HomeMy WebLinkAboutItem 07July 15, 2013
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 $4,800,000 General Obligation Improvement Bonds Series 2013 A.
Passage of this motion will result in the financing of Improvement Project 13 -02, which is the
reconstruction of streets.
Overview
The City Council, at its May 6, 2013 meeting, approved the special assessments for the 2013
street reconstruction project. Contracts for the improvements were approved by the City
Council at the May 20 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 4096 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.
The bid opening for the bonds is at 10:00 a.m. on Monday July 15; 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 2/1/2024 and thereafter are callable 2/1/2023 or
thereafter.
Supporting Information
• Official Statement
Dennis Fe er, Finance Dir or
RESOLUTION AUTHORIZING ISSUANCE, AWARDING
SALE, PRESCRIBING THE FORM AND DETAILS AND
PROVIDING FOR THE PAYMENT OF $4,800,000 GENERAL
OBLIGATION IMPROVEMENT BONDS, SERIES 2013A
Item No.
Financial Impact: N/A Budgeted: Y Source: Taxes and Special Assessments
Related Documents (CIP, ERP, etc.):
Notes:
CITY OF LAKEVILLE
RESOLUTION
Date July 15, 2013 Resolution No.
Motion By Seconded By
RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE
FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $4,800,000
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2013A
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 17, 2013,
authorized the issuance and sale on the date hereof of its General Obligation Improvement
Bonds, Series 2013A (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
Project).
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, 2013, 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
2015 $350,000 % 2025 $105,000 %
2016 385,000 2026 100,000
2017 380,000 2027 100,000
2018 380,000 2028 100,000
2019 385,000 2029 100,000
2020 380,000 2030 100,000
2021 385,000 2031 95,000
2022 385,000 2032 95,000
2023 390,000 2033 95,000
2024 395,000 2034 95,000
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, 2014, 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
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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:
The remaining $
February 1, 20
Term Bonds Maturing February 1.20
Year Principal Amount
stated principal amount of such Bonds shall be paid at maturity on
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
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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) Register. 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
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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 Destroyed 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.
(1) 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.
(j) 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 Delivery. 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
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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:
"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
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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 determine 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.
No. R-
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 2013A
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Interest Rate Maturity Date Date of Original Issue CUSIP No.
96 February 1, 20 August 15, 2013
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, 2014 (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 National 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
$4,800,000 issued pursuant to a resolution adopted by the City Council on July 15, 2013 (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
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to be mailed, by first class mail, to the registered holders of any Bonds, at the holders'
addresses as they appear on 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 1 in each of the years shown below, in an
amount equal to the following principal amounts:
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
governmental charge required to be paid with respect to any such transfer or exchange.
The Bonds have been designated by the City as 'qualified tax- exempt obligations"
pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986.
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.
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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 2013A 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.
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Date of Authentication:
U.S. BANK NATIONAL ASSOCIATION,
as Registrar
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
JT TEN -- as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used.
Dated:
ASSIGNMENT
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(State)
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.
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 2013A 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 2013A 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
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 2013A Bond Fund.
SECTION 4. GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2013A 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 2013A 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
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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 amount 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.
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 1/12th 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
13
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
$2,090,000. It is estimated that the principal and interest on such special assessments will be
levied beginning in 2013 and collected in the years 2014 -2033 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 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
14
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 8. 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. It is hereby found that the City has general taxing powers, that
no Bond is a "private activity bond" within the meaning of Section 141 of the Code, that 95%
or more of the net proceeds of the Bonds are to be used for local governmental activities of
the City, and that the aggregate face amount of all tax - exempt obligations (other than private
activity bonds) issued by the City and all subordinate entities thereof during the year 2013 is
not reasonably expected to exceed $5,000,000. Therefore, pursuant to the provisions of
Section 148(f)(4)(D) of the Code, the City shall not be required to comply with the arbitrage
rebate requirements of paragraphs (2) and (3) of Section 148(f) of the Code.
15
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. Oualified Tax - Exempt Obligations. The Council hereby designates the Bonds as
"qualified tax - exempt obligations" for purposes of Section 265(b)(3) of the Code relating to
the disallowance of interest expense for financial institutions, and hereby finds that the
reasonably anticipated amount of tax - exempt obligations which are not private activity
bonds (not treating qualified 501(c)(3) bonds under Section 145 of the Code as private activity
bonds for the purpose of this representation) which will be issued by the City and all
subordinate entities during calendar year 2013 does not exceed $10,000,000.
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
16
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 twelve months 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
17
(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;
(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 it 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
18
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 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) 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
Bonds are Outstanding. Notwithstanding the preceding sentence, however, the
19
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 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.
SECTION 9. CERTIFICATION OF PROCEEDINGS.
9.01. Registration 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 &
20
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
2013, 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 I5c2 -12 adopted by the SEC
under the Securities Exchange Act of 1934. The officers of the City are hereby authorized and
directed to execute such certificates as may be appropriate concerning the accuracy,
completeness and sufficiency of the Official Statement.
APPROVED AND ADOPTED this 15th day of July, 2013.
ATTEST:
Charlene Friedges, City Clerk
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CITY OF LAKEVILLE,
Matt Little, Mayor
APPENDIX 1
City of Lakeville, Minnesota
General Obligation Improvement Bonds, Series 2013A
Payments on Special Assessments
Year of
Collection Principal Interest Total
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
PROJECTED TAX LEVIES
Levy year / Collect year Leiy
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 15, 2013, by the City Council of the City of Lakeville,
Minnesota, setting forth the form and details of an issue of $4,800,000 General Obligation
Improvement Bonds, Series 2013A, dated as of August 15, 2013 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 , 2013.
(SEAL)
Dakota County Auditor
OFFICIAL STATEMENT DATED JULY 1, 2013
NEW ISSUE Rating: 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 fax purposes and from taxable net income of individuals, estates, and trusts for Minnesota income fax purposes; is not
an item of tax preference for federal or hfinnesota 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.
$4,800,000*
City of Lakeville, Minnesota
General Obligation Improvement Bonds, Series 2013A
(Book Entry Only)
Dated Date: Date of Delivery Interest Due: Each February 1 and August 1,
commencing August 1, 2014
The Bonds will mature February 1 as follows:
2015 $335,000 2019 $380,000
2016 $375,000 2020 $380,000
2017 $375,000 2021 $380,000
2018 $375,000 2022 $390,000
2023 $395,000
2024 $400,000
2025 $105,000
2026 $105,000
2027 $100,000
2028 $100,000
2029 $100,000
2030 $100,000
2031 $100,000
2032 $100,000
2033 $100,000
2034 $105,000
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 scheduled to conform to the maturity schedule set forth above.
The City may elect on February 1, 2022, and on any day thereafter, to prepay 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, In addition, the City will pledge special assessments against benefitted properties. The
proceeds will be used to finance infrastructure improvement projects in various areas of the City.
Proposals shall be for not less than $4,742,400 plus accrued interest, if any, on the total principal amount of the Bonds.
Proposals shall specify rates in integral multiples of 1/100 or 1/8 of 1 %. The initial price to the public for each maturity
must be 98.0% or greater. Proposals must be accompanied by a good faith deposit in the amount of $48,000 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 the Bonds will be made on the basis of True
Interest Cost (TIC).
The City will designate the Bonds as "qualified tax -exempt obligations" pursuant to Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended.
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. The Bonds will be available for delivery at DTC on or about August 15, 2013.
Preliminary; subject to change.
PROPOSALS RECEIVED: July 15, 2013 (Monday) until 10:30 A.M., Central Time
AWARD: July 15, 2013 (Monday) at 7 :00 P.M. . Central Time
Springsted
Further information may be obtained from SPRINGSTED
Incorporated, Financial Advisor to the City, 380 Jackson Sheet, 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 in the preceding paragraph in the amount specified in the Terms of Proposal.
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 (11) 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 i -v
Introductory Statement 1
Continuing Disclosure 1
The Bonds 2
Authority and Purpose 5
Security and Financing 5
Future Financing 5
Litigation 5
Legality 6
Tax Exemption 6
Related Tax Considerations 6
Bank Qualified Tax - Exempt Obligations 7
Rating 7
Financial Advisor 8
Certification 8
City Property Values 9
City Indebtedness 10
City Tax Rates, Levies and Collections 16
Funds on Hand 17
City Investments 17
General Information Concerning the City 18
Governmental Organization and Services 22
Proposed Forms of Legal Opinion Appendix 1
Continuing Disclosure Covenants Appendix II
Summary of Tax Levies, Payment Provisions, and
Minnesota Real Property Valuation Appendix III
Excerpt of 2012 Comprehensive Annual Financial Report 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
$4,800,000
CITY OF LAKEVILLE, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2013A
(BOOK ENTRY ONLY)
Proposals for the Bonds and the Good Faith Deposit ( "Deposit ') will be received on Monday,
July 15, 2013, until 10:30 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 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 any 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, 2nd 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 of 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, 2014.
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 $335,000 2019 $380,000 2023 $395,000 2027 $100,000 2031 $100,000
2016 $375,000 2020 $380,000 2024 $400,000 2028 $100,000 2032 $100,000
2017 $375,000 2021 $380,000 2025 $105,000 2029 $100,000 2033 $100,000
2018 $375,000 2022 $390,000 2026 $105,000 2030 $100,000 2034 $105,000
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 amount of any maturity in multiples of $5,000. In the event the
amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same
gross spread per $1,000 of Bonds as that of the original proposal. Gross spread is the differential
between the price paid to the City for the new issue and the prices at which the securities are initially
offered to the investing public.
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 scheduled to 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
infrastructure improvement projects in various areas of the City.
BIDDING PARAMETERS
Proposals shall be for not less than $4,742,400 plus accrued interest, if any, 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 1/100 or 1/8 of 1%. The initial price to the public for each maturity must be 98.0%
or greater. 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 $48,000, 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 2013A Good Faith Deposit
Contemporaneously with such wire transfer, the bidder shall send an e-mail to
bond servicesasr rincisted.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.
AWARD
The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true
interest cost (TIC) basis calculated on the proposal prior to any adjustment made by the City.
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 (!ii) reject any proposal that the City determines to have failed to comply with
the terms herein.
BOND INSURANCE AT PURCHASER'S OPTION
The City has not applied for or pre - approved a commitment for any policy of municipal bond
insurance with respect to the Bonds. If the Bonds qualify for municipal bond insurance and a
bidder desires to purchase a policy, such indication, the maturities to be insured, and the name
of the desired insurer must be set forth on the bidder's Proposal. The City specifically reserves
the right to reject any bid specifying municipal bond insurance, even though such bid may result
in the lowest TIC to the City. All costs associated with the issuance and administration of such
policy and associated ratings and expenses (other than any independent rating requested by
the City) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue
the policy after the award of the Bonds shall not constitute cause for failure or refusal by the
successful bidder to accept delivery of 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, 2013, 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 preparaun 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 up to 25 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 17, 2013 BY ORDER OF THE CITY COUNCIL
/s/ Charlene Friedges
City Clerk
OFFICIAL STATEMENT
$4,800,000
CITY OF LAKEVILLE, MINNESOTA
GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2013A
(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 $4,800,000* General Obligation Improvement
Bonds, Series 2013A, (the "Bonds," the "Obligations," or the "Issue "). 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. In addition, the City will pledge special assessments
against benefitted properties.
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 Resolution, 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 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
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 amount of any maturity in multiples of $5,000. In the event the
amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same
gross spread per $1,000 of Bonds as that of the original proposal. Gross spread is the differential
between the price paid to the City for the new issue and the prices at which the securities are initially
offered to the investing public.
1
or the Resolution. 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.
Optional Redemption
THE BONDS
General Description
The Bonds are dated as of the 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, 2014. 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.
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 the stated
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 ownership
interests in such maturity to be redeemed. All prepayments shall be at a price of par plus
accrued interest.
Thirty days' notice of redemption shall be given by ordinary mail to the registered owner(s) of
the Bonds. Failure to give such notice by mail to any registered owner of the Bonds or any
defect therein shall not affect the validity of any proceedings for the redemption of the Bonds.
All Bonds or portions thereof called for redemption will cease to bear interest after the specified
redemption date, provided funds for their redemption are on deposit at the place of payment.
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
-2-
certificates. Direct Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of
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 OTC 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 altemative, 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 Tess 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).
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Redemption proceeds, distributions, ana aivfaena 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 Balance of This Page Has Been Intentionally Left Blank)
The Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 429. The
proceeds will be used to finance infrastructure improvement projects in various areas of the
City. The composition of Bonds is as follows:
The composition of the Bonds is as follows:
AUTHORITY AND PURPOSE
Sources of Funds:
Principal Amount $4,800,000
Total Sources of Funds $4,800,000
Uses of Funds:
Deposit to Project Fund $4,691,091
Allowance for Discount Bidding 57,600
Costs of Issuance 51,309
Total Uses of Funds $4,800,000
SECURITY AND FINANCING
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. Assessments in the principal amount of
approximately $2,090,000 will be filed on or about November 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 3.25 %.
The City will make its first levy for the Bonds in 2013 for collection in 2014. Each year's
collection of taxes and special assessments, if collected in full, will be sufficient to pay 105% of
the interest payment due August 1 in the collection year and the principal and interest payment
due February 1 of the following year.
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.
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. A legal opinion in substantially the
form 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 eamings 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
6
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.
BANK QUALIFIED TAX - EXEMPT OBLIGATIONS
The City will 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.
RATING
An application tor rating of the Bonds has been made to Moody's Investors Service ( "Moody's "),
7 World Trade Center, 250 Greenwich Street, 23` Floor, New York, New York. If a rating is
assigned, it will reflect only the opinion of Moody's. Any explanation of the significance of the
rating may be obtained only from Moody's.
There is no assurance that the rating, if assigned, will continue for any given period of time, or
that such rating will not be revised or withdrawn if, in the judgment of Moody's, circumstances
so warrant. A revision or withdrawal of the rating may have an adverse effect on the market
price of the Bonds.
7
FINANCIAL ADVISOR
The City has retained Springsted Incorporated, Public Sector Advisors, ot 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 ot this Official Statement tor use in connection with the
initial sale of the Bonds. As of the date of the settlement of the Bonds, the Purchaser will be
furnished with a certificate signed by the appropriate officers of the City. The certificate will
state that 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)
8
(a)
(b)
(c)
Excludes mobile home valuation of $132,669.
Trend of Values
CITY PROPERTY VALUES
2012/13 Indicated Market Value of Taxable Property: $4,715,603,681*
Indicated market value is calculated by dividing the City's taxable market value of $4,767,475,321 by
the 2011 sales ratio of 101.1% for the City as determined by the State Department of Revenue. (2012
sales ratios are not yet available. Excludes mobile home valuation of$13,268,480.)
2012/13 Taxable Net Tax Capacity by Class of Property: $55,320,301*
Real Estate:
Residential Homestead $38,983,401 71.1%
Commercialllndustrial, Public
Utility, and Railroad 13,017,529 23.7
Non- Homestead Residential 1,311,388 2.4
Agricultural and Seasonal /Recreational 674,411 1.2
Personal Property 866,496
2012/13 Net Tax Capacity $54,853,225 100.0%
Less: Captured Tax Increment Tax Capacity (863,946)
Contribution to Fiscal Disparities (5,494,207)
Plus: Distribution from Fiscal Disparities 6,825,229
2012/13 Taxable Net Tax Capacity $55,320,301
Indicated Taxable Taxable Net
Market Value(a) Market Value(c) Tax Caoacitv(b)
2012/13 $4,715,603,681 $4,767,475,321 $55,320,301
2011/12 4,975,275,137 5,030,003,164 58,325,034
2010/11 5,421,918,927 5,356,855,900 62,063,161
2009/10 5,812,160,284 5,736,602,200 65,043,115
2008/09 6,368,568,182 6,024,665,500 67,986,992
Indicated market values am 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.
See Appendix 111 for discussion of taxable net tax capacity and the Minnesota property tax system.
The taxable market value reflects a decrease of $256,627,663 due to the Market Value Homestead
Exclusion program implemented by the State of Minnesota in 2011. See Appendix 111.
9
Ten of the Largest Taxpayers in the City
2012/13 Taxable
Taxpayer Type of Business Net Tax Capacity
Lakeville 2004 LLC Commercial $ 326,426
Heritage Commons LLC Retail 318,046
Dakota Electric Association Utility 295,012
Target Corporation Retail 256,414
Argonne Investments LLC Retail 246,873
LTF Real Estate Company Inc. Real Estate 238,810
FR/CAL Interstate South LLC Industrial 229,026
Xcel Energy Utility 216,430
CenterPoint Energy Utility 207,782
Southfork Apts. Ltd Partnership Apartments 191,100
Total $2,525,919*
* Represents 4.6% of the City's 2012/13 taxable net tax capacity.
Legal Debt Limit and Margin*
CITY INDEBTEDNESS
Legal Debt Limit (3% of Taxable Market Value)
Less: Outstanding Debt Subject to Limit
Legal Debt Margin as of August 15, 2013
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.
$143,024,260
(47,055,000)
$ 95,969,260
General Obligation Debt Supported by Taxes(a)
Date Original
of Issue Amount
3 -15 -03 $14,890,000
11 -1 -04 14,445,000
12 -1 -05 5,430,000
5 -1 -07 840,000
8 -1 -07 15,115,000
12 -15 -07 2,810,000
12 -30 -09 4,945,000
12 -1 -11 1,21 5,000
8 -15 -12 22,450,000
Total
Purpose
(a) These issues are subject to the legal debt limit.
(b) Includes the City's proportionate share of the Dakota Communications Center's $7,315,000 Public
Safety Revenue Bonds, Series 2007, dated May 1, 2007,
General Obligation Debt Supported Primarily by Special Assessments
Date Original
of Issue Amount Purpose
2 -1 -07 $3,165,000 Improvement Refunding 2 -1 -2016 $ 280,000
8 -1 -07 1,310,000 Local Improvements 2 -1 -2018 250,000
10 -1 -08 620,000 Local Improvements 2 -1 -2019 180,000
12 -30 -09 4,250,000 Refunding 2 -1 -2020 2,400,000
12 -1 -11 2,385,000 Local improvements 2 -1 -2032 2,040,000
8 -15 -12 6,805,000 Local Improvements 2 -1 -2033 6,805,000
8 -15 -13 4,800,000 Local Improvements (the Bonds) 2 -1 -2034 4,800,000
Total
General Obligation Debt Supported by Tax Increment
Date Original
of Issue Amount Purpose
2 -1 -07
2 -1 -07
12 -30 -09
$2,265,000
820,000
930,000
Street Reconstruction 2 -1 -2014 $ 700,000
Capital Improvements 2 -1 -2015 680,000
Street Reconstruction 2 -1 -2026 2,400,000
Public Safety Revenue 2 -1 -2014 140,000(")
Capital Improvements 2 -1 -2032 13,110,000
Street Reconstruction 2 -1 -2028 2,380,000
Street Reconstruction 2 -1 -2030 4,380,000
Park Refunding 4 -1 -2015 815,000
Street Reconstruction and
Capital Improvements Refunding 2 -1 -2030 22,450,000
Tax Increment Refunding
Taxable Tax Increment Refunding
Tax Increment Refunding
- 11
Est. Principal
Final Outstanding
Maturity As of 8 -15 -13
$47,055,000
Est. Principal
Final Outstanding
Maturity As of 8 -15 -13
$16,755,000
Est. Principal
Final Outstanding
Maturity As of 8 -15 -13
2 -1 -2022 $1,960,000
2 -1 -2014 135,000
2 -1 -2014 240,000
Total $2,335,000
General Obligation Debt Supported by Revenues
Est. Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturity As of 8 -15 -13
11 -1 -04 $9,735,000 Water Revenue Refunding 2 -1 -2016 $2,865,000
12 -15 -07 3,675,000 State -Aid Street 4 -1 -2018 2,035,000
1 -1 -10 2,680,000 State -Aid Street Refunding 4 -1 -2020 1,960,000
12 -1 -11 665,000 State -Aid Street Refunding 4 -1 -2021 595,000
Total $7,455,000
Ice Arena Debt
Est. Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturity As of 8 -15 -13
4 -1 -99 $1,250,000 Recreational Facility Revenue 8 -1 -2019 $ 770,000(a)
12 -1 -06 9,230,000 Ice Arena Lease Revenue 2 -1 -2032 8,325,000(b)
10 -1 -08 775,000 Ice Arena Refunding 2 -1 -2015 275.0000)
Total $9,370,000
(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.
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.
(b)
(c)
These bonds are general obligations of the City, but are payable from gross revenues of the City's lce
Arena.
Revenue Debt
Est. Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturity As of 8 -15 -13
5 -1 -07 $3,955,000 Liquor Store 2 -1 -2027 $3,235,000
Estimated Calendar Year Debt Service Payments Including the Bonds
G.O. Debt Supported
by Taxes
G.O. Debt Supported
Primarily by
Special Assessments
Principal Principal
Year Principal & interest Principal & Interest(a)
2013 (at 8 -15) (Paid) $ 2,753 (Paid) (Paid)
2014 $ 2,485,000 5,540,734 $ 1,255,000 $ 1,643,397
2015 2,365,000 4,508,891 1,630,000 1,994,919
2016 2,210,000 3,834,306 1,680,000 2,014,608
2017 2,225,000 3,780,770 1,575,000 1,877,860
2018 2,370,000 3,840,636 1,550,000 1,820,721
2019 2,510,000 3,876,920 1,510,000 1,745,231
2020 2,625,000 3,882,334 1,280,000 1,480,127
2021 2,785,000 3,926,489 1,140,000 1,309,422
2022 2,860,000 3,888,243 1,005,000 1,146,367
2023 2,990,000 3,908,495 1,020,000 1,131,141
2024 3,125,000 3,928,067 585,000 671,160
2025 3,285,000 3,966,469 280,000 353,969
2026 3,455,000 4,008,263 280,000 345,949
2027 2,370,000 2,808,673 275,000 332,843
2028 2,480,000 2,818,640 275,000 324,633
2029 2,395,000 2,634,893 275,000 316,188
2030 2,545,000 2,686,861 270,000 302,613
2031 965,000 1,034,028 270,000 294,033
2032 1,010,000 1,033,356 270,000 285,363
2033 225,000 232,338
2034 105,000 106,838
Total $47,055,000(b) $65,909,821 $16,755,000(0 $19,729,720
(a) includes the Bonds at an assumed average annual interest rate of 2.43 %.
(b) 54.3% of this debt will be retired within ten years.
(c) 81.4% of this debt will be retired within ten years.
- 13 -
Estimated Calendar Year Debt Service Payments Including the Bonds
(continued)
Year
2013 (at 8-15)
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total
Year
2013 (at 8 -15)
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Total
Principal
(Paid) (Paid)
$ 445,000 $ 529,004
210,000 282,561
220,000 283,961
220,000 275,161
230,000 276,161
240,000 276,761
245,000 271,908
260,000 276,493
265.000 270.565
$2,335,000 $2,742,575
Principal
(Paid)
$ 360,000
520,000
415,000
470,000
505,000
525,000
370,000
390,000
415,000
435,000
450,000
470,000
495,000
520,000
545,000
575,000
605,000
635,000
670.000
G.O. Debt Supported
by Tax Increment
Principal
& Interest
Ice Arena Debt
Principal
& Interest
(Paid)
$ 780,219
925,864
800,490
834,980
847,028
842,480
661,988
664,888
671,775
672,650
667,738
667,038
670,325
672,163
672,534
676,634
679,347
680,672
685.494
$9,370,000(a) $13,774,307
(a) 47.0% of this debt will be retired within ten years.
(b) 64.1 % of this debt will be retired within ten years.
14
G.O. Debt Supported by
Revenues
Principal
Principal & Interest
(Paid) $ 73,801
$1,590,000 1,824,143
1,685,000 1,861,201
1,765,000 1,878,358
780,000 847,226
800,000 840,326
375,000 396,064
380,000 388,626
80,000 80,860
$7,455,000 $8,190,605
Principal
(Paid)
$ 165,000
175,000
180,000
190,000
200,000
210,000
220,000
235,000
245,000
255,000
270,000
285,000
295,000
310,000
Revenue Debt
Principal
& Interest
(Paid)
$ 322,625
324,125
320,250
321,000
321,250
321,000
320,250
323,875
321,875
319,375
321,250
322,375
317,875
317,750
$3,235,000 04 $4,494,875
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(a)
Dakota County
ISD No. 192 (Farmington)
ISD No. 194 (Lakeville)
ISD No. 196 (Rosemount -
Apple Valley- Eagan)
Metropolitan Council
Metropolitan Transit
Total
Debt Ratios*
2012/13 Taxable
Net Tax Capacity
$ 390,816,299
26,387,034
48,659,828
141,864,104
2,964,890,691
2,367,824,145
Est. G.O. Debt
As of 8- 15 -13(b)
$ 46,485,00001
200,101,000
181,335,000(d)
91,499,247
16,715,000(e)
327,475,000(0
G.O.
Direct Debt
Debt Applicable to
Tax Capacity in the City
Percent Amount
12.4% $ 5,764,140
18.9 37,819,089
87.8 159,212,130
5.4
1.6
2.1
4,940,959
267,440
6.876.975
$214,880,733
(a) Only those units with general obligation debt outstanding are shown here.
(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.
G.O. Indirect &
Direct Debt
To 2012/13 Indicated Market Value ($4,715,603,681) 1.40% 5.96%
Per Capita (57,048 — 2012 MN State Demographer's
Estimate) $1,159 $4,926
* Excludes general obligation debt supported by revenues; ice arena debt; revenue debt; and the
Metropolitan Council Loan Agreement.
Tax Capacity Rates for a City Resident in Independent School District No. 194 (Lakeville)
Dakota County
City of Lakeville(a)
ISD No. 194
(Lakeville)(b)
Special Districts(°)
Total
2008/09
25.821 %
33.973
Tax Levies and Collections
Levy /Collect
2012/13
2011/12
2010/11
2009/10
2008/09
Net
Lew
CITY TAX RATES, LEVIES AND COLLECTIONS
$20,413,865
20,485,607
20,341,647
20,785,640
20,463,299
2009/10
27.269%
36.624
$20,266,433
19,955,441
20,437,282
20,022,607
For
2010/11 2011/12 Total Debt Only
29.149%
38.250
31.426%
39.051
33.421 %
41.234
2012/13
- 0 -
9.028%
27.062 27.714 32.138 32.061 33.535 23.083
4.916 4.987 5.199 5.562 5.848 1.638
91.772% 96.594% 104.736% 108.100% 114.038% 33.749%
(a) The City also has a 2012/13 tax rate of 0.00843% spread on the market value of property in support of
debt service.
(b) Independent School District No. 194 (Lakeville) also has a 2012/13 tax rate of 0.19955% spread on
the market value of property in support of an excess operating levy.
( °) 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.
Collected During Collected and /or Abated
Collection Year as of 5 -28 -13
Amount Percent
The net levy excludes state -aid for property tax relief and fiscal disparities, if applicable.
is the basis for computing the tax capacity rates. See Appendix 11!.
(In Process of Collection)
98.9% $20,382,137
98.1 20,300,052
98.3 20,756,402
97.8 20,446,238
Amount Percent
99.5%
99.8
99.9
99.9
The net levy
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
Investment Policy
Investment Procedures
FUNDS ON HAND
As of April 30, 2013
CITY INVESTMENTS
- 17 -
Cash and Investments
$ 7,208,568
844,289
878,382
1,012,554
659,478
31,260
117,893
17,879,008
4,553,020
8,470, 733
350,713
6.018,552
$48,024,450
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.
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. 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. 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.
Current Cash and Investments
As of April 30, 2013, the City's portfolio had a book value of $47,398,135 versus a cost to the
City of $47,646,265. The composition of the portfolio was as follows: 2.0% in cash or money
market funds, 29.2% in certificates of deposit, and 68.8% in in government agency securities.
The portfolio had a maturity schedule as follows:
Year
Liquid
2013
2014
2015
2016
2017
2018 -2023
Total investments
Cash
Total
Cost Percent of Total
$ 353,119
11,045,557
10,070,654
7,297,508
2,982,882
4,651,090
10.997.325
0.7%
23.0
21.0
15.2
6.2
9.7
22.9
$47,398,135 98.7%
626,616 1.3
$48,024,751 100.0%
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
(24,320 acres).
The following chart shows Lakeville's population growth since 1970:
Year Population Percent Change
2012 MN State Demographer 57,048 2.0%
2010 U.S. Census Bureau 55,954 29.7
2000 U.S. Census Bureau 43,128 73.5
1990 U.S. Census Bureau 24,854 68.0
1980 U.S. Census Bureau 14,790 95.7
1970 U.S. Census Bureau 7,556
Sources: U.S. Census Bureau, htta:/ /www.census.00v; Minnesota State Demographer,
httrx/Iwww.demograohy.state.mn.usiestimates.html.
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 within in the City are listed below:
Employer Product/Service
Independent School District No. 194
(Lakeville)
Ryt -Way Industries, Inc.
ConAgra Store Brands
Target
Imperial Plastics, Inc.
Despatch Industries, Inc.
Malt -O -Meal Brands
Life Time Fitness
Menasha Corporation
City of Lakeville
Fleet Farm
Image Trend
Jeff Belzers Chev - Dodge -Kia
Verified Credentials, Inc.
National Polymers, Inc.
Hearth & Home Technologies, Inc.
Source: City of Lakeville, Minnesota.
Retail Sales and Effective Buying Income (EBI) for Dakota County
2012
2011
2010
2009
2008
Source: Claritas, inc.
Total Retail Total Median
Sales ($000) EBI ($000) Household EBI
$5,794,034
6,784,232
6,786,831
6,197,129
6,694,404
Public education
Food service contractors
Breakfast cereal manufacturing
Retail
Plastics material and resin manufacturing
Industrial furnace and oven manufacturing
Cereal production
Fitness clubs
Corrugated box manufacturing
City government
Retail
Computer programming
Auto dealership
Credit bureau
Plastics material and resin manufacturing
Fireplaces /metal work
-19
$10,770,815
10,387,368
10,287,060
10,543,345
10,270,100
The 2012 median household EBI for the State of Minnesota was $44,911.
$55,539
56,655
56,964
59,620
57,581
Approximate
Number
of Employees
1,273
830
515
360
360
300
250
230
204
201
180
141
110
106
100
80
Labor Force Data
Labor Force:
City of Lakeville
Dakota County
State of Minnesota
Unemployment Rate:
City of Lakeville
Dakota County
State of Minnesota
Annual Average April
2009 2010 2011 2012 2013
31,043 30,918 31,037 131,213 31,776
229,997 229,733 230,864 231,946 235,723
2,950,277 2,962,633 2,969,696 2,969,366 2,989,154
6.7% 6.7% 5.6% 4.9% 4.3%
7.4 7.1 6.1 5.3 4.5
8.0 7.4 6.5 5.6 4.9
Source: Minnesota Department of Employment and Economic Development,
http ://www.positivelyminnesota.com. 2013 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 2011, 2012, and through April 30, 2013 (in excess of $250,000)
Business Product/Service Valuation
Wal -Mart
Goodwill
McDonalds
McDonalds
Retail $8,495,000
Retail 1,400,000
Restaurant 800,000
Restaurant 900,000
Expansion or Remodel Building Permits in 2011, 2012, and through April 30, 2013 (in excess of
$250,000)
Business
MOM Brands
Gander Mountain
ImageTrend
Jeff Belzer's
MOM Brands (fka Malt -O -Meal)
National Polymers
ConAgra
MOM Brands
McDonalds
Pizza Ranch
Computer Science Corp
Dayton Freight
McDonalds
Product/Service
Corporate Headquarters
Retail
Software Development
Automobile Dealership
Admin. Offices/Technology Center
Plastic's Manufacturer
Food Manufacturer
Admin. Offices/Technology Center
Restaurant
Restaurant
Mail Transport/Equipment Service Center
Freight Carrier
Restaurant
Valuation
$4,320,000
2,400,000
2,050,000
2,270,000
1,800,000
1,865,000
1,500, 000
438,000
400,000
300,000
260,000
260,000
250,000
In late 2012, Malt -O -Meal Brands (MOM Brands) acquired a second 65,000 square foot
building in the Fairfield Business Campus, which is adjacent to their existing 98,000 square foot
building where they currently have over 240 employees. MOM Brands was issued a building
permit in February 2013 to begin a $4,320,000 renovation of their second building. Upon the
completion of the renovation, MOM Brands will move their corporate headquarters from
downtown Minneapolis to the City, bringing an additional 100 corporate jobs to the community.
Wa!mart constructed a new 152,000 square -foot store on Keokuk Avenue near the County
Road 70/1 -35 interchange, which opened in October 2012.
In February 2012, Stonehenge Development completed construction of a new 20,000 square -
foot store currently being leased to Goodwill. This new commercial retail building is located on
Kenrick Avenue south of Kenwood Trail.
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 within the City. The
addition replaces warehouse space the company previously leased in the City of Shakopee,
Minnesota, and improves ConAgra's shipping and logistics operations.
In January 2012, ImageTrend, a local software development company, completed construction
on a 24,000 square-foot expansion to their existing building. This expansion will result in the
ability to hire up to 100 additional employees for the company, bringing the total employment to
approximately 240 people.
In 2011, Gander Mountain completed a renovation to its retail store that included construction of
a firearms training center.
In April 2009, FR/CAL Interstate South LLC developed a 282,000 square -foot warehouse
distribution building that is currently being marketed for lease. In 2011, 163,000 square feet of
this distribution warehouse was leased by Computer Sciences Corporation and created
approximately 35 new jobs.
Since 2011, over 750,000 square teet ot existing industrial buildings have been purchased or
leased throughout the City. Some of the larger tenants/owners include: Genpak (210,000
square feet); CSC (First Park Spec. Building - 160,000 square feet); BTD (100,000 square
feet); Despatch Industries (68,000 square feet); Midwest Veterinary Supply (51,000 square
feet); and GRI Group (45,600 square feet).
Residential Development
The City is reliant upon regional sanitary sewer and the allocation ot 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), B (2015 or thereafter), and the Urban Reserve (2020
or thereafter). MUSA Expansion Area A was brought into the current MUSA on
February 4, 2013, which increased the amount of available residentially zoned land within the
current MUSA.
As of April 1, 2013, there were 594 vacant single - family lots and 255 vacant townhome unit lots
that have been final platted but not yet built upon, and 346 single family lots and 62 townhome
unit lots preliminary platted pending final plat approval for development. A total of
approximately 3,246 acres of residentially zoned land is available within the current MUSA,
including 1,258 acres of single family zoned property, 362 acres of single and two family zoned
property, 834 acres of townhome zoned property, and 471 acres of Planned Unit Development.
Building Permit Summary
2013 (to 4 -30) 1,040 $ 43,247,900 112 $ 33,547,000
2012 4,973 129,305,246 393 95,829,000
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
Financial Institutions
Education
Number of Residential
Total Permits Dwelling Units
Number Value Number Value
Financial institutions located within the City include Anchor Bank, Bank of the West, KleinBank,
Lakeview Bank, M &I Marshal! and !Islay 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.
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). Enrollment for each district for the 2012/13 school
year was 6,779, 10,919, and 27,174, respectively. Nine elementary schools, three middle
schools, and two high schools are located within 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
The City 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.
-22
The present Mayor and Council members are:
The City's full -time equivalent employment is 201 persons.
Public Utilities
Expiration of Term
Matt Little Mayor December 31, 2014
Doug Anderson Member December 31, 2016
Kerrin Swecker Member December 31, 2016
Bart Davis 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 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 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 of the Empire plant in
2008, 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 53 full -time officers and 21 police reservists.
The City's Fire Department has four stations and is served by 85 trained volunteers. The City
has a fire rating of 3 for insurance purposes, which results in a significant reduction of fire
insurance premiums for commercial and industrial buildings and apartments.
Additional City facilities include 62 public parks(including 40 playgrounds), 18 conservation
areas, three municipal swimming beaches, six outdoor ice rinks which are fully boarded, three
indoor ice rinks, and approximately 100 miles of paved trails and sidewalks.
The City operates three liquor stores that are iocatea adjacent to major highways. Two of the
facilities are located at County Road 46 (160 Street) and Kenrick Avenue and at County Road
46 (160th Street) and Galaxie Avenue. These two facilities are owned by the City; retail space
for a third facility located at County Road 50 (Kenwood Trail) and Dodd Boulevard is leased by
the City.
Minnesota Statutes prohibit private off -site liquor operations if the City owns and operates a
municipal liquor store. Sales for 2012 were $15,220,064, resulting in net income before
transfers of $1,476,434. Sales as of April 30, 2013 were $4,359,821, which is a $128,113
(3.0 %) increase over the same period in 2012.
Labor Contracts
The City of Lakeville has labor agreements with Law Enforcement Labor Services, Inc. for
police sergeants, Minnesota Public Employees Association, for police officers, and Minnesota
Teamsters Public & Law Enforcement Employees Union Local No. 320 for public works
employees. All contracts are in effect through December 31, 2013 and represent 43% of the
City's full -time equivalent number of employees.
Employee Pensions
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
2012 $587,750 $679,673
2011 596,142 650,578
2010 583,884 621,658
2009 578,225 602,343
2008 575,007 524,673
For more information regarding the liability of the City with respect to its employees, please
reference Note 16, Defined Employee Benefit Pension Plans — Statewide, of the City's
Comprehensive Annual Financial Report for fiscal year ended December 31, 2012, 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 govemments 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, 2012,
the City contributed $16,594 to the plan.
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, 2012 are as
follows:
Annual required contribution $ 75,006
Interest on net OPEB obligation 6,365
Adjustment to annual required contribution (9,227)
Annual OPEB cost (expense) $ 72,144
Contributions made (16,594)
Increase in net OPEB obligation $ 55,550
Net OPEB obligation — beginning of year 159.124
Net OPEB obligation — end of year $214,674
According to the City's most recent actuarial valuation date (January 1, 2011), the City's
unfunded actuarial accrued liability (UAAL) was $588,458.
The City's annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan,
and the net OPEB obligation for the past five years are as follows:
Fiscal Year Ended
December 31, 2012
December 31, 2011
December 31, 2010
December 31, 2009
December 31, 2008
Annual
OPEB Cost
$72,144
73,281
41,447
41,866
42,474
Employer
Contribution
$16,594
11,356
9,809
8,484
10,295
Annual Net
OPEB Cost OPEB
Contributed Oblication
23.0% $214,674
15.5 159,124
23.7 97,199
20.3 65,561
24.2 32,179
For more information concerning the City's OPEB obligation, please reference Note 14, Other
Post - Employment Benefits (OPEB) Plan of the City's Comprehensive Annual Financial Report
as of December 31, 2012, an excerpt of which is included as Appendix IV to this Official
Statement.
General Fund Budget
Revenues:
General Property Taxes
Licenses and Permits
Intergovernmental
Charges for Services
Court Fines
Investment Income
Miscellaneous
Total Revenues
Expenditures:
Mayor and Council
Committees and Commissions
City Administration
City Clerk
Legal Counsel
Planning
Community and Economic
Development
Inspections
General Govemment Facilities
Finance
Information Systems
Human Resources
Insurance
Police
Fire
Engineering
Streets
Parks
Recreation
Heritage Center
Arts Center
Other
Total Expenditures
Other Financing Sources (Uses):
Transfer from Other Funds
Transfer to Other Funds
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance, January 1
Fund Balance, December 31
2011 2012 2012 2013
Actual Amended Estimated Adopted
$16,539,283 $16,153,641 $16,186,995 $15,920,497
1,238,704 972,953 1,595,579 1,345,449
680,483 757,638 661,788 621,226
1,625,953 1,531,849 1,591,200 1,632,580
294,122 279,301 294,809 294,809
58,365 91,795 39,282 32,735
66,461 69,547 76,955 63,585
$20,503,371 $19,856,724 $20,446,608 $19,910,881
$ 92,670
67,859
316,455
109,044
61,368
336,092
290,835
848,488
435,755
548,010
443,692
287,204
289,532
8,380,796
1,375,303
668,448
2,371,434
2,022,148
597,629
0
441,207
$19,983,969
$ 633,008
0
$ 633,008
$ 1,152,410
$ 9,395,928
$10,548,338
- 26 -
$ 94,724
66,403
319,215
178,350
65,132
341,554
298,310
770,692
464,061
609,939
480,466
359,119
223,275
8,585,132
1,359, 729
723,349
2,668,200
2,179,649
596,619
25,507
443,698
0
$20,853,123 $20,577,799 $21,246,903
$ 680,253
0
$ 680,253 $ (218.382) $ 715,297
$ (316,146) $ (349,573)
$10,548,338 $10,548,338
$10,232,192 $10,198,765
$ 94,108 $ 95,275
78,438 82,272
322,765 392,969
170,732 114,964
65,132 65,132
344,137 392,834
302,427 300,421
774,942 794,978
463,385 442,807
609,021 610,134
481,584 481,319
364,827 363,195
223,275 227,420
8,619,839 8,736,220
1,355,724 1,444,532
640,197 693,354
2,516,819 2,634,403
2,116,243 2,202,544
599,127 578,477
13,849 72,605
421,228 416,048
0 105000
$ 693,312 $ 715,297
(911,694) 0
$ (620,725)
$10,198,765
$ 9,578,040
City of Lakeville, Minnesota
[Original Purchaser]
Ladies and Gentlemen:
PROPOSED FORM OF LEGAL OPINION
APPENDIX I
HORSEY
1. Re: $ General Obligation Improvement Bonds, Series 2013A
City of Lakeville, Minnesota
DORSEY & WHITNEY LLP
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, 2013 (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:
2. The Bonds are valid and binding general obligations of the City, enforceable in
accordance with their terms.
3. The principal of and interest on the Bonds are payable from special assessments and 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.
4. 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 fmancial 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.
5. The City has designated the Bonds as "qualified tax- exempt obligations" within the
meaning of Section 265(bX3) of the Internal Revenue Code of 1986, as amended (the "Code "), and
financial institutions described in Section 265(b)(5) of the Code may treat the Bonds for purposes of
Sections 265(b)(2) and 29I(e)(1)(B) of the Code as if they were acquired on August 7, 1986.
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 paragraphs 3 and 4 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.
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, 2013.
Very truly yours,
CONTINUING DISCLOSURE COVENANTS
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. 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 twelve months after the end of each fiscal year of the City, commencing with
the fiscal year ending December 31, 2013, 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
APPENDIX II
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;
(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
11 -2
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) 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 fmancial 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 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 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 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.
SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND
MINNESOTA REAL PROPERTY VALUATION
(effective through levy year 2012 /payable year 2013)
APPENDIX III
Following is a summary of certain statutory provisions effective through levy year 2012/payable
year 2013 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 la or 1b 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.
Market Value Homestead Exclusion. In 2011, the Market Value Homestead Exclusion Program
(MVHE) was implemented to offset the elimination of the Market Value Homestead Credit
Program that provided relief to certain homesteads. The MVHE reduces the taxable market
value of a homestead with an Assessor's Estimated Market Value up to $413,800 in an attempt
to mimic the property tax prior to the elimination of the homestead credit. The MVHE applies to
property classified as Class la or 1b and Class 2a, and causes a decrease in the Issuer's
Taxable Market Value, even though the Assessor's Estimated Market Value on the same
property did not decline.
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 tumed 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,
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.
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.
8. 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 475.81 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 (la}
Up to $500,000
Over $500,000
Residential Non - homestead
Single Unit (4bbl )
Up to $500,000
Over $500,000
1 -3 unit and undeveloped land (4b1)
Market Rate Apartments
Regular (4a)
Low - Income (4d)
Commercialllndustrial!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 (4c12)
Up to $500,000
Over $500,000
Disabled Homestead (*lb)
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 $1,290,000'
Over $1,290,000
Non- homestead (2b)
Subject to the State General Property Tax.
Exempt from referendum market value tax.
2012 legislative increases.
Local Tax Local Tax Local Tax Local Tax Local Tax
Payable Payable Payable Payable Payable
2009 2010 2011 2012 2013
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 %' 1 1.00 %' 1 1.00 %' 1 1.00%' 1 1.00 %'
1.25% ` 1.25% ` 1.25 %' ` 1.25 %' ` 1.25%'
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% 1.25% 1.25% 1.25%
0.55 %` 0.55% 0.50%` 0.50V 0.50p 1
1.00 % 1.00 % 1.00 % 1.00 % 1.00 %
1.00 % 1.00 % 1.00 % 1.00 % 1.00 %
111-4
EXCERPT OF 2012 COMPREHENSIVE ANNUAL FINANCIAL REPORT
APPENDIX IV
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, 2012. 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, 2011. 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 (GASB) 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 govemmental funds.
Toth p y Coma led Shregmere
c of 'Media, Neo=n*
IQOxrore me mo ANaALfirkrsfIlefor
We her mind the Bigmdd Marmots of the Ioraemewl eachifree, the bw*0s ape aaflvilis, wwh
mein had, sod the mgegpi a umainag lid *Rmriae d ihe Co' of Lakeeille, Hlaaeatta (the C y)
as of rad Tee the lam sided Deunrber 31, 2012, and dm aimed emu le the Amide m emewa, which
collectively amprh sthe Cty'u boric 111 1 1mtemumeelineditthetableofor m
NIANAm111rlk wwONIWYIy p01MitratA11p&LSTArenra6
Adaaaporem is rerpmBne for the provenica red parcemiea of thew fm>,clal statamgk in
aoewduue with ascanoing principles pmually ier iced ib the United hoe of Arm*0 to Whim
Ike dodo, imps m. W tmmtorme at lead man relevant re der prepamme and 1hh
peleraWes of Amanda Moi ne = tom ne lies from match miu aleme . whether din to fled or
m=.
ATWI06 $ Itfi'Otemegatr
Or rspoodblliy kte express wintms se three Arnold erWeele breed co m Mk We credoeed
or malt in seemdree with awning madnds gams* aawptsd a to UMW Wee of Aerial and
the sddeds q dinble to &mmi l sail a nlaisd a Gwwmen Alufti g andirds. hood by the
Compeller Greed of the UMW Bator. Tear medrda moire tat Flee mid perform the Mat to
Ora mumisble About whether the Mahe merman m foe him wash missmkmmL
A. suit helves performing pmmdmee to Mamie oh endear ghoul the amamm and &don us in
the flrnsel imam . The precede= sdna4d depaed m the sadlters Judpeer, inelading to
aeemst aftherie4ofamleialmbeide to rdthe *genii
la tool* dune risk ensersonee, Om editor scosidee ben d morel Maven to the City's preps dise
red 6k pxeeeta ice ofthc 611.$1 ratmorl a order to help, mat peaceim a the me appapFta e
the eh:ammrm, lea we Or ha popne of oxpresdos an aploim an fa elledvmon of the CPA
Monad canon. Meant*, leis expos m mob maim An edit sLo hhtds m'atar6ra the
d ncounini polkas gad and the mamoabkms of dgdilmd mccandon emsmae
made wanngmed, as well as wallahs ilse oven! ptasolmkr cite frnein msleetrlg.
We before ins the audit Mama era have canned ie wtIdml end lee epeine to preside a fads her
wn r adk °Vi mfr
Opatlmte
le our opinion, die Aoanoisl neemr1 ringed to on the previous page pagan 1s:N, le el wdar1
✓ anger, the response Ameeoid polio dtbe ppvrmend'ctoides, the bethaurrtnic rtivi* . cosh
soh fed, and the app amain gin Bead inherence of this C1 r at Mamba 31, 2012, nd she
reeprave changes fro Aaeen11 incision ad, stow appl able, cosh flaws greet, in statamly wl0n
▪ n vhdpies eeeaaliymimpadle the United Seam ofAmerica.
As dlaamed it Woe 1 retire oaks to bade fatans*l enemwns, the C iy le irrplen need Govs.seeatal
Mows g Shadmk Band (CASB) Se imuret Ala. 63, Isis swirl Repot* ofDObwsd Claryfren of
ihrsom e , Wand Moo Raaror, and MI RsW" red GASB S Utrreet No 65, Rees
Previanbkrpogcdsn Man mid liabarrer dens the yew coded December 31.2012.
011110 BUM=
Other 1irmYon
lta7ahsktim plwarmrylahrerger
Accounting pinch gaudy reaped in the Uatrd Stator of AwsIea remits to ha Kamen meta
Diamien sad Melva the r ethic Worry miaperiea bdemdon Wr no Grand Feed, ad dm
Oder Ponikeployment Benefit PMm — Sdanxia dl9ad*g Provos as Ibed le On table erase n%
he Famed er mrppker' Are boric handed moments. Soeh bdormttla . although net n pint of the
brio financial Oraamn, Is NOM by GAM wlo amines it to be an gore ild peer of boded
rrpeit*0 fin pledge the bade amain strrgado le an approving Wmrnind, economic, or hurried
em set We her upplud oath ImYgd paeedass to the agahed ggpplmwrry Milamn ba a
mgmd.c wi0u eeditng redid% gemelb' eceplpd le to United Sum 0America, which amdred
of hgdtior of meryaa -t ohdr tee methods of pnpsrlet ba infanrnton and eeprleg ace
igdbrug6m for ao®sancy with mm earreat's n greme a err bu4drs,, the 6mia Aerial atmreets,
an other InarWge wed rained daring ow mil of the boric Hmril mtmera. We do re escrow,
m opinion ar pawide soy rgme co de bdaamdaa because the limbed promisees de ma provide nor
with eetieiehtinhume uprose an epfefee rprwride any wanueu.
Chatdit wee conducted i rtla prpos of loanig opi eee on the Armand Marna that collerdvny
ceps* she City's WWI mmmrm. The imodongy =din, eae0leiag and lodilidwl Rod
Omen= and sheddd, suppler/0P itetemrka, and rdta0eal extra is had le the tabs of
aoalmh, see pr=eend for pmrp=osea/Mikan anrbwia and arc note required pod doe brio frmndol
anomant
The caabieing sod Winded Ingd rateaaata end adssddm sad wppinaeeW lefannsho m the
respor ibiliy ofomgmmeat ad were dgdad *ant ad Mate drolly to to oaderiying awgmainp nod
Mar more geed to prom tom beak Bernal tame em. Sat eibmafm has Lm rbiomed to the
andiRee page ureic applied a the wait of the task Areal Orman sod moan slim]
PonrdmxR ledudbe etmptriei and reconciling rah bt6Nwtka diemgy is the sudayihg ementleg
mid other trends and tic prapam the hair Antacid emmrm or to the Leek feral ealgweta
thdmlr=, red other addidmnsl prosaism is egeordm with sdliog mire gray meeprd fro
me laird Siam of Amok.. le or opines, the mambbhleg red Ltlhided And atremmts Ord
ahaddke sad exppkmetW *Pormena as fairly sated, a NO amtaial aeons, a Niglio eo to bank
March ratarmte es s wiolc.
37se tauedas eiy era omtlrtmd emirs have not Lam *hod ta the soda* peaged1r inched in the
Nib of the boic fmmidal smarm mi4 amrdsgly, we do net moor m opiim r provide art'
seminar n tam.
0Tmt1ROltlt1G 111QUilt1O15GO IIMelerAwlnlG OrAmar.a
Leemdorxor with Goerrrnw , wohoe din feedeurreptdoledJoe5,20I3an
ar mridmstar of tIs (Spins irNmid carrel over feared wepn mid on min has of la aespllam
win eanda previsions of hors, tep0irs, WOMB, par alpraers. mid other *010. The purpose
of the epee is to deenhe the rope of or tabs of intend oemd mvr &weld seghm0t Red
o omparca and the roans of 1Wtteriag, and an to provide en mire ono Barad rebel arm MOW
✓ pm* a an eorpiteer. Tea aspen e g impel purl of an ado pulNaad a memaeae with
GwwNarr Mihne 8dndsada in odridNks the [1y's band csa rei over Amid repaeg and
coinplirms
Arm 5, 2019
era. 114470,
"
IV -2
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF NET POSITION
DECEMBER 31, 2012
ASSETS:
Cash and investments
Receivables
Internal balances
Inventory
Prepaid items
Restricted assets (temporarily):
Cash and investments
investments held by trustee
Capital assets
Non - depreciable
Depreciable, net
Total capital assets
Total assets
LIABILITIES:
Salaries, accounts, contracts, interest, and deposits
Unearned revenue
Non- current liabilities
Due within one year
Due in more than one year
Total liabilities
NET POSITION:
Net investment in capital assets
Restricted for
Special purposes
Debt service
Capital acquisition
Unrestricted
Total net position
See accompanying notes to basic financial statements.
Governmental
$ 37,811,737
10,130,194
(208,516)
243,870
12,806
24,383,284
29,113,820
155,916,398
185,030,218
257,383,393
3,797,758
377,887
6,922,897
105,754,121
116,852,683
125,051,058
26,357
10,935,596
8,441,214
(1,923,495)
$ 140,530,730
Businees -type
Activities
$ 13,421,352 $
2,629,462
208,516
1,533,191
34,994
3,429,036
101,997e152
105,426,488
123,579,753
325,750
1,810,188
389,243
3,386
5,58,
5 970
102,009,893
325,750
15
$ 1
Tots)
51,233,089
12,759,656
1,7T ,061
47,600
325,750
24,363,284
32,542,856
257,913,850
290,456,706
390,963,146
5,607,946
377,887
7,312,140
109,140,660
122,438,633
227,060,951
26,357
11,261,346
6,441,214
13,784.
$ 259,524,513
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CITY OF LAKEVILLE, MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
DECEMBER 31, 2012
Fund balance - total governmental funds
Amounts reported for governmental activities in the statement of net position
are different because:
1. Capftal assets used in governmental activities are not current financial
resources and therefore are not reported in the governmental funds.
Governmental capital assets
Less accumulated depredation
2. Grant receivable that is applicable towards accrued bond interest payable
is susceptible to full accrual on the government -wide statements.
3. Long term liabilities are not payable with current financial resources
and therefore are not reported In the governmental funds.
Bonds
Accrued interest
Loan
Unamortized bond discount
Unamortized bond premium
4. Accrued compensated absences and net OPEB obligations are not
Payable with current financial resources and therefore are not reported
in the governmental funds.
5. Deferred inflows of resources in governmental funds is susceptible to full
accrual on the government -wide statements.
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 position.
Net position of governmental activities
See accompanying notes to basic financial statements
$ 61,706,702
$ 299,713,182
(114,682,964). 185,030,218
31,575
(106,350,000)
(1,533,053)
(1,159,843)
8,911
(2,711,537) (111,745,522)
(2,464,549)
7,323,458
648,848
$140,530,730
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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, 2012
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the statement of activities are
different because:
1. 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 position decreases by the amount of
depreciation expense charged for the year. This is the amount by which depreciation
expense exceeded capital outlay.
Capital outlay $10,153,263
Capital contributed by developer 2,845,720
Depreciation expense (8,790,719) 4,208,264
2. In the government -wide statement of activities, only the gain or loss on the sate of
capital assets is reported, whereas in the governmental funds, the proceeds from the
sales increase financial resources. Thus, the change in net position differs from the
change In fund balance by the net book value of the capital assets disposed of. (350,613)
ce
3. Revenues in the government -wide statement of activities that do not provide current
financial resources are not reported as revenues in the governmental funds.
Deferred inflows of resources - December 31, 2011 (5,617,972)
Deferred inflows of resources - December 31, 2012 7,323,458 1,705,486
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 (29,255,000)
Bond, loan, and capital lease principal maturities 9,472,027 (19,782,973)
5. Interest and debt premium/disoounts in the government -ride 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 premiums/
discounts which are recognized respectively as expenditures and other financing sources
and uses in the governmental fund statements.
Accrued interest payable (104,692)
Grant applicable towards accrued Interest payable (441)
Premium on 2012 bonds issued (1,957,050)
Amortization of debt premiums/discounts 139 210 (1,922,973)
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 increase - December 31, 2012 (66,765)
Net OPEB obligation increase - December 31, 2012 047,219) (113,984)
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 position of the Internal service fund, which are reported in with governmental activities. (739
Change in net position of governmental activities $ 9,540,769
See accompanying notes to basic financial statements.
$ 26,537,113
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
DECEMBER 31. 2012
ASSETS
Cunfsnt snob
Cash and investments
Interest receivable
Accounts receivable
Inventory
Prepaid expenses
Total current assets
Oran - current assets
Restricted cash and investments
Capital assets
Land
Buildings and improvements
Machinery and equipment
Infrastructure
Construction In process
Accumulated depreciation
Net capital assets
Total non - current assets
Total assets
UABIUTIES
Current tiisbilitiss
Salaries payable
Accounts payable
Contracts 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 POSITION
Net investment In capital assets
Restricted for debt service
Unrestricted
Lbor
$ 4,512,813 $ 8,908,539 $ 13,421,352 $ 858,157
25,604 50,009 75,613 2,617
1,002 2,552,847 2,553,849 534
1,403,501 129,690 1,533,191
21,494 13.500 34,994
5,964,414 11,654.585 17,618,999 861,308
32,750
1,272,296
3,866,890
420,956
4,700
(1,240,335)
4,324,507
4, 650, 257 101,101, 981
10,614,671 112,756,566
27,027
1,140,870
70,729
8,317
101,369
180,000
1,508,312
Total net position $ 5,813,472 $ 111,971,795
Explanation of difference between proprietary funds statement of net position
and the government -wide statement of net position:
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 position of business -type activities
See accompanying notes to basic financial statements.
24,917 73,481 98,398
21,595 - 21,595
11,375 20,171 31,546
3,235,000 3,235,000
3,292 93,652 3,386,539
4 801 199 784 771 5 585 970 3,944
907,912 101,101,981
325,750
4,579,810 10,869,814
Busies -type Activities -
EEnterpriss Funds
Mat
325,750
528,160 1,800,456
22,041,706 25,908,596
2,136,623 2,557,579
124,861,812 124,861,812
1,623,880 1,628,580
(50,090,200) (51,330,535)
101,101, 981 105.426.488
40,381 67,408
369,955 1,510,825
147,009 147,009
70,729
5,900 14,217
127,874 229,243
- 180.000
691,119 2199,431
Governmental
Ashville% -
Intsrnal Service
isttal
105,752,238
123,371,237 861,308
102,009,893
325,750
15,449,624 857,364
117,785,287 $ 657,364
208,516
$ 117,993,783
3,944
3,944
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POST" lON - PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2012
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
Contributed capital from governmental activities
Contributed capital from developers
Transfers from other funds
Transfers to other funds
Total contributions and transfers (net)
Change in net position
Net position, January 1 as previously reported
Change In accounting principle
Net position, January 1 as restated
Net position, December 31
See accompanying notes to basic financial statements.
Lauer
$ 15,220,064
11,380,341
3,839723
1,274,805
57,869
765,980
117,168
2,215,822
1,623,901
Business -type Activities -
Enterprise Funds
Utiitty
$ 9,356,521
180,785
9 537 306 9,537,306
3,839,723 _ 9,537,306
1,711,932
387,863
2,200,264
2,950,800
3 __ __. 1167774
10 ...... 0
(830,127)
Explanation of difference between proprietary funds statement of revenue,
expenses, and changes in fund net position 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 position of business -type activities
$ 15,220,064
11,380,341
3,839 723
9,356,521 $
180,785
13, 377,029 458,235
2,986,737
445,732
2,968,244 484,415
2,950,600
3,2 33,942
12,583,255
793,774
3,762 98,398 102,160 21,363
26,400 51,564 77,964 2,698
(169,362) (169,362)
(8,267) 4,978 (3,289) -
(147,487) 154,940 7,473 24,081
1,476,434 (675,187 801,247 (2,119)
- 29,395 28,395
2,903,043 2,903,043
3,122 3,122 -
(2,554,609� (579,258) (3,133,867) (729,370)
12 2,356,302 (198,307) (729,370)
(1,078,175) 1,681,115 602,940 (731,489)
6,958,037 110,290,680 1,588,853
(86,390 -
6,891,647 110,290,680 1,588,853
$ 857,364
$ 5,813,472 $ 111,971,795
8,062
$ 611,002
Governmental
Activities -
internal Service
Brxts
293,779
164,456
458,235
484,415
(26,180)
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2012
Cash Mows from operating activates
Cash received tram customers
Cash received from genteel service charges
Cash paid to suppliers
Cash paid to and for employees
Net cash flaws from operating activhies
Cash flaws Iran noncsp ta$ financing activRlas
it ergovemmental - grant
Transfers from other funds
Transfers to ether funds
Net cash flows from noncapart ameba activities
Cash flows from capital and related Mincing activities
Acquisition d capital assets
Proceeds from sale of capital assets
Interest and fiscal charges
Principal maturltles
Net cash flows from capital and related financing activities
Cash flows from kweefing activities
Investment income received
Net change In cash and cash equivalents
Cash and cash equivalents, January 1
Cash and cash equivalents, December 31
(including restricted cash account of 8325 ,750)
fieaonoltietton of operating Income (loss) to net cash flows
Gram operating activttles
Operating income (bas)
Adjustments
Depreciation wanes
(Increase) decrease in assets
Accounts receivable
kwentory
Prepaid gases
Increase (decrease) in Halides
es
Wades payable
Accounts is payable
Contracts payable
payable Deposits
Accrued compensated absences
Net OPEB obrgation
Total adjustments
Net cash floras from operating activities
The Ca!► assumes Caw ership of utlI ty capital assets
from govammental projects and band developers.
Capital assets assumed were as follows:
See accompanying notes to basic financial statements.
$ 15,219,829
(12,142,076)
(1.292,954)
1,784,799
Lima
Business -type Activities
Entsrprias Funds
3,762
(2,554,809)
(2,550,947)
(4,700)
757
(174,020)
(150,000)
(327,963)
43,969
(1.050,042)
5,888,805
$ 4,838,583
117,168
(235)
(11,0
993
3,878
72,536
(0)
(24,604)
2,777
$ 9,379,299
(5,451,310
(1,691,512)
2,236,398
98,398
3,122
(579,258)
(477,738)
(1,774,013)
4,978
(1,769,035)
63.749
53,374
8,655,165
$ 8,908,539
3,116,774
(158,007)
(57,970)
(7,600)
8,233
4,399
147,009
1,500
Governmental
Activities -
Internal Service
Imo!
aNa
$ 24,599,128
457,701
(17,593,465) (492,006)
(2,984,'0 -
4,021,197 (34,305)
102,160 21,363
3,122
(3,133,887) (129,370)
(3,028,585) (708,007)
(1,778.713)
5,735
(174,00
(150,000)
(2,096,998)
107 ,718 8,867
(906,668) (733,445)
14,743,770 1,591,602
$ 13,747,102 $ 858,157
$ 1.623,901 $ (830,127) $ 793,774 $ (26,180)
3,233,942
(158,242)
(69,034)
(8,607)
12,111
76,934
147,009
1,150
6,633 (16,171)
5,554 8,331
160,898 3,086,525 3,227,423 (8,125)
$ 1,784,799 $ 2,236,398 $ 4,021,197 $ (34.305)
?932, $ 2,932,438
(7,591)
CITY OF LAKEVILLE, MJNNESOTA
STATEMENT OF FIDUCIARY NET POSITION -
AGENCY FIND
DECEMBER 31, 2012
Assets
Cash and investments
Liabilities
Deposits payable
See accompanying notes to basic financial statements.
Escrow
Fund
5,690,
$ 5,890,114
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IV-45
PROPOSAL SALE DATE: July 15, 2013
TO: Ms. Charlene Friedges, City Clerk
City of Lakeville, Minnesota
clo Springsted Incorporated
380 Jackson Street, Suite 300
St. Paul, MN 55101 -2887
Phone: (651) 223 -3000
Fax: (651) 223-3046
RE: $4,800,000* General Obligation Improvement Bonds, Series 2013A
For the Bonds of this Issue which shall mature and bear interest at the respective annual rates, as follow, we offer a price of
$ (which may not be less than $4,742,400) plus accrued interest, if any, to the date of delivery.
Year
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Interest
Rate ( %)
%
Years of Term Maturities
Dollar
Yield ( %) Price
°/D %
Designation 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 or the amount
of any maturity in multiples of $5,000. In the event the amount of any maturity is modified, the aggregate purchase price will be adjusted to result
in the same gross spread per $1,000 of Bonds as that of the original proposal. Gross spread is the differential between the price paid to the City
for the new issue and the prices at which the securities are initially offered to the investing public.
In making this offer we accept all of the terms and conditions of the Terms of Proposal published in the Official Statement dated
July 1, 2013. 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:
The Bidder ❑ will ❑ will not purchase municipal bond insurance from
Account Members
Interest Dollar
Year Rate ( %) Yield ( %) Price
2025
2026
2027
2028
2029
2030
2031
2032 % %
2033 % %
2034
Account Manager
By:
Phone:
The foregoing proposal has been accepted by the City.
Attest:
Date:
SURE -BID Wire Transfer Good Faith Check Submitted