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8.a. Accept Bids and Award Sale - G.O. Utility Revenue Refunding Bonds, Series 2010A
4ROSEMOUNTEXECUTIVE SUMMARY CITY COUNCIL City Council Meeting Date: November 16, 2010 AGENDA ITEM: Accept Bids and Award Sale — G.O. AGENDA SECTION: Utility Revenue Refunding Bonds, Series Old Business 2010A PREPARED BY: Jeff May, Finance Director AGENDA NO. 3.6j, ATTACHMENTS: Resolution and Official Statement APPROVED BY: RECOMMENDED ACTION: Motion to adopt a Resolution Awarding the Sale of $1,550,000 General Obligation Utility Revenue Refunding Bonds, Series 2010A; and Providing for their Issuance. ISSUE Accept bids and award sale of utility revenue refunding bonds for three current City water and storm water revenue bonds: 1) G.O. Storm Water Revenue Bonds, 2001B (Original issue amount - $1,140,000 for the Marcotte Pond Lift Station and Forcemain and the Hawkins Pond Lift Station and Forcemain); 2) G.O. Water /Storm Water Revenue Bonds, 2002B (Original issue amount - $1,195,000 for Well #12 and the Brockway Draw Storm Water Improvements); and 3) G.O. Water Revenue Bonds, 2003B (Original issue amount - $1,170,000 for the East Side Watermain Phase 2 Improvements). BACKGROUND This item is on the agenda for Council to formally award the sale of utility revenue refunding bonds. At 10:30 A.M. Tuesday, November 16, 2010, sealed bids for G.O. Utility Revenue Refunding Bonds, Series 2010A, will be opened and the results tabulated at the offices of Springsted, our financial advisors 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. CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF $1,550,000 GENERAL OBLIGATION UTILITY REVENUE REFUNDING BONDS, SERIES 2010A; AND PROVIDING FOR THEIR ISSUANCE BE IT RESOLVED By the City Council of the City of Rosemount, Dakota County, Minnesota (the "City ") as follows: Section 1. Sale of Bonds. 1.01 It is hereby determined that: (a) the City is authorized by Minnesota Statutes, Chapter 475 (the "Act ") and Section 475.67, Subdivision 3, of the Act to issue and sell its general obligation bonds to refund obligations and the interest thereon before the due date of the obligations, if consistent with covenants made with the holders thereof, when determined by the City Council to be necessary or desirable for the reduction of debt service cost to the City or for the extension or adjustment of maturities in relation to the resources available for their payment; (b) Section 475.67, subdivision 4 of the Act permits the sale of refunding obligations during the six month period prior to the date on which the obligations to be refunded may be called for redemption; (c) it is necessary and desirable to reduce debt service costs that the City issue $1,550,000 General Obligation Utility Revenue Refunding Bonds, Series 2010A (the "Bonds ") to refund certain outstanding general obligations of the City; (d) the outstanding bonds to be refunded (the "Refunded Bonds ") consist of (i) the February 1, 2012 through February 1, 2017, maturities of the General Obligation Storm Water Revenue Bonds, Series 2001B, dated August 15, 2001, of which $555,000 in principal amount is callable on February 1, 2011, (ii) the February 1, 2012 through February 1, 2018, maturities of the General Obligation Water and Storm Water Revenue Bonds, Series 2002B, dated July 1, 2002 of which $665,000 in principal amount is callable on February 1, 2011, and (iii) the February 1, 2012 through February 1, 2014 maturities of the General Obligation Water Revenue Bonds, Series 2003B dated July 1, 2003, of which $390,000 in principal amount is callable on February 1, 2011. 1.02. Award to the Purchaser and Interest Rates. The proposal of (the "Purchaser ") to purchase $1,550,000 General Obligation Utility Revenue Refunding Bonds, Series 2010A (the "Bonds ") of the City described in the Terms of Proposal thereof is determined to be the most favorable offer and is accepted, the proposal being to purchase the Bonds at a price of $ plus accrued interest to date of delivery, for Bonds bearing interest as follows: 377202v1 MMD RS 125 -8 Year Interest Rate 2012 2013 2014 2015 Year 2016 2017 2018 RESOLUTION 2010- Interest Rate 1.03. Purchase. The City Finance Director is directed to retain the good faith check of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers forthwith. The Mayor and City Clerk are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amount of the Bond. The City will forthwith issue and sell the Bonds pursuant to Minnesota Statutes, Chapter 475 (the "Act ") in the total principal amount of $1,550,000, originally dated December 1, 2010, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R -1, upward, bearing interest as above set forth, and which mature serially on February 1 without option of prior payment in the years and amounts as follows: Year Amount Year Amount 2012 $295,000 2016 $180,000 2013 310,000 2017 175,000 2014 310,000 2018 105,000 2015 175,000 As may be requested by the Purchaser, one or more term Bonds may be issued having mandatory sinking fund redemption and final maturity amounts conforming to the foregoing principal repayment schedule, and corresponding additions may be made to the provision of the applicable Bond(s). Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2011, to the registered owners of record as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 377202v1 MMD RS125 -8 2 RESOLUTION 2010- 2.01 Registration. The City will appoint, and will maintain, a bond registrar, transfer agent, authenticating agent and paying agent (the "Registrar "). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Re ster. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to 377202v1 MMD RS125 -8 3 RESOLUTION 2010- the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. 2.04. Appointment of Initial Registrar. The City appoints U.S. Bank National Association, St. Paul, Minnesota, as the initial Registrar. The Mayor and the City Clerk are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Clerk must transmit to the Registrar monies sufficient for the payment of all principal and interest then due. 2.05. Execution. Authentication and Delivery. The Bonds will be prepared under the direction of the City Clerk and executed on behalf of the City by the signatures of the Mayor and the City Clerk., provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City Finance Director will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. 3772020 MMD RS125 -8 4 RESOLUTION 2010- Section 3. Form of Bond. 3.01. The Bonds will be printed or typewritten in substantially the following form: No. R- UNITED STATES OF AMERICA $ STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF ROSEMOUNT GENERAL OBLIGATION UTILITY REVENUE REFUNDING BOND, SERIES 2010A Date of Rate Maturity Original. Issue CUSIP 20_ December 1, 2010 Registered Owner: Cede & Co. The City of Rosemount, Minnesota, a duly organized and existing municipal corporation in Dakota County, Minnesota (the "City "), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above, or registered assigns, the principal sum set forth above on the maturity date specified above without option of prior payment, with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing August 1, 2011, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, St. Paul, Minnesota, as Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. This Bond is one of an issue in the aggregate principal amount of $1,550,000 all of like original issue date and tenor, except as to number, maturity date, and interest rate, all issued pursuant to a resolution adopted by the City Council on November 16, 2010 (the "Resolution "), for the purpose of providing money to refund the outstanding principal amount of certain general obligation bonds of the City, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 475.67 and Chapter 444, and the principal hereof and interest hereon are payable primarily from net revenues of the water and storm water utility systems of the City in a special debt service fund of the City as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in net revenues of the water and storm water systems pledged, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. 377202v1 MMD RS125 -8 5 RESOLUTION 2010- IT IS HEREBY CERTIFIED AND RECITED That in and by the Resolution, the City has covenanted and agreed that it will continue to own and operate the water and storm water systems free from competition by other like utilities; that adequate insurance on said systems and suitable fidelity bonds on employees will be carried; that proper and adequate books of account will be kept showing all receipts and disbursements relating to the Water and Storm Water Fund, into which it will pay all of the gross revenues from the water and storm water systems; that it will also create and maintain a General Obligation Utility Revenue Refunding Bonds, Series 2010A Debt Service Fund, into which it will pay, out of the net revenues from the water and storm water systems a sum sufficient to pay principal hereof and interest hereon when due; and that it will provide, by ad valorem tax levies, for any deficiency in required net water and storm water system revenues. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code "). The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, or statutory limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual signature of one of its authorized representatives. 377202v1 MMDRS125 -8 6 RESOLUTION 2010- IN WITNESS WHEREOF, the City of Rosemount, Dakota County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Clerk and has caused this Bond to be dated as of the date set forth below. Dated: 2010 CITY OF ROSEMOUNT, MINNESOTA (Facsimile) Facsimile) City Clerk Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION By Authorized Representative The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants UNIF GIFT MIN ACT Custodian in common (Cust) TEN ENT -- as tenants under Uniform Gifts or by entireties Transfers to Minors Act............ JT TEN -- as joint tenants with right of survivorship and not as tenants in common (State) Additional abbreviations may also be used though not in the above list. 377202v1 MMDRS125 -8 7 (Minor) RESOLUTION 2010- ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ( "STAMP "), the Stock Exchange Medallion Program ( "SEMP "), the New York Stock Exchange, Inc. Medallion Signatures Program ( "MSP ") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee 377202v1 MMD RS 125 -8 8 RESOLUTION 2010- PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Signature of Date of Registration Registered Owner Officer of Registrar Cede & Co. Federal ID #13- 2555119 3.02. Approving Legal Opinion. The City Finance Director is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. Section 4. Payment; Security, Pledges and Covenants. 4.01. Funds and Accounts. The City will create and continue to operate its Water and Storm Fund to which will be credited all gross revenues of the water and storm water systems and out of which will be paid all normal and reasonable expenses of current operations of the water and storm water systems. Any balance therein will be deemed net revenues and will be transferred from time to time, to a General Obligation Utility Revenue Refunding Bonds, Series 2010A Debt Service Fund (the "Debt Service Fund ") hereby created in the Water and Storm Water Fund, which fund will be used only to pay principal of and interest on the Bonds and any other bonds similarly authorized. The Water and Storm Water Fund Accounts established in the resolutions awarding the sale of the Refunded Bond are continued and will be maintained as therein provided. These accounts are the Operations Account, the Sinking Fund Account, the Construction Account and the Surplus Account. There will always be retained in the Debt Service Fund a sufficient amount to pay principal of and interest on all the Bonds, and the City Finance Director will report any current or anticipated deficiency in the Debt Service Fund to the City Council. The debt service fund for the Refunded Bonds is terminated, and all monies therein are hereby transferred to the Debt Service Fund herein created. 4.02. Findings. It is determined that estimated collection of net revenues of the water and storm water systems will produce at least five percent in excess of the amount needed to meet when due, the principal and interest payments on the Bonds and that no tax levy is needed at this time. 4.03. Certification to County Auditors as to Redemption. The City Clerk is directed to file a certified copy of this resolution with the County Auditors of Dakota and Rice Counties and to obtain the certificate required by Section 475.63 of the Act. 4.04. Covenants and Agreements. The City Council covenants and agrees with the holders of the Bonds that so long as any of the Bonds remain outstanding and unpaid, it will keep and enforce the following covenants and agreements: (a) The City will continue to maintain and efficiently operate the water and storm water systems as public utilities and conveniences free from competition of other like utilities and will cause all revenues therefrom to be deposited in bank accounts and credited to the water and storm water 377202v1 MMDRS125 -8 9 RESOLUTION 2010- systems accounts as hereinabove provided, and will make no expenditures from said accounts except for a duly authorized purpose and in accordance with this resolution. (b) The City will also maintain the Debt Service Fund as a separate account in the Water and Storm Water Fund and will cause money to be credited thereto from time to time, out of net revenues from the water and storm water systems, in sums sufficient to pay principal of and interest on the Bonds when due. (c) The City will keep and maintain proper and adequate books of records and accounts separate from all other records of the City in which will be complete and correct entries as to all transactions relating to the water and storm water systems and which will be open to inspection and copying by any bondholder, the bondholder's agent or attorney, at any reasonable time, and it will furnish certified transcripts therefrom upon request and upon payment of a reasonable fee therefor, and said account will be audited at least annually by a qualified public accountant and statements of such audit and report will be furnished to all bondholders upon request. (d) The City Council will cause all persons handling revenues of the water and storm water systems to be bonded in reasonable amounts for the protection of the City and the bondholders and will cause the funds collected on account of the operations of the water and storm water systems to be deposited in a bank whose deposits are guaranteed under the Federal Deposit Insurance Law. (e) The Council will keep the water and storm water systems insured at all times against loss by fire, tornado and other risks customarily insured against with an insurer or insurers in good standing, in such amounts as are customary for like plants, to protect the holders, from time to time, of the Bonds and the City from any loss due to any such casualty and will apply the proceeds of such insurance to make good any such loss. (fl The City and each and all of its officers will punctually perform all duties with reference to the water and storm water systems as required by the laws of the State of Minnesota. (g) The City will impose and collect charges of the nature authorized by Minnesota Statutes, Section 444.075 at the times and in the amounts required to produce, net revenues adequate to pay all principal and interest when due on the Bonds and to create and maintain such reserves securing said payments as may be provided in this resolution. (h) The City Council will levy general ad valorem taxes on all taxable property in the City when required to meet any deficiency in net revenues pledged for payment of the Bonds. Section 5. Refunding, Findings; Redemption of Refunded Bonds. 5.01. Notice of Redemption. The Refunded Bonds maturing on February 1, 2012 and thereafter will be redeemed and prepaid on February 1, 2011. The Refunded Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the forms of Notices of Call for Redemption attached hereto as Exhibits B, C and D which terms and conditions are hereby approved and incorporated herein by reference. The Registrars for the Refunded Bonds are authorized and directed to send a copy of the Notices of Redemption to each registered holder of the Refunded Bonds. 377202v1 MMD RS125 -8 10 RESOLUTION 2010- Section 6. Authentication of Transcript. 6.01. Authority Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 6.02. Certificate as to Official Statement. The Mayor and City Clerk are hereby authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. Section 7. Tax Covenant. 7.01. Tax Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code "), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 7.02. Rebate. The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Bonds. 7.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 7.04. Qualifie d. In order to qualify the Bonds as "qualified tax- exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the City hereby designates the Bonds as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax - exempt obligations (other than private activity bonds, that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2010 will not exceed $30,000,000; and 377202v1 MMD RS125 -8 11 RESOLUTION 2010- (d) not more than $30,000,000 of obligations issued by the City during calendar year 2010 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 8. Book -Entry System, Limited Obligation of City-. 8.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ( "DTC "). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 8.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the "Participants ") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Clerk of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co.," will refer to such new nominee of DTC; and upon receipt of such a notice, the City Clerk will promptly deliver a copy of the same to the Registrar and Paying Agent. 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Representation Letter ") which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 377202v1 MMD RS125 -8 12 RESOLUTION 2010- 8.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof 8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements as set forth in the Representation Letter. Section 9. Continuing Disclosure. 9.01. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate will not be considered an event of default with respect to the Bonds; however, such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. 9.02. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Clerk and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 10. Defeasance. 10.01. Defeasance. When all Bonds and all interest thereon, have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. [(The remainder of this page is intentionally left blank.)] 377202v1 MMDRS125 -8 13 RESOLUTION 2010- ADOPTED this 16th day of November, 2010, by the City Council of the City of Rosemount. William H. Droste, Mayor ATTEST: Amy Domeier, City Clerk 377202v1 MMDRS125 -8 14 RESOLUTION 2010- CERTIFICATE STATE OF MINNESOTA ) COUNTY OF DAKOTA ) ss ROSEMOUNT PORT AUTHORITY ) I am the duly appointed, acting and qualified City Clerk of the City of Rosemount, Dakota County, Minnesota do hereby certify that I have examined the City of Rosemount records and the Minute Book of said City for the meeting of the 16th of November, 2010 and that the attached copy of the Resolution 2010 -_ A RESOLUTION AWARDING THE SALE OF $1,550,000 GENERAL OBLIGATION UTILITY REVENUE REFUNDING BONDS, SERIES 2010A; AND PROVIDING FOR THEIR ISSUANCE 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 2010. City Clerk City of Rosemount Dakota County, Minnesota 377202v1 MMD RS 125 -8 AWARD: SALE: [] springsted Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101 -2887 Tel: 651 - 223 -3000 Fax: 651 - 223 -3002 Email: advisors @springsted.com www.springsted.com $1,550,000* CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION UTILITY REVENUE REFUNDING BONDS, SERIES 2010A (BOOK ENTRY ONLY) UNITED BANKERS' BANK FIRST STATE BANK OF ROSEMOUNT November 16, 2010 � Moody's Rating: Aa2 Interest Net Interest True Interest Bidder Rates Price Cost Rate UNITED BANKERS' BANK FIRST STATE BANK OF ROSEMOUNT CRONIN & COMPANY, INC. ROBERT W. BAIRD & COMPANY, INCORPORATED C.L. KING & ASSOCIATES SAMCO CAPITAL MARKETS, INC. DAVENPORT & COMPANY LLC LOOP CAPITAL MARKETS, LLC KILDARE CAPITAL EDWARD D. JONES & COMPANY JACKSON SECURITIES, LLC COUNTRY CLUB BANK WEDBUSH MORGAN SECURITIES 0.80% 2012 $1,540,700.00 $108,047.08 1.9671% 1.15% 2013 1.35% 2014 1.65% 2015 2.00% 2016 2.30% 2017 2.60% 2018 2.00% 2012 -2014 $1,567,237.90 $123,791.27 2.2285% 2.50% 2015 3.00% 2016 -2018 2.00% 2012 -2014 $1,570,453.55 $124,221.45 2.2332% 3.00% 2015 -2018 BERNARDI SECURITIES, 2.25% 2012 -2016 $1,550,000.00 $129,947.92 2.3638% INCORPORATED 2.50% 2017 2.75% 2018 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - — - - - - - - - - - - - - - - - - - - — - - - - - - - - - - - - - - - - - - - - - - - - - - - — -------- — ----------- — - — — ------------ - - - - - — These Bonds are being reoffered at Par. * Subsequent to bid opening, the issue size decreased from $1,550,000 to $1,545,000. BBI: 4.24% Average Maturity: 3.541 Years Public Sector Advisors RESOLUTION 2010- EXHIBIT A PROPOSALS 377202v1 MMD RS125 -8 A -1 RESOLUTION 2010- EXHIBIT B NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION STORM WATER REVENUE BONDS, SERIES 2001B CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Rosemount, Dakota County, Minnesota, there have been called for redemption and prepayment on February 1, 2011 all outstanding bonds of the City designated as General Obligation Storm Water Revenue Bonds, Series 2001B, dated August 15, 2001, having stated maturity dates of February 1 in the years 2012 through 2017, both inclusive, totaling $555,000 in principal amount, and with the following CUSIP numbers: Year of Maturity 2012 2013 2014 2015 2016 2017 * * * * * * * * * * * * * ** Amount $80,000 85,000 90,000 95,000 100,000 105,000 CUSIP Number The bonds are being called at a price of par plus accrued interest to February 1, 2011, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, in the City of St. Paul, Minnesota (formerly known as U.S. Bank Trust National Association) on or before February 1, 2011. If by mail: U.S. Bank National Association Corporate Trust Operations 60 Livingston Avenue EP- MN -WS3C St. Paul, MN 55107 * * * * * * * * * * * * * * ** If by hand: U.S. Bank National Association 60 Livingston Avenue 3`d Floor — Bond Drop Window St. Paul, MN 55107 377202v1 MMDRS125 -8 B -1 RESOLUTION 2010- Important Notice: In compliance with the Jobs and Growth Tax Relief Reconciliation Act of 2003, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W -9 Form, which may be obtained at a bank or other financial institution. The Registrar will not be responsible for the selection or use of the CUSIP number, nor is any representation made as to the correctness indicated in the Redemption Notice or on any Bond. It is included solely for convenience of the Holders. Additional information may be obtained from: U.S. Bank National Association Corporate Trust Division Bondholder Relations (800) 934 -6802 * * * * * * * * * * * * * * * * * * * ** Dated: November 16, 2010. BY ORDER OF THE CITY COUNCIL 377202v1 MMD RS125 -8 B -2 RESOLUTION 2010- EXHIBIT C NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION WATER AND STORM WATER REVENUE BONDS, SERIES 2002B CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Rosemount, Dakota County, Minnesota, there have been called for redemption and prepayment on February 1, 2011 all outstanding bonds of the City designated as General Obligation Water and Storm Water Revenue Bonds, Series 2002B, dated July 1, 2002, having stated maturity dates of February 1 in the years 2012 through 2018, both inclusive, totaling $665,000 in principal amount, and with the following CUSIP numbers: Year of Maturity 2012 2013 2014 2015 2016 2017 2018 * * * * * * * * * * * * * ** Amount $80,000 90,000 90,000 95,000 100,000 100,000 110,000 CUSIP Number The bonds are being called at a price of par plus accrued interest to February 1, 2011, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, in the City of St. Paul, Minnesota on or before February 1, 2011. 3772020 MMD RS125 -8 C_1 If by mail: U.S. Bank National Association Corporate Trust Operations 60 Livingston Avenue EP- MN -WS3C St. Paul, MN 55107 * * * * * * * * * * * * * * ** RESOLUTION 2010- If by hand: U.S. Bank National Association 60 Livingston Avenue 3`d Floor — Bond Drop Window St. Paul, MN 55107 Important Notice: In compliance with the Jobs and Growth Tax Relief Reconciliation Act of 2003, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W -9 Form, which may be obtained at a bank or other financial institution. The Registrar will not be responsible for the selection or use of the CUSIP number, nor is any representation made as to the correctness indicated in the Redemption Notice or on any Bond. It is included solely for convenience of the Holders. * * * * * * * * * * * * * * * * * ** Additional information may be obtained from: U.S. Bank National Association Corporate Trust Division Bondholder Relations (800) 934 -6802 * * * * * * * * * * * * * * * * * * * ** Dated: November 16, 2010. BY ORDER OF THE CITY COUNCIL 377202v1 MMD RS125 -8 C -2 RESOLUTION 2010- EXHIBIT D NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 2003B CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Rosemount, Dakota County, Minnesota, there have been called for redemption and prepayment on February 1, 2011 all outstanding bonds of the City designated as General Obligation Water Revenue Bonds, Series 2003B, dated July 1, 2003, having stated maturity dates of February 1 in the years 2012 through 2014, both inclusive, totaling $390,000 in principal amount, and with the following CUSIP numbers: Year of Maturity * * * * * * * * * * * * * ** Amount 2012 $125,000 2013 130,000 2014 135,000 CUSIP Number The bonds are being called at a price of par plus accrued interest to February 1, 2011, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, in the City of St. Paul, Minnesota on or before February 1, 2011. If by mail: U.S. Bank National Association Corporate Trust Operations 60 Livingston Avenue EP- MN -WS3C St. Paul, MN 55107 * * * * * * * * * * * * * * ** If by hand: U.S. Bank National Association 60 Livingston Avenue 3rd Floor — Bond Drop Window St. Paul, MN 55107 Important Notice: In compliance with the Jobs and Growth Tax Relief Reconciliation Act of 2003, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W -9 Form, which may be obtained at a bank or other financial institution. 377202v1 MMD RS125 -8 D -1 RESOLUTION 2010- The Registrar will not be responsible for the selection or use of the CUSIP number, nor is any representation made as to the correctness indicated in the Redemption Notice or on any Bond. It is included solely for convenience of the Holders. Additional information may be obtained from: U.S. Bank National Association Corporate Trust Division Bondholder Relations (800) 934 -6802 * * * * * * * * * * * * * * * * * * * ** Dated: November 16, 2010. BY ORDER OF THE CITY COUNCIL 3772020 MMD RS125 -8 D -2 STATE OF MINNESOTA COUNTY AUDITOR'S CERTIFICATE AS TO COUNTY OF DAKOTA REGISTRATION I, the undersigned County Auditor of Dakota County, Minnesota, hereby certify that a resolution adopted by the City Council of the City of Rosemount, Minnesota, on November 16, 2010, relating to General Obligation Utility Revenue Refunding Bonds, Series 2010A, in the amount of $1,550,000 dated December 1, 2010, has been filed in my office and said obligations have been registered on the register of obligations in my office. WITNESS My hand and official seal this day of , 2010. County Auditor Dakota County, Minnesota (SEAL) Deputy 3772020 MMD RS125 -8 4ROSEMOUNTEXECUTIVE SUMMARY CITY COUNCIL City Council Meeting Date: November 16, 2010 AGENDA ITEM: Accept Bids and Award Sale — G.O. AGENDA SECTION: Utility Revenue Refunding Bonds, Series Old Business 2010A PREPARED BY: Jeff May, Finance Director AGENDA NO. ATTACHMENTS: Resolution and Official Statement APPROVED BY: RECOMMENDED ACTION: Motion to adopt a Resolution Awarding the Sale of $1,550,000 General Obligation Utility Revenue Refunding Bonds, Series 2010A; and Providing for their Issuance. ISSUE Accept bids and award sale of utility revenue refunding bonds for three current City water and storm water revenue bonds: 1) G.O. Storm Water Revenue Bonds, 2001B (Original issue amount - $1,140,000 for the Marcotte Pond Lift Station and Forcemain and the Hawkins Pond Lift Station and Forcemain); 2) G.O. Water /Storm Water Revenue Bonds, 2002B (Original issue amount - $1,195,000 for Well #12 and the Brockway Draw Storm Water Improvements); and 3) G.O. Water Revenue Bonds, 2003B (Original issue amount - $1,170,000 for the East Side Watermain Phase 2 Improvements). BACKGROUND This item is on the agenda for Council to formally award the sale of utility revenue refunding bonds. At 10:30 A.M. Tuesday, November 16, 2010, sealed bids for G.O. Utility Revenue Refunding Bonds, Series 2010A, will be opened and the results tabulated at the offices of Springsted, out financial advisors 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. CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION NO. A RESOLUTION AWARDING THE SALE OF $1,550,000 GENERAL OBLIGATION UTILITY REVENUE REFUNDING BONDS, SERIES 2010A; AND PROVIDING FOR THEIR ISSUANCE BE IT RESOLVED By the City Council of the City of Rosemount, Dakota County, Minnesota (the "City ") as follows: Section 1. Sale of Bonds. 1.01 It is hereby determined that: (a) the City is authorized by Minnesota Statutes, Chapter 475 (the "Act") and Section 475.67, Subdivision 3, of the Act to issue and sell its general obligation bonds to refund obligations and the interest thereon before the due date of the obligations, if consistent with covenants made with the holders thereof, when determined by the City Council to be necessary or desirable for the reduction of debt service cost to the City or for the extension or adjustment of maturities in relation to the resources available for their payment; (b) Section 475.67, subdivision 4 of the Act permits the sale of refunding obligations during the six month period prior to the date on which the obligations to be refunded may be called for redemption; (c) it is necessary and desirable to reduce debt service costs that the City issue $1,550,000 General Obligation Utility Revenue Refunding Bonds, Series 2010A (the "Bonds ") to refund certain outstanding general obligations of the City; (d) the outstanding bonds to be refunded (the "Refunded Bonds ") consist of (i) the February 1, 2012 through February 1, 2017, maturities of the General Obligation Storm Water Revenue Bonds, Series 2001B, dated August 15, 2001, of which $555,000 in principal amount is callable on February 1, 2011, (u) the February 1, 2012 through February 1, 2018, maturities of the General Obligation Water and Storm Water Revenue Bonds, Series 2002B, dated July 1, 2002 of which $665,000 in principal amount is callable on February 1, 2011, and (iii) the February 1, 2012 through February 1, 2014 maturities of the General Obligation Water Revenue Bonds, Series 2003B dated July 1, 2003, of which $390,000 in principal amount is callable on February 1, 2011. 1.02. Award to the Purchaser and Interest Rates. The proposal of (the "Purchaser ") to purchase $1,550,000 General Obligation Utility Revenue Refunding Bonds, Series 2010A (the "Bonds ") of the City described in the Terms of Proposal thereof is determined to be the most favorable offer and is accepted, the proposal being to purchase the Bonds at a price of $ plus accrued interest to date of delivery, for Bonds bearing interest as follows: 377202v1 MMD RS125 -8 Year Interest Rate Year 2012 2016 2013 2017 2014 2018 2015 RESOLUTION 2010- Interest Rate 1.03. Purchase. The City Finance Director is directed to retain the good faith check of the Purchaser, pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers forthwith. The Mayor and City Clerk are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amount of the Bond. The City will forthwith issue and sell the Bonds pursuant to Minnesota Statutes, Chapter 475 (the "Act") in the total principal amount of $1,550,000, originally dated December 1, 2010, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R -1, upward, bearing interest as above set forth, and which mature serially on February 1 without option of prior payment in the years and amounts as follows: Year Amount Year Amount 2012 $295,000 2016 $180,000 2013 310,000 2017 175,000 2014 310,000 2018 105,000 2015 175,000 As may be requested by the Purchaser, one or more term Bonds may be issued having mandatory sinking fund redemption and final maturity amounts conforming to the foregoing principal repayment schedule, and corresponding additions may be made to the provision of the applicable Bond(s). Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates: Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2011, to the registered owners of record as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 377202v1 MMD RS125 -8 2 RESOLUTION 2010- 2.03. Registration. The City will appoint, and will maintain, a bond registrar, transfer agent, authenticating agent and paying agent (the "Registrar "). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Re 'stet. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Ironer or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated. Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to 377202v1 MMD Rs125 -8 3 RESOLUTION 2010- the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. 2.04. Appointment of Initial Registrar. The City appoints U.S. Bank National Association, St. Paul, Minnesota, as the initial Registrar. The Mayor and the City Clerk are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Clerk must transmit to the Registrar monies sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Clerk and executed on behalf of the City by the signatures of the Mayor and the City Clerk., provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the City Finance Director will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. 377202v1 MMDRS125 -8 4 RESOLUTION 2010- Section 3. Form of Bond. 3.01. The Bonds will be printed or typewritten in substantially the following form: No. R- UNITED STATES OF AMERICA $ STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF ROSEMOUNT GENERAL OBLIGATION UTILITY REVENUE REFUNDING BOND, SERIES 2010A Date of Rate Maturity Original Issue CUSIP 20_ December 1, 2010 Registered Owner: Cede & Co. The City of Rosemount, Minnesota, a duly organized and existing municipal corporation in Dakota County, Minnesota (the "City "), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above, or registered assigns, the principal sum set forth above on the maturity date specified above without option of prior payment, with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing August 1, 2011, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, St. Paul, Minnesota, as Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. This Bond is one of an issue in the aggregate principal amount of $1,550,000 all of like original issue date and tenor, except as to number, maturity date, and interest rate, all issued pursuant to a resolution adopted by the City Council on November 16, 2010 (the "Resolution "), for the purpose of providing money to refund the outstanding principal amount of certain general obligation bonds of the City, pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 475.67 and Chapter 444, and the principal hereof and interest hereon are payable primarily from net revenues of the water and storm water utility systems of the City in a special debt service fund of the City as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in net revenues of the water and storm water systems pledged, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. 3772020 MMDRS125 -8 5 RESOLUTION 2010- IT IS HEREBY CERTIFIED AND RECITED That in and by the Resolution, the City has covenanted and agreed that it will continue to own and operate the water and storm water systems free from competition by other like utilities; that adequate insurance on said systems and suitable fidelity bonds on employees will be carried; that proper and adequate books of account will be kept showing all receipts and disbursements relating to the Water and Storm Water Fund, into which it will pay all of the gross revenues from the water and storm water systems; that it will also create and maintain a General Obligation Utility Revenue Refunding Bonds, Series 2010A Debt Service Fund, into which it will pay, out of the net revenues from the water and storm water systems a sum sufficient to pay principal hereof and interest hereon when due; and that it will provide, by ad valorem tax levies, for any deficiency in required net water and storm water system revenues. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City Council has designated the issue of Bonds of which this Bond forms a part as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code "). The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, or statutory limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual signature of one of its authorized representatives. 377202v1 MMD RS125 -8 6 RESOLUTION 2010- IN WITNESS WHEREOF, the City of Rosemount, Dakota County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Clerk and has caused this Bond to be dated as of the date set forth below. Dated: , 2010 CITY OF ROSEMOUNT, MINNESOTA (Facsimile) acsimile) City Clerk Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION By Authorized Representative The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants UNIF GIFT MIN ACT Custodian in common (Cust) (Minor) TEN ENT -- as tenants by entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common under Uniform Gifts or Transfers to Minors Act............ (State) Additional abbreviations may also be used though not in the above list. 377202v1 MMD RS125 -8 7 RESOLUTION 2010- ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program ( "STAMP "), the Stock Exchange Medallion Program ( "SEMP "), the New York Stock Exchange, Inc. Medallion Signatures Program ( "MSP ") or other such "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee 377202v1 MMD RS 125-8 8 RESOLUTION 2010- PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Signature of Date of Registration Registered Owner Officer of Registrar Cede & Co. Federal ID #13- 2555119 3.02. Approving Legal Opinion. The City Finance Director is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. Section 4. Paytnent: Security; Pledges and Covenants. 4.01. Funds and Accounts. The City will create and continue to operate its Water and Storm Fund to which will be credited all gross revenues of the water and storm water systems and out of which will be paid all normal and reasonable expenses of current operations of the water and storm water systems. Any balance therein will be deemed net revenues and will be transferred from time to time, to a General Obligation Utility Revenue Refunding Bonds, Series 2010A Debt Service Fund (the "Debt Service Fund ") hereby created in the Water and Storm Water Fund, which fund will be used only to pay principal of and interest on the Bonds and any other bonds similarly authorized. The Water and Storm Water Fund Accounts established in the resolutions awarding the sale of the Refunded Bond are continued and will be maintained as therein provided. These accounts are the Operations Account, the Sinking Fund Account, the Construction Account and the Surplus Account. There will always be retained in the Debt Service Fund a sufficient amount to pay principal of and interest on all the Bonds, and the City Finance Director will report any current or anticipated deficiency in the Debt Service Fund to the City Council. The debt service fund for the Refunded Bonds is terminated, and all monies therein are hereby transferred to the Debt Service Fund herein created. 4.02. Findings. It is determined that estimated collection of net revenues of the water and storm water systems will produce at least five percent in excess of the amount needed to meet when due, the principal and interest payments on the Bonds and that no tax levy is needed at this time. 4.03. Certification to County Auditors as to Redemption. The City Clerk is directed to file a certified copy of this resolution with the County Auditors of Dakota and Rice Counties and to obtain the certificate required by Section 475.63 of the Act. 4.04. Covenants and Agreements. The City Council covenants and agrees with the holders of the Bonds that so long as any of the Bonds remain outstanding and unpaid, it will keep and enforce the following covenants and agreements: (a) The City will continue to maintain and efficiently operate the water and storm water systems as public utilities and conveniences free from competition of other like utilities and will cause all revenues therefrom to be deposited in bank accounts and credited to the water and storm water 377202v1 MMD RS125 -8 9 RESOLUTION 2010- systems accounts as hereinabove provided, and will make no expenditures from said accounts except for a duly authorized purpose and in accordance with this resolution. (b) The City will also maintain the Debt Service Fund as a separate account in the Water and Storm Water Fund and will cause money to be credited thereto from time to time, out of net revenues from the water and storm water systems, in sums sufficient to pay principal of and interest on the Bonds when due. (c) The City will keep and maintain proper and adequate books of records and accounts separate from all other records of the City in which will be complete and correct entries as to all transactions relating to the water and storm water systems and which will be open to inspection and copying by any bondholder, the bondholder's agent or attorney, at any reasonable time, and it will furnish certified transcripts therefrom upon request and upon payment of a reasonable fee therefor, and said account will be audited at least annually by a qualified public accountant and statements of such audit and report will be furnished to all bondholders upon request. (d) The City Council will cause all persons handling revenues of the water and storm water systems to be bonded in reasonable amounts for the protection of the City and the bondholders and will cause the funds collected on account of the operations of the water and storm water systems to be deposited in a bank whose deposits are guaranteed under the Federal Deposit Insurance Law. (e) The Council will keep the water and storm water systems insured at all times against loss by fire, tornado and other risks customarily insured against with an insurer or insurers in good standing, in such amounts as are customary for like plants, to protect the holders, from time to time, of the Bonds and the City from any loss due to any such casualty and will apply the proceeds of such insurance to make good any such loss. (0 The City and each and all of its officers will punctually perform all duties with reference to the water and storm water systems as required by the laws of the State of Minnesota. (g) The City will impose and collect charges of the nature authorized by Minnesota Statutes, Section 444.075 at the times and in the amounts required to produce, net revenues adequate to pay all principal and interest when due on the Bonds and to create and maintain such reserves securing said payments as may be provided in this resolution. (h) The City Council will levy general ad valorem taxes on all taxable property in the City when required to meet any deficiency in net revenues pledged for payment of the Bonds. Section 5. Refunding, Findings: Redemption of Refunded Bonds. 5.01. Notice of Redemption. The Refunded Bonds maturing on February 1, 2012 and thereafter will be redeemed and prepaid on February 1, 2011. The Refunded Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the forms of Notices of Call for Redemption attached hereto as Exhibits B, C and D which terms and conditions are hereby approved and incorporated herein by reference. The Registrars for the Refunded Bonds are authorized and directed to send a copy of the Notices of Redemption to each registered holder of the Refunded Bonds. 377202v1 MMD RS125 -8 10 RESOLUTION 2010- Section 6. Authentication of Transcript. 6.01. Authority Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 6.02. Certificate as to Official Statement. The Mayor and City Clerk are hereby authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. Section 7. Tax Covenant. 7.01. Tax Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code "), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 7.02. Rebate. The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Bonds. 7.03. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 7.04. Qualifie d. In order to qualify the Bonds as "qualified tax- exempt obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the City hereby designates the Bonds as "qualified tax- exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax- exempt obligations (other than private activity bonds, that are not qualified 501(c) (3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2010 will not exceed $30,000,000; and 377202v 1 MMD RS 125 -8 11 RESOLUTION 2010- (d) not more than $30,000,000 of obligations issued by the City during calendar year 2010 have been designated for purposes of Section 265(b)(3) of the Code. 7.05. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. Section 8. Book -Entry System, Limited Obligation of City 8.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns ( "DTC "). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 8.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the "Participants ") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Clerk of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co.," will refer to such new nominee of DTC; and upon receipt of such a notice, the City Clerk will promptly deliver a copy of the same to the Registrar and Paying Agent. 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Representation Letter ") which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 377202v1 MMD RS125 -8 12 RESOLUTION 2010- 8.04. Transfers Outside Book -Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be made and given, respectively in the manner provided in DTC's Operational Arrangements as set forth in the Representation Letter. Section 9. Continuing Disclosure. 9.01. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate will not be considered an event of default with respect to the Bonds; however, such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. 9.02. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate executed by the Mayor and City Clerk and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 10. Defeasance. 10.01. Defeasance. When all Bonds and all interest thereon, have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. [(The remainder of this page is intentionally left blank.)] 3772020 MMDRS125 -8 13 RESOLUTION 2010- ADOPTED this 16th day of November, 2010, by the City Council of the City of Rosemount. William H. Droste, Mayor ATTEST: Amy Domeier, City Clerk 377202v1 MMDRS125 -8 14 RESOLUTION 2010- CERTIFICATE STATE OF MINNESOTA ) COUNTY OF DAKOTA ) ss ROSEMOUNT PORT AUTHORITY ) I am the duly appointed, acting and qualified City Clerk of the City of Rosemount, Dakota County, Minnesota do hereby certify that I have examined the City of Rosemount records and the Minute Book of said City for the meeting of the 16th of November, 2010 and that the attached copy of the Resolution 2010 -_ A RESOLUTION AWARDING THE SALE OF $1,550,000 GENERAL OBLIGATION UTILITY REVENUE REFUNDING BONDS, SERIES 2010A; AND PROVIDING FOR THEIR ISSUANCE 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 , 2010. City Clerk City of Rosemount Dakota County, Minnesota 3772020 MMDRS125 -8 RESOLUTION 2010- EXHIBIT A PROPOSALS 377202v1NWD RS125 -8 A -1 RESOLUTION 2010- EXHIBIT B NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION STORM WATER REVENUE BONDS, SERIES 2001B CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Rosemount, Dakota County, Minnesota, there have been called for redemption and prepayment on February 1, 2011 all outstanding bonds of the City designated as General Obligation Storm Water Revenue Bonds, Series 2001B, dated August 15, 2001, having stated maturity dates of February 1 in the years 2012 through 2017, both inclusive, totaling $555,000 in principal amount, and with the following CUSIP numbers: Year of Maturity 2012 2013 2014 2015 2016 2017 * * * * * * * * * * * * * ** Amount $80,000 85,000 90,000 95,000 100,000 105,000 CUSIP Number The bonds are being called at a price of par plus accrued interest to February 1, 2011, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, in the City of St. Paul, Minnesota (formerly known as U.S. Bank Trust National Association) on or before February 1, 2011. If by mail: U.S. Bank National Association Corporate Trust Operations 60 Livingston Avenue EP- MN -WS3C St. Paul, MN 55107 * * * * * * * * * * * * * * ** If by hand: U.S. Bank National Association 60 Livingston Avenue 3`a Floor — Bond Drop Window St. Paul, MN 55107 377202v1 MMD RS125 -8 B -1 RESOLUTION 2010- Important Notice: In compliance with the Jobs and Growth Tax Relief Reconciliation Act of 2003, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W -9 Form, which may be obtained at a bank or other financial institution. The Registrar will not be responsible for the selection or use of the CUSIP number, nor is any representation made as to the correctness indicated in the Redemption Notice or on any Bond. It is included solely for convenience of the Holders. * * * * * * * * * * * * * * * * * ** Additional information may be obtained from: U.S. Bank National Association Corporate Trust Division Bondholder Relations (800) 934 -6802 * * * * * * * * * * * * * * * * * * * ** Dated: November 16, 2010. BY ORDER OF THE CITY COUNCIL 377202v1 MMD RS125 -8 B -2 RESOLUTION 2010- EXHIBIT C NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION WATER AND STORM WATER REVENUE BONDS, SERIES 2002B CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Rosemount, Dakota County, Minnesota, there have been called for redemption and prepayment on February 1, 2011 all outstanding bonds of the City designated as General Obligation Water and Storm Water Revenue Bonds, Series 200213, dated July 1, 2002, having stated maturity dates of February 1 in the years 2012 through 2018, both inclusive, totaling $665,000 in principal amount, and with the following CUSIP numbers: Year of Maturity 2012 2013 2014 2015 2016 2017 2018 * * * * * * * * * * * * * ** Amount $80,000 90,000 90,000 95,000 100,000 100,000 110,000 CUSIP Number The bonds are being called at a price of par plus accrued interest to February 1, 2011, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, in the City of St. Paul, Minnesota on or before February 1, 2011. 377202.1 MMD RS125 -8 C_1 If by mail: T U.S. Bank National Association Corporate Trust Operations 60 Livingston Avenue EP- 'SIN -WS3C St. Paul, MN 55107 * * * * * * * * * * * * * * ** RESOLUTION 2010- If by hand: U.S. Bank National Association 60 Livingston Avenue 3`d Floor — Bond Drop Window St. Paul, MN 55107 Important Notice: In compliance with the Jobs and Growth Tax Relief Reconciliation Act of 2003, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W -9 Form, which may be obtained at a bank or other financial institution. The Registrar will not be responsible for the selection or use of the CUSIP number, not is any representation made as to the correctness indicated in the Redemption Notice or on any Bond. It is included solely for convenience of the Holders. * * * * * * * * * * * * * * * * * ** Additional information may be obtained from: U.S. Bank National Association Corporate Trust Division Bondholder Relations (800) 934 -6802 * * * * * * * * * * * * * * * * * * * ** Dated: November 16, 2010. BY ORDER OF THE CITY COUNCIL 3772020 MMD RS125 -8 C -2 RESOLUTION 2010- EXHIBIT D NOTICE OF CALL FOR REDEMPTION GENERAL OBLIGATION WATER REVENUE BONDS, SERIES 2003B CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Rosemount, Dakota County, Minnesota, there have been called for redemption and prepayment on February 1, 2011 all outstanding bonds of the City designated as General Obligation Water Revenue Bonds, Series 2003B, dated July 1, 2003, having stated maturity dates of February 1 in the years 2012 through 2014, both inclusive, totaling $390,000 in principal amount, and with the following CUSIP numbers: Year of Maturity * * * * * * * * * * * * * ** Amount 2012 $125,000 2013 130,000 2014 135,000 CUSIP Number The bonds are being called at a price of par plus accrued interest to February 1, 2011, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, in the City of St. Paul, Minnesota on or before February 1, 2011. If by mail: U.S. Bank National Association Corporate Trust Operations 60 Livingston Avenue EP- MN -WS3C St. Paul, MN 55107 * * * * * * * * * * * * * * ** If by hand: U.S. Bank National Association 60 Livingston Avenue 3`d Floor — Bond Drop Window St. Paul, MN 55107 Important Notice: In compliance with the Jobs and Growth Tax Relief Reconciliation Act of 2003, federal backup withholding tax will be withheld at the applicable backup withholding rate in effect at the time the payment by the redeeming institutions if they are not provided with your social security number or federal employer identification number, properly certified. This requirement is fulfilled by submitting a W -9 Form, which may be obtained at a bank or other financial institution. 377202.1 MMD PS125 -8 D -1 RESOLUTION 2010- The Registrar will not be responsible for the selection or use of the CUSIP number, not is any representation made as to the correctness indicated in the Redemption Notice or on any Bond. It is included solely for convenience of the Holders. * * * * * * * * * * * * * * * * * ** Additional information may be obtained from: U.S. Bank National Association Corporate Trust Division Bondholder Relations (800) 934 -6802 * * * * * * * * * * * * * * * * * * * ** Dated: November 16, 2010. BY ORDER OF THE CITY COUNCIL 3772020 MMD RS125 -8 D -2 STATE OF MINNESOTA COUNTY AUDITOR'S CERTIFICATE AS TO COUNTY OF DAKOTA REGISTRATION I, the undersigned County Auditor of Dakota County, Minnesota, hereby certify that a resolution adopted by the City Council of the City of Rosemount, Minnesota, on November 16, 2010, relating to General Obligation Utility Revenue Refunding Bonds, Series 2010A, in the amount of $1,550,000 dated December 1, 2010, has been filed in my office and said obligations have been registered on the register of obligations in my office. WITNESS My hand and official seal this day of )2010. County Auditor Dakota County, Minnesota (SEAL) Deputy 377202v1 MMD RS125 -8 OFFICIAL STATEMENT DATED NOVEMBER 3, 2010 Ratings: Requested from Moody's REFUNDING ISSUES Investors Service In the opinion of Kennedy & Graven, Chartered, Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decisions, at the time of their issuance and delivery to the original Purchaser(s), interest on the Bonds is excluded from gross income for purposes of United States income tax and is excluded, to the same extent, in computing both gross 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). Interest on the Bonds is not an item of tax preference for purposes of the alternative minimum tax imposed on individuals and corporations or for the purpose of determining adjusted current earnings for purposes of computing the federal alternative minimum tax imposed on corporations. No opinion will be expressed by Bond Counsel regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Bonds or arising with respect to ownership of the Bonds. See "Tax Exemption" and "Other Federal and State Tax Considerations" herein. $1,550,000* City of Rosemount, Minnesota General Obligation Utility Revenue Refunding Bonds, Series 2010A (the "City Bonds ") $1,350,000 Rosemount Port Authority, Minnesota General Obligation Public Facility Refunding Bonds, Series 2010B (the "Authority Bonds ") (collectively referred to as the `Bonds," the "Obligations," or the "Issues ") (Book Entry Only) Dated Date: December 1, 2010 Interest Due: Each February 1 and August 1, commencing August 1, 2011 The Bonds will mature as shown on the inside front cover of this Official Statement. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption and must conform to the respective maturity schedule set forth on the following page. The Authority may elect on February 1, 2019, and on any day thereafter, to prepay the Authority Bonds due on or after February 1, 2020 at a price of par plus accrued interest. The City Bonds will not be subject to payment in advance of their respective stated maturity dates. The City 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 Authority Bonds are full faith and credit obligations of the City for which the City has consented to the Authority's levy of general ad valorem taxes on all property in the City for their payment. Additional sources of security for the City Bonds are discussed herein. A separate proposal must be submitted for each Issue for not less than the respective minimum bid shown below and accrued interest on the total principal amount of each Issue. Proposals shall specify rates in integral multiples of 5/100 or 1/8 of 1 %. Rates are not required to be in level or ascending order; however, the rate for any maturity cannot be more than 1 % lower than the highest rate of any of the preceding maturities. Proposals must be accompanied by a good faith deposit in the amounts shown below in the form of a certified or cashier's check payable to the order of the City for the City Bonds or the Authority for the Authority Bonds, a wire transfer, or a Financial Surety Bond, and delivered to Springsted Incorporated prior to the time proposals will be opened. The Bonds will be awarded on the basis of True Interest Cost (TIC). Minimum Bid Good Faith Deposit The City Bonds $1,540,312 $15,500 The Authority Bonds 1,338,862 13,500 The City and the Authority will designate the Bonds as "qualified tax- exempt obligations' pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, and the Bonds will not be subject to the alternative minimum tax for individuals. The Bonds will be issued as fully registered Bonds without coupons and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ( "DTC "). DTC will act as securities depository for the Bonds. Individual purchases may be made in book -entry form only, in the principal amount of $5,000 and integral multiples thereof. Investors will not receive physical certificates representing their interest in the Bonds purchased. (See "Book Entry System" herein.) U.S. Bank National Association, Saint Paul, Minnesota will serve as registrar (the "Registrar") for the Bonds. The Bonds will be available for delivery at DTC on or about December 16, 2010. Preliminary, subject to change. PROPOSALS RECEIVED: November 16, 2010 (Tuesday) until 10:30 A.M., Central Time AWARD OF THE CITY BONDS: November 16, 2010 (Tuesday) at 7:30 P.M., Central Time AWARD OF THE AUTHORITY BONDS: November 16, 2010 (Tuesday) at 6:00 P.M., Central Time ® Further information may be obtained from SPRINGSTED S p r i n g s t e d Incorporated, Financial Advisor to the City and Authority, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101 -2887 (651) 223 -3000 City of Rosemount, Minnesota $1,550,000* General Obligation Utility Revenue Refunding Bonds, Series 2010A The City Bonds will mature each February 1 as follows: 2012 $295,000 2014 $310,000 2016 $180,000 2018 $105,000 2013 $310,000 2015 $175,000 2017 $175,000 Rosemount Port Authority, Minnesota $1,350,000* General Obligation Public Facility Refunding Bonds, Series 2010B The Authority Bonds will mature each February 1 as follows: 2013 $125,000 2015 $125,000 2017 $135,000 2019 $135,000 2021 $145,000 2014 $125,000 2016 $125,000 2018 $135,000 2020 $145,000 2022 $155,000 * Preliminary; subject to change. For purposes of compliance with Rule 15c2 -12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the Issuer from time to time (collectively, the "Official Statement "), may be treated as an Official Statement with respect to the Obligations described herein that is deemed final as of the date hereof (or of any such supplement or correction) by the Issuer, except for the omission of certain information referred to in the succeeding paragraph. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Obligations, together with any other information required by law, shall constitute a "Final Official Statement" of the Issuer with respect to the Obligations, as that term is defined in Rule 15c2 -12. Any such addendum shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. By awarding the Obligations to any underwriter or underwriting syndicate submitting a Proposal therefor, the Issuer agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Obligations are awarded copies of the Official Statement and the addendum or addenda described in the preceding paragraph in the amount specified in the Terms of Proposal. The Issuer designates the senior managing underwriter of the syndicate to which the Obligations are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivenng a Proposal with respect to the Obligations agrees thereby that if its bid is accepted by the Issuer (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Obligations for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. No dealer, broker, salesman or other person has been authorized by the Issuer to give any information or to make any representations with respect to the Obligations, other than as contained in the Official Statement or the Final Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the Issuer. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the Issuer and, while believed to be reliable, is not guaranteed as to completeness or accuracy. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER SINCE THE DATE THEREOF. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts of documents prepared by or on behalf of the Issuer have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. Any CUSIP numbers for the Obligations included in the Final Official Statement are provided for convenience of the owners and prospective investors. The CUSIP numbers for the Obligations have been assigned by an organization unaffiliated with the Issuer. The Issuer is not responsible for the selection of the CUSIP numbers and makes no representation as to the accuracy thereof as printed on the Obligations or as set forth in the Final Official Statement. No assurance can be given that the CUSIP numbers for the Obligations will remain the same after the date of issuance and delivery of the Obligations. TABLE OF CONTENTS Page(s) Terms of Proposal: $1,550,000* General Obligation Utility Revenue Refunding Bonds, Series 2010A........ i-v $1,350,000* General Obligation Public Facility Refunding Bonds, Series 2010B .......... vi -x IntroductoryStatement ...................................................................... ............................... 1 ContinuingDisclosure ........................................................................ ............................... 1 TheBonds ......................................................................................... ............................... z TheAuthority ..................................................................................... ............................... 5 TheCity Bonds .................................................................................. ............................... 5 TheAuthority Bonds .......................................................................... ............................... 6 FutureFinancing ................................................................................ ............................... 7 Litigation............................................................................................ ............................... 7 Legality.............................................................................................. ............................... 7 TaxExemption ................................................................................... ............................... 7 Other Federal and State Tax Considerations ..................................... ............................... 8 Bank - Qualified Tax - Exempt Obligations ............................................ ............................... 9 Ratings.............................................................................................. ............................... 9 FinancialAdvisor ............................................................................... ............................... 10 Certification........................................................................................ ............................... 10 CityProperty Values .......................................................................... ............................... 11 Fundson Hand .................................................................................. ............................... 18 CityInvestments ................................................................................ ............................... 18 General Information Concerning the City ........................................... ............................... 19 Governmental Organization and Services .......................................... ............................... 22 Proposed Forms of Legal Opinions .......................................... ............................... Appendix Continuing Disclosure Undertakings ......................................... ............................... Appendix 11 Summary of Tax Levies, Payment Provisions, and Minnesota Real Property Valuation ........................................ ............................... Appendix III Excerpt of 2009 Annual Financial Statements .......................... ............................... Appendix IV THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,550,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION UTILITY REVENUE REFUNDING BONDS, SERIES 2010A (BOOK ENTRY ONLY) Proposals for the Bonds and the Good Faith Deposit ( "Deposit ") will be received on Tuesday, November 16, 2010, until 10:30 A.M., Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at 7:30 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 specked above. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Bonds regardless of the manner in which the Proposal is submitted. (a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223 -3046 to Springsted. Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3046 for inclusion in the submitted Proposal. OR (b) Electronic Biddin . Notice is hereby given that electronic proposals will be received via PARIT . 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® sole) as a communication mechanism to conduct the electronic bidding for the Bonds, and PARITY4is not an agent of the City. If any provisions of this Terms of Proposal conflict with information provided by PARITYe, this Terms of Proposal shall control. Further information about PARITY®, including any fee charged, may be obtained from: PARITY®, 1359 Broadway, 2nd Floor, New York, New York 10018 Customer Support: (212) 849 -5000 Preliminary, subject to change. DETAILS OF THE BONDS The Bonds will be dated December 1, 2010, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 2011. 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: 2012 $295,000 2014 $310,000 2016 $180,000 2018 $105,000 2013 $310,000 2015 $175,000 2017 $175,000 The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds or the maturity amounts offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption and must conform to the maturity schedule set forth above. In order to designate term bonds, the proposal must specify "Years of Term Maturities" in the spaces provided on the Proposal Form. BOOK ENTRY SYSTEM The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ( "DTC "), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The Bonds will not be subject to payment in advance of their respective stated maturity dates. SECURITY AND PURPOSE The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge net revenues of the City's water and storm water utility systems. The proceeds will be used to refund (i) the February 1, 2012 through February 1, 2017 maturities of the City's General Obligation Storm Water Revenue Bonds, Series 2001B, dated August 15, 2001; (ii) the February 1, 2012 through February 1, 2018 maturities of the City's General Obligation Water and Storm Water Revenue Bonds, Series 2002B, dated July 1, 2002; and (iii) the February 1, 2012 through February 1, 2014 maturities of the City's General Obligation Water Revenue Bonds, Series 2003B, dated July 1, 2003. BIDDING PARAMETERS Proposals shall be for not less than $1,540,312 and accrued interest on the total principal amount of the Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 51100 or 1/8 of 1 %. Rates are not required to be in level or ascending order; however, the rate for any maturity cannot be more than 1 % lower than the highest rate of any of the preceding maturities. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will be accepted. GOOD FAITH DEPOSIT Proposals, regardless of method of submission, shall be accompanied by a Deposit in the amount of $15,500, in the form of a certified or cashier's check, a wire transfer, or Financial Surety Bond and delivered to Springsted Incorporated prior to the time proposals will be opened. Each bidder shall be solely responsible for the timely delivery of their Deposit whether by check, wire transfer or Financial Surety Bond. Neither the City nor Springsted Incorporated have any liability for delays in the transmission of the Deposit. Any Deposit made by certified or cashier's check should be made payable to the City and delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101. Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the City's agent according to the following instructions: Wells Fargo Bank, N.A., San Francisco, CA 94104 ABA #121000248 For credit to Springsted Incorporated, Account #635- 5007954 Contemporaneously with such wire transfer, the bidder shall send an e-mail to bond_services @spdngsted.com, including the following information; (i) indication that a wire transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies, and (iv) the return wire instructions if such bidder is not awarded the Bonds. Any Deposit made by the successful bidder by check or wire transfer will be delivered to the City following the award of the Bonds. Any Deposit made by check or wire transfer by an unsuccessful bidder will be returned to such bidder following City action relative to an award of the Bonds. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota and pre - approved by the City. Such bond must be submitted to Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded to an underwriter using a Financial Surety Bond, then that underwriter is required to submit its Deposit to the City in the form of a certified or cashier's check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement. The Deposit received from the purchaser, the amount of which will be deducted at settlement, will be deposited by the City and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. AWARD The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non - substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the City determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the underwriter, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating agency fees shall be the responsibility of the purchaser. Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Bonds. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT 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 Kennedy & Graven, Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no- litigation certificate. On the date of settlement, payment for the Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Bonds has been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non - compliance with said terms for payment. CONTINUING DISCLOSURE 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). - iv- OFFICIAL STATEMENT The City has authorized the preparation of an Official Statement containing pertinent information relative to the Bonds, and said Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2 -12 of the Securities and Exchange Commission. For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223 -3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law, shall constitute a "Final Official StatementA 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 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 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 October 19, 2010 -v- BY ORDER OF THE CITY COUNCIL /s/ Amy Domeier City Clerk THE AUTHORITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,350,000 ROSEMOUNT PORT AUTHORITY, MINNESOTA GENERAL OBLIGATION PUBLIC FACILITY REFUNDING BONDS, SERIES 20108 (BOOK ENTRY ONLY) Proposals for the Bonds and the Good Faith Deposit (Deposit ") will be received on Tuesday, November 16, 2010, until 10:30 A.M., Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened and tabulated. Consideration for award of the Bonds will be by the Board of Commissioners at 6:00 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each Proposal shall be deemed to constitute a contract between the bidder and the Authority to purchase the Bonds regardless of the manner in which the Proposal is submitted. (a) Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223 -3046 to Springsted. Signed Proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final Proposal price and coupons, by telephone (651) 223 -3000 or fax (651) 223 -3046 for inclusion in the submitted Proposal. OR (b) Electronic Bidding. Notice is hereby given that electronic proposals will be received via PARI 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 Authority, 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 Authority, its agents nor PARITY® shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have an liability for any delays or interruptions of or any damages caused by the services of PARITY. The Authority 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 Authority. If any provisions of this Terms of Proposal conflict with information provided by PARITY®, this Terms of Proposal shall control. Further information about PARITY®, including any fee charged, may be obtained from: PARITY®, 1359 Broadway, 2"d Floor, New York, New York 10018 Customer Support: (212) 849 -5000 Preliminary, subject to change. -vi - DETAILS OF THE BONDS The Bonds will be dated December 1, 2010, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 2011. 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: 2013 $125,000 2015 $125,000 2017 $135,000 2019 $135,000 2021 $145,000 2014 $125,000 2016 $125,000 2018 $135,000 2020 $145,000 2022 $155,000 The Authority reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds or the maturity amounts offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption and must conform to the maturity schedule set forth above. In order to designate term bonds, the proposal must specify "Years of Term Maturities" in the spaces provided on the Proposal Form. BOOK ENTRY SYSTEM The Bonds will be issued by means of a book entry system with no physical distribution of Bonds made to the public. The Bonds will be issued in fully registered form and one Bond, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ( "DTC "), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Bonds, will be required to deposit the Bonds with DTC. REGISTRAR The Authority will name the registrar which shall be subject to applicable SEC regulations. The Authority will pay for the services of the registrar. OPTIONAL REDEMPTION The Authority may elect on February 1, 2019, and on any day thereafter, to prepay Bonds due on or after February 1, 2020. Redemption may be in whole or in part and if in part at the option of the Authority and in such manner as the Authority shall determine. If less than all Bonds of a maturity are called for redemption, the Authority will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. - vii - SECURITY AND PURPOSE The Authority Bonds are full faith and credit obligations of the City of Rosemount, Minnesota (the "City ") for which the City has consented to the Authority's levy of general ad valorem taxes on all property in the City for their payment. The proceeds will be used to refund the February 1, 2013 through February 1, 2022 maturities of the Authority's General Obligation Public Facilities Bonds, Series 2001C, dated August 15, 2001. BIDDING PARAMETERS Proposals shall be for not less than $1,338,862 and accrued interest on the total principal amount of the Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the Authority scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or 1/8 of 1 %. Rates are not required to be in level or ascending order; however, the rate for any maturity cannot be more than 1 % lower than the highest rate of any of the preceding maturities. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will be accepted. GOOD FAITH DEPOSIT Proposals, regardless of method of submission, shall be accompanied by a Deposit in the amount of $13,500, in the form of a certified or cashier's check, a wire transfer, or Financial Surety Bond and delivered to Springsted Incorporated prior to the time proposals will be opened. Each bidder shall be solely responsible for the timely delivery of their Deposit whether by check, wire transfer or Financial Surety Bond. Neither the Authority nor Springsted Incorporated have any liability for delays in the transmission of the Deposit. Any Deposit made by certified or cashier's check should be made payable to the Authority and delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101. Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the Authority's agent according to the following instructions: Wells Fargo Bank, N.A., San Francisco, CA 94104 ABA #121000248 For credit to Springsted Incorporated, Account #635- 5007954 Contemporaneously with such wire transfer, the bidder shall send an e-mail to bond_services @springsted.com, including the following information; (i) indication that a wire transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies, and (iv) the return wire instructions if such bidder is not awarded the Bonds. Any Deposit made by the successful bidder by check or wire transfer will be delivered to the Authority following the award of the Bonds. Any Deposit made by check or wire transfer by an unsuccessful bidder will be returned to such bidder following Authority action relative to an award of the Bonds. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota and pre - approved by the Authority. 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 - viii - that underwriter is required to submit its Deposit to the Authority 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 Authority to satisfy the Deposit requirement. The Deposit received from the purchaser, the amount of which will be deducted at settlement, will be deposited by the Authority and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the Authority. F�"T I t c The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis. The Authority's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The Authority will reserve the right to: (i) waive non - substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the Authority determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the underwriter, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the Authority has requested and received a rating on the Bonds from a rating agency, the Authority 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 Kennedy & Graven, Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no- litigation certificate. On the date of settlement, payment for the Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the Authority 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 Authority, or its agents, the purchaser shall be liable to the Authority for any loss suffered by the Authority by reason of the purchaser's non - compliance with said terms for payment. -ix - CONTINUING DISCLOSURE On the date of actual issuance and delivery of the Bonds, the Authority will execute and deliver a Continuing Disclosure Undertaking (the "Undertaking ") whereunder the Authority will covenant for the benefit of the owners of the Bonds to provide certain financial and other information about the Authority and notices of certain occurrences to information repositories as specified in and required by SEC Rule 15c2- 12(b)(5). OFFICIAL STATEMENT The Authority 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 Authority, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223 -3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law, shall constitute a "Final Official Statement" of the Authority 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 Authority 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 55 copies of the Official Statement and the addendum or addenda described above. The Authority 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 Authority (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 October 19, 2010 BY ORDER OF THE BOARD OF COMMISSIONERS /s/ Amy Domeier Port Authority Secretary -x- OFFICIAL STATEMENT $1,550,000 CITY OF ROSEMOUNT, MINNESOTA GENERAL OBLIGATION UTILITY REVENUE REFUNDING BONDS, SERIES 2010A $1,350,000' ROSEMOUNT PORT AUTHORITY, MINNESOTA GENERAL OBLIGATION PUBLIC FACILITY REFUNDING BONDS, SERIES 20106 (BOOK ENTRY ONLY) INTRODUCTORY STATEMENT This Official Statement contains certain information relating to the City of Rosemount, Minnesota (the "City ") and its issuance of $1,550,000* General Obligation Utility Revenue Refunding Bonds, Series 2010A (the "City Bonds "). This Official Statement also contains information relating to the Rosemount Port Authority, Minnesota (the "Authority") and its issuance of $1,350,000' General Obligation Public Facility Refunding Bonds, Series 2010B (the "Authority Bonds "). The City Bonds and the Authority Bonds are collectively referred to as the "Bonds," the "Obligations" or the "Issues." The City 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 Authority Bonds are full faith and credit obligations of the City for which the City has consented to the Authority's levy of general ad valorem taxes on all property in the City for their payment. Additional sources of security for the City Bonds 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, St. Paul, Minnesota 55101 -2887, or by telephoning (651) 223 -3000. CONTINUING DISCLOSURE In order to assist the Underwriters in complying with SEC Rule 15c2 -12 promulgated by the Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934, as the same may be amended from time to time, and official interpretations thereof (the "Rule"), pursuant to the Award Resolutions, the City and the Authority have each entered into an undertaking (the "Undertakings ") for the benefit of holders including beneficial owners of the Bonds to provide certain financial information and operating data relating to the City and the Authority to the Electronic Municipal Market Access system ( "EMMA ") annually, and to provide The City and the Authority reserve the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds or the maturity amounts offered for sale. Any such increase or reduction will be made in multiples of $5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. -1- notices of the occurrence of certain events enumerated in the Rule to EMMA or the Municipal Securities Rulemaking Board ( "MSRB "). 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 Continuing Disclosure Certificate to be executed and delivered by the City and the Authority at the time the Bonds are delivered in substantially the form attached hereto as Appendix II. Neither the City nor the Authority have ever 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 or the Authority to comply with the Undertakings will not constitute an event of default on the Bonds (although holders will have any available remedy at law or in equity). 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 Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. THE BONDS General Description The Bonds are dated as of December 1, 2010 and issued in book entry form. Interest on the Bonds is payable February 1 and August 1 of each year, commencing August 1, 2011. Interest will be payable to the holder (initially Cede & Co.) registered on the books of the Registrar as of the fifteenth day of the calendar month next preceding such interest payment date. Principal of and interest on the Bonds will be paid as described in the section herein entitled "Book Entry System." Bonds 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 Bonds. The City and Authority will pay for registration services. Optional Redemption The Authority may elect on February 1, 2019, and on any day thereafter, to prepay the Authority Bonds due on or after February 1, 2020. Redemption may be in whole or in part and if in part at the option of the Authority and in such manner as the Authority shall determine. If less than all of the Bonds of a maturity are called for redemption, the Authority 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 City Bonds 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, each in the aggregate principal amount of such maturity, and will be deposited with DTC. -2- DTC is a limited - purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for securities that its participants ( "Direct Participants ") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ( "DTCC "). DTCC, in turn, is owned by a number of Direct Participants of DTC and members of the National Securities Clearing Corporation and Fixed Income Clearing Corporation all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the Obligations on DTC's records. The ownership interest of each actual purchaser of each Obligation ( "Beneficial Owner') is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Obligations are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Obligations, except in the event that use of the book -entry system for the Obligations is discontinued. To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Obligations with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Obligations; DTC's records reflect only the identity of the Direct Participants to whose accounts such Obligations are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Obligations may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of the Obligations may wish to ascertain that the nominee holding the Obligations for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them. -3- Redemption notices are required to be sent to DTC. If less than all of the Obligations within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Obligations unless authorized by a Direct Participant in accordance with DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer or Bond Registrar as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Obligations will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the Issuer or its agent on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, the Bond Registrar, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Bond Registrar, Issuer, or the Issuer's agent. Disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Obligations purchased or tendered, through its Participant, to Agent, and shall effect delivery of such Obligations by causing the Direct Participant to transfer the Participant's interest in the Obligations, on DTC's records, to Agent. The requirement for physical delivery of Obligations in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Obligations are transferred by Direct Participants on DTC's records and followed by a book - entry credit of tendered Obligations to Trustee's DTC account. DTC may discontinue providing its services as securities depository with respect to the Obligations at any time by giving reasonable notice to the Issuer or its agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. The Issuer may decide to discontinue use of the system of book -entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. -4- THE AUTHORITY The Rosemount Port Authority is a public body politic and corporate and a political subdivision of the State of Minnesota duly organized and existing under the laws of the State of Minnesota. The Authority was established on September 3, 1991 and is governed by a seven - member Board. The current Board members are as follows: Jeffrey Weisensel Kurt Bills Mark DeBettignies Brno DiNella William Droste Mary Riley Jay Tentinger President Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Expiration of Term December 31, 2012 December 31, 2012 December 31, 2010 March 31, 2011 December 31, 2010 March 31, 2014 December 31, 2010 Mr. Dwight Johnson is the Executive Director and Ms. Amy Domeier is the Secretary for the Authority. THE CITY BONDS Authority and Purpose The City Bonds are being issued pursuant to Minnesota Statues, Chapters 475 and 444. The proceeds of the City Bonds, along with available City funds, will be used to refund (i) the February 1, 2012 through February 1, 2017 maturities (the "Series 2001 B Refunded Maturities ") of the City's General Obligation Storm Water Revenue Bonds, Series 2001B, dated August 15, 2001 (the "Series 2001 B Bonds "); (ii) the February 1, 2012 through February 1, 2018 maturities (the "Series 2002B Refunded Maturities ") of the City's General Obligation Water and Storm Water Revenue Bonds, Series 2002B, dated July 1, 2002 (the "Series 2002B Bonds "); and (iii) the February 1, 2012 through February 1, 2014 maturities (the "Series 2003B Refunded Maturities ") of the City's General Obligation Water Revenue Bonds, Series 2003B, dated July 1, 2003 (the "Series 2003B Bonds°). The refunding is being conducted to achieve debt service savings. The Series 2001B Refunded Maturities, Series 2002B Refunded Maturities and Series 2003B Refunded Maturities are collectively referred to as the City's Refunded Maturities. The composition of the City Bonds is as follows: Sources of Funds: Principal Amount $1,550,000 Available City Funds 100,000 Total Sources of Funds $1,650,000 Uses of Funds: Deposit to Current Refunding Fund $1,610,000 Costs of Issuance 30,312 Allowance for Discount Bidding 9,688 Total Uses of Funds $1,650,000 The City Bonds will constitute a "current" refunding since the City's Refunded Maturities will be called within 90 days of settlement of the City Bonds. The City's Refunded Maturities will be called and prepaid on February 1, 2011 at a price of par plus accrued interest. -5- Security and Financing The City 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. In addition, the City will pledge net revenues of the City's water and storm water utilities. Pursuant to Minnesota Statutes, Chapter 444, and the resolution awarding the sale of the City Bonds, the City will covenant to maintain rates in an amount sufficient to support the operation of the water and storm water enterprise funds and to pay debt service on the City Bonds. The City is required to annually review the budget of the water and storm water utilities to determine whether current rates and charges are sufficient and to adjust such rates and charges as necessary. Net revenues of the City's water and storm water utilities, if collected in full, are expected to be sufficient to pay 105% of the interest payment due on August 1 in the year of collection and the principal and interest payment due on February 1 of the following year. The City does not anticipate that a tax levy will be required for payment of the City Bonds. THE AUTHORITY BONDS Authority and Purpose The Authority Bonds are being issued pursuant to Minnesota Statues, Chapter 475 and Section 469.060. The proceeds of the Authority Bonds will be used to refund the February 1, 2013 through February 1, 2022 maturities (the "Authority's Refunded Maturities ") of the Authority's General Obligation Public Facilities Bonds, Series 2001 C, dated August 15, 2001 (the "Series 2001C Bonds "). The Authority's Refunded Maturities and the City's Refunded Maturities are collectively referred to as the Refunded Maturities. The refunding is being conducted to achieve debt service savings. The composition of the Authority Bonds is as follows: Sources of Funds: Principal Amount $1,350,000 Total Sources of Funds $1,350,000 Uses of Funds: Deposit to Crossover Escrow Fund $1,305,764 Costs of Issuance 33,098 Allowance for Discount Bidding 11,138 Total Uses of Funds $1,350,000 The refunding will be conducted by means of a "crossover" refunding mechanism. The Authority Bonds will be placed in an escrow account (the "Escrow Account ") with U.S. Bank National Association, St. Paul, Minnesota. The amount in the Escrow Account will be invested in special obligations of the United States Treasury or other obligations of the United States or of its agencies, which shall mature in such amounts and at such times as to be available to pay debt service on the Authority Bonds through the call date of the Series 2001C Bonds, which is February 1, 2012. WE The Authority will continue making debt service payments on the Series 2001 C Bonds through the February 1, 2012 call date, at which time the escrow will pay the remaining principal on the Series 2001 C Bonds. The Authority will begin making debt service payments on the Authority Bonds beginning with the August 1, 2012 interest payment. Actuarial services necessary to insure the adequacy of the Escrow Account to provide timely payment of the principal and interest for which the escrow account is obligated will be performed by a certified public accounting firm. Security and Financing The Authority Bonds are full faith and credit obligations of the City for which the City has consented to the Authority's levy of general ad valorem taxes on all property in the City for their payment. The Authority will make its first levy for the Authority Bonds in 2011 for collection in 2012. The Escrow Account will be used to pay interest on the Authority Bonds through February 1, 2012. Thereafter, each year's collection of taxes, if collected in full, will be sufficient to pay 105% of the interest payment due on August 1 in the year of collection and the principal and interest payment due on February 1 of the following year. FUTURE FINANCING Neither the City nor the Authority anticipate any additional borrowing for at least the next 90 days. LITIGATION Neither the City nor the Authority are aware of any threatened or pending litigation affecting the validity of the Bonds or their ability to meet their financial obligations. LEGALITY The Bonds are subject to approval as to certain matters by Kennedy & Graven, Chartered, of 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 forms set out in Appendix I herein will be delivered at closing. TAX EXEMPTION At closing Kennedy & Graven, Chartered, of Minneapolis, Minnesota, Bond Counsel, will render an opinion that, at the time of their issuance and delivery to the original purchasers, 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 the Bonds is -7- 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 Bonds 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; interest on the Bonds is not taken into account in determining adjusted current earnings for purposes of computing the federal 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 Bonds or arising with respect to ownership of the Bonds. Preservation of the exclusion of interest on the Bonds from federal gross income and state gross and taxable net income, however, depends upon compliance by the City and the Authority with all requirements of the Internal Revenue Code of 1986, as amended, (the "Code ") that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be (or continue to be) excluded from federal gross income and state gross and taxable net income. The City and the Authority will covenant to comply with requirements necessary under the Code to establish and maintain the Bonds 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 Bonds. OTHER FEDERAL AND STATE TAX CONSIDERATIONS Property and Casualty Insurance Companies Property and casualty insurance companies are required to reduce the amount of their loss reserve deduction by 15% of the amount of tax - exempt interest received or accrued during the taxable year on certain obligations, including interest on the Bonds. 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 Bonds. 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 Bonds. 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 Prior to the adoption of the Internal Revenue Code of 1986, as amended, (the "Code "), financial institutions were generally permitted to deduct 80% of their interest expenses allocable to the ownership of tax - exempt obligations. Under the Code, financial institutions are generally not entitled to a deduction for tax - exempt obligations purchased after August 7, 1986. However, the City will designate the Bonds as qualified tax - exempt obligations pursuant to section 265(b)(3) of the Code which permits financial institutions to deduct interest expenses allocable to the Bonds to the extent permitted under prior law. Future Tax Legislation The exclusion of interest on the Bonds from gross income from federal income tax purposes and the exclusion of interest on the Bonds from the net taxable income of individuals, estates, and trusts for State income tax purposes is not mandated or guaranteed by the United States Constitution or the Minnesota Constitution. Accordingly, federal laws providing that interest on the obligations of the states and the political subdivisions of the states is not includable in gross income for federal income tax purposes and Minnesota laws providing that interest on the obligations of the State is not includable in the net taxable income of individuals, estates, and trusts for State income tax purposes may be subject to change. In the event federal or Minnesota law is amended in a manner that results in interest on the Bonds becoming subject to federal or Minnesota income taxation, or if federal or Minnesota income tax rates are reduced, the market value of the Bonds may be adversely affected. General The preceding is not a comprehensive list of all federal or State tax consequences which may arise from the receipt or accrual of interest on the Bonds. The receipt or accrual of interest on the Bonds 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 Bonds are advised to consult their own tax advisors as to the tax consequences of, or tax considerations for, purchasing or holding the Bonds. BANK - QUALIFIED TAX- EXEMPT OBLIGATIONS The City and the Authority will designate the Bonds 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. RATINGS Applications for ratings of the Bonds have been made to Moody's Investors Service ("Moody's "), 7 World Trade Center, 250 Greenwich Street, 23`d Floor, New York, New York. If ratings are assigned, they will reflect only the opinion of Moody's. Any explanation of the significance of the ratings may be obtained only from Moody's. WE 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 Bonds. FINANCIAL ADVISOR The City and the Authority have retained Springsted Incorporated, Public Sector Advisors, of St. Paul, Minnesota, as financial advisor (the "Financial Advisor") in connection with the issuance of the Bonds. In preparing the Official Statement, the Financial Advisor has relied upon governmental officials, and other sources, who have access to relevant data to provide accurate information for the Official Statement, and the Financial Advisor has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. The Financial Advisor is not a public accounting firm and has not been engaged by the City or the Authority to compile, review, examine or audit any information in the Official Statement in accordance with accounting standards. The Financial Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities and therefore will not participate in the underwriting of the Bonds. CERTIFICATION The City and the Authority have authorized the distribution of this Official Statement for use in connection with the initial sale of the Bonds. As of the date of the settlement of the Bonds, the Purchaser(s) will be furnished with a certificate signed by the appropriate officers of the City and the Authority. The certificate will state that as of the date of the Official Statement, the Official Statement did not and does not as of the date of the certificate contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (The Balance of This Page Has Been Intentionally Left Blank) -10- CITY PROPERTY VALUES 2009 Indicated Market Value of Taxable Property: $2,261,466,162 Indicated market value is calculated by dividing the City's taxable market value of $2,238,851,500 by the 2009 sales ratio of 99.0% for the City as determined by the State Department of Revenue. 2009 Taxable Net Tax Capacity: $25,430,852 2009 Net Tax Capacity $25,633,368 Less: Captured Tax Increment Tax Capacity (732,345) Contribution to Fiscal Disparities ( 2 295 853 ) Plus: Distribution from Fiscal Disparities 2.825.682 2009 Taxable Net Tax Capacity $25,430,852 2009 Taxable Net Tax Capacity by Class of Property Real Estate: Residential Homestead $18,421,731 72.5% Commercial /Industrial, Public Utility, Market Value(a) and Railroad* 5,595,353 22.0 Agricultural 537,115 2.1 Residential Non - Homestead 310,563 1.2 Personal Property 566.090 2.2 Total $25,430,852 100.0% * Reflects adjustments for fiscal disparities and captured tax increment tax capacity. Trend of Values (a) Indicated market values are calculated by dividing the taxable market value by the sales ratio determined for the City each year by the State Department of Revenue. (b) See Appendix 111 for a description of taxable net tax capacity and the Minnesota property tax system. - 11 - Indicated Taxable Taxable Net Market Value(a) Market Value Tax Capacitv(b) 2009 $2,261,466,162 $2,238,851,500 $25,430,852 2008 2,481,136,059 2,367,003,800 26,648,399 2007 2,549,310,668 2,365,760,300 26,349,633 2006 2,469,808,927 2,185,780,900 24,307,723 2005 2,152,394,283 1,919,935,700 21,355,769 (a) Indicated market values are calculated by dividing the taxable market value by the sales ratio determined for the City each year by the State Department of Revenue. (b) See Appendix 111 for a description of taxable net tax capacity and the Minnesota property tax system. - 11 - Ten of the Largest Taxpayers in the City Taxpayer Great Northern Oil Co. /Flint Hills Resources /Koch Refining Xcel Energy Clarel Corporation Rosemount Crossing LLC Northern Natural Gas Company Individuals Webb Properties Continental Nitrogen & Resources Corp. Bigos- Rosemount LLC (Cannon Equipment) CF Industries, Inc. (Cenex) Total 2009 Net Type of Business Tax Capacity Oil Refinery $2,935,471 Utility 282,944 Retail 219,868 Retail 117,916 Utility 116,506 Commercial 105,254 Manufacturing 102,578 Fertilizer Blending & Plant Food 99,054 Manufacturing 93,020 Fertilizer 88,730 $4,161,341' Great Northern Oil Co./Flint Hills Resourcesftch Refining represents 11.5% of the City's 2009 taxable net tax capacity. The remaining nine taxpayers represent 4.8% of the City's 2009 taxable net tax capacity. CITY INDEBTEDNESS Legal Debt Limit" Debt Limit (3% of Taxable Market Value) $67,165,545 Less: Outstanding Debt Subject to Limit (including the Authority Bonds and excluding the Authority's Refunded Maturities) (5,700,000) Legal Debt Margin at December 1, 2010 $61,465,545 ' The legal debt margin is referred to statutorily as the "Net Debt Limit" and permits debt to be offset by debt service funds and current revenues which are applicable to the payment of debt in the current fiscal year. To conservatively state the legal debt margin, no such offset has been used to increase the margin as shown above. -12- General Obligation Debt Supported by Taxes(a) Date Original Final Principal Outstanding of Issue Amount Purpose Maturity As of 12 -1 -10 8 -15 -01 $2,045,000 City Hall 2 -1 -2012 $ 190,000(b)(c) 12 -1 -01 725,000 Community Center Refunding 2 -1 -2013 245,000 6 -15 -05 2,630,000 Fire Station 2 -1 -2025 2,225,000 11 -1 -05 1,115,000 Fire Station Refunding 2 -1 -2016 715,000 6 -1 -06 370,000 Equipment 2 -1 -2012 155,000 5 -1 -07 360,000 Public Safety Revenue 2 -1 -2014 215,000(4) 10 -15 -07 10 -30 -08 450,000 385,000 Equipment Equipment 2 -1 -2013 285,000 12 -1 -10 1,350,000 Public Facility Refunding 2 -1 -2014 320,000 Taxable Tax Increment 2 -1 -2024 (the Authority Bonds) 2 -1 -2022 1,350,000(6) Total $5,700,000 (a) These issues are subject to the statutory debt limit. (b) These bonds were issued by the Rosemount Port Authority and are being repaid from ad valorem taxes levied by the City. (c) Excludes the Authority's Refunded Maturities. (d) Represents the City's proportionate share (4.90%) of the Dakota Communication Center's $7,315,000 Public Safety Revenue Bonds, Series 2007, dated May 1, 2007. General Obligation Debt Supported Primarily by Special Assessments Date Original Final Principal Outstanding of Issue Amount Pur ose Mature As of 12 -1 -10 7 -1 -99 $3,715,000 Local Improvements 2 -1 -2011 $ 240,000 7 -1 -02 3,395,000 Local Improvements 2 -1 -2013 150,000 7 -1 -03 1,945,000 Local Improvements 2 -1 -2014 770,000 6 -1 -06 4,405,000 Local Improvements 2 -1 -2017 3,115,000 Total $4,275,000 General Obligation Supported by Tax Increment Revenue* Date Original Final Principal Outstanding of Issue Amount Pur ose Maturi As of 12 -1 -10 4 -10 -08 $2,765,000 Taxable Tax Increment 2 -1 -2024 $2,765,000 4 -10 -08 3,275,000 Tax Increment 2 -1 -2032 3,275,000 Total $6,040,000 * These bonds were issued by the Rosemount Port Authority. -13- General Obligation Debt Supported by Revenues (a) Excludes the Series 20018 Refunded Maturities. (b) Excludes the Series 20028 Refunded Maturities. (c) Excludes the Series 20038 Refunded Maturities. Annual Calendar Year Debt Service Including the Bonds and Excluding the Refunded Maturities Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 12 -1 -10 9 -1 -00 $1,160,000 Water Revenue 2 -1 -2016 $ 585,000 8 -15 -01 1,140,000 Storm Water Revenue 2 -1 -2011 80,000(x) 7 -1 -02 1,195,000 Water and Storm Water Revenue 2 -1 -2011 80,000(b) 7 -1 -03 1,170,000 Water Revenue 2 -1 -2011 120,000() 11 -1 -05 2,990,000 Water Revenue 2 -1 -2016 1,925,000 10 -15 -07 1,210,000 Water Revenue 2 -1 -2018 1,020,000 12 -1 -10 1,550,000 Refunding (the City Bonds) 2 -1 -2018 1,550.000 Total 626,818.25 640,000 706,717.50 $5,360,000 (a) Excludes the Series 20018 Refunded Maturities. (b) Excludes the Series 20028 Refunded Maturities. (c) Excludes the Series 20038 Refunded Maturities. Annual Calendar Year Debt Service Including the Bonds and Excluding the Refunded Maturities G.O. Debt Supported G.O. Debt Supported Primarily by by Taxes Special Assessments Principal Principal Year Principal & Interest(a) Principal & Interest 2010 (at 12 -1) (Paid) (Paid) (Paid) (Paid) 2011 $ 685,000 $ 864,339.67 $ 910,000 $1,057,850.00 2012 715,000 876,702.00 675,000 792,127.50 2013 680,000 816,491.25 685,000 776,706.25 2014 510,000 626,818.25 640,000 706,717.50 2015 380,000 482,612.50 450,000 495,600.00 2016 390,000 480,625.00 455,000 482,500.00 2017 275,000 355,275.00 460,000 469,200.00 2018 280,000 351,706.25 2019 285,000 347,600.00 2020 300,000 352,891.25 2021 310,000 351,696.25 2022 325,000 354,751.25 2023 180,000 200,267.50 2024 190,000 202,470.00 2025 195,000 199,192.50 Total $5,700,000(b) $6, 863 ,438.67 $4,275,000 $4,780,701.25 (a) Includes the Authority Bonds at an assumed average annual interest rate of 2.50% and excludes the Authority's Refunded Maturities. (b) 76.9% of this debt will be- retired within ten years. -14- Annual Calendar Year Debt Service Including the Bonds and Excluding the Refunded Maturities (continued) G.O. Debt Supported G.O. Debt Supported — by Tax Increment Revenue by Revenues Year Principal Principal & Interest Principal Principal & Interest(a) 2010 (at 12 -1) 2011 -0- (Paid) (Paid) (Paid) 2012 -0- $ 35,000 $ 276,635.00 310,760.00 $ 770,000 805,000 $ 918,444.17 934,457.50 2013 2014 75 ,000 110,000 348,010.00 378,385.00 840,000 860,000 946,885.00 942,740.00 2015 2016 150,000 195,000 411,885.00 745,000 802,402.50 2017 230,000 448,260.00 472,635.00 775,000 315,000 805,840.00 327,616.25 2018 2019 245,000 260,000 475,760.00 250,000 254,055.00 2020 270,000 478,135.00 474,716.25 2021 285,000 474,960.00 2022 300,000 473,872.50 2023 315,000 471, 960.00 2024 330,000 469,485.00 2025 350,000 473,672.50 2026 365,000 474,372.50 2027 380,000 474,472.50 2028 395,000 473,873.75 2029 410,000 472,572.50 2030 430,000 475,562.50 2031 2032 445,000 472,843.75 465.000 474.416.25 Total $6,040,000(b) $9,757,245.00 $5,360,000 $5,932,440.42 (a) Includes the City Bonds at an assumed average annual interest rate of 1.50% and excludes the City's Refunded Maturities. (b) 26.0% of this debt will be retired within ten years. (The Balance of This Page Has Been Intentionally Left Blank) -15- Indirect General Obligation Debt (a) Only those units with debt outstanding are shown here. (b) Excludes general obligation debt supported by revenues and tax and aid anticipation debt. Includes annual appropriation lease revenue debt. (c) Includes Dakota County's proportionate share ($305,000) of the Dakota Communication Center's $7,315, 000 Public Safety Revenue Bonds, Series 2007. (d) Includes annual appropriation lease revenue debt. (e) Excludes general obligation debt payable from sewer system revenues, 911 user fees, and housing rental payments. Includes certificates of participation. Debt Ratios G.O. Direct Debt' To 2009 Indicated Market Value ($2,261,466,162) 0.71% Per Capita (22,750 — Current City Estimate) $704 Excludes general obligation debt supported by revenues. G.O. Indirect & Direct Debt 1.84% $1,827 NOTE. To conservatively state the debt ratios, no offset of debt service funds on hand has been used in the above calculations. (The Balance of This Page Has Been Intentionally Left Blank) -16- Debt Applicable to 2009 Taxable G.O. Debt Tax Capacity in City Taxing Unit(a) Net Tax Capacity As of 12- 1 -10(b) Percent Amount Dakota County $ 461,482,225 $ 63,530,000(x) 5.5% $ 3,494,150 ISD No. 196 (Rosemount - Apple Valley- Eagan) 170,622,815 1301168,730(4) 13.9 18,093,453 ISD No. 199 (Inver Grove - Pine Bend) 30,307,069 45,380,000 5.5 2,495,900 ISD No. 200 (Hastings) 37,219,680 54,220,000 0.1 54,220 Metropolitan Council 3,553,445,725 16,320,000(e) 0.7 114,240 Metropolitan Transit Dist. 3,113,706,756 162,675,000 0.8 1,301,400 Total $25,553,363 (a) Only those units with debt outstanding are shown here. (b) Excludes general obligation debt supported by revenues and tax and aid anticipation debt. Includes annual appropriation lease revenue debt. (c) Includes Dakota County's proportionate share ($305,000) of the Dakota Communication Center's $7,315, 000 Public Safety Revenue Bonds, Series 2007. (d) Includes annual appropriation lease revenue debt. (e) Excludes general obligation debt payable from sewer system revenues, 911 user fees, and housing rental payments. Includes certificates of participation. Debt Ratios G.O. Direct Debt' To 2009 Indicated Market Value ($2,261,466,162) 0.71% Per Capita (22,750 — Current City Estimate) $704 Excludes general obligation debt supported by revenues. G.O. Indirect & Direct Debt 1.84% $1,827 NOTE. To conservatively state the debt ratios, no offset of debt service funds on hand has been used in the above calculations. (The Balance of This Page Has Been Intentionally Left Blank) -16- CITY TAX RATES, LEVIES AND COLLECTIONS Tax Capacity Rates Dakota County(a) City of Rosernount(b) ISD No. 196 (Rosemount - Apple Valley -Ea an)(c) Special Districts( Total 2009/10 For 2005/06 2006/07 2007/08 2008/09 Total Debt Only 26.318% 25.127% 25.184% 25.821% 27.269% -0- 43.755 42.521 42.440 42.323 43.358 3.192% 27.554 23.607 21.136 21.109 25.391 10.055 5.256 5.024 4.996 4.916 4.987 1.276 102.883% 96.279% 93.756% 94.169% 101.005% 14.523% (a) Dakota County also has a 2009110 tax rate of 0.00501% spread on the market value of property in support of debt service. (b) The City also has a 2009110 tax rate of 0.00652% spread on the market value of property in support of debt service on general obligation fire station bonds. (c) -Independent School District No. 196 (Rosemount-Apple Valley - Eagan) also has a 2009110 tax rate of 0.22268% spread on the market value of property in support of an excess operating levy and buildings. (d) Special districts include Metropolitan Council, Metropolitan Transit District, Mosquito Control, Dakota County Community Development Agency, Dakota County Light Rail and Vermillion River Watershed District. NOTE: Taxes are determined by multiplying the net tax capacity by the tax capacity rate, plus multiplying the referendum market value by the market value rate. This table does not include the market value based rates. See Appendix lll. Tax Levies and Collections Collected During Collected and/or Abated Net Collection Year as of 8 -31 -10 Levy /Collect Levy Amount Percent Amount Percent 2009/10 $ 9,943,406 (In Process of Collection) 2008/09 9,931,167 $9,793,023 98.6% $9,881,079 99.5% 2007/08 10,013,396 9,849,067 98.4 9,989,265 99.8 2006107 9,297,707 9,164,874 98.6 9,290,974 99.9 2005/06 8,413,864 8,316,139 98.8 8,411,708 99.9 The net levy excludes state aid for property tax relief and fiscal disparities, if applicable. The net levy is the basis for computing tax capacity rates. See Appendix 111. -17- FUNDS ON HAND As of September 30, 2010 Fund General Special Revenue Port Authority Debt Service: Tax Supported Assessment Supported Port Authority Supported General Obligation Revenue Supported Capital Projects Water, Sewer and Storm Water Arena Total CITY INVESTMENTS Cash and Investments $ 6,348,273 619,221 312,648 1,306,486 2,292,498 359,613 1,842,099 4,952,626 14,044,621 164,891 $32,242,976 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. 3. Repurchase Agreement. 4. Reverse Repurchase Agreement. 5. Prime Commercial Paper. 6. Any security 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. Collateralization 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% of the market value of principal and accrued interest. -18- 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 September 30, 2010, the City had a total of $29,534,154 invested funds as follows: Amount Invested Type of Security Length of Investment as of 9 -30 -10 Money Market Savings N/A $ 9,094,754 Certificates of Deposit Less than 12 months 6,731,000 Certificates of Deposit One to ten years 3,062,000 Government Asset Backed Securities Ten years or less 9,896,400 Government Asset Backed Securities Over ten years 750,000 Total $29,534,154 GENERAL INFORMATION CONCERNING THE CITY 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 had 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 current population to be 22,750, a 55.6% 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 Great Northern Oil Co. /Flint Hills Resources /Koch Refining, CF Industries, Inc., Continental Nitrogen & Resource Corporation, Endres Processing Ltd., SKB (industrial waste containment facility) and Spectro Alloys Corporation. 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 320,000 barrels of crude oil into gasoline each day. This Rosemount company employs 900 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. -19- Major Employers Employer Independent School District No. 196 (Rosemount -Apple Valley- Eagan) Flint Hills Resources' Pine Bend Refinery Dakota County Technical College Intermediate School District No. 917 Wayne Transports Endres Processing Ltd. Cannon Equipment Company Spectro Alloys Corporation City of Rosemount Greif Brothers Corporation Reese Enterprises, Inc. (a) Represents District -wide employment. (b) Includes full- and part -time employees. 226 FTE employees. (c) Excludes over 160 part-time and seasonal employees. Source: Telephone survey of individual employers, October 2010. Labor Force Data September 2010 Civilian Unemployment Labor Force Rate Dakota County 234,344 6.7% Minneapolis /St. Paul MSA 1,863,965 6.7 State of Minnesota 2,961,692 6.7 September 2009 Civilian Unemployment Labor Force Rate 231,993 7.3% 1,852,765 7.7 2,960,075 7.6 Source: Minnesota Department of Employment and Economic Development http: /ANww.positivelvminnesota.coml. 2010 figures are preliminary. Building Permits Issued by the City Approximate Total Permits Number Product/Service of Employees Public education 3,500(a) Oil refinery 900 Education 381 (b) Education 325 General freight trucking 250 Livestock feed 140 Manufacturing of metal parts 109 Aluminum alloys 97 Government 79(c) Multiwall bags 76 Plastics manufacturing 40 (a) Represents District -wide employment. (b) Includes full- and part -time employees. 226 FTE employees. (c) Excludes over 160 part-time and seasonal employees. Source: Telephone survey of individual employers, October 2010. Labor Force Data September 2010 Civilian Unemployment Labor Force Rate Dakota County 234,344 6.7% Minneapolis /St. Paul MSA 1,863,965 6.7 State of Minnesota 2,961,692 6.7 September 2009 Civilian Unemployment Labor Force Rate 231,993 7.3% 1,852,765 7.7 2,960,075 7.6 Source: Minnesota Department of Employment and Economic Development http: /ANww.positivelvminnesota.coml. 2010 figures are preliminary. Building Permits Issued by the City -20- Total Permits New Single Family Homes Number Value Number Value 2010 (to 9 -30) 574 $ 23,014,105 61 $ 13,128,411 2009 914 31,839,499 88 19,190,195 2008 1,649 67,945,640 237 26,809,851 2007 1,368 63,085,633 143 27,084,690 2006 1,055 70,879,026 224 46,503,749 2005 1,293 123, 374, 042 454 88,551,982 2004 1,158 126,348,047 551 110,674,682 2003 1,128 96, 872, 709 440 87,119,479 2002 1,398 82,398,820 330 61,571,739 2001 1,009 82,897,167 304 60,458,504 -20- Recent and Proposed Development As the national and state economies dipped, new construction in the City also decreased. In 2007, approvals for commercial tenant improvements, two new health related offices and institutional uses added value and new construction in the community. Constructed in 2007, the new local library opened in February 2008 and the primary school district offices, ISD No. 196, were relocated to the City. In 2008 and 2009 commercial and industrial work was down with much of the building permit value coming from institutional or public uses. Similarly, new residential development has also decreased. New dwelling units in 2007 were 143 and rebounded to 237 in 2008. This jump directly related to construction of the Waterford Commons project, a mixed use 3 -story building located in the heart of the City's downtown. Its construction represented the first substantial phase of redevelopment in the City's downtown which was initiated with the 2003 planning process. Construction in new residential projects has slowed as compared to previous rapid growth but planning for new neighborhoods continues. Land owners have received approval for a 280 -acre mixed residential neighborhood. The City continues to work with the University of Minnesota about development of their approximate 3,000 -acre agricultural research facility. Previously platted subdivisions continue to permit moderately steady growth. The following lists platted lots available for development: Remaining Units lots as of Development/Developer Housing Approved 9 -30 -10 Biscayne Pointe 4n, Addition /Heritage Development Biscayne Pointe North /Giles Property Connemara Crossing/ Basic Builders, Inc. Evermoor 3`d Addition /CPDC Evermoor Crosscroft 3"d Addition /DR Horton Evermoor Glendalough 6th Addition/ Lundgren Brothers Geronime Pond 2"d Addition/ Heritage Development Glendalough 2"d /Lennar GlenRose of Rosemount/ Dean Johnson Homes Harmony /CPDC Harmony 2nd Addition /CPDC Harmony 3`d Addition /CPDC Harmony 5th Addition /CPDC Harmony 6t" Addition /CPDC Meadows of Bloomfield 3`d Addition/ Centex Homes Rosewood Estates /Progress Land Rosewood Village 2nd Addition/ Progress Land Co. Single Family 73 1 Single Family 22 1 Single Family 44 19 Single Family 30 10 Single Family 47 1 Single Family 42 2 Single Family 52 4 Single Family 7 3 Multi - Family 76 64 Multi- Family 176 11 Multi - Family 81 28 Single Family 17 3 Single Family 64 44 Single Family 50 32 Single Family 118 1 Single Family 55 1 Single Family/Townhomes 56 7 In 2007 and 2008, there was approximately $60,000,000 of new value added in the community. It is expected that in 2010, similar to 2009 that new valuation will be around $30,000,000. Much of that value continues to come from residential development, but rather than new dwelling units, there are more permits drawn on existing residences. -21- Financial Institutions Full service banking is provided by the First State Bank of Rosemount and Rosemount National Bank, located in the City. As of June 30, 2010, the two banks reported deposits of $53,120,000 and $34,546,000 respectively. Branches of TCF Bank and Vermillion State Bank are also located in the City. Source: Federal Deposit Insurance Corporation, httD.,1 vww2.fdic.gov /. Education The major portion of the City is part of Independent School District No. 196 (Rosemount -Apple Valley- Eagan), headquartered in the City. The District's enrollment for the 2009/10 school year was approximately 27,485 students in grades kindergarten through twelve. The District is one of the largest employers in the City with approximately 3,500 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 No. 199 (Inver Grove -Pine Bend) and Independent School District No. 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 a total enrollment of approximately 4,690 students. in addition, the Technical College offers an extensive adult education program. GOVERNMENTAL ORGANIZATION AND SERVICES Organization 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, 2010 Mark DeBettignies Council Member December 31, 2010 Kimberly Shoe - Corrigan Council Member December 31, 2010 Jeffrey Weisensel Council Member December 31, 2012 Kurt Bills Council Member December 31, 2012 The City's chief administrative officer is the City Administrator, who is appointed by and serves at the discretion of the City Council. Mr. Dwight D. Johnson was appointed to the position of City Administrator in August 2008. 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 1991. Growth and development of the City is guided by the Comprehensive Land Use Plan, most recently adopted in 2009, covering development expectations until the year 2030. The Comprehensive Plan outlines the long -range land use plan and development policies of the community, and is designed to encourage and promote orderly development and growth, perpetuating a sound and steady growth in the City tax base. -22- Services Police protection for the City is provided by 22 full -time officers, and four other police personnel. Fire protection is provided by 43 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 eight wells with four water towers having a total storage capacity of 3,500,000 gallons. The maximum pumping capacity is 12,096,000 gallons per day with an average demand of 2,569,474 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 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 PERF belong to the Coordinated Plan. All police officers, fire fighters and peace officers who qualify for membership by statute are covered by the PEPFF. The City's contributions to the PERF for the years ending December 31, 2009, 2008, and 2007 were $248,891, $242,631, and $222,179, respectively. The City's contributions to the PEPFF for the years ending December 31, 2009, 2008, and 2007 were $240,374, $219,322, and $178,096 respectively. Other Post Employment Benefits The Governmental Accounting Standards Board (GASB) has issued Statement No. 45, Accounting and Financial Reporting by Employers for Post Employment Benefits Other Than Pensions (GASB 45), which addresses how state and local governments must account for and report their obligations related to post employment healthcare and other non - pension benefits (referred to as Other Post Employment Benefits or "OPEB "). GASB 45 requires that local governments account for and report the annual cost of OPEB and the outstanding obligations and commitments related to OPEB in essentially the same manner as they currently do for pensions. -23- The City does not provide health insurance for retired City employees. All former employees who were eligible to participate in the City's health insurance program while employed with the City are allowed to continue their coverage after employment has ended through COBRA. However, this coverage is to be paid in full at the former employee's expense. The City's greatest liability under GASB 45 comes through an implicit rate subsidy. The implicit rate subsidy is the additional cost of health insurance to current employees and the City as a result of the higher cost of providing health insurance to retirees. The retiree benefits discussed above are the City's only OPEB. General Fund Budget Expenditures: General Government $ 2,789,800 $ 2,750,800 Public Safety 3,263,200 3,295,700 Public Works 3,059,700 3,140,000 Parks and Recreation 1,272,100 1,279,500 Total Expenditures $10,384,800 $10,466,000 -24- 2009 2010 Adopted Budget Adopted Budget Revenues: General Property Taxes $ 7,981,300 $ 8,287,000 Licenses and Permits 486,600 382,600 Intergovernmental 616,000 566,500 Charges for Services 679,100 655,900 Fines and Forfeits 110,000 125,000 Recreational Fees 253,800 267,300 Miscellaneous Revenues 254,500 178,200 Transfers In 3,500 3,500 Total Revenues $10,384,800 $10,466,000 Expenditures: General Government $ 2,789,800 $ 2,750,800 Public Safety 3,263,200 3,295,700 Public Works 3,059,700 3,140,000 Parks and Recreation 1,272,100 1,279,500 Total Expenditures $10,384,800 $10,466,000 -24- APPENDIX I PROPOSED FORMS OF LEGAL OPINIONS k ::Offices in 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis Minneapolis MN 55402 ,� Saint Paul (612) 337 -9300 telephone (612) 337 -9310 fax St. Cloud http: / /www.kennedy graven.com Affirmative Action Equal Opportunity Employer CHARTERED $1,550,000 General Obligation Utility Revenue Refunding Bonds, Series 2010A City of Rosemount Dakota County, Minnesota We have acted as bond counsel to the City of Rosemount, Dakota County, Minnesota (the "Issuer ") in connection with the issuance by the Issuer of its General Obligation Utility Revenue Refunding Bonds, Series 2010A (the "Bonds "), originally dated as of December 1, 2010, and issued in the original aggregate principal amount of $1,550,000. In such capacity and for the purpose of rendering this opinion we have examined certified copies of certain proceedings, certifications and other documents, and applicable laws as we have deemed necessary. Regarding questions of fact material to this opinion, we have relied on certified proceedings and other certifications of public officials and other documents furnished to us without undertaking to verify the same by independent investigation. Under existing laws, regulations, rulings and decisions in effect on the date hereof, and based on the foregoing we are of the opinion that: 1. The Bonds have been duly authorized and executed, and are valid and binding general obligations of the Issuer, enforceable in accordance with their terms. 2. The principal of and interest on the Bonds are payable from net revenues of the water system of the Issuer, but if necessary for the payment thereof, ad valorem taxes are required by law to be levied on all taxable property of the Issuer, which taxes are not subject to any limitation as to rate or amount. 3. Interest on the Bonds is excludable from gross income of the recipient for federal income tax purposes and, to the same extent, is excludable from taxable net income of individuals, trusts, and estates for Minnesota income tax purposes, and is not a preference item for purposes of the computation of the federal alternative minimum tax, or the computation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates. However, such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income and the alternative minimum tax base. The opinion set forth in this paragraph is 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, excludable from gross income for federal income tax purposes and from taxable net income for Minnesota income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes and taxable net income for Minnesota income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. 1 -1 4. The rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditor's rights generally and by equitable principles, whether considered at law or in equity. We have not been asked and have not undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, and accordingly we express no opinion with respect thereto. This opinion is given as of the date hereof and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Dated , 2010 at Minneapolis, Minnesota ba Offices in 470 U.S. Bank Plaza el�d F 200 South Sixth Street s YMinneapolis Minneapolis MN 55402 CHARTERED Saint Paul (612) 337 -9300 telephone (612) 337 -9310 fax St. Cloud hgp: / /www.kennedy- mven.com Affirmative Action Equal Opportunity Employer $1,350,000 General Obligation Public Facility Refunding Bonds, Series 2010B Rosemount Port Authority Dakota County, Minnesota We have acted as bond counsel to the Rosemount Port Authority, Dakota County, Minnesota (the "Issuer ") in connection with the issuance by the Issuer of its General Obligation Public Facility Refunding Bonds, Series 2010B (the "Bonds "), originally dated as of December 1, 2010, and issued in the original aggregate principal amount of $1,350,000. In such capacity and for the purpose of rendering this opinion we have examined certified copies of certain proceedings, certifications and other documents, and applicable laws as we have deemed necessary. Regarding questions of fact material to this opinion, we have relied on certified proceedings and other certifications of public officials and other documents furnished to us without undertaking to verify the same by independent investigation. Under existing laws, regulations, rulings and decisions in effect on the date hereof, and based on the foregoing we are of the opinion that: 1. The Bonds have been duly authorized and executed, and are valid and binding general obligations of the Issuer, enforceable in accordance with their terms. 2. The principal of and interest on the Bonds are payable from valorem taxes levied by the Issuer, which taxes are not subject to any limitation as to rate or amount 3. Interest on the Bonds is excludable from gross income of the recipient for federal income tax purposes and, to the same extent, is excludable from taxable net income of individuals, busts, and estates for Minnesota income tax purposes, and is not a preference item for purposes of the computation of the federal alternative minimum tax, or the computation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates. However, such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income and the alternative minimum tax base. The opinion set forth in this paragraph is 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, excludable from gross income for federal income tax purposes and from taxable net income for Minnesota income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes and taxable net income for Minnesota income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. 1 -3 4. The rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditor's rights generally and by equitable principles, whether considered at law or in equity. We have not been asked and have not undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, and accordingly we express no opinion with respect thereto. This opinion is given as of the date hereof and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Dated December , 2010 at Minneapolis, Minnesota. 1-4 APPENDIX II CONTINUING DISCLOSURE UNDERTAKINGS December , 2010 This Continuing Disclosure Certificate (the "Disclosure Certificate ") is executed and delivered by the City of Rosemount, Minnesota (the "Issuer") in connection with the issuance of its General Obligation Utility Revenue Refunding Bonds, Series 2010A, in the original aggregate principal amount of $1,550,000 (the `Bonds "). The Bonds are being issued pursuant to an award resolution adopted by the City Council of the Issuer on November 16, 2010 (the "Resolution ") and delivered to (the "Purchaser ") on the date hereof. Pursuant to the Resolution, the Issuer has covenanted and agreed to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events. In addition, the Issuer hereby covenants and agrees as follows: Section 1. Dose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders (defined herein) of the Bonds in order to assist the Participating Underwriters (defined herein) in complying with SEC Rule 15c2- 12(bx5). This Disclosure Certificate, together with the Resolution, constitutes the written agreement or contract for the benefit of the Holders of the Bonds that is required by the Rule. Section 2. Definitions. In addition to the defined terms set forth in the Resolution[s], which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any annual report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Audited Financial Statements" means the Issuer's annual financial statements, prepared in accordance with generally accepted accounting principles ( "GAAP ") for Governmental Units as Prescribed by the Governmental Accounting Standards Board ( "GASB "). "EMMA" means the Electronic Municipal Market Access system operated by the MSRB as the primary portal for complying with the continuing disclosure requirements of the Rule. "Final Official Statement" means the deemed final official statement dated November 3, 2010 plus the addendum thereto which together constitute the final official statement delivered in connection with the Bonds, which is available from the MSRB. security. Bonds. "Fiscal Year" means the fiscal year of the Issuer. "Holder" means the person in whose name a security is registered or a beneficial owner of such a "Issuer" means the City of Rosemount, Minnesota, which is the obligated person with respect to the II -1 "Material Event" means any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" means the Municipal Securities Rulemaking Board located at 1900 Duke Street, Suite 600, Alexandria, VA 22314. "Participating Underwriter" means any of the original underwriter(s) of the Bonds (including the Purchaser) required to comply with the Rule in connection with the offering of the Bonds. "Repository" means EMMA. "Rule" means SEC Rule 15c2- 12(b)(5) promulgated by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time, and including written interpretations thereof by the SEC. "SEC" means the Securities and Exchange Commission. Section 3. Provision of Annual Financial Information and Audited Financial Statements. (a) The Issuer shall provide, as soon as available, but not later than 12 months after the end of the Fiscal Year commencing with the year that ends December 31, 2010, the Repository with an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross - reference other information as provided in Section 4 of this Disclosure Certificate; rod vided that the Audited Financial Statements of the Issuer may be submitted separately from the balance of the Annual Report and will be submitted as soon as available. (b) If the Issuer is unable or fails to provide to the Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice of that fact to the Repository and the MSRB. (c) The Issuer shall determine each year prior to the date for providing the Annual Report the name and address of each Repository. Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the following sections of the Final Official Statement: 1. City Property Values 2. City Indebtedness 3. City Tax Rates, Levies and Collections In addition to the items listed above, the Annual Report shall include Audited Financial Statements submitted in accordance with Section 3 of this Disclosure Certificate. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to the Repository or the SEC. If the document incorporated by reference is a final official statement, it must also be available from the MSRB. The Issuer shall clearly identify each such other document so incorporated by reference. II -2 Section 5. Reporting of Material Events. (a) This Section 5 shall govern the giving of notice of the occurrence of any of the following events ( "Material Events ") with respect to the Bonds: 1. Principal and interest payment delinquencies; 2. Non - payment related defaults, if material; 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, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 —TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; 7. Modifications to rights of security holders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities, if material; 11. Rating changes; 12. Bankruptcy, insolvency, receivership or similar event of the obligated person; 13. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. (b) The Issuer shall file a notice of such occurrence with the Repository or with the MSRB within ten (10) business days of the occurrence of the Material Event. (c) Unless otherwise required by law and subject to technical and economic feasibility, the Issuer shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the Issuer's information. 11-3 Section 6. EMMA. The SEC has designated EMMA as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. Until the EMMA system is amended or altered by the MSRB and the SEC, the Issuer shall make all filings required under this Disclosure Certificate solely with EMMA. Section 7. Termination of Resorting_ Obligation. The Issuer's obligations under the Resolution[s] and this Disclosure Certificate shall terminate upon the legal defeasance, or upon the redemption or payment in full of all the Bonds. Section 8. Agent. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under the Resolution[s] and this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent. Section 9. Amendment: Waiver. Notwithstanding any other provision of the Resolution[s] or this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not, in and of itself, cause a violation of the Rule. The provisions of the Resolution[s] constituting the undertaking and this Disclosure Certificate, or any provision hereof, shall be null and void in the event that the Issuer delivers to the Repository an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require the Resolution and this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply to the Bonds. The provisions of the Resolution and this Disclosure Certificate may be amended without the consent of the Holders of the Bonds, but only upon the delivery by the Issuer to the Repository of the proposed amendment and an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance of the Resolution and this Disclosure Certificate and by the Issuer with the Rule. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Holder of the Bonds 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 under the Resolution and this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 12. Beneficiari es. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Participating Underwriters and Holders from time to time of the Bonds, and shall create no rights in any other person or entity. 11-4 IN WITNESS WHEREOF, we have executed this Disclosure Certificate in our official capacities effective as of the date and year first written above. CITY OF ROSEMOUNT, MEVNESOTA Mayor City Clerk 11 -5 December , 2010 This Continuing Disclosure Certificate (the "Disclosure Certificate ") is executed and delivered by the Rosemount Port Authority, Minnesota (the "Issuer ") and the City of Rosemount, Minnesota (the "City") in connection with the issuance by the Issuer of its General Obligation Public Facility Refunding Bonds, Series 2010B, in the original aggregate principal amount of $1,350,000 (the `Bonds "). The Bonds are being issued pursuant to an award resolution adopted by the Board of Commissioners of the Issuer on November 16, 2010 (the "Resolution ") and delivered to (the "Purchaser ") on the date hereof. Pursuant to the Resolution, the Issuer has covenanted and agreed to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events. In addition, the City has adopted a resolution on November 16, 2010, authorizing, among other things, the execution of this Continuing Disclosure Certificate. In addition, the Issuer hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer and the City for the benefit of the Holders (defined herein) of the Bonds in order to assist the Participating Underwriters (defined herein) in complying with SEC Rule 15c2- 12(b)(5). This Disclosure Certificate, together with the Resolution, constitutes the written agreement or contract for the benefit of the Holders of the Bonds that is required by the Rule. Section 2. Definitions. In addition to the defined terms set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any annual report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Audited Financial Statements" means the City's annual financial statements, prepared in accordance with generally accepted accounting principles ( "GAAP ") for Governmental Units as Prescribed by the Governmental Accounting Standards Board ( "GASB "). "EMMA" means the Electronic Municipal Market Access system operated by the MSRB as the primary portal for complying with the continuing disclosure requirements of the Rule. "Final Official Statement" means the deemed final official statement dated November 3, 2010 plus the addendum thereto which together constitute the final official statement delivered in connection with the Bonds, which is available from the MSRB. "Fiscal Year" means the fiscal year of the City. "Holder" means the person in whose name a security is registered or a beneficial owner of such a security. "Issuer" means the Rosemount Port Authority, Minnesota, which together with the City are the obligated persons with respect to the Bonds. M "Material Event" means any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" means the Municipal Securities Rulemaking Board located at 1900 Duke Street, Suite 600, Alexandria, VA 22314. "Participating Underwriter" means any of the original underwriter(s) of the Bonds (including the Purchaser) required to comply with the Rule in connection with the offering of the Bonds. "Repository" means EMMA. "Rule" means SEC Rule 15c2- 12(bx5) promulgated by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time, and including written interpretations thereof by the SEC. "SEC" means the Securities and Exchange Commission. Section 3. Provision of Annual Financial Information and Audited Financial Statements. (a) The Issuer or the City shall provide, as soon as available, but not later than 12 months after the end of the Fiscal Year commencing with the year that ends December 31, 2010, the Repository with an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross - reference other information as provided in Section 4 of this Disclosure Certificate; provided that the Audited Financial Statements of the City may be submitted separately from the balance of the Annual Report and will be submitted as soon as available. (b) If the Issuer is unable or fails to provide to the Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice of that fact to the Repository and the MSRB. (c) The Issuer shall determine each year prior to the date for providing the Annual Report the name and address of each Repository. Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the following sections of the Final Official Statement: 1. City Property Values 2. City Indebtedness 3. City Tax Rates, Levies and Collections In addition to the items listed above, the Annual Report shall include Audited Financial Statements submitted in accordance with Section 3 of this Disclosure Certificate. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to the Repository or the SEC. If the document incorporated by reference is a final official statement, it must also be available from the MSRB. The Issuer shall clearly identify each such other document so incorporated by reference. II -7 Section 5. Reporting of Material Events. (a) This Section 5 shall govern the giving of notice of the occurrence of any of the following events ( "Material Events ") with respect to the Bonds: Principal and interest payment delinquencies; 2. Non - payment related defaults, if material; 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, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 —TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; 7. Modifications to rights of security holders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities, if material; 11. Rating changes; 12. Bankruptcy, insolvency, receivership or similar event of the obligated person; 13. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. (b) The Issuer shall file a notice of such occurrence with the Repository or with the MSRB within ten (10) business days of the occurrence of the Material Event. (c) Unless otherwise required by law and subject to technical and economic feasibility, the Issuer shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the Issuer's information. HM Section 6. EMMA. The SEC has designated EMMA as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. Until the EMMA system is amended or altered by the MSRB and the SEC, the Issuer and the City shall make all filings required under this Disclosure Certificate solely with EMMA. Section 7. Termination of Reporting Obligation. The Issuer's and the City's obligations under the Resolution and this Disclosure Certificate shall terminate upon the legal defeasance, or upon the redemption or payment in full of all the Bonds. Section 8. Agent. The Issuer and the City may, from time to time, appoint or engage a dissemination agent to assist it in carving out its obligations under the Resolution and this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent. Section 9. Amendment, Waiver. Notwithstanding any other provision of the Resolution or this Disclosure Certificate, the Issuer and City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not, in and of itself, cause a violation of the Rule. The provisions of the Resolution constituting the undertaking and this Disclosure Certificate, or any provision hereof, shall be null and void in the event that the Issuer and City deliver to the Repository an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require the Resolution and this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply to the Bonds. The provisions of the Resolution and this Disclosure Certificate may be amended without the consent of the Holders of the Bonds, but only upon the delivery by the Issuer and City to the Repository of the proposed amendment and an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance of the Resolution and this Disclosure Certificate and by the Issuer and the City with the Rule. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer and City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Issuer and City choose to include any information in any Annual Report or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer and City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 11. Default. In the event of a failure of the Issuer or City to comply with any provision of this Disclosure Certificate any Holder of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer or City to comply with its obligations under the Resolution and this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer or City to comply with this Disclosure Certificate shall be an action to compel performance. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the City, the Participating Underwriters and Holders from time to time of the Bonds, and shall create no rights in any other person or entity. HE IN WITNESS WHEREOF, we have executed this Disclosure Certificate in our official capacities effective as of the date and year first written above. ROSEMOUNT PORT AUTHORITY, MINNESOTA Chair Secretary CITY OF ROSEMOUNT, MINNESOTA Mayor City Clerk II -10 APPENDIX III SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND MINNESOTA REAL PROPERTY VALUATION (effective through levy year 2009 /payable year 2010) Following is a summary of certain statutory provisions effective through levy year 2009 /payable year 2010 relative to tax levy procedures, tax payment and credit procedures, and the mechanics of real property valuation. The summary does not purport to be inclusive of all such provisions or of the specific provisions discussed, and is qualified by reference to the complete text of applicable statutes, rules and regulations of the State of Minnesota. Property Valuations (Chapter 273, Minnesota Statutes) Assessor's Estimated Market Value. Each parcel of real property subject to taxation must, by statute, be appraised at least once every five years as of January 2 of the year of appraisal. With certain exceptions, all property is valued at its market value, which is the value the assessor determines to be the price the property to be fairly worth, and which is referred to as the "Estimated Market Value." Taxable Market Value. The Taxable Market Value is the value that property taxes are based on, after all reductions, limitations, exemptions and deferrals. It is also the value used to calculate a municipality's legal debt limit. Indicated Market Value. The Indicated Market Value is determined by dividing the Taxable Market Value of a given year by the same year's sales ratio determined by the State Department of Revenue. The Indicated Market Value serves to eliminate disparities between individual assessors and equalize property values statewide. Net Tax Capacity. The Net Tax Capacity is the value upon which net taxes are levied, extended and collected. The Net Tax Capacity is computed by applying the class rate percentages specific to each type of property classification against the Taxable Market Value. Class rate percentages vary depending on the type of property as shown on the last page of this Appendix. The formulas and class rates for converting Taxable Market Value to Net Tax Capacity represent a basic element of the State's property tax relief system and are subject to annual revisions by the State Legislature. Property taxes are determined by multiplying the Net Tax Capacity by the tax capacity rate, plus multiplying the referendum market value by the market value rate. Property Tax Payments and Delinquencies (Chapters 276, 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 courity 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% III -1 or 8% on June 1. Thereafter, an additional 1 % penalty shall accrue each month through October 1 of the collection year for unpaid real property taxes. In the case of the second installment of real property taxes due October 15, the penalty increases to 6% or 8% on November 1 and increases again to 8% or 12% on December 1. Personal property taxes remaining unpaid on May 16 are deemed to be delinquent and a penalty of 8% attaches to the unpaid tax. However, personal property that is owned by a tax - exempt entity, but is treated as taxable by virtue of a lease agreement, is subject to the same delinquent property tax penalties as real property. On the first business day of January of the year following collection all delinquencies are subject to an additional 2% penalty, and those delinquencies outstanding as of February 15 are filed for a tax lien judgment with the district court. By March 20 the county auditor files a publication of legal action and a mailing of notice of action to delinquent parties. Those property interests not responding to this notice have judgment entered for the amount of the delinquency and associated penalties. The amount of the judgment is subject to a variable interest determined annually by the Department of Revenue, and equal to the adjusted prime rate charged by banks but in no event is the rate less than 10% or more than 14 %. Property owners subject to a tax lien judgment generally have five years (5) in the case of all property located outside of cities or in the case of residential homestead, agricultural homestead and seasonal residential recreational property located within cities or three (3) years with respect to other types of property to redeem the property. After expiration of the redemption period, unredeemed properties are declared tax forfeit with title held in trust by the State of Minnesota for the respective taxing districts. The county auditor, or equivalent thereof, then sells those properties not claimed for a public purpose at auction. The net proceeds of the sale are first dedicated to the satisfaction of outstanding special assessments on the parcel, with any remaining balance in most cases being divided on the following basis: county - 40 %; town or city - 20 %; and school district - 40 %. Property Tax Credits (Chapter 273, Minnesota Statutes) In addition to adjusting the taxable value for various property types, primary elements of Minnesota's property tax relief system are: property tax levy reduction aids; the circuit breaker credit, which relates property taxes to income and provides relief on a sliding income scale; and targeted tax relief, which is aimed primarily at easing the effect of significant tax increases. The circuit breaker credit and targeted credits are reimbursed to the taxpayer upon application by the taxpayer. Property tax levy reduction aid includes educational aids, local governmental aid, equalization aid, county program aid and disparity reduction aid. Levy Limitations for Counties and Cities (Chapter 275) The 2008 Legislature enacted provisions to establish levy limitations for taxes levied for collection in 2009, 2010, and 2011. Basically, levy increases for cities over 2,500 population and for counties are limited to its levy aid base or levy limit base for collection in the prior year, (1) plus the lesser of 3.9 percent or the percentage growth in the implicit price deflator, (2) plus an adjustment for population increases and (3) plus increases in taxable market value due to new construction of certain class 3 property (commercial/industrial). Certain property tax levies are authorized outside of the new overall levy limitations ( "special levies "). Special levies can be made outside of levy limits for multiple purposes including, but not limited to, bonded indebtedness, certificates of indebtedness, tax or aid anticipation certificates of indebtedness, and to provide for the bonded indebtedness portion of payments made to another political subdivision of the State of Minnesota. In order to receive approval for any special levy claims outside of the overall levy limitation, requests for III -2 such special levies must be submitted to the Commissioner of Revenue by the date specified in the year in which the levy is to be made for collection in the following year. The Commissioner of Revenue has the authority to approve, reduce, or deny a special levy request. Final adjustments to all levies must be made by the Department of Revenue on or before December 10. (275.74) Debt Limitations All Minnesota municipalities (counties, cities, towns and school districts) are subject to statutory "net debt" limitations under the provisions of Minnesota Statutes, Section 475.53. Net debt is defined as the amount remaining after deducting from gross debt the amount of current revenues that are applicable within the current fiscal year to the payment of any debt and the aggregate of the principal of the following: 1. Obligations issued for improvements that are payable wholly or partially from the proceeds of special assessments levied upon benefited property. 2. Warrants or orders having no definite or fixed maturity. 3. Obligations payable wholly from the income from revenue producing conveniences. 4. Obligations issued to create or maintain a permanent improvement revolving fund. 5. Obligations issued for the acquisition and betterment of public waterworks systems, and public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which revenue is or may be derived. 6. Certain debt service loans and capital loans made to school districts. 7. Certain obligations to repay loans. 8. Obligations specifically excluded under the provisions of law authorizing their issuance. 9. Certain obligations to pay pension fund liabilities. 10. Debt service funds for the payment of principal and interest on obligations other than those described above. 11. Obligations issued to pay judgments against the municipality. Levies for General Obligation Debt (Sections 475.61 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. 111 -3 Metropolitan Revenue Distribution (Chapter 473F, Minnesota Statutes) "Fiscal Disparities Law" The Charles R. Weaver Metropolitan Revenue Distribution Act, more commonly known as "Fiscal Disparities," was first implemented for taxes payable in 1975. Forty percent of the increase in commercial - industrial (including public utility and railroad) net tax capacity valuation since 1971 in each assessment district in the Minneapolis /St. Paul seven - county metropolitan area (Anoka, Carver, Dakota, excluding the City of Northfield, Hennepin, Ramsey, Scott, excluding the City of New Prague, and Washington Counties) is contributed to an area -wide tax base. A distribution index, based on the factors of population and real property market value per capita, is employed in determining what proportion of the net tax capacity value in the area - wide tax base shall be distributed back to each assessment district. III-4 STATUTORY FORMULAE: CONVERSION OF TAXABLE MARKET VALUE (TMV) TO NET TAX CAPACITY FOR MAJOR PROPERTY CLASSIFICATIONS Property Type Residential Homestead (1a) Up to $500,000 Over $500,000 Residential Non - homestead Single Unit Up to $500,000 Over $500,000 1 -3 unit and undeveloped land (4b1) Market Rate Apartments Regular (4b1) Low -Income (4d) Commercial/Industrial/Public Utility (3a) Up to $150,000 Over $150,000 Electric Generation Machinery Commercial Seasonal Residential Homestead Resorts (1c) Up to $600,0003 $600,000 - $2,300,0003 Over $2,300,0003 Seasonal Resorts (4c) Up to $500,000 Over $500,000 Non - Commercial (40) Up to $500,000 Over $500,000 Disabled Homestead (1 b) Up to $50,0003 $50,000 to $500,0003 Over $500,000 Agricultural Land & Buildings Homestead (2a) Up to $500,000 Over $500,000 Remainder of Farm Up to $1,010,0004 Over $1,010,0004 Non - homestead (2b) ' Subject to the State General Property Tax. 2 Exempt from mferendum market value tax. 3 2008 legislative increases. 4 2009 legislative increases. Local Tax Local Tax Local Tax Local Tax Local Tax Payable Payable Payable Payable Payable 2006 2007 2008 2009 2010 1.00% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% 1.25% 1.00% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 125% 1.25% 1.25% 1.25% 1.25% 1.25% 0.75% 0.75% 0.75% 0.75% 0.75% 1.50% 1.50% 1.50 %' 1.50 %' 1.50 %' 2.00% 2.00% 2.00 %' 2.00%' 2.00 %' 2.00% 2.00% 2.00% 2.00% 2.00% 1.00% 0.55% 0.55% 0.50% 0.50% 1.25% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 1.25%' 1.25 %' 1.25 %' 1.00% 1.00% 1.00%' 1.00%' 1.00%' 1.25% 1.25% 1.25 %' 1.25 %' 125 %' 1.00 %' 1.00 %, 1.00 %12 1.0o%12 1.00%' 2 1.25 %' 1.25 %1 1.25 %' 2 1.25 %' 2 1.25%12 0.45% 0.45% 0.45% 0.45% 0.45% 1.00% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% 1.25% 1.00%' 1.00%' 1.00% 1.00% 1.00% 1.00 %' 1.00 %' 1.25% 1.25% 125% 0.55 %' 0.55 %' 0.55p2 0.50 %2 0.50 %2 1.00%' 1.00%' 1.00% 1.00% 1.00 %2 1.00%' 1.00 %' 1.00 %2 1.00 %2 1.00% III -5 APPENDIX IV EXCERPT OF 2009 ANNUAL FINANCIAL STATEMENTS The City is audited annually by an independent certified public accounting firm. Data on the following pages has been extracted from the audited financial statements for fiscal year ended December 31, 2009. The reader should be aware that the complete financial statements may contain additional information which may interpret, explain or modify the data presented here. For its comprehensive annual financial report for the fiscal years ended December 31, 1996 through 2008, the City 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 principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City believes its CAFR continues to conform to the Certificate of Achievement program requirements and has submitted its CAFR for the 2009 fiscal year to GFOA. IV -1 BAKER TILLY VIRCHOW KRAUSE, LLP saimmyrueaawxn.a,w znssaxthsr.soazm Mimapolis UN 5%m 4w ad l zzsys45W �6izi3sa9oo To The Flo wmW Maya and Mwnber$ of the Cky CWXA Cky of Rosemount WffvW$*ta tax map As, tNnnesota May,% 2010 IV-2 CITY OF ROSEMOUNT STATEMENT OF NET ASSETS December 31, 2009 (With Summarized lnfonnalion 1vr December 31, 2008) Total Assets LiABtUTIES Accosts payer Accrued payroll and Payroll taxes Other accrued lialftes and deposits Noneurrerd NOW=: Due wMhIn one year Due in more than one year Total Ulabillies 1? 8ushess- Governnental Type Totals Aclivities Adivifies 2009 2006 $ 18,596,416 $ 17.408,280 $ 36,004,696 $ 38,581,664 605,586 - 605,586 5+48,1148 235.602 - 235A02 207,398 180,562 730,661 91 1,223 870,527 - 225,000 225,000 321.282 2,078,754 218.789 2,297,543 2,536,325 7.377 21,025 28,402 81,809 (17008) 170,588 - 171,952 120,566 292,518 130,975 5,003 5,003 9.332 8,590,049 2,694,451 1184,500 12,121.968 1.766.283 4,340,402 6.106,685 5.944,991 2,087.650 - 2,087.650 1,696,370 15.412.848 11,085,341 26,498,189 25.536.515 8.462,907 2,731,397 11.194,304 10.844.694 40,281.897 118,581,552 158,863.449 154,997.779 (17,693.61 (41,322,974) (59,016,584} (55.956,1563 80,618.688 117,069,078 197.623,786 199,083,679 630285 101,244 731,530 WAS 74.646 11,915 86,561 67,770 529,251 1011860 531,111 704,280 2,252,321 819,889 3,072,210 4,787,251 16,166.818 5,504.699 21.671,517 24,199,626 19.653,322 %66.607 26.192.929 30.605,763 Invested in capital assets, M Of related debt 41.347,888 91,948,323 133,296,211 127,564,529 Resbkftd for debt service 4,637,711 - 4,637,711 6.621.026 Uruesticted 14.979,767 1 .8.51.7.148 33,496,915 344172,361 Toth Net Assets $ W W5.366 $ i 1�0A65 j4.71 $ 171,440,&37 _ _ $ 168 .916 See acmnpa WbV notes to . M&I z 0 w 0 V ":pp.ap ape a pwpmNmOm m a m��wmo� $ tl tl A p1 N O O 1r m A ♦ n t•1 O !� tl a m ti N 0 N w PJ !J • N f f 3 w 1I{1 y, ps •atlpp �OopI m ��appa// A f� 1�^I N Cry N w m f0 m A pl p P A p C wit �qp O N iD !f f A 1A M N S �' N p w O p A W N p Q ft w m f f S O wwE�iv v w N S • t t t . • tf1[ � � i► O t0 , • {wM • a N O� � W 'yAI� wN w w to w n al f a m v � g pO C^ n p^l 0 S /pp . . • $ N w �! O !e7 ♦ O[ b 3 %•t�A ON S w •O'Jf Ntl Aftfil N O{ VO R N O e n m •� f 7" O e" O O •7 N tl r 7 i I1110l! � NpA A A N e e w N N •► f 4 tl O r � O•� A p . t . .. O O w ii SV 3 � boa4d �oR � C o��$ g Rif e NAf �• w r N e w w e IV-4 9 CRY OF ROSEMOUNf BALANCE SHEET - GOVERNMERAL FIENDS Damlber 31, 2009 LiABILMES AND FUND BALANCES AoaolM Pat=e $ 23D,A34 $ . $ 378.280 $ 3247 $ 1,261 $ 610.047 AoCued Pe fsc6 and payroll Wws 74.846 - - - 74.646 Dv�p 227.842 - - - - 227AQ 60.36 Deemedrererxre 339.589 101 2.360,449 AdWraesfloorcdwrkmft - 170.588 170.568 Towt ie- " 1 smile 1.084.861 1.483.867 3247 1261 3.444.872 Fund Batertaee Reserved tar. Debtsesvix - 3.864.780 - - - 3.850,760 F11Gatlbe--as 638254 - 1,118,850 - 1.756.W4 Prepaid Mmte M379 78X9 tAraswved and 3 jgraled, tapotted i m C,ernow 6" 6,636 429 capbt walsm - - 4.994,835 - 4,9K835 SPeeiat mvenx: tads - _ S. 4.374 Unreeaned and undoOrA led. repots, im C-4rm" fixed 15.549 Speaatreventt tor& - 262577 1256132 387.704 TOW *Ad boanoes 7-289.111 3.854.780 6.103,485 242,577 134506 17,4K430 TOW NmbMWs wd UW baton= 5 8.141.227 5 4 121 S 7.587362 S 266.824 S f36Tdf Amount repOted for grxwsmwttet sa*Aw in the sbtfeawrtt Ot stet arias we I iet a - bsesusa Capieet assets used in owAnow ud ttxtds ate not fetanpiai seeouww and, #twetare sm not rgt, tad in the fintds 58,908,024 Swo receivables foam not atxro* avabble are reposto as,' Is m ►evsnw io the find bwndai xaternatt but are eeetopntaed esterante what aerated in tlts govemmer*%ide staternar i Z3B6,909 bttental serriee fixtds see sepersed in the ifaiesrtent of net seset as 9orenmtt:rthY acovft& 787.925 Some tiabd Om i ro m dstbC are not else sstd psyabfe rn Ute axnstt period grid therefore are riot r4tporte " it fie ksnas. See Nm pA (18.745.971) NETASSETS+OFOOVERN OMLACt7lsliM S 60.986,366 See awdr pnrj v stows eo aata<t , sceeerstatte. IV-5 Pat AtAtMty odw Total ASSETS cwww Debt Service Copm Preierxs Cwoomment TIF l Cora' wmttd Funds Ftnds cmh aid vtvestrrtetsts S 7.037,341 S 3,816,151 $ 6,644,377 S 250,066 S 135,767 S RAM= RecoNabks 1n7rt> Taxes 838,st0 - - 2.778 841'.186 AOotxll5 t48�342 - 20.509 1$980 - 179,891 Spww anessn am 33.106 t,D52.837 422.426 - - 2.008.389 D*quadsPadataswswwM 252 70,133 - - - 7um Due kom otwoovwnronm ut4b 7.377 - - - - 7,371 Prepaid teems 78.379 7&= Tobd asset 8S s 83412t S T Sli7�3S1 S 26582 S 135,787 i 21jcom t LiABILMES AND FUND BALANCES AoaolM Pat=e $ 23D,A34 $ . $ 378.280 $ 3247 $ 1,261 $ 610.047 AoCued Pe fsc6 and payroll Wws 74.846 - - - 74.646 Dv�p 227.842 - - - - 227AQ 60.36 Deemedrererxre 339.589 101 2.360,449 AdWraesfloorcdwrkmft - 170.588 170.568 Towt ie- " 1 smile 1.084.861 1.483.867 3247 1261 3.444.872 Fund Batertaee Reserved tar. Debtsesvix - 3.864.780 - - - 3.850,760 F11Gatlbe--as 638254 - 1,118,850 - 1.756.W4 Prepaid Mmte M379 78X9 tAraswved and 3 jgraled, tapotted i m C,ernow 6" 6,636 429 capbt walsm - - 4.994,835 - 4,9K835 SPeeiat mvenx: tads - _ S. 4.374 Unreeaned and undoOrA led. repots, im C-4rm" fixed 15.549 Speaatreventt tor& - 262577 1256132 387.704 TOW *Ad boanoes 7-289.111 3.854.780 6.103,485 242,577 134506 17,4K430 TOW NmbMWs wd UW baton= 5 8.141.227 5 4 121 S 7.587362 S 266.824 S f36Tdf Amount repOted for grxwsmwttet sa*Aw in the sbtfeawrtt Ot stet arias we I iet a - bsesusa Capieet assets used in owAnow ud ttxtds ate not fetanpiai seeouww and, #twetare sm not rgt, tad in the fintds 58,908,024 Swo receivables foam not atxro* avabble are reposto as,' Is m ►evsnw io the find bwndai xaternatt but are eeetopntaed esterante what aerated in tlts govemmer*%ide staternar i Z3B6,909 bttental serriee fixtds see sepersed in the ifaiesrtent of net seset as 9orenmtt:rthY acovft& 787.925 Some tiabd Om i ro m dstbC are not else sstd psyabfe rn Ute axnstt period grid therefore are riot r4tporte " it fie ksnas. See Nm pA (18.745.971) NETASSETS+OFOOVERN OMLACt7lsliM S 60.986,366 See awdr pnrj v stows eo aata<t , sceeerstatte. IV-5 CITY OF ROSEMOUNT STATEMENT OF REVENUES, EXPENWtIRES AND CFIANGES IN FUND BALANCES - GOVERNMENTAL RROS For the Year Eroded Decea W 31,20W $ 7 111 3.3 S 6,10%485 S 252.577 S 1-UM s 17.674A39 See aaompanft spies tp financial stalacnardS. 1V -6 Port Odw Tara! General Debt Service Capital Proiect5 AutdA* TIF Garetrenealal Funds GommwnW Funds IREVEl1M Taxes $ 8,308,935 s 1,332.101 $ 1,=,733 $ 379,351 i 50A00 $ 11,429.120 MuNgoveanneNa1 345.100 - 347.818 254.636 947.554 Publia chetW tot Servi008 833,498 - 442.640 - 6,459 1,382,587 Licenses endpennits 430,551 - - - - 430.551 Fetes and fotfeidtros 121418 2AW - - - 12CM Spedal assessments 10.82D 339;503 406,900 757,223 inveonent tome and miscellaneous 352.335 58.100 855.160 11998 1 1.268:8 Total Revenues 10,502.857 1,732.154 MIA1 635.985 57.712 16.338959 EXPENDITURES curnint General 9&Anmwt 2,485,328 - - 18,267 58,65@ 2,5Gt 244 Public so" 3.265.587 - 29.478 - 2.455 3.297.620 Pubticwaks 2:632.514 - 49.848 - 4.732 2667294 Packs end "Mrn ion 1,153.777 - - - - 160.445 - - 1,153;777 160,445 Consetvip ion and deve1pPnent capilall Ouy - 12.375 - 3,721.504 100,047 1,900 3.835.828 Debt smite retnattretrt 3,645.000 3••� 1Maest end Used charges 539,599 9.266 277,485 - MUM Toth Enures 9.529.981 4.184,58.4 3.809.896 556.234 47.746 18.128.456 Empass (deficits q) of revenues over expendtures 972.876 (2452445} (398,64$} 79.751 9 9ti6 (1.78849?) OT"BtFKMRMG SOURCES (USES) - 3.000 - - 3.000 Sak of apaw weals Translate in - 23,464 725.000 890.747 - - 1639.211 Transfers out (777,089} (753.625) - 72&= "(18964} 873.783 - (797.053} 845,158 Total Ogm Financing Soutaes _ Net ChwW in Fund embmw 219,251 (1,727.445) 475,136 79,751 9,866 (943.33M FUND BALANCES - BegWaft 7.049.880 5,582,2 5628.347 182.826 124,540 18.567 778 $ 7 111 3.3 S 6,10%485 S 252.577 S 1-UM s 17.674A39 See aaompanft spies tp financial stalacnardS. 1V -6 CITY OF ROSEMOUNT RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTNMES For the Yew Ended December 31, 2009 Net change in fund balances - total governmenial funds $ (943,339) 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 usdW fives with depreciation expense reported in the statement of activities. Capital outlay is reported as an expenditure in the ftmd financial statements but is capitalized in the govemttent --wide financial statements 3,835,826 Less: Some items reported as capital outley but not capitalized (397.016) Depreciation is reported in the gowemment- wide shatements (1,680,071) Uft ire 0DINhiCted by capital proms funds not reported as governmental activities (1,081.399) In the statement of activities, the gain or loss ($651,439) on the disposal of capital assets is reported. In the fund fmanciai statements, proceeds from the sate Of capital assets ($3,0W) are reported because the proceeds vmwe financial resources (854,439) I"10=1 service funds are reported in the statement of activities. 26,919 Receivables riot currently available are reported as deferred revenue in the fund fv»t sUrtements but are recognized as reveille when earned in the government -wide financial Statements. (200.0 Repayment of debt principal is an expenditure in the goveemmer" funds, but the rSlayrrlerlt reduces brig -berm liabilities in the statement of net assets. This is the amount of principal payments per• 3,645.000 Governmental funds report the effect of issuance colds, prernitarrs, discounts . and simiar items when debt is fast issued, whereas these amounts are deferred and amortized in the stalement of activities. Some expenses in the statement of activities do not require the use of airrent financial resources and. there! ore, are not reported as expenditures in the governmental funds. This is the change in the following UbWties. Compensated absences (56,411) Ac cnjed interest on debt 60,757 CHANGE IN NET ASSETS OF GOVERNMENTAL. ACTMMES gS 2,M357 See accompanying notes loo financial statements. IV-7 CITY OF ROSEMOUNT STATEMENT OF NET ASSETS - PROPRIETARY FUNDS December31,2009 See seoospanyirg noise m finee 4, almiemerie. Iv -8 0u*W trTirae ACS - Enterprise Funds Governmental Storm Non-maw Adi Mn - k*@"Nd Service ASSIM Water Sewer vhw Arena Tot* Fund Currerd assets: Call and Wmedraent S 5,882,526 S 6.536.476 $ 4119x,829 S 117,448 $ 17408,280 $ 712M Cuslaaw accounts receivable 291 208 284210 155.243 - 730,661 - Other receivsbiea - - 225,000 - 225,000 - SPerSat sear n I " receivable 98.585 83,282 25,922 - 218,789 - Prepaid Sold atfrar =93i 851978 4.V7 5.760 120,566 93078 TOW carrantSaam 6277,652 6.999.944 5.302691 144,034 68.724.321 805.771 Non-current aasetK Advance to other funds - 241,866 - - 241.686 - Propsrly and equipment: Land 1,051,312 $47.158 1,098,96! - 204.451 - Consft e8on in progress 450.842 3,429.972 45940 • 4AM402 - 8utG*w 6,794,504 401,414 1,489,523 2,399900 11AB5,341 Mairm and btea 17,769,890 13,914,356 24,918.017 - 52,590263 - Dow kaplovernelft 16,528,701 36,927460 12,535,128 - 6599109 - pgWnery and OW*ft em 1,837,976 641,417 355,312 98,692 2,731,387 - Less accu rnulaled dep ecladon (10,388.463) (24,091,126) (643711201 (80x.763) (413229741 Not prop" and 0* nrerd 33 04,262 31,770.649 3014,429 1.690.829 98,110,189 TOW r9n- sxxrsrrt "Oft 33 ,834.282 32,012,315 30,814,429 1,690,829 98.3551,835 TOfalAsaets 40,111.911 39.012.259 36.117 ;120 18;44663 117476.156 805.771 Lt40LFM ctxm t siab/Bas Acwwft payable 34,571 51,899 9,258 5,676 101,244 17,848 Atoned iabillies 4AW 205 2.018 2,797 11,915 - Accrued' 11 mb't 73.774 - 26066 - 101,880 - ctxvw portion of Iprtg term obigapom 815`044 30.044 165.827 8.974 819,889 Tdst current falmills 728,054 84.318 208.185 17.347 1,034,908 17,848 Noncurrent t9bilWes: Accrued aoiM Named abserwas 32 ,547 32,547 11,729 9,721 86,514 - General eb88a8on debt 4,042,488 - 1.375.667 - 5,418,155 - Advances *am *VW UW5 71.078 - 71 AT8 Total ranounent labOw 4.14$083 32,547 1.387.418 _ 9,721 5474777 Tow t gbi6es 4874,147 116,865 1,582:608 27,068 6,810685 17.846 WET ASSETS kuvesisd in cepW sssebe, net of related debt 29,203,103 31,770,849 29,288,742 1 090,829 91.918,323 Unrestricted 8.094664 7,124,745 5,240.775 116,966 18,517.148 787,925 TOTA6WETASSETS S ,767 f 3 X5.394 34.524.615 S 1.807.795 S 110,466471 S 787.925 See seoospanyirg noise m finee 4, almiemerie. Iv -8 CITY OF ROSEMOUNT STATEMENT OF REVENUES. EXPENSES AND CHANGES IN FUND NET ASSETS • PROPRIETARY FUNDS Forge Year Ended December 31.2009 YYater Sewer WWw Arens Toesis Funds OPER ATM REV@ Chug" for semices S 1211.887 S 1,344.240 S 792.506 i 3'!0.964 S 3,719.597 5 Water mebmr 90114 - - - 30.714 - 50 - 60 58.312 TaW Opens" Reasmres 1242,651 1,344,22A0 79' OS 570.964 3.750.961 38.312 OPERATIMG E1PERSFS Parsammi swipes 428.185 428.913 168,810 192460 1218.388 . S>4pon 11 &361 27,315 %W 15,970 174515 Soo Roks8i Waervim and dmges Dow ser4oes and dwr9es 10.2, 118 309;125 33.e 150.291 64242 39A78 30.782 162.086 248.896 980,581 28.371 270,801 Mwoc"mdlefpes 724.893 � 2130.594 - T�1.882.701 E��. 2. 309. 715 848.455 166.706 5287.577 301241 Ot B LOSS t410.050I (965.475) (36.9 (85.742) (15472191 _ (283.9 NONOPERMING REVENUES (EXPENS1113) Connec4on ices 254.917 125217 M 725 - 438,868 ' 275:000 Tai®s seaeamw* - 70,279 80.799 20,960 - 17 1,976 576.800 - }tp" 149.3a 1x.309 575.800 127.05 - 917 467.149 15,252 Net bxxs ao in fair vows of iwesbmd 1.691 27 (44781 - PAM (73407) 5e6 (3.451) Mum lees 267216 1 1 ) 13.194 3.474 283.884 (267.4171 ' hiaaat eeiparise and f+sCei agent 517.822 -�-- -� 404 ,625 ---- W&422 917 1 591.786 290.848 Tool Reversals (Hearts (Wa) I III m oontilbulliorw and tnx�s 101"m (580.8507 562473 (84.825) 41.570 26,919 oofaR tm 392.016 921.774 408,362 - 1,417.152 Transfers in - t .800f - (193700) $3.000 115.000 (3 5001 "SAW (1.010.15 ' Transfers out Chop in Net Assets (39.812) (132.77 786.477 26.875 619.884 28,919 TOTAL NET ASSETS -BegiMiq 31.277.579 170 33,70M 1.781.120 109.815.907 761.M TOTAL NET ASSETS - ENOM S 3SW-767 5 5.394 $34,50015 E 1 807.795 S 110.465 471 S MA25 Sea aoca»parariaD moles b 8raaraeYY slalemords. IV -9 Z 0 YJ IS 0 Ot U. 1 0: ti � W LL 6 LL )-a O� us F�y LL .2 N N • p 0 r r . Qp p m m . • • m N' A O A C • m o O LL ��ppppp 9Q ilF �� OOm�pf p�j� .OlO ppm q A! $'OO OfN Ck 01% m ID W m � R 00® 1pY m R 119D S IT+ t1p N v "M O f P• srD t�9 O ti a9 O t� tp. . •. p Q • g pm�i ! O r A A r Z M N ��ppmOr fi0 • • r ppppm A o�v a� m OHO ! � N o � � Ci mm m.A .• � �m Ol�i l'� if Of pIAYN OOO1d Nm pO m'K W OO ml�tO 44 N �y � A V A r� CV N N N N N F{h • 19� � Npp d O�0AO rODAb� Ci N C N m40 Pf Hd0 O� fOp � 1�7 f~ O pO� Nv i Mal Y N N M �pj r N Y!A N N N p O O a � r s g co as lu EL it 5 .sit 1_ 11 1 IV -10 f. f �. . .\ . ■a)� g■ ■ § /&$ § k 0 ®�&� & _ � to X ® ©£�■ ■ � ■ k � ■�.- ° � &� ■ �� � w� - t ¢� fo 8606 ti cd ~ g C-4 � �$ 8: 40 ■ �� - t $ § ■� I ) 9& ■ z © 42 E� `$ ■ _ oe a Ia § §■ �£ ■ �II. 3� IV-1 1 ) k � � h i CITY OF ROSEMOUNT STATEMENT OF NET ASSETS FIDUCIARY FUND December 31, 2009 M.AAG. 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