Details and Providing for the Payment of $6,805,000 General Obligation Improvement Bonds Series 2012 A. Approval of the Resolution will result in the financing of Improvement Project 12 -02 which is the reconstruction of streets. Overview The City Council, at its May 7, 2012 meeting approved the special assessments for the 2012 street reconstruction project. Contracts for the improvements were approved by the City Council at the May 21 meeting. The proposed bond issue will finance the project construction costs. The debt will be repaid with a combination of special assessments and property tax levies. Approximately 40% of the project is financed with special assessments with the remaining 60% of improvement costs financed with property tax levies. The special assessments will be repaid over a 20 year period; the property tax portion of the debt will be amortized over a 10 year period. Moody's Investor Service has affirmed an Aal rating for this bond issue. The bid opening for the bonds is at 10:00 a.m. on Monday July 16; results of the bid opening and recommendations will be presented to the City Council at its regular meeting that same night. Primary Issues to Consider • Call provisions. Bonds maturing 2/1/2023 and thereafter are callable 2/1/2022 or thereafter. Supporting Information Financial Impact: See attached budgeted: Yes Source: Taxes and Special Assessments Related Documents (CIP, ERP, etc.): Notes: CITY OF LAKEVILLE RESOLUTION Date July 16, 2012 Resolution No. Motion By Seconded By RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $6,805,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2012A BE IT RESOLVED by the City Council of the City of Lakeville, Minnesota (the City), as follows: SECTION 1. AUTHORIZATION AND SALE 1.01. Authorization This Council, by resolution duly adopted on June 18, 2012, authorized the issuance and sale on the date hereof of its General Obligation Improvement Bonds, Series 2012A (the Bonds), pursuant to Minnesota Statutes, Chapters 429 and 475. Proceeds of the Bonds will be used to finance various improvement projects in the City (the - Proj ect). 1.02. Sale. Pursuant to the Terms of Proposal and the Official Statement prepared on behalf of the City by Springsted Incorporated, sealed proposals for the purchase of the Bonds were received at or before the time specified for receipt of proposals. The proposals have been opened, publicly read and considered, and the purchase price, interest rates and net interest cost under the terms of each proposal have been determined. The most favorable proposal received is that of in (the Purchaser), to purchase the Bonds at a price of $ plus accrued interest, if any, on all Bonds to the day of delivery and payment, on the further terms and conditions hereinafter set forth. 1.03. Award The sale of the Bonds is hereby awarded to the Purchaser, and the Mayor and City Clerk are hereby authorized and directed to execute a contract on behalf of the City for the sale of the Bonds in accordance with the Terms of Proposal. The good faith deposit of the Purchaser shall be retained by the City until the Bonds have been delivered and shall be deducted from the purchase price paid at settlement. SECTION 2. BOND TERMS: REGISTRATION• EXECUTION AND DELIVERY 2.01. Issuance of Bonds All acts, conditions and things which are required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed precedent to and in the valid issuance of the Bonds having been done, now existing, having happened and having been performed, it is now necessary for the City Council to establish the form and terms of the Bonds, to provide security therefor and to issue the Bonds forthwith. 2.02. Maturities: Interest Rates: Denominations and Payment The Bonds shall be originally dated as of August 15, 2012, shall be in the denomination of $5,000 each, or any integral multiple thereof, of single maturities, shall mature on February 1 in the years and amounts stated below, and shall bear interest from date of issue until paid or duly called for redemption, at the annual rates set forth opposite such years and amounts, as follows: Year Amount Rate Year Amount Rate 2014 $505,000 % 2024 $135,000 % 2015 550,000 2025 130,000 2016 550,000 2026 130,000 2017 555,000 2027 130,000 2018 550,000 2028 130,000 2019 550,000 2029 130,000 2020 555,000 2030 125,000 2021 565,000 2031 125,000 2022 565,000 2032 125.000 2023 575,000 2033 125,000 [REVISE MATURITY SCHEDULE FOR TERM BONDS] The Bonds shall be issuable only in fully registered form. The interest thereon and, upon surrender of each Bond at the principal office of the Registrar described herein, the principal amount thereof, shall be payable by check or draft issued by the Registrar described herein, provided that, so long as the Bonds are registered in the name of a securities depository, or a nominee thereof, in accordance with Section 2.08 hereof, principal and interest shall be payable in accordance with the operational arrangements of the securities depository. 2.03. Dates and Interest Payment Dates Upon initial delivery of the Bonds pursuant to Section 2.07 and upon any subsequent transfer or exchange pursuant to Section 2.06, the date of authentication shall be noted on each Bond so delivered, exchanged or transferred. Interest on the Bonds shall be payable on February 1 and August 1 in each year, commencing August 1, 2013, each such date being referred to herein as an Interest Payment Date, to the persons in whose names the Bonds are registered on the Bond Register, as hereinafter defined, at the Registrar's close of business on the fifteenth day of the month immediately preceding the Interest Payment Date, whether or not such day is a business day. Interest shall be computed on the basis of a 360 -day year composed of twelve 30 -day months. 2.04. Redemption Bonds maturing in 2023 and later years shall be subject to redemption and prepayment at the option of the City, in whole or in part, in such order of maturity dates as the City may select and, within a maturity, by lot as selected by the Registrar (or, if applicable, by the bond depository in accordance with its customary procedures) in multiples of $5,000, on February 1, 2022, and on any date thereafter, at a price equal to the principal amount thereof and accrued interest to the date of redemption. The City Clerk shall cause notice of redemption thereof to be published if and as required by law, and at least thirty and not more than 60 days prior to the designated redemption date, shall cause notice of redemption to be mailed, by first class mail, to the registered holders of any Bonds to be redeemed at their addresses as they appear on the bond register described in Section 2.06 hereof, but no defect in or failure to give such mailed notice of redemption shall affect the validity of proceedings for the redemption of any Bond not affected by such defect or failure. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon partial redemption of any Bond, a new Bond or Bonds will be delivered to the owner without charge, representing the remaining principal amount outstanding. Bonds maturing on February 1, 20_ (the Term Bonds) shall be subject to mandatory redemption prior to maturity pursuant to the sinking fund requirements of this Section 2.04 at a redemption price equal to the stated principal amount thereof plus interest accrued thereon to the redemption date, without premium. The Registrar shall select for redemption, by lot or other manner deemed fair, on February 1 in each of the following years the following stated principal amounts of such Bonds: Term Bonds Maturing February 1 20 Year Principal Amount The remaining $ stated principal amount of such Bonds shall be paid at maturity on February 1, 20. Notice of redemption shall be given as provided in the preceding paragraph.] 2.05. Appointment of Initial Registrar The City hereby appoints U.S. Bank National Association, St. Paul, Minnesota, as the initial bond registrar, transfer agent and paying agent (the Registrar). The Mayor and City Clerk are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company organized under the laws of the United States or one of the states of the United States and authorized by law to conduct such business, such corporation shall be authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar, effective upon not less than thirty days' written notice and upon the appointment and acceptance of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Bonds in its possession to the successor Registrar and shall deliver the Bond Register to the successor Registrar. 2.06. Registration The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Re ister. The Registrar shall keep at its principal corporate trust office a register (the Bond Register) in which the Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. The term Holder or Bondholder as used herein shall mean the person (whether a natural person, corporation, association, partnership, trust, governmental unit, or other legal entity) in whose name a Bond is registered in the Bond Register. (b) Transfer of Bonds Upon surrender for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until such interest payment date. (c) Exchange of Bonds Whenever any Bonds are surrendered by the registered owner for exchange the Registrar shall authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity, as requested by the registered owner or the owner's attorney in writing. (d) Cancellation All Bonds surrendered for payment, transfer or exchange shall be promptly canceled by the Registrar and thereafter disposed of. The Registrar shall furnish the City at least once each year a certificate setting forth the principal amounts and numbers of Bonds canceled and destroyed. (e) Improper or Unauthorized Transfer When any Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners The City and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of the Bond, whether the Bond shall be overdue or not, for the purpose of receiving payment of or on account of, the principal of and interest on the Bond and for all other purposes, and all payments made to any registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability upon Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges For every transfer or exchange of Bonds (except for an exchange upon a partial redemption of a Bond), the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated Lost Stolen or Destroved Bonds In case any Bond shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith, and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. All Bonds so surrendered to the Registrar shall be canceled by it, and evidence of such cancellation shall be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Bond prior to payment. (i) Authenticating Agent The Registrar is hereby designated authenticating agent for the Bonds, within the meaning of Minnesota Statutes, Section 475.55, Subdivision 1, as amended. 0) Valid Obligations. All Bonds issued upon any transfer or exchange of Bonds shall be the valid obligations of the City, evidencing the same debt, and entitled to the same benefits under this Resolution as the Bonds surrendered upon such transfer or exchange. 2.07. Execution, Authentication and Deliverv The Bonds shall be prepared under the direction of the City Clerk and shall be executed on behalf of the City by the signatures of the Mayor and the City Clerk, provided that the signatures may be printed, engraved or lithographed facsimiles of the originals. In case any officer whose signature or a facsimile of whose signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until the date of delivery of such Bond. Notwithstanding such execution, no Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond, substantially in the form provided in Section 2.09, has been executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on any Bond shall be conclusive evidence that it has been duly authenticated and delivered under this Resolution. When the Bonds have been prepared, executed and authenticated, the City Clerk shall deliver them to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore executed, and the Purchaser shall not be obligated to see to the application of the purchase price. 2.08. Securities Depository (a) For purposes of this section the following terms shall have the following meanings: 5 "Beneficial Owner" shall mean, whenever used with respect to a Bond, the person in whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant, or such person's subrogee. "Cede & Co." shall mean Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Bonds. "DTC" shall mean The Depository Trust Company of New York, New York. "Participant" shall mean any broker - dealer, bank or other financial institution for which DTC holds Bonds as securities depository. "Representation Letter" shall mean the Representation Letter pursuant to which the City agrees to comply with DTC's Operational Arrangements. (b) The Bonds shall be initially issued as separately authenticated fully registered bonds, and one Bond shall be issued in the principal amount of each stated maturity of the Bonds. Upon initial issuance, the ownership of such Bonds shall be registered in the bond register in the name of Cede & Co., as nominee of DTC. The Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, if any, giving any notice permitted or required to be given to registered owners of Bonds under this resolution, registering the transfer of Bonds, and for all other purposes whatsoever, and neither the Registrar nor the City shall be affected by any notice to the contrary. Neither the Registrar nor the City shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other person which is not shown on the bond register as being a registered owner of any Bonds, with respect to the accuracy of any records maintained by DTC or any Participant, with respect to the payment by DTC or any Participant of any amount with respect to the principal of or interest on the Bonds, with respect to any notice which is permitted or required to be given to owners of Bonds under this resolution, with respect to the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds, or with respect to any consent given or other action taken by DTC as registered owner of the Bonds. So long as any Bond is registered in the name of Cede & Co., as nominee of DTC, the Registrar shall pay all principal of and interest on such Bond, and shall give all notices with respect to such Bond, only to Cede & Co. in accordance with DTC's Operational Arrangements, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than DTC shall receive an authenticated Bond for each separate stated maturity evidencing the obligation of the City to make payments of principal and interest. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the Bonds will be transferable to such new nominee in accordance with paragraph (e) hereof. (c) In the event the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bonds in the form of bond certificates, the City may notify DTC and the Registrar, whereupon DTC shall notify the Participants of the availability through DTC of Bonds in the form of certificates. In such event, the Bonds will be transferable in accordance with paragraph (e) hereof. DTC may detennine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and the Registrar and discharging its responsibilities with respect thereto under applicable law. In such event the Bonds will be transferable in accordance with paragraph (e) hereof. (d) The execution and delivery of the Representation Letter to DTC, if not previously filed with DTC, by the Mayor or City Clerk is hereby authorized and directed. (e) In the event that any transfer or exchange of Bonds is permitted under paragraph (b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee in accordance with the provisions of this resolution. In the event Bonds in the form of certificates are issued to owners other than Cede & Co., its successor as nominee for DTC as owner of all the Bonds, or another securities depository as owner of all the Bonds, the provisions of this resolution shall also apply to all matters relating thereto, including, without limitation, the printing of such Bonds in the form of bond certificates and the method of payment of principal of and interest on such Bonds in the form of bond certificates. 2.09. Form of Bonds The Bonds shall be prepared in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA, COUNTY OF DAKOTA CITY OF LAKEVILLE GENERAL OBLIGATION IMPROVEMENT BOND, SERIES 2012A No. R -_ $ Interest Rate Maturity Date Date of Orieinal Issue CUSIP No. % February 1, 20_ August 15, 2012 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: THOUSAND DOLLARS CITY OF LAKEVILLE, State of Minnesota (the City) acknowledges itself to be indebted and for value received hereby promises to pay to the registered owner specified above, or registered assigns, the principal amount specified above on the maturity date specified above and promises to pay interest thereon from the date of original issue specified above or from the most recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for, at the annual interest rate specified above, payable on February 1 and August 1 in each year, commencing August 1, 2013 (each such date, an Interest Payment Date), all subject to the provisions referred to herein with respect to the redemption of the principal of this Bond before maturity. The interest so payable on any Interest Payment Date shall be paid to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the calendar month immediately preceding the Interest Payment Date. Interest hereon shall be computed on the basis of a 360 -day year composed of twelve 30 -day months. The interest hereon and, upon presentation and surrender hereof at the principal office of the Registrar described below, the principal hereof are payable in lawful money of the United States of America by check or draft drawn on U.S. Bank rational Association, St. Paul, Minnesota, as bond registrar, transfer agent and paying agent, or its successor designated under the Resolution described herein (the Registrar). For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. This Bond is one of an issue (the Bonds) in the aggregate principal amount of $6,805,000 issued pursuant to a resolution adopted by the City Council on July 16, 2012 (the Resolution), to finance various improvement projects in the City and is issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota thereunto enabling, including Minnesota Statutes, Chapters 429 and 475. The Bonds are issuable only in fully registered form, in the denomination of $5,000 or any integral multiple thereof, of single maturities. Bonds maturing in 2023 and later years shall be subject to redemption and prepayment at the option of the City, in whole or in part, in such order of maturity dates as the City may select and, within a maturity, by lot as selected by the Registrar (or, if applicable, by the bond depository in accordance with its customary procedures) in multiples of $5,000, on February 1, 2022, and on any date thereafter, at a price equal to the principal amount thereof and accrued interest to the date of redemption. The City shall cause notice of the call for redemption thereof to be published if and as required by law, and at least thirty and not more than 60 days prior to the designated redemption date, shall cause notice of redemption to be mailed, by first class mail, to the registered holders of any Bonds, at the holders' addresses as they appear cn the bond register maintained by the Registrar, but no defect in or failure to give such mailed notice of redemption shall affect the validity of proceedings for the redemption of any Bond not affected by such defect or failure. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon partial redemption of any Bond, a new Bond or Bonds will be delivered to the owner without charge, representing the remaining principal amount outstanding. [Bonds maturing in the year _ shall be subject to mandatory redemption, at a redemption price equal to their principal amount plus interest accrued thereon to the redemption date, without premium, on February i in each of the years shown below, in an amount equal to the following principal amounts: 8 Term Bonds Maturing in 20 Sinking Fund Aggregate Payment Date Principal Amount Notice of redemption shall be given as provided in the preceding paragraph.] As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney, and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange, the City will cause a new Bond or Bonds to be issued in the name of the designated transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or govermnental charge required to be paid with respect to any such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment as herein provided and for all other purposes, and neither the City nor the Registrar shall be affected by any notice to the contrary. Notwithstanding any other provisions of this Bond, so long as this Bond is registered in the name of Cede & Co., as nominee of The Depository Trust Company, or in the name of any other nominee of The Depository Trust Company or other securities depository, the Registrar shall pay all principal of and interest on this Bond, and shall give all notices with respect to this Bond, only to Cede & Co. or other nominee in accordance with the operational arrangements of The Depository Trust Company or other securities depository as agreed to by the City. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed prior to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required; that, prior to the issuance hereof, the City Council has by the Resolution covenanted and agreed to levy ad valorem taxes upon all taxable property in the City and special assessments upon property specially benefited by the local improvements financed by the Bonds, which taxes and special assessments will be collectible for the years and in amounts sufficient to produce sums not less than five percent in excess of the principal of and interest on the Bonds when due, and has appropriated such special assessments and taxes to its General Obligation Improvement Bonds, Series 2012A Bond Fund for the payment of principal and interest; that if necessary for payment of principal and interest, additional ad valorem taxes are required to be levied upon all taxable property in the City, without limitation as to rate or amount and that the issuance of this Bond, together with all other indebtedness of the City outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon shall have been executed by the Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City has caused this Bond to be executed on its behalf by the facsimile signatures of its Mayor and City Clerk. CITY OF LAKEVILLE, MINNESOTA (facsimile signature — City Clerk) (facsimile signature — Mayor) CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. Date of Authentication: U.S. BANK NATIONAL ASSOCIATION, as Registrar C Authorized Representative The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to the applicable laws or regulations: TEN COM - as tenants in common UTMA ................... as Custodian for ..................... (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Transfers to Minors Act .............. (State) JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used. T ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: NOTICE: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. Signature Guaranteed: Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in STAMP or such other "signature guaranty program" as may be determined by the Registrar in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: [end of bond form] SECTION 3. GENERAL OBLIGATION IMPROVEMENT BONDS SERIES 2012A CONSTRUCTION FUND There is hereby established on the official books and records of the City a separate fund designated as the General Obligation Improvement Bonds, Series 2012A Construction Fund (the Construction Fund). To the Construction Fund there shall be credited from the proceeds of the Bonds an amount equal to the estimated cost of the Project. There shall also be credited to the Construction Fund all special assessments collected with respect to the Project until all costs of the Project have been fully paid. All proceeds of the Bonds deposited in the Construction Fund will be expended solely for the payment of the costs of the Project. To the extent required by Minnesota Statutes, Section 429.091, subdivision 4, the City shall 11 maintain a separate account within the Construction Fund to record expenditures for each improvement. The City Clerk shall maintain the Construction Fund until all costs and expenses incurred by the City in connection with the construction of the improvements have been paid. All special assessments on hand in the Construction Fund when terminated or thereafter received, and any Bond proceeds not so transferred, shall be credited to the General Obligation Improvement Bonds, Series 2012A Bond Fund. SECTION 4. GENERAL OBLIGATION IMPROVEMENT BONDS SERIES 2012A BOND FUND There is hereby established on the official books and records of the City a separate fund designated as the General Obligation Improvement Bonds, Series 2012A Bond Fund (the Bond Fund). Into the Bond Fund shall be paid (a) the amounts specified in Section 3 above, (b) any amounts received from the Purchaser upon delivery of the Bonds in excess of the amounts appropriated to the Construction Fund pursuant to Section 3 hereof, (c) any special assessments and taxes collected pursuant to Sections 5 or 6 hereof, except as otherwise provided in Section 3 hereof and (d) any other funds appropriated by the City Council for the payment of the Bonds. The money on hand in the Bond Fund from time to time shall be used only to pay the principal of and interest on the Bonds. If the balance on hand in the Bond Fund is at any time insufficient to pay principal and interest then due on the Bonds, such amounts shall be paid from other money on hand in other funds of the City, which other funds shall be reimbursed therefor when sufficient money becomes available in the Bond Fund. The Bond Fund shall be maintained until the City has paid, or made provision for the payment of, all of the principal of and interest on the Bonds. There are hereby established two accounts in the Bond Fund, designated as the "Debt Service Account' and the "Surplus Account." There shall initially be deposited into the Debt Service Account upon the issuance of the Bonds the arnount set forth in (b) above. Thereafter, during each Bond Year (i.e., each twelve month period commencing on February 2 and ending on the following February 1), as monies are received into the Bond Fund, the City Clerk shall first deposit such monies into the Debt Service Account until an amount has been appropriated thereto sufficient to pay all principal and interest due on the Bonds through the end of the Bond Year. All subsequent monies received in the Bond Fund during the Bond Year shall be appropriated to the Surplus Account. If at any time the amount on hand in the Debt Service Account is insufficient for the payment of principal and interest then due, the City Clerk shall transfer to the Debt Service Account amounts on hand in the Surplus Account to the extent necessary to cure such deficiency. Investment earnings (and losses) on amounts from time to time held in the Debt Service Account and Surplus Account shall be credited or charged to said accounts. If the aggregate balance in the Bond Fund is at any time insufficient to pay all interest and principal then due on all Bonds payable therefrom, the payment shall be made from any fund of the City which is available for that purpose, subject to reimbursement from the Surplus Account in the Bond Fund when the balance therein is sufficient, and the City Council covenants and agrees that it will each year levy a sufficient amount of ad valorem taxes to take care of any accumulated or anticipated deficiency, which levy is not subject to any constitutional or statutory limitation. 12 In order to ensure compliance with the Code and applicable Regulations (all as defined in Section 8.01 hereof), upon allocation of any funds to the Bond Fund, the balance then on hand in the Bond Fund shall be ascertained. If it exceeds the amount of principal and interest on the Bonds to become due and payable through the next following February 1, plus a reasonable carryover equal to 1 /12 of the debt service due in the following bond year, the excess shall (unless an opinion is received from bond counsel stating that another use shall not interfere with the tax exemption of the bonds) be used to prepay or purchase Bonds, or be invested at a yield which does not exceed the yield on the Bonds calculated in accordance with Section 148 of the Code. SECTION 5. SPECIAL ASSESSMENTS The City hereby covenants and agrees that, for the payment of the costs of the Project, the City has done or will do and perform all acts and things necessary for the final and valid levy of special assessments in an amount not less than 20% of the cost of the Project financed by the Bonds. The City estimates it has levied or will levy special assessments in the original aggregate principal amount of approximately $2,738,828. It is estimated that the principal and interest on such special assessments will be levied beginning in 2012 and collected in the years 2013 -2032 in the amounts shown on Appendix I attached hereto. The principal of the special assessments shall be made payable in annual installments, with interest as established by this City Council in accordance with law on installments thereof from time to time remaining unpaid. In the event any special assessment shall at any time be held invalid with respect to any lot or tract of land, due to any error, defect or irregularity in any action or proceeding taken or to be taken by the City or by this City Council or by any of the officers or employees of the City, either in the making of such special assessment or in the performance of any condition precedent thereto, the City hereby covenants and agrees that it will forthwith do all such further things and take all such further proceedings as shall be required by law to make such special assessment a valid and binding lien upon said property. SECTION 6. PLEDGE OF TAXING POWERS For the prompt and full payment of the principal of and interest on the Bonds as such payments respectively come due, the full faith, credit and unlimited taxing powers of the City shall be and are hereby irrevocably pledged. In order to produce aggregate amounts which, together with the collections of special assessments as set forth in Section 5, will produce amounts not less than 5% in excess of the amounts needed to meet when due the principal and interest payments on the Bonds, ad valorem taxes are hereby levied on all taxable property in the City. The taxes will be levied and collected in years and amounts shown on the attached levy computation. Said taxes shall be irrepealable as long as any of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce said levies in accordance with the provisions of Minnesota Statutes, Section 475.61. SECTION 7. DEFEASANCE When all of the Bonds have been discharged as provided in this Section, all pledges, covenants and other rights granted by this Resolution to the Holders of the Bonds shall cease. The City may discharge its obligations with respect to any Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or, if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued from the due date to the date of such deposit. The City may also discharge its obligations with respect to any prepayable Bonds called for redemption by depositing with the Registrar on or before the date of redemption an amount equal to the principal, interest and 13 redemption premium, if any, which are then due, provided that notice of such redemption has been duly given as provided herein. The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with the Registrar or with a bank or trust company qualified by law to act as an escrow agent for this purpose, cash or securities which are authorized by law to be so deposited for such purpose, bearing interest payable at such times and at such rates and maturing or callable at the holder's option on such dates as shall be required to pay all principal and interest to become due thereon to maturity or, if notice of redemption as herein required has been irrevocably provided for, to an earlier designated redemption date, provided, however, that if such deposit is made more than ninety days before the maturity date or specified redemption date of the Bonds to be discharged, the City shall have received a written opinion of bond counsel to the effect that such deposit does not adversely affect the exemption of interest on any Bonds from federal income taxation and a written report of an accountant or investment banking firm verifying that the deposit is sufficient to pay when due all of the principal and interest on the Bonds to be discharged on and before their maturity dates or earlier designated redemption date. SECTION S. TAX COVENANTS; ARBITRAGE MATTERS AND CONTINUING DISCLOSURE 8.01. General Tax Covenant The City agrees with the registered owners from time to time of the Bonds that it will not take, or permit to be taken by any of its officers, employees or agents, any action that would cause interest on the Bonds to become includable in gross income of the recipient under the Internal Revenue Code of 1986, as amended (the Code) and applicable Treasury Regulations (the Regulations), and agrees to take any and all actions within its powers to ensure that the interest on the Bonds will not become includable in gross income of the recipient under the Code and the Regulations. All proceeds of the Bonds deposited in the Construction Fund will be expended solely for the payment of the costs of the Project. The Project is owned and maintained by the City and available for use by members of the general public on a substantially equal basis. The City shall not enter into any lease, management contract, use agreement, capacity agreement or other agreement with any non - governmental person relating to the use of the Project, or any portion thereof, or security for the payment of the Bonds which might cause the Bonds to be considered "private activity bonds" or "private loan bonds" pursuant to Section 141 of the Code. 8.02. Arbitrage Certification The Mayor and City Clerk being the officers of the City charged with the responsibility for issuing the Bonds pursuant to this Resolution, are authorized and directed to execute and deliver to the Purchaser a certificate in accordance with Section 148 of the Code, and applicable Regulations, stating the facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds which make it reasonable to expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of the Code and Regulations. 8.03. Arbitrage Rebate The City acknowledges that the Bonds are subject to the rebate requirements of Section 1.48(f) of the Code. The City covenants and agrees to retain such records, make such determinations, file such reports and documents and pay such amounts at such times as are required under said Section 148(£) and applicable Regulations, unless the 14 Bonds qualify for an exception from the rebate requirement pursuant to one of the spending exceptions set forth in Section 1.148 -7 of the Regulations and no "gross proceeds" of the Bonds (other than amounts constituting a "bona fide debt service fund ") arise during or after the expenditure of the original proceeds thereof. 8.04. Reimbursement The City certifies that the proceeds of the Bonds will not be used by the City to reimburse itself for any expenditure with respect to the Project which the City paid or will have paid more than 60 days prior to the issuance of the Bonds unless, with respect to such prior expenditures, the City shall have made a declaration of official intent which complies with the provisions of Section 1.150 -2 of the Regulations, provided that this certification shall not apply (i) with respect to certain de minimis expenditures, if any, with respect to the Project meeting the requirements of Section 1.150- 2(f)(1) of the Regulations, or (ii) with respect to "preliminary expenditures" for the Project as defined in Section 1.150- 2(f)(2) of the Regulations, including engineering or architectural expenses and similar preparatory expenses, which in the aggregate do not exceed 20% of the "issue price" of the Bonds. 8.05. Not Qualified Tax - Exempt Obligations The Bonds are not designated as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Code. 8.06 Continuing Disclosure (a) Purpose and Beneficiaries To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit the Purchaser and other participating underwriters in the primary offering of the Bonds to comply with amendments to Rule 15c2 -12 promulgated by the SEC under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2 -12), relating to continuing disclosure (as in effect and interpreted from time to time, the Rule), which will enhance the marketability of the Bonds, the City hereby makes the following covenants and agreements for the benefit of the Owners (as hereinafter defined) from time to time of the Outstanding Bonds. The City is the only obligated person in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. The City has complied in the past five years in all material respects with any undertaking previously entered into by it under the Rule. If the City fails to comply with any provisions of this section, any person aggrieved thereby, including the Owners of any Outstanding Bonds, may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any agreement or covenant contained in this section, including an action for a writ of mandamus or specific performance. Direct, indirect, consequential and punitive damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained herein, in no event shall a default under this section constitute a default under the Bonds or under any other provision of this resolution. As used in this section, Owner or Bondowner means, in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any Beneficial Owner (as hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, Beneficial Owner means, in respect of a Bond, any person or entity which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through nominees, depositories or other intermediaries), or (ii) is treated as the owner of the Bond for federal income tax purposes. 15 (b) Information To Be Disclosed The City will provide, in the manner set forth in subsection (c) hereof, either directly or indirectly through an agent designated by the City, the following information at the following times: (1) on or before 365 days after the end of each fiscal year of the City, commencing with the fiscal year ending December 31, 2012, the following financial information and operating data in respect of the City (the Disclosure Information): (A) the audited financial statements of the City for such fiscal year, prepared in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Minnesota law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City, noting the discrepancies therefrom and the effect thereof, and certified as to accuracy and completeness in all material respects by the fiscal officer of the City; and (B) to the extent not included in the financial statements referred to in paragraph (A) hereof, the information for such fiscal year or for the period most recently available of the type contained in the Official Statement under headings: City Property Values; City indebtedness; and City Tax Rates, Levies and Collections. Notwithstanding the foregoing paragraph, if the audited financial statements are not available by the date specified, the City shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of the Disclosure Information and, within 10 days after the receipt thereof, the City shall provide the audited financial statements. Any or all of the Disclosure Information may be incorporated by reference, if it is updated as required hereby, from other documents, including official statements, which have been filed with the SEC or have been made available to the public on the Internet Web site of the Municipal Securities Rulemaking Board (MSRB). The City shall clearly identify in the Disclosure Information each document so incorporated by reference. If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure Information need no longer be provided if the City includes in the Disclosure Information a statement to such effect; provided, however, if such operations have been replaced by other City operations in respect of which data is not included in the Disclosure Information and the City determines that certain specified data regarding such replacement operations would be a Material Fact (as defined in paragraph (2) hereof), then, from and after such determination, the Disclosure Information shall include such additional specified data regarding the replacement operations. If the Disclosure Information is changed or this section is amended as permitted by this paragraph (b)(1) or subsection (d), then the City shall include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. 16 (2) In a timely manner not in excess of ten business days after the occurrence of the event, notice of the occurrence of any of the following events (each a Material Fact): (A) Principal and interest payment delinquencies; (B) Non- payment related defaults, if material; (C) Unscheduled draws on debt service reserves reflecting financial difficulties; (D) Unscheduled draws on credit enhancements reflecting financial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (G) Modifications to rights of security holders, if material; (H) Bond calls, if material, and tender offers; (I) Defeasances; (J) Release, substitution, or sale of property securing repayment of the securities, if material; (K) Rating changes; (L) Bankruptcy, insolvency, receivership or similar event of the obligated person; (M) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (N) Appointment of a successor or additional trustee or the change of name of a trustee, if material. As used herein, for those events that must be reported if material, an event is "material' if it is an event as to which a substantial likelihood exists that a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor from the Official Statement, information disclosed hereunder or information generally available to the public. Notwithstanding the foregoing sentence, an event is also "material' if it is an event that would be deemed material for purposes of the purchase, holding or sale of a Bond within the meaning of applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event. For the purposes of the event identified in (L) hereinabove, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or govermnental authority, or the entry of an 17 order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (3) In a timely manner, notice of the occurrence of any of the following events or conditions: (A) the failure of the City to provide the Disclosure Information required under paragraph (b)(1) at the time specified thereunder; (B) the amendment or supplementing of this section pursuant to subsection (d), together with a copy of such amendment or supplement and any explanation provided by the City under subsection (d)(2); (C) the termination of the obligations of the City under this section pursuant to subsection (d); (D) any change in the accounting principles pursuant to which the financial statements constituting a portion of the Disclosure Information are prepared; and (E) any change in the fiscal year of the City. (c) Manner of Disclosure (1) The City agrees to make available to the MSRB, in an electronic format as prescribed by the MSRB from time to time, the information described in subsection (b), (2) All documents provided to the MSRB pursuant to this subsection (c) shall be accompanied by identifying information as prescribed by the MSRB from time to time. (d) Term; Amendments; Interpretation (1) The covenants of the City in this section shall remain in effect so long as any Bond: are Outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this section shall terminate and be without further effect as of any date on which the City delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or proceedings, the failure of the City to comply with the requirements of this section will not cause participating underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. (2) This section (and the form and requirements of the Disclosure Information) may be amended or supplemented by the City from time to time, without notice to (except as provided in paragraph (c)(3) hereof) or the consent of the Owners of any Bonds, by a resolution of this Council filed in the office of the recording officer of the City 18 accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection with a change in circumstances that arises from a change in law or regulation or a change in the identity, nature or status of the City or the type of operations conducted by the City, or (b) is required by, or better complies with, the provisions of paragraph (b)(5) of the Rule; (ii) this section as so amended or supplemented would have complied with the requirements of paragraph (b)(5) of the Rule at the time of the primary offering of the Bonds, giving effect to any change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. If the Disclosure Information is so amended, the City agrees to provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of financial information or operating data being provided hereunder. (3) This section is entered into to comply with the continuing disclosure provisions of the Rule and should be construed so as to satisfy the requirements of paragraph (b)(5) of the Rule. SECTIONT 9. CERTIFICATION OF PROCEEDINGS 9.01. Reeistration of Bonds The City Clerk is hereby authorized and directed to file a certified copy of this resolution with the County Auditor of Dakota County and obtain a certificate that the Bonds and the taxes levied pursuant hereto have been duly entered upon the Auditor's bond register. 9.02. Authentication of Transcript The officers of the City and the County Auditor are hereby authorized and directed to prepare and furnish to the Purchaser and to Dorsey & Whitney LLP, Bond Counsel, certified copies of all proceedings and records relating to the Bonds and such other affidavits, certificates and information as may be required to show the facts relating to the legality and marketability of the Bonds, as the same appear from the books and records in their custody and control or as otherwise known to them, and all such certified copies, affidavits and certificates, including any heretofore furnished, shall be deemed representations of the City as to the correctness of all statements contained therein. 9.03. Official Statement The Official Statement relating to the Bonds, dated 2012, prepared and distributed by Springsted Incorporated, the financial consultant for the City, is hereby approved. Springsted Incorporated is hereby authorized on behalf of the City to prepare and deliver to the Purchaser within seven business days from the date hereof a supplement to the Official Statement listing the offering price, the interest rates, selling compensation, delivery date, the underwriters and such other information relating to the Bonds required to be included in the Official Statement by Rule 15c2 -12 adopted by the SEC under the Securities Exchange Act of 1934. The officers of the City are hereby authorized and directed to 19 execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency of the Official Statement. APPROVED AND ADOPTED this 16`" day of July, 2012. CITY OF LAKEVILLE, - 0 01 Mark Bellows, Mayor ATTEST: Charlene Friedges, City Clerk 20 APPENDIX I City of Lakeville, Minnesota General Obligation Improvement Bonds, Series 2012A Payments on Special Assessments Year of Collection Principal Interest Total 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 PROJECTED TAX LEVIES Levv vear / Collect year Lew Total DAKOTA COUNTY AUDITOR'S CERTIFICATE AS TO REGISTRATION AND TAX LEVY The undersigned, being the duly qualified and acting County Auditor of Dakota County, Minnesota, hereby certifies that there has been filed in my office a certified copy of a resolution duly adopted on July 16, 2012, by the City Council of the City of Lakeville, Minnesota, setting forth the form and details of an issue of $6,805,000 General Obligation Improvement Bonds, Series 2012A, dated as of August 15, 2012 and levying taxes for their payment. I further certify that the issue has been entered on my bond register and the tax required by law for their payment has been levied and filed as required by Minnesota Statutes, Sections 475.61 to 475.63. WITNESS my hand officially this day of 1 2012. Dakota County Auditor (SEAL) ! 1t Moody's INVESTORS SERVICE New Issue: million Obli ation IM . o 2012A and $23.6 million General Obligation » Bonds, Global Credit Research -12 Jul 2012 Aal underlying rating applies to $75.6 million of outstanding post -sale general obligation debt LAKEVILLE (CITY OF) MN Cities (including Towns, Villages and Townships) MN Moody's Rating ISSUE RATING General Obligation Refunding Bonds, Series 20128 Aal Sale Amount $23,635,000 Expected Sale Date 07124/12 Rating Description General Obligation General Obligation Improvement Bonds, Series 2012A Aal Sale Amount $6,805,000 Expected Sale Date 07/24/12 Rating Description General Obligation Moody's Outlook NOO Opinion NEW YORK, July 12, 2012 — Moody's Investors Service has assigned a Aal rating to the City of Lakeville's (MN) $6.8 million General Obligation Improvement Bonds, Series 2012A and $23.6 million General Obligation Refunding Bonds, Series 20128. Concurrently, Moody's maintains the Aal underlying rating on the district's outstanding long- term general obligation debt and the Aa3 underlying rating on the city's lease revenue debt which is rated two notches below the GO rating due to risk of appropriation and non - essentiality. Post -sale, the district will have $75.6 rrmllion of outstanding long -term general obligation debt and $9.3 million of outstanding lease revenue debt. SUMMARY RATINGS RATIONALE Debt service on the Series 2012A and 2012B bonds are both ultimately secured by the city's general obligation unlimited tax pledge, however the city expects that special assessments against benefitting properties will pay for approximately $2.2 million of the Series 2012Abonds. Proceeds of the 2012Abonds will be used to finance various street reconstruction projects in the city. Proceeds from the 2012B bonds will be used to refund outstanding maturities for the 2015 -2026 maturities of the city's General Obligation Street Reconstruction Bonds, Series 2003A and the 2016 -2030 maturities of the city's General Obligation Capital Improvement Plan Bonds, Series 2004Afor an estimated net present value savings of $2.1 million or 9% of refunded par. The Aal underlying rating reflects the district's history of excellent financial management and strong reserve levels; large tax base located just south of the Twin Cities Metropolitan Area, and an elevated debt burden. The Aa3 lease revenue rating is notched twice off the city's underlying rating due to the annual risk of non - appropriation and the non - essential nature of the financed project. STRENGTHS - Strong diverse tax base in close proximity to the Twin Cities Metropolitan Area - Strong financial management with robust general fund reserves CHALLENGES - Declining property valuations - Elevated debt service as a portion of operating expenditures DETAILED CREDIT DISCUSSION LARGE TAX BASE LOCATED NEIGHBORING THE TWIN CITIES Due to the city's favorable location near Minneapolis (GO rated Aaa/stable outlook) and St. Paul (GO rated Aa1 /stable outlook), growing population with strong socioeconomic indicators, the city's tax base to remain stable. The city is located in Dakota County (GO rated Aaa/stable outlook) approximately 40 miles south of the Twin Cities. The city's large $5.1 billion tax base benefits from its proximity to the Twin Cities as 80% of the residents commute to the Twin Cities area for work. The city is primarily residential (72.5% of net tax capacity) and consists of mostly single family homes. There is also a fairly significant commercial and industrial presence (22.8% of net tax capacity) which indicates a diverse and somewhat autonomous tax base. The city has seen declines in property valuation of 8.7 %, 6.7% and 6.1% in levy years 2009 through 2011. The majority of the 2011 decline in assessed and indicated market valuation is attributable to a legislative change that reduces the taxable value of certain residential properties, effective levy year 2011 for collection in 2012. City management reports that approximately 60% of the decline in valuations in 2011 is a result of this legislative change. Favorably, some of the declines resulting from the legislative change and changes in market values was offset by new construction. Management notes that while it has adjusted the property tax rate to achieve same property tax levy, they anticipate a minimal impact on delinquencies or appeals as a result. While this decline is significant, we believe that this change will be one time occurrence and that the city's valuations will remain stable due to ongoing building permit activity. Residential building permits for single family homes has remained stable, due partly to the steady population growth of 29.4% from 2000 to 2010. Socioeconomic indicators for the population is strong with median family income at 138.5% of the state and 156.8% of the nation, and per capita income of 119.6% of the state and 129.5% of the nation. The city's unemployment rate at 4.7% (May 2012) tracks better than both the state (5.2 %) and the nation (7.9 %). The city anticipates significant infill of vacant commercial and industrial properties which will utilize roughly 250,000 square feet of space. Several corporations have purchased plots near existing facilities and have indicated a desire for future expansion. Currently, a Wal Mart store is under construction. The city has planned for future growth and development by approving zoning and subdivision ordinance as a part of their 2008 comprehensive plan. These factors may indicate a stabilization in property valuations in the medium term. STRONG FINANCIAL MANAGEMENT WITH AMPLE GENERAL FUND RESERVES The city has a strong financial condition due to a history of prudent financial management and ample general fund reserves of nearly 50% of revenues which is in accordance with city policies. The city has posted planned deficits in the General Fund since 2008 through 2010. Monies were transferred out of the General Fund to build reserves in various capital improvement funds to begin self - financing all future equipment purchases as opposed to issuing debt. In 2010 the city posted a General Fund deficit of $1.8 million after transferring nearly $3 million into the equipment, trail improvement and pavement management funds. This brought reserves down to a still ample 45% of General Fund revenues. The city posted a sizable $1.2 million surplus in fiscal 2011, exceeding projections of a more modest $300,000 surplus. The surplus in fiscal 2011 was driven primarily by higher than expected building permit activity has well as a decline in tax delinquencies. Delinquency rates were already low at approximately 2.5% annually, however in fiscal 2011 these rates dropped to 0.3 %. After initially budgeting a $500,000 draw in reserves for fiscal 2012, management is projecting a $100,000 surplus resulting from additional building permit activity and fewer expenditures resulting from a favorable winter. Management is committed to maintaining its strong reserves and adhering to its official fund balance policy of keeping between 40 -50% of funds in reserve, The vast majority of the city's revenues come in the form of property taxes (78.1%) followed by charges for services (7.6 %) and building permits (5.9 %). The city has little dependence on state aid, which comprised only 3.3% of revenues. The city also has top performing municipal liquor fund in the State of Minnesota, which had an unrestricted balance of $5.9 million at the close of fiscal 2011 and serves as alternate liquidity for the city. The city utilizes revenues for this fund to support both the capital and general funds as well as to prepay debt HIGH DEBT BURDEN WITH LIMITED FUTURE DEBT PLANS The city has an average direct debt burden of 1.7% with an elevated overall debt burden of 5.8% which is mostly attributed to the overlapping debt associated with the Lakeville Independent School District No. 194 (GO rated Aa3 /negative outlook). The city plans to issue between $5 to $6 million in debt per year for capital projects over the next five years. Principal amortization is a modest 50.9% over ten years. The city does have lease revenue debt that is subject to appropriation but the city consistently appropriates for debt service and includes this lease payment in its property tax levy. While debt service is an elevated 36.3% of operating expenditures, we believe the city's debt burden will remain manageable due to some non -levy support and the city's effort to begin cash - financing certain ongoing capital projects. All of the district's debt is fixed rate mode, and the district is not a party to any interest rate swap agreements. WHAT COULD CHANGE RATING UP - Expansion and diversification of local area economy and tax base - Maintenance and growth of General Fund reserves - Improved demographic profile WHAT COULD CHANGE RATING DOWN - Continued declines in property valuations - Erosion of general fund liquidity and reserves KEY STATISTICS: 2010 Census population: 55,954 (29.7% increase since 2000) 2011 Full valuation: $5.1 billion (4.1 % average annual decrease since 2006) 2010 Full valuation per capita: $90,987 2006 -2010 Median Family Income (American Community Survey 5 -Year Estimates): $98,761 (138.5% of MN, 156.8% of US) 2006 -2010 Per Capita Income (American Community Survey 5 -Year Estimates): $35,391 (119.6 %, 129.5% of US) City of Lakeville unemployment rate (May 2012): 4.7% (MN at 5.2 %; US at 7.9 %) Fiscal 2011 General Fund balance: $10.5 million (49.9% of General Fund revenues) Fiscal 2011 Unassigned General Fund balance: $9.6 million (45.6% of General Fund revenues) Overall debt burden: 5.8% (1.7% direct) Payout of principal (10 years): 50.9% Post -sale general obligation debt: $75.6 million, including current offering PRINCIPAL METHODOLOGY The principal methodology used in this rating was General Obligation Bonds Issued by U.S. Local Governments published in October 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology. REGULATORY DISCLOSURES The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com. For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer /entity page for the respective issuer on www.moodys.com. Information sources used to prepare the rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service's information. Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating. Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third -party sources. However. Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Please see the ratings disclosure page on www.noodys.com for general disclosure on potential conflicts of interests. Please see the ratings disclosure page on www.noodys.com for information on (A) MCO's major shareholders (above 5 %) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5 %. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter. Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery. Please see ratings tab on the issuer /entity page on wvvw.noodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information. Please see www.rnoodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating. Analysts Chandra Ghosal Lead Analyst Public Finance Group Moody's Investors Service Soo Yun Chun Backup Analyst Public Finance Group Moody's Investors Service Rachel Cortez Additional Contact Public Finance Group Moody's Investors Service Contacts Journalists: (212) 553 -0376 Research Clients: (212) 553 -1653 Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 USA !* © 2012 Moody's Investors Service, Inc. and /or its licensors and affiliates (collectively, "MOODY'S "). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ( "MIS ") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT -LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ( "MOODY'S PUBLICATIONS ") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT -LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable, including, when appropriate, independent third -party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. MIS, a wholly -owned credit rating agency subsidiary of Moody's Corporation ( "MCO "), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approbmately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information . regarding certain affiliations that may ebst between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5 %, is posted annually at www.moodys.co under the heading "Shareholder Relations — Corporate Governance — Director and Shareholder Affiliation Policy." Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pry Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761 G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761 G of the Corporations Act 2001. Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ( "MJKK ") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt -like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK ". MJKK is a wholly -owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly -owned subsidiary of MCO. This credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser. OFFICIAL STATEMENT DATED JULY 3, 2012 NEW AND REFUNDING ISSUES Ratings: Requested from Moody's Investors Service In the opinion of Dorsey & Whitney LLP, Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decisions, and assuming compliance with certain covenants, interest to be paid on the Bonds is excluded from gross income for federal income tax purposes and from taxable net income of individuals, estates, and trusts for Minnesota income tax purposes; is not an item of tax preference for federal or Minnesota alternative minimum tax purposes; and interest is included in adjusted current earnings of corporations for federal alternative minimum tax purposes. Interest is included in taxable income for the purposes of the Minnesota franchise tax on corporations and financial institutions. See "TAX EXEMPTION" and "RELATED TAX CONSIDERATIONS" herein. City of Lakeville, Minnesota $6,805,000* $23,635,000* General Obligation Improvement Bonds, General Obligation Refunding Bonds, Series 2012A Series 20128 (the "Series 2012A Bonds ") (the "Series 2012B Bonds ") (collectively referred to as the "Bonds," the "Obligations" or the "Issues ") (Book Entry Only) Dated Date: Date of Delivery Interest Due: Each February 1 and August 1, commencing August 1, 2013 The Series 2012A Bonds will mature February 1 as follows: 2014 $505,000 2018 $550,000 2022 $565,000 2026 $130,000 2030 $125,000 2015 $550,000 2019 $550,000 2023 $575,000 2027 $130,000 2031 $125,000 2016 $550,000 2020 $555,000 2024 $135,000 2028 $130,000 2032 $125,000 2017 $555,000 2021 $565,000 2025 $130,000 2029 $130,000 2033 $125,000 The Series 2012B Bonds will mature February 1 as follows: 2015 $ 830,000 2019 $1,480,000 2022 $1,660,000 2025 $1,890,000 2028 $1,165,000 2016 $1,445,000 2020 $1,540,000 2023 $1,735,000 2026 $1,980,000 2029 $1,240,000 2017 $1,400,000 2021 $1,600,000 2024 $1,815,000 2027 $1,095,000 2030 $1,325,000 2018 $1,435,000 Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption and must conform to the respective maturity schedule set forth above. The City may elect on February 1, 2022, and on any day thereafter, to prepay the Bonds due on or after February 1, 2023 at a price of par plus accrued interest. The Bonds will be general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. Additional sources of security for the Series 2012A Bonds are described herein A separate proposal must be submitted for each Issue for not less than the amounts shown below. Proposals shall specify rates in integral multiples of 5/100 or 1/8 of 1 %. Rates are not required to be in level or ascending order; however, the rate for any maturity cannot be more than 1% lower than the highest rate of any of the preceding maturities. Proposals must be accompanied by a good faith deposit in the amounts shown below in the form of a certified or cashier's check payable to the order of the City, a wire transfer, or a Financial Surety Bond, and delivered to Springsted Incorporated prior to the time proposals will be opened. Award of each Issue will be made on the basis of True Interest Cost (TIC). Minimum Bid Good Faith The Series 2012A Bonds $ 6,723,340 $ 68,050 The Series 20128 Bonds 23,635,000 (Par) 236,350 The Bonds will be issued as fully registered Bonds without coupons and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ( "DTC "). DTC will act as securities depository for the Bonds. Individual purchases may be made in book entry form only, in the principal amount of $5,000 and integral multiples thereof. Investors will not receive physical certificates representing their interest in the Bonds purchased. (See "Book Entry System" herein.) U.S. Bank National Association, St. Paul, Minnesota will serve as registrar (the "Registrar ") for the Bonds. Bonds will be available for delivery at DTC on or about August 15, 2012. ' Preliminary subject to change. PROPOSALS RECEIVED: July 16, 2012 (Monday) until 10:00 A.M., Central Time AWARD: July 16, 2012 (Monday) at 7:00 P.M., Central Time El R r (n L Further information may be obtained from SPRINGSTED Incorporated, Y g [ Financial Advisor to the City, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101 -2887 (651) 223 -3000 For purposes of compliance with Rule 15c2 -12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the Issuer from time to time (collectively, the "Official Statement'), may be treated as an Official Statement with respect to the Obligations described herein that is deemed final as of the date hereof (or of any such supplement or correction) by the Issuer, except for the omission of certain information referred to in the succeeding paragraph. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Obligations, together with any other information required by law, shall constitute a "Final Official Statement' of the Issuer with respect to the Obligations, as that term is defined in Rule 15c2 -12. Any such addendum shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. By awarding the Obligations to any underwriter or underwriting syndicate submitting a Proposal therefor, the Issuer agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Obligations are awarded copies of the Official Statement and the addendum or addenda described to the preceding paragraph in the amount specified in the Terms of Proposals. The Issuer designates the senior managing underwriter of the syndicate to which the Obligations are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a Proposal with respect to the Obligations agrees thereby that if its bid is accepted by the Issuer (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Obligations for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. No dealer, broker, salesman or other person has been authorized by the Issuer to give any information or to make any representations with respect to the Obligations, other than as contained in the Official Statement or the Final Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the Issuer. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the Issuer and, while believed to be reliable, is not guaranteed as to completeness or accuracy. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER SINCE THE DATE THEREOF. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts of documents prepared by or on behalf of the Issuer have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. Any CUSIP numbers for the Obligations included in the Final Official Statement are provided for convenience of the owners and prospective investors. The CUSIP numbers for the Obligations have been assigned by an organization unaffiliated with the Issuer. The Issuer is not responsible for the selection of the CUSIP numbers and makes no representation as to the accuracy thereof as printed on the Obligations or as set forth in the Final Official Statement. No assurance can be given that the CUSIP numbers for the Obligations will remain the same after the date of issuance and delivery of the Obligations. TABLE OF CONTENTS Page(s Terms of Proposal: $6,805,000 General Obligation Improvement Bonds, Series 2012A.. .......................... $23,635,000 General Obligation Refunding Bonds, Series 2012B ............................... IntroductoryStatement .......................................... ............................... ...................1111........ ContinuingDisclosure ........................................... ............................... 1...........................111 TheBonds ............................................................................................ ............................... TheSeries 2012A Bonds ...................................... ............................... ......1..........111........... TheSeries 2012B Bonds ..................................................................... ............................... FutureFinancing., ..... ............................ ...... ...... ................................................ ........... _ Litigation............................................................................................... ............................... Legality................................................................................................. ............................... TaxExemption ..................................................................................... ............................... Related Tax Considerations ................................................................. ............................... Not Qualified Tax - Exempt Obligations ................................................. ............................... Ratings.................................................................. ............................... .................1111.......... FinancialAdvisor ................................................... ............................... ...............1111............ Certification.......................................................................................... ............................... CityProperty Values ............................................................................ ............................... CityIndebtedness ................................................................................ ............................... City Tax Rates, Levies and Collections ................ ............................... ........................1...111 Fundson Hand .................................................................................... ............................... CityInvestments .................................................................................. ............................... General Information Concerning the City. .............................................. ............................ Governmental Organization and Services ........................................... ............................... Proposed Forms of Legal Opinions ......................... Continuing Disclosure Covenants ............................ Summary of Tax Levies, Payment Provisions, and Minnesota Real Property Valuation ...................... Excerpt of 2011 Audited Financial Statements........ i-v vi -x 1 1 2 4 5 6 6 7 7 7 8 8 9 9 10 11 17 18 18 19 23 .................. .................1 ...1....... Appendix I ... ... ......................... I ...... .... I... Appendix II .............I. ..1..11..1..................... Appendix III ............... ............................... Appendix IV THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $6,805,000 CITY OF LAKEVILLE, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2012A (BOOK ENTRY ONLY) Proposals for the Bonds and the Good Faith Deposit ( "Deposit ") will be received on Monday, July 16, 2012, until 10:00 A.M., Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at 7:00 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds regardless of the manner in which the Proposal is submitted. (a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651)223 -3046 to Springsted. Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3046 for inclusion in the submitted Proposal. (b) Elect Bidding. Notice is hereby given that electronic proposals will be received via PARIT 7- For purposes of the electronic bidding process, the time as maintained by PARITY shall constitute the official time with respect to all Bids submitted to PARITY Each bidder shall be solely responsible for making necessary arrangements to access PARITY for purposes of submitting its electronic Bid in a timely manner and in compliance with the requirements of the Terms of Proposal. Neither the City, its agents nor PARITY shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the City, its agents nor PARITY shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have anX liability for any delays or interruptions of or any damages caused by the services of PARIT . The City is using the services of PARITY solely as a communication mechanism to conduct the electronic bidding for the Bonds, and PARITY is not an agent of the City. If any provisions of this Terms of Proposal conflict with information provided by PARITY this Terms of Proposal shall control. Further information about PARITY including any fee charged, may be obtained from: PARITY 1359 Broadway, 2n Floor, New York, New York 10018 Customer Support: (212) 849 -5000 Preliminary; subject to change. DETAILS OF THE BONDS The Bonds will be dated as the date of delivery, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 2013. Interest will be computed on the basis of a 360 -day year of twelve 30 -day months. The Bonds will mature February 1 in the years and amounts' as follows: 2014 $505,000 2018 $550,000 2022 $565,000 2026 $130,000 2030 $125,000 2015 $550,000 2019 $550,000 2023 $575,000 2027 $130,000 2031 $125,000 2016 $550,000 2020 $555,000 2024 $135,000 2028 $130,000 2032 $125,000 2017 $555,000 2021 $565,000 2025 $130,000 2029 $130,000 2033 $125,000 The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds or the maturity amounts offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption and must conform to the maturity schedule set forth above. In order to designate term bonds, the proposal must specify "Years of Term Maturities' in the spaces provided on the Proposal Form. BOOK ENTRY SYSTEM The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ( "DTC "), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The City may elect on February 1, 2022, and on any day thereafter, to prepay Bonds due on or after February 1, 2023. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. SECURITY AND PURPOSE The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special assessments against benefited properties. The proceeds will be used to finance various street reconstruction projects within the City. BIDDING PARAMETERS Proposals shall be for not less than $6,723,340 and accrued interest on the total principal amount of the Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or 1/8 of 1 %. Rates are not required to be in level or ascending order; however, the rate for any maturity cannot be more than 1% lower than the highest rate of any of the preceding maturities. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will be accepted. GOOD FAITH DEPOSIT Proposals, regardless of method of submission, shall be accompanied by a Deposit in the amount of $68,050 in the form of a certified or cashier's check, a wire transfer, or Financial Surety Bond and delivered to Springsted Incorporated prior to the time proposals will be opened. Each bidder shall be solely responsible for the timely delivery of their Deposit whether by check, wire transfer or Financial Surety Bond. Neither the City nor Springsted Incorporated have any liability for delays in the transmission of the Deposit. Any Deposit made by certified or cashier's check should be made payable to the City and delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101. Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the City's agent according to the following instructions: Wells Fargo Bank, N.A., San Francisco, CA 94104 ABA #121000248 for credit to Springsted Incorporated, Account #635- 5007954 Ref: Lakeville, MN Series 2012A Good Faith Deposit Contemporaneously with such wire transfer, the bidder shall send an e -mail to bond services(o)soringsted.com including the following information; (i) indication that a wire transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies, and (iv) the return wire instructions if such bidder is not awarded the Bonds. Any Deposit made by the successful bidder by check or wire transfer will be delivered to the City following the award of the Bonds. Any Deposit made by check or wire transfer by an unsuccessful bidder will be returned to such bidder following City action relative to an award of the Bonds. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota and pre- approved by the City. Such bond must be submitted to Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded to an underwriter using a Financial Surety Bond, then that underwriter is required to submit its Deposit to the City in the form of a certified or cashier's check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement. The Deposit received from the purchaser, the amount of which will be deducted at settlement, will be deposited by the City and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. GXV-1kTa The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non - substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the City determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the underwriter, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating agency fees shall be the responsibility of the purchaser. Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Bonds. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT On or about August 15, 2012, the Bonds will be delivered without cost to the purchaser through DTC in New York, New York. Delivery will be subject to receipt by the purchaser of an approving legal opinion of Dorsey & Whitney LLP of Minneapolis, Minnesota, and of customary closing papers, including a no- litigation certificate. On the date of settlement, payment for the Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Bonds has been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non - compliance with said terms for payment. -iv - CONTINUING DISCLOSURE In accordance with SEC Rule 15c2- 12(b)(5), the City will undertake, pursuant to the resolution awarding sale of the Bonds, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Official Statement. The purchaser's obligation to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Bonds. OFFICIAL STATEMENT The City has authorized the preparation of an Official Statement containing pertinent information relative to the Bonds, and said Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2 -12 of the Securities and Exchange Commission. For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223 -3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in Rule 15c2 -12. By awarding the Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded 250 copies of the Official Statement and the addendum or addenda described above. The City designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated June 18, 2012 BY ORDER OF THE CITY COUNCIL /s/ Charlene Friedges City Clerk -v- THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $23,635,000 CITY OF LAKEVILLE, MINNESOTA GENERAL OBLIGATION REFUNDING BONDS, SERIES 2012B (BOOK ENTRY ONLY) Proposals for the Bonds and the Good Faith Deposit ( "Deposit') will be received on Monday, July 16, 2012, until 10:00 A.M., Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at 7:00 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds regardless of the manner in which the Proposal is submitted. (a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223 -3046 to Springsted. Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3046 for inclusion in the submitted Proposal. OR (b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via PARITY ". For purposes the electronic bidding process, the time as maintained by PARITY`' shall constitute the official time with respect to all Bids submitted to PARITY Each bidder shall be solely responsible for making necessary arrangements to access PARITY for purposes of submitting its electronic Bid in a timely manner and in compliance with the requirements of the Terms of Proposal. Neither the City, its agents nor PARITY shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the City, its agents nor PARITY shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have an liability for any delays or interruptions of or any damages caused by the services of PARITY. The City is using the services of PARITY solely as a communication mechanism to conduct the electronic bidding for the Bonds, and PARITY is not an agent of the City. If any provisions of this Terms of Proposal conflict with information provided by PARITY this Terms of Proposal shall control. Further information about PARITY including any fee charged, may be obtained from: PARITY 1359 Broadway, 2 d Floor, New York, New York 10018 Customer Support: (212) 849 -5000 DETAILS OF THE BONDS Preliminary; subject to change. -vi - The Bonds will be dated as the date of delivery, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 2013. Interest will be computed on the basis of a 360 -day year of twelve 30 -day months. The Bonds will mature February 1 in the years and amounts* as follows: 2015 $ 830,000 2019 $1,480,000 2023 $1,735,000 2027 $1,095,000 2016 $1,455,000 2020 $1,540,000 2024 $1,815,000 2028 $1,165,000 2017 $1,400,000 2021 $1,600,000 2025 $1,890,000 2029 $1,240,000 2018 $1,435,000 2022 $1,660,000 2026 $1,980,000 2030 $1,325,000 The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds or the maturity amounts offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption and must conform to the maturity schedule set forth above. In order to designate term bonds, the proposal must specify "Years of Term Maturities" in the spaces provided on the Proposal Form, BOOK ENTRY SYSTEM The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ( "DTC "), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The City may elect on February 1, 2022, and on any day thereafter, to prepay Bonds due on or after February 1, 2023. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. - vii - SECURITY AND PURPOSE The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. The proceeds will be used to refund (i) the February 1, 2015 through February 1, 2026 maturities of the City's General Obligation Street Reconstruction Bonds, Series 2003A, dated March 15, 2003; and (ii) the February 1, 2016 through February 1, 2030 maturities of the City's General Obligation Capital Improvement Plan Bonds, Series 2004A, dated November 1, 2004. Proposals shall be for not less than $23,635,000 (Par) and accrued interest on the total principal amount of the Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or 1/8 of 1 %. Rates are not required to be in level or ascending order; however, the rate for any maturity cannot be more than 1% lower than the highest rate of any of the preceding maturities. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will be accepted. GOOD FAITH DEPOSIT Proposals, regardless of method of submission, shall be accompanied by a Deposit in the amount of $236,350 in the form of a certified or cashier's check, a wire transfer, or Financial Surety Bond and delivered to Springsted Incorporated prior to the time proposals will be opened. Each bidder shall be solely responsible for the timely delivery of their Deposit whether by check, wire transfer or Financial Surety Bond. Neither the City nor Springsted Incorporated have any liability for delays in the transmission of the Deposit. Any Deposit made by certified or cashier's check should be made payable to the City and delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101. Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the City's agent according to the following instructions: Wells Fargo Bank, N.A., San Francisco, CA 94104 ABA #121000248 for credit to Springsted Incorporated, Account #635- 5007954 Ref: Lakeville, MN Series 20126 Good Faith Deposit Contemporaneously with such wire transfer, the bidder shall send an e -mail to bond services(a)sprinosted.com including the following information; (i) indication that a wire transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies, and (iv) the return wire instructions if such bidder is not awarded the Bonds. Any Deposit made by the successful bidder by check or wire transfer will be delivered to the City following the award of the Bonds. Any Deposit made by check or wire transfer by an unsuccessful bidder will be returned to such bidder following City action relative to an award of the Bonds. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota and pre- approved by the City. Such bond must be submitted to Springsted Incorporated prior to the opening of the proposals. The Financial viii - Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded to an underwriter using a Financial Surety Bond, then that underwriter is required to submit its Deposit to the City in the form of a certified or cashier's check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement. The Deposit received from the purchaser, the amount of which will be deducted at settlement, will be deposited by the City and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. AWARD The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non - substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the City determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the underwriter, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating agency fees shall be the responsibility of the purchaser. Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Bonds. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT On or about August 15, 2012, the Bonds will be delivered without cost to the purchaser through DTC in New York, New York. Delivery will be subject to receipt by the purchaser of an approving legal opinion of Dorsey & Whitney LLP of Minneapolis, Minnesota, and of customary closing papers, including a no- litigation certificate. On the date of settlement, payment for the Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Bonds has been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non - compliance with said terms for payment. CONTINUING DISCLOSURE - ix - In accordance with SEC Rule 15c2- 12(b)(5), the City will undertake, pursuant to the resolution awarding sale of the Bonds, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Official Statement. The purchaser's obligation to purchase the Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Bonds. OFFICIAL STATEMENT The City has authorized the preparation of an Official Statement containing pertinent information relative to the Bonds, and said Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2 -12 of the Securities and Exchange Commission. For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223 -3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in Rule 15c2 -12. By awarding the Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded 250 copies of the Official Statement and the addendum or addenda described above. The City designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated June 18, 2012 BY ORDER OF THE CITY COUNCIL /s/ Charlene Friedges City Clerk vc OFFICIAL STATEMENT CITY OF LAKEVILLE, MINNESOTA $6,805,000* GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2012A $23,635,000* GENERAL OBLIGATION REFUNDING BONDS, SERIES 2012B (BOOK ENTRY ONLY) INTRODUCTORY STATEMENT This Official Statement contains certain information relating to the City of Lakeville, Minnesota (the "City" or the "Issuer ") and its issuance of $6,805,000" General Obligation Improvement Bonds, Series 2012A (the "Series 2012A Bonds "), and $23,635,000* General Obligation Refunding Bonds, Series 2012B (the "Series 2012B Bonds "), collectively referred to as the "Bonds," the "Obligations" or the "Issues ". The Bonds will be general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. Additional sources of security for the Series 2012A Bonds are described herein. Inquiries may be directed to Mr. Dennis Feller, Finance Director, City of Lakeville, 20195 Holyoke Avenue, Lakeville, Minnesota 55044 -0957, or by telephoning (952) 985 -4481. Inquiries may also be made to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101 -2887, or by telephoning (651) 223 -3000. If information of a specific legal nature is desired, requests may be directed to Ms. Jennifer Hanson, Dorsey & Whitney LLP, 50 South Sixth Street, 15` Floor, Minneapolis, Minnesota 55402, Bond Counsel (612) 492 -6959. CONTINUING DISCLOSURE In order to permit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2 -12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the 'Rule "), the City will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds, in the Resolutions, to provide annual reports of specified information and notice of the occurrence of certain events, if material, as hereinafter described (the "Disclosure Covenants "). The information to be provided on an annual basis, the events as to which notice is to be given, if material, and a summary of other provisions of the Disclosure Covenants, including termination, amendment and remedies, are set forth in Appendix II to this Official Statement. The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds or the maturity amounts offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. - 1 - The City has not failed to comply in the past five years in all material respects with any previous Disclosure Covenants under the Rule to provide annual reports or material events. Breach of the Disclosure Covenants will not constitute a default or an "Event of Default" under the Bonds or the Resolutions. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the City to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. 11111 t�1 General Description The Bonds are dated as of date of delivery, and will mature annually each February 1, as set forth on the front cover of this Official Statement. Interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2013. The Bonds are being issued in book entry form. Interest will be payable to the holder (initially Cede & Co.) registered on the books of the Registrar on the fifteenth day of the calendar month next preceding such interest payment date. Principal of and interest on the Bonds will be paid as described in the section 'book Entry System." U.S. Bank National Association has been named Registrar for the Bonds and the City will pay for registration services. Optional Redemption The City may elect on February 1, 2022, and on any day thereafter, to prepay Bonds due on or after February 1, 2023. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all the Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. Book Entry System The Depository Trust Company ( "DTC "), New York, New York, will act as securities depository for the Obligations. The Obligations will be issued as fully- registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered certificate will be issued for each maturity of each series of the Obligations, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited - purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for securities that its participants ( "Direct Participants ") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of 2- The Depository Trust & Clearing Corporation ( "DTCC "). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com Purchases of Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the Obligations on DTC's records. The ownership interest of each actual purchaser of each Obligation ( "Beneficial Owner ") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Obligations are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Obligations, except in the event that use of the book -entry system for the Obligations is discontinued. To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Obligations with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Obligations; DTC's records reflect only the identity of the Direct Participants to whose accounts such Obligations are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Obligations may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of the Obligations may wish to ascertain that the nominee holding the Obligations for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them. Redemption notices are required to be sent to DTC. If less than all of the Obligations within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any such other DTC nominee) will consent or vote with respect to the Obligations unless authorized by a Direct Participant in accordance with DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer or Bond Registrar as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). -3- Redemption proceeds, distributions, and dividend payments on the Obligations will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the Issuer or its agent on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, the Bond Registrar, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Bond Registrar, Issuer, or the Issuer's agent. Disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Obligations purchased or tendered, through its Participant, to Agent, and shall effect delivery of such Obligations by causing the Direct Participant to transfer the Participant's interest in the Obligations, on DTC's records, to Agent. The requirement for physical delivery of Obligations in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Obligations are transferred by Direct Participants on DTC's records and followed by a book - entry credit of tendered Obligations to Trustee's DTC account. DTC may discontinue providing its services as securities depository with respect to the Obligations at any time by giving reasonable notice to the Issuer or its agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book - entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. THE SERIES 2012A BONDS Authority and Purpose The Series 2012A Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 429. The proceeds of the Series 2012A Bonds will be used to finance various street improvement projects within the City. The composition of the Series 2012A Bonds is as follows: Sources of Funds Principal Amount $ 6.805.000 Total Sources of Funds $6,805,000 Uses of Funds: Deposit to Project Fund $6,669,725 Allowance for Discount Bidding 81,660 Costs of Issuance 53.615 Total Uses of Funds $6,805,000 Security and Financing The Series 2012A Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special assessments against benefited properties for repayment of the Series 2012A Bonds. Assessments in the principal amount of approximately $2,710,000 will be filed on or about January 1, 2013 and will be spread over a term of 20 years with equal annual payments of principal. Interest on the unpaid balance will be charged at a rate of 3.50 %. The City will make its first levy for the Series 2012A Bonds in 2012 for collection in 2013. Each year's collections of taxes and special assessments, if collected in full, will be sufficient to pay 105% of the interest payment due August 1 in the year of collection and the principal and interest payment due February 1 of the following year. THE SERIES 20426 BONDS Authority and Purpose The Series 2012B Bonds are being issued pursuant to Minnesota Statutes, Chapter 475. The proceeds of the Series 2012B Bonds will be used to refund (i) the February 1, 2015 through February 1, 2026 maturities (the "Series 2003A Refunded Maturities ") of the City's General Obligation Street Reconstruction Bonds, Series 2003A, dated March 15, 2003 (the "Street Reconstruction Portion "); and (ii) the February 1, 2016 through February 1, 2030 maturities (the "Series 2004A Refunded Maturities") of the City's General Obligation Capital Improvement Plan Bonds, Series 2004A, dated November 1, 2004 (the "CIP Portion "). The Series 2003A Refunded Maturities and the Series 2004A Refunded Maturities will collectively be referred to as the "Refunded Maturities ". The composition of the Series 2012B Bonds is as follows: The refunding is being conducted to achieve debt service savings and has been structured as a crossover refunding. Proceeds of the Series 2012B Bonds will be placed in an escrow account with U.S. Bank National Association, St. Paul, Minnesota. The amount in the escrow account will be invested in special obligations of the United States Treasury or other obligations of the United States or of its agencies, which shall mature in such amounts and at such times as to be -5- Street Reconstruction CIP Portion Portion Total Sources of Funds: Principal Amount $10,335,000 $13,300,000 $23,635,000 Estimated Reoffering Premium 172.615 113376 285.991 Total Sources of Funds $10,507,615 $13,413,376 $23,920,991 Uses of Funds: Deposit to Escrow Fund $10,334,969 $13,191,876 $23,526,845 Estimated Underwriter's Compensation 124,623 160,377 285,000 Costs of Issuance 48,023 61,123 109,146 Total Uses of Funds $10,507,615 $13,413,376 $23,920,991 The refunding is being conducted to achieve debt service savings and has been structured as a crossover refunding. Proceeds of the Series 2012B Bonds will be placed in an escrow account with U.S. Bank National Association, St. Paul, Minnesota. The amount in the escrow account will be invested in special obligations of the United States Treasury or other obligations of the United States or of its agencies, which shall mature in such amounts and at such times as to be -5- available to (i) pay the interest on the Street Reconstruction Portion of the Series 20128 Bonds through the call date of February 1, 2014; (ii) pay the interest on the CIP Portion of the Series 2012B Bonds through the call date of February 1, 2015; (iii) redeem the Series 2003A Refunded Maturities and the Series 2004A Refunded Maturities on their respective call dates at a price of par plus accrued interest; and (iv) pay the costs associated with the issuance of the Bonds. Verification services necessary to ensure the adequacy of the escrow account to provide timely payment of the principal and interest for which the escrow account is obligated will be performed by a certified public accounting firm. Security and Financing The Series 2012B Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. The City will make its first levy (i) for the Street Reconstruction Portion of the Series 2012B Bonds in 2013 for collection in 2014; and (ii) for the CIP Portion of the Series 2012B Bonds in 2014 for first collection in 2015. The escrow account established with the proceeds of the Series 2012B Bonds will make the interest payments due on the Street Reconstruction Portion and the CIP Portion of the Series 20128 Bonds through their respective call dates as noted above. Thereafter, each year's collection of taxes, if collected in full, will be sufficient to pay 105% of the interest payment due on August 1 in the collection year and the principal and interest payment due on February 1 of the following year. In addition, the City expects to use special assessments filed against benefited properties for repayment of a portion of the Series 2012B Bonds. Minnesota Statutes, Section 475.521, limits the maximum amount of principal and interest to become due in any year on all outstanding capital improvement plan bonds to be not more than 0.16% of the taxable market value of property for taxes payable in the year in which the bonds are issued or sold. The statutory maximum allowable for annual debt service on the City's capital improvement plan bonds is $8,048,005, based on the City's 2011112 taxable market value of $5,030,003,164. The combined maximum annual debt service for the City's outstanding capital improvement plan bonds, including the CIP Portion of the Series 2012B Bonds, is projected to be approximately $2,377,825, which is within the statutory limit. FUTURE FINANCING The City does not anticipate issuing any additional long -term general obligation debt for at least the next 90 days. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. mom LEGALITY The Bonds are subject to approval as to certain matters by Dorsey & Whitney LLP, of Minneapolis, Minnesota, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement except for guidance concerning the following sections entitled "Tax Exemption" and "Related Tax Considerations," and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify, any of the financial or statistical statements, or data contained in this Official Statement, and will express no opinion with respect thereto. Legal opinions in substantially the forms set out in Appendix I herein will be delivered at closing. TAX EXEMPTION It is the opinion of Dorsey & Whitney LLP, Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decisions, and on certifications to be furnished at closing, and assuming compliance by the City with certain covenants (the "Tax Covenants "), that interest to be paid on the Bonds is excluded from gross income for federal income tax purposes and from taxable net income of individuals, estates, and trusts for Minnesota income tax purposes. Such interest is, however, included in taxable income for purposes of Minnesota franchise taxes imposed on corporations and financial institutions. Certain provisions of the Internal Revenue Code of 1986, as amended (the "Code "), however, impose continuing requirements that must be met after the issuance of the Bonds in order for interest thereon to be and remain not includable in federal gross income and in Minnesota taxable net income of individuals, estates and trusts. These requirements include, but are not limited to, provisions regarding the use of Bond proceeds and the facilities financed with such proceeds; restrictions on the investment of Bond proceeds and other amounts; and provisions requiring that certain investment earnings be rebated periodically to the federal government. Noncompliance with such requirements may cause interest on the Bonds to be includable in federal gross income or in Minnesota taxable net income retroactively to their date of issue. Compliance with the Tax Covenants will satisfy the current requirements of the Code with respect to exemption of interest on the Bonds. No provision has been made for redemption of or for an increase in the interest rate on the Bonds in the event that interest on the Bonds becomes includable in federal gross income or in Minnesota taxable net income. RELATED TAX CONSIDERATIONS Interest on the Bonds is not an item of tax preference for federal or Minnesota alternative minimum tax purposes, but it is included in adjusted current earnings of corporations for purposes of the federal alternative minimum tax. Section 86 of the Code and corresponding provisions of Minnesota law require recipients of certain social security and railroad retirement benefits to take interest on the Bonds into account in determining the taxability of such benefits. Passive investment income, including interest on the Bonds, may be subject to taxation under section 1375 of the Code, and corresponding provisions of Minnesota law, for an S corporation that has accumulated earnings and profits at the close of the taxable year, if more than 25 percent of its gross receipts is passive investment income. Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of the Owner's interest expense allocated to the -7- Bonds, and Minnesota law similarly denies a deduction for such interest in the case of individuals, estates and trusts. Indebtedness may be allocated to the Bonds for this purpose even though not directly traceable to the purchase of the Bonds. Federal and Minnesota laws also restrict the deductibility of other expenses allocable to the Bonds. In the case of an insurance company subject to the tax imposed by section 831 of the Code, the amount which otherwise would be taken into account as losses incurred under section 832(b)(5) of the Code must be reduced by an amount equal to 15 percent of the interest on the Bonds that is received or accrued during the taxable year. Interest on the Bonds may be included in the income of a foreign corporation for purposes of the branch profits tax imposed by section 884 of the Code, and is included in net investment income of foreign insurance companies under section 842(b) of the Code. Because of the Code's basis reduction rules for amortizable bond premium, Bondholders who acquire Bonds at a premium may be required to recognize taxable gain upon sale of the Bonds, even if the Bonds are sold for an amount equal to or less than their original cost. THE FOREGOING IS NOT INTENDED TO BE AN EXHAUSTIVE DISCUSSION OF COLLATERAL TAX CONSEQUENCES ARISING FROM OWNERSHIP OR DISPOSITION OF THE BONDS OR RECEIPT OF INTEREST ON THE BONDS. PROSPECTIVE PURCHASERS OR BONDHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO COLLATERAL TAX CONSEQUENCES AND APPLICABLE STATE AND LOCAL TAX RULES IN STATES OTHER THAN MINNESOTA. NOT QUALIFIED TAX - EXEMPT OBLIGATIONS The City will not designate the Bonds as "qualified tax - exempt obligations" for purposes of Section 265(b)(3) of the Code relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax - exempt obligations. RATINGS Application for ratings of the Bonds has been made to Moody's Investors Service ( "Moody's "), 7 World Trade Center, 250 Greenwich Street, 23r Floor, New York, New York. If ratings are assigned, they will reflect only the opinion of Moody's. Any explanation of the significance of the ratings may be obtained only from Moody's. There is no assurance that the ratings, if assigned, that such ratings will not be revised or withdrawn if, so warrant. A revision or withdrawal of the ratings price of the Bonds. will continue for any given period of time, or in the judgment of Moody's, circumstances may have an adverse effect on the market WE FINANCIAL ADVISOR The City has retained Springsted Incorporated, Public Sector Advisors, of St. Paul, Minnesota, as financial advisor (the "Financial Advisor') in connection with the issuance of the Bonds. In preparing the Official Statement, the Financial Advisor has relied upon governmental officials, and other sources, who have access to relevant data to provide accurate information for the Official Statement, and the Financial Advisor has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. The Financial Advisor is not a public accounting firm and has not been engaged by the City to compile, review, examine or audit any information in the Official Statement in accordance with accounting standards. The Financial Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities and therefore will not participate in the underwriting of the Bonds. CERTIFICATION The City has authorized the distribution of this Official Statement for use in connection with the initial sale of the Bonds. As of the date of the settlement of the Bonds, the Purchaser(s) will be furnished with a certificate signed by the appropriate officers of the City. The certificate will state that as of the date of the Official Statement, the Official Statement did not and does not as of the date of the certificate contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (The Balance of This Page Has Been Intentionally Left Blank) CITY PROPERTY VALUES 2011/12 City Property Values A total of $238,171,979 (72.9 %) of the decline in the City's taxable market value is caused by a legislated change in the computation of taxable market value. The Market Value Homestead Credit Program was eliminated in 2011 and replaced with the Market Value Homestead Exclusion Program. The change was made to offset the elimination of a homestead credit that provided property tax relief for certain homesteads. To minimize the impact of eliminating the credit, it was replaced with a new "market value homestead exclusion" or MVHE. The MVHE reduces the taxable market value of a homestead with an estimated market value of up to $413,800 so that the resultant property tax attempts to mimic the previous property tax net of the now eliminated homestead credit. A homestead that qualifies for the MVHE will cause a drop in the City's taxable market value even if the estimated market value of the same property does not decline. 2011/12 Indicated Market Value of Taxable Property: $5,091,096,320* Indicated market value is calculated by dividing the City's taxable market value of $5,030,003,164 by the 2010 sales ratio of 98.8% for the City as determined by the State Department of Revenue. (2011 sales ratios are not yet available. Excludes mobile home valuation of $13,359,160.) 2011112 Net Tax Capacity: $57,583,990 Real Estate $56,739,042 Personal Property 844.948 Total $57,583,990 2011/12 Taxable Net Tax Capacity by Class of Property: $58,325,034* Real Estate Residential Homestead $41,780,807 72.5% Commercial /Industrial, Public Utility, and Railroad 13,125,901 22.8 Non - Homestead Residential 1,265,526 2.2 Agricultural and Seasonal /Recreational 566,808 1.0 Personal Property 844.948 1.5 2011/12 Net Tax Capacity $57,583,990 100.0% Less: Captured Tax Increment Tax Capacity (862,243) Contribution to Fiscal Disparities (5,591,597) Plus: Distribution from Fiscal Disparities 7,194,884 2011/12 Taxable Net Tax Capacity $58,325,034 * Excludes mobile home valuation of $133,574. Trend of Values 2011/12 2010/11 2009/10 2008/09 2007/08 Indicated Market Value $5,091,096,320 5,421,918,927 5,812,160,284 6,368,568,182 6,344,690,405 Taxable Market Value $5,030,003,164 5,356,855,900 5,736,602,200 6,024,665,500 5,951,319,600 Taxable Net Tax Capacity $58,325,034 62,063,161 65, 043,115 67,986,992 65,586,013 (a) Indicated market values are calculated by dividing the City's taxable market value by the sales ratio as certified for the City each year by the Minnesota Department of Revenue. (b) See Appendix 111 for discussion of taxable net tax capacity and the Minnesota property tax system. Ten of the Largest Taxpayers in the City 2011/12 Taxable Taxpaver Type of Business Net Tax Capacity Lakeville 2004 LLC Commercial $ 333,532 Heritage Commons LLC Retail 320,908 Dakota Electric Association Utility 314,834 Target Corporation Retail 256,414 Argonne Investments LLC Retail 255,123 LTF Real Estate Company Inc. Real Estate 242,738 Xcel Energy Utility 242,352 Walker Highview Hills LLC Apartments 220,599 CenterPoint Energy Utility 199,264 SouthforkApts. Ltd Partnership Apartments 191,100 Total $2,576,864 Represents 4.4% of the City's 2011192 taxable net tax capacity CITY INDEBTEDNESS Legal Debt Limit* Legal Debt Limit (3% of Taxable Market Value) $150,900,095 Less: G.O. Debt Subject to Limit (50,620,000 Legal Debt Margin as of August 15, 2012 $100,280,095 The legal debt margin is statutorily referred to as the "net debt limit" and permits debt to be offset by debt service funds and current revenues which are applicable to the payment of debt in the current fiscal year. No such offset has been used to increase the margin as shown above. - 11 - General Obligation Debt Supported by Taxes(a) General Obligation Debt Supported Primarily by Special Assessments Est. Principal Date Original Final Est. Principal Date Original Purpose Final Outstanding of Issue Amount Purpose Maturity As of 8 -15 -12 3 -15 -03 $14,890,000 Street Reconstruction 2 -1 -2014 $ 1,380,000(b) 11 -1 -04 14,445,000 Capital Improvements 2 -1 -2015 960,000(c) 12 -1 -05 5,430,000 Street Reconstruction 2 -1 -2026 2,540,000 5 -1 -07 840,000 Public Safety Revenue 2 -1 -2014 270,000( 8 -1 -07 15,115,000 Capital Improvements 2 -1 -2032 13,545,000 12 -15 -07 2,810,000 Street Reconstruction 2 -1 -2028 2,495,000 12 -30 -09 4,945,000 Street Reconstruction 2 -1 -2030 4,580,000 12 -1 -11 1,215,000 Park Refunding 4 -1 -2015 1,215,000 8 -15 -12 23,635,000 Street Reconstruction and Date Original Final Capital Improvements Refunding of Issue Amount Purpose Maturi (the Series 20126 Bonds) 2 -1 -2030 23,635 000 Total 2 -1 -2022 $2,015,000 2 -1 -07 $50,620,000 (a) These issues are subject to the legal debt limit. 2 -1 -2014 265,000 (b) Excludes the Series 2003A Refunded Maturities. Tax Increment Refunding 2 -1 -2014 (c) Excludes the Series 2004A Refunded Maturities. Total (d) Includes the City's proportionate share of the Dakota Communications Centers $7,315,000 Public Safety Revenue Bonds, Series 2007, dated May 1, 2007. General Obligation Debt Supported Primarily by Special Assessments Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 8 -15 -12 2 -1 -07 $3,165,000 Improvement Refunding 2 -1 -2016 $ 575,000 8 -1 -07 1,310,000 Local Improvements 2 -1 -2018 300,000 10 -1 -08 620,000 Local Improvements 2 -1 -2019 210,000 12 -30 -09 4,250,000 Refunding 2 -1 -2020 2,910,000 12 -1 -11 2,385,000 Local Improvements 2 -1 -2032 2,385,000 8 -15 -12 6,805,000 Local Improvements (the Series 2012A Bonds) 2 -1 -2033 6,805,000 Total $13,185,000 General Obligation Debt Supported by Tax Increment Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturi As of 8 -15 -12 2 -1 -07 $2,265,000 Tax Increment Refunding 2 -1 -2022 $2,015,000 2 -1 -07 820,000 Taxable Tax Increment Refunding 2 -1 -2014 265,000 12 -30 -09 930,000 Tax Increment Refunding 2 -1 -2014 475,000 Total $2,755,000 12- General Obligation Debt Supported by Enterprise Funds and State -Aid Road Funds (a) These bonds were issued by the Housing and Redevelopment Authority of the City of Lakeville, Minnesota. Gross revenues from the Ames Ice Arena and Lakeville Hockey Association operations are pledged to the repayment of this debt. (b) These bonds were issued through means of an operating lease - purchase agreement between the City and the Housing and Redevelopment Authority of the City of Lakeville, Minnesota. This issue will be repaid with annual appropriation lease payments to be made by the City. Pursuant to a joint powers agreement between the City and Independent School District No. 194 (Lakeville), Minnesota (the 'District), the District has agreed to reimburse the City for 50% of the annual debt service payments for this issue. (c) These bonds are general obligations of the City, but are payable from gross revenues of the City's Ice Arena. Revenue Debt Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 8 -15 -12 5 -1 -07 $3,955,000 Liquor Store 2 -1 -2027 $3,395,000 -13- Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturi As of 8 -15 -12 11 -1 -04 $9,735,000 Water Revenue Refunding 2 -1 -2016 $3,760,000 12 -15 -07 3,675,000 State -Aid Street 4 -1 -2018 2,400,000 1 -1 -10 2,680,000 State -Aid Street Refunding 4 -1 -2020 2,215,000 12 -1 -11 665,000 State -Aid Street Refunding 4 -1 -2021 665,000 Total $9,040,000 Ice Arena Debt Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 8 -15 -12 4 -1 -99 $1,250,000 Recreational Facility Revenue 8 -1 -2019 $ 770,000(s) 12 -1 -06 9,230,000 Ice Arena Lease Revenue 2 -1 -2032 8,535,000(b) 10 -1 -08 775,000 Ice Arena Refunding 2 -1 -2015 405,000 Total $9,710,000 (a) These bonds were issued by the Housing and Redevelopment Authority of the City of Lakeville, Minnesota. Gross revenues from the Ames Ice Arena and Lakeville Hockey Association operations are pledged to the repayment of this debt. (b) These bonds were issued through means of an operating lease - purchase agreement between the City and the Housing and Redevelopment Authority of the City of Lakeville, Minnesota. This issue will be repaid with annual appropriation lease payments to be made by the City. Pursuant to a joint powers agreement between the City and Independent School District No. 194 (Lakeville), Minnesota (the 'District), the District has agreed to reimburse the City for 50% of the annual debt service payments for this issue. (c) These bonds are general obligations of the City, but are payable from gross revenues of the City's Ice Arena. Revenue Debt Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 8 -15 -12 5 -1 -07 $3,955,000 Liquor Store 2 -1 -2027 $3,395,000 -13- Estimated Annual Calendar Year Debt Service Payments Including the Bonds And Excluding the Refunded Maturities (a) Includes the Series 2012B Bonds at an assumed average annual interest rate of 2.51% and excludes the Refunded Maturities. (b) Includes the Series 2012A Bonds at an assumed average annual interest rate of 2.13 %, (c) 50.9% of this debt will be retired within ten years. (d) 82.4% of this debt will be retired within ten years. 14- G.O. Debt Supported G.O. Debt Supported Primarily by by Taxes Special Assessments Principal Principal Year Principal & Interest Principal & Interest 2012 (at 8 -15) (Paid) $ 6,254 (Paid) (Paid) 2013 $ 2,380,000 4,525,306 $ 1,230,000 $ 1,478,780 2014 2,485,000 4,440,570 1,255,000 1,485,801 2015 2,550,000 4,210,452 1,295,000 1,506,846 2016 2,425,000 3,898,606 1,305,000 1,495,483 2017 2,420,000 3,820,970 1,200,000 1,368,016 2018 2,505,000 3,830,034 1,175,000 1,320,334 2019 2,590,000 3,834,185 1,130,000 1,251,883 2020 2,690,000 3,853,114 900,000 1,001,366 2021 2,800,000 3,880,964 760,000 845,048 2022 2,900,000 3,891,903 615,000 686,186 2023 3,035,000 3,930,271 625,000 682,626 2024 3,170,000 3,959,991 185,000 233,204 2025 3,310,000 3,985,642 175,000 218,480 2026 3,460,000 4,012,768 175,000 213,575 2027 2,395,000 2,836,024 175,000 208,540 2028 2,520,000 2,861,420 175,000 203,408 2029 2,435,000 2,677,056 175,000 198,088 2030 2,575,000 2,717,643 170,000 187,656 2031 965,000 1,034,028 170,000 182,238 2032 1,010,000 1,033,356 170,000 176,756 2033 125,000 127,000 Total $50,620,000( $69,240,557 $13,185,000( $15,071,314 (a) Includes the Series 2012B Bonds at an assumed average annual interest rate of 2.51% and excludes the Refunded Maturities. (b) Includes the Series 2012A Bonds at an assumed average annual interest rate of 2.13 %, (c) 50.9% of this debt will be retired within ten years. (d) 82.4% of this debt will be retired within ten years. 14- Estimated Annual Calendar Year Debt Service Payments Including the Bonds And Excluding the Refunded Maturities (continued) (Paid) $ 340,000 $ 773,505 $ 160,000 $ 325,750 G.O. Debt Supported by 780,219 G.O. Debt Supported Enterprise Funds and 925,864 by Tax Increment State -Aid Road Funds 180,000 320,250 Principal 834,980 Principal Year Principal & Interest Principal & Interest 2012 (at 8 -15) (Paid) (Paid) (Paid) $ 86,860 2013 $ 420,000 $ 518,011 $1,585,000 1,875,128 2014 445,000 529,004 1,590,000 1,824,143 2015 210,000 282,561 1,685,000 1,861,201 2016 220,000 283,961 1,765,000 1,878,358 2017 220,000 275,161 780,000 847,226 2018 230,000 276,161 800,000 840,326 2019 240,000 276,761 375,000 396,064 2020 245,000 271,908 380,000 388,626 2021 260,000 276,493 80,000 80,860 2022 265,000 270,565 685,494 Total $2,755,000 $3,260,586 $9,040,000 $10,078,792 Year Ice Arena Debt Principal Principal & Interest Revenue Debt Principal Principal & Interest 2012 (at 8 -15) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Total (Paid) (Paid) (Paid) (Paid) $ 340,000 $ 773,505 $ 160,000 $ 325,750 360,000 780,219 165,000 322,625 520,000 925,864 175,000 324,125 415,000 800,490 180,000 320,250 470,000 834,980 190,000 321,000 505,000 847,028 200,000 321,250 525,000 842,480 210,000 321,000 370,000 661,988 220,000 320,250 390,000 664,888 235,000 323,875 415,000 671,775 245,000 321,875 435,000 672,650 255,000 319,375 450,000 667,738 270,000 321,250 470,000 667,038 285,000 322,375 495,000 670,325 295,000 317,875 520,000 672,163 310,000 317,750 545,000 672,534 575,000 676,634 605,000 679,347 635,000 680,672 670,000 685,494 $9,710,000 (a) $14,547,812 $3,395,000(b) $4,820,625 (a) 44.4% of this debt will be retired within ten years. (b) 58.3% of this debt will be retired within ten years. -15- Equipment Leases In 2005, the City entered into an equipment -lease purchase agreement to finance the acquisition of dehumidification equipment for the Lakeville Ice Arena with semiannual payments of $6,536 due from August 1, 2006 to February 1, 2021. Metropolitan Council Loan Agreement The City entered into a loan agreement with the Metropolitan Council on February 21, 2006 in the amount of $1,466,300 to finance the acquisition of property for a commuter vehicle park and pool lot. The loan is interest -free and will be discharged by the Metropolitan Council at an undetermined future date. Indirect Debt Taxing Unit Dakota County ISD No. 192 (Farmington) ISD No. 194 (Lakeville) ISD No. 196 (Rosemount - Apple Valley- Eagan) Metropolitan Council Metropolitan Transit Total (a) Only those units with general obligation debt outstanding are shown here. $213,676,245 (b) Excludes tax and aid anticipation certificates and general obligation debt supported by revenues. Includes annual appropriation lease revenue debt. (c) Includes Dakota County's proportionate share of the Dakota Communications Center's $7,315,000 Public Safety Revenue Bonds, Series 2007. (d) Excludes the outstanding principal amount of the City of Lakeville Housing and Redevelopment Authority's $9,230,000 Lease Revenue Bonds (Ice Arena Project), Series 2006, of which 50% of the debt service is paid by Independent School District No. 194, pursuant to a joint powers agreement. This debt has already been included under the City's debt totals in its entirety. (e) Excludes general obligation debt supported by wastewater revenues, 911 user fees, and housing rental payments. Includes certificates of participation. 0 Includes general obligation grant anticipation notes. Debt Ratios* G.O. G.O. Indirect & Direct Debt Direct Debt To 2011/12 indicated Market Value ($5,091,096,320) 1.31% 5.50% Per Capita (55,954 — 2010 U.S. Census Bureau) $1,190 $5,008 Excludes general obligation debt supported by enterprise funds and state -aid road funds, ice arena debt, revenue debt, equipment leases, and the Metropolitan Council Loan Agreement. -16- Debt Applicable to 2011/12 Taxable G.O. Debt Tax Capacity in the City Net Tax Capacity As of 8- 15 -12 Percent Amount $ 410,765,633 $ 52,415,000(c) 14.2% $ 7,442,930 27,685,523 205,270,000 19.0 39,001,300 51,329,173 176,262,884(d) 87.7 154,582,549 148,664,489 101,792,334 5.4 5,496,786 3,088,480,725 21,200,000(e) 1.9 402,800 2,461,354,036 281,245,000(0 2.4 6,749,880 -16- CITY TAX RATES, LEVIES AND COLLECTIONS Tax Capacity Rates for a City Resident in Independent School District No. 194 (Lakeville) (a) Dakota County also has a 2011112 tax rate of 0.00551% spread on the market value of property in support of debt service. (b) The City also has a 2011112 tax rate of 0.00784% spread on the market value of property in support of debt service. (c) Independent School District No. 194 (Lakeville) also has a 2011112 tax rate of 0.18932% spread on the market value of property in support of an excess operating levy. (d) Special districts include Metropolitan Mosquito Control, Metropolitan Council, Metropolitan Transit District, the Dakota County Community Development Agency, the Light Rail Authority, and the Vermillion River Watershed District. NOTE: Property taxes are determined by multiplying the net tax capacity by the tax capacity rate, plus multiplying the referendum market value by the market value rate. This table does not include the market value based rates. See Appendix lll. Tax Levies and Collections Collected During Collected and /or Abated 2011/12 Collection Year as of 5 -29 -12 Levy /Collect Levy Amount Percent For Percent 2007/08 2008/09 2009/10 2010/11 Total Debt Only Dakota County(a) 25.184% 25,821% 27.269% 29.149% 31.426% -0- City of Lakeville(b) 34.195 33.973 36.624 38.250 39.051 7.929% ISD No. 194 20,194,972 19,811,776 98.1 20,183,606 99.9 The net levy excludes state -aid for property tax relief and fiscal disparities, if applicable. (Lakeville)(c) 26.272 27.062 27.714 32.138 32.061 23.887 Special Districts(d) 4.996 4.916 4.987 5.199 5.562 1.521 Total 90.647% 91.772% 96.594% 104.736% 108.100% 33.337% (a) Dakota County also has a 2011112 tax rate of 0.00551% spread on the market value of property in support of debt service. (b) The City also has a 2011112 tax rate of 0.00784% spread on the market value of property in support of debt service. (c) Independent School District No. 194 (Lakeville) also has a 2011112 tax rate of 0.18932% spread on the market value of property in support of an excess operating levy. (d) Special districts include Metropolitan Mosquito Control, Metropolitan Council, Metropolitan Transit District, the Dakota County Community Development Agency, the Light Rail Authority, and the Vermillion River Watershed District. NOTE: Property taxes are determined by multiplying the net tax capacity by the tax capacity rate, plus multiplying the referendum market value by the market value rate. This table does not include the market value based rates. See Appendix lll. Tax Levies and Collections -17- Collected During Collected and /or Abated Net Collection Year as of 5 -29 -12 Levy /Collect Levy Amount Percent Amount Percent 2011/12 $20,374,917 (In Process of Collection) 2010/11 20,341,647 $19,955,441 98.1% $20,151,389 99.1% 2009/10 20,785,640 20,437,282 98.3 20,673,875 99.5 2008/09 20,463,299 20,022,607 97.8 20,399,567 99.7 2007/08 20,194,972 19,811,776 98.1 20,183,606 99.9 The net levy excludes state -aid for property tax relief and fiscal disparities, if applicable. The net levy is the basis for computing the tax capacity rates. See Appendix lit. -17- FUNDS ON HAND As of April 30, 2012 Funds General Special Revenue Debt Service: G.O. Supported by Taxes G.O. Supported by Special Assessments G.O. Supported by Tax Increment G.O. State -Aid Road Bonds Ice Arena Revenue Capital Projects Liquor Utility internal Service Escrow Total CITY INVESTMENTS Investment Policy Cash and Investments $ 6,143,033 941.172 830,169 231,577 527,326 28,043 144,746 13, 502,156 4,348,147 8,466,423 1,282,369 5,885,916 $42,331,077 Investments shall be undertaken so as to insure the preservation of capital in the overall portfolio. Safety of principal is the foremost objective. Liquidity and yield are also important considerations. It is essential that money is always available when needed; therefore, the City's investment goal is to maximize yield while scheduling maturity dates to coincide with expenditure needs. The City's investment portfolio shall be designed to attain a market - average rate of return during budgetary and economic cycles, taking into account the City's investment risk constraint and the cash flow characteristics of the portfolio. Each individual participating in the investment process shall seek to act responsibly as custodians of the public trust. Investment officials shall avoid any transaction that might impair public confidence in the City's ability to govern effectively. Investment Procedures Cash management is essential to the City's investment program. The Finance Department has responsibility to organize and establish procedures for effective cash management, based on the following guidelines: 1. Each morning, cash balances will be prepared based on cash received the previous day, warrants paid the previous day and sizable checks or wire transfers that present investment opportunity. 2. Each morning, the investment records will be reviewed and updated as investments mature or are purchased. 3. Each month, the investment records will be balanced to the financial records. 4. Interest earnings will be allocated to the various City fund. 5. The General Fund will be allocated a management fee equal to one percent of the investment earnings. Current Cash and Investments As of April 30, 2012, the City's portfolio had a book value of $42,000,196 versus a cost to the City of $42,331,077. The composition of the portfolio was as follows: 2.8% cash or money market funds, 31.0% in certificates of deposit and 66.2% held in government agency securities. The portfolio had a maturity schedule as follows: Year Cost Percent of Total Census Year Liquid $ 1,187,178 2.8% 2012 13,298,837 31.4 2013 14,001,772 33.1 2014 5,107,462 12.1 2015 3,548,836 8.4 2016 3,570,450 8.4 2017 -2024 1,616,542 3.8 Total $42,331,077 100.0% GENERAL INFORMATION CONCERNING THE CITY The City of Lakeville is located in southern Dakota County, approximately 20 miles south of downtown Minneapolis and St. Paul. The area of the City is approximately 38 square miles. The following chart shows Lakeville's population growth since 1970: Source U.S. Census Bureau, hap://www.census.pov -19- Percentage of Census Year Population Increase in Population 2010 55,954 29.7% 2000 43,128 73.5 1990 24,854 68.0 1980 14,790 95.7 1970 7,556 -- Source U.S. Census Bureau, hap://www.census.pov -19- Employment As a part of the Minneapolis -Saint Paul metropolitan area, Lakeville's labor market is drawn from many of the surrounding communities; and, conversely, many City residents commute to other areas of the Minneapolis -Saint Paul metropolitan area for work. Major employers located in the City of Lakeville are listed below: Employer Independent School District No. 194 (Lakeville) Ryt -Way Industries, Inc. ConAgra Store Brands Target Despatch industries, Inc. Imperial Plastics, Inc. Malt -O -Meal Life Time Fitness City of Lakeville Menasha Corporation Fleet Farm Image Trend Jeff Belzers Chev- Dodge -Kia Verified Credentials, Inc. National Polymers, Inc. Hearth & Home Technologies, Inc. Product/Service Approximate Number of Employees Public education 1,273 Food service contractors 750 Breakfast cereal manufacturing 515 Retail 360 Industrial furnace and oven manufacturing 300 Plastics material and resin manufacturing 260 Cereal production 250 Fitness clubs 230 City government 201 Corrugated box manufacturing 194 Retail 180 Computer programming 141 Auto dealership 110 Credit bureau 106 Plastics material and resin manufacturing 100 Fireplaces /metal work 80 Source: City of Lakeville, Minnesota. Retail Sales and Effective Buying Income (EBI) for Dakota County The 2011 median household EBI for the State of Minnesota is $45,084. Source: Claritas, Inc. -20- Total Retail Total Median Sales ($000) EBI 000 Household EBI 2011 $6,784,232 $10,387,368 $56,655 2010 6,786,831 10,287,060 56,964 2009 6,197,129 10,543,345 59,620 2008 6,694,404 10,270,100 57,581 2007 6,836,681 10,124,173 56,622 The 2011 median household EBI for the State of Minnesota is $45,084. Source: Claritas, Inc. -20- Labor Force Data May 2012 May 2011 Civilian Unemployment Civilian Unemployment Labor Force Rate Labor Force Rate City of Lakeville 31,412 4.7% 31,116 5.3% Dakota County 233,088 4.9 231,443 5.8 State of Minnesota 2,973,291 5.2 2,981,492 6.1 Source: Minnesota Department of Employment and Economic Development, http : //www.positivelvminnesota.com/ 2012 data are preliminary. Commerce and Industry Building construction and commercial /industrial development initiated and /or completed within the past 24 months has been as follows: New Permits in 2010 and 2011 (in excess of $250,000) Business Product/Service Valuation Wal -Mart Retail $8,495,000 Goodwill Retail 1,400,000 Lakeville Orthodontics Medical 545,000 Expansion or Remodel Building Permits in 2010 and 2011 (in excess of $250,000) Business Product/Service Valuation Gander Mountain Retail $2,400,000 ImageTrend Software Development 2,090,000 Malt -O -Meal Admin. Offices/Technology Center 1,800,000 Argonne Village Multi- tenant Retail 477,000 Timbercrest Multi- tenant Retail 385,000 Pizza Ranch Restaurant 300,000 Minnesota School of Business Private Business School 275,000 Computer Science Corp Mail Transport/Equipment Service Center 260,000 Dayton Freight Freight Carrier 260,000 McDonalds Corp Restaurant 250,000 Walmart is constructing a new 152,000 square -foot store on Keokuk Avenue near the County Road 70/1 -35 interchange, which is anticipated to be completed in the Fall of 2012. Stonehenge Development completed construction in February 2012 of a new 20,000 square - foot store that is being leased to Goodwill. This new commercial retail building is located on Kenrick Avenue south of Kenwood Trail. Gander Mountain recently completed a renovation to its retail store that serves as a firearms training center. -21- The Malt -O -Meal Company acquired an existing 83,000 square -foot office building in the City in October 2009, located in the Fairfield Business Campus, where they currently have over 240 employees. Malt -O -Meal also acquired an adjacent 5 acres of undeveloped land that will allow for future expansion of this facility, as well as the possible relocation of additional corporate staff. ImageTrend, a local software development company, purchased 3.4 acres of land from the City adjacent to the company's existing 35,000 square -foot office building in 2009. The land will accommodate the construction of up to 50,000 square feet of additional office space over the next four years. A 24,000 square -foot expansion to their existing building was completed in January 2012. The new facility expansion will result in the ability to hire up to 100 additional employees for the company, bringing the total employment to approximately 225 people. First Industrial completed a 285,000 square -foot warehouse distribution facility occupied by Uponor in April 2009. FR /CAL Interstate South LLC developed a 282,000 square -foot warehouse distribution building that is being marketed for lease. 163,000 square feet of this distribution warehouse was recently leased by Computer Sciences Corporation and created approximately 35 new jobs. In 2011, 580,250 square feet of industrial space was purchased or leased in Lakeville. Some of the predominate tenants /owners include Genpack (210,000 square feet); CSC (First Park Spec. Building) (160,000 square feet); and Despatch Industries (68,000 square feet). In 2012, ConAgra Foods was issued a permit valued at $1.5 million to construct a 27,000 square -foot warehouse addition to their existing manufacturing plant in Lakeville. The addition replaces warehouse space the company previously leased in the City of Shakopee, Minnesota. The Lakeville facility improves ConAgra's shipping and logistics operations at this plant. Residential Development The City is reliant upon regional sanitary sewer and the allocation of Metropolitan Urban Service Area (MUSA) from the Metropolitan Council for future urban growth. To accommodate the City's forecasted 2030 growth, the City has allocated its MUSA in three stages: MUSA Expansion Areas A (2010 or thereafter) and B (2015 or thereafter), and the Urban Reserve (2020 or thereafter). As of May 31, 2012, there were 490 vacant single family lots and 289 vacant townhome unit lots that have been final platted but not yet built upon. A total of 2,172 acres of residentially zoned land is available within the current MUSA, including 521 acres of single family zoned property, 206 acres of single and two family zoned property, 627 acres of townhome zoned property, and 341 acres of Planned Urban Development. -22- Building Permit Summary Beginning in 2004, the total permits include electrical permits Financial Institutions Financial institutions located within the City include Anchor Bank, Bank of the West, Kleinbank, Lakeview Bank, M &I Marshall and Ilsley Bank, New Market Bank, Wells Fargo Bank, Provincial Bank, Sterling State Bank, U.S. Bank, TCF National Bank, Affinity Plus Credit Union, Citizens Bank, Bremer Bank, Guaranty Bank, Inter Bank, and Merchants Bank. Education The City is served by three independent school districts: Independent School District No. 192 (Farmington), Independent School District No. 194 (Lakeville), and Independent School District No. 196 (Rosemount -Apple Valley- Eagan). Nine elementary schools, three middle schools, and two high schools are located in the City. Two private elementary schools are also located in the City. Lakeville residents and businesses have access to a number of post- secondary programs and institutions, many of which provide customized training programs for local companies. Inver Hills Community College and Dakota County Technical College are located minutes away, while the Minneapolis /Saint Paul metropolitan area offers a variety of colleges, universities and vocational schools. GOVERNMENTAL ORGANIZATION AND SERVICES Lakeville has been a municipal corporation since 1967 and became a statutory City on January 1, 1974. The City's governing body consists of a Mayor and four Council members, all elected at large. The Mayor serves a two -year term of office and Council members serve overlapping four -year terms. -23- Number of Residential Total Permits* Dwelling Units Number Value Number Value 2012 (to 5 -31) 1,473 $ 38,132,171 97 $ 28,245,000 2011 4,005 87,670,949 235 51,751,000 2010 4,017 54,308,186 140 38,718,000 2009 3,955 72,782,473 174 41,010,000 2008 4,692 125,760,060 416 71,312,000 2007 7,015 140,258,386 378 72,128,000 2006 7,515 173,001,636 444 101,174,955 2005 6,617 195,256,366 665 131,774,000 2004 8,192 239,918,385 906 160,871,000 2003 4,913 250,107,516 787 149,604,000 Beginning in 2004, the total permits include electrical permits Financial Institutions Financial institutions located within the City include Anchor Bank, Bank of the West, Kleinbank, Lakeview Bank, M &I Marshall and Ilsley Bank, New Market Bank, Wells Fargo Bank, Provincial Bank, Sterling State Bank, U.S. Bank, TCF National Bank, Affinity Plus Credit Union, Citizens Bank, Bremer Bank, Guaranty Bank, Inter Bank, and Merchants Bank. Education The City is served by three independent school districts: Independent School District No. 192 (Farmington), Independent School District No. 194 (Lakeville), and Independent School District No. 196 (Rosemount -Apple Valley- Eagan). Nine elementary schools, three middle schools, and two high schools are located in the City. Two private elementary schools are also located in the City. Lakeville residents and businesses have access to a number of post- secondary programs and institutions, many of which provide customized training programs for local companies. Inver Hills Community College and Dakota County Technical College are located minutes away, while the Minneapolis /Saint Paul metropolitan area offers a variety of colleges, universities and vocational schools. GOVERNMENTAL ORGANIZATION AND SERVICES Lakeville has been a municipal corporation since 1967 and became a statutory City on January 1, 1974. The City's governing body consists of a Mayor and four Council members, all elected at large. The Mayor serves a two -year term of office and Council members serve overlapping four -year terms. -23- The present Mayor and Council members are Expiration of Term Mark Bellows Mayor December 31, 2012 Laurie Rieb Member December 31, 2012 Kerrin Swecker Member December 31, 2012 Matt Little Member December 31, 2014 Colleen Ratzlaff LaBeau Member December 31. 2014 Mr. Steven C. Mielke is the City Administrator and has served in this capacity since June 2004. The City Administrator is responsible for the daily management of City business and the administration of policy as directed by the Council. Mr. Mielke was previously the City Manager for the City of Hopkins, Minnesota, and has 24 years of experience in local government. The City's Finance Director, Mr. Dennis Feller, has been with the City in that capacity since 1977. Mr. Feller has a Bachelor of Science degree in accounting, with minors in mathematics and data processing from Bemidji State University. He is an active member and past President of the Minnesota Government Finance Officers Association, Ms. Charlene Friedges has been the City Clerk since September 1989 and is currently an officer with the Minnesota Clerks and Finance Officer's Association. Mr. David L. Olson is the Community and Economic Development Director, a position he formerly held in Farmington, Minnesota, The City's full -time equivalent employment is 201 persons Public Utilities The City provides water and sewer facilities to a majority of its residential areas. The City's present water system includes 17 wells and eight water storage facilities with a total capacity of 8.5 million gallons. The City's water treatment plant has a production capacity of 20 million gallons of water per day. The Metropolitan Council Environmental Service completed expansion in 2008 of the Empire plant, which increases the plant's capacity to 48 million gallons per day. The plant meets discharge standards. Lakeville's daily use of the plant is approximately 4.0 million gallons per day of the total capacity. Other Services The City's Police Department consists of 52 full -time officers and 15 police reservists The Fire Department has four stations and is served by 85 trained volunteers. The City has a fire rating of 4 for insurance purposes. This results in a significant reduction of fire insurance premiums for commercial and industrial buildings and apartments. Additional City facilities include 62 public parks (which include 40 playgrounds), 18 conservation areas, 3 municipal swimming beaches, 6 outdoor ice rinks (fully boarded), 3 indoor ice rinks, and approximately 100 miles of paved trails and sidewalks. -24- The City operates three liquor stores that are located adjacent to major highways. The two facilities located at County Road 46 (160' Street) and Kenrick Avenue and at County Road 46 (160th Street) and Galaxie Avenue are owned by the City; retail space for the store located at County Road 50 (Kenwood Trail) and Dodd Boulevard is leased. Minnesota Statutes prohibit private off -site liquor operations municipal liquor store. Sales for 2011 were $14,373,261 transfers of $1,225,708. Sales as of May 31, 2012 were (5.6 %) increase over the same period in 2011. Employee Pensions if the City owns and operates a resulting in net income before $5,520,856, which is a $294,670 Employees of the City are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost - sharing multiple - employer retirement plans. GERF members belong to either the Coordinated Plan or the Basic Plan, Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers are covered by the PEPFF. The City's contributions for the past five years are as follows: GERF PEPFF 2011 $596,142 $650,578 2010 583,884 621,658 2009 578,225 602,343 2008 575,007 524,673 2007 525,627 438,592 For more information regarding the liability of the City with respect to its employees, please reference Note 18, Defined Employee Benefit Pension Plans — Statewide, of the City's Comprehensive Annual Financial Report for fiscal year ended December 31, 2011, an excerpt of which is included as Appendix IV of this Official Statement. Other Post - Employment Benefits The Governmental Accounting Standards Board (GASB) has issued Statement No. 45, Accounting and Financial Reporting by Employers for Post - employment Benefits Other Than Pensions (GASB 45), which addresses how state and local governments must account for and report their obligations related to post - employment healthcare and other non - pension benefits (referred to as Other Post - Employment Benefits or "OPEB "). The City operates a single - employer defined benefit plan that provides medical and dental insurance to eligible employees through the City's health insurance plan. The City currently finances the plan on a pay -as- you -go basis. During the fiscal year ended December 31, 2011, the City contributed $11,356 to the plan. 25- Components of the City's annual OPEB cost, the amount actually contributed to the plan, and the changes in the City's net OPEB obligation for fiscal year ended December 31, 2011 are as follows: Annual required contribution $ 75,006 Interest on net OPEB obligation 3,888 Adjustment to annual required contribution (5,613 Annual OPEB cost (expense) $ 73,281 Contributions made (11,356) Increase in net OPEB obligation $ 61,925 Net OPEB obligation — beginning of year 97,199 Net OPEB obligation — end of year $152,124 According to the City's most recent actuarial valuation date (January 1, 2008), the City's unfunded actuarial accrued liability (UAAL) was $588,458. For more information concerning the City's OPES obligation, please reference Note 14, Other Post - Employment Benefits (OPEB) Plan of the City's Comprehensive Annual Financial Report as of December 31, 2011, an excerpt of which is included as Appendix IV to this Official Statement. (The Balance of This Page Has Been Intentionally Left Blank) 26- General Fund Budget -27- 2011 2012 2013 Estimated Adopted Estimated Revenues: General Property Taxes $16,579,487 $16,153,641 $16,726,570 Licenses and Permits 1,132,102 972,953 1,153,753 Intergovernmental 674,631 646,267 605,705 Charges for Services 1,388,300 1,526,681 1,472,297 Court Fines 275,877 279,301 296,455 Investment Income 92,400 91,795 104,313 Miscellaneous 60,022 58,857 71.284 Total Revenues $20.202.819 $19.729.495 $20,430.377 Expenditures: Mayor and Council $ 92,678 $ 94,724 $ 95,535 Committees and Commissions 64,361 66,403 68,042 City Administration 318,901 321,527 320,529 City Clerk 114,422 179,068 160,143 Legal Counsel 65,132 65,132 65,132 Planning 343,264 343,905 342,540 Community and Economic Development 309,202 300,178 294,366 Inspections 836,364 775,986 761,559 General Government Facilities 464,249 485,805 454,615 Finance 559,976 614,709 616,501 Information Systems 448,548 482,719 494,430 Human Resources 310,926 361,001 354,506 Insurance 289,532 223.275 223,275 Police 8,552,695 8,619,053 8,691,921 Fire 1,394,017 1,353,848 1,407,095 Engineering 707,546 728,506 735,146 Streets 2,533,428 2,576,134 2,655,032 Parks 2,147,795 2,188,320 2,172,447 Recreation 589,983 599,246 640,615 Arts Center 451,932 445,355 450,919 Other -- 104,000 105,000 Total Expenditures $20.594.951 $20.928,894 $21,109.348 Other Financing Sources (Uses): Transfer from Other Funds $ 632,848 $ 680,253 $ 722,205 Transfer to Other Funds -- Total Other Financing Sources (Uses) $ 632.848 $ 680,253 $ 722.205 Net Change in Fund Balance 240,716 (519,146) 43,234 Fund Balance, January 1 $ 9,395,928 $ 9,636,644 $ 9,117,498 Fund Balance, December 31 L2&36 644 $ 9j 17 498 $ 9.160.732 -27- ►_R -TA 7, - AT 1 PROPOSED FORMS OF LEGAL OPINIONS 7 f 1 OORSEY rcRser R WHJNEV Lta City of Lakeville, Minnesota [Original Purchaser] Re: $6,805,000 General Obligation Street Reconstruction Bonds, Series 2012A City of Lakeville, Minnesota Ladies and Gentlemen: As Bond Counsel in connection with the authorization, issuance and sale by the City of Lakeville, Minnesota (the City), of the obligations described above, dated, as originally issued, as of August 15, 2012 (the Bonds), we have examined certified copies of certain proceedings taken, and certain affidavits and certificates furnished, by the City in the authorization, sale and issuance of the Bonds, including the form of the Bonds. As to questions of fact material to our opinion, we have assumed the authenticity of and relied upon the proceedings, affidavits and certificates famished to us without undertaking to verify the same by independent investigation. From our examination of such proceedings, affidavits and certificates and on the basis of existing law, it is our opinion that: 1. The Bonds are valid and binding general obligations of the City, enforceable in accordance with their terms. 2. The principal of and interest on the Bonds are payable from ad valorem taxes heretofore duly levied on all taxable property in the City, which have been pledged and appropriated for this purpose, but if necessary for payment thereof, additional ad valorem taxes are required by law to be levied on all such property, which taxes are not subject to any limitation as to rate or amount. 3. Interest on the Bonds (a) is not includable in gross income for federal income tax purposes or in taxable net income of individuals, estates or trusts for Minnesota income tax purposes; (b) is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax; (c) is not an item of tax preference includable in alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum tax applicable to individuals, estates and trusts; and (d) is includable in adjusted current earnings of corporations in determining alternative minimum taxable income for purposes of federal and Minnesota alternative minimum taxes. The opinions expressed in paragraphs 1 and 2 above are subject, as to enforceability, to the effect of any state or federal laws relating to bankruptcy, insolvency, reorganization, moratorium or creditors' rights and the application of equitable principles, whether considered at law or in equity. The opinions expressed in paragraph 3 above are subject to the condition of the City's compliance with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon may be, and continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with these continuing requirements. Its failure to do so could result in the inclusion of interest on the Bonds in federal gross income and in Minnesota taxable net income, retroactive to the date of issuance of the Bonds. 1 -1 Except as stated in this opinion, we express no opinion regarding federal, state or other tax consequences to holders of the Bonds. We have not been asked, and have not undertaken, to review the accuracy, completeness or sufficiency of any offering materials relating to the Bonds, and, accordingly, we express no opinion with respect thereto. Dated this day of August, 2012. Very truly yours, 1 -2 _ >» OORSEY DORSEY E WH5TNEY LP City of Lakeville, Minnesota [Original Purchaser] Re: $23,635,000 General Obligation Refunding Bonds, Series 2012B City of Lakeville, Minnesota Ladies and Gentlemen: As Bond Counsel in connection with the authorization, issuance and sale by the City of Lakeville, Minnesota (the City), of the obligations described above, dated, as originally issued, as of August 15, 2012 (the Bonds), we have examined certified copies of certain proceedings taken, and certain affidavits and certificates furnished, by the City in the authorization, sale and issuance of the Bonds, including the form of the Bonds. As to questions of fact material to our opinion, we have assumed the authenticity of and relied upon the proceedings, affidavits and certificates furnished to us without undertaking to verify the same by independent investigation. From our examination of such proceedings, affidavits and certificates and on the basis of existing law, it is our opinion that: 1. The Bonds are valid and binding general obligations of the City, enforceable in accordance with their terms. 2. The principal of and interest on the Bonds are payable from ad valorem taxes heretofore duly levied on all taxable property in the City, which have been pledged and appropriated for this purpose, but if necessary for payment thereof, additional ad valorem taxes are required by law to be levied on all such property, which taxes are not subject to any limitation as to rate or amount. interest on the Bonds (a) is not includable in gross income for federal income tax purposes or in taxable net income of individuals, estates or trusts for Minnesota income tax purposes; (b) is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax; (c) is not an item of tax preference includable in alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum tax applicable to individuals, estates and trusts; and (d) is includable in adjusted current earnings of corporations in determining alternative minimum taxable income for purposes of federal and Minnesota alternative minimum taxes. The opinions expressed in paragraphs 1 and 2 above are subject, as to enforceability, to the effect of any state or federal laws relating to bankruptcy, insolvency, reorganization, moratorium or creditors' rights and the application of equitable principles, whether considered at law or in equity. The opinions expressed in paragraph 3 above are subject to the condition of the City's compliance with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon may be, and continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with these continuing requirements. Its failure to do so could result in the inclusion of interest on the Bonds in federal gross income and in Minnesota taxable net income, retroactive to the date of issuance of the Bonds. 1 -3 Except as stated in this opinion, we express no opinion regarding federal, state or other tax consequences to holders of the Bonds. We have not been asked, and have not undertaken, to review the accuracy, completeness or sufficiency of any offering materials relating to the Bonds, and, accordingly, we express no opinion with respect thereto. Dated this _ day of August, 2012. Very truly yours, IQ! /_12:24ZR Ia]OAI CONTINUING DISCLOSURE COVENANTS Continuin¢ Disclosure (a) Pumose and Beneficiaries To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit the Purchaser and other participating underwriters in the primary offering of the Bonds to comply with amendments to Rule 15c2- 12 promulgated by the SEC under the Securities Exchange Act of 1954 (17 C.F.R. § 240.15c2 -12), relating to continuing disclosure (as in effect and interpreted from time to time, the Rule), which will enhance the marketability of the Bonds, the City hereby makes the following covenants and agreements for the benefit of the Owners (as hereinafter defined) from time to time of the Outstanding Bonds. The City is the only obligated person in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. The City has complied in the past five years in all material respects with any undertaking previously entered into by it under the Rule. If the City fails to comply with any provisions of this section, any person aggrieved thereby, including the Owners of any Outstanding Bonds, may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any agreement or covenant contained in this section, including an action for a writ of mandamus or specific performance. Direct, indirect, consequential and punitive damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained herein, in no event shall a default under this section constitute a default under the Bonds or under any other provision of this resolution. As used in this section, Owner or Bondowner means, in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any Beneficial Owner (as hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, Beneficial Owner means, in respect of a Bond, any person or entity which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through nominees, depositories or other intermediaries), or (ii) is treated as the owner of the Bond for federal income tax purposes. (b) Information To Be Disclosed The City will provide, in the manner set forth in subsection (c) hereof, either directly or indirectly through an agent designated by the City, the following information at the following times: (1) on or before 365 days after the end of each fiscal year of the City, commencing with the fiscal year ending December 31, 2012, the following financial information and operating data in respect of the City (the Disclosure Information): (A) the audited financial statements of the City for such fiscal year, prepared in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Minnesota law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City, noting the discrepancies therefrom and the effect thereof, and certified as to accuracy and completeness in all material respects by the fiscal officer of the City; and (B) to the extent not included in the financial statements referred to in paragraph (A) hereof, the information for such fiscal year or for the period most recently available of the type contained in the Official Statement under headings: City Property Values; City Indebtedness; and City Tax Rates, Levies and Collections. Notwithstanding the foregoing paragraph, if the audited financial statements are not available by the date specified, the City shall provide on or before such date unaudited financial statements in the format II -1 required for the audited financial statements as part of the Disclosure Information and, within 10 days after the receipt thereof, the City shall provide the audited financial statements. Any or all of the Disclosure Information may be incorporated by reference, if it is updated as required hereby, from other documents, including official statements, which have been filed with the SEC or have been made available to the public on the Internet Web site of the Municipal Securities Rulemaking Board ( "MSRB "). The City shall clearly identify in the Disclosure Information each document so incorporated by reference. If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure Information need no longer be provided if the City includes in the Disclosure Information a statement to such effect; provided, however, if such operations have been replaced by other City operations in respect of which data is not included in the Disclosure Information and the City determines that certain specified data regarding such replacement operations would be a Material Fact (as defined in paragraph (2) hereof), then, from and after such determination, the Disclosure Information shall include such additional specified data regarding the replacement operations. If the Disclosure Information is changed or this section is amended as permitted by this paragraph (b)(1) or subsection (d), then the City shall include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. (2) In a timely manner not in excess of ten business days after the occurrence of the event, notice of the occurrence of any of the following events (each a "Material Fact "): (A) Principal and interest payment delinquencies; (B) Non - payment related defaults, if material; (C) Unscheduled draws on debt service reserves reflecting financial difficulties; (D) Unscheduled draws on credit enhancements reflecting financial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (G) Modifications to rights of security holders, if material; (H) Bond calls, if material, and tender offers; (I) Defeasances; (7) Release, substitution, or sale of property securing repayment of the securities, if material; (IL) Rating changes; (L) Bankruptcy, insolvency, receivership or similar event of the obligated person: (.M) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (N) Appointment of a successor or additional trustee or the change of name of a trustee, if material. As used herein, for those events that must be reported if material, an event is "material" if it is an event as to which a substantial likelihood exists that a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor from the Official Statement, information disclosed hereunder or information generally available to the public. Notwithstanding the foregoing sentence, an event is also "material" if it is an event that would be deemed material for purposes of the purchase, holding or sale of a Bond within the meaning of applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event. 11 -2 For the purposes of the event identified in (L) hereinabove, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (3) In a timely manner, notice of the occurrence of any of the following events or conditions: (A) the failure of the City to provide the Disclosure Information required under paragraph (b)(1) at the time specified thereunder; (B) tl.e amendment or supplementing of this section pursuant to subsection (d), together with a copy of such amendment or supplement and any explanation provided by the City under subsection (d)(2); (C) the termination of the obligations of the City under this section pursuant to subsection (d); (D) any change in the accounting principles pursuant to which the financial statements constituting a portion of the Disclosure Information are prepared; and (E) any change in the fiscal year of the City. (c) Manner of Disclosure (1) The City agrees to make available to the MSRB, in an electronic format as prescribed by the MSRB from time to time, the information described in subsection (b). (2) All documents provided to the MSRB pursuant to this subsection (c) shall be accompanied by identifying information as prescribed by the MSRB from time to time. (d) Tern: Amendments: Interpretation (1) The covenants of the City in this section shall remain in effect so long as any Bonds are Outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this section shall terminate and be without further effect as of anv date on which the City delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or proceedings, the failure of the City to comply with the requirements of this section will not cause participating underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. (2) This section (and the form and requirements of the Disclosure Information) may be amended or supplemented by the City from time to rime, without notice to (except as provided in paragraph (c)(3) hereof) or the consent of the Owners of any Bonds, by a resolution of this Council filed in the office of the recording officer of the City accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection with a change in circumstances that arises from a change in law or regulation or a change in the identity, nature or status of the City or the type of operations conducted by the City, or (b) is required by, or better complies with, the provisions of 11 -3 paragraph (b)(5) of the Rule; (ii) this section as so amended or supplemented would have complied with the requirements of paragraph (b)(5) of the Rule at the time of the primary offering of the Bonds, giving effect to any change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. If the Disclosure Information is so amended, the City agrees to provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, , of the change in the type of financial information or operating data being provided hereunder. (3) This section is entered into to comply with the continuing disclosure provisions of the Rule and should be construed so as to satisfy the requirements of paragraph (b)(5) of the Rule. W APPENDIX 111 SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND MINNESOTA REAL PROPERTY VALUATION (effective through levy year 2011 /payable year 2012) Following is a summary of certain statutory provisions effective through levy year 2011 /payable year 2012 relative to tax levy procedures, tax payment and credit procedures, and the mechanics of real property valuation. The summary does not purport to be inclusive of all such provisions or of the specific provisions discussed, and is qualified by reference to the complete text of applicable statutes, rules and regulations of the State of Minnesota. Property Valuations (Chapter 273, Minnesota Statutes) Assessor's Estimated Market Value Each parcel of real property subject to taxation must, by statute, be appraised at least once every five years as of January 2 of the year of appraisal. With certain exceptions, all property is valued at its market value, which Is the value the assessor determines to be the price the property to be fairly worth, and which is referred to as the "Estimated Market Value." Taxable Market Value The Taxable Market Value is the value that property taxes are based on, after all reductions, limitations, exemptions and deferrals. It is also the value used to calculate a municipality's legal debt limit. Indicated Market Value The Indicated Market Value is determined by dividing the Taxable Market Value of a given year by the same year's sales ratio determined by the State Department of Revenue. The Indicated Market Value serves to eliminate disparities between individual assessors and equalize property values statewide. Net Tax Capacity The Net Tax Capacity is the value upon which net taxes are levied, extended and collected. The Net Tax Capacity is computed by applying the class rate percentages specific to each type of property classification against the Taxable Market Value. Class rate percentages vary depending on the type of property as shown on the last page of this Appendix. The formulas and class rates for converting Taxable Market Value to Net Tax Capacity represent a basic element of the State's property tax relief system and are subject to annual revisions by the State Legislature. A homestead market value exclusion is applied prior to determining a property's net tax capacity, for property classified as Class 1a or 1 b and Class 2a. Property taxes are determined by multiplying the Net Tax Capacity by the tax capacity rate, plus multiplying the referendum market value by the market value rate. Property Tax Payments and Delinquencies (Chapters 275, 276, 277, 279 -282 and 549, Minnesota Statutes) Ad valorem property taxes levied by local governments in Minnesota are extended and collected by the various counties within the State. Each taxing jurisdiction is required to certify the annual tax levy to the county auditor within five (5) working days after December 20 of the year preceding the collection year. A listing of property taxes due is prepared by the county auditor and turned over to the county treasurer on or before the first business day in March. The county treasurer is responsible for collecting all property taxes within the county. Real estate and personal property tax statements are mailed out by March 31. One -half (1/2) of the taxes on real property is due on or before May 15. The remainder is due on or before October 15. Real property taxes not paid by their due date are assessed a penalty that, III -1 depending on the type of property, increases from 2% to 4% on the day after the due date. In the case of the first installment of real property taxes due May 15, the penalty increases to 4% or 8% on June 1. Thereafter, an additional 1% penalty shall accrue each month through October 1 of the collection year for unpaid real property taxes. In the case of the second installment of real property taxes due October 15, the penalty increases to 6% or 8% on November 1 and increases again to 8% or 12% on December 1. Personal property taxes remaining unpaid on May 16 are deemed to be delinquent and a penalty of 8% attaches to the unpaid tax. However, personal property that is owned by a tax - exempt entity, but is treated as taxable by virtue of a lease agreement, is subject to the same delinquent property tax penalties as real property. On the first business day of January of the year following collection all delinquencies are subject to an additional 2% penalty, and those delinquencies outstanding as of February 15 are filed for a tax lien judgment with the district court. By March 20 the county auditor files a publication of legal action and a mailing of notice of action to delinquent parties. Those property interests not responding to this notice have judgment entered for the amount of the delinquency and associated penalties. The amount of the judgment is subject to a variable interest determined annually by the Department of Revenue, and equal to the adjusted prime rate charged by banks but in no event is the rate less than 10% or more than 14 %. Property owners subject to a tax lien judgment generally have five years (5) in the case of all property located outside of cities or in the case of residential homestead, agricultural homestead and seasonal residential recreational property located within cities or three (3) years with respect to other types of property to redeem the property. After expiration of the redemption period, unredeemed properties are declared tax forfeit with title held in trust by the State of Minnesota for the respective taxing districts. The county auditor, or equivalent thereof, then sells those properties not claimed for a public purpose at auction. The net proceeds of the sale are first dedicated to the satisfaction of outstanding special assessments on the parcel, with any remaining balance in most cases being divided on the following basis: county - 40 %; town or city - 20 %; and school district - 40 %. Property Tax Credits (Chapter 273, Minnesota Statutes) In addition to adjusting the taxable value for various property types, primary elements of Minnesota's property tax relief system are: property tax levy reduction aids; the renters credit, which relates property taxes to income and provides relief on a sliding income scale; and targeted tax relief, which is aimed primarily at easing the effect of significant tax increases. The circuit breaker credit and targeted credits are reimbursed to the taxpayer upon application by the taxpayer. Property tax levy reduction aid includes educational aids, local governmental aid, equalization aid, county program aid and disparity reduction aid. Debt Limitations All Minnesota municipalities (counties, cities, towns and school districts) are subject to statutory "net debt" limitations under the provisions of Minnesota Statutes, Section 475.53. Net debt is defined as the amount remaining after deducting from gross debt the amount of current revenues that are applicable within the current fiscal year to the payment of any debt and the aggregate of the principal of the following: 1. Obligations issued for improvements that are payable wholly or partially from the proceeds of special assessments levied upon benefited property. 2. Warrants or orders having no definite or fixed maturity. 3. Obligations payable wholly from the income from revenue producing conveniences. III -2 4. Obligations issued to create or maintain a permanent improvement revolving fund. 5. Obligations issued for the acquisition and betterment of public waterworks systems, and public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which revenue is or may be derived. 6. Certain debt service loans and capital loans made to school districts. 7. Certain obligations to repay loans. & Obligations specifically excluded under the provisions of law authorizing their issuance. 9. Certain obligations to pay pension fund liabilities. 10. Debt service funds for the payment of principal and interest on obligations other than those described above. 11. Obligations issued to pay judgments against the municipality. Levies for General Obligation Debt (Sections 475.61 and 475.74, Minnesota Statutes) Any municipality that issues general obligation debt must, at the time of issuance, certify levies to the county auditor of the county(ies) within which the municipality is situated. Such levies shall be in an amount that if collected in full will, together with estimates of other revenues pledged for payment of the obligations, produce at least five percent in excess of the amount needed to pay principal and interest when due. Notwithstanding any other limitations upon the ability of a taxing unit to levy taxes, its ability to levy taxes for a deficiency in prior levies for payment of general obligation indebtedness is without limitation as to rate or amount. Metropolitan Revenue Distribution (Chapter 473F, Minnesota Statutes) "Fiscal Disparities Law" The Charles R. Weaver Metropolitan Revenue Distribution Act, more commonly known as "Fiscal Disparities," was first implemented for taxes payable in 1975. Forty percent of the increase in commercial - industrial (including public utility and railroad) net tax capacity valuation since 1971 in each assessment district in the Minneapolis /St. Paul seven - county metropolitan area (Anoka, Carver, Dakota, excluding the City of Northfield, Hennepin, Ramsey, Scott, excluding the City of New Prague, and Washington Counties) is contributed to an area -wide tax base. A distribution index, based on the factors of population and real property market value per capita, is employed in determining what proportion of the net tax capacity value in the area - wide tax base shall be distributed back to each assessment district. III -3 STATUTORY FORMULAE: CONVERSION OF TAXABLE MARKET VALUE (TMV) TO NET TAX CAPACITY FOR MAJOR PROPERTY CLASSIFICATIONS Property Type Residential Homestead (1a) Up to $500,000 Over $500,000 Residential Non - homestead Single Unit (4bl) Up to $500,000 Over $500,000 1 -3 unit and undeveloped land (4bl ) Market Rate Apartments Regular (4a) Low - Income (4d) Commercial /Industrial /Public Utility (3a) Up to $150,000 Over $150,000 Electric Generation Machinery Commercial Seasonal Residential Homestead Resorts (1c) Up to $600,000 $600,000 - $2,300,000 Over $2,300,000 Seasonal Resorts (4c) Up to $500,000 Over $500,000 Non - Commercial (4cl) Up to $500,000 Over $500,000 Disabled Homestead (1 b) Up to $50,000 $50,000 to $500,000 Over $500,000 Agricultural Land & Buildings Homestead (2a) Up to $500,000 Over $500,000 Remainder of Farm Up to $1,140,000" Over $1,140,000 Non - homestead (21b) 1 Subject to the State General Property Tax. 2 Exempt from referendum market value tax. 3 2008 legislative increases. 2010 legislative increases. Local Tax Local Tax Local Tax Local Tax Local Tax Payable Payable Payable Payable Payable 2008 2009 2010 2011 2012 1.00% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% 1.25% 1.00% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 0.75% 0.75% 0.75% 0.75% 0.75% 1.50 % 1.50 % 1.50 % 1.50 % 1.50 % 2.00 %' 2.00 %' 2.00%' 2.00 % 2.00 % 2.00% 2.00% 2.00% 2.00% 2.00% 0.55% 0.55% 0.50% 0.50% 0.50% 1.00% 1.00% 1.00% 1.00% 1.00% 1.25 %' 1.25%' 1.25 % 1.25 %' 1.25 % 1.00%' 1.00 %' 1.00 %' 1.00%' 1.00%' 1.25%' 1.25 %' 1.25 %' 1.25 %' 1.25%' 1.00 %' 2 1.00 %' 2 1.00% 1.00 %' 2 1.00 % 2 1.25 % 2 1.25 %' 2 125 %1 2 1.25 %' 2 1.25 %' 2 0.45% 0.45% 0.45% 0.45% 0.45% 1.00% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% 1.25% 1.00% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 125% 1.25% 1.25% 0.55 % 0.55 % 0.50 % 0.50 % 0.50 % 1.00 % 1.00 % 1.00p2 1.00%2 1.00 %, 1.00 % 1.00 % 1.00 % 1.00 % 1.00 % MKI APPENDIX IV EXCERPT OF 2011 AUDITED FINANCIAL STATEMENTS The City is audited annually by an independent certified public accounting firm. Data on the following pages were extracted from the City's comprehensive annual financial report for the fiscal year ended December 31, 2011. The reader should be aware that the complete report may contain additional information which may interpret, explain or modify the data presented here. The City has been awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA) for its comprehensive annual financial report (CAFR) for the year ended December 31, 2010. The Certificate of Achievement is the highest form of recognition for excellence in State and local government financial reporting. The City has received this award every year since 1985. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report (CAFR), whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The Governmental Accounting Standards Board (GASS) issued Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions for State and Local Governments in February 2009. The statement establishes a new financial reporting model for state and local governments to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. This statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. IV -1 M KR CI R I IF I E DlImiBLIc A C C O U N T A N TS INMIEPENDENT AUDITOR'S REPORT To the City Council City of Lakeville, Mimesom PRNOPAIS I I.n— IL M onrayuo. CVA I h—, A Kam,xra4i. (lit Paul A. Wd. —k4c (TA U'Jllam I. taus. (:1'A I-- H. blhl n. CU\ Aaron I. Ni,l— ( PA tSn,mu L H�din4v. CIN We have audited the accompanying financial sbmmmts of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fand information of the City of Lakeville (the City) as of and for the year ended December 31, 2011, which collectively comprise the City's basic financial statements m listed in the table of contents. These financial statements ate the responsibility of the City's management Our responsibility is to express opinions on these financial statements based on mr audit We conducted our audit in smordence with auditing standards generally accepted in the United States of America and the standards applicable th financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial smtemems are fee of material misstatement An audit includes consideration of internal control over f arcial reporting as a basis for designing audit procedures that are appropriate in the circumeances, has not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we express no such opinion. An aud also includes examining, on a rest basis, evidence supporting the amounts and discioantas in the financial eeanrnm assessing . the accounting principles used and the significant estimates made by management, as well as condoning the overall financial statement presentation. We believe that our walk provides a reasonable basis fw our opinions. In our opinion, the financial statements referred to above present fa in all material respects, the respective financial position of the governmmal activities, the busirmas type activities, each major fund and the aggregate remaining fund information of the City as of December 31, 2011, and the respective changes in financial position and cash flows, where applicable thereof; in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1 of the notes to basic financial statements, the City has implemented Governmental Accounting Standards Board (GASB) Statement No. 54, "Fund Balance Repenting and Governmental Fund Type Definitions" during the year coded December 31, 2011. In accordance with Government Auditing Standards, we have also issued a report dated lane 21, 2012 on our consideration of the City's internal control over financial reporting and on our team of its compliance with certain provisions of laws, regulmima, anouuts, grunt agreements, and other matters. The purpose of the repot is to describe the scope of our testing of internal control ova financial reporting and compliance and the results of t testing, and not to provide an opinion an the interval connnl over financial reporting or an compliance. The report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis (MD&A) and the required supplementary information other than MD&A, u listed in the able of comma, be presented to supplement the basin financial statements. Such information, although not a pee of the basic f ream acemmmts, is required by GASB, who considers it to be an essential part of financial reporting for placing the basic financial stuemma in a appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplemenat information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the infomastion and comparing the information for consistency with manageaerlt's responses m on inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide my assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion a provide any assurence. Oa audit was conducted fa the purpose of forming opinions on the financial statements the collectively comprise the City's basic financial satemenm. The introductory section, combining and individual fund financial statements and schedules, supplemental information, and statistical notion, as limed in the able of contents, are presented for purposes of additional analysis and are not required parts of the basic financial statemrna. The combining and individual fund financial statements and schedules and supplemental information are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic fmauiai steements and certain additional procedures, including compering and reconciling such information directly to the underlying accounting and other records used to prepare the basic finmmial statements or in the basic financial Statements themselves, and other additional procedures in accordance with auditing aandanls generally accepted in the United States of America In our opinion, the information is fairly sated in all material respcets, in relation to the basic financial statements as a whole. The introductory section and statistical section have amt been subjected m the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. V 4,64 7, 1�gnA.r �(1, P.A. June 21, 2012 Iv -1 CITY OF LAKEVILLE, MINNESOTA STATEMENT OF NET ASSETS DECEMBER 31, 2011 ASSETS: Cash and investments Receivables Internal balances Inventory Prepaid items Unamortized bond issuance costs Restricted assets (temporarily): Cash and investments investments held by trustee Capital assets Non- depreciabie Depreciable, net Total capital assets Total assets Governmental Business -type 5,176,573 Activities Activities Total $ 33,407,546 $ 14,418,020 $ 47,825,566 8,362,441 2,500,974 10, 863, 415 (200,454) 200,454 100,428.268 371,304 1,464,157 1,835,461 13,100 28,387 41,487 953,725 66,390 1,020,115 1,830,000 325,750 2,155,750 948,461 948,461 24,669,187 1,800,456 26,469,643 156,503,380 102,157,847 258,661,227 181,172,567 103,958,303 285,130,870 226,858_,690 122,962,435 349,821,125 LIABILITIES: Salaries, accounts, contracts, interest, and deposits Unearned revenue Non - current liabilities Due within one year Due in more than one year Total liabilities 3,600,464 1,576,109 5,176,573 352,319 352,319 8,720,479 363,941 9,084,420 82,241,742 3,573,214 B5,814,956 94,915,004 5,513.264 100,428.268 NET ASSETS: Invested in capital assets, net of related debt Restricted for Special purposes Debt service Capital acquisition Unrestricted Total net assets 121,070,410 100,390,175 221,460,585 27,985 - 27,985 10,916,197 325,750 11,241,947 5,557,956 - 5,557,956 (5,628,862) 16,733,246 11,104,384 $ 131,943,686 $ 117,449,171 $ 249,392,857 See accompanying notes to basic financial statements. IV-2 Q E O W z o W n W aim aOA k 1 GZL7 � 9 C R d C i d Z co cv m 0 0 0 n m M m M M O wmo�nmm N nmrn m m 41 m tU mn n O m M M m N d L O nrp N MV n O K N'� V'M O N O N O w N N 4 O M m M N ' M r m lc� m m W 0 0 ce, a O V m N fA n n m oC\ N O n o mu o so o wmm M O m m In N n V' m inn r�W ai mmo to m .- v 0 N �- mv. -.-N Mmv a m omnvo o m m V N W N ca U U qa C 'v 0 V w q d U i W L U NOV h M -, N m M W n m N m N N N IM H? OM OWN ' d n In m M W N M N d n m O m M N V - N IN (A m n V V ROAM O MM (7 M M coro n °ncoN v iii nn N N r O�� M ON MIN WM M W O a O M I M N m 0 m m m O a q t O M O n I N n y N m O m N m m m n 41 m tU mn n O m M M m N d L O nrp N MV n O K N'� V'M O N O N O w N N N m U R m � r = 4 E E d E q> C m p R W p m C O O O R p o n m iy q >i R y 0 C E — ° E m >> c m 0 n. CL u� 0 q d U R q ZT. .+ q d � C W � i6 O O q O . ~ � J � m E E E D OI R o. F N d N C R c R .g. N M N N R E > R O 0 = ow R K C R m m m c c ro E n 0 R O ct d T M m a d q 'p O N j d j maa m o m c � c c c c a p � U R N � h R � R m c m Z U Z m d y m z N c E d ro N m U G R U a 0 q u O c . R a O U R d cn IV-3 O t n M N N N n O m 0 M m N N N 4 O N N N ' M r m P m m I p 0 0 ce, m O V m N M n n m oC\ N O n W M O m M In N n V' m inn to m .- v N N �- mv. -.-N Mmv m omnvo o m m V M m 0 r ONO m n tY M m O N n CNI N N m m O m m cq N N N M r t � � N d N C R c R .g. N M N N R E > R O 0 = ow R K C R m m m c c ro E n 0 R O ct d T M m a d q 'p O N j d j maa m o m c � c c c c a p � U R N � h R � R m c m Z U Z m d y m z N c E d ro N m U G R U a 0 q u O c . R a O U R d cn IV-3 Z � z 7 G .a LL7 7 W ,I tL W N ax^ m Oum Ua3� W a1 y w E �I C > tL O C7 0 y EEcI O u. Z � c O U C O V m m O w O ml c al u V' mco m0 "t 't m ON m n'rn v n (c 'D m V' w N@ n0 M V -nM0)m O mN Vm m V' to V MO MO m �r V m NnONm V:ON . n m V' wt N o m "t M m M t ol l) a vto a m m V' V 0) n mm T n.- m mO CtnMQ1 m stm M m m CC m M 0.- M V' Nv — NON M nm t V: m N� V a mm ^m ai� G w o ~ � j v ffT VT fA y yT C m M n fti o r m m0 c C N Cn~ aiOD_(`�7 n o V:rm Vo o m"m N( W N. W O('>thtot0 to m NcOOrm C6 m m m V O m m m N NOW M m mm N zx0<D to 0> ^N M.- m O m cm mm N O r m to of m m VT KJ FA VT r r r r r M m r r r 0 Qt ' N n m N n W N7 I �N �m 0 N r v O r m c7 M ^ V' N M M r m N v .- Y- N M EFT ({� cry yT r m o r r n r r n r n M o^ m m o V n n o V rn rn v fCi to m n m m m n n _N N T M N fh m m m N N ' I n N m r o r r. m V' co tv n N n n m C tn�. N tmtl m M n m ? N M m f` m n m N V co tno 1010 N N � N M N N FA fFT 6T m N ' O m ' N " N n V m V n m O m M (O n m < O n n n co n" V m ci n V V m n m to m m V mmn " Vm V rno ' rnmm rn " mMm V m m M IM� M m v N n m O N m - CO ri d M n� w� V m ' 0 0 `7' W V' m O) In rn amn rn m N 0) m n tDM M N Nm nn M mw N A O N EFT 1 EFTi E» w y N U N Q r T d N E2ayro o h m N m= o m 0> m E mEm�cd_�o ro y m w c m as m U �Sr<�U)Sa` C E E m N R{ U R C U a O N m c O c 'T m o. U ro a II`VM y y c w C a w m ca a y CD 9 c N ca C y lti w yy r d y m al G w o ~ � j y c C w CL ID a d 0 0 v fti o r CL 0 N m C .y. m c C N Cn~ B m y o m"m w cL E c•� J 0 0 CL = woo a) d �cyE'�m a o d o y c o t- �co Q.000 zx0<D w IL C E E m N R{ U R C U a O N m c O c 'T m o. U ro a II`VM CITY OF LAKEVILLE, MINNESOTA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS DECEMBER 31, 2011 Fund balance - total governmental funds $ 35,169,589 Amounts reported for governmental activities in the statement of net assets are different because: 1. Capital assets used in governmental activities are not current financial resources and therefore are not reported in the governmental funds. Governmental capital assets $ 288,642,372 Less accumulated depreciation (107,469,805) 181,172,567 2. Grant receivable that is applicable towards accrued bond interest payable is susceptible to full accrual on the government -wide statements. 32,016 3. Long term liabilities are not payable with current financial resources and therefore are not reported in the governmental funds. Bonds (86,470,000) Accrued interest (1,428,361) Capital lease and loan (1,256,870) Unamortized debt issuance costs 953,725 Unamortized bond discount 9,976 Unamortized bond premium (694,762) (89,086,292) 4. Accrued compensated absences and net OPEB obligations are not Payable with current financial resources and therefore are not reported in the governmental funds. (2,350,565) 5. Deferred revenue in governmental funds is susceptible to full accrual on the government -wide statements. 5,617,972 6. The City uses an internal service fund to charge the cost of insurance activities to individual funds. A portion of the assets and liabilities of the municipal reserves fund are included in governmental activities in the statement of net assets. 1,388,399 Net assets of governmental activities $ 131,943,686 See accompanying notes to basic financial statements. IV-5 CITY OF LAKEVILLE, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- GOVERNMENTAL FUNDS YEAR ENDED DECEMBER 31. 2011 Expenditures - current 633,008 Debt Service Capital Projects Nonmajor Total 3,425,296 5,324,043 General G.O. - Improvement Governmental Governmental 423,341 Gomm! Obliaatlon imoro vemem Bulkhro construction Funds Funds Revenues 9,755251 Public works 3,019,293 1.215,OD0 - Property fazes $ 16.516,469 $ 4,292,586 $ 379,346 $ - $ - $ 1,979.047 $ 23,167,448 Tax increment - - 19,892,477 - - 890,174 890,174 Licenses and permits 1,238,704 - - - - 581,704 1,820,408 Intergovernmental 703,296 77,135 - 98,158 168,551 1,575,347 2,622,487 Charges for services 1,616,718 - - - - 2,321,486 3,938,204 Special assessments - 156,293 401,152 - - 65,354 622,799 Fines 294,121 - - - - - 294,121 inveslmentincome 58,365 20,532 5,074 10,940 21,819 153,648 270,378 Donations 20,313 - - 145,948 - 103,501 269,762 Miscellaneous 55,385 Principal maturities 12,120 1,725,000 370,137 437,642 Total revenues 20.503,371 4,546,546 785,572 267,166 190,370 8.040.398 34.333.423 Expenditures - current 633,008 406,457 508,177 173,672 177.433 3,425,296 5,324,043 General government 4,070,027 - - (325,732) 423,341 4,493,368 Public safety 9,755,251 - - - 2,385.000 - 9,755251 Public works 3,019,293 1.215,OD0 - - 3,019,293 Parks and recreation 3447.906 1,621,457 508.177 173,672 2,236.701 1,891,752 3,047.906 Total expenditures current 19,892,477 321,414 (606,658) (45,426) (2,641,774) 423,341 20,315,818 Expenditures - capital outlay 9,395,928 5,413,308 1,874,037 1,313,383 2,766,121 16,522,484 37,285.261 General government 56,977 355,881 42.647 267,763 723,268 Public safety 848 5,413,308 1,874,037 54,282 - 780,019 835,149 Public works 20,589 5,734,722 $ 1,267,379 $ 76,101 5,026,198 2,644,397 7,767,285 Parks and recreation 13.078 1.007728 1,020,206 Toted expenditures - capital outlay 91,492 486,264 5,068.845 4.699,307 10,345,908 Expenditures - debt service Principal maturities 3,446,457 1,725,000 2,517,725 7,689,162 Interest on debt 2,361,519 166,120 1,105,646 3,633,285 Fiscal charges 36,613 9,287 30.243 78,143 Total expenditures - debt service 5.846.589 1.900,407 3,653.614 11,400,610 Total expenditures 19.983,969 5,846,589 1,900,407 486,264 5,068,845 8,776,262 42,062.336 Excess (deficiency) of revenues over expenditures 519.402 (1,300,043) (1,114,835) (219,098) (4.676,475) (735,8641 (7,728,9131 Other financing sources and (uses) Transfers from other funds 633,008 406,457 508,177 173,672 177.433 3,425,296 5,324,043 Transfers to other funds - - - (325,732) (2.198,544) (2,524,276) Issuance of debt - - - - 2,385.000 - 2,385,000 Refunding bonds issued 1.215,OD0 - 665,000 1,880,000 Total other financing sources and (uses) 633.008 1,621,457 508.177 173,672 2,236.701 1,891,752 7,064,767 Net change in fund balance 1,152,410 321,414 (606,658) (45,426) (2,641,774) 1,155,868 (664,146) Fund balance, January t as previously reported 9,395,928 5,413,308 1,874,037 1,313,383 2,766,121 16,522,484 37,285.261 Change in accounting principle (1,451,526) (1,451,526) Fund balance, January 1 as restated 9,395.928 5,413,308 1,874,037 1.313,383 2,766,121 15,070,958 35.833,735 Fund balance, December 31 $ 10,548.338 $ 5,734,722 $ 1,267,379 $ 1,267,957 $ 124.347 $ 16.226,846 $ 35,169,589 See accompanying notes to basic financial statements $ IV -6 CITY OF LAKEVILLE, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER. 31, 2011 Net change in fund balances - total governmental funds $ (664,146) Amounts reported for governmental activities in the statement of activities are different because: t. Governmental funds report capital outlays as expenditures while the government -wide statement of activities reports depreciation expense to allocate those expenditures over the life of the assets. As a result, fund balance decreases by the amount of financial resources expended, whereas net assets decrease by the amount of depreciation expense charged for the year. This is the amount by which depreciation expense exceeded capital outlay. Capital outlay $ 4,620,594 Capital contributed by developer 1,442,380 Depreciation expense (8,733,285} (2,470,311) 2. In the government -wide statement of activities, only the gain or loss on the sale of capital assets is reported, whereas in the governmental funds, the proceeds from the sales increase financial resources. Thus, the change in net assets differs from the change in fund balance by the net book value of the capital assets disposed of. (1 86,969) 3. Revenues in the govemment -wide statement of activities that do not provide current financial resources are not reported as revenues in the governmental funds. Deferred revenue - December 31, 2010 (4,894,323) Deferred revenue - December 31, 2011 5,617,972 723,649 4. Bond proceeds are reported as other financing sources in governmental funds and thus contribute to the increase in fund balance. Bond, loan, and capital lease principal maturities are reported as expenditures in governmental funds thus reducing fund balance. In the govemment -wide statements, however, issuing debt increases long- term liabilities while debt repayment reduces long -term liabilities thus affecting the statement of activities. Bond proceeds (4,265,000) Bond, loan, and capital lease principal maturities 7,689,182 3,424,182 5. Interest/debt issuance expenses and debt premium /discounts in the government -wide statement of activities differs from the amounts reported in governmental funds because accrued interest was calculated for long -term debt payable in addition to the amortizations of debt issuance and debt premiums/discounts which are recognized respectively as expenditures and other financing sources and uses in the governmental fund statements. Accrued interest payable 100,761 Grant applicable towards accrued interest payable (247) Issuance cost on 2011 bond issued 59,464 Amortization of debt issuance costs (89,754) Amortization of debt premiums/discounts 102,565 172,789 6. Accrued compensated absences and net OPEB obligations are not payable with current financial resources and therefore are not reported in the governmental funds. Net compensated absences decrease - December 31, 2011 3,572 Net OPEB obligation increase - December 31, 2011 (52,638) (49,066) 7. internal service funds are used by management to charge the costs of certain activities, such as insurance, to individual funds. This amount represents a portion of the change in net assets of the internal service fund, which are reported in with governmental activities. 19,474 Change in net assets of governmental activities $ 969,602 See accompanying notes to basic financial statements. IV -7 CITY OF LAKEVILLE, MINNESOTA STATEMENT OF NET ASSETS - PROPRIETARY FUNDS DECEMBER 31, 2011 Business -type Activities- Governmental Enterprise Funds Activities - Internal Service Uauor Utifitv Total FA Imi. ASSETS Current assets Cash and investments Interest receivable Accounts receivable Inventory Prepaid expenses Total current assets Noncurrent assets Restricted cash and investments Unamortized bond issuance cost Capital assets Land Buildings and improvements Machinery and equipment Infrastructure Accumulated depreciation Net capital assets $ 5,562,855 $ 8,855,165 $ 14,418,020 43,173 62,194 105,367 767 2,394,840 2,395,607 1,392,437 71,720 1,464,157 22,487 5,900 28,387 7,021,719 11,389,819 18,411,538 1,591,602 8,786 Total non - current assets Total assets t1ABIUTIES AND NET ASSETS Current liabilities Salaries payable Accounts payable Accrued interest payable Deposits payable Accrued compensated absences Bonds payable Total current liabilities Non - current liabilities Accrued compensated absences Unamortized bond premium Net OPEB obligation Bonds payable Total non - current liabilities Total liabilities Net assets Invested in capital assets, net of related debt Restricted for debt service Unrestricted Total net assets Explanation of difference between proprietary funds statement of net assets and the government -wide statement of net assets: The City uses an internal service fund to charge the cost of its insurance activities to individual funds. This amount consists of the necessary adjustment to reflect the consolidation of internal service fund activities: Net assets of business -type activities See accompanying notes to basic financial statements. 325,750 66,390 325,750 66,390 1,272,296 528,160 1,800,456 3,883,794 22,041,706 25,925,500 425,545 2,165,180 2,590,725 - 121,837,414 121,837,414 (1,135,636) (47,060,156) (48,195,792) 4,445,999 99,512,304 103,958,303 1,600,388 . 4,838,139 99,512,304 104,350,443 11,859,858 110, 902,123 122, 761, 981 1,600,388 23,149 32,148 55,297 - 1,068,335 365,556 1,433,891 11,535 73,854 - 73,854 - 8,667 4,400 13,067 - 68,112 145,829 213,941 - 150,000 150,000 1,392,117 547,933 1,940,050 11,535 82,978 48,893 131,871 23,128 - 23,128 8,598 14,617 23,215 3,395,000 3,395,000 3.509,704 63,510 3,573,214 4,901,821 611,443 5,513,264 11,535 877,871 99,512,304 100,390,175 325,750 - 325,750 5,754,416 10, 778,376 16,532.792 1,588,853 $ 6,958,037 $ 110,290,680 117,248,717 $ 1,588,853 200,454 $ 117,449,171 V-8 CITY OF LAKEVILLE, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS YEAR ENDED DECEMBER 31, 2011 Sales and cost of sales Sales Cost of sales Gross profit Operating revenues User charges Other Total operating revenues Gross profit and total operating revenues Operating expenses Personnel services Commodities Other charges and services Disposal charges Depreciation Total operating expenses Operating income (loss) Non - operating revenue (expense) Intergovernmental - grants Investment income Interest, fiscal charges, bond premium (net) Disposal of capital assets Total non-operating revenue (expense) Income (loss) before contributions and transfers Business -type Activities - Governmental Enterprise Funds Activities - Internal Service Liguor Utiltty Total Funds $ 14,373,261 10,826,384 3,546.877 $ 14,373,261 10,826,384 3,546,877 $ 8,673,535 8,673,535 $ 390,494 192,744 192,744 82,328 8,866,279 8,866,279 472,822 3,546,877 8.866,279 12,413,156 472,822 1234,337 1,705,633 48,780 398,762 797,046 2,299,323 Transfers to other funds 2,950,490 116,595 3,064,766 2,196,758 10,418,974 1,350,119 (1,552,695) 3,762 53,096 (181,335) 66 (124,411) 1.225.708 Contributed capital from governmental activities 121,214 Contributed capital from developers (1,307,070) Transfers from other funds 97,045 Transfers to other funds (1,134,131) Total contributions and transfers (net) (1,134,131) Change in net assets 91,577 Net assets, January 1 as previously reported 6,866,460 Change in accounting principle (1,623,085) Net assets, January 1 as restated 6,866,460 2,939,970 447,542 3,096,369 2,950,490 3,181,361 12,615,732 (202,576} 169,137 172,899 76,488 129,584 - (181,335) 66 386,582 386,582 86,240 10,805 245,625 121,214 10,805 (1,307,070) (81,362) 97,045 52,890 52,890 1,020,334 1,020,334 11,655 11,655 - (1,623,085) (2,757,216} (54,206) (538,206) (1,672,337) (54,206) (1,845,276) (1,753,699) 42,839 111,508,237 627,719 112,135,956 Net assets, December 31 $ 6,958,037 $ 110,290,680 Explanation of difference between proprietary funds statement of revenue, expenses, and changes in fund net assets and the statement of activities: The City uses an internal service fund to charge the cost of its insurance activities to individual funds. This amount represents the income that has been allocated back to the business -type activities in the government -wide statement of activities that is attributable to the City's business -type activities: Change in net assets of business -type activities See accompanying notes to basic financial statements. 23,365 $ (1,730,334) 722,207 823,807 1,546,014 $ 1,588,853 IV -9 CITY OF LAKEVMLE, MINNESOTA STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED DECEMBER 31, 2011 Cash flows from operating activities Cash received from customers Cash received from general service charges Cash paid to suppliers Cash paid to and for employees Net cash flows from operating activities Cash flows from rloncaphal financing activities Intergovernmental - grant Transfers from other funds Transfers to other funds Net cash flows from noncapitai financing activities Cash flows from capital and related financing activities Acquisition of capital assets Disposal of capital assets Interest and fiscal charges Principal maturities Net cash flows from capital and related financing activities Cash flows from investing activities Investment income received Net change in cash and cash equivalents Cash and cash equivalents, January i Change in Accounting Principle Cash and cash equivalents, December 31 (including restricted cash account of $325,750) Reconciliation of operating income (loss) to net cash flows from operating activities Operating income floss) Adjustments Depreciation expense (increase) decrease in assets Accounts receivable Inventory Prepaid expenses Increase (decrease) in liabilities Salaries payable Accounts payable Contracts payable Deposits payable Accrued compensated absences Net OPEB obligation Total adjustments Net cash flows from operating activities Supplemental schedule of noncash financing activities: The City assumes ownership of utility capital assets from governmental projects and land developers. Capital assets assumed were as follows: See accompanying notes to basic financial statements. Business -type Activities - Governmental Enterprise Funds Activities - Internal Service I-Ifluor Utility Total Fund $ 14,380,810 $ 8,623,273 $ 23,004,083 $ 472,822 (11,783,653) (5,726,509) (17,510,162) (376,787) (1,232,466) (1,688,044) (2,920,510) 1,364,691 1,208,720 2,573,411 94,035 3,762 169,137 172,899 - 11,655 11,655 - (1134,131) _ (1,623,085) (2,757,216} (54,206) (1,130,369) (1,442,293) (2,572,662) (54,206) (8,140) (450,197) (456,337) 66 66 (181,488) - (181,488) (145,000) (145.000) (334,562) (450,197} (784,759) 42,427 70,099 112,526 3,956 (57,813) (613,671) (671,484) 43,785 5,946,418 8,841,117 14,787,535 724,010 62,412 627,719 627,719 823,807 $ 5,888,605 $ 6,855,165 $ 14,743,770 $ 1,591,602 $ 1,350,119 $ (1,552,695) $ (202,576) $ 86,240 116,595 3,064,766 3,181,361 - 7,549 (243,006) (235,457) - 8,014 62,412 70,426 - 930 (2,250) (1,320) - 851 9,009 91860 - (108,525) (138,496) (247,021) 7,795 (11,862) 400 (2,075) 2,388 3,095 6,192 14,572 2,761,415 $ 1,364,691 $ 1,208,720 (11,462) 313 9,287 2,775,987 7,795 $ 2,573,411 $ 94,035 $ 1,073,224 $ 1,073,224 IV -10 CITY OF LAKEVILLE, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS - AGENCY FUND DECEMBER 3l, 2011 Escrow Fund Assets Cash and investments $ 5,512,751 Liabilities Deposits payable $ 5.512,751 See accompanying notes to basic financial statements. IV -11 _�" - ' "3. "e _ % �Sv "w e�'�g u$ t q 3 .�O.�c 3 DE u� =5�� s °s - y}� i c y i ��c go � yyyy�� 6 g <<Y @g.Eo mgA& Q $ " s3 3 � y = W u -' c. rE >$aRmg� . �=E.E �wEB CU. iwEG >^ c 9 ` ° Y u@ L)zm 8 4 U L) z o c, `yg `3" Um`- ��z u t:�a9wou mu -B 9 ygV c 1 �2 -' - °` = s8 cy ° 9 �tEU E• -_ ^� ��+ o o 'o U .E 1 E 9 A� ^2L � u o Z V o N cc C0 rElS ° L' "+D'a r °i ° m.� _ H „�$ _z° Sffi2 °= 3A v :J u ° , m•°; c s .5G Z a y g° . a g O S i p er p ' y $ d E d C.GN]' a ; t.�ma .2LO °E�9q $ u00 < ,y ° ud6 • . '' 4CYz O go& Q q r W ' +r. N c_ 9 'G' Y s Y U •� p y i 'q EOC •• ' m V 3 t v N C . 8-8 D . 'E 3�` w °�w s i•_�yR gggACr� bcy��y o " z ma �� eo - ° `u a ii� _� O�m °ENV °W_mg Y u 5Y mE F $cC �gGSo c �"'c ' mx Y. E s � `' 8'S w• uzc IV -12 �+J.a " '° 00 T E 5 lit T E c E 6=:% '� : y � c w u c 1 2.6. vi `o E 29°�� E�' v E Em °> .o hog jgg o9 3E.EE„ E g33i�a €E2 -=�3 g in g m& w g t S m Z� - � ES U� ^`o u €S� °fi - `u �` '• 0 �'� U_.c `E E � Eli w ` z ESE• c.'�E '�.. m� �cg S_ �g e��' e9r��lg `� E a+ .5o WOE � E c • • • E �.g k °kiGiyEya s Fbc� 3 O CsLQ Z ci u v b 3y 8' ° =E of 1c� a: 8 c mcr' Elsl � U - g`o� x .sr` oNOE $ c. o .S EO o c Z V sti3 c3 v`ozs U E m 8 �+ aag ° y':t o a e au Z g V n E — �e .=I � �cg� o `em E O`v... a ' ° ° O w.'y� F` pp ba 'o S � o��=_ Qt E o Ea 5 o o meet . _ ��L a=_ 1 E Uza s m 11VAN ' r R C G G G V j 9 u uC a.e Y.E�n`nm 9g° `�L^Y{ g�-r'•c�3°2E B ^zh `o c�`i�� and � o •�''� u uo8 ._��'' >o a,. Ca ,� o e= 3'� ffi mod F n— u u �' °' h • � U C`�`v�i� .- L_ou � aV ° 8a 5��.:9m t= FFV Uzq z a `oc v w � c L c °° a 3� e''� 8 8_ = ou mos 'u C 1 y G 2 - �itip O'4a`u5 rv5A L�'"u �a a�'P �w O `.- 9 u V 6'E F t 6 hp V W � O 78 K l^. • � ° C w 9 9 � �� 5'o uw` .$ °a g'• ppor ._�'w'R 'nc -c'S 70 g Z Sgt r7= F9 ^$ r'm 3nn ao'�pp at it 5. r.•Z +�Ury ° � 5 > =`�d y3 e��u3 � ^mo ° �'o mo 'oc _'•'S�3E aa"' z "q:�e�8 o e�w�� w5s`e ��mae m �z��•°o9o�r O � {v� y w • • • 'O � 41 1'(+jpi'. x . p� UzR e 4 U r $ . 6 3� a 6 a� 3� �g IV -14 y O y g WF Z < �5 r te' v a as z W'W S y ^ �UN a mom z U zw U2q F v9 N J a� a¢ U ry a¢^ O U o za o 11 A `o a > s 9 c& xeaB- 3a9ALM `r75 � m$ tggE u a sm E 4 E h 5 5 t a o °ate msaapr to ❑ ' D B m i° o ' o m" E@ $Saw g °On E�A_3?. Eo 4C - 82 o " g gad° as a aa5 m Egg eta E� ae�a Y - @� €o m 'c.E E =B a w ° °'�5 $'o°9'm m E 'o' wo d C� � E F 2� ° c � �� d O x 9 C�� 6 � u� 6 $ P. C `•1 —" 1= 9 a 6 0 vi .6 r a IV -15 c A o v a 8 � ° 14'y � 's �a� V9 TN � ON 'T UY OL w 8d� =_�= = F p c O e o u, —F nY n q mm. '^G'Cd 6pG _T° C 7 ,p •1 G'0 p > G `�f S$� tp � ." 'E_ Y Z=_C v�nJb56b�'t3 %��' _U'va$ R L 85 If �yLL1 — uz❑ ° m o x - = g m Y E L.S J.o o� '3 ,� 2�s5 �T eoJ3 w�v 9 a rc nE 'c E i kno 00g , $Ems °o`c8g2m � P S � u,m 5 Y o c€' am Gn� m UllC``,�gqmu$TF UmG c z �F OGY2V i! � OVY = -9C �J'�3 y � y .� J✓� `� IC M< <9 �° M :. " o v 8 8 .E ti B � m E° d� v a a S• � t = o L.] cy $ °SLa ZvCdt` Z N g nc°°wg % =� Y 3 ° m mw�2 E3 �Y b 3 c L GG D u 0 � e0 44 Q Ea >. " =_m ° E�g 3 .gs • z �c uz0 z IV -16 3 ` U L m y� y I U ' EF `osm�u� yry 6 '' � f 79 2 s C Uzz z `�@' `o S'= •� °_ 3� v �ye CY ° E ° � o g 5 4 N J a v If �✓ _ C a a Y g r d= o� az p 0 c � ° c � b �t go 'mow— mdc`W� = dc c °a o y, e7u� �Z`o ° ° m F '1mx w �fz w w ._.. u.. . °_3Y — °„5 a F=4wy5 ° u o3 j, mE � u `o Uz❑ ui p 5 c 8 p 5 Y 6 o_ E V c IV -17 IV -18 wo w � �� '2 ? - � vv`__ c ?`off pP n O @ $ =qe iW w �a m T a m3�s g,b cy $ =�� r u =_ Vi V OPPN c ^ Q� . t •1 el ry wry =V` YS N Y ' ` yTm t `o as�Tv °u b TWI HE P, ywyp y w m ysy U�o �'a °0 �.� '�`OV 2222 ° 3 ;U y � Z� �ZG6 TiY.`.PE I r'��CCU e � y aa. K F Y. ° gg g s ^ 5y riT 7 3 z s aa s s W Y � "'S.u� i `a h EVij .G �g`Y6 P TY p u H¢ z IV -18 • P m •O • r V C� N n P m W P VI • "ryv V ; iv • —Z° $n. a ov N g y ° r( M 1� N •O m = P O] m N P N q U E" � . b .� O vt O. d O. •O n P d' pN, � � O Vj � m {G m v Pl l N V W O E Q m P� v v P C. •° N f •L = h U m t S C c n = o c a Fay m ws y o 5 c ° , .. y c 'd V c m ? � E c -• o g � } } c ' gq y uu $. yy � c 3 $ pp t� CAN lz W F 'C B� • T � • m C u il t S� ? q C u 4 � T u m N Z UzC Vf H 6 y O € T Y IV -19 QQ WIN 25 c� S u E wa m _ 4 Y c m c,g3 w w y� ' Y g 3 N m I .- da "5 w =oar m IMA `o k3a c s m >.rcyg8 Vol 3�h $a' M 'd N O. P P P by , m emery c i m p C O x� h P � � xx P O O � q e C� P O. N 1+f N y v. rm c o ry m � C V F w o c 3 PIT? « im — ' ¢g r k a'�g yy%E' v u 9 g m y=c ate' C g��o N10 L N: �_ g8 p hod$ c 8�gr U Wt y 'a � c v hEg Sc' ;w ._. r55S $9V3'S.ry a� «fie r s r p `o E .m E` � G N C m C a 2 F a 'c E`g 0Ea E�nc IV -21 € -g t Y s " _ 6F hG hV �LLLNL y ' ' jm C BS p .i C SX N V G N Q a 6 E° V u u [•" LEI 8 Y �Eo^ ' g V 8 a € M A E N y eYY TC. � x mo ^frmd�8 W o s N E �QQ'y E:� E s °; a •$v5� W A =` E a€ w ti g E o r7 Z Z ^' E c e' � v c S5 E — ,c O E C .g C Vyy � •l u m ` O oY E o > _ ✓ v. ` c = ,� N 'e L =V O 'C S . i u a �<m �.B•s.3 S cg - F ca Cv KEe' ° �9 �8�' ° 'S 3€ 'a V 9 T^ iY� E82p S? � � a E - •G V - cE T:dC 15 p V FYux IV -21 89 of ° n` °2 Aws Z`w�j 6c�u. �9 C is Le ti< °+,�.g= 7 z ._' W = fi 8'9 „ =_� rY �. tY X. i F UZa Z ❑ `a _° :e rind - a Km w o h Y.� � �evriav°nN vP+ n o a � L��o$�g �-� °o'•' -oNO F � E66Lr 7525. 25� 75 n SI = r y 2 o F o N d F N N N ( N N N N 10, _ m � ' A zF �v SO S B� u C ° W N MUM r ^iZ gg c � u w wxx. ° oW >��P��ytiFh3�F .B Dory E°- O N 2 !2 1 n IA N N ° Ug F p °U ui ' o C 5 Uza z Fa IV -22 C� O g y a� z am" Uzo F� h� 4 W� a� z V ry aa^ > O � N � yF Uz0 F , E F i u o` d n N 1 H N p f. L M y g.,sg " �a 9 i ZEE z v « oY y� v n 44 v �O q a s "c u uY.3 A j Ua y moue OF LK V F Z i«�a�E d cry_ eo & r a mg�� III c M $ X .gm > E 8 E E E p C7 S V ¢ 3 Z< Z IV -23 3 � N � H II 1 r � I I I Q I I I I i i I II t II II �'l� n b N w ! E PI o ' 09 C b ' O b dE �L 2�MN 0 IOC v � S m U S m N o 3 h N myT� 0� # g E VG4 Z � yO C E ^ W� $ J ¢ c5 Lry my Gw= m Q�a 1 E c � M aw 4 —e.. A� Uzc <` N � H II 1 r � I I I Q I I I I i i I II t II II �'l� n b N w ! E PI 09 C b ' O b dE �L 2�MN IOC v I 9 V w N o 3 h # g E o— �� 9 9 E c Gy —e.. A� o� o w 14 `s o J gi w _ 2 G amm c ��oe Uz, r =so N � H II 1 r � I I I Q I I I I i i I II t II II �'l� n b N w ! E PI M IK x Y o > — r 'o wg5�g�w G IV -24 C b ' O b �L 2�MN IOC v P w w M IK x Y o > — r 'o wg5�g�w G IV -24 { y G 8 `u g C S y 9 y Y C Y � _ f`V'm mE 7 � S yg6 " G � Gwgs ffi v Y Sm � qg�= x y:11 3 °m c tl °V 9 t u L W �Tc 3 z" C ° " A o » Ty B ads 3�' '6 °9VU d'a C� C.�$ V =I b n V O y V y tl � v v J S3 �Ti FE p xs a w Z° L C. Z L N GVL C�9 II g� o y W -3yx ° OV } A �a 0 d m ri D� u � w w tT�5 mE3 z a`°9�� — zu r x Q O . ° r rl D uJ UzG z yy F5 U3£5� { y G 8 `u g C S y 9 y Y C Y � _ f`V'm mE 7 � S yg6 " G � Gwgs ffi v Y Sm � qg�= x y:11 3 °m c tl °V 9 t u L W �Tc 3 z" q al w w � 3 IV -25 C ° " Ty B ads 3�' '6 °9VU d'a C� C.�$ V =I b n V O y V y tl � v v J S3 �Ti q al w w � 3 IV -25 t ya C u` 3 =d �w m.'.. `gag. 1.8 `o c y F m ° c e� v� I.°- 4 Eva tali 12 to I ^ �- T g a °� c_E9 q Ei E EO VV4'E. ojo E b N 3D ,n gc n oc e� 'u T b w y 4 yC h ._ o y c y t, a @ v I - v ,`o 3 . pC yC OL V .a'.._Q9 yN ° Wg PoLY5 O c g -E < y TC Wye+ Simi 4 B' � Ca' w° a. 32 g•�o°'n ., [[ 9 E 11.1 p og �y d zz ?yy L e . O Q Y Jz = Y- q y G Y Y L l ie L W U ry C m E Y 9 i i c m u E v a �i $ E` ° �� 3 `�Y.. C m O p O 4 m O y; y �` ° B y �C g - oy y•sU (SO U W u ° � Tyt my s9. 9 . ° s' ^jFm T9aa W E E �3.0 °g'� f �og$u $$ 3y- g 8� e 5 �UL 6o L aguE E - E'w F W o c y E Eo u y e 31 w W c a ., og 5= n r `o 000 o" o - c a a EE �� m s V E Z E 51 J G m 8 N A U ¢ � ytE h 6u E 'a uC H JA wa t2y�5e�o Sic i 1 82 o Sa 3 Sa d= �'� E 'c9 "f��.. 6 P �` 9 '3 N y h 4 � J c E Eg 9 c m 'O in a cn Z� C Y wEf-a o a I E w $ 2 08 lav AA Q E E G 3 E A l 1'0 SRI ° � n ^) v °= 59 "s v5oo ogj.�yc S v L m.- WU i g g`.`09 -V ° � c u v� c E� � 45 o�t E oa v_p r A y" y p ti 9O "JOm .x,a Ec N 'o Ep .9 `3 V eVw - 113 yE c t 6 H �n WOm ac. fit d �. r F 6. F$ u F 4EI F 3 w F n. yy 3 o g v g a 0�_ }, e m � nuS. B W in mmy'c �o�'3a O m $ a Q u s� o E E g c u 8o z E E. a 6 E stir o >y�_y1,1 IVA6 8=' o'sY°'9 .�`Km� 5 "E =� ` v��4'g•oY3 ` = °g�mo 5v�� Ba�uC ` �.�� .E . a N Y C i 9 m a = c ° 2 a.2 .tis -P '$E.5 iE z F w o m:S e Y -!' D' v m n Y u p Nil c � = ?. c tl ° S o v QC 3 G U a e v s 0 d o g 6 w m g K= - wS�CTu > C C u .2 ' a 9 `= o � .- $ w o• �`c ` y m Y N U W = p C= 0 q p` gac_'?$ ? c 99 * m_ - °�-iv " "> SF UzC Z q G E c �' °- Y` 79 Y g w •o ry � � cQ tam H ,8 .o w C qy V e � � m m C m� Ui'• 'p5 G q O O y� y y 4 . �' Q' � F a — m a m >Z o K � c a 0 9rmid Ev d` �:F 0 Uza X d m U p IV -27 f° g A c c `° 'u w. E 2 q W • ` o '� 5t oa I E T.. E a C°- M y`��cS tl L EG tE C vP • v w4° &Y .. �` m�n wx w e`�o3 `°'� u _q w y at s '.c y _Re b' G,�:C ttvi c$ ova •�'°�4 01 _Yc L'�o b'> >,q tF 3mb :`o�5 - C"2 y o q Ya a ° L �a g9m5 O W ! E vS d L V T a w' ry w T C O y U m Y C y y Q m it =o >a ynjc° 9'.9 ¢ ° � "c an ° Y ZF aR w °9 yq __'g aU= m Arv$n J N m U Q �.1 ° - w i. `a'G raja' it I ow '� I ts B• Y a S T't 3 '� vo ag w-O b a.a .S 2T'Z r �'- s = 8 r; Y�$ o.�'�^ 2 � s E� °w = c ° C c 3 S G of ps 8i m g E c EEa� 9 c � a � �m S - Z ... Q C �� g T V6' ° �v 'D i aF{j �gSSO tuqu .,N q s ° 1 S c a ,k S m c 6 = E r �EvE��nn 1 Sm E T ...._ V 9 > -z p ° '' u t u y - G U ,yc � ✓ g i w`. � m ' t m Yg nU T'�E Soa ct-° OT.O °'E x'C {p3, 4 09 p 6 EE O U a� ! ° ai ._ can b q g Q - .1 r2 L il N ` Le art c 8 mFos 0 -Vuh ES �' -o •�� =5h $ m L wyE C'C c _d`E3 5 a -2. -$ - S bo o Cti p`o�&• gg cxgS ° rg e6+ v�om'g n'K `a �� W cm _ �OE Slug u e= a fi UNA § o g 4 =Ei� m •_Y a Em ey,.' oym� 5&� Esg °� i_ 8 >�^ .. cygE 8xx oSU Bpd � k�Y ' a c= S �'g e �'.�4 E Q �°ao al y a lu a .7ma .` o ff' ac•cgFm c t 2 ¢ _ . ° � eT T m" 03 U S ° d W E5 4 °' °Efia'e a •5n �"y a L r y�v a ac U5 IF, iE 9 g 2 w ° £_ Sol 9 d�z of v USE fvQ8 `o u c5 c 'y g .cq Fw F,�y m Uz= d w u yG `z :�q . 7 L y s a h y O U C LE d 6 72 i 3 '$tL2 g°c �qUv W Rc p� Qp �j �Qg o.5 ° C `o9m zd ° �G V `6 a 3 '7 5 .�E cg c Ei3 It 3�t� trytc cz 'tea �jVN � c 6 w y pY. w _ °ra'Q 'CpgC y�. 6•yyyy8 V y a T Z gg a � UzQ 5 IV -29 E 9 0 `o f E$ u y C q� � u °E' a g$O-• � I c a - RAE cS�ocSc'c c Qo a. YLLmT�y um- °Tx'g ° F_r D� $�oaNUs `mfi 'BE Aa ooyb'9 05` T�$3 Ep�E$a T`c — e �E�� 3£oe ag2y o; , ow FYS Y q a'�._ ` 4 V °Ee tv "8 c �9rs L" rY, a— n� 5'3 < u =r�� 4. Dm9 h� � F zh �a W 33 U {i x � N Q >am� Q O m UZC D � N o q m 5 G u� 3 „ N Eg � T p F o w L N ,a E a y c E o 6 V mw u O r a pppY �O IV -30 y,= ii .duet oQ V 4 � C p 4T G$ • D k O N S_ G 6 � K � � G � j G � j 5 gF c. r ` � O 6 _O - m 5 �s. 3 uDfL p�g O 5 G u� 3 „ N Eg � T p F o w L N ,a E a y c E o 6 V mw u O r a pppY �O IV -30 �^PSaW m m If C) "WWnCI N mN0 m N O � m -mm W a m�i n m m n m �n Nnmm>� m n m mNO C W Nam N C abeam m N OmNN NN ^tea � �<VN� m� N� N� NO ym pp mm �m ° m, C O !h^ t n wmy 00 � N p� Nm y (yN��Dpp W O �LY N�N � Nm� Nm CNI m �NNm m N N T N Q mmNm m m OOmpp N O CI COl � N bp @ It N W x I1� pp O a O s tn BYON. m mCl u y 0 y 6 §� m'N« m Nam NCV N T �NNm N N N Ub m OG`R _ r N U T a x U z 4 i5 G � � �.a 6 o � d oaf e w 0 8 TE m a n zq O,,� m _mqq .9m g 44 Y$wmw m r C "[� n effi m g� g e ii &3:4a o£m �m = ❑ � W 9m> `m'm o EY'v W, amT,ano� Qw�m y y mm y NNN4�iLLU �Cnann W °m 9 a Iz Z is o u o a = 8 8m � „68 a = u a .m hza.� ° -z x w a > a E y t o o R as Q Y ° q IV -31 W U z 0 0 z a O Z a O � a _ Z � o y z m W N y Q � w, w Y Z Y W W 6' U W U L 5 m z v z V D Z F w V O V] G W W O E a xa� Qzw U� w��aa E+zx JUV �mmm P nmm m PmNN n 'gym �n m K pp�� m qq m y m y mm O � O m mP a Y �' m na'Ny mm To T m p p 0 m O N N ID ' N r n m m N 2 p V n O O N nCCC!!!mN m m� f�ppm NN n NCJNm m OPnm �[1 m y w (p O-9E { ^ rNNd 0 0N2 y ^OC1N ° nmmm 1p .-m. -� n NIO P1[i !p P120 W Q�� p Ri t0 u) mYi'1� N N NN � Oib2tG .py mp�I c m E o o Y C c u s. u c g 3 mT6USv i @ic>S� EnSSci o aci5� W m E m m m 4c 'm £L m o E �< n mi r Po a $ E goE { ffi �Eu i- Eo 0 o mO Tai�O �n�0 °mc m �ac m eon N mI O m n0� m m IA Vlp m�mp m O A m n y N y m� m� h m N O ° m P O m P V Y ^ o N m N 4 m O O � N OCpI m m � m E u 4c 'm j o E a $ E goE { ffi �Eu i- Eo 0 o mO Tai�O �n�0 °mc m �ac m eon a IV -32 m E LLB r1 N� Clmm� � NI Nmn nI �� mnN� N pn l m LL 9 V O O n O M lI m M N N nW0 m N -m m p N NMm WI{ mpyn m�- mmNW TI M� q Om�NI fOl ONNNI NI O� Q Nm NpppqqG�� N N ! N .-Wp� N mNW m m W m U Z N X mN m W m W � m m �-Wm m m W y m n m N U Z G U C Z 6 F N � c fsi G Yyy Z' SF w 0 m zn 0 a m 3 m E o q 0 9 Q ZIL OO 4 C$� �CmV0 6C 9 ' - g p �Lm ~ R a p`d q`W l a 08a 8 E °a v yaa ci�l3 �at4 V ti z5�¢ G 3a -u ffi U U� cT � a a 0 IV -33 a6 OAT H W ^N_OOi O�NV WNm SOW �I CI OiON Atm�l� N T I LGm WM� � 1 N M 1 N m O� W N N m h l {rf m 1 { m { I 1 NOOm T 1 �� W t4 t7 0 $TNN n N O mCi n m ^NWN �yyyO NN cf app�P p� N I a lN � W I N I �� NNN I N T n N b O N C ; 0 m 1 A N m I T rrrr��I� y N M q o m N S l� V N N N Cf LL m 2 N Q O T n N q m O O ! n Wm yy W O W goo- Cp 44 I_NWW mmK! NN lm.. Aim^ n p WNM Q 'm NN m 0 f V 0 N-N . 9 N N m O N N ! N Ff M N ! B mo v z a �i 0 'i3 v EQ+ O x z E GY7Z� c 4 b 00 .s m E 0 0 ja yz q 9 E_ W c R 4 QZ�a 0 Etc m I- .7 C p�c�w ° ' p �aVbU mo tgO U� E atg�U r'1U �� e �o fj C O LL Uvv u'f S 0 IV -33 ( / \ \ (( k ( } k §_! \> �(!&§ ((((} \ \ \ ( } § � K =\ i ME! ' (t] \ /E // \\ \j\ / \ ##»! # & , ■ ■ K # f2fm 7■ ® �� ,§ �t i ; | 7 ! ! a �� ) ) ! !;!■ ! ; ; \k J� !§ ,r�■� \�!! ■!, ;K; ; QKk! a §«!e ! § ! / \ , ■ ■ K # f2fm < \ir■ i ; | IV-3. ~~ a �� !;!■ ! ; ; \k J� !§ ,r�■� ■!, ;K; ; QKk! a §«!e ! § ! ; ! / ; | IV-3. / _ \ _ _ ( }/ \\ -- E ) \))/ IF -\ -- !� 2( I` ZE \/« -- � re _ /® Pq I \ }� ! \{ o:/ _ PROPOSAL SALE DATE: July 16, 2012 TO: Ms. Charlene Friedges, City Clerk City of Lakeville, Minnesota c/o Springsted Incorporated 380 Jackson Street, Suite 300 St. Paul, MN 55101 -2887 Phone: (651) 223 -3000 Fax: (651) 223 -3046 RE: $6,805,000` General Obligation Improvement Bonds, Series 2012A For the Bonds of this Issue which shall mature and bear interest at the respective annual rates, as follow, we offer a price of $ (Note: This amount may not be less than $6,723,340) and accrued interest to the date of delivery. % 2014 % 2018 % 2022 % 2026 % 2030 % 2015 % 2019 % 2023 % 2027 % 2031 % 2016 % 2020 % 2024 % 2028 % 2032 % 2017 % 2021 % 2025 % 2029 % 2033 Designation of Serial and Term Maturities Years of Term Maturities The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. In making this offer we accept all of the terms and conditions of the Terms of Proposal published in the Official Statement dated July 3, 2012. In the event of failure to deliver these Bonds in accordance with the Terms of Proposal as printed in the Official Statement and made a part hereof, we reserve the right to withdraw our offer, whereupon the deposit accompanying it will be immediately returned. All blank spaces of this offer are intentional and are not to be construed as an omission. Subject to any applicable exemption in the Rule, this offer to purchase /bid is subject to the City's covenant and agreement to take all steps necessary to assist us in complying with SEC Rule 15c2 -12, as amended. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: TRUE INTEREST RATE: % Account Members Account Manager 0 Phone: ..................................................................................................... ............................... The foregoing offer is hereby accepted by the City on the date of the offer by its following officers duly authorized and empowered to make such acceptance. Mayor INrTi7 SURE -BID Wire Transfer Good Faith Check Submitted PROPOSAL TO: Ms. Charlene Friedges, City Clerk City of Lakeville, Minnesota c/o Springsted Incorporated 380 Jackson Street, Suite 300 St. Paul, MN 55101 -2887 Phone: (651) 223 -3000 Fax: (651) 223 -3046 RE: $23,635,000' General Obligation Refunding Bonds, Series 20128 SALE DATE: July 16, 2012 For the Bonds of this Issue which shall mature and bear interest at the respective annual rates, as follow, we offer a price of $ (Note: This amount may not be less than $23,635,000 -Par) and accrued interest to the date of delivery. " The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. In making this offer we accept all of the terms and conditions of the Terms of Proposal published in the Official Statement dated July 3, 2012. In the event of failure to deliver these Bonds in accordance with the Terms of Proposal as printed in the Official Statement and made a part hereof, we reserve the right to withdraw our offer, whereupon the deposit accompanying it will be immediately returned. All blank spaces of this offer are intentional and are not to be construed as an omission. Subject to any applicable exemption in the Rule, this offer to purchase /bid is subject to the City's covenant and agreement to take all steps necessary to assist us in complying with SEC Rule 15c2 -12, as amended. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: $ TRUE INTEREST RATE: % Account Members Account Manager 0 Phone: ...................................................................................................................................................... ............................... . The foregoing offer is hereby accepted by the City on the date of the offer by its following officers duly authorized and empowered to make such acceptance. Mayor City Clerk SURE -BID Wire Transfer Good Faith Check Submitted 2015 % 2019 % 2023 % 2027 2016 % 2020 % 2024 % 2028 2017 % 2021 % 2025 % 2029 2018 % 2022 % 2026 % 2030 Designation of Serial and Term Maturities Years of Term Maturities " The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. In making this offer we accept all of the terms and conditions of the Terms of Proposal published in the Official Statement dated July 3, 2012. In the event of failure to deliver these Bonds in accordance with the Terms of Proposal as printed in the Official Statement and made a part hereof, we reserve the right to withdraw our offer, whereupon the deposit accompanying it will be immediately returned. All blank spaces of this offer are intentional and are not to be construed as an omission. Subject to any applicable exemption in the Rule, this offer to purchase /bid is subject to the City's covenant and agreement to take all steps necessary to assist us in complying with SEC Rule 15c2 -12, as amended. Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: $ TRUE INTEREST RATE: % Account Members Account Manager 0 Phone: ...................................................................................................................................................... ............................... . The foregoing offer is hereby accepted by the City on the date of the offer by its following officers duly authorized and empowered to make such acceptance. Mayor City Clerk SURE -BID Wire Transfer Good Faith Check Submitted