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HomeMy WebLinkAbout2.b. Accept Bids and Award Sale - G.O. Equipment Certificates of Indebtedness, Series 2005BAGENDA ITEM: Accept Bids and Award Sale G.O. Equipment Certificates of Indebtedness, Series 2005B AGENDA SECTION: Old Business PREPARED BY: Jeff May, Finance Director AGENDA NO. I`: ypac w w ATTACHMENTS: Resolution (Official Statement with 2005A Agenda Item) APPROVED BY: RECOMMENDED ACTION: Motion to adopt A RESOLUTION ACCEPTING ER ON THE SALE OF $1,535,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2005B, PROVIDING FOR THEIR ISSUANCE AND LEVYING A TAX FOR THE PAYMENT THEREOF. ACTION: CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION Special City Council Meeting Date: May 24, 2005 ISSUE Accept bids and award sale of equipment certificates for the purchase of equipment for the Public Works Department and the Fire Department. BACKGROUND This item is on the agenda for Council to formally award the sale of equipment certificates for the purchase of equipment. At 11;00 A M. Tuesday, May 24, 2005, sealed bids for G.O Equipment Certificates of Indebtedness, Series 2005B, will be opened and the results tabulated at the offices of Springsted, our financial consultants for the sale. A representative from Springsted will be at the Council meeting that evening to give their recommendation for the issuance of these bonds and to answer any questions that you may have. Because the bid opening is not until earlier in the day Tuesday, you will receive information regarding the bids at the meeting that evening. SUMMARY Recommend the above motion. RESOLUTION ACCEPTING OFFER ON THE SALE OF $1,535,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2005B, PROVIDING FOR THEIR ISSUANCE AND LEVYING A TAX FOR THE PAYMENT THEREOF WHEREAS, the City Council of the City of Rosemount, Minnesota (the "City has heretofore determined and declared that it is necessary and expedient to issue $1 ,535,000 General Obligation Equipment Certificates of Indebtedness, Series 2005B of the City, pursuant to Minnesota Statutes, Chapter 475 and Minnesota Statutes, Section 412.301, to finance the acquisition of various items of capital equipment for the City (the "Equipment and WHEREAS, each piece of equipment to be financed by the Certificates has an expected useful life at least as long as the term of the Certificates, and WHEREAS, the principal amount of the Certificates to be issued does not exceed 0.25% of the market value of taxable property in the City ($1,606,616,700 times 0 25% is $4,016,541); and WHEREAS, the City has retained Springsted Incorporated, an independent financial consultant, and therefore the City is authorized to negotiate the sale of the Certificates without compliance with the public sale requirements of Chapter 475; and WHEREAS, the following proposals were received, opened and recorded at the offices of Springsted Incorporated at 1100 a.m. this same day: Bidder CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA Interest Rate Net Interest Cost NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rosemount, Minnesota, as follows: (the 'Purchaser to purchase $1,535,000 General Obligation Equipment Certificates of Indebtedness, Series 2005B of the City (the "Certificates or individually a "Certificate in accordance with the terms of proposal at the rates of interest hereinafter set forth, and to pay therefor the sum of plus interest accrued to settlement, is hereby found, determined and declared to be the most favorable proposal received and is hereby accepted, and the Certificates are hereby awarded to said purchaser. The Finance Director is directed to retain the deposit of said purchaser and to forthwith return to the others making proposals their good faith checks or drafts. 1759417v1 RESOLUTION 2005 1. Acceptance of Proposal. The proposal of 2. Terms of Certificates. (a) Title; Onginal Issue Date; Denominations; Maturities. The Certificates shall be titled "General Obligation Equipment Certificates of Indebtedness, Series 2005B shall be dated June 15, 2005, as the date of original issue and shall be issued forthwith on or after such date as fully registered certificates. The Certificates shall be numbered from R -1 upward in the denomination of $5,000 each or in any integral multiple thereof of a single maturity. The Certificates shall mature, without option of prepayment, on June 1 in the years and amounts as follows: Year Amount 2006 $290,000 2007 300,000 2008 305,000 2009 315,000 2010 325,000 (b) Book Entry Only System The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York or any of its successors or its successors to its functions hereunder (the "Depository will act as secunties depository for the Certificates, and to this end: (i) The Certificates shall be initially issued and, so long as they remain in book entry form only (the "Book Entry Only Period shall at all times be in the form of a separate single fully registered Certificate for each maturity of the Certificates; and for purposes of complying with this requirement under paragraph 10 (with respect to registration, transfer, exchange) Authorized Denominations for any Certificate shall be deemed to be limited during the Book Entry Only Period to the outstanding pnncipal amount of that Certificate. (ii) Upon initial issuance, ownership of the Certificates shall be registered in a register maintained by U S. Bank National Association, in Saint Paul Minnesota (the "Registrar in the name of CEDE CO., as the nominee (it or any nominee of the existing or a successor Depository, the "Nominee (iii) With respect to the Certificates neither the City nor the Registrar shall have any responsibility or obligation to any broker, dealer, bank, or any other financial institution for which the Depository holds Certificates as securities depository (the "Participant or the person for which a Participant holds an interest in the Certificates shown on the books and records of the Participant (the "Beneficial Owner Without limiting the immediately preceding sentence, neither the City, nor the Registrar, shall have any such responsibility or obligation with respect to (A) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Certificates, or (B) the delivery to any Participant, any Owner or any other person, other than the Depository, of any notice with respect to the Certificates, including any notice of redemption, or (C) the payment to any Participant, any Beneficial Owner or any other person, other than the Depository, of any amount with respect to the principal of or premium, if any, or interest on the Certificates, or (D) the consent given or other action taken by the Depository as the Registered Holder of any Certificates (the "Holder For purposes of securing the vote or consent of any Holder under this Resolution, the City may, however, rely upon an omnibus proxy under which the Depository assigns its consenting or voting rights to 1759417v1 2 RESOLUTION 2005 RESOLUTION 2005 certain Participants to whose accounts the Certificates are credited on the record date identified in a listing attached to the omnibus proxy. (iv) The City and the Registrar may treat as and deem the Depository to be the absolute owner of the Certificates for the purpose of payment of the principal of and premium, if any, and interest on the Certificates, for the purpose of giving notices of redemption and other matters with respect to the Certificates, for the purpose of obtaining any consent or other action to be taken by Holders for the purpose of registering transfers with respect to such Certificates, and for all purpose whatsoever The Registrar, as paying agent hereunder, shall pay all principal of and premium, if any, and interest on the Certificates only to the Holder or the Holders of the Certificates as shown on the register, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and premium, if any, and interest on the Certificates to the extent of the sum or sums so paid. (v) Upon delivery by the Depository to the Registrar of written notice to the effect that the Depository has determined to substitute a new Nominee in place of the existing Nominee, and subject to the transfer provisions in paragraph 11 hereof (with respect to registration, transfer, exchange), references to the Nominee hereunder shall refer to such new Nominee. (vi) So long as any Certificate is registered in the name of a Nominee, all payments with respect to the principal of and premium, if any, and interest on such Certificate and all notices with respect to such Certificate shall be made and given, respectively, by the Registrar or City, as the case may be, to the Depository as provided in the Letter of Representations to the Depository required by the Depository as a condition to its acting as book -entry Depository for the Certificates (said Letter of Representations, together with any replacement thereof or amendment or substitute thereto, including any standard procedures or policies referenced therein or applicable thereto respecting the procedures and other matters relating to the Depository's role as book -entry Depository for the Certificates, collectively hereinafter referred to as the "Letter of Representations (vii) All transfers of beneficial ownership interests in each Certificate issued in book -entry form shall be limited in principal amount to Authorized Denominations and shall be effected by procedures by the Depository with the Participants for recording and transferring the ownership of beneficial interests in such Certificates. (viii) In connection with any notice or other communication to be provided to the Holders pursuant to this Resolution by the City or Registrar with respect to any consent or other action to be taken by Holders, the Depository shall consider the date of receipt of notice requesting such consent or other action as the record date for such consent or other action; provided, that the City or the Registrar may establish a special record date for such consent or other action. The City or the Registrar shall, to the extent possible, give the Depository notice of such special record date not less than 15 calendar days in advance of such special record date to the extent possible. (ix) Any successor Registrar in its written acceptance of its duties under this Resolution and any paying agency /registrar agreement, shall agree to take any actions necessary from time to time to comply with the requirements of the Letter of Representations. (c) Termination of Book -Entry Only System. Discontinuance of a particular Depository's services and termination of the book -entry only system may be effected as follows: 1759417v1 3 RESOLUTION 2005 (i) The Depository may determine to discontinue providing its services with respect to the Certificates at any time by giving written notice to the City and discharging its responsibilities with respect thereto under applicable law The City may terminate the services of the Depository with respect to the Certificate if it determines that the Depository is no longer able to carry out its functions as securities depository or the continuation of the system of book -entry transfers through the Depository is not in the best interests of the City or the Beneficial Owners. (ii) Upon termination of the services of the Depository as provided in the preceding paragraph, and if no substitute secunties depository can be found which, in the opinion of the City, is willing and able to assume such functions upon reasonable or customary terns, or if the City determines that it is m the best interests of the City or the Beneficial Owners of the Certificate that the Beneficial Owners be able to obtain certificates for the Certificates, the Certificates shall no longer be registered in the register in the name of the Nominee, but may be registered in whatever name or names the Holder of the Certificates shall designate at that time, in accordance with paragraph 10 hereof (with respect to registration, transfer, exchange). To the extent that the Beneficial Owners are designated as the transferee by the Holders, in accordance with paragraph 10 hereof (with respect to registration, transfer, exchange), the Certificates will be delivered to the Beneficial Owners. (iii) Nothing in this subparagraph (c) shall limit or restrict the provisions of paragraph 10 hereof (with respect to registration, transfer, exchange). (d) Letter of Representations. The provisions in the Letter of Representations are incorporated herein by reference and made a part of the resolution, and if and to the extent any such provisions are inconsistent with the other provisions of this resolution, the provisions in the Letter of Representations shall control. 3. Purpose. The Certificates shall provide funds to finance the acquisition of capital equipment for the City (the "Equipment The total cost of the Equipment, which shall include all costs enumerated in Minnesota Statutes, Section 475.65, is estimated to be at Least equal to the amount of the Certificates. 4. Interest. The Certificates shall bear interest payable semiannually on June 1 and December I of each year (each, an "Interest Payment Date commencing December 1, 2005, calculated on the basis of a 360 -day year of twelve 30 -day months, at the respective rates per annum set forth opposite the maturity years as follows: Maturity Interest Year Rate 2006 2007 2008 2009 2010 5. No Redemption. The Certificates shall not be subject to redemption and prepayment prior to their maturity. 6. Registrar. U.S. Bank National Association, in Saint Paul, Minnesota, is appointed to act as registrar and transfer agent with respect to the Certificates (the "Registrar and shall do so 175941711 4 RESOLUTION 2005 unless and until a successor Registrar is duly appointed, all pursuant to any contract the City and Registrar shall execute which is consistent herewith. The Registrar shall also serve as paying agent unless and until a successor paying agent is duly appointed. Principal and interest on the Certificates shall be paid to the registered holders (or record holders) of the Certificates in the manner set forth in the form of Certificate and paragraph 12 of this resolution (with respect to interest payment and record date). 7. Form of Certificate. The Certificates, together with the Registrar's Certificate of Authentication, the form of Assignment and the registration mformation thereon, shall be in substantially the following form: 1759417v1 5 RESOLUTION 2005 UNITED STATES OF AMERICA STATE OF MINNESOTA DAKOTA COUNTY CITY OF ROSEMOUNT R- GENERAL OBLIGATION EQUIPMENT CERTIFICATE OF INDEBTEDNESS, SERIES 2005B DATE OF INTEREST RATE MATURITY DATE ORIGINAL ISSUE CUSIP REGISTERED OWNER: CEDE CO. June 15, 2005 PRINCIPAL AMOUNT: DOLLARS KNOW ALL PERSONS BY THESE PRESENTS that the City of Rosemount, Dakota County, Minnesota (the "Issuer certifies that it is indebted and for value received promises to pay to the registered owner specified above, or registered assigns, without option of prepayment, in the manner hereinafter set forth, the principal amount specified above, on the maturity date specified above, and to pay interest thereon semiannually on June 1 and December 1 of each year (each, an "Interest Payment Date commencing December 1, 2005, at the rate per annum specified above (calculated on the basis of a 360 -day year of twelve 30 -day months) until the principal sum is paid or has been provided for This Certificate will bear interest from the most recent Interest Payment Date to which interest has been paid or, if no interest has been paid, from the date of original issue hereof. The pnncipal of and premium, if any, on this Certificate are payable upon presentation and surrender hereof at the principal office of U.S. Bank National Association, in Saint Paul, Minnesota (the "Registrar acting as paying agent, or any successor paying agent duly appointed by the Issuer Interest on this Certificate will be paid on each Interest Payment Date by check or draft mailed to the person in whose name this Certificate is registered (the "Holder on the registration books of the Issuer maintained by the Registrar and at the address appearing thereon at the close of business on the fifteenth day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date Any interest not so timely paid shall cease to be payable to the person who is the Holder hereof as of the Regular Record Date, and shall be payable to the person who is the Holder hereof at the close of business on a date (the "Special Record Date fixed by the Registrar whenever money becomes available for payment of the defaulted interest. Notice of the Special Record Date shall be given to Holders not less than ten days prior to the Special Record Date The principal of and premium, if any, and interest on this Certificate are payable in lawful money of the United States of America. So long as this Certificate is registered m the name of the Depository or its Nominee as provided in the Resolution hereinafter described, and as those terms are defined therein, payment of principal of, premium, if any, and interest on this Certificate and notice with respect thereto shall be made as provided in the Letter of Representations, as defined in the Resolution, and surrender of this Certificate shall not be required for payment of the redemption price upon a partial redemption of this Certificate. Until termination of the book -entry only 1759417v1 6 RESOLUTION 2005 system pursuant to the Resolution, Certificates may only be registered in the name of the Depository or its Nominee. No Redemption. The Certificates are not subject to redemption and prepayment prior to their maturity. Issuance; Purpose; General Obligation. This Certificate is one of an issue in the total pnncipal amount of $1,535,000, all of like date of original issue and tenor, except as to number, maturity, interest rate and denomination, which Certificate has been issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota and pursuant to a resolution adopted by the City Council of the Issuer on May 24, 2005 (the "Resolution"), for the purpose of providing money to finance the acquisition of various items of capital equipment for the City This Certificate is payable out of the General Obligation Equipment Certificates of Indebtedness, Series 2005B Fund of the Issuer. This Certificate constitutes a genera obligation of the Issuer, and to provide moneys for the prompt and full payment of its principal, premium, if any, and interest when the same become due, the full faith and credit and taxing powers of the Issuer have been and are hereby irrevocably pledged. Denominations; Exchange; Resolution. The Certificates are issuable solely as fully registered certificates in the denominations of $5,000 and integral multiples thereof of a single maturity and are exchangeable for fully registered Certificates of other authorized denominations in equal aggregate principal amounts at the principal office of the Registrar, but only in the manner and subject to the limitations provided in the Resolution. Reference is hereby made to the Resolution for a description of the rights and duties of the Registrar. Copies of the Resolution are on file in the principal office of the Registrar. Transfer This Certificate is transferable by the Holder in person or by his, her or its attorney duly authorized m writing at the principal office of the Registrar upon presentation and surrender hereof to the Registrar, all subject to the terms and conditions provided in the Resolution and to reasonable regulations of the Issuer contained in any agreement with the Registrar. Thereupon the Issuer shall execute and the Registrar shall authenticate and deliver, in exchange for this Certificate, one or more new fully registered Certificates in the name of the transferee (but not registered in blank or to "bearer" or similar designation), of an authorized denomination or denominations, in aggregate principal amount equal to the principal amount of this Certificate, of the same maturity and bearing interest at the same rate. Fees upon Transfer or Loss. The Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of this Certificate and any legal or unusual costs regarding transfers and lost Certificates. Treatment of Registered Owners. The Issuer and Registrar may treat the person in whose name this Certificate is registered as the owner hereof for the purpose of receiving payment as herein provided (except as otherwise provided herein with respect to the Record Date) and for all other purposes, whether or not this Certificate shall be overdue, and neither the Issuer nor the Registrar shall be affected by notice to the contrary. Authentication. This Certificate shall not be valid or become obligatory for any purpose or be entitled to any security unless the Certificate of Authentication hereon shall have been executed by the Registrar 175941/v1 7 RESOLUTION 2005 Qualified Tax Exempt Obligation. This Certificate has been designated by the Issuer as a "qualified tax exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution, laws of the State of Minnesota to be done, to happen and to be performed, precedent to and in the issuance of this Certificate, have been done, have happened and have been performed, in regular and due form, time and manner as required by law, and that this Certificate, together with all other debts of the Issuer outstanding on the date of original issue hereof and the date of its issuance and delivery to the original purchaser, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Rosemount, Dakota County, Minnesota, by its City Council has caused this Certificate to be executed on its behalf by the facsimile signatures of its Mayor and its Clerk, the corporate seal of the Issuer having been intentionally omitted as permitted by law. Date of Registration: REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Certificate is one of the Certificates described in the Resolution mentioned within. U S. Bank National Association Saint Paul, Minnesota Registrar By Authorized Signature 1759417v1 8 Registrable by U.S. BANK NATIONAL ASSOCIATION Payable at: U S BANK NATIONAL ASSOCIATION CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA /s/ Facsimile Mayor /s/ Facsimile Clerk (Cust) (Minor) under the Uniform (State) Transfers to Minors Act Additional abbreviations may also be used though not in the above list. ABBREVIATIONS RESOLUTION 2005 The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM as tenants in common TEN ENT as tenants by the entireties JT TEN as joint tenants with right of survivorship and not as tenants in common UTMA as custodian for 1759417v1 9 For value received, the undersigned hereby sells, assigns and transfers unto the within Certificate and does hereby irrevocably constitute and appoint attorney to transfer the Certificate on the books kept for the registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: Signature(s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges or any other "Eligible Guarantor Institution" as defined in 17 CFR 240.17 Ad- 15(a)(2) The Registrar will not effect transfer of this Certificate unless the information concerning the transferee requested below is provided. Name and Address: 1759417v1 Notice: ASSIGNMENT (Include information for all Joint owners if the Certificate is held by Joint account.) 10 RESOLUTION 2005 The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Certificate in every particular, without alteration or any change whatever. 1759417v1 11 RESOLUTION 2005 8. Execution; Temporary Certificates. The Certificates shall be printed (or, at the request of the Purchaser, typewritten), shall be executed on behalf of the City by the signatures of its Mayor and Clerk and be sealed with the seal of the City; provided, however, that the seal of the City may be a pnnted (or at the request of the Purchaser, photocopied) facsimile, and provided further that both of such signatures may be printed (or, at the request of the Purchaser, photocopied) facsimiles and the corporate seal may be omitted on the Certificates as permitted by law. In the event of disability or resignation or other absence of either such officer, the Certificates may be signed by the manual or facsimile signature of that officer who may act on behalf of such absent or disabled officer In case either such officer whose signature or facsimile of whose signature shall appear on the Certificates shall cease to be such officer before the delivery of the Certificates, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he or she had remained in office until delivery. The City may elect to deliver, in lieu of printed definitive certificates, one or more typewritten temporary certificates in substantially the form set forth above, with such changes as may be necessary to reflect more than one maturity in a single temporary certificate The temporary certificates may be executed with photocopied facsimile signatures of the Mayor and Clerk. Such temporary certificates shall, upon the printing of the definitive certificates and the execution thereof, be exchanged therefor and canceled. 9. Authentication. No Certificate shall be valid or obligatory for any purpose or be entitled to any security or benefit under this resolution unless a Certificate of Authentication on such Certificate, substantially in the form heremabove set forth, shall have been duly executed by an authorized representative of the Registrar Certificates of Authentication on different Certificates need not be signed by the same person. The Registrar shall authenticate the signatures of officers of the City on each Certificate by execution of the Certificate of Authentication on the Certificate and by inserting as the date of registration in the space provided the date on which the Certificate is authenticated, except that for purposes of delivering the original Certificates to the Purchaser, the Registrar shall insert as a date of registration the date of original issue, which date is June 15, 2005. The Certificate of Authentication so executed on each Certificate shall be conclusive evidence that it has been authenticated and delivered under this resolution 10. Registration Transfer Exchange. The City will cause to be kept at the pnncipal office of the Registrar a certificate register in which, subject to such reasonable regulations as the Registrar may prescribe, the Registrar shall provide for the registration of Certificates and the registration of transfers of Certificates entitled to be registered or transferred as herein provided. Upon surrender for transfer of any Certificate at the principal office of the Registrar, the City shall execute Of necessary), and the Registrar shall authenticate, insert the date of registration (as provided in paragraph 10 with respect to authentication) of, and deliver, in the name of the designated transferee or transferees, one or more new Certificates of any authorized denomination or denominations of a like aggregate principal amount, having the same stated maturity and interest rate, as requested by the transferor; provided, however, that no Certificate may be registered in blank or in the name of "bearer" or similar designation. At the option of the Holder, Certificates may be exchanged for Certificates of any authorized denomination or denominations of a like aggregate principal amount and stated maturity, upon surrender of the Certificates to be exchanged at the principal office of the Registrar. Whenever any Certificates are so surrendered for exchange, the City shall execute Of necessary), and the RESOLUTION 2005 Registrar shall authenticate, insert the date of registration of, and deliver the Certificates which the Holder making the exchange is entitled to receive All Certificates surrendered upon any exchange or transfer provided for in this resolution shall be promptly canceled by the Registrar and thereafter disposed of as directed by the City. All Certificates delivered in exchange for or upon transfer of Certificates shall be valid general obligations of the City evidencing the same debt, and entitled to the same benefits under this resolution, as the Certificates surrendered for such exchange or transfer. Every Certificate presented or surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the Holder thereof or his, her or its attorney duly authorized in wntmg. 6 The Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange of any Certificate and any legal or unusual costs regarding transfers and lost Certificates. Transfers shall also be subject to reasonable regulations of the City contained in any agreement with the Registrar, including regulations which permit the Registrar to close its transfer books between record dates and payment dates. The Clerk is hereby authorized to negotiate and execute the terms of said agreement. 11 Rights Upon Transfer or Exchange. Each Certificate delivered upon transfer of or in exchange for or in lieu of any other Certificate shall carry all the rights to interest accrued and unpaid, and to accrue, which were carried by such other Certificate. 12. Interest Payment; Record Date. Interest on any Certificate shall be paid on each Interest Payment Date by check or draft mailed to the person in whose name the Certificate is registered (the "Holder on the registration books of the City maintained by the Registrar and at the address appearing thereon at the close of business on the fifteenth (15th) day of the calendar month next preceding such Interest Payment Date (the "Regular Record Date Any such interest not so timely paid shall cease to be payable to the person who is the Holder thereof as of the Regular Record Date, and shall be payable to the person who is the Holder thereof at the close of business on a date (the "Special Record Date fixed by the Registrar whenever money becomes available for payment of the defaulted interest Notice of the Special Record Date shall be given by the Registrar to the Holders not less than ten (10) days prior to the Special Record Date. 13. Treatment of Registered Owner. The City and Registrar may treat the person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving payment of principal of and premium, if any, and interest (subject to the payment provisions in paragraph 12 above with respect to payment and record date) on such Certificate and for all other purposes whatsoever whether or not such Certificate shall be overdue, and neither the City nor the Registrar shall be affected by notice to the contrary. 14. Delivery; Application of Proceeds. The Certificates when so prepared and executed shall be delivered by the Finance Director to the Purchaser upon receipt of the purchase price, and the Purchaser shall not be obliged to see to the proper application thereof. 1759417v1 12 RESOLUTION 2005 15. Fund and Accounts. There is hereby created a special fund to be designated the "General Obligation Equipment Certificates of Indebtedness, Series 2005B Fund" (the "Fund to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until all of the Certificates and the interest thereon have been fully paid. There shall be maintained in the Fund two (2) separate accounts, to be designated the "Capital Account" and "Debt Service Account respectively. (i) Capital Account. To the Capital Account there shall be credited the proceeds of the sale of the Certificates, less accrued interest received thereon, and less any amount paid for the Certificates in excess of $1,526,557. From the Capital Account there shall be paid all costs and expenses of acquiring and installing the equipment, including all costs incurred and to be incun of the kind authorized in Minnesota Statutes, Section 475.65; and the moneys m said account shall be used for no other purpose except as otherwise provided by law, provided that the proceeds of the Certificates may also be used to the extent necessary to pay interest on the Certificates due prior to the anticipated date of commencement of the collection of taxes herein levied. (ii) Debt Service Account. There are hereby irrevocably appropriated and pledged to, and there shall be credited to, the Debt Service Account: (a) all accrued interest received upon delivery of the Certificates, (b) all funds paid for the Certificates in excess of $1,526,557; (c) any collections of all taxes herein or hereafter levied for the payment of the Certificates and interest thereon, (d) all funds remaining in the Capital Account after the payment of all costs of acquiring and installing the Equipment, (e) all investment earnings on funds held in the Debt Service Account, and (f) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Debt Service Account, including but not limited to a deposit made on or before December 1 of each year of available funds of the City sufficient to pay the interest due on the Certificates in June 1 of the following year. The Debt Service Account shall be used solely to pay the pnncipal and interest of the Certificates and any other general obligation certificates of the City hereafter issued by the City and made payable from said account as provided by law No portion of the proceeds of the Certificates shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Certificates were issued and (2) in addition to the above in an amount not greater than the lesser of five percent (5 of the proceeds of the Certificates or $100,000 To this effect, any proceeds of the Certificates and any sums from time to time held in the Capital Account or Debt Service Account (or any other City account which will be used to pay principal or interest to become due on the certificates payable therefrom) in excess of amounts which under then applicable federal arbitrage regulations may be invested without regard to yield shall not be invested at a yield in excess of the applicable yield restrictions imposed by said arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. Money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Certificates to be "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code 1759417v1 13 RESOLUTION 2005 16. Tax Levy; Coverage Test. To provide moneys for payment of the principal and interest on the Certificates there has heretofore and there is hereby levied upon all of the taxable property in the City a direct annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the City for the years and in the amounts as follows Year of Tax Levy 2004 2005 2006 2007 2008 Year of Tax Collection Amount 2005 2006 2007 2008 2009 The tax levies are such that if collected in full they, together with other revenues herein pledged for the payment of the Certificates, will produce at least five percent (5 in excess of the amount needed to meet when due the principal and interest payments on the Certificates The tax levies shall be irrepealable so long as any of the Certificates are outstanding and unpaid, provided that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475 61, Subdivision 3. 17. Defeasance. When all Certificates have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this resolution to the registered holders of the Certificates shall cease The City may discharge its obligations with respect to any Certificates which are due on any date by irrevocably depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or if any Certificate 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 to the date of such deposit. The City may also at any time discharge its obligations with respect to any Certificates, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a suitable banking institution qualified by law as an escrow agent for this purpose, cash or securities described in Minnesota Statutes, Section 475.67, Subdivision 8, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, subject to sale and/or reinvestment, to pay all amounts to become due thereon to maturity. 18. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Certificates, as the same respectively become due, the full faith, credit and taxing powers of the City shall be and are hereby irrevocably pledged If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Certificates and any other certificates payable therefrom, the deficiency shall be promptly paid out of any other funds of the City which are available for such purpose, and such other funds may be reimbursed with or without interest from the Debt Service Account when a sufficient balance is available therein. 19. Certificate of Registration and Tax Levy. The Clerk is hereby directed to file a certified copy of this resolution with the County Auditor of Dakota County, Minnesota, together with such other information as he or she shall require, and to obtain the County Auditor's certificate that the Certificates have been entered in the County Auditor's Register, and that the tax levy required by law has been made. 1759417v1 14 RESOLUTION 2005 20. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and famish to the Purchaser, and to the attorneys approving the legality of the issuance of the Certificates, certified copies of all proceedings and records of the City relating to the Certificates and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Certificates as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, mcludmg any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 21. Compliance with Reimbursement Regulations. The provisions of this paragraph are intended to establish and provide for the City's compliance with United States Treasury Regulations Section 1 150 -2 (the "Reimbursement Regulations applicable to the "reimbursement proceeds" of the Certificates, being those portions thereof which will be used by the City to reimburse itself for any expenditure which the City paid or will have paid prior to the Closing Date (a "Reimbursement Expenditure The City hereby certifies and /or covenants as follows: (a) Not later than 60 days after the date of payment of a Reimbursement Expenditure, the City (or person designated to do so on behalf of the City) has made or will have made a written declaration of the City's official intent (a "Declaration which effectively (i) states the City's reasonable expectation to reimburse itself for the payment of the Reimbursement Expenditure out of the proceeds of a subsequent borrowing; (ii) gives a general and functional description of the property, project or program to which the Declaration relates and for which the Reimbursement Expenditure is paid, or identifies a specific fund or account of the City and the general functional purpose thereof from which the Reimbursement Expenditure was to be paid (collectively the "Project and (in) states the maximum principal amount of debt expected to be issued by the City for the purpose of financing the Project; provided, however, that no such Declaration shall necessarily have been made with respect to: (i) "prelimurary expenditures" for the Project, defined in the Reimbursement Regulations to include engineering or architectural, surveying and soil testing expenses and similar prefatory costs, which in the aggregate do not exceed 20% of the "issue price" of the Certificates, and (n) a de minnmis amount of Reimbursement Expenditures not m excess of the lesser of $100,000 or 5% of the proceeds of the Certificates. (b) Each Reimbursement Expenditure is a capital expenditure or a cost of issuance of the Certificates or any of the other types of expenditures described in Section 1 150- 2(d)(3) of the Reimbursement Regulations. (c) The "reimbursement allocation" described in the Reimbursement Regulations for each Reimbursement Expenditure shall and will be made forthwith following (but not prior to) the issuance of the Certificates and in all events within the period ending on the date which is the later of three years after payment of the Reimbursement Expenditure or one year after the date on which the Project to which the Reimbursement Expenditure relates is first placed in service. (d) Each such reimbursement allocation will be made in a writing that evidences the City's use of Certificate proceeds to reimburse the Reimbursement Expenditure and, if made within 30 days after the Certificates are issued, shall be treated as made on the day the Certificates are issued. 1759417v1 15 RESOLUTION 2005 Provided, however, that the City may take action contrary to any of the foregoing covenants in this paragraph 21 upon receipt of an opinion of its Bond Counsel for the Certificates stating in effect that such action will not impair the tax exempt status of the Certificates. 22. Negative Covenant as to Use of Proceeds and Equipment. The City hereby covenants not to use the proceeds of the Certificates or the Equipment or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Equipment, in such a manner as to cause the Certificates to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 23 Tax Exempt Status of the Certificates: Rebate The City shall comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Certificates, including without limitation (1) requirements relating to temporary periods for investments, (2) limitations on amounts invested at a yield greater than the yield on the Certificates, and (3) the rebate of excess investment earnings to the United States if the Certificates (together with other obligations reasonably expected to be issued and outstanding at one time in this calendar year) exceed the small issuer exception amount of $5,000.000. For purposes of qualifying for the exception to the federal arbitrage rebate requirements for governmental units issuing $5,000,000 or less of Certificates, the City hereby finds, determines and declares that (1) the Certificates are issued by a governmental unit with general taxing powers, (2) no Certificate is a private activity Certificate, (3) ninety -five percent (95 or more of the net proceeds of the Certificates are to be used for local governmental activities of the City (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the City), and (4) the aggregate face amount of all tax exempt Certificates (other than private activity Certificates) issued by the City (and all subordinate entities thereof, and all entities treated as one issuer with the City) during the calendar year in which the Certificates are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D) of the Code. 24. Continuing Disclosure. (a) The City is the sole obligated person with respect to the Certificates. The City hereby agrees, in accordance with the provisions of Rule 15c2 -12 (the "Rule promulgated by the Securities and Exchange Commission (the "Commission pursuant to the Securities Exchange Act of 1934, as amended, and a Continuing Disclosure Undertaking (the "Undertaking hereinafter described to: (1) provide or cause to be provided to each nationally recognized municipal securities information repository "NRMSIR and to the appropnate state information depository "SID"), if any, for the State of Minnesota, in each case as designated by the Commission in accordance with the Rule, certain annual financial information and operating data in accordance with the Undertaking. (2) Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the Municipal Securities Rulemaking Board "MSRB and (ii) the SID, notice of the occurrence of certain material events with respect to the Certificates in accordance with the Undertaking. 1759417v1 16 RESOLUTION 2005 (3) Provide or cause to be provided, in a timely manner, to (i) each NRMSIR or to the MSRB and (ir) the SID, notice of a failure by the Issuer to provide the annual financial information with respect to the Issuer described in the Undertaking. (4) The City agrees that its covenants pursuant to the Rule set forth in this paragraph and in the Undertaking are intended to be for the benefit of the holders and any other beneficial owners of the Certificates and shall be enforceable on behalf of such holders and beneficial owners, provided that the right to enforce the provisions of these covenants shall be limited to a right to obtain specific enforcement of the City's obligations under the covenants (b) The Mayor and Clerk of the City, or any other officer of the City authorized to act in their place, (the "Officers are hereby authorized and directed to execute on behalf of the City the Undertaking in substantially the form presented to the City Council, subject to such modifications thereof or additions thereto as are (i) consistent with the requirements under the Rule, (n) required by the purchaser of the Certificates and (111) acceptable to the Officers. 25. Designation of Qualified Tax Exempt Obligations; Issuance Limit. In order to qualify the Certificates as "qualified tax- exempt obligations" within the meamng of Section 265(b)(3) of the Code, the City hereby makes the following factual statements and representations: (a) the Certificates are issued after August 7, 1986; (b) the Certificates are not "private activity bonds" as defined in Section 141 of the Code; (c) the City hereby designates the Certificates as "qualified tax exempt obligations" for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax- exempt obligations (other than pnvate activity bonds, treating qualified 501(c)(3) bonds as not being private activity bonds) which will be issued by the City (and all entities treated as one issuer with the City, and all subordinate entities whose obligations are treated as issued by the City) during this calendar year 2005 will not exceed $10,000,000; and (e) not more than $10,000,000 of obligations issued by the City during this calendar year 2005 have been designated for purposes of Section 265(b)(3) of the Code. The City shall use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designation made by this paragraph. 26. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution 27. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. 1759417v1 17 ADOPTED this 24 day of May, 2005. ATTEST: Linda Jentink, City Clerk Motion by: Seconded by: Voted in favor: Voted Against: 1759417v1 18 RESOLUTION 2005 William H. Droste, Mayor STATE OF MINNESOTA COUNTY OF DAKOTA ss CITY OF ROSEMOUNT CERTIFICATE RESOLUTION 2005 I, Linda J. Jentink, duly appointed, acting and qualified City Clerk of the City of Rosemount do hereby certify that I have examined the City of Rosemount records and the Minute Book of said City for the meeting of the 24 of May, 2005 and that the attached copy of the RESOLUTION ACCEPTING OFFER ON THE SALE OF $1,535,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2005B, PROVIDING FOR THEIR ISSUANCE AND LEVYING A TAX FOR THE PAYMENT THEREOF was approved and is a true and correct copy of the City Proceedings relating to said Resolution. IN WITNESS WHEREOF, I have hereunto set my hand and seal of said City this day of 2005. 1759417v1 19 Linda J. Jentink, City Clerk City of Rosemount Dakota County, Minnesota OFFICIAL STATEMENT DATED MAY 10, 2005 Ratings Requested from Moody's NEW ISSUES Investors Service In the ocirio,n of Briggs and ,Morgan, Professional Association, Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decis,ons, at the time of their issuance and ceJver✓ to the anginal purcnaser, interest on the Obbgations is excluded from gross income for purposes of United States income tax and is excluoed, to the same extent 'n computing both gross income and taxaote ret income for purposes of State cf Minnesota ncome rax otner than Minnesota franchise taxes measured by income and imposed on corperatons and financial inshtut.ons), ard,s not ar item of tax preference for purposes of The tede'ai alternative minimum tax imposed on mmviduals and corporations or the Minnesota a ternahve imnimum rax cacheable to individuals, estates or trusts provided, however, !hat for the purpose of computing the federal alternative minimum sax imposed on corporations, ,nterest or the Ookgations is taken into account in determining adjusted current earrings No opinion will be expressed by Bond Counsel regarcing other federal or state rax consequences caused ov the receipt or accrual of interest on the Oci,garons pr ansng with respect to ownership of The Cbhgauons See 'Tax Exemption" and 'Other Federal Tax Considerations "here'n 2007 95,000 2008 $100,000 2009 $105,000 2010 $105,000 City of Rosemount, Minnesota $2,630,000 $1,535,000 General Obligation Capital Improvement General Obligation Equipment Certificates Plan Bonds, Series 2005A of Indebtedness, Series 2005B (the "Bonds (the "Certificates (collectively referred to as the "Obligations" or the "Issues") (Book Entry Only) Dated Date: June 15, 2005 The Bonds will bear interest payable each February 1 and August 1, commencing February 1, 2006, and will mature February 1 as follows 2011 2012 2013 2014 $110,000 $115,000 $120,000 $125,000 2015 2016 2017 2018 $130,000 $135,000 $140,000 $145,000 2019 $150,000 2020 $155,000 2021 5165,000 2022 $170,000 2023 $180,000 2024 $190,000 2025 $195,000 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 and must conform to the maturity schedule set forth above at a price of par plus accrued interest to the date of redemption The Certificates will bear interest payable each June 1 and December 1, commencing December 1, 2005, and will mature June 1 as follows 2006 5290,000 The City may elect on February 1, 2016, and on any day thereafter, to prepay the Bonds due on or after February 1, 2017 All prepayments shall be at a price of par plus accrued interest The Certificates will not be subject to redemption in advance of their respective stated maturity dates Common to Both Issues The Obligations are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes Additional sources of security for the Obligations are discussed herein A separate proposal must be submitted for each Issue, along with a certified or cashier's check or a Financial Surety Bond, for not less than the amounts shown below Proposals shall specify rates in integral multiples of 5/100 or 1/8 of 1%. Rates must be in level or ascending order Award will be made on the basis of True interest Cost (TIC)- The Bonds The Certificates Springsted 2007 $300,000 2008 $305,000 Minimum Bid 52,595,810 1,526,557 2009 $315,000 2010 $325,000 Good Faith Deposit $26,300 15,350 The City will designate the Obligations as qualified tax exempt obligations pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended The Obligations will not be subject to the alternative minimum tax for individuals The Obligations will be issued as fully registered Obligations 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 Obligations 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 thew interest in the Obligations purchased (See "Book Entry System" herein U S Bank National Association, Saint Paul, Minnesota will serve as registrar (the "Registrar for the Obligations The Obligations will be available for delivery at DTC on or about June 23, 2005. PROPOSALS RECEIVED: May 24, 2005 (Tuesday) until 11:00 A.M., Central Time AWARD: May 24, 2005 (Tuesday) at 6.30 P.M Central Time Further information may be obtained from SPRINGSTED Incorporated, Financial Advisor to the Issuer, 380 Jackson Street, Suite 300, Saint Paul Minnesota 55101-2367 (651) 223 -3000 For purposes of compliance with Rule 15c2 -12 of the Secunties 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 Underwnter Any underwriter delivering a Proposal with respect to the Obligations agrees thereby that if its bid is accepted by the Issuer (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Obligations for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. No dealer, broker, salesman or other person has been authorized by the Issuer to give any information or to make any representations with respect to the Obligations, other than as contained in the Official Statement or the Final Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the Issuer. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the Issuer and, while believed to be reliable, is not guaranteed as to completeness or accuracy THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER SINCE THE DATE THEREOF. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein Where full texts of documents prepared by or on behalf of the Issuer have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request Any CUSIP numbers for the Obligations included on the Addendum to the 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 on the Addendum to the 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. Terms of Proposal TABLE OF CONTENTS Paqe(s) $2,630,000 General Obligation Capital Improvement Plan Bonds, Series 2005A... t -tv $1,535,000 General Obligation Equipment Certificates of Indebtedness, Series 2005B v -viii Introductory Statement 1 Continuing Disclosure. 1 The Obligations 2 The Bonds 4 The Certificates 5 Future Financing 5 Litigation 6 Legality 6 Tax Exemption 6 Other Federal Tax Considerations 7 Bank Qualified Tax Exempt Obligations 8 Ratings 8 Financial Advisor 8 Certification 8 City Property Values 9 City Indebtedness 10 City Tax Rates, Levies and Collections 15 Funds on Hand 16 City Investments 16 General Information Concerning the City 17 Governmental Organization and Services 20 Proposed Forms of Legal Opinion Appendix I Continuing Disclosure Undertakings Appendix II Summary of Tax Levies, Payment Provisions, and Minnesota Real Property Valuation Appendix III Excerpt of 2003 Annual Financial Statements... Appendix IV Proposal Forms Inserted THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: OR TERMS OF PROPOSAL $2,630,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2005A (BOOK ENTRY ONLY) Proposals for the Bonds will be received on Tuesday, May 24, 2005, until 11 A M., Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time they will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at 6.30 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 pnor to the time of sale specified above. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds regardless of the manner in which the Proposal is submitted. (a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223-3046 to Springsted Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale The bidder shall be responsible for submitting to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3046 for inclusion in the submitted Proposal. (b) 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 PAR/TY® 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, 2 Floor, New York, New York 10018 Customer Support. (212) 849 -5000 DETAILS OF THE BONDS The Bonds will be dated June 15, 2005, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing February 1, 2006 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. 2007 95,000 2008 $100,000 2009 $105,000 2010 $105,000 2011 $110,000 2012 $115,000 2013 $120,000 2014 $125,000 2015 $130,000 2016 $135,000 2017 $140,000 2018 $145,000 2019 $150,000 2020 $155,000 2021 $165,000 2022 3170,000 2023 $180,000 2024 $190,000 2025 $195,000 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 and must conform to the maturity schedule set forth above at a price of par plus accrued interest to the date of redemption 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. t OPTIONAL REDEMPTION The City may elect on February 1, 2016, and on any day thereafter, to prepay Bonds due on or after February 1, 2017 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. The proceeds will be used to finance the construction of a fire station in the City TYPE OF PROPOSALS Proposals shall be for not less than $2,595,810 and accrued interest on the total principal amount of the Bonds Proposals shall be accompanied by a Good Faith Deposit "Deposit in the form of a certified or cashier's check or a Financial Surety Bond in the amount of $26,300, payable to the order of the City If a check is used, it must accompany the proposal 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 preapproved 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 purchaser is required to submit its Deposit to Springsted Incorporated 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 and no interest will accrue to the purchaser, will be deposited by the City In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made Rates shall be in integral multiples of 5/100 or 1/8 of 1% Rates must be in level or ascending order. 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 AWARD The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to. (i) waive non substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and (w) reject any proposal that the City determines to have faded to comply with the terms herein BOND INSURANCE AT PURCHASERS OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the underwriter, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee Any other rating agency fees shall be the responsibility of the purchaser Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Bonds CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser SETTLEMENT Within 40 days following the date of their award, 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 Briggs and Morgan, Professional Association, of Saint Paul and Minneapolis, Minnesota, and of customary closing papers, including a no- litigation certificate On the date of settlement, payment for the Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the City or its designee not later than 12 00 Noon, Central Time Unless compliance with the terms of payment for the Bonds has been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non compliance with said terms for payment CONTINUING DISCLOSURE On the date of actual issuance and delivery of the Bonds, the City will execute and deliver a Continuing Disclosure Undertaking (the "Undertaking whereunder the City will covenant for the benefit of the owners of the Bonds to provide certain financial and other information about the City and notices of certain occurrences to information repositories as specified in and required by SEC Rule 15c2- 12(b)(5) OFFICIAL STATEMENT The City has authorized the preparation of an Official Statement containing pertinent information relative to the Bonds, and said Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2 -12 of the Securities and Exchange Commission For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the City, Spnngsted 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 100 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 April 5, 2005 BY ORDER OF THE CITY COUNCIL iv /s/ Linda Jentink City Clerk THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: OR TERMS OF PROPOSAL $1,535,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2005E (BOOK ENTRY ONLY) Proposals for the Certificates will be received on Tuesday, May 24, 2005, until 11:00 A.M., Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time they will be opened and tabulated Consideration for award of the Certificates will be by the City Council at 6.30 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 Certificates 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 Spnngsted Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3046 for inclusion in the submitted Proposal. (b) 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 Certificates, and PARITY is not an agent of the City If any provisions of this Terms of Proposal conflict with information provided by PARITY this Terms of Proposal shall control. Further information about PARITY®, including any fee charged, may be obtained from. PARITY 1359 Broadway, 2 Floor, New York, New York 10018 Customer Support: (212) 849 -5000 -v DETAILS OF THE CERTIFICATES The Certificates will be dated June 15, 2005, as the date of original issue, and will bear interest payable on June 1 and December 1 of eacn year, commencing December 1, 2005 Interest will be computed on the basis of a 360 -day year of twelve 30 -day months The Certificates will mature June 1 in the years and amounts as follows 2006 $290,000 2007 $300,000 2008 $305,000 2009 $315,000 BOOK ENTRY SYSTEM The Certificates will be issued by means of a book entry system with no physical distribution of Certificates made to the public The Certificates will be issued in fully registered form and one Certificate, representing the aggregate principal amount of the Certificates 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 Certificates. Individual purchases of the Certificates 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 Certificates 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 Certificates, will be required to deposit the Certificates 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 Certificates will not be subject to payment in advance of their respective stated maturity dates SECURITY AND PURPOSE TYPE OF PROPOSALS VI 2010 $325,000 The Certificates will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes The proceeds will be used to finance the acquisition of vanous items of capital equipment Proposals shall be for not less than $1,526,557 and accrued interest on the total principal amount of the Certificates Proposals shall be accompanied by a Good Faith Deposit "Deposit in the form of a certified or cashier's check or a Financial Surety Bond in the amount of $15,350, payable to the order of the City If a check is used, it must accompany the proposal 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 preapproved 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 Certificates are awarded to an underwriter using a Financial Surety Bond, then that purchaser is required to submit its Deposit to Springsted Incorporated 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 and no interest will accrue to the purchaser, will be deposited by the City In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. 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 Certificates is adjourned, recessed, or continued to another date without award of the Certificates having been made. Rates shall be in integral multiples of 5/100 or 1/8 of 1 Rates must be in level or ascending order Certificates of the same maturity shall bear a single rate from the date of the Certificates to the date of maturity No conditional proposals will be accepted. AWARD The Certificates will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to (i) waive non substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Certificates, (ii) reject all proposals without cause, and (in) reject any proposal that the City determines to have failed to comply with the terms herein BOND INSURANCE AT PURCHASER'S OPTION If the Certificates qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the underwnter, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Certificates Any increased costs of issuance of the Certificates resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Certificates from a rating agency, the City will pay that rating fee. Any other rating agency fees shall be the responsibility of the purchaser Failure of the municipal bond insurer to issue the policy after Certificates have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Certificates CUSIP NUMBERS If the Certificates qualify for assignment of CUSIP numbers such numbers will be printed on the Certificates, but neither the failure to print such numbers on any Certificate nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Certificates. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT Within 40 days following the date of their award, the Certificates 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 Briggs and Morgan, Professional Association, of Saint Paul and Minneapolis, Minnesota, and of customary closing papers, including a no- litigation certificate. On the date of settlement, payment for the Certificates 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 Certificates has been made impossible by action of the City, or its agents, the purchaser shall -vii- be liable to the City for any loss suffered by the City by reason of the purchaser's non- compliance with said terms for payment CONTINUING DISCLOSURE On the date of actual issuance and delivery of the Certificates, the City will execute and deliver a Continuing Disclosure Undertaking (the "Undertaking whereunder the City will covenant for the benefit of the owners of the Certificates to provide certain financial and other information about the City and notices of certain occurrences to information repositories as specified in and required by SEC Rule 15c2- 12(b)(5) OFFICIAL STATEMENT The City has authorized the preparation of an Official Statement containing pertinent information relative to the Certificates, 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 Certificates, together with any other information required by law, shall constitute a "Final Official Statement" of the City with respect to the Certificates, as that term is defined in Rule 15c2 -12. By awarding the Certificates 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 Certificates are awarded 60 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 Certificates 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 Certificates agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (u) it shall enter into a contractual relationship with all Participating Underwriters of the Certificates for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement Dated April 5, 2005 BY ORDER OF THE CITY COUNCIL /s/ Linda Jentink City Clerk OFFICIAL STATEMENT CITY OF ROSEMOUNT, MINNESOTA $2,630,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2005A $1,535,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2005B (BOOK ENTRY ONLY) INTRODUCTORY STATEMENT This Official Statement contains certain information relating to the City of Rosemount, Minnesota (the "City and its issuance of $2,630,000 General Obligation Capital Improvement Plan Bonds, Series 2005A (the "Bonds and $1,535,000 General Obligation Equipment Certificates of Indebtedness, Series 20058 (the "Certificates collectively referred to as the "Obligations" or the "Issues The Obligations are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. The purpose and additional sources of security for the Issues are further described herein. Inquiries may be directed to Mr Jeffrey May, Finance Director, City of Rosemount, 2875 145th Street West, Rosemount, Minnesota 55068 -4997, or by telephoning (651) 423 -4411 Inquiries may also be made to Springsted Incorporated, 380 Jackson Street, Suite 300, Si 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 Mary Dyrseth, Briggs and Morgan, Professional Association, Bond Counsel, 2200 First National Bank Building, St. Paul, Minnesota 55101, or by telephoning (651) 808 -6625. CONTINUING DISCLOSURE In order to assist the Underwriters in complying with SEC Rule 15c2 -12 (the "Rule pursuant to the Award Resolutions for the Bonds and the Certificates, the City has entered into an undertaking (collectively the "Undertakings for the benefit of holders or beneficial owners of the Obligations to provide certain financial information and operating data relating to the City to certain information repositories annually, and to provide notices of the occurrence of certain events enumerated in the Rule to certain information repositories or the Municipal Securities Rulemaking Board and to any stale information depository. The specific nature of the Undertakings, as well as the information to be contained in the annual report or the notices of material events, is set forth in the Undertakings in substantially the form attached hereto as Appendix 11, subject to such modifications thereof or additions thereto as. (r) consistent with requirements under the Rule, (ii) required by the purchaser(s) of the Obligations and (m) acceptable to the Mayor and Clerk of the City The City has never failed to comply in all material respects with any previous undertakings under the Rule to provide annual reports or notices of material events A failure by the City to comply with the Undertakings will not constitute an event of default on the Obligations (although holders or other beneficial owners of the Obligations will have the sole remedy of bringing an action for specific performance). Nevertheless, such a failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Obligations in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Obligations and their market price. -1- General Description THE OBLIGATIONS The Obligations are dated as of June 15, 2005 and issued in book entry form Interest on the Bonds is payable February 1, 2006 and semiannually thereafter on August 1 and February 1. Interest on the Certificates is payable December 1, 2005 and semiannually thereafter on June 1 and December 1 Interest will be payable to the holder (initially Cede Co.) registered on the books of the registrar (the "Registrar as of the fifteenth day of the calendar month next preceding such interest payment date Principal of and interest on the Obligations will be paid as described in the section herein entitled "Book Entry System Obligations will mature in the amounts and on the dates shown on the cover of this Official Statement. U.S. Bank National Association, Saint Paul, Minnesota will serve as Registrar for the Obligations. The City will pay for registration services. Optional Redemption The City may elect on February 1, 2016, and on any day thereafter, to prepay Bonds due on or after February 1, 2017. 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. The Certificates will not be subject to redemption in advance of their respective stated maturity dates 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, in the aggregate principal amount of such maturity, and will be deposited with DTC OTC 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 Secunties Exchange Act of 1934. DTC holds securities that its participants "Direct Participants deposit with DTC DTC also facilitates the settlement among Direct Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book -entry changes in Direct Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants "Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, no Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or -2- indirectly "Indirect Participants The Rules applicable to DTC and its Direct and Indirect Participants are on file with the Securities and Exchange Commission. 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, but Beneficial Owners are 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 requested by an authorized representative of DTC. The deposit of Obligations with DTC and their registration in the name of Cede Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Obligations; DTC's records reflect only the identity of the Direct Participants to whose accounts such Obligations are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Obligations may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Obligations such as redemptions, defaults, and proposed amendments to the security documents 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, or in the alternative, Beneficial Owners may with to provide their names and addresses to the Registrar and request that copies of the notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Obligations within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede Co (nor such other DTC nominee) will consent or vote with respect to the Obligations. Under its usual procedures, DTC mails an Omnibus Proxy to the 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). Principal and interest 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 on the payable date in accordance with their respective holdings shown on DTC's records, unless DTC has reason to believe that it will not receive payment on the payable date 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 (nor its nominee), the Registrar, or the Issuer, -3- subject to any statutory or regulatory requirements as may be in effect from time to time Payment of principal and interest to Cede Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Registrar, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Obligations purchased or redeemed, through its Direct Participant, to the nominee holding the Obligations, and shall effect delivery of such Obligations by causing the Direct Participant to transfer the Direct Participant's interest in the Obligations, on DTC's records, to the nominee holding the Obligations. The requirement for physical delivery of the Obligations in connection with a purchase or redemption will be deemed satisfied when the ownership rights in the Obligations are transferred by the Direct Participants on DTC's records and followed by a book -entry credit of purchased or redeemed Obligations to the nominee holding the Obligations DTC may discontinue providing its services as securities depository with respect to the Obligations at any time by giving reasonable notice to the Registrar. 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 transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered. 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 Authority and Purpose The Bonds are being issued pursuant to Minnesota Statutes, Section 475.521 and Chapter 475 Minnesota Statutes, Section 475 521 limits the maximum amount of principal and interest to become due in any year on all outstanding capital improvement plan bonds to not more than 0 05367% of the taxable market value of property for taxes payable in the year in which the bonds are issued or sold Based on the City's 2004/05 taxable market value, the statutory limit on maximum annual principal and interest is $862,271. The maximum annual debt service for the Bonds, which is the City's only capital improvement plan issue, is projected at approximately $207,193, which is within the statutory limit The proceeds will be used to finance the construction and equipping of a new fire station. The composition of the Bonds is as follows: THE BONDS Project Costs $2,498,131 Capitalized Interest 68,979 Allowance for Discount Bidding 34,190 Costs of Issuance 28,700 Total Improvement Bonds $2,630,000 -4- Security and Financing The Bonds are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. The City will make its first levy for the Bonds in 2005 for collection in 2006. Capitalized interest from proceeds of the Bonds will be used to make the February 1, 2006 interest payment on the Bonds Thereafter, each year's levy, if collected in full, will be equal to 105% of the interest due August 1 in the year of collection and the principal and interest due February 1 in the following year. Authority and Purpose The Certificates are being issued pursuant to Minnesota Statutes, Section 412.301 and Chapter 475 Minnesota Statutes Section 412 301 specifies that the City may issue certificates of indebtedness without exposure to a petition requirement calling for a referendum if the total amount of the issue does not exceed 'A of 1% of the market value of the taxable property in the City Based on the City s current market value, this represents an issue size of approximately $4,016 541 This issuance of $1,535,000 is within that limitation and is not subject to petition. The proceeds will be used to finance the acquisition of various items of capital equipment for City departments and to prepay a lease- purchase agreement (the "Lease- Purchase Agreement The composition of the Certificates is as follows: Security and Financing THE CERTIFICATES Project Costs $1,502,607 Costs of Issuance 23,950 Allowance for Discount Bidding 8,443 Total Certificates $1,535,000 The Certificates are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes The City will make its first levy for the Certificates in 2005 for collection in 2006 The December 1, 2005 interest payment will be made with taxes previously levied for payment of the Lease Purchase Agreement Thereafter, each year's levy, if collected in full, will be sufficient to pay 105% of the principal and interest due in the year of collection Since first -half collections will not be sufficient to pay the principal and interest due on June 1 each year, the City expects to use available funds to pay a portion of each June 1 payment, which funds will be reimbursed from second -half collections. FUTURE FINANCING The City may issue approximately $2.75 million in general obligation water revenue bonds in early fall 2005 to finance the construction of a water tower -5- LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Obligations or the ability to meet its financial obligations. LEGALITY The Obligations are subject to approval as to certain matters by Bnggs and Morgan, Professional Association, of Saint Paul and Minneapolis, Minnesota, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined, nor attempted to examine or verify, any of the financial or statistical statements or data contained in this Official Statement and will express no opinion with respect thereto Legal opinions in substantially the form set out in Appendix I herein will be delivered at dosing. TAX EXEMPTION At closing Briggs and Morgan, Professional Association, Bond Counsel, will render an opinion that at the time of their issuance and delivery to the original purchaser, under present federal and State of Minnesota laws, regulations, rulings and decisions (which excludes any pending legislation which may have a retroactive effect), the interest on each Obligation is excluded from gross income for purposes of United States income tax and is excluded, to the same extent, in computing both gross income and taxable net income for purposes of State of Minnesota income tax (other than Minnesota franchise taxes measured by income and imposed on corporations and financial institutions), and that interest on the Obligations is not an item of tax preference for purposes of computing the federal alternative minimum tax imposed on individuals and corporations or the Minnesota alternative minimum tax applicable to individuals, estates or trusts, provided that interest on the Obligations is subject to federal income taxation to the extent it is included as part of adjusted current earnings for purposes of computing the alternative minimum tax imposed on certain corporations. No opinion will be expressed by Bond Counsel regarding other federal or state tax consequences caused by the receipt or accrual of interest on the Obligations or arising with respect to ownership of the Obligations. Preservation of the exclusion of interest on the Obligations from federal gross income and state gross and taxable net income, however, depends upon compliance by the City with all requirements of the Internal Revenue Code of 1986, as amended, (the "Code that must be satisfied subsequent to the issuance of the Obligations in order that interest thereon be (or continue to be) excluded from federal gross income and state gross and taxable net income. The City will covenant to comply with requirements necessary under the Code to establish and maintain the Obligations as tax exempt under Section 103 thereof, including without limitation, requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Obligations. -6- Property and Casualty Insurance Companies OTHER FEDERAL TAX CONSIDERATIONS Property and casualty insurance companies are required to reduce the amount of tax exempt interest received or accrued during the taxable year on certain obligations acquired after August 7, 1986, including interest on the Obligations. Foreign Insurance Companies Foreign companies carrying on an insurance business in the United States are subject to a tax on income which is effectively connected with their conduct of any trade or business in the United States, including "net investment income Net investment income includes tax exempt interest such as interest on the Obligations. Branch Profits Tax A foreign corporation is subject to a branch profits tax equal to 30% of the "dividend equivalent amount" for the taxable year The "dividend equivalent amount" is the foreign corporation's "effectively connected earnings and profits" adjusted for increase or decrease in "U.S net equity A branch's earnings and profits may include tax exempt municipal bond interest, such as interest on the Obligations Passive Investment Income of S Corporations Passive investment income, including interest on the Bonds, may be subject to federal income taxation under Section 1375 of the Code for an S corporation that has Subchapter C earnings and profits at the close of the taxable year if more than 25% of the gross receipts of such S corporation is passive investment income Financial Institutions For federal income tax purposes, financial institutions are unable to deduct any portion of the interest expense allocable to me ownership of certain tax exempt obligations acquired after August 7, 1986, including the Obligations but for the designation as Qualified Tax Exempt Obligations See "Bank- Qualified Tax Exempt Obligations" below. General The preceding is not a comprehensive list of all federal tax consequences which may arise from the receipt or accrual of interest on the Obligations The receipt or accrual of interest on the Obligations may otherwise affect the federal income tax (or Minnesota income tax or franchise tax) liability of the recipient based on the particular taxes to which the recipient is subject and the particular tax status of other items of income or deductions. All prospective purchasers of the Obligations are advised to consult their own tax advisors as to the tax consequences of, or tax considerations for, purchasing or holding the Obligations -7- BANK QUALIFIED TAX EXEMPT OBLIGATIONS The City will designate the Obligations as "qualified tax exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, 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 "Qualified tax exempt obligations" are treated as acquired by a financial institution before August 8, 1986 Interest allocable to such obligations remains subject to the 20% disallowance under prior law. RATINGS Applications for ratings of the Obligations have been made to Moody's Investors Service "Moody's 99 Church Street, New York, New York. If ratings are assigned, they will reflect only the opinion of Moody's Any explanation of the significance of the ratings may be obtained only from Moody's There is no assurance that ratings, if assigned, will continue for any given period of time, or that such ratings will not be revised or withdrawn, if in the judgment of Moody's, circumstances so warrant. A revision or withdrawal of the ratings may have an adverse effect on the market price of the Obligations FINANCIAL ADVISOR The City has retained Spnngsted incorporated, Public Sector Advisors, of St. Paul, Minnesota, as financial advisor (the "Financial Advisor in connection with the issuance of the Obligations. 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 Obligations. CERTIFICATION The City has authorized the distribution of this Official Statement for use in connection with the initial sale of the Obligations As of the date of the settlement of the Obligations, the Purchaser(s) will be furnished with a certificate signed by the appropriate officers of the City. The certificate will state that as of the date of the Official Statement, the Official Statement did not and does not as of the date of the certificate contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading -8- Total Trend of Values CITY PROPERTY VALUES 2004 Indicated Market Value of Taxable Property: $1,868,158,953 As of 2004, the indicated market value is calculated by dividing the City's 2004 taxable market value of $1,606,616,700 by the 2003 sales ratio of 86.0% for the City as provided by the State Department of Revenue (2004 sales ratios are not yet available Prior to 2004, indicated market value was calculated using the estimated market value, which is no longer available. 2004 Taxable Net Tax Capacity: $18,028,538 2004 Net Tax Capacity $18,281,576 Less: Captured Tax Increment Tax Capacity (299,465) Contribution to Fiscal Disparities (1,489,653) Plus Distribution from Fiscal Disparities 1,536,080 2004 Taxable Net Tax Capacity $18,028,538 2004 Taxable Net Tax Capacity by Class of Property Residential Homestead $13,426,180 74 5 Commercial /Industrial, Public Utility and Railroad 3,534,145 19 6% Agricultural 301,898 1.7 Apartments 297,944 1.6 Personal Property 468 371 2 6 $18,028,538 100.0% Reflects adjustments for fiscal disparities and captured tax increment tax capacity. Indicated Taxable Taxable Tax Market Valuela) Market Value Capacity(b) 2004 $1,868,158,953 $1,606,616,700 $18,028,538 2003 1,588, 774, 651 1,366,346,200 15,373,855 2002 1,353,935,798 1,153,553,300 13,132,139 2001 1,122,690,460 976,740,700 11,262,405 2000 959,718,481 846,471,700 14,047,202 (a) Calculated by dividing the county assessor's taxable market value by the sales ratio determined for the City each year by the State Department of Revenue (b) See Appendix 111 for an explanation of tax capacity and legislative changes in 2001 to the Minnesota property tax laws The decrease in taxable tax capacity in 2001 was attributable primarily to reductions in property tax class rates. -9- Ten of the Largest Taxpayers in the City Taxpayer Flint Hills Resources /Koch Refining Xcel Energy Clarel Corporation Bigos- Rosemount LLC (Cannon Equipment) Webb Properties Limerick Way LLC Continental Nitrogen Resources Corp CF Industries, Inc (Cenex) Hidden Valley SPE, LLC Gruett- Labnola Partnership Total Legal Net Debt Margin at April 2, 2005 General Obligation Debt Supported by Taxes' Date Original of Issue Amount y7 -1 -96 12 -1 -01 6 -15 -05 6 -15 -05 Total $1,780,000 725,000 2,630,000 1,535,000 Purpose These issues are subject to the statutory debt limit. Type of Business Oil Refinery Utility Retail Manufacturing Manufacturing Townhouses Fertilizer Blending Plant Food Fertilizer Utility Manufacturing Represents 15 2% of the City's 2004 taxable net tax capacity. CITY INDEBTEDNESS Legal Debt Limit Debt Limit (2% of Taxable Market Value) Less Outstanding Net Debt Subject to Limit Fire Station Community Center Refunding Fire Station (the Bonds) Equipment (the Certificates) 10 $32,132,334 (5,774,510) $26,357,824 2004 Net Tax Capacity $1,762,985 284,441 177,582 86,794 77,968 75,002 73,172 72,580 68,512 66,784 $2,745,820 Principal Final Outstanding Maturity As of 4 -2 -05 2 -1 -2016 $1,165,000 2 -1 -2013 600,000 2 -1 -2025 2,630,000 6 -1 -2010 1,535,000 $5,930,000 General Obligation Debt Supported Primarily by Special Assessments Date Original of Issue Amount 4 -1 -98 7 -1 -99 10 -1 -99 8 -15 -01 7 -1 -02 7 -1 -03 Total Date of Issue 4 -1 -98 9 -1 -00 8 -15 -01 7 -1 -02 Total (a) (b) (c) (d) Total $2,010,000 3,715,000 4,395,000 1,325,000 3,395,000 1,945,000 General Obligation Port Authority Debt Original Amount $2,405,000 1,750,000 2,045,000 1,795, 000 Date Original of Issue Amount Purpose 7 -1 -96 $1,035,000 10 -1 -99 855,000 9 -1 -00 1,160,000 8 -15 -01 1,140, 000 12 -1 -01 805,000 7 -1 -02 1,195,000 7 -1 -03 1,170, 000 Purpose Local Improvements Local Improvements Local Improvements Local Improvements Local Improvements Local Improvements Purpose Municipal Building Refunding Business Park Infrastructure Improvements City Hall Highway 3 Enhancement General Obligation Debt Supported by Revenues Storm Water Revenue Storm Water Revenue Water Revenue Storm Water Revenue Storm Water Revenue Refunding Water and Storm Water Revenue Water Revenue Principal Final Outstanding Maturity As of 4 2 05 2 -1 -2009 755,000 2 -1 -2011 1,515,000 2 -1 -2011 1,940,000 2 -1 -2012 970,000 2 -1 -2013 2,110,000 2 -1 -2014 1,735,000 Final Maturity 2 -1 -2018 2 -1 -2011 2 -1 -2022 2 -1 -2013 Debt service payments on this issue are made from a combination of certain special fund levies This issue is being repaid from ad valorem tax levies This issue is being repaid from ad valorem taxes levied by the City. This issue is being repaid from a combination of tax levies, special assessments, utility revenues 2 -1 -2012 2 -1 -2015 2 -1 -2016 2 -1 -2017 2 -1 -2008 2 -1 -2018 2 -1 -2014 $9,025,000 Principal Outstanding As of 4 -2 -05 $2,145,000(a) 1,170,0000) 1,875,000(c) 1,380,000(d) $6,570,000 tax and general and storm water Principal Final Outstanding Maturity As of 4 -2 -05 575,000 640,000 950,000 980,000 425,000 1,105,000 1,065,000 $5,740,000 Annual Calendar Year Debt Service Including These Issues Year 2005 (at 4 -2) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total G O. Principal (Paid) 440,000 545,000 565,000 590,000 605,000 295,000 305,000 320,000 245,000 260,000 270,000 140,000 145,000 150,000 155,000 165,000 170,000 180,000 190,000 195,000 $5,930,000(b) Debt Supported by Taxes Principal Interest(a) 55,211 78 697,132.41 771,391 25 772,131 25 775,910.00 768,075.00 439,622.50 435,851 25 436,217.50 345,665 00 348,155.00 344,770 00 204,875 00 203,711 25 202,220.00 200,433.75 203,231 25 200,567.50 202,472 50 203,775.00 199.631.25 $8,011,050.44 12 G 0 Debt Supported Primarily by Special Assessments Principal Principal Interest (Paid) 177,120 00 $2,105,000 2,419,633.75 1,620,000 1,864,795 00 1,615,000 1,798,152.50 1,065,000 1,193,982 50 890,000 977,147.50 900,000 948,475.00 390,000 411,727.50 245,000 255,506 25 195,000 198,217 50 $9,025,000 $10,244,757 50 (a) Includes the Bonds and the Certificates at assumed average annual interest rates of 4 40% and 3 25 respectively. (b) 70.3% of this debt will be refired within ten years. Annual Calendar Year Debt Service Including These Issues (continued) G.O Debt Supported G 0 Port Authority Debt by Revenues Principal Principal Year Principal Interest Principal Interest 2005 (at 4 -2) (Paid) 147,950.01 (Paid) 121,343.13 2006 585,000 869,420 02 565,000 797,522 51 2007 615,000 875,443 77 585,000 796,328 76 2008 635,000 869,603.77 605,000 793,401 26 2009 580,000 788,643 77 470,000 637,022.51 2010 605,000 787,561.27 495,000 642,121 26 2011 635,000 789,447.52 520,000 645,402.51 2012 435,000 565,053 14 540,000 642,102.51 2013 455,000 565,125 01 470,000 550,021 26 2014 260,000 353,698 13 490,000 549,121 26 2015 270,000 350,867.50 375,000 414,060.01 2016 285,000 352,230.00 310,000 332,248 76 2017 305,000 357,587.50 205,000 214,869 38 2018 315,000 352,113.75 110,000 112,530.00 2019 135,000 160,990 00 2020 145,000 164,125 00 2021 150,000 161,750.00 2022 160,000 164, 000.00 Total $6,570,000(a) $8,675,610 16 $5,740,000(b) $7,248,095.12 (a) 77 2% of this debt will be retired within ten years (b) 89.1% of this debt will be retired within ten years. Lease-Purchase Agreements The City has entered into a lease- purchase agreement dated March 28, 1995 for the acquisition of various equipment and vehicles The principal amount of the lease is $362,000, with semiannual payments of $25,359. The final payment is due August 1, 2005. The City entered into a lease- purchase agreement dated May 15, 1996 for a fire truck. The principal amount of the lease is $476,445 with annual payments of $64,896. Final payment will be due June 1, 2006. The City entered into a lease- purchase agreement dated May 31, 2001 for the acquisition of various equipment and vehicles. This lease will be prepaid with a portion of the proceeds of the Certificates 13 Summary of Direct Debt Including These Issues G 0 Debt Supported by Taxes $5,930,000 (155,490) $5,774,510 G 0 Debt Supported by Special Assessments 9,025,000 (4,215,832) 4,809,168 G 0 Port Authority Debt 6,570,000 (2,018,502) 4,551,498 G 0 Debt Supported by Revenues 5,740,000 (1,405,365) 4,334,635 Debt service funds are as of March 31, 2005 and include money to pay both principal and interest. Indirect General Obligation Debt Taxing Unit(a) Dakota County ISD 196 (Rosemount Apple Valley- Eagan) ISD 199 (Inver Grove -Pine Bend) ISD 200 (Hastings) Metropolitan Council Metropolitan Transit Dist. Total (a) (b) (c) (d) 2004 Taxable Net Tax Capacity 372,381,645 140,066,496 24,624,172 25,075,067 2,680,905,320 2,304,847,503 Debt Ratios Including These Issues 14 Gross Debt G.O. Debt As of 4- 2 -05(b) 83,795,000 141,207,964(°) 7,255,000 44,890,000 35,750,000(d) 179,545,000 G.O Net Direct Debt To 2004 Indicated Market Value ($1,868,158,953) 0.81% Per Capita (19,907 2004 City Estimate) $760 Less' Debt Net Service Funds Direct Debt Debt Applicable to Tax Capacity in City Percent Amount 4 8% 12.1 4.5 0.1 0.7 0.8 4,022,160 17,086,164 326,475 44,890 250,250 1,436,360 $23,166,299 Only those units with debt outstanding are shown here. Excludes debt supported by revenues and tax and aid anticipation debt. Includes $16,840,000 of annual appropriation lease revenue debt Does not include outstanding general obligation debt supported by sewer revenues, 911 user fees or housing rental payments Includes certificates of participation. G.O Indirect Net Direct Debt 2 05% $1,924 Excludes general obligation debt supported by revenues, state -aid street bonds and lease purchase agreements Tax Capacity Rates CITY TAX RATES, LEVIES AND COLLECTIONS 2004/05 For 2000/01 2001/02 2002/03 2003/04 Total Debt Only Dakota County(a) 25 320% 33 102% 32.463% 30.300% 28.267% -0- City of Rosemount(b) 36.553 59 546 57 123 52 368 46 041 6 951% ISD 196'0 53 249 28.883 27 638 26.074 26 251 13312 Special Districts(d) 6 378 5 021 5.563 5.128 5.216 1 742 Total 121.500% 126 552% 122 787% 113.870% 105.775% 22.005% (c) (a) Dakota County also has a 2004/05 tax rate of 0 00666% spread on the market value of property in support of debt service The City also has a 2004/05 tax rate of 0.00972% spread on the market value of property in support of debt service on general obligation fire station bonds Independent School District 196 (Rosemount -Apple Valley Eagan) also has a 2004/05 tax rate of 0 10862% spread on the market value of property in support of an excess operating levy Special districts Include Metropolitan Council, Regional Transit District, Mosquito Control, Dakota County Community Development Authority Dakota County Light Rail and Vermillion River Watershed District. (b) (d) NOTE Taxes are determined by multiplying the net tax capacity by the tax capacity rate, expressed as a percentage (see Appendix ill). Tax Collections for the City Net Collected During Collected Amount Collection Year As of 3 -31 -05 Levy /Collect of Levy' Amount Percent Amount Percent 2004/05 $7,746,600 (In Process of Collection) 2003/04 7,032,501 $6,952,283 98 9% $6,976,259 99.2% 2002/03 6,469,801 6,384,169 98.7 6,452,770 997 2001/02 5,730,975 5,675,507 99 0 5,722,467 99 9 2000/01 4,716,935 4,658,485 98.8 4,713,779 99.9 The net levy excludes state aid for property tax relief and fiscal dispanties, if applicable. The net levy rs the basis for computing tax capacity rates 15 Fund Total FUNDS ON HAND As of March 31, 2005 General Special Revenue Port Authority Debt Service: Tax Supported Assessment Supported Port Authority Supported General Obligation Revenue Supported Construction Water, Sewer and Storm Water Arena CITY INVESTMENTS City funds are invested in accordance with Minnesota Statutes, Section 118A and the City's investment policy which is more restrictive than State statutes. The City investment portfolio is managed in a manner to attain a market rate of return while preserving and protecting the capital of the overall portfolio The Finance Director or the City Administrator is responsible for investing all funds, including making investment decisions on a daily basis and monitoring the portfolio. Pursuant to the City's investment policy the City is authorized to invest in the following' 1 Governmental Securities Instruments such as bonds, notes, bills, mortgages and other securities which are direct obligations of the federal government or its agencies, with the principal fully guaranteed by the U S government or its agencies The City will not invest in any mortgage or mortgage related security unless a return of principal is completely guaranteed by a federal entity 2. Certificate of Deposit. 7 3. Repurchase Agreement 4. Reverse Repurchase Agreement. 5. Prime Commercial Paper. 6 Any secunty which is a general obligation of the State of Minnesota or any of its municipalities. 7 Bankers acceptances of United States banks eligible for purchase by the Federal Reserve System Coliateralization is required on two types of investments, certificates of deposit and repurchase agreements In order to anticipate market changes and provide a level of security for all funds, the collateralization level is 110 percent of the market value of principal and accrued interest. 16 Cash and Investments 5 4,581,937 4,218,488 183,274 155,490 4,215,832 2,018,502 1,405, 365 3,613,370 16,313,811 69,468 $36,775,537 The City attempts to diversify its investments according to type and maturity The portfolio, as much as possible, contains both short-term and long -term investments. The long -term portion of the portfolio, meaning longer than five years, may not exceed 35% of the total funds in the portfolio. This is done to reduce overall market risk of rates changing. As of March 31, 2005 the City had a total of $35,287,807 invested funds as follows: Type of Security Money Market Savings Certificates of Deposit Certificates of Deposit Certificates of Deposit Government Asset Backed Securities Government Asset Backed Securities Total Amount Invested Length of Investment as of 3 -31 -05 N/A Less than 12 months One to ten years Over ten years Ten years or less Over ten years GENERAL INFORMATION CONCERNING THE CITY 500,000 20,998,681 960,000 672,000 11,086,448 1.070.678 $35,287,807 The City of Rosemount, located in northern Dakota County, is a southern suburb of the Minneapolis /Saint Paul metropolitan area The City encompasses an area of 22,560 acres and has a 2000 U S Census count of 14,619, a 69.6% increase from the City's 1990 Census count of 8,622 The City estimates its 2004 population to be 19,907, a 36% increase over the 2000 U S Census A major contributor to the City's tax base and economy is an industrial complex sited on 6,200 acres in the northeastern portion of the City near the Mississippi River. Firms located there include Flint Hills Resources /Koch Petroleum Group, CF Industries, Continental Nitrogen, Endres Processing and Spectro Alloys. Mid American Pipeline Company transports gas from southern states and operates a bottling station at Pine Bend Minnesota Pipeline Company transports Canadian and North Dakota crude oil to the Flint Hills refinery at Pine Bend Flint Hills is a leading producer of petroleum products in Minnesota converting 290,000 barrels of crude oil into gasoline each day This Rosemount company employs 742 full -time workers. The University of Minnesota's Rosemount Research Center is located on a 7,500 acre tract of land of which approximately 3,200 acres are situated in the City. This facility is utilized by the University, other research agencies, and private firms for agricultural and other research projects 17 Major Employers Employer Independent School District 196 Flint Hills Resources Intermediate School District 917 Dakota County Technical College Genz Ryan Plumbing Heating Cannon Equipment Company Spectro Alloys Corp Greif Brothers Corporation Endres Processing Ltd. City of Rosemount Astro Plastics Dakota County HRA Aquila, Inc. Continental Nitrogen Resources Corp CF Industries, Inc (Cenex) Rayfo Inc. Labor Force Data Dakota County Minneapolis /St Paul MSA Minnesota 229,734 1,841,047 2,952,747 Building Permits Issued by the City 1 2005 (to 3 -31) 2004 2003 2002 2001 2000 1999 1998 1997 1996 Product/Service March 2005 Civilian Unemployment Labor Force Rate 160 25,608,019 1,158 126,348,047 1,128 96,872,709 1,398 82,398,820 1,009 82,897,167 862 52,125,217 1,021 50,950,727 739 31,939,355 601 24,173,652 655 28,440,950 Education Crude Oil Education Education Plumbing and Heating Manufacturing of Metal Parts Aluminum Alloys Multiwall Bags Livestock Feed Government Plastics Manufacturing Government Natural Gas Chemicals Warehousing /Freight Terminal Industrial Refuse Containers (a) Represents total employment, not Just within the City of Rosemount. (b) Excludes over 160 part -time and seasonal employees. Source. Telephone survey of individual employers, May 2005. 4 2% 45 5.0 Total Permits New Single Number Value Number 18 Civilian Labor Force 226,024 1,815,995 2,926,418 101 551 440 330 304 285 357 190 99 130 March 2004 Approximate Number of Employees 4,000(a) 742 360 250 200 160 125 100 85 76(b) 60 60 40 37 35 35 Unemployment Rate 4 7% 5.2 5.7 Source. Minnesota Department of Employment and Economic Development. 2005 data are preliminary. Family Homes Value 22,124,877 110,674,682 87,119,479 61,571,739 60,458,504 39,074,424 40,780,200 21,856,164 10,942,651 13,941,688 Recent and Proposed Development Residential activity in the City continued to grow in 2004, with a 25% increase over the prior year in permits issued for new dwelling units. Of the 551 permits issued, 56% of the new construction was for single family detached housing. Planning approvals by the City have created an inventory of land that should generate more than 500 housing starts annually for the next few years From 2000 through 2004, an average of almost $72 million in new construction value was added per year During this same period, the City added over 1,910 single family homes to its housing stock (an average of 382 homes per year) Some of the larger housing projects currently being developed or recently completed are as follows. Development /Developer Bard's Crossing/Wensmann Biscayne Pointe North /Giles Property Connemara Crossing/ Basic Builders, Inc. Evermoor 3 Addition /CPDC Evermoor Crosscroft 2 Addition/ CPDC Evermoor Innisfree 2 Addition/ CPDC Evermoor Roundstone /CPDC Glendalough 4' Addition /Lundgren Brothers Glendalough 5 Addition /Lundgren Brothers Harmony /CPDC Meadows of Bloomfield 3 Addition/ Centex Homes Meadows of Bloomfield Phase 2/ Centex Homes Meadows of Bloomfield /Centex Homes Rosewood Village 2 Addition/ Progress Land Co Units Units Built as Housing Approved of 4 -14 -05 Multi Family 110 55 Single Family 22 22 Multi Family 44 -0- Single Family 30 21 Single Family 23 23 Single Family 3 3 Townhomes 119 52 Single Family 19 19 Single Family 35 35 Multi -Family 178 21 Single Family 118 -0- Single Family 20 19 Single Family/Townhomes 220 166 Single Family 56 55 The City Council approved a revitalization plan for the historic downtown and selected an initial development team in 2004 A tax increment financing district was created in 2004 to permit alternative financing sources for portions of the redevelopment process, if needed The first project construction is expected to begin in spring 2006. Also planned for the district is a residential development (Harmony Addition) including 600 single and multi family units on the redeveloped site of the Brockway glass factory, which closed in the mid -1980s The City also negotiated the purchase of land from the Church of St Joseph at the edge of downtown The property will serve as the site of a branch of the Dakota County Library. In 2004, construction began on a 48,000 square -foot retail development. The retail center will include a 15,000 square -foot grocery store and a 6,400 square -foot restaurant site. The City Council also approved a Comprehensive Guide Plan amendment that allotted 32 acres of developable commercial land at County Road 42 and Business Parkway An Applebee's restaurant was constructed at County Road 42 and Cimarron Avenue. 19 Industrial valuations increased by $2 million in 2004, primarily due to upgrades to the Flint Hills refinery. The new construction will meet recent air emission standards and increase production at the plant Financial Institutions Full service banking is provided by the First State Bank of Rosemount and Rosemount National Bank, located in the City As of December 31, 2004, the two banks reported deposits of $54,234,000 and $46,371,000, respectively Branches of TCF Bank and Vermillion State Bank are also located in the City Source Federal Deposit Insurance Corporation website. Education The major portion of the City is part of Independent School District 196, headquartered in Rosemount The District's enrollment for the 2004105 school year was approximately 28,367 students in grades kindergarten through twelve The District is one of the fastest growing school districts in the State, and one of the largest employers in the City with approximately 4,000 full time and part-time employees District -wide The physical plant of the District consists of 18 elementary schools, six middle schools, and four senior high schools. Of these schools, two elementary schools, one junior high, and one senior high are located in the City of Rosemount. Small portions of the City are located in Independent School District 199 (Inver Grove -Pine Bend) and Independent School District 200 (Hastings). The Dakota County Technical College is also located in the City. The Technical College, located on a 96 -acre site, opened in 1973. The Technical College has an enrollment of approximately 2,000 post- secondary students. In addition, the Technical College offers an extensive adult education program. Organization GOVERNMENTAL ORGANIZATION AND SERVICES Rosemount was established as a municipal corporation in 1858, and became a statutory City in 1974 The City has a Mayor Council form of government, with the four Council members being elected to overlapping four -year terms of office The present City Council is listed below. Expiration of Term William H. Droste Mayor December 31, 2006 Mark DeBettignies Council Member December 31, 2006 Kimberly Shoe- Corrigan Council Member December 31, 2006 Michael Baxter Council Member December 31, 2008 Phillip Sterner Council Member December 31, 2008 The City's chief administrative officer is the City Administrator, who is appointed by and serves at the discretion of the City Council Mr. James D Verbrugge was appointed to the position of City Administrator in March 2003. Prior to that, Mr. Verbrugge served as Assistant City Administrator in Eagan, Minnesota since 1998 Mr Jeffrey A. May, who has served in the City's Finance Department since 1985, was appointed as the City's Finance Director in March of 1991 20 Growth and development of the City is guided by a Comprehensive Land Use Plan which was commissioned soon after the consolidation of the former Village and Town of Rosemount in 1971 The Plan outlines long -range zoning and development policy of the City, and is designed to encourage and promote orderly development and growth which will perpetuate a sound tax base The last major update of this Plan was completed in 1999 and covers the next 25 -year period Services Police protection for the City is provided by 19 full -time officers, and four other police personnel. Fire protection is provided by 37 trained volunteers. The City has a class 5 insurance rating. The City completed an expansion of its public works facility in 1999 The expansion was funded by a 20 -year internally funded lease- purchase agreement, effective January 20, 1999, in the amount of $548,000. Municipal water, sanitary sewer and storm water services are provided to virtually all of the developed areas of the City. The municipal water service is provided by six wells with three water towers having a total storage capacity of 2,000,000 gallons The maximum pumping capacity is 6,000,000 gallons per day with an average demand of 2,007,841 gallons pumped daily. It is the City's policy to finance all of its lateral sanitary sewer and water improvements by special assessments filed against benefited property; however, there is a provision for deferred assessments, in which case it may be necessary to provide some tax support Core facilities are intended to be financed from water and sewer connection charges, but these too may require some tax support in the event sufficient connections do not occur in a timely manner. To date, tax support has not been necessary. The City finances the construction and long -term maintenance of its storm water core facilities through the operation of a storm water utility. Each property in the City pays a quarterly "stormwater user fee" and an initial connection charge to support the program Interceptor sewer lines and wastewater treatment plants in the seven county metropolitan area, of which the City is a part, are under the jurisdiction of the Metropolitan Council Environmental Services "MCES MCES finances its operations through user charges based on usage. The City is responsible for the construction and maintenance of sewer laterals Employee Pensions All full -time and certain part-time employees of the City of Rosemount are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost sharing multiple employer public employees retirement plans PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All employees of the City covered by PERA belong to the Coordinated Plan All police officers, fire fighters and peace officers who qualify for membership by statute are covered by the PEPFF For the year ended December 31, 2004 (unaudited), the City's contribution to PERA was $284,713 -21 Current General Fund Budget General Fund Revenues. General Property Taxes $4,839,469 $4,884,614 $5,083,300 Intergovernmental 456,889 470,978 484,000 Licenses and Permits 618,400 1,295,164 750,200 Fines and Forfeits 90,000 96,902 90,000 Charges for Services 1,085,200 1,222,213 1,229,900 Miscellaneous Revenues 233,500 361,300 253,700 Investment Income 82,442 141,909 101,500 Transfers In 3,500 11 677 3,500 Total General Fund Revenues $7,409,400 $8,484,757 $7,996,100 General Fund Expenditures: 2004 Adopted Budget 2004 2005 Estimated* Adopted Budget General Government $1,885,600 $2,102,842 $2,161,700 Public Safety 2,272,500 2,233,232 2,430,500 Public Works 2,302,500 2,169,602 2,389,200 Parks and Recreation 948,800 980,841 1,014,700 Transfer Out -0- 590.000 -0- Total General Fund Expenditures $7,409,400 $8,076,517 $7,996,100 Audited 2004 numbers are not yet avadlab(e. Action taken by the 2003 Minnesota Legislature provided for total reductions in City Aid (formerly titled Local Government Aid and Market Value Homestead Credit) of $142,000,000 in collection year 2003 and $170,000,000 in collection year 2004. The effect of these changes to the City of Rosemount was a reduction in aid of approximately $752,472 in each 2003 and 2004 Minnesota law allowed the City to levy for 60% of the lost aid during the levy cycle payable in 2004. For 2005, the Market Value Homestead Credit (MVHC) was supposed to be put back in place. At this time, the Governor's budget proposal, as well as most proposals coming forth from the Legislature, include further reductions in MVHC. For the City, the reduction would be approximately 5350,000 The level of aid reductions does not pose a significant problem to the City and in the opinion of management will not affect ongoing operations. 22 BRIGGS AND M ORGAN PROFESSIONAL ASSOCIATION PROPOSED FORMS OF LEGAL OPINION $2,630,000 GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2005A CITY OF ROSEMOUNT DAKOTA COUNTY MINNESOTA 1 -1 APPENDIX I 2200 FIRST NATIONAL BANK BUILDING 332 MINNESOTA STREET SAINT PAUL, MINNESOTA 55101 TELEPHONE (651) 808 -6600 FACSI.MIILE (651) 808 -6450 W WBRIGGS COM We have acted as bond counsel in connection with the issuance by the City of Rosemount, Dakota County, Minnesota (the "Issuer of its S2,630,000 General Obligation Capital Improvement Plan Bonds, Series 2005A, beanng a date of original issue of June 15, 2005 (the "Bonds We have examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, and we express no opinion relating thereto. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation Based upon such examinations, and assuming the authenticity of all documents submitted to us as originals, the conformity to onginal documents of all documents submitted to us as certified or photostatic copies and the authenticity of the onginals of such documents, and the accuracy of the statements of fact contained in such documents, and based upon present Minnesota and federal laws (which excludes any pending legislation which may have a retroactive effect on or before the date hereof), regulations, rulings and decisions, it is our opinion that: (I) The proceedings show lawful authority for the issuance of the Bonds according to their terms under the Constitution and laws of the State of Minnesota now in force. (2) The Bonds are valid and binding general obligations of the Issuer and all of the taxable property within the Issuer's jurisdiction is subject to the levy of an ad valorem tax to pay the same without limitation as to rate or amount; provided that the enforceability (but not the validity) of the Bonds and the pledge of taxes for the payment of the pnncipal and interest thereon is subject to the exercise of Judicial discretion in accordance with general principles of equity, to the constitutional powers of the United States of America and to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted (3) At the time of the issuance and delivery of the Bonds to the onginal purchaser, the interest on the Bonds is excluded from gross income for United States income tax purposes and is excluded, to the same extent, from both gross income and taxable net income for State of Minnesota income tax purposes (other than Minnesota franchise taxes measured by income and imposed on corporations and financial institutions), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations or the Minnesota alternative minimum tax applicable to individuals, estates or trusts, it should be noted, however, that for the purpose of computing the federal alternative minimum tax imposed on corporations, such interest is taken into account in determining adjusted current earnings. The opinions set forth in the preceding sentence are subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes and from both gross income and taxable net Income for State of Minnesota income tax purposes. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income and taxable net income retroactive to the date of issuance of the Bonds. We express no opinion regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Bonds or ansing with respect to ownership of the Bonds Dated at Saint Paul, Minnesota, this clay of June, 2005. Professional Association 1 -2 BRIGGS AND MORGAN 2200 FIRST NATIONAL BANK BUILDING 332 MINNESOTA STREET SAINT PAUL, MINNESOTA 53101 TELEPHONE (651) S08 -6600 FACSPvIILE (651; 8C8 -6450 PROFESSIONAL ASSOCIATION W W W BRIGGS COM $1,535,000 GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2005B CITY OF ROSEMOUNT DAKOTA COUNTY MINNESOTA We have acted as bond counsel in connection with the issuance by the City of Rosemount, Dakota County, Minnesota (the "Issuer of its $1,535,000 General Obligation Equipment Certificates of Indebtedness, Senes 2005B, bearing a date of original issue of June 15, 2005 (the "Certificates We have examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Certificates, and we express no opinion relating thereto. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Based upon such examinations, and assuming the authenticity of all documents submitted to us as originals, the conformity to onginal documents of all documents submitted to us as certified or photostatic copies and the authenticity of the onginals of such documents, and the accuracy of the statements of fact contained in such documents, and based upon present Mlmnesota and federal laws (which excludes any pending legislation which may have a retroactive effect on or before the date hereof), regulations, rulings and decisions, it is our opinion that (1) The proceedings show lawful authority for the issuance of the Certificates according to their terms under the Constitution and laws of the State of Minnesota now in force. (2) The Certificates are valid and binding general obligations of the Issuer and all of the taxable property within the Issuer's jurisdiction is subject to the levy of an ad valorem tax to pay the same without limitation as to rate or amount; provided that the enforceability (but not the validity) of the Certificates and the pledge of taxes for the payment of the pnncipal and interest 1 -3 thereon is subject to the exercise of judicial discretion in accordance with general pnnciples of equity, to the constitutional powers of the United States of Amenca and to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' nghts heretofore or hereafter enacted (3) At the time of the issuance and delivery of the Certificates to the original purchaser. the interest on the Certificates is excluded from gross income for United States income tax purposes and is excluded, to the same extent, from both gross income and taxable net income for State of Minnesota income tax purposes (other than Minnesota franchise taxes measured by income and imposed on corporations and financial institutions), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations or the Minnesota alternative minimum tax applicable to individuals, estates or trusts, it should be noted, however, that for the purpose of computing the federal alternative minimum tax imposed on corporations, such interest is taken into account in determining adjusted current earnings. The opinions set forth in the preceding sentence are subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Certificates in order that interest thereon be. or continue to be, excluded from grass income for federal income tax purposes and from both gross income and taxable net income for State of Minnesota income tax purposes Failure to comply with certain of such requirements may cause the inclusion of interest on the Certificates in gross income and taxable net income retroactive to the date of issuance of the Certificates We express no opinion regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Certificates or ansing with respect to ownership of the Certificates Dated at Saint Paul, Minnesota, this day of June, 2005. Professional Association 1-4 CONTINUING DISCLOSURE UNDERTAKINGS This Continuing Disclosure Undertaking (the "Disclosure Undertaking is executed and delivered by the City of Rosemount, Minnesota (the "Issuer"), in connection with the issuance of S2,630,000 General Obligation Capital Improvement Plan Bonds, Series 2005A (the "Bonds The Bonds are being issued pursuant to a Resolution adopted May 24, 2005 (the "Resolution Pursuant to the Resolution and this Undertaking, the Issuer covenants and agrees as follows• SECTION 1. Purpose of the Disclosure Undertaking This Disclosure Undertaking is being executed and delivered by the Issuer for the benefit of the Owners and in order to assist the Participating Underwriters in complying with SEC Rule 15c2- 12(b)(5) SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any annual financial information provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Undertaking. "Audited Financial Statements" shall mean the financial statements of the Issuer audited annually by an independent certified public accounting firm, prepared pursuant to generally accepted accounting principles promulgated by the Financial Accounting Standards Board, modified by governmental accounting standards promulgated by the Government Accounting Standards Board. "Dissemination Agent" shall mean such party from time to time designated in wnting by the Issuer to act as information dissemination agent and which has filed with the Issuer a written acceptance of such designation "Fiscal Year" shall be the fiscal year of the Issuer. "Governing Body" shall, with respect to the Bonds, have the meaning given that term in Minnesota Statutes, Section 475.51, Subdivision 9. "MSRB" shall mean the Municipal Securities Rulemaking Board. "Official Statement" shall be the Official Statement dated 2005, prepared in connection with the Bonds APPENDIX!! "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The National Repositones as of the date of execution of this Undertaking are as listed on Exhibit A. "Occurrence(s)" shall mean any of the events listed in Section S.A. of this Disclosure Undertaking "Owners" shall mean the registered holders and, if not the same, the beneficial owners of any Bonds. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Repository" shall mean each National Repository and each State Depository. "Resolution" shall mean the resolution or resolutions adopted by the Governing Body of the Issuer providing for, and authonzing the issuance of, the Bonds. "Rule" shall mean Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time or interpreted by the Securities and Exchange Commission. "State" shall mean the State of Minnesota. "State Depository" shall mean any public or private repository or entity designated by the State as a state depository for the purpose of the Rule. As of the date of this Disclosure Undertaking, there is no State Depository in Minnesota SECTION 3. Provision of Annual Reports. A. Beginning in connection with the Fiscal Year ending on December 31, 2004, the Issuer shall, or shall cause the Dissemination Agent to, as soon as available, but in any event not later than December 31, 2005, and by December 31 of each year thereafter, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Undertaking. B. If the Issuer is unable to provide to the Repositories an Annual Report by the date required in subsection A, the Issuer shall send a notice of such delay and estimated date of delivery to each Repository or to the MSRB and to the State Depository, if any C. Any filing under this Disclosure Undertaking may be made solely by transmitting such filing to the Texas Municipal Advisory Council (the "MAC as provided at http /Iwww.disciosureusa.org unless the United States Secunties and Exchange Commission has withdrawn the interpretive advice in its Letter to the MAC dated September 7, 2004. SECTION 4 Content and Format of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the financial information and operating data pertaining to the Issuer listed below as of the end of the preceding Fiscal Year The Annual Report may be submitted to each Repository as a single document or as separate documents comprising a package, and may cross reference other information as provided in this Disclosure Undertaking. The following financial information and operating data shall be supplied: A. an update of the type of information contained in the Official Statement under the caption CITY PROPERTY VALUES; CITY INDEBTEDNESS, and CITY TAX RATES, LEVIES AND COLLECTIONS; B. Audited Financial Statements of the Issuer. The Audited Financial Statements of the Issuer may be submitted to each Repository separately from the balance 11 -2 of the Annual Report In the event Audited Financial Statements of the Issuer are not available on or before the date for filing the Annual Report with the appropriate Repositones as set forth in Section 3 A. above, unaudited financial statements shall be provided as part of the Annual Report The accounting pnnciples pursuant to which the financial statements will be prepared will be pursuant to generally accepted accounting pnnciples promulgated by the Financial Accounting Standards Board, as such principles are modified by the governmental accounting standards promulgated by the Government Accounting Standards Board, as in effect from time to time If Audited Financial Statements are not provided because they are not available on or before the date for filing the Annual Report, the Issuer shall promptly provide them to the Repositories when available. SECTION 5. Reporting. of Significant Events. A This Section 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the Bonds, if matenal: (1) principal and interest payment delinquency; (2) non- payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform, (6) adverse tax opinions or events affecting the tax exempt status of the security; (7) modifications to nghts of security holders; (8) Bond calls, (9) defeasances, (10) release, substitution or sale of property securing repayment of the Bonds; and (I 1) rating changes. B. Whenever an event listed in Section S.A. above has occurred, the Issuer shall as soon as possible determine if such event would constitute material information for Owners of Bonds. If knowledge of the Occurrence would be matenal, the Issuer shall promptly file a notice of such Occurrence with each National Repository or the MSRB and with the State Depository, if any. C The Issuer agrees to provide or cause to be provided, in a timely manner, to each National Repository or the MSRB and to the State Depository, if any, notice of a failure by the Issuer to provide the Annual Reports described in Section 4 SECTION 6 Termination of Reporting. Obligation. The Issuer's obligations under this Disclosure Undertaking shall terminate upon the legal defeasance, pnor redemption or payment in full of all of the Bonds SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure 11 -3 Undertaking, and may discharge any such Agent, with or without appointing a successor Dissemination Agent SECTION 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Undertaking, the Issuer may amend this Disclosure Undertaking, and any provision of this Disclosure Undertaking may be waived, if (a) a change in law or change in the ordinary business or operation of the Issuer has occurred, (b) such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule, and (c) such amendment or waiver is supported by an opinion of counsel expert in federal securities laws to the effect that such amendment or waiver would not materially impair the interests of Owners. SECTION 9 Additional Information. Nothing in this Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of an Occurrence, in addition to that which is required by this Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of an Occurrence in addition to that which is specifically required by this Disclosure Undertaking, the Issuer shall have no obligation under this Disclosure Undertaking to update such information or include it in any future Annual Report or notice of an Occurrence. SECTION 10. Default. In the event of a failure of the Issuer to provide information required by this Disclosure Undertaking, any Owner may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations to provide information under this Disclosure Undertaking A default under this Disclosure Undertaking shall not be deemed an Event of Default under the Resolution, and the sole remedy under this Disclosure Undertaking in the event of any failure of the Issuer to comply with this Disclosure Undertaking shall be an action to compel performance SECTION 11. Beneficiaries. This Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriters and Owners from time to time of the Bonds, and shall create no nghts in any other person or entity. f SECTION 12. Reserved Rights. The Issuer reserves the right to discontinue providing any information required under the Rule if a final determination should be made by a court of competent jurisdiction that the Rule is invalid or otherwise unlawful or, subject to the provisions of Section 8 hereof, to modify the undertaking under this Disclosure Undertaking if the Issuer determines that such modification is required by the Rule or by a court of competent junsdiction. 11-4 Date: 2005 CITY OF ROSEMOUNT, MINNESOTA By Its By Its 11 -5 EXHIBIT A List of Nationally Recognized Municipal Securities Information Repositories Bloomberg Municipal Repository 100 Business Park Drive Skillman, NJ 08558 Phone 609 279 -3225 Fax: 609 279 -5962 Email Murns2iB1oomberg.com http://www bloomberd com/markets /rates /municontacts html DPC Data Inc. One Executive Drive Fort Lee. NJ 07024 Phone: 201 346 -0701 Fax: 201 -947 -0107 Email: nrmsir/clidpcdata.com http /iwww.dpcdata com FT Interactive Data Attn: NRMSIR 100 William Street New York, NY 10038 Phone: 212- 771 -6999 Fax: 212- 771 -7390 (Secondary Market Information) Fax: 212 771 -7391 (Primary Market Information) Email NRMSIRna FTID.com http: /www interactivedata.com Standard Poor's Securities Evaluations, Inc. 55 Water Street 45th Floor New York, NY 10041 Phone: 212 438 -4595 Fax: 212- 438 -3975 Email NRMSIR repository(a,sandp.com www.1jkennv.com/jjkenmv /pser descrip data rep.html This list is current as of the date of issuance of the Bonds. 11 -6 This Continuing Disclosure Undertaking (the "Disclosure Undertaking is executed and delivered by the City of Rosemount, Minnesota (the "Issuer in connection with the issuance of $1,535,000 General Obligation Equipment Certificates of Indebtedness, Senes 2005B (the "Certificates The Certificates are being issued pursuant to a Resolution adopted May 24, 2005 (the "Resolution Pursuant to the Resolution and this Undertaking, the Issuer covenants and agrees as follows: SECTION 1. Purpose of the Disclosure Undertaking. This Disclosure Undertaking is being executed and delivered by the Issuer for the benefit of the Owners and in order to assist the Participating Underwriters in complying with SEC Rule 15c2- 12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings. "Annual Report" shall mean any annual financial information provided by the Issuer pursuant to, and as descnbed in, Sections 3 and 4 of this Disclosure Undertaking. "Audited Financial Statements" shall mean the financial statements of the Issuer audited annually by an independent certified public accounting firm, prepared pursuant to generally accepted accounting pnnciples promulgated by the Financial Accounting Standards Board, modified by governmental accounting standards promulgated by the Government Accounting Standards Board. "Dissemination Agent" shall mean such party from time to time designated in writing by the Issuer to act as information dissemination agent and which has filed with the Issuer a written acceptance of such designation "Fiscal Year" shall be the fiscal year of the Issuer. "Governing Body" shall, with respect to the Certificates, have the meaning given that term in Minnesota Statutes, Section 475.51, Subdivision 9. "MSRB" shall mean the Municipal Securities Rulemaking Board. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule The National Repositories as of the date of execution of this Undertaking are as listed on Exhibit A. "Occurrence(s)" shall mean any of the events listed in Section S.A. of this Disclosure Undertaking. "Official Statement" shall be the Official Statement dated 2005, prepared in connection with the Certificates. "Owners" shall mean the registered holders and, if not the same, the beneficial owners of any Certificates. 11 -7 "Participating Undenvnter" shall mean any of the original underwriters of the Certificates required to comply with the Rule in connection with offenng of the Certificates "Repository" shall mean each National Repository and each State Depository. "Resolution" shall mean the resolution or resolutions adopted by the Governing Body of the Issuer providing for, and authonzing the issuance of, the Certificates "Rule" shall mean Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time or interpreted by the Securities and Exchange Commission. "State" shall mean the State of Minnesota. "State Depository" shall mean any public or private repository or entity designated by the State as a state depository for the purpose of the Rule. As of the date of this Disclosure Undertaking, there is no State Depository in Minnesota. SECTION 3 Provision of Annual Reports. A. Beginning in connection with the Fiscal Year ending on December 31, 2004, the Issuer shall, or shall cause the Dissemination Agent to, as soon as available, but in any event not later than December 31, 2005, and by December 31 of each year thereafter, provide to each Repository' an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Undertaking B. If the Issuer is unable to provide to the Repositories an Annual Report by the date required in subsection A, the Issuer shall send a notice of such delay and estimated date of delivery to each Repository or to the MSRB and to the State Depository, if any. C. Any filing under this Disclosure Undertaking may be made solely by transmitting such filing to the Texas Municipal Advisory Council (the "MAC as provided at http !hmww.disclosureusa.org unless the United States Secunties and Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated September 7, 2004. SECTION 4. Content and Format of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the financial information and operating data pertaining to the Issuer listed below as of the end of the preceding Fiscal Year. The Annual Report may be submitted to each Repository as a single document or as separate documents compnsing a package, and may cross reference other information as provided in this Disclosure Undertaking. The following financial information and operating data shall be supplied: A. An update of the type of information contained in the Official Statement under the caption CITY PROPERTY VALUES, CITY ENDEBTEDNESS, and CITY TAX RATES, LEVIES AND COLLECTIONS; B. Audited Financial Statements of the Issuer. The Audited Financial Statements of the Issuer may be submitted to each Repository separately from the balance 11 -8 of the Annual Report In the event Audited Financial Statements of the Issuer are not available on or before the date for filing the Annual Report with the appropnate Repositories as set forth in Section 3 A above, unaudited financial statements shall be provided as part of the Annual Report The accounting principles pursuant to which the financial statements will be prepared will be pursuant to generally accepted accounting pnnciples promulgated by the Ftnancial Accounting Standards Board, as such principles are modified by the governmental accounting standards promulgated by the Government Accounting Standards Board, as in effect from time to time. If Audited Financial Statements are not provided because they are not available on or before the date for filing the Annual Report, the Issuer shall promptly provide them to the Repositones when available. SECTION 5. Reporting of Sienificant Events. A. This Section 5 shall govern the giving of notices of the occurrence of any of the following events with respect to the Certificates, if material. principal and interest payment delinquency; non payment related defaults; unscheduled draws on debt service reserves reflecting financial difficulties, unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; adverse tax opinions or events affecting the tax exempt status of the secunty, modifications to rights of security holders; Bond calls; defeasances, release, substitution or sale of property securing repayment of the Certificates; and rating changes. B. Whenever an event listed in Section 5.A. above has occurred, the Issuer shall as soon as possible determine if such event would constitute material information for Owners of Certificates. If knowledge of the Occurrence would be matenal, the Issuer shall promptly file a notice of such Occurrence with each National Repository or the MSRB and with the State Depository, if any. C. The Issuer agrees to provide or cause to be provided, in a timely manner, to each National Repository or the MSRB and to the State Depository, if any, notice of a failure by the Issuer to provide the Annual Reports described in Section 4. SECTION 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Undertaking shall teuumate upon the legal defeasance, prior redemption or payment m full of all of the Certificates. SECTION 7 Dissemination A2ent The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out as obligations under this Disclosure 11 -9 Undertaking, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. SECTION 8 Amendment; Waiver. Notwithstanding any other provision of this Disclosure Undertaking, the Issuer may amend this Disclosure Undertaking, and any provision of this Disclosure Undertaking may be waived. if (a) a change in law or change in the ordinary business or operation of the Issuer has occurred, (b) such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule, and (c) such amendment or waiver is supported by an opinion of counsel expert in federal secunties laws to the effect that such amendment or waiver would not materially impair the interests of Owners. SECTION 9. Additional Information Nothing in this Disclosure Undertaking shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Undertaking or any other means of communication, or including any other information in any Annual Report or notice of an Occurrence, in addition to that which is required by this Disclosure Undertaking. If the Issuer chooses to include any information in any Annual Report or notice of an Occurrence in addition to that which is specifically required by this Disclosure Undertaking, the Issuer shall have no obligation under this Disclosure Undertaking to update such information or include it in any future Annual Report or notice of an Occurrence. SECTION 10 Default In the event of a failure of the Issuer to provide information required by this Disclosure Undertaking, any Owner may take such actions as may be necessary and appropriate. including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations to provide information under this Disclosure Undertaking A default under this Disclosure Undertaking shall not be deemed an Event of Default under the Resolution, and the sole remedy under this Disclosure Undertaking in the event of any failure of the Issuer to comply with this Disclosure Undertaking shall be an action to compel performance. SECTION 11. Beneficiaries. This Disclosure Undertaking shall inure solely to the benefit of the Issuer, the Participating Underwriters and Owners from time to time of the c ertificates, and shall create no nghts in any other person or entity SECTION 12. Reserved Rights. The Issuer reserves the right to discontinue providing any information required under the Rule if a final determination should be made by a court of competent jurisdiction that the Rule is invalid or otherwise unlawful or, subject to the provisions of Section 8 hereof, to modify the undertaking under this Disclosure Undertaking if the Issuer determines that such modification is required by the Rule or by a court of competent junsdiction. 11 Date: 2005 CITY OF ROSEMOUNT, MINNESOTA By Its By Its EXHIBIT A List of Nationally Recognized Municipal Secunties Infoimaton Repositones Bloomberg Municipal Repository 100 Business Park Dnve Skillman, NJ 08558 Phone 609- 279 -3225 Fax: 609 -279 -5962 Email: Munis an,Bloomberg.com http.//www bloombere com/markets /rates /municontacts html DPC Data Inc. One Executive Dnve Fort Lee, NJ 07024 Phone 201 -346 -0701 Fax: 201- 947 -0107 Email nrmsirftdpcdata.com http /www dpcdata com FT Interactive Data Attn NRMSIR 100 William Street New York, NY 10038 Phone: 212 771 -6999 Fax• 212- 771 -7390 (Secondary Market Information) Fax• 212- 771 -7391 (Pnmary Market Information) Email: NRMSW(FTID.com http.//www mteractivedata.com Standard Poor's Securities Evaluations, Inc. 55 Water Street 45th Floor New York, NY 10041 Phone: 212 -438 -4595 Fax. 212- 438 -3975 Email: NRMSIR repositorv(@,sandp.com www ukennv.com/iikenny /pser descnp data rep.html This list is current as of the date of issuance of the Certificates. 11 -12 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. Levies for General Obligation Debt (Sections 475.61 and 475.74, Minnesota Statutes) Any municipality that issues general obligation debt must, at the time of issuance, certify levies to the county auditor of the county(ies) within which the municipality is situated. Such levies shall be in an amount that if collected in full will, together with estimates of other revenues pledged for payment of the obligations, produce at least five percent in excess of the amount needed to pay principal and interest when due Notwithstanding any other limitations upon the ability of a taxing unit to levy taxes, its ability to levy taxes for a deficiency in prior levies for payment of general obligation indebtedness is without limitation as to rate or amount. Metropolitan Revenue Distribution (Chapter 473F, Minnesota Statutes) "Fiscal Disparities Law" The Charles R Weaver Metropolitan Revenue Distnbution 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. 111-3 STATUTORY FORMULAE: CONVERSION OF ESTIMATED MARKET VALUE (EMV) TO NET TAX CAPACITY FOR MAJOR PROPERTY CLASSIFICATIONS 2001 Property Tax Amendments The Omnibus Tax Bill adopted by the Minnesota Legislature during the First Special Session in 2001 (the "Tax Bill made numerous changes to the property tax system. Among its provisions, the Tax Bill provided for the assumption by the State of Minnesota of the general education property tax levy and certain transit costs; increased the appropriation for Local Government Aids by $140,000,000; re- imposed levy limits for two years on counties and cities over 2,500 in population, repealed the Homestead and Agricultural Credit Aid for cities, school districts and townships, provided for the gradual elimination of Limited Market Valuation; and compressed the class rates applicable to various classes of property Local Tax Local Tax Local Tax Local Tax Local Tax Payable Payable Payable Payable Payable Property Type 2001 2002 2003 2004 2005 Residential Homestead Up to $76,000 1 000% 1.000% 1 000% 1 000% 1.000% $76,000 $500,000 1.650% 1.000% 1 000% 1.000 1 000 Over $500,000 1.650% 1 250% 1.250% 1.250 1 250% Residential Non homestead Single Unit Up to $76,000 1 200% 1.000% 1 000% 1.000% 1.000% $76,000 $500,000 1 650% 1.000% 1 000% 1.000% 1 000% Over $500,000 1 650% 1.250% 1.250% 1 250% 1 250% 2 -3 unit and undeveloped and 1 650% 1.500% 1 250 1 250 t250% Market Rate Apartments Regular 2.400% 1.800 1.500 1.250 1.250 Small City 2.150% 1.800 1.500 1.250 1.250 Low- Income 1.000% 0 900 1.000 Commercial /Industrial /Public Utility Up to $150,000 2 400% 1.500% 1.500% 1.500% 1.500% Over $150,000 3 400% 2.000% 2.000% 2.000% 2.000% Electric Generation Machinery 3 400% 2 000% 2 000% 2.000% 2.000% Seasonal Recreational Commercial Homestead Resorts (1c) Up to $500,000 1.000% 1.000% 1.000% 1 000% 1.000% Over $500,000 1.000% L250% 1 250% 1.250% 1 250% Seasonal Resorts (4c) Up to $500,000 1.650% 1 000% 1.000% 1 000% 1.000% Over $500,000 1 650% 1.250% 1.250% 1 250% 1 250% Seasonal Recreational Residential Up to $76.000 $76,000 $500,000 Over $500,000 1 200% 1.000 1000 1000 1.000% 1 650% 1.000 1000 /a 1000 1000 1 650% 1.250 1 250 1 250 1 250 0 450% 0.450% 0 450% 0 450% 0 450% Disabled Homestead Agricultural Land Buildings Homestead Up to $115,000 0 350% 0 550 0.550 0.550 0.550 $115,000 5600,000 0 800% 0 550 0 550 0.550 0 550 Over $600,000 1 200% 1.000 1 000 1.000 1.000 Non- homestead 1 200% 1.000 1.000 1.000 1.000% Effective 2002 there are two classes of residential property, up to $500,000 and greater than $500,000 2 Rate reduced to 1 25% in pay 2003 and thereafter. 3 Rate reduced to 1 5% in pay 2003 and 1 25% in pay 2004 and thereafter Rate increased to 156 in pay 2003, classification abolished thereafter 5 Exempt from referendum market value tax 111 -4 SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND MINNESOTA REAL PROPERTY VALUATION (effective through payable 2005 with 2003 Legislative changes incorporated) APPENDIX III Following is a summary of certain statutory provisions effective through payable 2005 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 Chapter 21, Laws of Minnesota Special Session 2003 -1 was passed by the 2003 Minnesota Legislature and signed by the Governor on June 8, 2003. The enactment of this legislation caused changes for payable years 2003 and thereafter These changes are incorporated in the following discussions 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." Limitation of Market Value Increases. Minn. Stat., Sec 273.11, Subdivision la, was amended in 2001 to provide for a full phase -out of Limited Market Value, arriving at 100% of the assessor's estimated market value in the 2007 assessment year For assessment year 2005, the amount of the increase shall not exceed the greater of (1) 15% of the value in the preceding assessment, or (2) 33% of the difference between the current assessment and the preceding assessment For assessment year 2006, the amount of the increase shall not exceed the greater of (1) 15% of the value in the preceding assessment, or (2) 50% of the difference between the current assessment and the preceding assessment. 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 Property taxes are determined by multiplying the Net Tax Capacity by the tax capacity rate, expressed as a percentage Property Tax Payments and Delinquencies (Chapters 275, 276, 277, 279 -282 and 549, Minnesota Statutes) Ad valorem property taxes levied by local governments in Minnesota are extended and collected by the various counties within the State Each taxing jurisdiction is required to certify the annual tax levy to the county auditor within five (5) working days after December 20 of the year preceding the collection year A listing of property taxes due is prepared by the county auditor and turned over to the county treasurer on or before the first business day in March The county treasurer is responsible for collecting all property taxes within the county. Real estate and personal property tax statements are mailed out by March 31 One -half (1/2) of the taxes on real property is due on or before May 15 The remainder is due on or before October 15. Real property taxes not paid by their due date are assessed a penalty that, 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 t 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 clerk of court 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, vwith 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 circuit breaker credit, which relates property taxes to income and provides relief on a sliding income scale; and targeted tax relief, which is aimed primanly 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, homestead and agricultural credit aid (HACA) and disparity reduction aid. HACA has been repealed for cities, school districts, and townships and applies only to counties. 111-2 EXCERPT OF 2003 ANNUAL FINANCIAL STATEMENTS IV -1 APPENDIX IV The City's financial statements are audited annually by an independent certified public accounting firm in conformance with generally accepted accounting principles. Selected audited financial statements for the fiscal year ending December 31, 2003 are presented here. Governmental funds and expendable trust funds are accounted for using the modified accrual basis of accounting Proprietary funds are accounted for using the accrual basis of accounting. The reader should be aware that the complete financial statements may contain additional data relating to the information presented here, which may interpret, explain or modify it. The Governmental Accounting Standards Board (GASB) issued Statement 34, Basic Financial Statements for State and Local Governments in June 1999. The statement establishes a new financial reporting model for state and local governments and is a significant change in public- sector accounting GASB developed the new requirements to make annual reports more comprehensive and easier to understand and use The new requirements include government wide financial statements prepared on the full accrual basis that are in addition to, not instead of, the traditional Fund -Based statements, and an expanded Budget Comparison that includes the adopted budget, final budget, and actual revenues and expenditures. The City's 2003 financial statements are prepared in conformance with GASB principles. The City's comprehensive annual financial report for the year ended 2003 was awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA) The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting 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 pnnciples and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only, The City has received this recognition annually since 1996 and expects to submit its 2004 CAFR to GFOA. To The Honorable Mayor and Members of the City Council City of Rosemount, Minnesota We have audited the accompanying financial statements of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Rosemount, Minnesota, as of and for the year ended December 31, 2003, which collectively comprise the City's basic financial statements as listed in the table of contents These financial statements are the responsibility of the City of Rosemount's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation We believe that our audit provides a reasonable basis for our opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Rosemount, Minnesota, as of December 31, 2003, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As described in Note 1, the City has implemented a new financial reporting model, as required by the provisions of GASB Statement No 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments, as of January 1, 2003 The management's discussion and analysis on pages 2 through 10 and the budgetary comparison schedules on pages 59 through 61 are not required parts of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Rosemount's basic financial statements The introductory section, combining and individual fund statements and schedules, and statistical tables, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements The combining and individual fund statements and schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. Minneapolis, Minnesota March 12, 2004 VirchowKrause &company INDEPENDENT AUDITORS' REPORT IV -2 ASSETS Cash and investments Receivables (net of allowance for uncollectibles) Taxes Delinquent taxes Accounts Loans Special assessments Due from other govemmental units Internal balances Prepaid items Capital assets Land Construction in progress Land improvements Buildings Machinery and equipment Infrastructure Less: accumulated depreciation Total Assets LIABILITIES Accounts payable Accrued payroll and payroll taxes Other accrued liabilities and deposits Noncurrent liabilities: Due within one year Due in more than one year Total Liabilities NET ASSETS Invested in capital assets, net of related debt Restricted Unrestricted Total Net Assets CITY OF ROSEMOUNT STATEMENT OF NET ASSETS December 31, 2003 Governmental Activities 18,466,865 16,077,477 531,873 106,839 57,342 4,800,479 10,433 (249,111) 95,626 2,572,484 6,185,960 936,547 9,910,906 6,719,836 20,617,774 (11,135,016) 59,628,837 Primary Government Business Type Activities 675,234 489,500 45,631 249,111 63,641 6,076,878 1,595,518 83,776,763 (30,330,737) See accompanying notes to financial statements. IV -3 Total 34,544,342 3,242,389 531,873 106,839 732,576 5,289,979 56,064 159,267 962,205 3,534,689 7,839,063 14,025,023 936,547 15,987,784 8,315,354 104,394,537 (41,465,753) 87,520,284 147,149,121 1,095,917 196,593 1,292, 510 95,111 95,111 292 731 148,488 441,219 2,626,063 600,000 3,226,063 14,405,763 6,523,406 20,929,169 19,273,447 62,897,357 82,170,804 7,531,705 7,531,705 21,839,805 9,622,735 31,462,540 Component Unit 618,431 175,782 450 440,041 18,620 (6,252) 4,489,461 140,795 141,491 560,000 7,150, 000 18,515,585 7,468,487 25,984,072 7,992,286 (3,502,825) 41,113,252 80 051,797 121,165,049 (3,502,825) W co LL n O 0 f a Z E W d F 0 W 0 Q N a To 0 a c C 1 n 5 co 0 a 0 D O 0 m 0 P 0 U M m r ac moo 0 n it 0 a co f) 0 Cl Q m 0 I- Q 0 A o r n N 0 H N CO r 0 el 0 M CO 0 0 N Q a n 0 m 0•- Q 0 n O n m 0 V H as cn n w M M H 0 0 CO m O 0 0 N N Li 0 r e N n N CO n 0 on 0 m Q Q 0 '1 N 1 CO r 17 I 34 07 1 0 07 0 el 0 LO 0 N O 0 n cn to on to h 0 0 0 m eD m d N N 0 r A m CI le 00 n A m N 0 LO o m h a a N 1` 0 O 0 N 0 C to E n m c m m 0 m a 0 0 0 E o U a Q g Q 0. 0 0 m V_ C W m E m G a [L"J c m 0 E d' m s 2 o a m 0. m a E m Z m O m us g 0 Z m R v o E i E V 0 a D. 0 0 S r iv a y h a LL a in N. wl o 0 h N N 0 0 0 r 0 n CO 01 D Q Q 01 n n r r pj ao co Q 0 O n r a Q CO r 0 CO n r Q O r O 0 N O N CO 0 Ed N CO r 0 n n 0 0 0 tO r T 0 el O t0 Di Of m 0 N CID m n n 0 n 0 CD m w co no 0 on M IV -4 Q 1 N I CO 0 N N n O oa O m n Q VI o o a m oc o N Q n r 01 CO N N O 0 r 0 0 0 cg OD r Q V 0 r 0 CO m n A- R o N m v m N 0 0 N 0l v 0 0 el 6t) 0 N N 0 n N 0 0 O n no A Q n 0 CD 0 T. O a G0 0 a d m F E oi .ti 24 li m c m a` a 0 01 G a m F- =c0 m '0 o r m m et 0 i4, 0 0 Q CO 0 o 1 0 CO CO e4 Q CI el tr w O 0 N H eV N Q N Fund balances Reserved for Prepaid items Debt service Encumbrances Unreserved and designated, reported in General fund Capital projects Special projects Unreserved and undesignated (Deficit), reported in. General fund Special revenue funds Total fund balances Total liabilities and fund balances CITY OF ROSEN'IOUNT BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2003 Other Total Governmental Governmental General Debt Service Capital Project Funds Funds ASSETS Cash and investments 4,621,037 7,000,521 3,327,796 2,964,793 17,914,147 Receivables Taxes 531,873 531,873 Accounts 37,666 18,018 55,684 Special assessments 60,066 4,677,058 63,355 4,800,479 Delinquent speaalassessments 883 100,067 5,869 106,839 Due from other governmental units 10,433 10,433 Prepaid items 27,979 27,979 Total assets 5,289,937 11,777,666 3,327,796 3,052,035 23,447,434 LIABILITIES AND FUND BALANCES Liabilities Accounts payable 226,385 408,836 36,520 671,741 Accrued payroll and payroll taxes 95,111 95,111 Deposits payable 31,225 31,225 Contracts payable 411,432 411,432 Deferred revenue 224,069 4,214,483 69,069 4,507,621 Advances from other funds 249,111 249,111 Total liabilities 576,790 4,214,483 820,268 354,700 5,966,241 27,979 147,339 4,525,008 7,563,183 SPA ar:- omoanvma notes to_ financial statements. 2,507,528 1,128,712 1,666,889 27,979 7,563,183 1,276,051 4,525,008 2,507,528 1,666,889 12,821 12,821 (98,266) (98,266) 4,713,147 7,563,183 2,507,528 2,697,335 17,481,193 5,289,937 11,777,666 3,327,796 3,052,035 Amounts reported for governmental activities in the statement of net assets are different because Capital assets used in governmental funds are not financial resources and, therefore, are not reported in the funds. 35,808,491 Some receivables that are not currently available are reported as deferred revenue in the fund financial statements but are recognized as revenue when eamed in the government -wide statements 4,507,621 Internal service funds are reported in the statement of net assets as govemmental funds 609,279 Some liabilities, including long -term debt, are not due and payable in the current period and, therefore, are not reported in the funds See Note II A. (17,293,332) NET ASSETS OF GOVERNMENTAL ACTIVITIES 41,113,252 REVENUES Taxes Intergovernmental Public charges for services Licenses and permits Fines and forfeitures Special assessments Investment income and miscellaneous Total Revenues EXPENDITURES Current: General govemment Public safety Public works Parks and recreation Conservation and development Other Capital outlay Debt service: Principal retirement Interest and fiscal charges Total Expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Issuance of long -term debt Capital leases Sale bf capital assets Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balance FUND BALANCES Beginning FUND BALANCES ENDING CITY OF ROSEMOUNT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2003 General Debt Service 5,061,078 266,011 214,236 84,580 1,349,460 1,084,183 915,589 89,752 23,738 1,518,341 192,696 203,781 7,387,785 7,581,272 2,072,713 8,737,245 Other Governmental Capital Project Funds 905,100 2,380 294,737 15,307 33,701 1 251 225 Total Governmental Funds 6,232,189 1,650,656 1,378,920 915,589 89,752 1,557,386 7,817,963 19,642,455 1,597,819 7,500 1,605,319 2,085,001 6,443 2,091,444 1,987,960 67,429 2,055,389 907,100 907,100 297 297 21,050 21,050 5,780,912 1,575,668 7,356,580 10,085,000 180,948 10,265,948 1,074,005 63,018 1,137, 023 6,577,880 11,180,055 5,780,912 1,901,303 25,440,150 1,003,392 (9,107,342) 2,956,333 (650,078) (5,797,695) 2,435 3,500 (1,422,836) (1,416,901) See accompanying notes to financial statements. IV -6 50,499 1,894,501 1,945,000 74,257 74,257 35,078 37,513 469,970 921,524 1,056,987 2,451,981 (6,340,337) (164,933) (7,928,106) 520,469 (3,524,312) 1,001,389 (3,419,355) (413,509) (8,586,873) (567,979) 351,311 (9,217,050) 5,126,656 16,150,056 3,075,508 2,346,024 26,698,244 4,713,147 7,563,183 2,507,529 2,697,335 17,481,194 CITY OF ROSEMOUNT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2003 Net change in fund balances total governmental funds (9,217,050) Amounts reported for governmental activities in the statement of activities are different because Governmental funds report capital outlays as expenditures. However, in the statement of net assets the cost of these assets is capitalized and they are depreciated over their estimated useful lives with depreciation expense reported in the statement of activities. Capital outlay is reported as an expenditure in the fund financial statements but is capitalized in the govemment -wide financial statements 7,356,580 Less. Some items reported as capital outlay but not capitalized (1,143,642) Depreciation is reported in the government -wide statements (1,146,269) Capital asset disposals (269,670) Internal service funds are reported in the statement of activities (11,390) Receivables not currently available are reported as deferred revenue in the fund financial statements but are recognized as revenue when earned in the government -wide financial statements. Debt and lease proceeds provide current financial resources to governmental funds, but issuing these obligations increases long -term liabilities in the statement of net assets. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long -term liabilities in the statement of net assets. This is the amount by which payments ($10,085,000 G 0 debt and $167,943 capital leases) exceeded proceeds ($1,945,000 G.O. debt and $74,257 capital leases). Some expenses in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. Compensated absences Accrued interest on debt See accompanying notes to financial statements. IV -7 266,445 8,233,686 (58,355) 178,530 CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES 4,188,865 CITY OF ROSEMOUNT STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2003 Business -Type Activities Enterprise Funds Governmental Storm Nonmalor Activities Water Sewer Water Arena Total Insurance Fund ASSETS Current assets Cash and investments 5,958,473 5,027,707 5,064,846 26,451 16,077,477 552,718 Customer accounts receivable 254,684 277,595 142,955 675,234 1,658 Special assessments receivable 50,641 328,875 109,984 489,500 Duefromothergovernments 45,631 45,631 Prepaid items 7,050 50,366 2,848 3,377 63,641 67,647 Total current assets 6,270,848 5,684,543 5 320,633 75,459 17,351483 622,023 Noncurrent assets: Advance to other funds 352,908 352,908 Property and equipment Land 498,042 464,163 962,205 Buildings 2,574,394 240,164 862,420 2,399,900 6,076,878 Mains and lines 6,935,343 4,507,285 7,073,840 18,516,468 Other improvements 15,726,518 36,983,749 12,550,028 65,260,295 Machinery and equipment 933,615 424,325 142,980 94,598 1,595,518 Construction in progress 3,111,504 1,178,564 3,548,995 7,839,063 Less accumulated depreciation (6,977,293) (19,656,228) (3,217,834) (479,382) (30,330,737) Net property and equipment 22,802,123 23,677,859 21,424,592 2,015,116 69,919,690 Total non current assets 22,802,123 24,030,767 21,424,592 2,015,116 70,272,598 Total Assets 29,072,971 29,715,310 26,745,225 2,090,575 87,624,081 622,023 LIABILITIES Current liabddies Accounts payable 73,804 16,362 14,960 5,766 110,892 Contracts payable 85,701 85,701 Accrued liabilities 8,574 6,969 2,775 4,083 22,401 Accrued interest 45,046 81,041 126,087 Current portion of long term debt 260,000 340,000 600,000 Total current liabilities 473,125 23,331 438,776 9,849 945,081 TOTAL NET ASSETS See accompanying notes to financial statements IV-8 12,745 12,745 Noncurrent liabilities Accrued compensated absences 37,680 37,680 13,109 12,604 101,073 General obligation debt 2,375,281 4,047,052 6,422,333 Advances from other funds 103,797 103,797 Total noncurrent liabilities 2,516,758 37,680 4,060,161 12,604 6,627,203 Total Liabilities 2,989,883 61,011 4,498,937 22,453 7,572,284 12,745 NET ASSETS Invested En capital assets, net of related debt 20,166,842 23,677,859 17,037,540 2,015,116 62,897,357 Restncted for debt service 2,655,000 456,705 4,420,000 7,531705 Unrestncted 3,261,246 5,519,735 788,748 53,006 9,622,735 609,278 26,083,088 29,654,299 22,246,288 2,068,122 80,051,797 609,278 Water CITY OF ROSEMOUNT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For the Year Ended December 31, 2003 Busyness -Type Activities Enterpnse Funds Governmental Storm Non major Activities Sewer Water Arena Total Insurance Fund OPERATING REVENUES Charges for services 1,010,260 1,189,764 609,377 308,461 3,117,862 Water meters 136,115 136,115 Miscellaneous 131,141 5.578 136,719 30,748 Total Operating Revenues 1277,516 1,195,342 609,377 308,461 3,390,696 30,748 OPERATING EXPENSES Personnel services 246,900 247,168 183,679 146,658 824,405 Supplies 204,691 9,161 4,350 19,873 238,075 1.096 Professional services and charges 133,803 32347 56,708 13,105 235,963 28,999 Other services and charges 144,944 26,406 91,355 126,198 388,903 231,019 Metro sewer charges 510,640 510,640 Depreciation 440,240 651,436 298,555 53,796 1,444,027 Total Operating Expenses 1,170,578 1,477,158 634,647 359,630 3,642.013 261,114 Operating Income (Loss) 106,938 (281,816) (25,270) (51,169) (251,317) (230,366) NONOPERATING REVENUES (EXPENSES) Connection fees 1,152,316 633,074 898,554 2,683,944 Taxes 210,000 Special assessments 78,765 414,512 148,186 641,463 Intergovernmental 1,570 930 2,500 Investment income 120,948 182,420 113,881 486 417,735 8,975 Net decrease in the fair value of investment (26,403) (63,070) (28,411) (117,884) Loss from disposal of fixed assets (1252) (352) (1,604) Surcharges and penalties 196,313 9,345 2,183 207,841 Interest expense and fiscal agent fees (97.785) (5,419) (204,852) (308,056) Total Nonoperating Revenues 1,424,472 1,171,440 929,541 466 3,525,939 218,975 Income (loss) before contributions and transfers 1,531410 889,624 904,271 (50,683) 3 274 622 (11,391) Capital contributions 32,352 110,947 580,826 39,900 764,025 Operating transfers in 3,219,616 1,154,502 2 722 520 7,096,638 Operating transfers out (1,457,258) (77,095) (71,702) (14,458) (1,620,513) Change in Net Assets 3,326,120 2,077,978 4,135,915 (25,241) 9,514,772 TOTAL NET ASSETS Beginning 22,756,968 27,576,321 18,110,373 2,093.363 70,537,025 620,669 TOTAL NET ASSETS ENDING 26,083,088 29,654,299 5 22,246,288 2,068,122 80,051 797 609,278 See accompanying notes to financial statements. Iv -9 (11,391) cn 0 cn N O N ci LL Z Q LL 0E U cC 0 LL H d Z K c Wald 2 o `m Q a F OJ O LL LL O CO 0 O O N E o O T co fA CO 0 CO N- N n O m LO 0 v ai O 0 N 4 0 U CO LO 0 CD a) n m n n N N S9 0 '0 O LO N LO C7) c v m 0 a) O 0 4001 19 4) rnN- 0 0 N- 01 0 0 r) (0n 0 0 Q C N 69 0) O N CO O 0) Q 0, n Q N O N N N 0 0 N LO vi rn U U LO 0 0 0 0 Q Q Q Q 0 W F 0 H m 0 0 cn 0 Q W m Z O) H V N Z V Z a c F a U 7 O a w Q IT LL Q c U 0 J R o co Z y a m F 0 a`0 0o a K o rn o U U Z w y o y E Z -o O V N d O Z a O E_ y 2 m y O o a o 3 0 E a o f o K o 0 LL 9 co 0 L" LL E U °22= 0 o L U n U O 3 w N U N u N O °Oaa 0`U LL L L n N LL N o m 0 m Z Z a U U U CO r LLI O) CO 0 0 L0 CO ai 4o 0 0 CO 0 of 0) N 0 co co N. O CO O CO a) LO W z o E 0 N K o 0 U U LL N c L C N N N D E U LL N Z N c U O LL 0 0 0 0 co (74 0) 0 0 0 a) CO CO r 0 00)Q Qn 0 0 OD n t- 0 0 N c 0 O_. LO r CO O N 0 0 o co 0) cn O 0 0) n O O) O O) n O 0 N. O)O a Lr Q C P 0 10 0 0 (0 LO 0 CO U0 O O C N co N 0 0 0 0 CO 0 CO n O 0 O 0�4 01001 n Q CO 04 N N N A 0 m to 4 i 0) 0 O N co n CO m 0 W .4 1- J 4) W 16 z 0 3 N 0 n c 0 Z a 0 c Eu Q c O a M c N J O a) v o U m m a o o d E Q o U co m E y° 0) 0 Cr P d 3 Q O co C LL V O L N N O m 0 vi a �E� c acL 0 N a O co N m 0 H D A O Z a of a o c U m m LL U cu u) d= o ca `u' N Z Z E m am d m Q Z K a= a000S0< €9 N 0 Q CO 0 O C-- m o n Q e w 0 O) n N '0 N 0 CO c 69 m u0 C3 N- O CO o )n o 0 Cr) i9 0 CO CO 0 w n CO LO t0 69 N 0 n R v E C C 0 O R Z C a. CO 5 N t3 0 m N 0)) to m N O m 0 N m NC m N Q N N r 0) 0) cm v� m 10 ID m N N O m H (D 0 CO 0 0 co O N N co cn [1) n m n O N r to n N- CO rn m N mth CO m 9) 0 N 0) Q m CO N N O r- r) O O m 0 v 0) r oi m<o Q r 'Cr CC) Q N 0 rn 1 o Q o) M N r N N fp co N m c] N O A) m N N m N 0) m N 0 Q' N Q 0 CO N M O Q m O 0 M 0) O r Q Q N Q Q v v Iv -11 va J W Z O 02 -w 0 W F 0 0 o E d 0 0 Z Q 5 0 co ED¢ E (7 C Z Z R W 0 it: I at6 E a) c O w a� m cc H K O na E LL> a s -0 m E to a 2 o E 0 c c c o m O U O et R 0 0 y 0 N o) m cu LL Z 0 ca p 0 8 o a o m d o a _m CO Q R C t N y R co) E E 9 O W Z i E o y V 0 p 2) o 0 E 8 m 0 Z O O y o. C Z O DZ 1 6aoa¢O¢ Wv0Z 0 Z CITY OF ROSEMOUNT NET ASSETS COMPONENT UNIT PORT AUTHORITY December 31, 2003 Total Governmental Activities ASSETS Cash and investments 3,242,389 Receivables Loans 618,431 Special assessments 175,782 Prepaid items 450 Capital assets Land 440,041 Machinery and equipment 18,620 Less accumulated depreciation (6 252) Total Assets 4,489,461 LIABILITIES Accounts payable 140,795 Other accrued Iiabilites and deposits 141,491 Noncurrent liabilities Due within one year 560,000 Due in more than one year 7,150,000 Total Liabilities 7,992,286 NET ASSETS Unrestricted Total Net Assets (3,502,825) 1 See accompanying notes to financial statements. IV -12 (3,502,825) c0 O >Q a F— U d N Q O u. 0- r) O F H WD E U F- N Z Z O O 0 0 U 0 C N z o c m 2 m C 0 m 0 0)Q E c C N V ca. 0 O O> Q Lid o 0 0 0 C N co Z 0 0) 2 U 0 m 0 C U) a x w 63 63 spa 't *sr m (7 CO O M co r CO (0 CD CO va 0) CO N N ii G 0 _c N c m U c) c E m O C C O E O8' C f0 0 w O O c Q o 0) 2 CO m 0 C a C y O m m w m 0 E o °c o c H u=. 0OC�U m co 0) 0) 7 CO N 69 N N 0) 0) f) N N N Q d r r 69 a) O C o m O Q m 0 U U 0 0'Z N m p m m h y c 0 to m m N m t O N O a o 0 0 2 g •0 '0 m 0 m m m N co 0 m 0 6. m ,o O C X x m m c 7 N m E o C Q C O N -2.2- t to m U m C 0) mm =Em m a x o 0 a m N 0 c� a`a` c N>c 1V -13 N c r i O N nn N O 0 030 Q CO O r O m 0) (0 co co O O O N r (0 vi CITY OF ROSEMOUNT INDEX TO NOTES TO FINANCIAL STATEMENTS December 31, 2003 NOTE Page I. Summary of Significant Accounting Policies 23 A Reporting Entity 23 B. Government -Wide and Fund Financial Statements 24 C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation 27 D. Assets, Liabilities, and Net Assets or Equity 29 1. Deposits and Investments 29 2. Receivables 30 3. Inventories and Prepaid Items 31 4. Restricted Assets 31 5. Capital Assets 31 6. Other Assets 32 7. Compensated Absences 32 8. Long -Term Obligations /Conduit Debt 33 9 Claims and Judgments 33 10 Equity Classifications 34 11 Comparative Data /Reclassifications 34 II. Reconciliation of Government -Wide and Fund Financial Statements 35 A Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Statement of Net Assets 35 III. Stewardship, Compliance, and Accountability 35 A. Budgetary Information 35 B. Excess Expenditures Over Appropriations 36 C. Deficit Balances 36 IV. Detailed Notes on All Funds 36 A. Deposits and Investments 36 B. Receivables 38 C. Capital Assets 39 D. Interfund Receivables /Payables and Transfers 42 E. Long -Term Obligations 44 F. Lease Disclosures 47 G. Governmental Activities Net Assets 47 H Component Unit 49 V. Other Information 53 A. Employees' Retirement System 53 B. 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V c °v Vi-f--t- e E 0 c 00= r. y U i-¢nw 1-4= 0 0 �S a W N a 0 e c c N c c m0 d c c a v Z2— rE ory —.a a c 999 o m o NNE IV -32 AWARD: SALE: Bidder CRONIN COMPANY, INCORPORATED UBS FINANCIAL SERVICES INC. CITIGROUP GLOBAL MARKETS, INC. CITIZENS BANK CIBC WORLD MARKETS Rate (BOOK ENTRY ONLY) Springsted $2,630,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS, SERIES 2005A CRONIN COMPANY, INCORPORATED UBS FINANCIAL SERVICES INC. CITIGROUP GLOBAL MARKETS, INC. CITIZENS BANK CIBC WORLD MARKETS REOFFERING SCHEDULE OF THE PURCHASER Year Yield 3.50% 2007 2.70% 3 50% 2008 2.85% 3.50% 2009 3.00% 3.50% 2010 3.05% 3.75% 2011 3.20% 3.75% 2012 3.35% 3.75% 2013 3.45% 4 00% 2014 3.55% 4 00% 2015 3.65% 4 00% 2016 3.75% 4.00% 2017 3.90% 4 00% 2018 Par 4.00% 2019 Par 4.00% 2020 4.10% 4.10% 2021 4 15% 4 10% 2022 4 20% 4.125% 2023 4.25% 4.30% 2024 Par 4.30% 2025 Par Spnngsted Incorporated 380 Jackson Street, Sucre 300 Saint Paul, MN 55101.2887 Tel. 651-223-3000 Fax 651 223 -3002 Email advisors@springsted.com vNnv springsted.com May 24, 2005 Moody's Rating: Aaa XL Capital ed Interest Net Interest Tr e Interest Rates Price Cost 'Rate 3.50% 2007 -2010 $2.618.855.45 $1,272.895.70 4.0939° 3 75% 2011 -2013 4.00% 2014 -2020 4.10% 2021-2022 2023 �C 4.30% 2024 -2025 BBI: 4.25% Average Maturity: 11.810 Years (BOOK ENTRY ONLY) AWARD: WELLS FARGO BROKERAGE SERVICES, LLC SALE: May 24, 2005 Bidder WELLS FARGO BROKERAGE SERVICES, LLC UMB BANK, N.A PIPER JAFFRAY CO. $1,535,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION EQUIPMENT CERTIFICATES OF INDEBTEDNESS, SERIES 2005B Interest Rates 2.70% 2006 2.80% 2007 2.90% 2008 3.00% 2009 3.10% 2010 CRONIN COMPANY, INCORPORATED 3.50% 2006 -2010 $1,548,507.15 $148,553.54 3.1889% UBS FINANCIAL SERVICES INC CITIGROUP GLOBAL MARKETS, INC. CITIZENS BANK CIBC WORLD MARKETS 2.70% 2006 2.90% 2007 3.00% 2008 3.05% 2009 3.15% 2010 0 Springsted Price $1,527,325.00 3.00% 2006 -2007 $1,528,021.20 $155,296 09 3.3633% 3.25% 2008 -2010 These Certificates are being reoffered at Par. Spdngsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101 -2887 Tel 651-223-3000 Fax 651- 223 -3002 Email. advisors©spnngsted.com www spnngsted com Moody's Ratin Al Net Interest Tr Interest Cost Rate $145,280.56 31465% $1,527,140.80 $148,386.28 32142% BBI: 4 25% Average Maturity 3.016 Years