$1,580,000 Bonds 2010A GO Utility Revenue - Destroy 020127ADDENDUM DATED APRIL 13, 2010
TO OFFICIAL STATEMENT DATED MARCH 22, 2010
New Issue Rating: Standard & Poor's "AA"
$1,580,000
GENERAL OBLIGATION UTILITY REVENUE BONDS SERIES 2010A
CITY OF NEW HOPE, MINNESOTA
Schedule of Maturity Dates, Principal Amounts, Interest Rates and Yields
Serial Bonds
Maturity
(February 1)Amount
Interest
Rate Yield
CUSIP
Base
64544P
Maturity
(February 1)Amount
Interes
t Rate Yield
CUSIP
Base
64544P
2011
2012
2013
2014
2015
2016
$210,000
$270,000
$275,000
$270,000
$75,000
$75,000
2.000%
2.000%
2.000%
2.000%
2.000%
2.375%
0.700%
1.000%
1.300%
1.700%
2.050%
2.500%
BK8
BL6
BM4
BN2
BP7
BQ5
2017
2018
2019
2020
2021
$75,000
$80,000
$80,000
$85,000
$85,000
2.625%
3.000%
3.100%
3.250%
3.250%
2.750%
3.000%
3.150%
3.300%
3.400%
BR3
BS1
BT9
BU6
BV4
Wells Fargo Advisors has agreed to purchase the Bonds from the City for an aggregate price of $1,579,777.08 plus
accrued interest to the date of delivery. It is expected that the Bonds will be available for delivery on or about May
6, 2010.
Book-Entry-Only: This offering will be issued as fully registered Bonds and will be registered in the name of Cede
& Co., as nominee of The Depository Trust Company, New York, New York, to which principal and interest
payments on the Bonds will be made.
Paying Agent: Bond Trust Services Corporation, Roseville, Minnesota.
THIS ADDENDUM TOGETHER WITH THE OFFICIAL STATEMENT DATED MARCH 22, 2010, SHALL
CONSTITUTE A "FINAL OFFICIAL STATEMENT" OF THE ISSUER WITH RESPECT TO THE BONDS AS
THAT TERM IS DEFINED IN RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION.
WELLS FARGO ADVISORS
St. Louis, Missouri
ORIGINAL ISSUE DISCOUNT
The Bonds with a stated maturity of February 1, 2015 through February 1, 2017 and February 1, 2019 through
February 1, 2021 (the "Discount Bonds") are being sold at a discount from the principal amount payable on such
Bonds at maturity. The difference between the price at which a substantial amount of the Discount Bonds of a given
maturity is first sold to the public (the "Issue Price") and the principal amount payable at maturity constitutes
"original issue discount" under the 1986 Code. The amount of original issue discount that accrues to a holder of a
Discount Bond under Section 1288 of the 1986 Code is excluded from gross income for federal income tax purposes
and from taxable net income of individuals, estates and trusts for Minnesota income tax purposes to the same extent
that stated interest on such Discount Bond would be so excluded. The amount of the original issue discount that
accrues with respect to a Discount Bond under Section 1288 is added to the owner’s tax basis in determining gain
or loss upon disposition of such Discount Bond (whether by sale, exchange, redemption or payment at maturity).
Interest in the form of original issue discount accrues under Section 1288 pursuant to a constant yield method that
reflects semiannual compounding on days that are determined by reference to the maturity date of the Discount Bond.
The amount of original issue discount that accrues for any particular semiannual accrual period generally is equal
to the excess of (1) the product of (a) one-half of the yield on such Bonds (adjusted as necessary for an initial short
period) and (b) the adjusted issue price of such Bonds, over (2) the amount of stated interest actually payable. For
purposes of the preceding sentence, the adjusted issue price is determined by adding to the Issue Price for such Bonds
the original issue discount that is treated as having accrued during all prior semiannual accrual periods. If a Discount
Bond is sold or otherwise disposed of between semiannual compounding dates, then the original issue discount that
would have accrued for that semiannual accrual period for federal income tax purposes is to be apportioned in equal
amounts among the days in such accrual period.
If a Discount Bond is purchased for a cost that exceeds the sum of (1) the Issue Price, plus (2) accrued interest and
accrued original issue discount, the amount of original issue discount that is deemed to accrue thereafter to the
purchaser is reduced by an amount that reflects amortization of such excess over the remaining term of such Bond.
Except for the Minnesota rules described above, no opinion is expressed as to state and local income tax treatment
of original issue discount. It is possible under certain state and local income tax laws that original issue discount on
a Discount Bond may be taxable in the year of accrual, and may be deemed to accrue differently than under federal
law. Holders of Discount Bonds should consult their tax advisors for advice with respect to the state and local tax
consequences of owning Discount Bonds.
In the opinion of Dorsey & Whitney LLP, Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decisions, and assuming compliance with certain
covenants, interest to be paid on the Bonds is excluded from gross income for federal income tax purposes and from taxable net income of individuals, estates, and trusts for
Minnesota income tax purposes; is not an item of tax preference for federal or Minnesota alternative minimum tax purposes; but is included in adjusted current earnings of
corporations for federal alternative minimum tax purposes. Such interest is included in taxable income for purposes of the Minnesota franchise tax on corporations and financial
institutions. See "Tax Exemption and Related Tax Considerations" herein.
The City will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code relating to the ability of financial institutions to deduct from
income for federal income tax purposes, a portion of the interest expense that is allocable to tax-exempt obligations. Sections 265(a)(2) and 291 of the Code impose additional
limitations on the deductibility of such interest expense.
New Issue Rating Application Made: Standard & Poor's
PRELIMINARY OFFICIAL STATEMENT DATED MARCH 22, 2010
CITY OF NEW HOPE, MINNESOTA
$1,590,000* GENERAL OBLIGATION UTILITY REVENUE BONDS, SERIES 2010A
PROPOSAL OPENING: April 12, 2010, 10:00 A.M., C.T.
CONSIDERATION: April 12, 2010, 7:00 P.M., C.T.
PURPOSE/AUTHORITY/SECURITY: The $1,590,000 General Obligation Utility Revenue Bonds, Series 2010A (the "Bonds")
are being issued pursuant to Minnesota Statutes, Chapter 444 and Section 475.67, by the City of New Hope, Minnesota (the
"City"), for the purpose of effecting a current refunding of the 2011 through 2014 maturities of the $2,950,000 General Obligation
Utility Revenue Bonds, Series 1999A, dated May 1, 1999 and to reimburse the City Water and Sewer Utility Fund for costs
previously incurred for the municipal utility portions of the 2008 Infrastructure Improvement Project. The Bonds will be general
obligations of the City for which its full faith, credit and taxing powers are pledged. Delivery is subject to receipt of an approving
legal opinion of Dorsey & Whitney LLP, Minneapolis, Minnesota.
DATE OF BONDS: May 6, 2010
MATURITY: February 1 as follows:
Year Amount* Year Amount* Year Amount*
2011 $215,000 2015 $75,000 2019 $80,000
2012 275,000 2016 75,000 2020 85,000
2013 275,000 2017 75,000 2021 85,000
2014 270,000 2018 80,000
MATURITY ADJUSTMENTS: * The City reserves the right to increase or decrease the principal amount of the Bonds on the
day of sale, in increments of $5,000 each. Increases or decreases may be made in any
maturity. If any principal amounts are adjusted, the purchase price proposed will be adjusted
to maintain the same gross spread per $1,000.
TERM BONDS: See "Term Bond Option" herein.
INTEREST: February 1, 2011 and semiannually thereafter.
OPTIONAL REDEMPTION: Bonds maturing February 1, 2019 and thereafter are subject to call for prior redemption on
February 1, 2018 and any date thereafter, at par.
MINIMUM PROPOSAL: $1,570,920.
GOOD FAITH DEPOSIT: $31,800.
PAYING AGENT: Bond Trust Services Corporation, Roseville, Minnesota
BOOK-ENTRY-ONLY:See "Book-Entry-Only System" herein.
This Preliminary Official Statement will be further supplemented by an addendum specifying the offering prices, interest rates,
aggregate principal amount, principal amount per maturity, anticipated delivery date, and Syndicate Manager and Syndicate
Members, together with any other information required by law, and, as supplemented, shall constitute a "Final Official Statement"
of the City with respect to the Bonds, as defined in S.E.C. Rule 15c2-12.
ii
REPRESENTATIONS
No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representation other than
those contained in this Preliminary Official Statement and, if given or made, such other information or representations must not be relied upon
as having been authorized by the City. This Preliminary Official Statement does not constitute an offer to sell or a solicitation of an offer
to buy any of these Bonds in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction.
This Preliminary Official Statement is not to be construed as a contract with the Syndicate Manager or Syndicate Members. Statements
contained herein which involve estimates or matters of opinion are intended solely as such and are not to be construed as representations of
fact. Ehlers & Associates, Inc. prepared this Preliminary Official Statement and any addenda thereto relying on information of the City and
other sources for which there is reasonable basis for believing the information is accurate and complete. Bond Counsel has not participated
in the preparation of this Preliminary Official Statement except as described herein and is not expressing any opinion as to the completeness
or accuracy of the information contained therein. Compensation of Ehlers & Associates, Inc., payable entirely by the City, is contingent upon
the sale of the issue.
COMPLIANCE WITH S.E.C. RULE 15c2-12
Certain municipal obligations (issued in an aggregate amount over $1,000,000) are subject to General Rules and Regulations, Securities
Exchange Act of 1934, Rule 15c2-12 Municipal Securities Disclosure (the "Rule").
Preliminary Official Statement: This Preliminary Official Statement was prepared for the City for dissemination to potential customers.
Its primary purpose is to disclose information regarding these Bonds to prospective underwriters in the interest of receiving competitive
proposals in accordance with the sale notice contained herein. Unless an addendum is posted prior to the sale, this Preliminary Official
Statement shall be deemed nearly final for purposes of the Rule subject to completion, revision and amendment in a Final Official Statement
as defined below.
Review Period: This Preliminary Official Statement has been distributed to members of the legislative body and other public officials of
the City as well as to prospective bidders for an objective review of its disclosure. Comments or requests for the correction of omissions or
inaccuracies must be submitted to Ehlers & Associates at least two business days prior to the sale. Requests for additional information or
corrections in the Preliminary Official Statement received on or before this date will not be considered a qualification of a proposal received
from an underwriter. If there are any changes, corrections or additions to the Preliminary Official Statement, interested bidders will be informed
by an addendum at least one business day prior to the sale.
Final Official Statement: Upon award of sale of these Bonds, the Preliminary Official Statement together with any previous addendum
of corrections or additions will be further supplemented by an addendum specifying the offering prices, interest rates, aggregate principal
amount, principal amount per maturity, anticipated delivery date, and Syndicate Manager and Syndicate Members, together with any other
information required by law, and, as supplemented, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as defined
in S.E.C. Rule 15c2-12. Copies of the Final Official Statement will be delivered to the underwriter (Syndicate Manager) within seven business
days following the proposal acceptance.
Continuing Disclosure: Subject to certain exemptions, issues in an aggregate amount over $1,000,000 may be required to comply with
provisions of the Rule which require that underwriters obtain from the issuers of municipal securities (or other obligated party) an agreement
for the benefit of the owners of the securities to provide continuing disclosure with respect to those securities. This Preliminary Official
Statement describes the conditions under which these Bonds are exempt or required to comply with the Rule.
CLOSING CERTIFICATES
Upon delivery of these Bonds, the purchaser (underwriter) will be furnished with the following items: (1) a certificate of the appropriate officials
to the effect that at the time of the sale of these Bonds and all times subsequent thereto up to and including the time of the delivery of these
Bonds, this Preliminary Official Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (2) a receipt signed
by the appropriate officer evidencing payment for these Bonds; (3) a certificate evidencing the due execution of these Bonds, including
statements that (a) no litigation of any nature is pending, or to the knowledge of signers, threatened, restraining or enjoining the issuance and
delivery of these Bonds, (b) neither the corporate existence or boundaries of the City nor the title of the signers to their respective offices is
being contested, and (c) no authority or proceedings for the issuance of these Bonds have been repealed, revoked or rescinded; and (4) a
certificate setting forth facts and expectations of the City which indicates that the City does not expect to use the proceeds of these Bonds in
a manner that would cause them to be arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended,
or within the meaning of applicable Treasury Regulations.
iii
TABLE OF CONTENTS
INTRODUCTORY STATEMENT .......................1
THE BONDS ........................................1
G E N E R A L......................................1
OPTIONAL REDEMPTION ........................2
A U T H O R I T Y ; P U R P O S E..........................2
ESTIMATED SOURCES AND USES ................3
S E C U R I T Y .....................................4
R A T I N G........................................4
C O N T I N U I N G D I S C L O S U R E ......................5
L E G A L O P I N I O N ................................5
TAX EXEMPTION AND RELATED TAX
C O N S I D E R A T I O N S.........................5
QUALIFIED TAX-EXEMPT OBLIGATIONS ..........6
FINANCIAL ADVISOR ...........................6
R I S K F A C T O R S .................................7
V A L U A T I O N S ......................................8
C U R R E N T P R O P E R T Y V A L U A T I O N S ..............9
2009/10 NET TAX CAPACITY BY CLASSIFICATION . 10
T R E N D O F V A L U A T I O N S .......................1 0
L A R G E R T A X P A Y I N G P A R C E L S .................1 1
D E B T.............................................1 2
D I R E C T D E B T .................................1 2
SCHEDULES OF BONDED INDEBTEDNESS ........1 3
D E B T L I M I T ...................................2 0
O V E R L A P P I N G D E B T...........................2 0
D E B T R A T I O S .................................2 1
D E B T P A Y M E N T H I S T O R Y......................2 1
FUTURE FINANCING ...........................2 1
L E V Y L I M I T S..................................2 1
TAX LEVIES AND COLLECTIONS ....................2 2
TAX COLLECTIONS ............................2 2
T A X C A P A C I T Y R A T E S.........................2 2
T H E I S S U E R.......................................2 3
CITY GOVERNMENT ...........................2 3
E M P L O Y E E S ; P E N S I O N S ; U N I O N S ...............2 3
L I T I G A T I O N...................................2 4
FUNDS ON HAND ..............................2 4
ENTERPRISE FUNDS ...........................2 5
SUMMARY GENERAL FUND INFORMATION ......2 6
G E N E R A L I N F O R M A T I O N...........................2 7
L O C A T I O N ....................................2 7
L A R G E R E M P L O Y E R S ..........................2 7
U . S . C E N S U S D A T A.............................2 8
E M P L O Y M E N T / U N E M P L O Y M E N T D A T A .........2 8
B U I L D I N G P E R M I T S............................2 9
FINANCIAL INSTITUTIONS .....................2 9
E D U C A T I O N...................................3 0
I N - P A T I E N T M E D I C A L F A C I L I T I E S...............3 0
EXCERPTS FROM FINANCIAL STATEMENTS .......A - 1
F O R M O F L E G A L O P I N I O N.......................B - 1
BOOK-ENTRY-ONLY SYSTEM ....................C - 1
FORM OF CONTINUING DISCLOSURE COVENANTS D-1
T E R M S O F P R O P O S A L........................... E - 1
iv
CITY COUNCIL
Kathi Hemken Mayor
John Elder Council Member
Andy Hoffe Council Member
Eric Lammle Council Member
Daniel Stauner Council Member
ADMINISTRATION
Kirk McDonald, City Manager
Valerie Leone, City Clerk
PROFESSIONAL SERVICES
Jensen Sondrall Persellin, P.A., City Attorney, Brooklyn Park, Minnesota
Dorsey & Whitney LLP, Bond Counsel, Minneapolis, Minnesota
Ehlers & Associates, Inc., Financial Advisors, Roseville, Minnesota
(Other offices located in Brookfield, Wisconsin and Lisle, Illinois)
1
INTRODUCTORY STATEMENT
This Preliminary Official Statement contains certain information regarding the City of New Hope, Minnesota (the
"City") and the issuance of its $1,590,000 General Obligation Utility Revenue Bonds, Series 2010A (the "Bonds").
Any descriptions or summaries of the Bonds, statutes, or documents included herein are not intended to be complete
and are qualified in their entirety by reference to such statutes and documents and the form of the Bonds to be
included in the resolution awarding the sale of the Bonds to be adopted by the City Council on April 12, 2010.
Inquiries may be directed to Ehlers & Associates, Inc. ("Ehlers" or the "Financial Advisor"), Roseville, Minnesota,
(651) 697-8500, the City's Financial Advisor. A copy of this Preliminary Official Statement may be downloaded from
Ehlers’ web site at www.ehlers-inc.com by connecting to the link to the Bond Sales and following the directions at
the top of the site.
THE BONDS
GENERAL
The Bonds will be issued in fully registered form as to both principal and interest in denominations of $5,000 each
or any integral multiple thereof, and will be dated, as originally issued, as of May 6, 2010. The Bonds will mature
on February 1 in the years and amounts set forth on the cover of this Preliminary Official Statement. Interest will be
payable on February 1 and August 1 of each year, commencing February 1, 2011, to the registered owners of the
Bonds appearing of record in the bond register as of the close of business on the 15th day (whether or not a business
day) prior to the interest payment date. Interest will be computed upon the basis of a 360-day year of twelve 30-day
months and will be rounded pursuant to rules of the MSRB. All Bonds of the same maturity will bear interest from
date of issue until paid at a single, uniform rate.
The Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York,
New York ("DTC"). (See "Book-Entry-Only System" herein.) As long as the Bonds are held under the book-entry
system, beneficial ownership interests in the Bonds may be acquired in book-entry form only, and all payments of
principal of, premium, if any, and interest on the Bonds shall be made through the facilities of DTC and its
Participants. If the book-entry system is terminated, principal of, premium, if any, and interest on the Bonds shall
be payable as provided in the resolution awarding the sale of the Bonds.
The City has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the “Paying
Agent”). The City will pay the charges for Paying Agent services. The City reserves the right to remove the Paying
Agent and to appoint a successor.
2
OPTIONAL REDEMPTION
At the option of the City, Bonds maturing on or after February 1, 2019 shall be subject to prior payment on February
1, 2018 or on any date thereafter, at a price of par plus accrued interest.
Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the selection
of the amounts and maturities of the Bonds to be prepaid shall be at the discretion of the City. If only part of the
Bonds having a common maturity date are called for redemption, the City or Paying Agent, if any, will notify DTC
of the particular amount of such maturity to be redeemed. 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 interest
in such maturity to be redeemed.
Notice of such call shall be given by mailing a notice not more than 60 days and not fewer than 30 days prior to the
date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the
registration books.
AUTHORITY; PURPOSE
The Bonds are being issued by the City, pursuant to Minnesota Statutes, Chapter 444 and Section 475.67, by the City
of New Hope, Minnesota (the "City"), for the purpose of effecting a current refunding of the 2011 through 2014
maturities of the $2,950,000 General Obligation Utility Revenue Bonds, Series 1999A (the “Series 1999A Bonds”),
dated May 1, 1999 and to reimburse the City Water and Sewer Utility Fund for costs previously incurred for the
municipal utility portions of the 2008 Infrastructure Improvement Project.
Following are the maturities of the Series 1999A Bonds which are being refunded by this issue:
Issue Being Refunded
Date of
Refunded
Issue
Call
Date
Call
Price
Maturities
Being
Refunded
Interest
Rates
Principal
to be
Refunded
Series 1999A Bonds 5/01/99 6/01/10 Par 2011 4.40% $195,000
2012 4.50% 195,000
2013 4.55% 195,000
2014 4.60% 195,000
Total Series 1999A Bonds Being Refunded $780,000
Proceeds of the Bonds will be used to call and prepay the maturities described above and to pay all or most of the
costs of issuance.
3
ESTIMATED SOURCES AND USES
Sources 1999A Refunding
Portion
Reimbursement
Portion
Total
Bond Issue
Par Amount of Bonds $815,000 $775,000 $1,590,000
Uses
Deposit to Current Refunding Fund $791,645 $791,645
Deposit to Project Fund 0 $752,252 752,252
Discount Allowance 9,780 9,300 19,080
Finance Related Expenses 12,815 12,185 25,000
Contingency 760 1,263 2,023
Total Uses $815,000 $775,000 $1,590,000
4
Breakdown of Principal Payments:
Payment
Date
1999A Refunding
Portion
Reimbursement
Portion
Total
Bond Issue
2/01/2011 $215,000 $215,000
2/01/2012 205,000 $ 70,000 275,000
2/01/2013 200,000 75,000 275,000
2/01/2014 195,000 75,000 270,000
2/01/2015 75,000 75,000
2/01/2016 75,000 75,000
2/01/2017 75,000 75,000
2/01/2018 80,000 80,000
2/01/2019 80,000 80,000
2/01/2020 85,000 85,000
2/01/2021 85,000 85,000
Total $815,000 $775,000 $1,590,000
SECURITY
The Bonds are general obligations of the City for which its full faith, credit and taxing powers are pledged without
limitation as to rate or amount. Principal and interest on the Bonds will be paid entirely from net revenues of the
water and sewer systems which are owned and operated by the City. Should the revenues pledged for payment of the
Bonds be insufficient to pay the principal and interest as the same shall become due, the City is required to pay
maturing principal and interest from moneys on hand in any other fund of the City not pledged for another purpose
and/or to levy a tax for this purpose upon all the taxable property in the City, without limitation as to rate or amount.
RATING
The City has requested a rating on this issue from Standard & Poor's, and bidders will be notified as to the assigned
rating prior to the sale. Such a rating, if and when received, will reflect only the view of the rating agency and any
explanation of the significance of such rating may only be obtained from Standard & Poor's. There is no assurance
that such rating, if and when received, will continue for any period of time or that it will not be revised or withdrawn.
Any revision or withdrawal of the rating may have an effect on the market price of the Bonds.
5
CONTINUING DISCLOSURE
In order to permit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds to
comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (the "Rule"), the City will covenant and agree, for the benefit of the registered
holders and beneficial owners from time to time of the outstanding Bonds, in the resolution awarding the sale and
prescribing the terms of the Bonds, to provide certain financial information, and other financial information and
operating data if customarily prepared and publicly available, to the Municipal Securities Rulemaking Board, and to
provide notice of the occurrence of certain events, if material, as hereinafter described (the "Disclosure Covenants").
The City is the only "obligated person" in respect of the Bonds within the meaning of the Rule and, giving effect to
the issuance of the Bonds, there will not be more than $10 million in principal amount of municipal securities
outstanding on the date of issuance of the Bonds as to which the City is an obligated person (excluding municipal
securities exempt from the Rule under paragraph (d)(1) thereof). The information to be provided, the events as to
which notice is to be given, if material, and summary of other provisions of the Disclosure Covenants, including
termination, amendment and remedies, are set forth in Appendix D to this Official Statement. The City has complied
in all material respects with any undertaking previously entered into by it under the Rule.
Breach of the Disclosure Covenants will not constitute a default or an "Event of Default" under the Bonds or the
Resolution. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before
recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the City to
observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market
price.
LEGAL OPINION
An opinion as to the validity of the Bonds and the exemption from taxation of the interest thereon will be furnished
by Dorsey & Whitney LLP, Minneapolis, Minnesota, bond counsel to the City, and will accompany the Bonds. The
legal opinion will state that the Bonds are valid and binding general obligations of the City enforceable in accordance
with their terms, except to the extent to which enforceability may be limited by Minnesota or United States laws
relating to bankruptcy, reorganization, moratorium or creditors' rights generally.
TAX EXEMPTION AND RELATED TAX CONSIDERATIONS
Tax Exemption
It is the opinion of Dorsey & Whitney LLP, Bond Counsel, based on present federal and Minnesota laws, regulations,
rulings and decisions, and on certifications to be furnished at closing, and assuming compliance by the City with
certain covenants (the "Tax Covenants"), that interest to be paid on the Bonds is excluded from gross income for
federal income tax purposes and from taxable net income of individuals, estates, and trusts for Minnesota income tax
purposes. Such interest is, however, included in taxable income for purposes of Minnesota franchise taxes imposed
on corporations and financial institutions.
Certain provisions of the Internal Revenue Code of 1986, as amended (the "Code"), however, impose continuing
requirements that must be met after the issuance of the Bonds in order for interest thereon to be and remain not
includable in federal gross income and in Minnesota taxable net income of individuals, estates and trusts. These
requirements include, but are not limited to, provisions regarding the use of Bond proceeds and the facilities financed
with such proceeds; restrictions on the investment of Bond proceeds and other amounts; and provisions requiring that
certain investment earnings be rebated periodically to the federal government. Noncompliance with such requirements
may cause interest on the Bonds to be includable in federal gross income or in Minnesota taxable net income
6
retroactively to their date of issue. Compliance with the Tax Covenants will satisfy the current requirements of the
Code with respect to exemption of interest on the Bonds. No provision has been made for redemption of or for an
increase in the interest rate on the Bonds in the event that interest on the Bonds becomes includable in federal gross
income or in Minnesota taxable net income.
Related Tax Considerations
Interest on the Bonds is not an item of tax preference for federal or Minnesota alternative minimum tax purposes, but
it is included in adjusted current earnings of corporations for purposes of the federal alternative minimum tax. Section
86 of the Code and corresponding provisions of Minnesota law require recipients of certain social security and railroad
retirement benefits to take interest on the Bonds into account in determining the taxability of such benefits. Passive
investment income, including interest on the Bonds, may be subject to taxation under section 1375 of the Code, and
corresponding provisions of Minnesota law, for an S corporation that has accumulated earnings and profits at the close
of the taxable year, if more than 25 percent of its gross receipts is passive investment income. Section 265 of the Code
denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds (see
"QUALIFIED TAX-EXEMPT OBLIGATIONS" herein for provisions relating to certain financial institutions), and
Minnesota law similarly denies a deduction for such interest in the case of individuals, estates and trusts. Indebtedness
may be allocated to the Bonds for this purpose even though not directly traceable to the purchase of the Bonds.
Federal and Minnesota laws also restrict the deductibility of other expenses allocable to the Bonds. In the case of an
insurance company subject to the tax imposed by section 831 of the Code, the amount which otherwise would be
taken into account as losses incurred under section 832(b)(5) of the Code must be reduced by an amount equal to 15
percent of the interest on the Bonds that is received or accrued during the taxable year. Interest on the Bonds may
be included in the income of a foreign corporation for purposes of the branch profits tax imposed by section 884 of
the Code, and is included in net investment income of foreign insurance companies under section 842(b) of the Code.
Because of the Code’s basis reduction rules for amortizable bond premium, Bondholders who acquire Bonds at a
premium may be required to recognize taxable gain upon sale of the Bonds, even if the Bonds are sold for an amount
equal to or less than their original cost.
THE FOREGOING IS NOT INTENDED TO BE AN EXHAUSTIVE DISCUSSION OF COLLATERAL TAX
CONSEQUENCES ARISING FROM OWNERSHIP OR DISPOSITION OF THE BONDS OR RECEIPT OF
INTEREST ON THE BONDS. PROSPECTIVE PURCHASERS OR BOND HOLDERS SHOULD CONSULT
THEIR TAX ADVISORS WITH RESPECT TO COLLATERAL TAX CONSEQUENCES AND APPLICABLE
STATE AND LOCAL TAX RULES IN STATES OTHER THAN MINNESOTA.
QUALIFIED TAX-EXEMPT OBLIGATIONS
The City will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code
relating to the ability of financial institutions to deduct from income for federal income tax purposes, a portion of the
interest expense that is allocable to tax-exempt obligations. Sections 265(a)(2) and 291 of the Code impose additional
limitations on the deductibility of such interest expense.
FINANCIAL ADVISOR
Ehlers has served as Financial Advisor to the City in connection with the issuance of the Bonds. The Financial
Advisor will not participate in the underwriting of the Bonds. The financial information included in this Preliminary
Official Statement has been compiled by the Financial Advisor. Such information does not purport to be a review,
audit or certified forecast of future events and may not conform with accounting principles applicable to compilations
of financial information. Ehlers is not a firm of certified public accountants.
7
RISK FACTORS
Following is a description of possible risks to holders of these Bonds without weighting as to probability. This
description of risks is not intended to be all-inclusive, and there may be other risks not now perceived or listed here.
Taxes: The Bonds of this offering are general obligations of the City, the ultimate payment of which rests in the
City's ability to levy and collect sufficient taxes to pay debt service should other revenue be insufficient.
State Actions: Many elements of local government finance, including the issuance of debt and the levy of property
taxes, are controlled by state government. Past and future actions of the State may affect the overall financial
condition of the City, the taxable value of property within the City, and the ability of the City to levy property taxes.
Ratings; Interest Rates: In the future, the City's credit rating may be reduced or withdrawn, or interest rates for this
type of obligation may rise generally, either possibility resulting in a reduction in the value of the Bonds for resale
prior to maturity.
Tax Exemption: If the federal government or the State of Minnesota taxes the interest on municipal obligations,
directly or indirectly, or if there is a change in federal or state tax policy, the value of the Bonds may fall for purposes
of resale. Noncompliance following the issuance of the Bonds with certain requirements of the Code and covenants
of the bond resolution may result in the inclusion of interest on the Bonds in gross income of the recipient for United
States or in taxable net income of individuals, estates or trusts for State of Minnesota income tax purposes. No
provision has been made for redemption of the Bonds, or for an increase in the interest rate on the Bonds, in the event
that interest on the Bonds becomes subject to United States or State of Minnesota income taxation, retroactive to the
date of issuance.
Continuing Disclosure: A failure by the City to comply with the Undertaking for continuing disclosure (as described
herein) will not constitute an event of default on the Bonds. Any such 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. Such a failure may adversely affect the transferability and
liquidity of the Bonds and their market price.
State Economy; State Aids: State cash flow problems could affect local governments and possibly increase property
taxes.
Book-Entry-Only System: The timely credit of payments for principal and interest on the Bonds to the accounts of
the Beneficial Owners of the Bonds may be delayed due to the customary practices, standing instructions or for other
unknown reasons by DTC participants or indirect participants. Since the notice of redemption or other notices to
holders of these obligations will be delivered by the City to DTC only, there may be a delay or failure by DTC, DTC
participants or indirect participants to notify the Beneficial Owners of the Bonds.
Economy: A combination of economic, climatic, political or civil disruptions or terrorist actions could affect the local
economy and result in reduced tax collections and/or increased demands upon local government.
1 A residential property qualifies as "homestead" if it is occupied by the owner or a relative of the owner on the assessment date.
2 Applies to land and buildings. Exempt from referendum market value tax.
3 Exempt from referendum market value tax.
4 Cities of 5,000 population or less and located entirely outside the seven-county metropolitan area and the adjacent nine-county area and
whose boundaries are 15 miles or more from the boundaries of a Minnesota city with a population of over 5,000.
5 The estimated market value of utility property is determined by the Minnesota Department of Revenue.
8
VALUATIONS
OVERVIEW
All non-exempt property is subject to taxation by local taxing districts. Exempt real property includes Indian lands, public property, and
educational, religious and charitable institutions. Most personal property is exempt from taxation (except investor-owned utility mains,
generating plants, etc.).
The valuation of property in Minnesota consists of two elements. (1) The estimated market value is set by city or county assessors. Not less
than 20% of all real properties are to be appraised by local assessors each year. (2) The tax capacity (taxable) value of property is determined
by class rates set by the State Legislature. The tax capacity rate varies according to the classification of the property. Tax capacity represents
a percent of estimated market value.
The property tax rate for a local taxing jurisdiction is determined by dividing the total tax capacity or market value of property within the
jurisdiction into the dollars to be raised from the levy. State law determines whether a levy is spread on tax capacity or market value. Major
classifications and the percentages by which tax capacity is determined are:
Type of Property 2006/07 2007/08 2008/09
Residential homestead1 First $500,000 - 1.00%
Over $500,000 - 1.25%
First $500,000 - 1.00%
Over $500,000 - 1.25%
First $500,000 - 1.00%
Over $500,000 - 1.25%
Agricultural homestead1 First $500,000 HGA - 1.00%
Over $500,000 HGA - 1.25%
First $600,000 - 0.55% 2
Over $600,000 - 1.00% 2
First $500,000 HGA - 1.00%
Over $500,000 HGA - 1.25%
First $790,000 - 0.55% 2
Over $790,000 - 1.00% 2
First $500,000 HGA - 1.00%
Over $500,000 HGA - 1.25%
First $890,000 - 0.50% 2
Over $890,000 - 1.00% 2
Agricultural non-homestead Land - 1.00% 2 Land - 1.00% 2 Land - 1.00% 2
Seasonal recreational residential First $500,000 - 1.00% 3
Over $500,000 - 1.25% 3
First $500,000 - 1.00% 3
Over $500,000 - 1.25% 3
First $500,000 - 1.00% 3
Over $500,000 - 1.25% 3
Residential non-homestead: 1 unit - 1st $500,000 - 1.00%
Over $500,000 - 1.25%
2-3 units - 1.25%
4 or more - 1.25%
Small City 4 - 1.25%
1 unit - 1st $500,000 - 1.00%
Over $500,000 - 1.25%
2-3 units - 1.25%
4 or more - 1.25%
Small City 4 - 1.25%
1 unit - 1st $500,000 - 1.00%
Over $500,000 - 1.25%
2-3 units - 1.25%
4 or more - 1.25%
Small City 4 - 1.25%
Industrial/Commercial/Utility5 First $150,000 - 1.50%
Over $150,000 - 2.00%
First $150,000 - 1.50%
Over $150,000 - 2.00%
First $150,000 - 1.50%
Over $150,000 - 2.00%
1 According to the Minnesota Department of Revenue, the Assessor's Taxable Market Value (the "ATMV") for the
City of New Hope is about 96.0% of the actual selling prices of property most recently sold in the City. That
sales ratio was calculated by comparing the selling prices with the ATMV. Dividing the ATMV of real estate
by 0.960 and adding personal property and mobile home ATMV, if any, results in an "Estimated Full Value of
Taxable Property" for the City of $1,693,226,692.
2 The captured tax increment value shown above represents the captured net tax capacity of tax increment financing
districts in the City of New Hope.
3 Each community in the seven-county metropolitan area contributes 40% of the growth in its commercial-
industrial property tax base since 1972 to an area pool which is then distributed among the municipalities on the
basis of population, special needs, etc. Each governmental unit makes a contribution and receives a distribution--
sometimes gaining and sometimes contributing net tax capacity for tax purposes.
9
CURRENT PROPERTY VALUATIONS
Estimated Full Value of Taxable Property, 2009/10 $1,693,226,692 1
2009/10
Assessor's
Taxable
Market Value
2009/10
Net Tax
Capacity
Real Estate $1,618,178,200 $19,864,103
Personal Property 7,624,400 148,346
Total Valuation $1,625,802,600 $20,012,449
Less: Captured Tax Increment Tax Capacity2 (1,181,390)
Fiscal Disparities Contribution3 (2,596,468)
Taxable Net Tax Capacity $16,234,591
Plus: Fiscal Disparities Distribution3 3,946,315
Adjusted Taxable Net Tax Capacity $20,180,906
1 Net Tax Capacity is before fiscal disparities adjustments and includes tax increment values.
2 Adjusted Taxable Net Tax Capacity is after fiscal disparities adjustments and does not include tax increment
values.
10
2009/10 NET TAX CAPACITY BY CLASSIFICATION
2009/10
Net Tax Capacity
Percent of Total
Net Tax Capacity
Residential homestead $10,785,254 53.89%
Agricultural 5,830 0.03%
Commercial/industrial 6,566,650 32.81%
Railroad operating property 29,954 0.15%
Non-homestead residential 2,475,605 12.37%
Commercial & residential seasonal/rec. 810 0.00%
Personal property 148,346 0.74%
Total $20,012,449 100.00%
TREND OF VALUATIONS
Levy
Year
Assessor's
Taxable
Market Value
Net Tax
Capacity1
Adjusted
Taxable
Net Tax
Capacity2
Percent +/- in Assessor's
Taxable Market Value
2005/06 $1,571,305,700 $16,078,259 $18,725,973 +10.42%
2006/07 1,692,662,000 17,052,108 19,858,810 + 7.72%
2007/08 1,750,807,800 17,461,217 20,859,409 + 3.44%
2008/09 1,732,235,700 17,357,938 21,179,543 -1.06%
2009/10 1,625,802,600 20,012,449 20,180,906 -6.14%
1 Hennepin County has provided only the ten largest taxpaying parcels which appear on the tax rolls of the County,
and therefore the information stated above may not be reflective of the entire valuation of all parcels and may not
include all classifications of property.
11
LARGER TAXPAYING PARCELS1
Taxpayer Type of Property
2009/10
Assessor's Taxable
Market Value
2009/10
Net Tax
Capacity
Geneva Management Serv LLC Industrial $ 9,400,000 $187,250
Paddock Property Ltd Partnership Industrial 7,875,000 156,750
St. Therese Home Inc. Apartment 12,338,000 154,438
Minn Masonic Home No Ridge Apartment 12,182,000 152,275
New Hope/US Swim Partnership Commercial 7,600,000 151,250
Cobalt Industrial Reit II Industrial 7,230,000 143,850
New Hope Distribution Center LLC Industrial 7,000,000 139,250
Winnetka Mall LLC Commercial 7,000,000 139,250
Long Ridge Indust. Portfolio Industrial 6,800,000 135,250
FLS Properties Industrial 6,650,000 132,250
Source:Current Property Valuations, Net Tax Capacity by Classification, Trend of Valuations and Larger
Taxpaying Parcels have been furnished by Hennepin County.
1 Outstanding debt is as of the dated date of the Bonds.
2 Non-general obligation debt has not been included in the debt ratios.
12
DEBT
DIRECT DEBT1
General Obligation Debt (see schedules following)
Total g.o. debt being paid from revenues (includes the Bonds of this offering) $2,335,000
Total g.o. debt being paid from tax increment revenues 4,605,000
Total g.o. debt being paid from taxes 35,000
Total g.o. debt being paid from special assessments and taxes 775,000
Total General Obligation Debt $7,750,000
Revenue Debt (see schedule following)
Total revenue debt being paid from golf course revenues $375,000
Lease Purchase Obligations (see schedule following)
Total lease purchase obligations paid by annual appropriations2 $24,128
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18
1 Only those taxing jurisdictions with general obligation debt outstanding are included in this section. Does not
include non-general obligation debt, self-supporting g.o. revenue debt, short-term general obligation debt, or
general obligation tax/aid anticipation certificates of indebtedness.
2 Hennepin County also has General Obligation Solid Waste Revenue Bonds outstanding which are payable
entirely from the County’s solid waste enterprise fund; General Obligation Bonds (Century Plaza Debt) which
are expected to be paid from building rental fees from County departments and non-County tenants; and General
Obligation Ice Arena Revenue Bonds which are expected to be paid from building rental payments from
Augsburg College. These issues have not been included in the overlapping debt or debt ratios.
3 The above debt includes all outstanding general obligation debt supported by taxes of the Metropolitan Council.
The Council also has general obligation sewer revenue, wastewater revenue, and radio revenue bonds and lease
obligations outstanding all of which are supported entirely by revenues and have not been included in the
Overlapping Debt or Debt Ratios sections.
19
DEBT LIMIT
The statutory limit on debt of Minnesota municipalities other than school districts or cities of the first class (Minnesota
Statutes, Section 475.53, subd. 1) is 3% of the Assessor's Taxable Market Value of all taxable property within its
boundaries. "Net debt" (Minnesota Statutes, Section 475.51, subd. 4) is the amount remaining after deducting from
gross debt: (1) obligations payable wholly or partly from special assessments levied against benefitted property (e.g.
the Bonds of this offering); (2) warrants or orders having no definite or fixed maturity; (3) obligations issued to
finance any public revenue producing convenience; (4) obligations issued to create or maintain a permanent
improvement revolving fund; (5) funds held as sinking funds for payment of principal and interest on debt other than
those deductible under 1-4 above; (6) other obligations which are not to be included in computing the net debt of a
municipality under the provisions of the law authorizing their issuance.
Assessor's Taxable Market Value $1,625,802,600
Multiply by 3% 0.03
Statutory Debt Limit $ 48,774,078
Less: Long-Term Debt Outstanding Being Paid Solely from Taxes (35,000)
Unused Debt Limit $ 48,739,078
OVERLAPPING DEBT1
Taxing District
2009/10
Taxable Net
Tax Capacity
% In
City
Total
G.O. Debt
City's
Proportionate
Share
Hennepin County $1,600,479,523 1.2609% $620,945,000 2 $ 7,829,674
I.S.D. No. 281 (Robbinsdale) 104,267,959 19.3548% 172,775,000 33,440,340
Metropolitan Council 1,599,548,644 1.2617% 167,600,000 3 2,114,546
Three Rivers Park District 1,161,337,991 1.7377% 73,985,000 1,285,659
City's Share of Total Overlapping Debt $44,670,219
1 Funds on hand for debt redemption (available for payment of principal and interest) have been deducted from total
general obligation debt to determine net general obligation debt.
2 Debt service on the City’s general obligation revenue debt is being paid entirely from revenues and therefore is
considered self-supporting debt.
20
DEBT RATIOS
G.O. Debt
Debt/Estimated
Full Value of
Taxable Property
($1,693,226,692)
Debt/20,860
Estimated
Population
Direct G.O. Debt Being Paid From:
Revenues $ 2,335,000
Tax Increment Revenues 4,605,000
Taxes 35,000
Special Assessments & Taxes 775,000
Total General Obligation Debt $ 7,750,000
Less: Funds on Hand1 (5,190,536)
Less: G.O. Debt Paid Entirely from Revenues2 (745,000)
Net General Obligation Debt $ 1,814,464 0.11% $86.98
City's Share of Total Overlapping Debt $ 44,670,219 2.64% $2,141.43
DEBT PAYMENT HISTORY
The City has never defaulted in the payment of principal and interest on its debt.
FUTURE FINANCING
The City is in the process of issuing $418,644 General Obligation Water Bond, Series 2010 through the Minnesota
Public Facilities Authority.
LEVY LIMITS
The State Legislature has periodically imposed limitations on the ability of municipalities to levy property taxes. In
2008, the Legislature imposed levy limits for all counties and all cities over 2,500 population for budget years 2009,
2010 and 2011. These limitations do not apply to taxes levied to pay debt service on general obligation bonds of the
City or to pay bonds of another governmental unit. For more detailed information about Minnesota levy limits,
contact the Minnesota Department of Revenue or Ehlers & Associates.
1 This reflects the Final Levy Certification of the City after all adjustments have been made.
2 Collections are through December 31, 2009.
3 After reduction for state aids. Does not include the statewide general property tax against commercial/industrial,
non-homestead resorts and seasonal recreational residential property.
21
TAX LEVIES AND COLLECTIONS
TAX COLLECTIONS
Tax Year
Certified
Levy1
Total Collected
Following Year
Collected
to Date2 % Collected
2004/05 $8,029,931 $7,952,189 $8,024,891 99.94%
2005/06 8,029,931 7,946,201 8,021,681 99.90%
2006/07 8,402,096 8,293,172 8,378,270 99.72%
2007/08 8,759,354 8,650,857 8,737,191 99.75%
2008/09 8,768,965 In process of collection
Property taxes are collected in two installments in Minnesota--the first by May 15 and the second by October 15.
Mobile home taxes are collectible in full by August 31. Minnesota Statutes require that levies (taxes and special
assessments) for debt service be at least 105% of the actual debt service requirements to allow for delinquencies.
TAX CAPACITY RATES3
2005/06 2006/07 2007/08 2008/09 2009/10
Hennepin County 41.016% 39.110% 38.571% 40.413% 42.056%
City of New Hope 42.375% 42.346% 41.995% 41.342% 45.542%
I.S.D. No. 281 (Robbinsdale) 28.489% 28.750% 27.243% 27.214% 26.762%
HCRRA 0.559% 0.871% 0.979% 0.380% 0.000%
Hennepin County HRA 0.000% 0.000% 0.000% 0.000% 0.241%
Metropolitan Council 0.873% 0.877% 0.812% 0.817% 0.793%
Metropolitan Mosquito 0.509% 0.499% 0.486% 0.489% 0.461%
Metropolitan Transit 1.542% 1.295% 1.264% 1.273% 1.366%
Park Museum 0.685% 0.700% 0.719% 0.771% 0.778%
Three Rivers Park District 2.830% 3.068% 3.137% 3.334% 3.499%
Referendum Market Value Rates:
I.S.D. No. 281 (Robbinsdale) 0.16298% 0.14295% 0.11842% 0.22209% 0.22881%
Source:Tax Collections and Tax Capacity Rates have been furnished by Hennepin County.
22
THE ISSUER
CITY GOVERNMENT
The City of New Hope was organized as a municipality in 1953. The City operates under a statutory form of
government consisting of a five-member City Council of which the Mayor is a voting member. The City Manager
and City Clerk are responsible for administrative details and financial records.
EMPLOYEES; PENSIONS; UNIONS
The City currently has 84 full-time, 12 part-time and 112 seasonal employees. All full-time and certain part-time
employees of the City are covered by defined benefit pension plans administered by the Public Employee 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 retirement plans. PERA
members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social
Security. See the Notes to Financial Statements in Appendix A for a detailed description of the Plans.
Recognized and Certified Bargaining Units
Bargaining Unit
Expiration Date of
Current Contract
L.E.L.S. Local #77 Police Officers December 31, 2010
L.E.L.S. Local #273 Police Supervisors December 31, 2010
I.U.O.E. Local #49 December 31, 2009
Status of Contracts
Contracts which expired on December 31, 2009 are currently in negotiations.
23
LITIGATION
There is no litigation threatened or pending questioning the organization or boundaries of the City or the right of
any of its officers to their respective offices or in any manner questioning their rights and power to execute and
deliver these Bonds or otherwise questioning the validity of these Bonds.
FUNDS ON HAND (As of March 4, 2010)
Fund
Total Cash
and Investments
General $ 3,835,033
Special Revenue 2,775,606
Debt Service 6,474,407
Capital Projects 7,857,314
Enterprise Funds 798,623
Internal Service 8,712,115
Trust and Agency (24,946,178)
Total Funds on Hand $ 5,506,919
24
ENTERPRISE FUNDS
Cash flows for the City's enterprise funds have been as follows as of December 31 each year:
2006 2007 2008
Water and Sewer
Total Operating Revenues $4,473,801 $4,858,972 $5,151,776
Less: Operating Expenses (4,657,573) (4,895,395) (4,861,765)
Operating Income $ (183,772) $ (36,423) $ 290,011
Plus: Depreciation 178,793 193,357 246,010
Revenues Available for Debt Service $ (4,979) $ 156,934 $ 536,021
Golf Course
Total Operating Revenues $ 347,541 $ 338,971 $ 330,782
Less: Operating Expenses (392,924) (407,266) (349,496)
Operating Income $ (45,383) $ (68,295) $ (18,714)
Plus: Depreciation 46,548 46,766 47,057
Revenues Available for Debt Service $ 1,165 $ (21,529) $ 28,343
Ice Arena
Total Operating Revenues $ 629,636 $ 607,659 $ 655,832
Less: Operating Expenses (729,328) (718,802) (774,152)
Operating Income $ (99,692) $ (111,143) $ (118,320)
Plus: Depreciation 99,444 96,706 101,614
Revenues Available for Debt Service $ (248) $ (14,437) $ (16,706)
Storm Water
Total Operating Revenues $ 881,682 $ 922,850 $ 951,699
Less: Operating Expenses (528,808) (307,046) (288,445)
Operating Income $ 352,874 $ 615,804 $ 663,254
Plus: Depreciation 47,382 52,082 52,679
Revenues Available for Debt Service $ 400,256 $ 667,886 $ 715,933
Street Lighting
Total Operating Revenues $ 115,162 $ 116,940 $ 133,634
Less: Operating Expenses (106,065) (126,779) (121,661)
Operating Income $ 9,097 $ (9,839) $ 11,973
Plus: Depreciation 0 0 0
Revenues Available for Debt Service $ 9,097 $ (9,839) $ 11,973
25
SUMMARY GENERAL FUND INFORMATION
Following are summaries of the revenues and expenditures and fund balances for the City's General Fund for the past five fiscal
years. These summaries are not purported to be the complete audited financial statements of the City. Copies of the complete
audited financial statements are available upon request. See Appendix A for excerpts from the City's 2008 audited financial
statement.
FISCAL YEAR ENDING DECEMBER 31
COMBINED STATEMENT 2004 2005 2006 2007 2008
Revenue
Property taxes $4,720,599 $5,071,687 $5,368,368 $ 6,087,808 $6,228,780
Franchise taxes 291,560 296,816 295,431 314,543 312,308
Special assessments 0 0 3,017 3,615 7,293
Licenses and permits 500,141 398,843 289,534 332,351 415,012
Intergovernmental 1,301,221 1,124,979 1,200,712 741,307 960,620
Charges for services 1,063,391 808,144 829,308 954,186 916,889
Fines 268,358 240,273 266,750 247,794 285,255
Other 123,089 206,489 252,554 304,682 255,309
Total Revenues $8,268,359 $8,147,231 $8,505,674 $ 8,986,286 $9,381,466
Expenditures
Current
General government $1,247,047 $1,054,957 $1,095,531 $1,176,580 $1,302,294
Public safety 4,394,295 4,588,929 4,730,022 5,271,537 5,867,739
Public works 834,167 960,101 825,199 883,268 830,900
Culture and recreation 1,380,898 1,507,246 1,602,386 1,633,251 1,677,660
Total Expenditures $7,856,407 $8,111,233 $8,253,138 $ 8,964,636 $9,678,593
Excess of revenues over (under) expenditures $ 411,952 $ 35,998 $ 252,536 $ 21,650 $ (297,127)
Other Financing Sources (Uses)
O p e r a t i n g t r a n s f e r s i n $0 $0 $0 $0 $0
Operating transfers out (90,000) 0 0 0 0
Total Other Financing Sources (Uses)$ (90,000) $ 0 $ 0 $ 0 $ 0
Excess of revenues and other financing sources
over (under) expenditures and other financing
uses
$ 321,952 $ 35,998 $ 252,536 $ 21,650 $ (297,127)
General Fund Balance January 1 3,617,468 3,939,420 3,975,418 4,227,954 4,249,604
Residual Equity Transfer in (out) 0 0 0 0 0
General Fund Balance December 31 $3,939,420 $3,975,418 $4,227,954 $ 4,249,604 $3,952,477
DETAILS OF DECEMBER 31 FUND BALANCE
R e s e r v e d $0 $0 $0 $0 $0
Unreserved:
Designated 3,232,065 3,459,180 3,850,483 4,130,721 3,952,477
Undesignated 707,355 516,238 377,471 118,883 0
Total $3,939,420 $3,975,418 $4,227,954 $ 4,249,604 $3,952,477
1 Includes full-time, part-time and seasonal.
26
GENERAL INFORMATION
LOCATION
The City of New Hope, with a 2008 State Demographer's estimated population of 20,860 and comprising an area of
5.1 square miles, is located approximately 12 miles northwest of the City of Minneapolis.
LARGER EMPLOYERS
Larger employers in the City include the following:
Firm Type of Business/Product
No. of
Employees1
I.S.D. No. 281 (Robbinsdale) Elementary and secondary education 2,000
North Ridge Care Center/
Minnesota Masonic Homes
Nursing home and senior living facilities 808
Saint Therese Home of New Hope Nursing home and senior living facilities 602
Paddock Laboratories, Inc. Pharmaceutical and medicine manufacturing 557
Navarre Corporation Computer software, DVD's, video games and accessories 372
Source:Written and telephone survey (March, 2010), DirectoriesUSA and the Minnesota Department of Employment
and Economic Development.
27
U.S. CENSUS DATA
Population Trend: City of New Hope, Minnesota
1990 U.S. Census 21,853
2000 U.S. Census 20,873
2008 State Demographer's Estimate 20,860
Percent of Change 1990 - 2000 -4.48%
Income and Age Statistics
City of
New Hope
Hennepin
County
State of
Minnesota
1999 per capita income $23,562 $28,789 $23,198
1999 median household income $46,795 $51,711 $47,111
1999 median family income $60,424 $65,985 $56,874
2000 median gross rent $687 $654 $566
2000 median value owner occupied housing $136,600 $143,400 $122,400
2000 median age 38.3 yrs. 34.9 yrs. 35.4 yrs.
Housing Statistics
City of New Hope
1990 2000 Percent of Change
All Housing Units 8,795 8,744 -0.58%
Source: 1990 and 2000 Census of Population and Housing.
EMPLOYMENT/UNEMPLOYMENT DATA
Rates are not compiled for individual communities within counties.
Average Employment Average Unemployment
Year Hennepin County Hennepin County State of Minnesota
2006 626,862 3.6% 4.1%
2007 629,593 4.1% 4.6%
2008 627,744 4.9% 5.4%
2009 609,778 7.3% 8.0%
2010, January 608,627 7.0% 8.2%
Source: Minnesota Department of Employment and Economic Development.
1 As of March 4, 2010.
28
BUILDING PERMITS
2006 2007 2008 2009 20101
New Single Family Homes
N o . o f b u i l d i n g p e r m i t s 4200 0
Valuation $1,112,780 $1,458,542 $0 $0 $0
New Multiple Family Buildings
N o . o f b u i l d i n g p e r m i t s 1000 0
Valuation $6,300,000 $0 $0 $0 $0
New Commercial/Industrial
N o . o f b u i l d i n g p e r m i t s 1010 0
Valuation $2,100,000 $0 $910,000 $0 $0
No. of All Building Permits
(including additions and remodelings)
578 1,627 2,560 616 43
Valuation of All Building Permits
(including additions and remodelings)
$18,862,054 $17,205,133 $26,824,154 $9,043,344 $574,288
FINANCIAL INSTITUTIONS
Financial institutions located in the City include the following:
Associated Bank, National Association (Branch of Green Bay, Wisconsin)
Wells Fargo Bank, National Association (Branch of Sioux Falls, South Dakota)
Source:American Financial Directory.
29
EDUCATION
Independent School District No. 281 (Robbinsdale Area Schools) provides education for 11,745 students in grades
K through 12. The District, with 2,000 employees, owns and/or operates 13 schools, 4 of which are located in the
City of New Hope. Teachers' contracts in the District are currently settled.
IN-PATIENT MEDICAL FACILITIES IN THE CITY
Name of Facility Type of Facility No. of Beds
Good Samaritan Society Ambassador Nursing Home 85
North Ridge Care Center Nursing Home 397
Saint Therese Home of New Hope Nursing Home 302
MTAI Minnehaha Creek Supervised Living Facility 5
Source:Minnesota Department of Health and the American Hospital Directory.
A-1
APPENDIX A
EXCERPTS FROM FINANCIAL STATEMENTS
Reproduced on the following pages are excerpts from the City's audited Financial Statements for the fiscal year ending
December 31, 2008. The Financial Statements have been prepared by the City and audited by a certified public
accountant. The Management’s Discussion and Analysis and the Notes to Financial Statements are an integral part
of the audit and any judgment of the Financial Statements should be based on the Financial Statements as a whole.
Copies of the complete audited financial statements for the past three years and the current budget are available upon
request from Ehlers.
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B-1
APPENDIX B
FORM OF LEGAL OPINION
City of New Hope, Minnesota
[Original Purchaser]
Re: $1,590,000 General Obligation Utility Revenue Bonds, Series 2010A
City of New Hope, Hennepin County, Minnesota
Ladies and Gentlemen:
As Bond Counsel in connection with the authorization, issuance and sale by the City of New Hope, Hennepin
County, Minnesota (the City), of the obligations described above, dated, as originally issued, as of May 6, 2010 (the
Bonds), we have examined certified copies of certain proceedings taken, and certain affidavits and certificates
furnished, by the City in the authorization, sale and issuance of the Bonds, including the form of the Bonds. As to
questions of fact material to our opinion, we have assumed the authenticity of and relied upon the proceedings,
affidavits and certificates furnished to us without undertaking to verify the same by independent investigation. From
our examination of such proceedings, affidavits and certificates and on the basis of existing law, it is our opinion that:
1. The Bonds are valid and binding general obligations of the City, enforceable in accordance with their
terms.
2. The principal of and interest on the Bonds are payable net revenues of the City’s storm sewer utility
and sanitary sewer and water utility pledged to the payment of the Bonds, but if necessary for payment thereof ad
valorem taxes are required by law to be levied on all taxable property in the City, which taxes are not subject to any
limitation as to rate or amount.
3. Interest on the Bonds (a) is not includable in gross income for federal income tax purposes or in
taxable net income of individuals, estates or trusts for Minnesota income tax purposes; (b) is includable in taxable
income of corporations and financial institutions for purposes of the Minnesota franchise tax; (c) is not an item of tax
preference includable in alternative minimum taxable income for purposes of the federal alternative minimum tax
applicable to all taxpayers or the Minnesota alternative minimum tax applicable to individuals, estates and trusts; and
(d) is includable in adjusted current earnings of corporations in determining alternative minimum taxable income for
purposes of federal alternative minimum tax.
4. The City has designated the Bonds as “qualified tax-exempt obligations” within the meaning of Section
265(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), and, financial institutions described in
Section 265(b)(5) of the Code may treat the Bonds for purposes of Section 265(b)(2) and 291(e)(1)(B) of the Code
as if they were acquired on August 7, 1986.
B-2
City of New Hope, Minnesota
[Original Purchaser]
Page
The opinions expressed in paragraphs 1 and 2 above are subject, as to enforceability, to the effect of any state
or federal laws relating to bankruptcy, insolvency, reorganization, moratorium or creditors’ rights and the application
of equitable principles, whether considered at law or in equity.
The opinion expressed in paragraphs 3 and 4 above is subject to the condition of the City’s compliance with
all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest
thereon may be, and continue to be, excluded from gross income for federal income tax purposes. The City has
covenanted to comply with these continuing requirements. Its failure to do so could result in the inclusion of interest
on the Bonds in federal gross income and in Minnesota taxable net income, retroactive to the date of issuance of the
Bonds. Except as stated in this opinion, we express no opinion regarding federal, state or other tax consequences to
owners of the Bonds.
We have not been engaged, and have not undertaken, to review the accuracy, completeness or sufficiency of
any offering materials relating to the Bonds, and, accordingly, we express no opinion with respect thereto.
Dated this _____ day of May, 2010.
Very truly yours,
C-1
APPENDIX C
BOOK-ENTRY-ONLY SYSTEM
1. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the securities
(the "Securities"). The Securities 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 Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate
principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of
[any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal
amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.]
2. DTC, the world's largest securities depository, 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 over 3.5 million issues of U.S. and non-U.S. equity issues,
corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's
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 both U.S. and non-U.S. securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC,
National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered
clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also
available to others such as both U.S. and non-U.S. 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"). DTC has Standard & Poor's highest rating: AAA. 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.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive
a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security
("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 Securities 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 Securities, except in the event that use of the book-entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities 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 Securities 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 Securities; DTC's records reflect only the identity of the Direct Participants to whose
accounts such Securities 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.
C-2
5. 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 Securities may wish to take certain steps to augment the transmission to them of
notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed
amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that
the nominee holding the Securities 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 notices be provided directly to them.]
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed,
DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be
redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless
authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC
mails an Omnibus Proxy to City 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 Securities are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities 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 City or Agent,
on 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, or the City, 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 City or 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.
9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant,
to [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct Participant to
transfer the Participant's interest in the Securities, on DTC's records, to [Tender/Remarketing] Agent. The
requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will
be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's
records and followed by a book-entry credit of tendered Securities to [Tender/Remarketing] Agent's DTC account.
10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving
reasonable notice to the City or Agent. Under such circumstances, in the event that a successor depository is not
obtained, Security certificates are required to be printed and delivered.
11. The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor
securities depository). In that event, Security certificates will be printed and delivered to DTC.
12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources
that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof.
D-1
APPENDIX D
FORM OF CONTINUING DISCLOSURE COVENANTS
(Excerpts from Sale Resolution)
Continuing Disclosure. (a) Limited Exemption from Rule. The Securities and Exchange Commission (the “SEC”)
has promulgated amendments to Rule 15c2-12 under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12)
(as in effect and interpreted from time to time, the “Rule”) which govern the obligations of certain underwriters to
require that issuers of municipal Bonds enter into contracts for the benefit of the Bondholders to provide continuing
disclosure with respect to the Bonds. This Council hereby finds, determines and declares that the Bonds are exempt
from the application of paragraph (b)(5) of the Rule by reason of the exemption granted in paragraph (d)(2) thereof.
Specifically, this Council hereby finds that the only “obligated person” (within the meaning of the Rule) with respect
to the Bonds is the City and that, giving effect to the issuance of the Bonds and any other securities required to be
integrated with the Bonds, there will be no more than $10 million in principal amount of municipal securities
outstanding on the date of issuance of the Bonds as to which the City is an obligated person (excluding municipal
securities exempt from the Rule under paragraph (d)(1) thereof because, among other things, they were issued in
minimum denominations of $100,000). In making such finding, the City hereby represents that it has not issued
within the six months before the date of issuance of the Bonds and that it reasonably expects that it will not issue
within six months after the date of issuance of the Bonds, other securities of the City of substantially the same security
and providing financing for the same general purpose or purposes as the Bonds. The exemption from the Rule for
the Bonds is conditioned upon the City agreeing to provide certain continuing disclosure as hereinafter provided.
(b) Purpose and Beneficiaries. To provide for the public availability of certain information relating to the Bonds and
the security therefor and to permit participating underwriters in the primary offering of the Bonds to comply with
paragraph (b)(5) of the Rule, which will enhance the marketability of the Bonds, the City hereby makes the covenants
and agreements contained in this section for the benefit of the Owners (as hereinafter defined) from time to time of
the Outstanding Bonds. If the City fails to comply with any provisions of this section, any person aggrieved thereby,
including the Owners of any Outstanding Bonds, may take whatever action at law or in equity may appear necessary
or appropriate to enforce performance and observance of any agreement or covenant contained in this section,
including an action for specific performance or a writ of mandamus. Direct, indirect, consequential and punitive
damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything
to the contrary contained herein, in no event shall a default under this section constitute a default under the Bonds or
under any other provision of this resolution. As used in this section, “Owner” or “Bondowner” means, in respect of
a Bond, the registered owner or owners thereof appearing in the Bond register maintained by the Registrar or any
“Beneficial Owner” (as hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of
such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, “Beneficial
Owner” means, in respect of a Bond, any person or entity which (i) has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, such Bond (including persons or entities holding Bonds through
nominees, depositories or other intermediaries), or (ii) is treated as the owner of the Bond for federal income tax
purposes.
(c) Information To Be Disclosed. The City will provide, in the manner set forth below, either directly or indirectly
through an agent designated by the City, the following information at the following times:
(1) On or before 365 days after the end of each fiscal year of the City, commencing with the fiscal
year ending December 31, 2010, to the Municipal Securities Rulemaking Board (the “MSRB”), in an
electronic format as prescribed by the MSRB from time to time, the information in the City’s audited financial
statements, which shall be for the most recent fiscal year of the City, and the other financial information and
operating data, if any, that is customarily prepared by the City and publicly available under applicable data
privacy or other laws (the “Disclosure Information”).
D-2
Any or all of the Disclosure Information may be incorporated by reference, if it is updated as required hereby, from
other documents, including official statements, which have been filed with the SEC or have been made available to
the public on the Internet Web site of the MSRB. The City shall clearly identify in the Disclosure Information each
document so incorporated by reference. If the Disclosure Information is changed because it is no longer compiled
or publicly available or this paragraph (c)(1) is amended as permitted by subsection (d), then the City shall include
in the next Disclosure Information to be delivered hereunder, to the extent necessary, an explanation of the reasons
for the amendment and the effect of any change in the type of information provided.
(2) In a timely manner, to the MSRB, in an electronic format as prescribed by the MSRB from time
to time, notice of the occurrence of any of the following events which is a Material Fact (as hereinafter
defined):
(A) Principal and interest payment delinquencies;
(B) Non-payment related defaults;
(C) Unscheduled draws on debt service reserves reflecting financial difficulties;
(D) Unscheduled draws on credit enhancements reflecting financial difficulties;
(E) Substitution of credit or liquidity providers, or their failure to perform;
(F) Adverse tax opinions or events affecting the tax-exempt status of the security;
(G) Modifications to rights of security holders;
(H) Bond calls;
(I) Defeasances;
(J) Release, substitution, or sale of property securing repayment of the securities; and
(K) Rating changes.
As used herein, a “Material Fact” is a fact as to which a substantial likelihood exists that a reasonably prudent investor
would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter
the total information otherwise available to an investor from the Official Statement, information disclosed hereunder
or information generally available to the public. Notwithstanding the foregoing sentence, a “Material Fact” is also
an event that would be deemed “material” for purposes of the purchase, holding or sale of a Bond within the meaning
of applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event.
(3) In a timely manner, to the MSRB, in an electronic format as prescribed by the MSRB from
time to time, notice of the occurrence of any of the following events or conditions:
(A) the amendment or supplementing of this section (c) pursuant to section (e),
together with a copy of such amendment or supplement; and
(B) the termination of the obligations of the City under this section (c) pursuant to
section (e);
(C) any change in the accounting principles pursuant to which the financial statements
constituting a portion of the Disclosure Information are prepared; and
(D) any change in the fiscal year of the City.
(d) Identifying Information to Accompany Documents. All documents provided to the MSRB pursuant to section
(c) above shall be accompanied by identifying information as prescribed by the MSRB from time to time.
(e) Term; Amendments; Interpretation. The covenants of the City in this section shall remain in effect so long as any
Bonds are Outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this
section shall terminate and be without further effect as of any date on which the City delivers to the Registrar an
opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or
proceedings, the failure of the City to comply with the requirements of this section will not cause participating
underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of
the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof.
This section may be amended or supplemented by the City from time to time, without notice to or the consent of the
D-3
Owners of any Bonds, by a resolution of this Council filed in the office of the recording officer of the City
accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may
be subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection
with a change in circumstances that arises from a change in law or regulation or a change in the identity, nature or
status of the City or the type of operations conducted by the City, or (b) is required by, or better complies with, the
provisions of paragraph (d)(2) of the Rule; (ii) this section as so amended or supplemented would have complied with
the requirements of paragraph (d)(2) of the Rule at the time of the primary offering of the Bonds, giving effect to any
change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the
time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or
supplement does not materially impair the interests of the Bondowners under the Rule. This section is entered into
to comply with, and should be construed so as to satisfy the requirements of, paragraph (d)(2) of the Rule.
E-1
APPENDIX E
TERMS OF PROPOSAL
$1,590,000* GENERAL OBLIGATION UTILITY REVENUE BONDS, SERIES 2010A
CITY OF NEW HOPE, MINNESOTA
Proposals for the purchase of $1,590,000 General Obligation Utility Revenue Bonds, Series 2010A (the "Bonds") of
the City of New Hope, Minnesota (the "City") will be received at the offices of Ehlers & Associates, Inc. ("Ehlers"),
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, Financial Advisors to the City, until 10:00 A.M., Central
Time, and ELECTRONIC PROPOSALS will be received via PARITY, in the manner described below, until 10:00
A.M. Central Time, on April 12, 2010, at which time they will be opened, read and tabulated. The proposals will be
presented to the City Council for consideration for award at a meeting to be held at 7:00 P.M., Central Time, on the
same date. The proposal offering to purchase the Bonds upon the terms specified herein and most favorable to the
City will be accepted unless all proposals are rejected.
PURPOSE
The Bonds are being issued by the City, pursuant to Minnesota Statutes, Chapter 444 and Section 475.67, by the City
of New Hope, Minnesota (the "City"), for the purpose of effecting a current refunding of the 2011 through 2014
maturities of the $2,950,000 General Obligation Utility Revenue Bonds, Series 1999A, dated May 1, 1999 and to
reimburse the City Water and Sewer Utility Fund for costs previously incurred for the municipal utility portions of
the 2008 Infrastructure Improvement Project. The Bonds will be general obligations of the City for which its full
faith, credit and taxing powers are pledged.
DATES AND MATURITIES
The Bonds will be dated May 6, 2010, will be issued as fully registered Bonds in the denomination of $5,000 each,
or any integral multiple thereof, and will mature on February 1 as follows:
Year Amount*Year Amount*Year Amount*
2011 $215,000 2015 75,000 2019 $80,000
2012 275,000 2016 75,000 2020 85,000
2013 275,000 2017 75,000 2021 85,000
2014 270,000 2018 80,000
ADJUSTMENT OPTION
* The City reserves the right to increase or decrease the principal amount of the Bonds on the day of sale, in
increments of $5,000 each. Increases or decreases may be made in any maturity. If any principal amounts are
adjusted, the purchase price proposed will be adjusted to maintain the same gross spread per $1,000.
TERM BOND OPTION
Proposals for the Bonds may contain a maturity schedule providing for any combination of serial bonds and term
bonds, subject to mandatory redemption, so long as the amount of principal maturing or subject to mandatory
redemption in each year conforms to the maturity schedule set forth above. All dates are inclusive.
E-2
INTEREST PAYMENT DATES AND RATES
Interest will be payable on February 1 and August 1 of each year, commencing February 1, 2011, to the registered
owners of the Bonds appearing of record in the bond register as of the close of business on the 15th day (whether or
not a business day) of the immediately preceding month. Interest will be computed upon the basis of a 360-day year
of twelve 30-day months and will be rounded pursuant to rules of the MSRB. All Bonds of the same maturity must
bear interest from date of issue until paid at a single, uniform rate, not exceeding the rate specified for Bonds of any
subsequent maturity. Each rate must be expressed in an integral multiple of 5/100 or 1/8 of 1%.
BOOK-ENTRY-ONLY FORMAT
The Bonds will be designated in the name of Cede & Co., as nominee for The Depository Trust Company, New York,
New York ("DTC"). DTC will act as securities depository for the Bonds, and will be responsible for maintaining a
book-entry system for recording the interests of its participants and the transfers of interests between its participants.
The participants will be responsible for maintaining records regarding the beneficial interests of the individual
purchasers of the Bonds. So long as Cede & Co. is the registered owner of the Bonds, all payments of principal and
interest will be made to the depository which, in turn, will be obligated to remit such payments to its participants for
subsequent disbursement to the beneficial owners of the Bonds.
PAYING AGENT
The City has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the “Paying
Agent”). The City will pay the charges for Paying Agent services. The City reserves the right to remove the Paying
Agent and to appoint a successor.
OPTIONAL REDEMPTION
At the option of the City, Bonds maturing on or after February 1, 2019 shall be subject to prior payment on February
1, 2018 or on any date thereafter, at a price of par plus accrued interest.
Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the selection
of the amounts and maturities of the Bonds to be prepaid shall be at the discretion of the City. If only part of the
Bonds having a common maturity date are called for redemption, the City or Paying Agent, if any, will notify DTC
of the particular amount of such maturity to be redeemed. 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 interest
in such maturity to be redeemed.
Notice of such call shall be given by mailing a notice not more than 60 days and not fewer than 30 days prior to the
date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the
registration books.
DELIVERY
On or about May 6, 2010, the Bonds will be delivered without cost to the original purchaser at DTC. On the day of
closing, the City will furnish to the purchaser the opinion of bond counsel hereinafter described, an arbitrage
certification, and certificates verifying that no litigation in any manner questioning the validity of the Bonds is then
pending or, to the best knowledge of officers of the City, threatened. Payment for the Bonds must be received by the
City at its designated depository on the date of closing in immediately available funds.
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LEGAL OPINION
An opinion as to the validity of the Bonds and the exemption from taxation of the interest thereon will be furnished
by Dorsey & Whitney LLP, Minneapolis, Minnesota, bond counsel to the City, and will accompany the Bonds. The
legal opinion will state that the Bonds are valid and binding general obligations of the City enforceable in accordance
with their terms, except to the extent to which enforceability may be limited by Minnesota or United States laws
relating to bankruptcy, reorganization, moratorium or creditors' rights generally.
SUBMISSION OF PROPOSALS
Proposals must not be for less than $1,570,920 plus accrued interest on the principal sum of $1,590,000 from date
of original issue of the Bonds to date of delivery. A signed proposal form must be submitted to Ehlers prior to the
time established above for the opening of proposals as follows:
1) In a sealed envelope as described herein; or
2) A facsimile submission to Ehlers, Facsimile Number (651) 697-8555; or
3) Electronically via PARITY in accordance with this Terms of Proposal until 10:00 A.M. Central Time, but
no proposal will be received after the time for receiving proposals specified above. To the extent any
instructions or directions set forth in PARITY conflict with this Terms of Proposal, the terms of this Terms
of Proposal shall control. For further information about PARITY, potential bidders may contact Ehlers or
i-Deal LLC at 1359 Broadway, 2nd Floor, New York, New York 10018, Telephone (212) 849-5021.
Proposals must be submitted to Ehlers via one of the methods described above and must be received prior to the time
established above for the opening of proposals. Each proposal must be unconditional except as to legality. Neither
the City nor Ehlers shall be responsible for any failure to receive a facsimile submission.
A good faith deposit (the "Deposit") in the amount of $31,800, complying with the provisions below, must be
submitted with each proposal. The Deposit must be in the form of a certified or cashier's check, or a financial surety
bond or a wire transfer of funds to KleinBank, 1550 Audubon Road, Chaska, Minnesota, ABA No. 091915654
for credit: Ehlers & Associates Good Faith Account No. 3183661. The Deposit will be retained by the City as
liquidated damages if the proposal is accepted and the bidder fails to comply therewith. The Deposit will be returned
to the Purchaser at the closing for the Bonds.
The Deposit, payable to the City, shall be retained in the offices of Ehlers with the same effect as if delivered to the
City. Alternatively, bidders may wire the Deposit to KleinBank, 1550 Audubon Road, Chaska, Minnesota, ABA
No. 091915654 for credit: Ehlers & Associates Good Faith Account No. 3183661. The City and any bidder who
chooses to so wire the Deposit hereby agree irrevocably that Ehlers shall be the escrow holder of the Deposit wired
to such account subject only to these conditions and duties: 1) All income earned thereon shall be retained by the
escrow holder as payment for its expenses; 2) If the proposal is not accepted, Ehlers shall, at its expense, promptly
return the Deposit amount to the losing bidder; 3) If the proposal is accepted, the Deposit shall be returned to the
purchaser at the closing; 4) Ehlers shall bear all costs of maintaining the escrow account and returning the funds to
the bidder; 5) Ehlers shall not be an insurer of the Deposit amount and shall have no liability hereunder except if it
willfully fails to perform, or recklessly disregards, its duties specified herein; and 6) FDIC insurance on deposits
within the escrow account shall be limited to $250,000 per bidder.
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If a financial surety bond is used, it must be from an insurance company licensed to issue such a bond in the State of
Minnesota, and preapproved by the City. Such bond must be submitted to Ehlers prior to the opening of the
proposals. Such bond must identify each bidder whose Deposit is guaranteed by such financial surety bond. If the
Bonds are awarded to a bidder using a financial surety bond, then that bidder is required to submit its Deposit to
Ehlers in the form of a certified or cashier's check or wire transfer as instructed by Ehlers not later than 3:00 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 amount securing the successful
proposal will be retained as liquidated damages if the proposal is accepted and the bidder fails to comply therewith.
No proposal can be withdrawn 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.
AWARD
The Bonds will be awarded to the bidder offering 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. In the event of a tie, the sale of the Bonds will be awarded by lot. The City reserves the right to reject
any and all proposals and to waive any informality in any proposal.
BOND INSURANCE
If the Bonds are qualified for any bond insurance policy, the purchase of such policy shall be at the sole option and
expense of the purchaser. Any cost for such insurance policy is to be paid by the purchaser, except that, if the City
requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee. Any rating
agency fees not requested by the City are the responsibility of the purchaser.
Failure of the municipal bond insurer to issue the policy after the Bonds are awarded to the purchaser shall not
constitute cause for failure or refusal by the purchaser to accept delivery of the Bonds.
CUSIP NUMBERS
The City will assume no obligation for the assignment or printing of CUSIP numbers on the Bonds or for the
correctness of any numbers printed thereon, but will permit such numbers to be printed at the expense of the
purchaser, if the purchaser waives any delay in delivery occasioned thereby.
QUALIFIED TAX-EXEMPT OBLIGATIONS
The City 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.
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CONTINUING DISCLOSURE
In order to permit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds to
comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (the "Rule"), the City will covenant and agree, for the benefit of the registered
holders and beneficial owners from time to time of the outstanding Bonds, in the resolution awarding the sale and
prescribing the terms of the Bonds, to provide certain financial information, and other financial information and
operating data if customarily prepared and publicly available, to the Municipal Securities Rulemaking Board, and
notice of the occurrence of certain events, if material. The City is the only "obligated person" in respect of the Bonds
within the meaning of the Rule and, giving effect to the issuance of the Bonds, there will not be more than $10 million
in principal amount of municipal securities outstanding on the date of issuance of the Bonds as to which the City is
an obligated person (excluding municipal securities exempt from the Rule under paragraph (d)(1) thereof). A
description of the undertaking is set forth in the Official Statement. Failure of the City to enter into an undertaking
substantially similar to that described in the Official Statement would relieve the successful bidder of its obligation
to purchase the Bonds. The City has complied in all material respects with any undertaking previously entered
into by it under the Rule.
INFORMATION FROM PURCHASER
The successful purchaser will be required to provide, in a timely manner, certain information relating to the initial
offering prices of the Bonds necessary to compute the yield on the Bonds pursuant to the provisions of the Internal
Revenue Code of 1986, as amended.
PRELIMINARY OFFICIAL STATEMENT
Bidders may obtain a copy of the Preliminary Official Statement relating to the Bonds prior to the proposal opening
by request from Ehlers at www.ehlers-inc.com by connecting to the link to the Bond Sales. The Syndicate Manager
will be provided with an electronic copy and up to 10 printed copies upon request of the Final Official Statement
within seven business days of the proposal acceptance. Additional copies of the Final Official Statement will be
available at a cost of $10.00 per copy.
Information for bidders and proposal forms may be obtained from Ehlers at 3060 Centre Pointe Drive, Roseville,
Minnesota 55113-1105, Telephone (651) 697-8500.
By Order of the City Council
Valerie Leone, City Clerk
City of New Hope, Minnesota