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$1,330,000 GO 2012B - Destroy 020137
TaUe Of Contents $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B City of New Hope, Minnesota Section 1. • Post Sale Report • Bid Tabulation • Executed Proposal Form • Resolution Awarding the Sale of the Bonds Section 2. Documents Related to Final Financing Details including: • Closing Memorandum • Schedule of Principal and Interest Payments • Refunding Comparison Analysis • Paying Agent Fee Schedule Section 3. Presale Documents Authorizing the Issuance and Sale • Presale Report Section 4. • Legal Opinion • Closing Documents • Specimen Bond Section 5. • Continuing Disclosure Requirements Section 6. • Final Official Statement Section 7. • Credit Rating Report Section 8. • CPA Verification Report • Escrow Agreement Section 9. • General Certificate as to Organization and Financial Condition of the Issuer Section 10. • Hennepin County Auditor's Certificate as to Taxes and Taxable Property Debt Issuance Services Post Sale Report City of New Hope, Minnesota $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B Dated: January 11, 2012 44 EHLERS LEADERS IN PUBLIC FINANCE Overview This Bond Issue Summary Book has been compiled by Ehlers & Associates to provide a complete record of the City's issuance of $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B. Sections of Special Importance Following we have highlighted some sections of the Bond Issue Summary Book that will be of particular importance to you and have listed important responsibilities of you, the Issuer, throughout the life of the issue. Financing Details: Section 2 includes a copy of the Closing Memo detailing the distribution of the net proceeds and debt service payment instructions and the schedule of principal and interest payments. If at any time you have questions regarding repayment of the Bonds, do not hesitate to call Bruce Kimmel or Wendy Lundberg at (651) 697-8500. Arbitrage Requirements: This issue is subject to certain arbitrage provisions of the Internal Revenue Code of 1986 and related Treasury regulations. To comply with the statute and regulations, the City must undertake certain calculations. The City has contracted with Ehlers to provide certain arbitrage monitoring services related to this issue unless either party terminates the Agreement prior to maturity of the issue. Continuing Disclosure: You entered into a Continuing Disclosure Undertaking for this issue for which you are responsible for providing annually certain updated annual financial information and operating data and to provide notice of the occurrence of certain "material events." The deadline for submission of the first updated annual financial information is December 31, 2012. Reporting of material events begins immediately. It is imperative you familiarize yourself with these requirements which are in effect as long as the issue is outstanding. A detailed explanation of your responsibilities are found in the Continuing Disclosure section of the Sale Resolution. Please contact us at Ehlers at (651) 697-8500 if you have questions. Credit Rating: Standard & Poor's assigned this issue a "AA" rating. The credit rating report included in this book details the agency's analysis for rating this issue. Post Sale Report for City of New Hope, Minnesota $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 20128 Page 2 Summary of Bond Issue Details Date of Sale: December 12, 2011 Date of Bonds: January 11, 2012 Credit Rating: Underlying Standard & Poor's Rating: "AA" Principal Due: February 1, 2015 through February 1, 2031 Interest Payments: August 1, 2012 and semiannually thereafter. Optional Redemption: Bonds maturing February 1, 2023 and thereafter are subject to call for prior redemption on February 1, 2022 and any date thereafter at par. Term Bonds/ Certain of the maturities of these Bonds have been designated Mandatory Redemption: as Term Bonds which are each subject to Mandatory Redemption. Details of the Term Bonds can be found on the cover of the Final Official Statement and are additionally noted on the Schedule of Principal and Interest Payments found in Section 2. Bond Trust Services Corporation in Roseville, Minnesota, as Paying Agent for these Bonds, will send a mandatory Notice of Call to The Depository Trust Company at least 45 days prior to the call date for each required notification. If you discontinue using a paying agent for this issue or if you select another firm to act as paying agent, you will be responsible for publishing the mandatory call notices. Call Ehlers if you need assistance in drafting and mailing the required notices. Purchase Price: $1,313,375 True Interest Rate: 3.9091% Arbitrage Yield Rate: Pursuant to current U.S. Treasury regulations, the arbitrage interest rate is 3.7777884%. Continuing Disclosure Type: Full Continuing Disclosure Requirements. Seethe Continuing Disclosure section of the Sale Resolution for details. Purchaser: Northland Securities, Inc., Minneapolis, Minnesota Post Sale Report for City of New Hope, Minnesota $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 20128 Page 3 Registration/Depository: The Bonds have been issued as fully registered book -entry -only securities 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 will remit the principal and interest payments directly to The Depository Trust Company. Escrow Agent: U.S. Bank National Association, St. Paul, Minnesota Bond Counsel: Dorsey & Whitney LLP in Minneapolis, Minnesota Financial Advisors: Ehlers 3060 Centre Pointe Drive Roseville, Minnesota 55113 Phone: (651) 697-8500 Fax: (651) 697-8555 Web Site: www.ehlers-inc.com Post Sale Report for City of New Hope, Minnesota $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B Page 4 BID TABULATION $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B CITY OF NEW HOPE, MINNESOTA SALE: December 12, 2011 AWARD: NORTHLAND SECURITIES, INC. RATING: Standard & Poor's Credit Markets "AA" BBI: 3.93% NET TRUE NAME OF BIDDER MATURITY RATE REOFFERING PRICE INTEREST INTEREST (February 1) YIELD COST RATE NORTHLAND SECURITIES, INC. 2015* 1.350% 1.350% $1,313,375.00 $640,854.72 3.9091% Minneapolis, Minnesota 2016* 1.350% 1.350% 2017** 1.850% 1.850% 2018** 1.850% 1.850% 2019*** 2.500% 2.500% 2020*** 2.500% 2.500% 2021**** 3.000% 3.000% 2022**** 3.000% 3.000% 2023***** 3.500% 3.500% 2024***** 3.500% 3.500% 2025****** 3.850% 3.850% 2026****** 3.850% 3.850% 2027 4.050% 4.050% 2028 4.250% 4.250% 2029 4.450% 4.450% 2030******* 4.650% 4.650% 2031******* 4.650% 4.650% *$105,000 Term Bond due 2016 with mandatory redemption in 2015 **$105,000 Term Bond due 2018 with mandatory redemption in 2017 ***$115,000 Term Bond due 2020 with mandatory redemption in 2019 ****$140,000 Term Bond due 2022 with mandatory redemption in 2021 *****$175,000 Term Bond due 2024 with mandatory redemption in 2023 ******$190,000 Term Bond due 2026 with mandatory redemption in 2025 *******$195,000 Term Bond due 2031 with mandatory redemption in 2030 EHLERS LEADERS IN PUBLIC FINANCE www.ehlers-inc.com Minnesota phone 651.697-8500 3060 Can" Pointe Drive Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 5511 3-11 22 $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B City of New Hope, Minnesota Page 2 NET TRUE NAME OF BIDDER MATURITY RATE REOFFERING PRICE INTEREST INTEREST (February 1) YIELD COST RATE CRONIN & COMPANY, INC. Minneapolis, Minnesota BOSC, INC., A SUBSIDIARY OF BOK FINANCIAL CORPORATION Menomonee Falls, Wisconsin 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2.000% 2.000% 2.500% 3.000% 3.000% 3.000% 3.000% 3.600% 3.600% 3.600% 3.600% 4.250% 4.250% 4.250% 4.750% 4.750% 4.750% 2.250% 2.250% 2.500% 2.750% 3.125% 3.375% 3.625% 3.750% 4.000% 4.000% 4.500% 4.500% 4.750% 4.750% 5.000% 5.000% 5.000% $1,317,965.60 $669,188.98 4.0833% $1,313,720.00 $732,471.67 4.4774% PROPOSAL FORM The City Council December 1.2, 2011 City of New Hope, Minnesota RE: 51,330,000" General Obligation Taxable Tax increment Refunding Bonds, Series 2012B DATED: Januarv, 11, 2012 For Lill or none of the above Sedus 2012B Bonds, in accordance with the Terns ofPropotel and turns of the Global Bock -Entry System as stated in this ProlimivaryOf%ial8tatement,wewill pay you 5 1,313,375.00 (not less than$ 1,31.3,375) plus accrued interest to date of delivery for fully registered. Saries 20129 Bonds bearing interest rates and maturing is th o stated years as follows: 1.35 % duo 2015 T1 3.00 QA due 2021 T4 4.05 %, duo 2027 1.35 % due 2016 T1 3.00 % due 2022 T4 4.25 QK duo 2026 1.85 % due 2017 T2 3.50 % due 2023 T5 4.45 % due 2029 1.85 %due 2018 T2 3.50 %u due 2024 T5 4.65 Yo due 2030 T7 2.50 % due 2019 T3 3.85 % due 2025 T8 4.65 °/n due 2031 T7 2.50 % due 2020 T3 3.85 % due 2026 T6 * *The City reserves the right to increase or decrease the principal amount of the Series 201213 Bonds on the day of talc, in inoraments of 55,000. Increases or decreases may be, made in any maturity, if any principal Amounts arc adjusted, the purchase price proposed will be adjusted to maintain the Same gross spread per 51,000. We enclose our good faith deposit in the amount of 626,600, to be held by you pending delivery and paymont. Altornativoly, we have provided a financial surety bond or bavo wired our good faith dep osit to the KlelnBank,1550 Audubon Road, Chaska, Minnesota, ABA No. 09.1915654 for credit: Ehlers At Associates Good Faith Account No. 3208138. 1f our proposal is not accepted, said deposit shall be promptly Tctumcd to us. If tho good faith deposit is wired to such escrow account, we agree to the conditions and duties of Ehlers & Associates, Inc., as escrow holder of the good faith deposit, pursuant to the Preliminary Official Statement dated Dcccmbcr 1, 2011. This proposal is for prompt secepranee And is conditional upon deposit of said S erics 2012B Bonds to The Depository Trust Company, New York. New York, in accordance with the Temis of Proposal. Delivery is anticipated to be on or about January 11, 2012. This proposal is subject to tho City's agreomentto enter into a written undertaking to provide continuing disclosure under Rule 15c2-12 promulgated by the Securities and Exchange Conimistion under die Securities Exchange Act of 1934 as described in die Preliminary Official Statumcni. for this Issue. We have received and reviewed the preliminary Official Statement and have submitted our requests for additional information or corrections to the Final Official Statement, Aa Syndicate Manager, we agree to provide the City with the rcoffcrhag price of the Series 2012B Bonds within 24 hours of the proposal acceptance Account Manager: Northiand Securities, Inc. Account Members; Award will be on a true Interest cost basis. According to our computations (the correct computation being controlling in the award), the total dollar interest cost (including any discount or less any premium) computed from January 11, 2012 ofthe above proposal is $ Q,Q0.8 44.72 __and flu: true interest cost (TIC) is 3.9091 %. The foregoing offer is hereby accepted by and on buhali'oftbe. City Countyjof fiN City of New Hope, Minnusota, on.Decombur 12,12, 2011 ea�tr��``\�`_ �\ Title; rla�v �^ ✓� Title: I h/ 11441A9 111- CERTIFICATION OF MINUTES RELATING TO $1,330,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2012B Issuer: City of New Hope, Minnesota Governing body: City Council Kind, date, time and place of meeting: A regular meeting held on December 12, 2011, at 7:00 P.M., at the New Hope City Hall. Members present: Hemken, Elder, Hoff e, Lammle, Stauner Members absent: None Documents attached: Minutes of said meeting including (pages): RESOLUTION NO. 2011-177 RESOLUTION RELATING TO $1,330,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 201213; AWARDING THE SALE, FIXING THE FORM AND DETAILS AND PROVIDING FOR THE EXECUTION AND DELIVERY THEREOF AND SECURITY THEREFOR I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the obligations referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of the corporation in my legal custody, from which they have been transcribed; that the documents are a correct and complete transcript of the minutes of a meeting of the governing body of the corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at the meeting, insofar as they relate to the obligations; and that the meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice given as required by law. WITNESS my hand officially as such recording officer this 15th day of December, 2011. n Valerie Leone, City Clerk It was reported that three (3) proposals had been received prior to 12:00 Noon, Central Time today for the purchase of the $1,330,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B of the City in accordance with the Official Statement distributed by the City to potential purchasers of the Bonds. The proposals have been read and tabulated, and the terms of each have been determined to be as follows: Bid for Interest Net Interest Name of Bidder Principal Rates Cost [See attached] BID TABULATION $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 20128 CITY OF NEW HOPE, MINNESOTA SALE: December 12, 2011 AWARD: NORTHLAND SECURITIES, INC. RATING: Standard & Poor's Credit Markets "AA" BBI: 3.93% NET TRUE NAME OF BIDDER MATURITY RATE REOFFERING PRICE INTEREST INTEREST (February 1) YIELD COST RATE NORTHLAND SECURITIES, INC. 2015* 1.350% 1.350% $1,313,375.00 $640,854.72 3.9091% Minneapolis, Minnesota 2016* 1.350% 1.350% 2017** 1.850% 1.850% 2018** 1.850% 1.850% 2019*** 2.500% 2.500% 2020*** 2.500% 2.500% 2021**** 3.000% 3.000% 2022**** 3.000% 3.000% 2023***** 3.500% 3.500% 2024***** 3.500% 3.500% 2025****** 3.850% 3.850% 2026****** 3.850% 3.850% 2027 4.050% 4.050% 2028 4.250% 4.250% 2029 4.450% 4.450% 2030******* 4.650% 4.650% 2031 ******* 4.650% 4.650% *$105,000 Term Bond due 2016 with mandatory redemption in 2015 **$105,000 Term Bond due 2018 with mandatory redemption in 2017 ***$115,000 Term Bond due 2020 with mandatory redemption in 2019 ****$140,000 Term Bond due 2022 with mandatory redemption in 2021 *****$175,000 Term Bond due 2024 with mandatory redemption in 2023 ******$190,000 Term Bond due 2026 with mandatory redemption in 2025 *******$195,000 Term Bond due 2031 with mandatory redemption in 2030 wvwr.ehlers-hacom EH L E RS Minnesota phone 651-697-8500 3060 Centre Pointe Drive LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 5511 3-11 22 $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B of New Hope, Minnesota Page 2 NET TRUE NAME OF BIDDER MATURITY RATE REOFFERING PRICE INTEREST INTEREST (February 1) YIELD COST RATE CRONIN & COMPANY, INC. Minneapolis, Minnesota BOSC, INC., A SUBSIDIARY OF BOK FINANCIAL CORPORATION Menomonee Falls, Wisconsin 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2.000% 2.000% 2.500% 3.000% 3.000% 3.000% 3.000% 3.600% 3.600% 3.600% 3.600% 4.250% 4.250% 4.250% 4.750% 4.750% 4.750% 2.250% 2.250% 2.500% 2.750% 3.125% 3.375% 3.625% 3.750% 4.000% 4.000% 4.500% 4.500% 4.750% 4.750% 5.000% 5.000% 5.000% $1,317,965.60 $669,188.98 4.0833% $1,313,720.00 $732,471.67 4.4774% adoption: Councilmember Hoffe_ then introduced the following resolution and moved its RESOLUTION NO. 2011-177 RESOLUTION RELATING TO $1,330,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 201213; AWARDING THE SALE, FIXING THE FORM AND DETAILS AND PROVIDING FOR THE EXECUTION AND DELIVERY THEREOF AND SECURITY THEREFOR BE IT RESOLVED by the City Council (the "Council') of the City of New Hope, Minnesota (the "City"), as follows: Section 1. Recitals, Authorization and Sale of Bonds. 1.01. Authorization and Outstanding Bonds. The City has presently outstanding its Taxable General Obligation Tax Increment Bonds, Series 2005A, initially dated as of March 1, 2005 (the "Prior Bonds"). This Council hereby determines that it is in the best interest of the City to issue its Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B (the "Bonds"), of the City, the proceeds of which would be used, together with any additional funds of the City which might be required, to refund in advance of maturity the Series 2004 Bonds maturing in the years 2015 through 2031 which aggregate $1,195,000 in principal amount (the "Refunded Bonds"). Said refunding constitutes a "crossover refunding" as defined in Minnesota Statutes, Section 475.17, subd. 13. 1.02. Sale of Bonds. The City has retained Ehlers & Associates, Inc., an independent financial advisor, to assist the City in connection with the sale of the Bonds. The interest on the Bonds will not be excluded from gross income for federal income tax purposes. The Bonds are being sold pursuant to Minnesota Statutes, Section 475.60, Subdivision 2, paragraph (9), without meeting the requirements for public sale under Minnesota Statutes, Section 475.60, Subdivision 1. Pursuant to the Terms and Conditions of Sale for the Bonds, three (3) proposals for the purchase of the Bonds were received at or before the time specified for receipt of proposals. The proposals have been publicly read and considered, and the purchase price, interest rates and net interest cost under the terms of each proposal have been determined. The most favorable proposal received is that of Northland Securities, Inc., of Minneapolis, Minnesota (the "Purchaser"), to purchase the Bonds at a price of $1,313,375.00, the Bonds to bear interest at the rates set forth in Section 3.01. The proposal is hereby accepted, and the Mayor and the City Manager are hereby authorized and directed to execute a contract on the part of the City for the sale of the Bonds with the Purchaser. The good faith checks of the unsuccessful bidders shall be returned forthwith. 1.03. Performance of Requirements. The City is authorized by the Act to issue and sell the Bonds to secure the Bonds by the covenants and agreements hereinafter set forth. All acts, conditions and things which are required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed precedent to and in the valid issuance of the Bonds having been done, existing, having happened and having been performed, it is now necessary for this Council to establish the form and terms of the Bonds, to provide security therefor and to issue the Bonds forthwith. Section 2. Form of Bonds. The Bonds shall be prepared in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF NEW HOPE TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BOND, SERIES 2012B Date of Interest Rate Maturitv Original Issue CUSIP % February 1, January 11, 2012 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS THE CITY OF NEW HOPE, Hennepin County, Minnesota (the "City"), acknowledges itself to be indebted and, for value received, hereby promises to pay to the registered owner named above, or registered assigns, the principal amount specified above, on the maturity date specified above, with interest thereon from the date of original issue specified above, or from the most recent interest payment date to which interest has been paid or duly provided for, at the annual rate specified above. Interest hereon is payable on February 1 and August 1 in each year, commencing August 1, 2012, to the person in whose name this Bond is registered at the close of business on the 15th day (whether or not a business day) of the immediately preceding month, all subject to the provisions referred to herein with respect to the redemption of the principal of this Bond before maturity. The interest hereon and, upon presentation and surrender hereof, the principal hereof, are payable in lawful money of the United States of America by check or draft of Bond Trust Services Corporation, in Roseville Minnesota, as Bond Registrar, Transfer Agent and Paying Agent (the "Bond Registrar"), or its successor designated under the Resolution described herein. -2- This Bond is one of an issue in the aggregate principal amount of $1,330,000 (the "Bonds") all of like date and tenor except as to serial number, interest rate, redemption privilege and maturity date, issued pursuant to a resolution adopted by the City Council on December 12, 2011 (the "Resolution"), for the purpose of refunding certain of the City's outstanding general obligation bonds and is issued pursuant to and in full conformity with the provisions of the Constitution and laws of the State of Minnesota thereunto enabling, including Minnesota Statutes, Section 469.178 and Chapter 475. This Bond is payable primarily from tax increments to be derived from tax increment financing districts established by the New Hope Economic Development Authority, as successor to the Housing and Redevelopment Authority in and for the City of New Hope (the "Districts") which have been pledged to the payment of the Bonds by the Resolution. In addition, for the full and prompt payment of the principal and interest on the Bonds as the same become due, the full faith, credit and taxing power of the City have not been and are irrevocably pledged. The Bonds are issuable only as fully registered bonds in denominations of $5,000 or any multiple thereof, of single maturities. Bonds maturing in the years 2015 through 2022 are payable on their respective stated maturity dates without option of prior payment, but Bonds having stated maturity dates in the years 2023 through 2031 are each subject to redemption and prepayment, at the option of the City and in whole or in part, and if in part, in the maturities selected by the City and, within any maturity, in $5,000 principal amounts selected by lot, on February 1, 2022 and on any date thereafter, at a price equal to the principal amount thereof to be redeemed plus accrued interest to the date of redemption. Bonds maturing in the year 2016 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2015 $55,000 2016* 50,000 *Final Maturity In the event that any Bonds maturing in the year 2016 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2016 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2016 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. -3- Bonds maturing in the year 2018 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2017 $50,000 2018* 55,000 *Final Maturity In the event that any Bonds maturing in the year 2018 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2018 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2018 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. Bonds maturing in the year 2020 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2019 $55,000 2020* 60,000 *Final Maturity In the event that any Bonds maturing in the year 2020 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2020 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2020 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. M Bonds maturing in the year 2022 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2021 $65,000 2022* 75,000 *Final Maturity In the event that any Bonds maturing in the year 2022 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2022 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2022 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. Bonds maturing in the year 2024 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2023 $85,000 2024* 90,000 *Final Maturity In the event that any Bonds maturing in the year 2024 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2024 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2024 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. -5- Bonds maturing in the year 2026 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2025 $95,000 2026* 95,000 *Final Maturity In the event that any Bonds maturing in the year 2026 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2026 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2026 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. Bonds maturing in the year 2031 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2030 $100,000 2031* 95,000 *Final Maturity In the event that any Bonds maturing in the year 2031 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2031 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2031 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. 0 At least thirty days prior to the date set for redemption of any Bond, notice of the call for redemption will be mailed to the Bond Registrar and to the registered owner of each Bond to be redeemed at his address appearing in the Bond Register, but no defect in or failure to give such mailed notice of redemption shall affect the validity of the proceedings for the redemption of any Bond not affected by such defect or failure. Official notice of redemption having been given as aforesaid, the Bonds or portions of the Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price herein specified and from and after such date (unless the City shall default in the payment of the redemption price) such Bond or portions of Bonds shall cease to bear interest. Upon the partial redemption of any Bond, a new Bond or Bonds will be delivered to the registered owner without charge, representing the remaining principal amount outstanding. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by his attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or his attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange, the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed precedent to and in the issuance of this Bond in order to make this Bond a valid and binding general obligation of the City according to its terms, have been done, do exist, have happened and have been performed in regular and due form as so required; that prior to the issuance hereof the City has pledged and appropriated to a sinking fund established for the payment of the Bonds tax increments to be derived by the City from the Districts; that, if necessary for the payment of principal and interest on the Bonds, ad valorem taxes are required to be levied upon all taxable property in the City, which levy is not limited as to rate or amount; and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional or statutory limitation. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon shall have been executed by the Bond Registrar by the manual signature of one of the authorized representatives of the Bond Registrar. -7- IN WITNESS WHEREOF, the City of New Hope, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed by the facsimile signatures of the Mayor and the City Manager and has caused this Bond to be dated as of the date set forth below. CITY OF NEW HOPE City Manager CERTIFICATE OF AUTHENTICATION Mayor This is one of the Bonds delivered pursuant to the Resolution mentioned within. Date of Authentication: BOND TRUST SERVICES CORPORATION, Roseville, Minnesota, as Bond Registrar Authorized Representative The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM — — as tenants in common TEN ENT — — as tenants by the entireties JT TEN — — as joint tenants with right of survivorship and not as tenants in common UNIF TRANS MIN ACT....... Custodian....... . (Cust) (Minor) under Uniform Transfers to Minors Act...................... (State) N Additional abbreviations may also be used. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Bond Registrar, which requirements include membership or participation in the Securities Transfer Association Medalion Program (STAMP) or such other "signature guaranty program" as may be determined by the Bond Registrar in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration, enlargement or any change whatsoever. [End of Bond Form] Section 3. Bond Terms. Execution and Delivery. 0 3.01. Maturities, Interest Rates, Denominations, Payment. Dating of Bonds. The City shall forthwith issue and deliver the Bonds, which shall be denominated "Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B." The Bonds shall be dated as of January 11, 2011, shall be issuable in the denominations of $5,000 or any integral multiple thereof, shall mature on February 1 in the years and amounts set forth below, and Bonds maturing in such years and amounts shall bear interest from date of issue until paid or duly called for redemption at the rates per annum set forth opposite such years and amounts as follows: Year Amount Rate 2016 $105,000 1.35% 2018 105,000 1.85 2020 115,000 2.50 2022 140,000 3.00 2024 175,000 3.50 2026 190,000 3.85 2027 105,000 4.05 2028 100,000 4.25 2029 100,000 4.45 2031 195,000 4.65 The Bonds shall be issuable only in fully registered form, of single maturities. The interest thereon and, upon surrender of each Bond at the principal office of the Registrar described herein, the principal amount thereof, shall be payable by check or draft issued by the Registrar. Each Bond shall be dated by the Registrar as of the date of its authentication. 3.02. Interest Payment Dates. Interest on the Bonds shall be payable on February 1 and August 1 in each year, commencing August 1, 2012, to the owners thereof as such appear of record in the bond register as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. Interest on the Bonds will be computed on the basis of a 360 -day year consisting of twelve 30 -day months and will be rounded pursuant to the rules of the Municipal Securities Rulemaking Board. 3.03. Registration. The City shall appoint, and shall maintain, a bond registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the City and the Registrar with respect thereto shall be as follows: (a) Re ister. The Registrar shall keep at its principal office a bond register in which the Registrar shall provide for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. -10- (b) Transfer of Bonds. Upon surrender to the Registrar for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until such interest payment date. (c) Exchange of Bonds. Whenever any Bond is surrendered by the registered owner for exchange, the Registrar shall authenticate and deliver one or more new Bonds of a like aggregate principal amount, interest rate and maturity, as requested by the registered owner or the owner's attorney duly authorized in writing. (d) Cancellation. All Bonds surrendered upon any transfer or exchange shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When any Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on such Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the City upon such Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. For every transfer or exchange of Bonds (except for an exchange upon a partial redemption of a Bond), the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. In case any Bond shall become mutilated or be lost, stolen or destroyed, the Registrar shall deliver a new Bond of like amount, number, interest rate, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond lost, stolen or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond lost, stolen or destroyed, upon receipt by the Registrar of evidence satisfactory to it that such Bond was -11- lost, stolen or destroyed, and of the ownership thereof, and upon receipt by the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees. All Bonds so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the City. If the mutilated, lost, stolen or destroyed Bond has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new Bond prior to payment. 3.04. Appointment of Initial Re ig strar. The City hereby appoints Bond Trust Services Corporation in Roseville, Minnesota, as the initial Registrar. The Mayor and City Manager are authorized to execute and deliver, on behalf of the City, a contract with Bond Trust Services Corporation, as Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove any Registrar upon thirty (30) days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar shall deliver all cash and Bonds in its possession to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the Finance Director shall transmit to the Registrar from the 2012B Taxable Tax Increment Refunding Bond Fund described in Section 4.02 hereof, moneys sufficient for the payment of all principal and interest then due. 3.05. Redemption. Bonds maturing in the years 2015 through 2022 are payable on their respective stated maturity dates without option of prior payment, but Bonds maturing in the years 2023 and 2031 are each subject to redemption, at the option of the City and in whole or in part, and if in part, in the maturities selected by the City and, within any maturity, in $5,000 principal amounts selected by the Registrar by lot, on February 1, 2022 and on any date thereafter, at a redemption price equal to the principal amount thereof to be redeemed plus accrued interest to the date of redemption. Bonds maturing in the year 2016 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2015 $55,000 2016* 50,000 *Final Maturity In the event that any Bonds maturing in the year 2016 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2016 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed -12- pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2016 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. Bonds maturing in the year 2018 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2017 $50,000 2018* 55,000 *Final Maturity In the event that any Bonds maturing in the year 2018 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2018 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2018 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. Bonds maturing in the year 2020 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2019 $55,000 2020* 60,000 *Final Maturity In the event that any Bonds maturing in the year 2020 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2020 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2020 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. -13- Bonds maturing in the year 2022 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2021 $65,000 2022* 75,000 *Final Maturity In the event that any Bonds maturing in the year 2022 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2022 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2022 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. Bonds maturing in the year 2024 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2023 $85,000 2024* 90,000 *Final Maturity In the event that any Bonds maturing in the year 2024 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2024 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2024 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. -14- Bonds maturing in the year 2026 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2025 $95,000 2026* 95,000 *Final Maturity In the event that any Bonds maturing in the year 2026 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2026 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2026 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. Bonds maturing in the year 2031 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Year Amount 2030 $100,000 2031* 95,000 *Final Maturity In the event that any Bonds maturing in the year 2031 are redeemed pursuant to (a) above by the City and canceled by the Registrar and not reissued, the Bonds maturing in the year 2031 so redeemed and canceled may be applied by the City as a credit against the Bonds to be redeemed pursuant to this subsection (b), such credit to be equal to the principal amount of the Bonds maturing in the year 2031 so redeemed or canceled provided that the City has notified the Register not less than thirty-five (35) days prior to the redemption date of its election to apply such Bonds as a credit. -15- At least thirty days prior to the date set for redemption of any Bond, the City shall cause notice of the call for redemption to be mailed to the Registrar and to the registered owner of each Bond to be redeemed, but no defect in or failure to give such mailed notice of redemption shall affect the validity of proceedings for the redemption of any Bond not affected by such defect or failure. The notice of redemption shall specify the redemption date, redemption price, the numbers, interest rates and CUSIP numbers of the Bonds to be redeemed and the place at which the Bonds are to be surrendered for payment, which is the principal office of the Registrar. Official notice of redemption having been given as aforesaid, the Bonds or portions thereof so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified and from and after such date (unless the City shall default in the payment of the redemption price) such Bonds or portions thereof shall cease to bear interest. Bonds in a denomination larger than $5,000 may be redeemed in part in any integral multiple of $5,000. The owner of any Bond redeemed in part shall receive without charge, upon surrender of such Bond to the Registrar, one or more new Bonds in authorized denominations equal in principal amount to be unredeemed portion of the Bond so surrendered. 3.06. Preparation and Delivery. The Bonds shall be prepared under the direction of the City Manager and shall be executed on behalf of the City by the signatures of the Mayor and the City Manager; provided that said signatures may be printed, engraved, or lithographed facsimiles thereof. In case any officer whose signature, or a facsimile of whose signature, shall appear on the Bonds shall cease to be such officer before the delivery of any Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Notwithstanding such execution, no Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on such Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on each Bond shall be conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so executed and authenticated, they shall be delivered by the City Manager to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser shall not be obligated to see to the application of the purchase price. 3.07. Securities Depository. (a) For purposes of this Section the following terms shall have the following meanings: "Beneficial Owner" shall mean, whenever used with respect to a Bond, the person in whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant, or such person's subrogee. "Cede & Co." shall mean Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to the Bonds. "DTC" shall mean The Depository Trust Company of New York, New York. -16- "Participant" shall mean any broker-dealer, bank or other financial institution for which DTC holds Bonds as securities depository. "Representation Letter" shall mean the Representation Letter from the City to DTC previously executed by the City and on file with DTC. (b) The Bonds shall be initially issued as separately authenticated fully registered bonds, and one Bond shall be issued in the principal amount of each stated maturity of the Bonds. Upon initial issuance, the ownership of such Bonds shall be registered in the bond register in the name of Cede & Co., as nominee of DTC. The Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of payment of the principal of or interest on the Bonds, selecting the Bonds or portions thereof to be redeemed, if any, giving any notice permitted or required to be given to registered owners of Bonds under this resolution, registering the transfer of Bonds, and for all other purposes whatsoever; and neither the Registrar nor the City shall be affected by any notice to the contrary. Neither the Registrar nor the City shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant, or any other person which is not shown on the bond register as being a registered owner of any Bonds, with respect to the accuracy of any records maintained by DTC or any Participant, with respect to the payment by DTC or any Participant of any amount with respect to the principal of or interest on the Bonds, with respect to any notice which is permitted or required to be given to owners of Bonds under this resolution, with respect to the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds, or with respect to any consent given or other action taken by DTC as registered owner of the Bonds. So long as any Bond is registered in the name of Cede & Co., as nominee of DTC, the Registrar shall pay all principal of and interest on such Bond, and shall give all notices with respect to such Bond, only to Cede & Co. in accordance with the Representation Letter, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to the principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than DTC shall receive an authenticated Bond for each separate stated maturity evidencing the obligation of the City to make payments of principal and interest. Upon delivery by DTC to the Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the Bonds will be transferable to such new nominee in accordance with paragraph (d) hereof. (c) In the event the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bonds in the form of bond certificates, the City may notify DTC and the Registrar, whereupon DTC shall notify the Participants of the availability through DTC of Bonds in the form of certificates. In such event, the Bonds will be transferable in accordance with paragraph (d) hereof. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and the Registrar and discharging its responsibilities with respect thereto under applicable law. In such event the Bonds will be transferable in accordance with paragraph (d) hereof. -17- (d) In the event that any transfer or exchange of Bonds is permitted under paragraph (b) or (c) hereof, such transfer or exchange shall be accomplished upon receipt by the Registrar of the Bonds to be transferred or exchanged and appropriate instruments of transfer to the permitted transferee in accordance with the provisions of this resolution. In the event Bonds in the form of certificates are issued to owners other than Cede & Co., its successor as nominee for DTC as owner of all the Bonds, or another securities depository as owner of all the Bonds, the provisions of this resolution shall also apply to all matters relating thereto, including, without limitation, the printing of such Bonds in the form of bond certificates and the method of payment of principal of and interest on such Bonds in the form of bond certificates. Section 4. Security Provisions. 4.01. Use of Proceeds. There is hereby established as a separate account known as the "Escrow Account" in the 2012B Taxable General Obligation Tax Increment Refunding Bond Fund referred to in Section 4.02 hereof. The proceeds of the Bonds in the amount of $1,278,505.16 shall be deposited into the Escrow Account and are irrevocably appropriated for the payment of interest to become due on the Bonds to and including February 1, 2014 (the "Crossover Date"), and for the payment and redemption of the principal amount of the Refunded Bonds on the Crossover Date. The Finance Director is hereby authorized and directed, simultaneously with the delivery of the Bonds, to deposit the proceeds of the Bonds in the Escrow Account, in escrow with U.S. Bank National Association, in St. Paul, Minnesota, a banking institution whose deposits are insured by the Federal Deposit Insurance Corporation and whose combined capital and surplus is not less than $500,000, and shall invest the funds so deposited in securities authorized for such purpose by Minnesota Statutes, Section 475.67, subdivision 8, maturing on such dates and bearing interest at such rates as are required to provide funds sufficient, with cash retained in the escrow account, to make the above-described payments. The Mayor and City Manager are hereby authorized to enter into an escrow agreement with said Bank establishing the terms and conditions for the escrow account in accordance with Minnesota Statutes, Section 475.67. The remaining proceeds of the Bonds shall be applied to pay issuance expenses and any amounts not used for such purpose shall be deposited in the 2012A General Obligation Tax Increment Refunding Bond Fund referred to Section 4.02 hereof. 4.02. Taxable General Obligation Tax Increment Refunding Bond Fund. The Bonds shall be payable from a separate "2012B Taxable General Obligation Tax Increment Refunding Bond Fund" (the "Bond Fund") which shall be created and maintained on the books of the City as a separate debt redemption fund until the Bonds, and all interest thereon, are fully paid. There shall be credited to the Bond Fund the following: (a) Any amount initially deposited therein pursuant to Section 4.01 hereof. (b) All proceeds of all taxes levied and all other money which may at any time be received for or appropriated to the payment of such bonds and interest, including the tax increment herein pledged and appropriated to the Bond Fund, all collections of any ad valorem ICE taxes levied for the payment of the Bonds, and all other moneys received for or appropriated to the payment of the Bonds and interest thereon. (c) Any other funds appropriated by the Council for the payment of the Bonds. 4.03. Pledge of Tax Increment. The City hereby irrevocably pledges to the Bond Fund tax increments derived from the tax increment financing district created by the New Hope Ecomonic Development Authority (the "EDA"), and designated as Tax Increment Financing District No. 04-02 of the EDA which has yet to be designated by Hennepin County (the "District'), which are received by the City from the EDA to pay the Bonds. Such tax increments shall be deposited in the Bond Fund in an amount sufficient to pay all principal and interest when due on the Bonds. Nothing herein shall preclude the City or the EDA from hereafter making further pledges and appropriations of the tax increments from the District herein pledged for the payment of the Bonds for the payment of other obligations of the City or EDA or to pay costs eligible to be paid from the tax increments herein pledged. Any such pledge of increment from the District may be prior, on a parity with or subordinate to the pledge of such tax increment for the payment of the Bonds. 4.04. Full Faith and Credit Pledged. The full faith and credit of the City are irrevocably pledged for the prompt and full payment of the principal of and the interest on the Bonds, as such principal and interest comes due. If the money on hand in the Bond Fund should at any time be insufficient for the payment of principal and interest then due, this City shall pay the principal and interest out of any fund of the City, and such other fund or funds shall be reimbursed therefor when sufficient money is available to the Bond Fund. If on October 1 in any year the sum of the balance in the Bond Fund plus the available tax increment on hand and estimated to be received or before the end of the following calendar year is not sufficient with any ad valorem taxes heretofore levied in accordance with the provisions of this resolution, to pay when due all principal and interest become due on all Bonds payable therefrom in said following calendar year, or the Bond Fund has incurred a deficiency in the manner provided in this Section 4.04, a direct, irrepealable, ad valorem tax shall be levied on all taxable property within the corporate limits of the City for the purpose of restoring such accumulated or anticipated deficiency in an amount at least 5% in excess of amount needed to make good the deficiency. Section 5. Defeasance. When any Bond has been discharged as provided in this Section 5, all pledges, covenants and other rights granted by this resolution to the holders of such Bonds shall cease, and such Bonds shall no longer be deemed outstanding under this Resolution. The City may discharge its obligations with respect to any Bond which is due on any date by irrevocably depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or, if any Bond should not be paid when due, the City may nevertheless discharge its obligations with respect thereto by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities which are -19- authorized by law to be so deposited, bearing interest payable at such times and at such rates and maturing on such dates as shall be required, without reinvestment, to pay all principal and interest to become due thereon to maturity or, if notice of redemption as herein required has been duly provided for, to such earlier redemption date. Section 6. County Auditor Registration, Certification of Proceedings Investment of Money, Arbitrage, Official Statement and Fees. 6.01. County Auditor Registration. The City Manager is hereby authorized and directed to file a certified copy of this Resolution with the County Auditor of Hennepin County, together with such other information as the County Auditor shall require, and to obtain from said County Auditor a certificate that the Bonds have been entered on his bond register as required by law. 6.02. Certification of Proceedings. The officers of the City and the County Auditor of Hennepin County are hereby authorized and directed to prepare and furnish to the Purchaser and to Dorsey & Whitney LLP, Bond Counsel to the City, certified copies of all proceedings and records of the City, and such other affidavits, certificates and information as may be required to show the facts relating to the legality and marketability of the Bonds as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall be deemed representations of the City as to the facts recited therein. 6.03. Official Statement. The Official Statement relating to the Bonds, dated December 1, 2011, prepared and distributed on behalf of the City by Ehlers & Associates, Inc., is hereby approved. Ehlers & Associates, Inc. is hereby authorized on behalf of the City to prepare and distribute to the Purchaser a supplement to the Official Statement listing the offering price, the interest rates, selling compensation, delivery date, the underwriters and such other information relating to the Certificates required to be included in the Official Statement by Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. Within seven business days from the date hereof, the City shall deliver to the Purchaser a reasonable number of copies of the Official Statement and such supplement. The officers of the City are hereby authorized and directed to execute such certificates as may be appropriate concerning the accuracy, completeness and sufficiency of the Official Statement. Section 7. Continuing Disclosure. The City will provide, in the manner set forth in subsection (c) hereof, either directly or indirectly through an agent designated by the City, the following information at the following times: (1) on or before 365 days after the end of each fiscal year of the City, commencing with the fiscal year ending December 31, 2012 the following financial information and operating data in respect of the City (the "Disclosure Information"): -20- (A) the audited financial statements of the City for such fiscal year, prepared in accordance with generally accepted accounting principles in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Minnesota law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City, noting the discrepancies therefrom and the effect thereof, and certified as to accuracy and completeness in all material respects by the fiscal officer of the City; and (B) To the extent not included in the financial statements referred to in paragraph (A) hereof, the information for such fiscal year or for the period most recently available of the type set forth below, which information may be unaudited, but is to be certified as to accuracy and completeness in all material respects by the fiscal officer of the City, to the best of his or her knowledge, which certification may be based on the reliability of information obtained from governmental or other third party sources: Current Property Valuations; Direct Debt; Tax Levies and Collections; Population Trend; Employment/Unemployment. Notwithstanding the foregoing paragraph, if the audited financial statements are not available by the date specified, the City shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of the Disclosure Information and, within 10 days after the receipt thereof, the City shall provide the audited financial statements. Any or all of the Disclosure Information may be incorporated by reference, if it is updated as required hereby, from other documents, including official statements, which have been submitted to each of the repositories hereinafter referred to under subsection (b) or the SEC. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The City shall clearly identify in the Disclosure Information each document so incorporated by reference. If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure Information need no longer be provided if the City includes in the Disclosure Information a statement to such effect; provided, however, if such operations have been replaced by other City operations in respect of which data is not included in the Disclosure Information and the City determines that certain specified data regarding such replacement operations would be a Material Fact (as defined in paragraph (2) of this subsection (b)), then, from and after such determination, -21- the Disclosure Information shall include such additional specified data regarding the replacement operations. If the Disclosure Information is changed or this Section 7 is amended as permitted by this paragraph (1) or subsection (d), then the City shall include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. (2) In a timely manner, 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, if material; (C) Unscheduled draws on debt service reserves reflecting financial difficulties; (D) Unscheduled draws on credit enhancements reflecting financial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions 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; (K) Rating changes; (L) Bankruptcy, insolvency, receivership or a similar event with respect to the City; (M) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (N) Appointment of a successor or additional trustee or the change of name of a trustee, if material. As used herein, 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. -22- (3) In a timely manner, notice of the occurrence of any of the following events or conditions: (A) the failure of the City to provide the Disclosure Information required under paragraph (1) of this subsection (b) at the time specified thereunder; (B) the amendment or supplementing of this Section 7 pursuant to subsection (d), together with a copy of such amendment or supplement and any explanation provided by the City under paragraph (2) of subsection (d); (C) the termination of the obligations of the City under this Section 7 pursuant to subsection (d); (D) any change in the accounting principles pursuant to which the financial statements constituting a portion of the Disclosure Information are prepared; and (E) any change in the fiscal year of the City. (c) Manner of Disclosure. The City agrees to make available the information described in subsection (b) as follows: (1) The City agrees to make available to the MSRB, in an electronic format as prescribed by the MSRB from time to time, the information described in subsection (b). (2) All documents provided to the MSRB pursuant to this subsection (c) shall be accompanied by identifying information as prescribed by the MSRB from time to time. (d) Term, Amendments: Interpretation. (1) The covenants of the City in this Section 7 shall remain in effect so long as any Bonds are Outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this Section 7 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 7 will not cause participating underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. (2) This Section 7 (and the form and requirements of the Disclosure Information) may be amended or supplemented by the City from time to time, without notice to (except as provided in paragraph (3) of subsection (b)) or the consent of the Owners of any Bonds, by a resolution of this Council filed in the office of the recording officer of the City accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection with a change in circumstances that arises from a change in law or regulation -23- or a change in the identity, nature or status of the City or the type of operations conducted by the City, or (b) is required by, or better complies with, the provisions of paragraph (b)(5) of the Rule; (ii) this Section 7 as so amended or supplemented would have complied with the requirements of paragraph (b)(5) of the Rule at the time of the primary offering of the Bonds, giving effect to any change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. If the Disclosure Information is so amended, the City agrees to provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of financial information or operating data being provided hereunder. (3) This Section 7 is entered into to comply with the continuing disclosure provisions of the Rule and should be construed so as to satisfy the requirements of paragraph (b)(5) of the Rule. Section 9. Severability. If any section, paragraph or provision of this resolution shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this resolution. Section 8. Redemption of Refunded Bonds. The City hereby calls the Refunded Bonds for redemption on or before the Crossover Date. The Finance Director shall cause notice of the redemption of the Refunded Bonds to be given in the manner required by the resolution authorizing the Prior Bonds. Section 9. Authorization of Payment of Certain Costs of Issuance of the Bonds. The City authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses to Klein Bank, on the closing date for further distribution as directed by the City's financial advisor, Ehlers & Associates, Inc. -24- Attest: Mayor City Clerk The motion for the adoption of the foregoing resolution was duly seconded by Councilmember Hoffe , and upon vote being taken thereon, the following voted in favor thereof., Hemken, Elder, Hoffe, Lammle, Stauner and the following voted against the same: None whereupon said resolution was declared duly passed and adopted, and was signed by the Mayor which signature was attested by the City Clerk. -19- COUNTY AUDITOR'S CERTIFICATE AS TO REGISTRATION OF BONDS CITY OF NEW HOPE, MINNESOTA I, the undersigned, being the duly qualified and acting County Auditor of Hennepin County, Minnesota, hereby certify that there has been filed in my office a certified copy of a Resolution of the City Council of the City of New Hope, in said County, adopted December 12, 2011, awarding the sale, fixing the form and details and providing for the execution, delivery and security of $1,330,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2012B, of the City, to be dated, as of January 11, 2012. I further certify that said Bonds have been entered on my bond register as required by Minnesota Statutes, Sections 475.62. WITNESS my hand and official seal this day of — J , 2011. (SEAL') _ ■ El F1 Closing Memorandum City of New Hope, Minnesota $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B Dated: January 11, 2012 EHLERS LEADERS IN PUBLIC FINANCE Debt Issuance Services Closing Memorandum TO: Kirk McDonald, City Manager FROM: Bruce Kimmel and Diana Lockard; Ehlers & Associates, Inc. DATE: January 11, 2012 SUBJECT: City of New Hope, Minnesota $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B Date of Bonds: January 11, 2012 Following are details regarding the closing for the above issue. Please call if you have any questions. Closing Date: January 11, 2012 Wire Instructions In connection with the above closing, proceeds will be wired by the purchaser, Northland Securities, Inc., as follows: Wire Instructions Amount Wired 1) U.S. Bank, N.A., 60 Livingston Ave, St. Paul, MN 55107, ABA #0910-00022 $1,313,375.00 for credit U.S. Bank Trust N.A., account #1801-211-67365, FFC: 156616000, Ref: New Hope MN Cross Ref (05A) Esc 12B, Attn: Laura Saunders, 651.495.3892. Total Proceeds $1,313,375.00 Clcsing klemorandum for Ciiy of New Hope_ fdinn.esota 5'I 33G.000 General OblteaMn Taxable Tax Inc,ement Refuncng Bends. Serle 1118 Page 2 Calculation and Distribution of Net Proceeds Calculation of Net Proceeds Par Amount of the Bonds $1,330,000.00 Less: Costs of Issuance' Ehlers & Associates, Inc. (Financial Advisor) $17,500.00 Dorsey & Whitney LLP (Bond Counsel) 4,500.00 Standard & Poor's (Rating Agency) 2,830.00 Bond Trust Services Corporation (Paying Agent) 575.00 U.S. Bank National Association (Escrow Agent) 1,300.00 BBE-CIP - (Securities Placement Agent) 1,000.00 Grant Thornton LLP (Escrow Verification) 2,500.00 Total Costs of Issuance (30,205.00) Less: Underwriter's Discount (16.625.00) Net Proceeds $1.283.170.00 Distribution of Net Proceeds Purchase Price of Open Market Securities $1,278,505.16 Initial Cash Deposit to Escrow Account .1 P 984.72 Deposit to Debt Service Account �QQU ® �\ \ 3 680.12 \`S Distribution of Net Proceeds $1,283.170.00 ' The escrow agent will pay the costs of issuance from the proceeds of the Bonds. z Excess bond proceeds (contingency) in the amount of $3,680.12 should be deposited into the Debt Service Account for the Series 2012B Bonds. Closing Memorandum for City of N�-o,Hope. Minnesota S1.Si0.G00 Genera: Obligation Taxable Tax hicrement P.efunding bonds, Se:les 2012B Page 3 Debt Service Payments for the $1,370,000 General Obligation Taxable Tax Increment Bonds, Series 2005A The callable portion of the $1,370,000 General Obligation Taxable Tax Increment Bonds, Series 2005A (bonds maturing in the years 2015 through 2031) will be redeemed on February 1, 2014. The City will continue to pay, as due, principal and interest on the Series 2005A Bonds at the rates and amounts specified to the call date (February 1, 2014). The refunded bonds will be called and paid by the Escrow Account. Debt Service Payments for the $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B Source of Payment 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. It is the intention of the City to pay principal and interest on the Bonds from tax increment revenues generated by existing development within Tax Increment Financing District No. 04-02, for which the Series 2005A Bonds were originally issued. If tax increment revenues are insufficient to meet principal and interest on the Bonds, the City is required to levy ad valorem taxes without limit as to rate or amount on all taxable property in the City to make up the deficiency. Escrow Account The Escrow Account will be responsible for the payment of the debt service on the Series 2012B Refunding Bonds from August 1, 2012 through February 1, 2014; thereafter, the City will be responsible for payment of the debt service. On February 1, 2014, the escrow agent will be responsible for calling the $1,370,000 General Obligation Taxable Tax Increment Bonds, Series 2005A, and transferring the principal of the callable bonds to the Paying Agent for the issue. Schedule of Principal and Interest Payments The Schedule of Principal and Interest Payments including respective CUSIP numbers follows this memorandum. A copy of the Bond Resolution will be included in the Bond Issue Summary Book which will be provided to you after the closing. Payment Instructions for Obligations Issued in Book -Entry -Only Form with a Paying Agent The Bonds have been issued in 'Book -Entry -Only" form, and the City has named Bond Trust Services Corporation of Roseville, Minnesota to be the Paying Agent for the Bonds. Therefore, on a semi-annual basis the City will be invoiced by the Paying Agent for the interest and on an annual basis for the principal coming due on the Bonds. In addition, the City will be invoiced for paying agent/transfer agent charges on a regularly scheduled basis. Closir;g PAamorandum for City o' New Hope. Uhnneso[a S1 330000 Genera, 0!e' jafion TaanJle Taxi ryn'eat R,funding B; nds. Series 2012B Pig-, 4 Continuing Disclosure Requirements - New Deadlines and Material Events Effective December 1, 2010, the Securities and Exchange Commission (SEC) amended Rule 15c2-12, which impacts issuers of municipal securities. Specifically: a) issuers are required to provide material event notices within 10 days after the occurrence of the event; b) the list of material events has expanded from previous requirements and are as follows: Event Notices • Principal and interest payment delinquencies • Non-payment related defaults, if material • Unscheduled draws on debt service reserves reflecting financial difficulties • Unscheduled draws on credit enhancements reflecting financial difficulties • Substitution of credit or liquidity providers or their failure to perform • Adverse tax opinions, IRS notices or material events affecting the tax status of the security • Modifications to rights of security holders, if material • Bond calls, if material • Defeasances • Release, substitution or sale of property securing repayment of the securities, if material • Rating changes • Tender offers • Bankruptcy, insolvency, receivership or similar event of the obligated person • Merger, consolidation, or acquisition of the obligated person, if material • Appointment of a successor or additional trustee, or the change of name of a trustee, if material Additional/ Voluntary Event -Based Disclosures • Amendment to continuing disclosure undertaking • Change in obligated person • Notice to investors pursuant to bond documents • Certain communications form the Internal Revenue Service • Secondary market purchases • Bid for auction rate or other securities • Capital or other financing plan • Litigation / enforcement action • Change of tender agent, remarketing agent, or other on-going party • Derivative or other similar transaction • Other event -based disclosures If you have contracted with Ehlers or another company to provide continuing disclosure services, please notify them of these events as soon as they occur, so timely material event notices can be filed in compliance with the amended rules. If you have any questions regarding the closing, the calculation and use of proceeds, or debt service payments, please call Bruce Kimmel at (651) 697-8572. Closing Nlernorandum for Cit,, of Neav Hope, Minnesota S1 .330.000 General Obligation Taxable Tac Incrennen.t PULInding Bods, Series 2612B Page 5 .PRINCIPAL AND INTEREST PAYMENT SCHEDULE Issue ID# 38082 City of New Hope, Minnesota Dated Date: 1111/2012 $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 20128 Call Date: 2/1/2022 CUSIP No. Payment Payment Total Fiscal Base: Due Date Principal Rate Interest Notations P 81 Total 64544P 08/01/12 - - 25,497.22 Paid from Escrow 25,497.22 02/01/13 - - 22,947.50 Paid from Escrow 22,947.50 48,444.72 08/01/13 - - 22,947.50 Paid from Escrow 22,947.50 02/01/14 - - 22,947.50 Paid from Escrow 22,947.50 45,895.00 08/01/14 - - 22,947.50 22,947.50 02/01/15 55,000.00 1.350 22,947.50 77,947.50 100,895.00 ** 08/01/15 - - 22,576.25 22,576.25 02/01/16 50,000.00 1.350 22,576.25 72,576.25 95,152.50 CV3 08/01/16 - - 22,238.75 22,238.75 02/01/17 50,000.00 1.850 22,238.75 72,238.75 94,477.50 ** 08/01/17 - - 21,776.25 21,776.25 02/01/18 55,000.00 1.850 21,776.25 76,776.25 98,552.50 CX9 08/01/18 - - 21,267.50 21,267.50 02/01/19 55,000.00 2.500 21,267.50 76,267.50 97,535.00 " 08/01/19 - - 20,580.00 20,580.00 02/01/20 60,000.00 2.500 20,580.00 80,580.00 101,160.00 CZ4 08/01/20 - - 19,830.00 19,830.00 02/01/21 65,000.00 3.000 19,830.00 84,830.00 104,660.00 ** 08/01/21 - - 18,855.00 18,855.00 02/01/22 75,000.00 3.000 18,855.00 93,855.00 112,710.00 DB6 08/01/22 - - 17,730.00 17,730.00 02/01/23 85,000.00 3.500 17,730.00 102,730.00 120,460.00 ** 08/01/23 - - 16,242.50 16,242.50 02/01/24 90,000.00 3.500 16,242.50 106,242.50 122,485.00 DO2 08/01/24 - - 14,667.50 14,667.50 02/01/25 95,000.00 3.850 14,667.50 109,667.50 124,335.00 ** 08/01/25 - - 12,838.75 12,838.75 02/01/26 95,000.00 3.850 12,838.75 107,838.75 120,677.50 DF7 08/01/26 - - 11,010.00 11,010.00 02/01/27 105,000.00 4.050 11,010.00 116,010.00 127,020.00 DG5 08/01/27 - - 8,883.75 8,883.75 02/01/28 100,000.00 4.250 8,883.75 108,883.75 117,767.50 DI -13 08/01/28 - - 6,758.75 6,758.75 02/01/29 100,000.00 4.450 6,758.75 106,758.75 113,517.50 DJ9 08/01/29 - - 4,533.75 4,533.75 02/01/30 100,000.00 4.650 4,533.75 104,533.75 109,067.50 ** 08/01/30 - - 2,208.75 2,208.75 02/01/31 95,000.00 4.650 2,208.75 97,208.75 99,417.50 DI -4 1,330,000.00 624,229.72 1,954,229.72 1,954,229.72 Excess bond proceeds in the amount of $3,680.12 (contingency) will be deposited into the Debt Service Fund for the " Each of the maturites noted above with -- are Term Bonds and, therefore, Mandatory Call Notices must be published by the Paying Agent each of those years. EHLERS New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Sources & Uses Dated 011/111/20121 Delivered 01 /1112 01 2 Sources Of Funds Par Amount of Bonds $1,330,000,00 Total Sources Uses Of Funds $1,330,000.00 Total Underwntcr's Discount (1.250%) 16,625.00 Costs of Issuance 30,205.00 Deposit to Crossover Escrow Fund 1,279,489.88 Rounding Amount 3,680.12 Total Uses Series 20128 Tax GO TI F B I SI NGLE PU RPOSE 1 1211212011 1 237 PM $1,330,000.00 EHLERS Pagel LEADERS IN PUBLIC FINANCE New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 20126 Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 01/112012 08/01/2012 - - 25,497.22 25,497.22 - 02/01/2013 - - 22,947.50 22,947.50 48,444.72 08/012013 - - 22,947.50 22,947.50 _ 02/012014 - - 22,947.50 22,947.50 45,895.00 08/01/2014 - - 22,947.50 22,947 50 - 02/01/2015 55,000.00 1.350% 22,947.50 77,947.50 100,895.00 08/01/2015 - - 22,576.25 22,576.25 - 02/012016 50,000.00 1.350% 22,576.25 72,57625 95,152.50 08/01/2016 - 22,238.75 22,238.75 - 02/01/2017 50,000.00 1.850% 22,238.75 72,238.75 94A77.56 08/01/2017 - - 21,77625 21,776.25 - 02/01/2018 55,000.00 1.850% 21,776.25 76,776.25 98,552.50 08/01/2018 - - 21,267.50 21,267.50 - 02/01/2019 55,000.00 2.500% 21,267.50 76,267.50 97,535.00 08/01/2019 - - 20,580.00 20,580.00 - 02/01/2020 60,000.00 2.500% 20,580.00 80,580.00 101,160.00 08/01/2020 - - 19,830.00 19,830.00 - 02/01/2021 65,000.00 3.000% 19,830.00 84,830.00 104,660.00 08/01/2021 - - 18,855.00 18,855.00 - 02/01/2022 75,000.00 3000% 18,855.00 93,855.00 112,710.00 08/01/2022 - - 17,730.00 17,730.00 - 02/01/2023 85,000.00 3.500% 17,730.00 102,730.00 120,460.00 08/01/2023 - - 16,24250 16,242.50 - 02/01/2024 90,000.00 3.500% 16,242.50 106,242.50 122,485.00 08/01/2024 - - 14,667.50 14,667.50 - 02/01/2025 95,000.00 3.850% 14,667.50 109,667.50 124,335.00 08/01/2025 - - 12,838.75 12,838.75 - 02/01/2026 95,000.00 3.850% 12,838.75 107,838.75 120,677.50 08/01/2026 - - 11,010.00 11,010.00 - 02/01/2027 105,000.00 4.050% 11,010.00 116,010.00 127,020.00 08/01/2027 - - 8,883.75 8,883.75 - 02/01/2028 100,000.00 4.250% 8,883.75 108,883.75 117,767.50 08/01/2028 - - 6,758.75 6,758.75 - 02/01/2029 100,000.00 4.450% 6,758.75 106,758.75 113,517.50 08/01/2029 - - 4,53175 4,533.75 - 02/01/2030 100,000.00 4.650% 4,533.75 104,533.75 109,067.50 08/01/2030 - - 2,208.75 2,208.75 - 02/0l/2031 95,000.00 4.650% 2,208.75 97,208.75 99,417.50 Total $1,330,000.00 - $624,229.72 $1,954,229.72 - Yield Statistics Bond Year Dollars Average Lifc Average Coupon Net Interest Cost(NIC) True Interest Cost (TLC) Bond Yield for Arbitrage Purposes All Inclusive Cost (AIC) IRS Form 8038 $16,278.89 12.240 Years 3.8345966% 3.9367227% 3.9091120% 3.7777884% 4.1534778% Net Interest Cost 18345966% Weighted Average Maturity 12.240 Years Senes2012BTw GOTIFB I SINGLEPURPOSE 1 12/122011 1 2:37PM EHLERS Paget LEADERS IN PUBLIC FINANCE New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Debt Service Comparison PV Analysis Summary (Net to Net) Gross PV Debt Service Savings ..................... Net PV Cashfio,v Savings @ 3.778%(Bond Yield) Contingency or Rounding Amount Net Present Value Benefit Net PV Benefit / $1,283,037.29 PV Refunded Debt Scrvicc Net PV Benefit / $1,195,000 Refunded Principal... Net PV Benefit / $1,330,000 Refunding Principal.. Refunding Bond Information Refunding Dated Date Refunding Delivery Dam Series -- Series 2012B Tax GO TIF B 1 SINGLE PURPOSE 1 121122011 1 237 PM 42,966.52 42,966.52 3,680.12 $46,646.64 3.636% 3.903% 3.507% 1/11/2012 1/112012 E H L E RS Page 3 LEADERS IN PUBLIC FINANCE Const Loan Date Total P+I Pmt Existing D/S Net New DIS Old Net DIS Savings 02/01/2012 - - - (3,680.12) - 3,680.12 02/01/2013 48,444.72 (48,444.72) 72,356.24 72,356.24 72,356.24 - 02/01/2014 45,895.00 (1,240,895.00) 1,262,482.50 67,482.50 67,482.50 - 02/01/2015 100,895.00 - - 100,895.00 102,482.50 1,587.50 02/01/2016 95,152.50 - - 95,152.50 100,522.50 5,370.00 02/01/2017 94,477.50 - - 94,477.50 98,562.50 4,085.00 02/01/2018 98,552.50 - - 98,552.50 101,585.00 3,032.50 02101/2019 97,535.00 - - 97,535.00 99,325.00 1,790.00 02/01/2020 101,160.00 - - 101,160.00 107,065.00 5,905.00 02/01/2021 104,660.00 - - 104,660.00 109,240.00 4,580.00 02/01/2022 11.2,710.00 - - 112,710.00 116,132.50 3,422.50 02/01/2023 120,460.00 - - 120,460.00 122,460.00 2,000.00 02/01/2024 122,485.00 - - 122,485.00 128,222.50 5,737.50 02/01/2025 124,335.00 - - 124,335.00 128,420.00 4,085.00 02/01/2026 120,677.50 - - 120,677.50 123,335.00 2,657.50 02/01/2027 127,020.00 - - 127,020.00 128,250.00 1,230.00 02/01/2028 117,767.50 - - 117,767.50 122,600.00 4,832.50 02/01/2029 113,517.50 - - 113,517.50 116,950.00 3,432.50 02/01/2030 109,067.50 - - 109,067.50 111,300.00 2,232.50 02/01/2031 99,417.50 - 99,417.50 105,650.00 6,232.50 Total $1,954,229.72 (1,289,339.72) $1,334,838.74 $1,996,048.62 $2,061,941.24 $6589262 PV Analysis Summary (Net to Net) Gross PV Debt Service Savings ..................... Net PV Cashfio,v Savings @ 3.778%(Bond Yield) Contingency or Rounding Amount Net Present Value Benefit Net PV Benefit / $1,283,037.29 PV Refunded Debt Scrvicc Net PV Benefit / $1,195,000 Refunded Principal... Net PV Benefit / $1,330,000 Refunding Principal.. Refunding Bond Information Refunding Dated Date Refunding Delivery Dam Series -- Series 2012B Tax GO TIF B 1 SINGLE PURPOSE 1 121122011 1 237 PM 42,966.52 42,966.52 3,680.12 $46,646.64 3.636% 3.903% 3.507% 1/11/2012 1/112012 E H L E RS Page 3 LEADERS IN PUBLIC FINANCE New Hoge. MN $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Debt Service To Maturity And To Call Buse date for Avg. Life & Avg. Coupon Calculation Refunded Refunded 12.825 Years Average Coupon 5.6565264% Weighted Average Maturity (Par Basis) Refunded Date Bonds Interest DIS To Call Principal Coupon Interest D/S 02/01/2013 - 72,356.24 72,356.24 - - 72,356.24 72,356.24 02/01/2014 1,195,000.00 67,482.50 1,262,482.50 - - 67,482.50 67,482.50 02/01/2015 - - - 35,000.00 5.600% 67,482.50 102,482.50 02/01/2016 - - - 35,000.00 5.600% 65,522.50 100,522.50 02/01/2017 - - - 35,000.00 5.650% 63,562.50 98,562.50 02/01/2018 - - - 40,000.00 5.650% 61,585.00 101,585.00 02/01/2019 - - - 40,000.00 5.650% 59,325.00 99,325.00 02/01/2020 - - - 50,000.00 5.650% 57,065.00 107,065.00 02/01/2021 - - - 55,000.00 5.650% 54,240.00 109,240.00 02/01/2022 - - - 65,000.00 5.650% 51,132.50 116,132.50 02/01/2023 - - - 75,000.00 5.650% 47,460.00 122,460.00 02/01/2024 - - - 85,000.00 5.650% 43,222.50 128,222.50 02/01/2025 - - - 90,000.00 5.650% 38,420.00 128,420.00 02/01/2026 - - - 90,000.00 5.650% 33,335.00 123,335.00 02/01/2027 - - - 100,000.00 5.650% 28,250.00 128,250.00 02/01/2028 - - - 100,000.00 5.650% 22,600.00 122,600.00 02/01/2029 - - - 100,000.00 5.650% 16,950.00 116,950.00 02/01/2030 - - - 100,000.00 5.650% 11,300.00 111,300.00 02/01/2031 - - - 100,000.00 5.650% 5,650.00 105,650.00 Total $1,195,000.00 $139,838.74 $1,334,838.74 $1,195,000.00 - $866,941.24 $2,061,941.24 Buse date for Avg. Life & Avg. Coupon Calculation - 1/11/2012 Average Life 12.825 Years Average Coupon 5.6565264% Weighted Average Maturity (Par Basis) 12.825 Years Refundino Bond Information Refunding Dated Date 1/11/2012 Refunding Delivery Date 1/11/2012 Ser 2005 $1.37M Taxable G I SINGLE PURPOSE 1 12/142011 1 2:37 PM 10 EHLERS Page LEADERS IN PUBLIC FINANCE New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 20128 Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Crossover Escrow Fund Cashflow Date Principal Rate Interest Receipts Disbursements Cash Balance 01/11/2012 - - - 984.72 - 984.72 01/31/2012 - - 25.00 25.00 - 1,009.72 06/26/2012 - - 60.00 60.00 - 1,069.72 07/07/2012 - - 15,025.00 15,025.00 - 16,094.72 07/26/2012 10,000.00 0.030% - 10,000.00 - 26,094.72 07/31/2012 - - 25.00 25.00 - 26,119.72 08/01/2012 - - - - 25,497.22 622.50 12/26/2012 - - 60.00 60.00 - 682.50 01/07/2013 - - 15,025.00 15,025.00 - 15,707.50 01/31/2013 8,000.00 0.625% 25.00 8,025.00 - 23,732.50 02/01/2013 - - - - 22,947.50 785.00 06/26/2013 8,000.00 1.500% 60.00 8,060.00 - 8,845.00 07/07/2013 - - 15,025.00 15,025.00 - 23,870.00 08/01/2013 - - - - 22,947.50 922.50 01/07/2014 1,202,000.00 2.500% 15,025.00 1,217,025.00 - 1,217,947.50 02/01/2014 - - - - 1,217,947.50 - Total $1,2289000.00 - $60,355.00 $1,289,339.72 $1,289,339.72 - Investment Parameters Investment Madel [PV, GIC, or Securities] Default investment yield target Cash Deposit Cost of Investments Purchased with Bond Proceeds Total Cost of Investments Target Cost of Investments at bond yield Actual positive or (negative) arbitrage Yield to Receipt Yield for Arbitrage Purposes Senes 2012B Tax GO TIF B I SINGLE PURPOSE 1 12/1212011 1 2:37 PM EHLERS LEADERS IN PUBLIC FINANCE Securities Bond Yield 984.72 1,278,505.16 $1,279,489.88 $1,196,444.80 (83,045.08) 0.3973807% - - -- 3.7777884% Page 5 New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Pricing Summary Total - - - $1,330,000.00 - $1,330,000.00 Information Par Amount of Bonds Gross Production Total Underwriter's Discount (1.250%) Bid (98.750%) Total Purchase Price Bond Year Dollars Average Life Average Coupon Net Interest Cost (NIQ True Interest Cost (TIC) Series 2012BTax GO TIF B I SINGLEPURPOSE 1 12112/2011 1 297PM EHLERS LEADERS IN PUBLIC FINANCE $1,330,000.00 $1,330,000.00 $(16,625.00) 1,313,375.00 $1,313,375.00 $16,278.89 12.240 Years 3.8345966% 3.9367227% 3.9091120% Page 6 Maturity Maturity Type of Bond Coupon Yield Value Price Dollar Price 02/01/2016 Term 1 Coupon 1.350% 1.350% 105,000.00 100.000% 105,000.00 02/01/2018 Term 2 Coupon 1.850% 1.850% 105,000.00 100.000% 105,000.00 02/01/2020 Term 3 Coupon 2.500% 2.500% 115,000.00 100.000% 115,000.00 02/01/2022 Term 4 Coupon 3.000% 3.000% 140,000.00 100.000% 140,000.00 02/01/2024 Tom 5 Coupon 3.500% 3.500% 175,000.00 100.000% 175,000.00 02/01/2026 Term 6 Coupon 3.850% 3.850% 190,000.00 100.000% 190,000.00 02/01/2027 Serial Coupon 4.050% 4.050% 105,000.00 100.000% 105,000.00 02/01/2028 Serial Coupon 4.250% 4.250% 100,000.00 100.000% 100,000.00 02/01/2029 Serial Coupon 4.450% 4.450% 100,000.00 100.000% 100,000.00 02/01/2031 Term 7 Coupon 4.650% 4.650% 195,000.00 100.000% 195,000.00 Total - - - $1,330,000.00 - $1,330,000.00 Information Par Amount of Bonds Gross Production Total Underwriter's Discount (1.250%) Bid (98.750%) Total Purchase Price Bond Year Dollars Average Life Average Coupon Net Interest Cost (NIQ True Interest Cost (TIC) Series 2012BTax GO TIF B I SINGLEPURPOSE 1 12112/2011 1 297PM EHLERS LEADERS IN PUBLIC FINANCE $1,330,000.00 $1,330,000.00 $(16,625.00) 1,313,375.00 $1,313,375.00 $16,278.89 12.240 Years 3.8345966% 3.9367227% 3.9091120% Page 6 New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A PROOF OF GROSS D/S SAVINGS @ 3.7777884% Date NEW GROSS D/S OLD GROSS D/S SAVINGS PV Factor Present Value 01/11/2012 - - - 1.000000ox - 08/01/2014 22,947.50 33,741.25 10,793.75 0.9087884x 9,809.23 02/01/2015 77,947.50 68,741.25 (9,206.25) 0.8919406. (8,211.43) 08/01/2015 22,576.25 32,761.25 10,185.00 0.8754051x 8,916.00 02/01/2016 72,576.25 67,761.25 (4,815A0) 0.8591762x (4,136.93) 08/01/2016 22,238.75 31,781.25 9,542.50 0.843248lx 8,046.70 02/01/2017 72,238.75 66,781.25 (5,457.50) 0.8276153x (4,516.71) 08/01/2017 21,776.25 30,792.50 9,016.25 0.8122724x 7,323.65 02/01/2018 76,776.25 70,792.50 (5,983.75) 0.7972138x (4,770.33) 08/012018 21,267.50 29,662.50 8,395.00 0.7824345x 6,568.54 02/01/2019 76,267.50 69,662.50 (6,605.00) 0.767929lx (5,072.17) 08/01/2019 20,580.00 28,532.50 7,952.50 0.7536927x 5,993.74 02/01/2020 80,580.00 78,532.50 (2,047.50) 0.7397201x (1,514.58) 08/01/2020 19,830.00 27,120.00 7,290.00 0.7260066x 5,292.59 02/01/2021 84,830.00 82,120.00 (2,710.00) 0.7125474x (1,931.00) 08/01/2021 18,855.00 25,566.25 6,711.25 0.6993376x 4,693.43 02/01/2022 93,855.00 90,566.25 (3,288.75) 0.6863728x (2,257.31) 08/01/2022 17,730.00 23,730.00 6,000.00 0.6736483x 4,041.89 02/012023 102,730.00 98,730.00 (4,000.00) 0.6611597. (2,644.64) 08/01/2023 16,242.50 21,611.25 5,368.75 0.6489026x 3,483.80 02/01/2024 106,242.50 106,611.25 368.75 0.6368727x 234.85 08/01/2024 14,667.50 19,210.00 4,542.50 0.6250659x 2,839.36 02/01/2025 109,667.50 109,210.00 (457.50) 0.6134779x (280.67) 08/01/2025 12,838.75 16,667.50 3,828.75 0.6021048x 2,305.31 02/01/2026 107,838.75 106,667.50 (1,171.25) 0.5909425x (692.14) 08/01/2026 11,010.00 14,125.003,115.00 0.5799872x 1,806.66 02/01/2027 116,010.00 114,125.00 (1,885.00) 0.5692349x (1,073.01) 08/01/2027 8,883.75 11,300.00 2,416.25 0.5586820. 1,349.92 02/01/2028 108,883.75 111,300.00 2,416.25 0.5483248x 1,324.89 08/01/2028 6,758.75 8,475.00 1,716.25 05381595x 923.62 02/01/2029 106,758.75 108,475.00 1,716.25 0.5281827. 906.49 08/01/2029 4,533.75 5,650.00 1,116.25 0.5183908x 578.65 02/01/2030 104,533.75 105,650.00 1,116.25 0.5087805x 567.93 08/01/2030 2,208.75 2,825.00 616.25 0.4993483x 307.72 02/01/2031 97,208.75 102,825.00 5,616.25 0.4900910x 2,752.47 Total $1,859,890.00 $1,922,102.50 $62,212.50 - $42,966.52 Senes 20128 Tax GO TIF a 1 SINGLE PURPOSE 1 121122011 1 237 PM E H L E RS Page 7 LEADERS IN PUBLIC FINANCE New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Refunding Summary Dated 01/11/2012 1 Delivered 01/11/2012 Sources Of Funds Par Amount of Bonds $1,330,000.00 Total Sources $1,330,000.00 Uses Of Funds Total Underwriter's Discount (1.25VIoo) 16,625.00 Costs of Issuance 30,205.00 Deposit to Crossover Escrow Fund _. _. 1,279,489.88 Rounding Amount _ 3,680.12 Total Uses Detail State and Local Government Series (Sl -GS) rates for Date of OMP Candidates Crossover Escrow Fund Solution Method Total Cost of Investments Interest Earnings @ 0.397% Total Draws Refunded And Call Dates Set 2005 $1.37M Taxable GO Tax Iner Falls PV Analysis Summary (Net to Net) $1,330,000.00 Net Fundcd $1,279,489.88 60,355.00 $1,289,339.72 2/01/2014 Net PV Cashflow Savings @ 3.778%(Bond Yield) 42,966.52 Contingency or Rounding Amount 3,680.12 Net Present Value Benefit 546.646.64 Net PV Benefit / $1,195,000 Refunded Principal 3,903% Net PV Benefit / $1,330,000 Refunding Principal 3.507% Bond Statistics Average Life 12.240 Years Average Coupon 3.8345966% Net Interest Cost (NIC) 3.9367227% Bond Yield for Arbitrage Purposes 3.7777884% True Interest Cost (TIC) 3.9091120% All Inclusive Cost (AIC) 4.1534778% Series 2012B Tax GO TIF B 1 SINGLE PURPOSE 1 1211212011 1 237 PM EHLERS Page LEADERS IN PUBLIC FINANCE New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Proof Of Bond Yield @ 3.7777884% Cumulative Date Cashflow PV Factor Present Value PV 01/11/2012 - 1.000000Ox - _ 08/01/2012 25,497.22 0.9794227x 24,972.56 24,972.56 02/01/2013 22,947.50 0.9612654x 22,058.64 47,031.19 08/01/2013 22,947.50 0.9434447x 21,649.70 68,680.89 02/01/2014 22,947.50 0.9259544x 21,248.34 89,929.23 08/01/2014 22,947.50 0.9087884x 20,854.42 110,783.65 02/01/2015 77,947.50 0.8919406x 69,524.54 180,308.19 08/01/2015 22,576.25 0.8754051x 19,763.36 200,071.56 02/01/2016 72,576.25 0.8591762x 62,355.78 262,427.34 08/01/2016 22,238.75 0.8432481x 18,752.78 281,180.13 02/01/2017 72,238.75 0.8276153x 59,785.90 340,966.02 08/01/2017 21,776.25 0.8122724x 17,688.25 358,654.27 02/01/2018 76,776.25 0.7972138x 61,207.09 419,861.36 08/01/2018 21,267.50 0.7824345x 16,640.43 436,501.78 02/01/2019 76,267.50 0.767929lx 58,568.03 495,069.82 08/01/2019 20,580.00 0.7536927x 15,510.99 510,580.81 02/01/2020 80,580.00 0.7397201x 59,606.65 570,187.46 08/01/2020 19,830.00 0.7260066x 14,396.71 584,584.17 02/01/2021 84,830.00 0.7125474x 60,445.39 645,029.56 08/01/2021 18,855.00 0.6993376x -0.6863728x 13,186.01 658,215.58 02/01/2022 93,855.00 64,419.52 722,635.09 08/01/2022 17,730.00 0.6736483x 11,943.78 734,578.87 02/01/2023 102,730.00 0.6611597x 67,920.93 802,499.81 08/01/2023 16,242.50 0.6489026x 10,539.80 813,039.61 02/01/2024 106,242.50 0.6368727. 67,662.95 880,702.56 08/01/2024 14,667.50 0.6250659x 9,168.15 889,870.71 02/01/2025 109,667.50 0.6134779x 67,278.59 957,149.30 08/01/2025 12,838.75 0.6021048x 7,730.27 964,879.57 02/01/2026 107,838.75 0.5909425x 63,726.50 1.028.606.08 08/01/2026 11,010 00 0 5799872. 6,385.66 1,034,991.74 02/01/2027 116,010.00 0.5692349x 66,036.95 1,101,028.68 08/01/2027 8,883.75 0.5586820x 4,963.19 1,105,991.87 02/01/2028 108,883.75 0.5483248x 59,703.66 1,165,695.53 08/01/2028 6,758.75 0.5381595x 3,637.29 1,169,332.82 02/01/2029 106,758.75 0.5281827x 56,388.12 1,225,720.94 08/01/2029 4,533.75 0.5183908x 2,350.25 1,228,071.19 02/01/2030 104,533.75 0.5087805x 53,184.73 1,281,255.93 08/01/2030 2,208.75 0.4993483x 1,102.94 1,282,358.86 02/01/2031 97,208.75 0.4900910x 47,641.14 1,330,000.00 Total $1,954,229.72 - $1,330,000.00 - Derivation Of Target Amount Par Amount of Bonds $1,330,000.00 Original Issue Proceeds $1,330,000.00 Senes 2012B Tax GO TIF B I SINGLE PURPOSE 1 12/1212011 1 2:37 PM EHLERSPaget' LEADERS IN PUBLIC FINANCE New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Derivation Of Form 8038 Yield Statistics Total $1,330,000.00 $1,330,000.00 - $16,278,888.89 IRS Form 8038 Weighted Average Maturity = Bond Years/Issue Price Total Interest from Debt Service Total Interest NIC = Interest / (Issue Price " Average Maturity) Bond Yield for Arbitrage Purposes Series 20128 Tax GO TIF B I SINGLE PURPOSE 1 12/1212011 1 2.37 PM EHLERS LEADERS IN PUBLIC FINANCE 12.240 Years 624,229.72 624,229.72 3.8345966% 3.7777884% Page 10 Issuance Issuance Maturity Value Price Price Exponent Bond Years 01/11/2012 - - - _ - 02/01/2015 55,000.00 100.000% 55,000.00 3.0555556x 168,055.56 02/01/2016 50,000.00 100.000% 50,000.00 4.0555556x 202,777.78 02/01/2017 50,000.00 100.0000/0 50,000.00 5.0555556x 252,777.78 02/01/2018 55,000.00 100.000% 55,000.00 6.0555556x 333,055.56 02/01/2019 55,000.00 100.000% 55,000.00 7.0555556x 388,055.56 02/01/2020 60,000.00 100.000% 60,000.00 8.0555556x 483,333.33 02/01/2021 65,000.00 100.000% 65,000.00 9.0555556x 588,611.11 02/01/2022 75,000.00 100.000% 75,000.00 10.0555556x 754,166.67 02/01/2023 85,000.00 100.000% 85,000.00 11.0555556x 939,722.22 02/01/2024 90,000.00 100.000% 90,000.00 12.0555556. 1,085,000.00 02/01/2025 95,000.00 100.000% 95,000.00 13.0555556x 1,240,27278 02/01/2026 95,000.00 100.000% 95,000.00 14.0555556x 1,335,277.78 02/01/2027 105,000.00 100.000% 105,000.00 15.0555556. 1,580,833.33 02/01/2028 100,000.00 100.000% 100,000.00 16.0555556x 1,605,555.56 02/01/2029 100,000.00 100.000% 100,000.00 17.0555556x 1,705,555.56 02/01/2030 100,000.00 100.000% 100,000.00 18.0555556x 1,805,555.56 02/01/2031 95,000.00 100.000% 95,000.00 19.0555556x 1,810,277.78 Total $1,330,000.00 $1,330,000.00 - $16,278,888.89 IRS Form 8038 Weighted Average Maturity = Bond Years/Issue Price Total Interest from Debt Service Total Interest NIC = Interest / (Issue Price " Average Maturity) Bond Yield for Arbitrage Purposes Series 20128 Tax GO TIF B I SINGLE PURPOSE 1 12/1212011 1 2.37 PM EHLERS LEADERS IN PUBLIC FINANCE 12.240 Years 624,229.72 624,229.72 3.8345966% 3.7777884% Page 10 New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Crossover Escrow Summary Cost Par Principal +Accrued Maturity Type Coupon Yield $ Price Amount Cost Interest =Total Cost Cusip Crossover Escrow 07/26/2012 T -BILL 0.030% 0.030% 99.9835833% 10,000 9,998.36 - 9,998.36 9127954B4 01/31/2013 T -NOTE 0.625% 0.150% 100.5000000% 8,000 8,040.00 22.28 8,062.28 912828PR5 06/26/2013 FNMA 1.500% 0.230% 101.8437500% 8,000 8,147.50 5.00 8,152.50 31398AT44 01/07/2014 FBLMC 2500% 0.400% 104.1562500% 1,202,000 1,251,958.13 333.89 1,252,292.02 3137EABX6 Subtotal - - - $1,228,000 $1,278,143.99 $361.17 $1,278,505.16 Total $1,228,000 $1,278,143.99 $361.17 $1,278,505.16 Crossover Cost of Investments Purchased with Bond Proceeds Total Cost of Investments Delivery Date Seriee2012BTax GOTIFB I SINGLEPURPOSE 1 12/12/2011 1 2.37PM 984.72 1,278,505.16 $1,279,489.88 1/11/2012 0 EHLERS Page 11 LEADERS IN PUBLIC FINANCE New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Primary Purpose Fund Optimized Dedicated Portfolio - $1,228,000 $1,278,143.99 $361.17 $1,278,505.16 Composition Of Initial Deposit Cash Deposit Cost of Investments Purchased with Bond Proceeds Total Cost of Investments Series2012BTax GOTIFB I SINGLEPURPOSE 112/=011 I237PM 0 EHLERS LEADERS IN PUBLIC FINANCE 984.72 1,278,505.16 $1,279,489.88 Page 12 Par Principal +Accrued Maturity Type Coupon Yield $ Price Amount Cost Interest =Total Cost Cusip 07/26/2012 T -BILL 0.030% 0.030% 99.9835833% 10,000 9,998.36 - 9,998.36 912795464 01/31/2013 T -NOTE 0.625% 0.150% 100.5000000% 8,000 8,040.00 22.28 8,062.28 912828PR5 06/26/2013 FNMA 1.500% 0.230% 101.8437500% 8,000 8,147.50 5.00 8,152.50 31398AT44 01/07/2014 FMAC 2.500% 0.400% 104.1562500% 1,202,000 1,251,958.13 333.89 1,252,292.02 3137EABX6 - $1,228,000 $1,278,143.99 $361.17 $1,278,505.16 Composition Of Initial Deposit Cash Deposit Cost of Investments Purchased with Bond Proceeds Total Cost of Investments Series2012BTax GOTIFB I SINGLEPURPOSE 112/=011 I237PM 0 EHLERS LEADERS IN PUBLIC FINANCE 984.72 1,278,505.16 $1,279,489.88 Page 12 New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Primary Purpose Fund Proof Of Yield @ 0.3973807% Date Cashflow PV Factor Present 01/11/2 12 Cumulative PV 0 - 1.000000ox - - 01/31/2012 25.00 0.9997795x 24.99 24.99 06/26/2012 60.00 0.998182lx 59.89 84.89 07/07/2012 15,025.00 0.998061 Ix 14,995.87 15,080.75 07/26/2012 10,000.00 0.9978520x 9,978.52 25,059.27 07/31/2012 25.00 0.9977970x 24.94 25,084.22 12/26/2012 60.00 0.9962028x 59.77 25,143.99 01/07/2013 15,025.00 0.9960819x 14,966.13 40,110.12 01/31/2013 8,025.00 0.9958184x 7,991.44 48,101.56 06/26/2013 8,060.00 0.9942273x 8,013.47 56,115.04 07/07/2013 15,025.00 0.9941067x 14,936.45 71,051.49 01/07/2014 1,217,025.00 0.9921355x 1,207,453.67 1,278,505.16 Total $1,288,355.00 - $1,278,505.16 - Composition Of Initial Deposit Cost of Investments Purchased with Bond Proceeds Adjusted Cost of Investments Series 2012B Tax GO TIF B I SINGLE PURPOSE 1 12/12/2011 1 2:37 PM 1,278,505.16 1,278,505.16 EHLERS Page 13 LEADERS IN PUBLIC FINANCE New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 20128 Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Detail Costs Of Issuance Dated 01/11/20121 Delivered 01/11/2012 COSTS OF ISSUANCE DETAIL Financial Advisor $17,500.00 Bond Counsel $4,5.0.0.00 Rating Agency Fee $2,830.00 CPA Verification $2,500.00 Escrow Agent _ $1,300.00 Paying Agent $575.00 OMP Bidding Agent $1,000.00 TOTAL $30,205.00 Senes 2012B Tax GO TIF B I SINGLE PURPOSE 1 12/1212011 1 2,37 PM 19 EHLERS LEADERS IN PUBLIC FINANCE Page 14 SCHEDULE A BOND TRUST SERVICES C O R P O R A T 1 O N REGISTRAR AND PAYING AGENT FEE SCHEDULE FOR BOOK -ENTRY ONLY TRANSACTION Initial Fee: $350.00 The initial fee payable at closing covers: 1) Review of final bond documents; 2) Communication with Financial Advisor and Bond Counsel; 3) Coordination of delivery of Bond(s) for closing; and 4) Set up of necessary accounts and records. II. Annual Administration Fee: $450.00 The annual fee, payable in advance, covers: 1) Invoicing and collection of scheduled debt service payments; 2) Documentation and wiring of scheduled debt service payments; 3) Handling all correspondence and communications with The Depository Trust Company; 4) Maintenance of Issuer's account; 5) Destruction of Bond(s); and 6) Processing of optional redemption notices. III. Additional Services: 1) Processing of Mandatory Sinking Fund Notices - $100 per notice Fees for services other than those listed above not contemplated at the time of issuance will be charged based on the type of service performed, expenses incurred, time involved, and responsibility assumed. The above fees may be subject to periodic review and/or adjustment. 3060 CENTRE POINTE DRIVE, SUITE 110 ROSEVILLE, MN 55113 (651) 209-1010 • FAX: (651) 209-1059 info@bondtrustservices.com EHLERS LEADERS IN PUBLIC FINANCE Debt Issuance Services November 28, 2011 Pre -Sale Report for $2,760,000 G.O. Tax Increment Refunding Bonds, Series 2012A $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B wvwv.ehlers-inc.com Minnesota phone 651-697-8500 3060 Centre Pointe Drive Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 5511 3-11 22 ■ 1-1 F1Debt Issuance Services Details of Proposed Debt Proposed Issues: $2,760,000 G.O. Tax Increment Refunding Bonds, Series 2012A $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012B Purposes: 2012A: To effect a crossover advance refunding of the City's G.O. Tax Increment Bonds, Series 2004, callable February 1, 2014; and The City's 2004 Bonds were issued in the amount of $4,080,000, of which $2,585,000 payable February 1, 2015 through 2025 is callable as of February 1, 2014. By replacing existing interest rates of 3.40% to 4.30% with new rates estimated at 1.00% to 2.75%, this refunding is projected to yield future savings of roughly $107,000. Estimated savings expressed in present value terms is approximately 3.4% of the refunded 2004 debt service, exceeding the statutorily -required 3% savings threshold. 2012B: To effect a crossover advance refunding of the City's Taxable G.O. Tax Increment Bonds, Series 2005A, callable February 1, 2014. The City's 2005A Bonds were issued in the amount of $1,370,000, of which $1,195,000 payable February 1, 2015 through 2031 is callable as of February 1, 2014. By replacing existing interest rates of 5.60% to 5.65% with new rates estimated at 1.00% to 4.5%, this refunding is projected to yield future savings of roughly $75,000. Estimated savings expressed in present value terms is approximately 4.0% of the refunded 2005A debt service, exceeding the statutorily -required 3% savings threshold. Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapters 475 and 469. Funding Source(s): The City will pay debt service on the Series 2012A and 2012B Bonds with the same tax increment revenue streams as have been used to -date for the Series 2004 and 2005A Bonds. Rating: The City carries a Standard & Poor's "AA" credit rating on its outstanding GO bonds. A rating request will be made for this issue. Call Feature: The 2012A Bonds maturing February 1, 2021 through 2025 will be subject to prepayment at the discretion of the City on February 1, 2020 or any date thereafter. The 2012B Bonds maturing February 1, 2023 through 2031 will be subject to prepayment at the discretion of the City on February 1, 2022 or any date thereafter. E ❑ ❑ Proposed Debt Issuance Schedule Pre -Sale Review by Council: Distribute Official Statement: Conference with Rating Agency: City Council Meeting to Award Sale of the Bonds: Estimated Closing Date: Debt Issuance Services November 28, 2011 December 2, 2011 Week of December 5, 2011 December 12, 2011 January 5, 2012 (tentative) Attachments Estimated Debt Schedules for Series 2012A and 2012B Ehlers Contacts: Financial Advisors: Bruce Kimmel Dave Callister (651)697-8572 (651)697-8553 Bond Analysts: Diana Lockard (651) 697-8534 Wendy Lundberg (651)697-8540 Bond Sale Coordinator: Alicia Baldwin (651) 697-8523 The Official Statement for this financing will be provided to the City Council Members for review prior to the proposed bond sale date of December 12, 2011. New Hope, MN $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Dated: January 5, 2012 Proposed Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Sources & Uses Dated 01105/20121 Delivered 01 /0 512 0 1 2 Sources Of Funds Par Amount of Bonds _ $1,330,000.00 Uses Of Funds Total Underwriter's Discount (1.250%) 16,625.00 Deposit to Crossover Escrow Fund 1,282,63112 11 mver Ser2005$1.37M I SINGLE PURPOSE 1 11/9/2011 111:45AM EHLERS LEADERS IN PUBLIC FINANCE New Hope, MN $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Dated: January 5, 2012 Proposed Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Debt Service Schedule Date Principal Coupon Interest Total P+1 Fiscal Total 01/052012 - - - 17,261.25 17,261.25 08/01/2012 - - 25,820.10 25,820.10 - 02/012013 - - 22,561.25 22,561.25 48,381.35 08/012013 - - 22,561.25 22,561.25 - 02/012014 _ 1816 25 105,81625 22,56125 22,561.25 45,122.50 08/012014 - - 22,561.25 22,561.25 - 02/012015 55,000.00 1.000% 22,561.25 77,561.25 100,122.50 08/012015 - - 22,286.25 22,286.25 - 02/01/2016 50,000.00 1.350% 22,286.25 72,286.25 94,572.50 08/012016 _ - _ _ 21948.75 _ 21,948.75 02/012017 50,000.00 1.800% 21,948.75 71,94875 93,897.50 08/012017 - - 21,498.75 21,498.75 - 02/012018 55,000.00 2.100% 21,498.75 76,498.75 97,997.50 08/012018 - - 20,92125 20,921.25 - 02/012019 55,000.00 2.400% 20,921.25 75,921.25 96,842.50 08/012019 - - 20,261.25 20,261.25 - 02/012020 60,000.00 2.750% 20,261.25 80,261.25 100,522.50 08/01/2020 - - 19,43625 19,436.25 - 02/012021 65,000.00 3.000% 19,43625 84,436.25 103,872.50 02/012022 75,000.00 3.200% 18,46125 93,461.25 111,922.50 08/01/2022 - - 17,261.25 17,261.25 - 02/012023 85,000.00 3.400% 17,261.25 102,261.25 119,522.50 08/01/2023 - - 15,816.25 15,816.25 - 02/012024 _ 90,000.00 3.600% _ 1816 25 105,81625 121,63250 08/012024 - - 14,196.25 14,19625 - 02/012025 95,000.00 3.750% 14,196.25 109,196.25 123,392.50 08/012025 - - 12,415.00 12,415.00 - 02/012026 95,000.00 3.850% 12,415.00 107,415.00 119,830.00 08/012026 10,586.25 10,586.25 02/012027 105,000.00 3.950% 10,586.25 115,586.25 126,172.50 08/01/2027 - - 8,512.50 8,512.50 - 02/OI2028 100,000.00 4.150% 8,512.50 108,512.50 117,025.00 08/01/2028 - - 6,437.50 6,437.50 - 02/01/2029 100,000.00 4.250% 643750 10643750 11287500 08/01/2029 - - 4,312.50 4,31250 - 02/01/2030 100,000.00 4350% 4,312.50 104,312.50 108,625.00 08/01/2030 - - 2,137.50 2,137.50 - 02/01/2031 95,000.00 4.500% 2,137.50 97,137.50 99,275.00 Total $1,330,000.00 - 5611,603.85 $1,941,603.85 - Yield Statistics Net Interest Cost (NIC) 38539152% Bond Yield for Arbitrage Purposes _ 3.7021223% All Inclusive Cost (AIC) _ 4.0744100% Net Interest Cost 3.7519279% Weighted Average Matunty 12.256 Years 11 rover Ser200551.37M I SINGLE PURPOSE I ll/gMll 111.45 AM EHLERS LEADERS IN PUBLIG FtNANGE New Hope, MN $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Prior Original Debt Service Date Principal Coupon Interest Total P+I Fiscal Total 02/012012 - - _ _ - 08/012012 - - 38,614.99 38,614.99 - 02/012013 - - 33,741.25 33,741.25 72,35624 08/012013 - - 33,741.25 33,741.25 - 02/012014 5.650% 33,741.25 33,741.25 67,482.50 08/01/2014 - - 33,741.25 33,741.25 - 02/012015 35,000.00 5.600% 33,741.25 68,741.25 102,482.50 08/012015 - - 32,761.25 32,761.25 - 02/012016 35,000.00 5.600% 32,761.25 67,761.25 100,522.50 02/012017 35,000.00 5.650% 31,781.25 66,781.25 98,562.50 08/012017 - - 30,792.50 30,792.50 - 02/012018 40,000.00 5.650% 30,792.50 70,792.50 101,58500 08/012018 - - 29,662.50 29,662.50 - 02/012019 40,000.00 5.650% 29 662.50 69,66150 50 99 325 00 08/012019 - - 28,532.50 28,532.50 - 02/012020 50,000.00 5.650% 28,532.50 78,532.50 107,065.00 08/012020 - - 27,120.00 27,120.00 - 02/O1/2021 55,000.00 5.650% 27,120.00 82,120.00 109,240.00 08/01/2021 25,566.25 2556625 02/012022 65,000.00 5.650% 25,566.25 90,566.25 116,132.50 08/01/2022 - - 23,730.00 23,730.00 - 02/012023 75,000.00 5.650% 23,730 00 98,730.00 122,460.00 08/012023 - - 21,61125 21,611.25 - 02/012024 _ 85 000.00 5,650% 21,611.25 106,611 25 128,222.50 08/012024 - - 19,210.00 19,210.00 02/012025 90,000.00 5.650% 19,210.00 109,210.00 128,420.00 08/01/2025 - - 16,667.50 16,667.50 - 02/01/2026 90,000.00 5.650% 16,667.50 106,667.50 123,335.00 08/01/2026 14,125 00 14,125.00 02/01/2027 100,000.00 5.650% 14,125.00 114,125.00 128,250.00 08/01/2027 - - 11,300.00 11,300.00 - 02/01/2028 100,000.00 5.650% 11,300.00 111,300.00 122,600.00 08/01/2028 - - 8,475.00 8,475.00 - 02/01CO29 100,000.00 5.650% 8,475.00 108,475.00 116,950.00 08/01/2029 - - 5,650.00 5,650.00 - 02/01/2030 100,000.00 5.650% 5,650.00 105,650.00 111,30000 08/012030 - - 2,825.00 2,825.00 - 02/01/2031 100,000.00 5.650% 2,825.00 102,825.00 105650.00 Total $1,195,000.00 - 5866,941.24 $2,061,941.24 - Yield Statistics Base date for Ate: Llfe &. Av ..Cou n Calculation 1/05/2012 Average Life 12.842 Years Average u n 56491853% Weighted Average Maturity (Par Basis) 12 842 Years Refunding Bond Information Refunding Delivery Date1/052012 Ser2005S1.37MTa%8bieG I SINGLEPURPOSE 111/921111 I 11:45AM EHLERS LEADERS IN PUBLIC FINANCE New Hooe. MN $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Dated: January 5, 2012 Proposed Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Debt Service Comparison Date Total P+I PCF Existing DIS Net New D/S Old Net DIS Savings 02/01/2012 - - - (742.88) - 742.88 02/01/2013 48,381.35 (48,38135) 72,356.24 72,356.24 72,356.24 - 02/01/2014 45,122.50 (1,240,122.50) 1,262,482.50 67,482.50 67,482.50 - 02/01/2015 100,122.50 - - 100,122.50 102,482.50 2,360.00 02/01/2016 94 572.50 94,572 50 100,52150 50 5,950 00 02/01/2017 93,897.50 - - 93,897.50 98,562.50 4,665 00 02/01/2018 97,997.50 - - 97,997.50 101,585 00 3,587.50 02/0112019 96,842.50 - -. 96,842.50 99,325.00 2,482.50 02/0112020 100,522.50 - - 100,522.50 107,065.00 6,542.50 02/01/2021 103,872.50 - - 103 872.50 109,240.00 5,36750 02/01/2022 111,922.50 - - 111,922.50 116,132.50 4,210.00 02/01/2023 119,522.50 - - 119,522.50 122,460.00 2,937.50 02/01/2024 121,632.50 - - 121,632.50 128,222.50 6,590.00 02/01/2025 123,392.50 - - 123,39250 128,420.00 5,027.50 02/0112026 119,830.00 119,830.00 123,335 00 3,505.00 02/01/2027 126,172.50 - - 126,172.50 128,250.00 2,077.50 02/01/2028 117,025.00 - - 117,025.00 122,600.00 5,575.00 02/01/2029 112,875.00 - - 112,875.00 116,950.00 4,075.00 02/01/2030 108,625.00 - - 108,625.00 111,300.00 2,675.00 02/01/2031 99,275.00 99,275.00 105,650 00 6,375 00 Total $1,941,603.85 (1,288,503.85) $1,334,83&74 $1,987,195.86 52,061,941.24 $74,745.38 PV Analysis Summary (Net to Net) Gross PV Debt Service Savings.. 51,350.33 Net PV Cashflow Savings (n, 3.702%(Bond Yield)..... 51,350.33 _ Contingency or Rounding Amoun[....___.___._ 742.88 Net Present Value Benefit $52,093.21 Net PV Benefit/ $1,292,163.77PV Refunded Debt Service ___ 4.031% Net PV Benefit / $1,195,000 Refunded Principal... 4.359% Net PVBenefitl$1,330,000ReRmdinv Principal.. _ 3.917% Refunding Bond Information _ Refunding Da ted Date _ 1/05/2012 _ Refunding Delivery Date _ 1/052012 11 x er Ser 2005$1.37M I SINGLE PURPOSE 1 11/92011 1 11:45A EHERS LEADERS IN PUBLIC FINANCE New Hope, MN $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Dated: January 5, 2012 Proposed Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Crossover Escrow Fund Cashflow Investment Parameters Investment Model V , GIC, or Securities )__.....__.....__—_ _—_— Securities Default investment yield target Bond Yield Cost of Investments Purchased with Bond Proceeds 1282,632.00 Total Cost of Investments $1,282,632.12 _Target Cost oflnvesvnentsat bon�ield _ _ _ $1,196,710.52 Cash Date Principal Rate Interest Receipts Disbursements Balance 01/05/2012 - - _ 0.12 - 0.12 08/01/2012 24,18500 0.030% 1,635.82 25,820.82 25,820.10 0.84 02/01/2013 21,138.00 0.080% 1,422.89 22,560.89 22,561.25 0.48 08/OM013 21,147.00 0.150% 1,414.44 22,561.44 22,561.25 0.67 0_2/01/2014 1216362.00 0230% 1,398581,217,560.58 1217,56125 Total $1,282,632.00 $5,871.73 $1,288,503.85 $19288,503.85 - Investment Parameters Investment Model V , GIC, or Securities )__.....__.....__—_ _—_— Securities Default investment yield target Bond Yield Cost of Investments Purchased with Bond Proceeds 1282,632.00 Total Cost of Investments $1,282,632.12 _Target Cost oflnvesvnentsat bon�ield _ _ _ $1,196,710.52 Actual positive or (negative) arbitmge (85,921.60) Yield to Receipt 0,2267069% Yield for Arbitrage Purposes__ _ 3.7021223% _ State and Local Government Series SLGS rates fo _ �_r 11/08/2011 11 mver Ser 2D05 $1.37M I SINGLE PURPOSE 1 11/92011 1 11:45 AM EHLERS LEADERS IN PURLIG FINANCE w 0ORSEY- E� C E NSTVICER Y City of New Hope New Hope, Minnesota Northland Securities, Inc. Minneapolis, Minnesota Re: $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B 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 its General Obligation Taxable Tax Increment Refunding Bonds, Series 2011B dated, as originally issued, as of January 11, 2012, in the total principal amount of $1,330,000 (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 based upon laws, regulations, rulings and decisions in effect on the date hereof, 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 primarily from tax increment revenues generated from the captured net tax capacity of taxable property within tax increment financing districts in the City, the collections of which the governing body of the City has estimated will produce amounts at least five percent in excess of the amounts needed to meet, when due, the principal and interest payments on the Bonds; but, if necessary for the payment of such principal and interest, ad valorem taxes are required by law to be levied on all taxable property in the City without limitation of rate or amount. 3. Interest on the Bonds will be includable in gross income for federal and State of Minnesota income tax purposes. The opinions expressed in paragraphs 1 and 2 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 exercise of judicial discretion. DORSEY & WHITNEY LLP • WWW.DORSEY.COM • T 612.340.2600 • F 612.340.2868 SUITE 1500 • 50 SOUTH SIXTH STREET • MINNEAPOLIS, MINNESOTA 55402-1498 USA CANADA BURORE ASIA -PACIFIC I]ORSEY" City of New Hope Northland Securities, Inc. Page 2 We have not been asked, and have not undertaken, to review the accuracy, completeness or sufficiency of any offering materials relating to the Bonds, and accordingly, we express no opinion with respect thereto. Dated: January 11, 2012. Very truly yours, DORSEY & WHITNEY LLP CERTIFICATE AND RECEIPT OF CITY MANAGER I, Kirk McDonald, being the duly qualified and acting City Manager of the City of New Hope, Hennepin County, Minnesota, hereby certify and acknowledge that on the date of this instrument I received from Northland Securities, Inc., of Minneapolis, Minnesota, as purchaser thereof, the purchase price for the $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B (the Bonds), dated as of January 11, 2012, said purchase price being computed as follows: Purchase price of Bonds $1,313,375.00 Accrued interest from July 19, 2012 to the date hereof 0 Total Purchase Price $1.313.375.00 and that I thereupon delivered the Bonds to the Purchaser. WITNESS my hand officially as such City Manager this 11 m day of January, 2012. Kirk McDonald, City Manager OFFICERS' CERTIFICATE We, KATHI HEMKEN and KIRK MCDONALD, hereby certify that we are the Mayor and the City Manager, respectively, of the City of New Hope, Minnesota (hereinafter, the City), and that: 1. In our capacity as such officers, we have affixed our signatures as such officers to each bond of an issue of $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B, dated initially as of January 11, 2012 (hereinafter, the Bonds), of the City, and have delivered the Bonds to Bond Trust Services Corporation (hereinafter, the Registrar) for authentication and delivery to The Depository Trust Company on behalf of the purchasers thereof. The Bonds are in fully registered form. 2. The Bonds mature on the dates, bear interest at the rates and are substantially in the form prescribed by a resolution duly adopted by the City Council of the City on December 12, 2011, entitled "Resolution Relating to $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B; Awarding the Sale, Fixing the Form and Details and Providing for the Execution and Delivery Thereof and Security Therefor," (hereinafter, the Resolution). The Bonds have been in all respects duly executed for delivery pursuant to authority conferred upon as such officers; that no obligations other than the Bonds have been issued pursuant to such authority; that none of the proceedings or records which have been certified to the purchaser of the Bonds or to the attorneys rendering an opinion as to the validity of the Bonds has been in any manner repealed, amended or changed, except as shown in the proofs so furnished; and that there has been no material change in the financial condition of the City or the facts affecting the Bonds except as shown on the proofs so furnished. 3. The Resolution has not been amended or repealed. 4. The Official Statement, dated December 1, 2012, as amended by the Addendum thereto dated December 13, 2012, relating to the Bonds, prepared on behalf of the City by Ehlers & Associates, Inc., did not as of the date thereof and does not as of the date hereof contain any misstatement of a material fact or omit to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances under which they were made; provided that we make no comment regarding information provided by the purchaser of the Bonds for inclusion in the Official Statement relating to the purchase and the reoffering prices of the Bonds. 5. No litigation of any nature is now pending or, to the best of our knowledge, threatened, seeking to restrain or enjoin the issuance or delivery of the Bonds the pledge of any tax increments or the levy or collection of any ad valorem taxes to pay the interest on or principal of the Bonds, or in any manner questioning the authority or proceedings for the issuance of the Bonds or the application of the proceeds thereof, or for the pledge of any tax increments or the levy or collection of said ad valorem taxes, or affecting the validity of the Bonds or questioning the corporate existence or boundaries of the City or the title of any of the present officers thereof to their respective offices. 6. On the basis of facts, estimates and circumstances in existence on the date of issue of the Bonds, the proceeds will not be used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and applicable Treasury Regulations (hereinafter, the Regulations). The facts and circumstances upon which this certificate is based are as follows: (a) The proceeds of the Bonds, other than amounts set aside to pay costs of issuance, will be used to refund all of the outstanding General Obligation Taxable Tax Increment Bonds, Series 2005A, initially dated as of March 1, 2005 of the City (hereinafter, the 2005A Bonds), which mature on or after February 1, 2015 (hereinafter, the Refunded Bonds). The Refunded Bonds will be paid in full on February 1, 2014. February 1, 2014 is the earliest date on which the Refunded Bonds can be called for redemption. The Bonds are the first advance refunding of the Refunded Bonds. The Bonds are "crossover" refunding bonds pursuant to Minnesota Statutes, Section 475.67, subd.13. (b) The proceeds of the Bonds $1,330,000.00 less underwriter's discount of $16,625.00, plus accrued interest of $-0-) will be applied as follows: (i) $1,278,505.16 of proceeds of the Bonds will be used to purchase open - market securities as provided in the Escrow Agreement dated as of January 11, 2012 (hereinafter the Escrow Agreement), between the City and U.S. Bank National Association, as escrow agent (hereinafter the Escrow Agent); (ii) $30,205.00 of proceeds of the Bonds to be used to pay bond issuance expenses; and (iii) $984.72 of proceeds of the Bonds will be used to establish a beginning cash balance in the escrow account (hereinafter the Escrow Account) held by the Escrow Agent pursuant to the Escrow Agreement; and (iv) $3,680.12 of proceeds of the Bonds will be deposited in the 2012B General Obligation Tax Increment Refunding Bond Fund established on the books of the City pursuant to Section 4 of the Resolution (hereinafter, the Bond Fund). Amounts in the Escrow Account will be applied to pay interest to come due on the Bonds until February 1, 2014, and on February 1, 2014, $1,195,000.00 of amounts in the Escrow Account will be used to pay the principal of the Refunded Bonds. (c) The purpose of refunding the Refunded Bonds is to enable the City to achieve a total debt service savings of $65,892.62 ($42,966.52 on a present value basis). (d) The Bonds have been sold at a competitive sale after solicitation of bids by the City's independent financial advisor. To the best of our knowledge, the price paid by the purchasers thereof is reasonable under customary standards applied in the market. (e) To the best of the knowledge and belief of the undersigned, the expectations of the City, as set forth above, are reasonable, and there are no present facts, estimates or circumstances which would change the foregoing expectations. 7. We are now, and were on January 11, 2012, the duly qualified and acting Mayor and City Manager and duly authorized to execute the Bonds. WITNESS our hands and the seal of the City, this 11`x' day of January, 2012. CITY OF NEW HOPE, MINNESOTA Mayor City Manager [Signature Page — Officers' Certificate (Series 2012B)] REQUEST AND AUTHORIZATION Bond Trust Services Corporation 3060 Centre Pointe Drive Roseville, Minnesota 55113-1122 Gentlemen: You are hereby requested and authorized forthwith to execute the Certificate of Authentication printed on the $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B, initially dated as of January 11, 2012, of the City of New Hope, Minnesota (the City), and to deliver the Bonds to The Depository Trust Company, on behalf of Northland Securities, Inc., of Minneapolis, Minnesota, as purchaser thereof, all in accordance with a resolution adopted by the City Council on December 12, 2012 (the Resolution) relating to said Bonds. We transmit to you herewith the Bonds described above, which have been duly executed on behalf of the City, and a copy of the Resolution. We request that you acknowledge receipt of the Bonds and the resolution by signing the receipt at the bottom of this page and by returning a copy hereof so signed to the City. Dated: January 11, 2012. CITY OF NEW HOPE Its Mayor By����� Its City Manager Received the Bonds described above and the Resolution this l 1 th day of January, 2012. BOND TRUST SERVICES CORPORATION i By Its Payhig Agent erns ra or RECEIPT OF PURCHASER The undersigned hereby acknowledges, on behalf of Northland Securities, Inc., Minneapolis, Minnesota, that on the date hereof it received through The Depository Trust Company in New York, New York, S 1,330,000 principal amount of General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B of the City of New Hope, Minnesota, dated January 11, 2012. Dated: January 11, 2012. NORTHLAND SECURITIES, INC. By4y2- i Its CERTIFICATE OF REGISTRAR The undersigned officer hereby certifies and declares that I am duly elected, qualified and acting as such as of the date hereof, of Bond Trust Services Corporation, in Roseville, Minnesota (the Registrar) and that: 1. The Registrar has been designated by resolution of the City Council of the City of New Hope, Minnesota (the City), adopted on December 12, 2011 (the Bond Resolution), a copy of which has been furnished to the Registrar, to act as paying agent, registrar and transfer agent for $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B, dated January 11, 2012 (the Bonds) of the City and has been designated to execute the certificates of authentication on the Bonds on behalf of the City as an authenticating agent. The Registrar shall comply with all obligations imposed upon it pursuant to the Bond Resolution. 2. The Registrar is duly organized and existing as a banking association pursuant to the laws of the United States and has full power and authority to act as bond registrar and to execute the certificates of authentication and thereby authenticate the Bonds as an authenticating agent. 3. The Registrar has received from the City ten (10) fully executed and unauthenticated Bonds consisting of Bond Nos. R-1 through R-10, and has verified the principal amounts, interest rates, maturity dates, and CUSIP numbers set forth on each of the Bonds, and the same are all true and correct. On the date hereof the Registrar has authenticated and delivered to The Depository Trust Company, on behalf of Northland Securities, Inc. (the Purchaser), $1,330,000 in principal amount of Bonds, maturing and bearing interest as set forth in the Bond Resolution. 4. Each and all of the Bonds so authenticated and delivered were registered, on the face thereof and also in the register maintained by the Registrar, in the name of Cede & Co., as nominee for The Depository Trust Company, as designated by the Purchaser. Dated: January 11, 2012. BOND TRUST SERVICES CORPORATION By ✓�� P Its Paying Agent Administrator Exhibit A F,1MTQ W69)k'f.9 I, Carol L. Sweeney, Cashier of Bond Trust Services Corporation, Roseville, MN, a Limited Purpose Trust Company (the "Bank"), do certify that the following resolutions were adopted by the Board of Directors of Bond Trust Services Corporation on February 20, 2004, and that the same are in effect as of the date hereof and have not been modified, amended or revoked. WHEREAS, it is appropriate and in furtherance of business goals and efficiency to authorize certain employees within the corporate trust department to sign and countersign certain documents. RESOLVED, that the following individuals be and are hereby authorized to sign or countersign on behalf of Bond Trust Services Corporation and its affiliates for the sole and express purpose of acting in their respective capacities as transfer agents or registrar for certificates of stock or as trustees or authenticating agents for bond certificates, equipment trust certificates, notes and similar securities and while acting as servicing agent in the performance of these duties. FURTHER RESOLVED, that such individuals shall act until their respective successors are appointed and qualify. IN WITNESS WHEREOF, I have set my hand on January 11 2012. (No corporate seal) Carol L. Sweeney, Cashier RESOLUTIONS OF THE BOARD OF DIRECTORS OF BOND TRUST SERVICES CORPORATION (December 16, 2011) Authorized Agents WHEREAS, it is appropriate and in furtherance of business goals and efficiency to authorize certain employees within the corporate trust department to sign and countersign certain documents. RESOLVED, that the following individuals be and are hereby authorized to sign or countersign on behalf of Bond Trust Services Corporation and its affiliates for the sole and express purpose of acting in their respective capacities as transfer agents or registrar for certificates of stock or as trustees or authenticating agents of bond certificates, equipment trust certificates, notes and similar securities and while acting as servicing agent in the performance of these duties: Debra Peterson Connie Kuck Carol Sweeney Alicia Baldwin Steven Apfelbacher FURTHER RESOLVED, that such individuals shall act until their respective successors are appointed and qualify. CERTIFICATE OF EHLERS & ASSOCIATES, INC. The undersigned officer of Ehlers & Associates, Inc. hereby certifies: 1. Ehlers & Associates, Inc., is acting as financial advisor in connection with the issuance by the City of New Hope, Minnesota (the "City"), of its $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B, dated, as originally issued, as of January 1, 2012 (the "Bonds"). The information contained in this Certificate is correct, to the best of our knowledge, in reliance upon certain information provided to us by the City and the original purchaser of the Bonds. 2. The proposal accepted by the City for the purchase of the Bonds is a reasonable proposal under customary standards applicable in the municipal bond market. Dated: January 11, 2012. EHLERS & ASSOCIATES, INC. By -� P67 Its Administrative Vice President UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF NEW HOPE TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BOND, SERIES 2012B No. R-_ $ Date of Interest Rate Maturity Original Issue CUSIP February 1, 20_ January 11, 2012 64544P REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: DOLLARS THE CITY OF NEW HOPE, Hennepin County, Minnesota (the "City"), acknowledges itself to be indebted and, for value received, hereby promises to pay to the registered owner named above, or registered assigns, the principal amount specified above, on the maturity date specified above, with interest thereon from the date of original issue specified above, or from the most recent interest payment date to which interest has been paid or duly provided for, at the annual rate specified above. Interest hereon is payable on February 1 and August 1 in each year, commencing August 1, 2011, to the person in whose name this Bond is registered at the close of business on the 15th day (whether or not a business day) of the immediately preceding month, all subject to the provisions referred to herein with respect to the redemption of the principal of this Bond before maturity. The interest hereon and, upon presentation and surrender hereof, the principal hereof, are payable in lawful money of the United States of America by check or draft of Bond Trust Services Corporation, in Roseville Minnesota, as Bond Registrar, Transfer Agent and Paying Agent (the "Bond Registrar"), or its successor designated under the Resolution described herein. This Bond is one of an issue in the aggregate principal amount of $1,330,000 (the "Bonds") all of like date and tenor except as to serial number, interest rate, redemption privilege and maturity date, issued pursuant to a resolution adopted by the City Council on December 12, 2011 (the "Resolution"), for the purpose of refunding certain of the City's outstanding general obligation bonds and is issued pursuant to and in full conformity with the provisions of the Constitution and laws of the State of Minnesota thereunto enabling, including Minnesota Statutes, Section 469.178 and Chapter 475. This Bond is payable primarily from tax increments to be derived from tax increment financing districts established by the New Hope Economic Development Authority, as successor to the Housing and Redevelopment Authority in and for the City of New Hope (the "Districts") which have been pledged to the payment of the Bonds by the Resolution. In addition, for the full and prompt payment of the principal and interest on the Bonds as the same become due, the full faith, credit and taxing power of the City have not been and are irrevocably pledged. The Bonds are issuable only as fully registered bonds in denominations of $5,000 or any multiple thereof, of single maturities. Bonds maturing in the years 2015 through 2022 are payable on their respective stated maturity dates without option of prior payment, but Bonds having stated maturity dates in the years 2023 through 2031 are each subject to redemption and prepayment, at the option of the City and in whole or in part, and if in part, in the maturities selected by the City and, within any maturity, in $5,000 principal amounts selected by lot, on February 1, 2022 and on any date thereafter, at a price equal to the principal amount thereof to be redeemed plus accrued interest to the date of redemption. Bonds maturing in the years 2016, 2018, 2020, 2022, 2024, 2026 and 2031 shall be subject to mandatory sinking fund redemption by lot at a redemption price equal to the principal amount of the Bonds to be so redeemed plus interest accrued thereon to the date fixed for redemption, on February 1, in the years and principal amounts set forth below: Term Bonds Maturing in 2016 Sinking Fund Aggregate Payment Date Principal Amount 2015 $55,000 2016 50,000 Term Bonds Maturing in 2018 Sinking Fund Aggregate Payment Date Principal Amount 2017 $50,000 2018 55,000 Term Bonds Maturing in 2020 Sinking Fund Aggregate Payment Date Principal Amount 2019 $55,000 2020 60,000 Term Bonds Maturing in 2022 Sinking Fund Aggregate Payment Date Principal Amount 2021 $65,000 2022 75,000 -2- Term Bonds Maturing in 2024 Sinking Fund Aggregate Payment Date Principal Amount 2023 $85,000 2024 90,000 Term Bonds Maturing, in 2026 Sinking Fund Aggregate Payment Date Principal Amount 2025 $95,000 2026 95,000 Term Bonds Maturing in 2031 Sinking Fund Aggregate Payment Date Principal Amount 2030 $100,000 2031 95,000 At least thirty days prior to the date set for redemption of any Bond, notice of the call for redemption will be mailed to the Bond Registrar and to the registered owner of each Bond to be redeemed at his address appearing in the Bond Register, but no defect in or failure to give such mailed notice of redemption shall affect the validity of the proceedings for the redemption of any Bond not affected by such defect or failure. Official notice of redemption having been given as aforesaid, the Bonds or portions of the Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price herein specified and from and after such date (unless the City shall default in the payment of the redemption price) such Bond or portions of Bonds shall cease to bear interest. Upon the partial redemption of any Bond, a new Bond or Bonds will be delivered to the registered owner without charge, representing the remaining principal amount outstanding. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Bond Registrar, by the registered owner hereof in person or by his attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Bond Registrar, duly executed by the registered owner or his attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange, the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Bond Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose -3- of receiving payment and for all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed precedent to and in the issuance of this Bond in order to make this Bond a valid and binding general obligation of the City according to its terms, have been done, do exist, have happened and have been performed in regular and due form as so required; that prior to the issuance hereof the City has pledged and appropriated to a sinking fund established for the payment of the Bonds tax increments to be derived by the City from the Districts; that, if necessary for the payment of principal and interest on the Bonds, ad valorem taxes are required to be levied upon all taxable property in the City, which levy is not limited as to rate or amount; and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional or statutory limitation. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon shall have been executed by the Bond Registrar by the manual signature of one of the authorized representatives of the Bond Registrar. IN WITNESS WHEREOF, the City of New Hope, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed by the facsimile signatures of the Mayor and the City Manager and has caused this Bond to be dated as of the date set forth below. City Manager M CITY OF NEW HOPE Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. Date of Authentication: BOND TRUST SERVICES CORPORATION, Roseville, Minnesota, as Bond Registrar Authorized Representative The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM — — as tenants in common TEN ENT — — as tenants by the entireties JT TEN — — as joint tenants with right of survivorship and not as tenants in common UNIF TRANS MIN ACT....... Custodian....... . (Cust) (Minor) under Uniform Transfers to Minors Act...................... (State) Additional abbreviations may also be used. -5- ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE: Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Bond Registrar, which requirements include membership or participation in the Securities Transfer Association Medalion Program (STAMP) or such other "signature guaranty program" as may be determined by the Bond Registrar in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. attorney NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration, enlargement or any change whatsoever. .[a Continuing Disclosure Requirements Compliance with Continuing Disclosure Requirements In order to comply with SEC Rule 15c2-12 (the "Rule"), pursuant to the Continuing Disclosure section of the Sale Resolution, the City has covenanted to provide annually certain financial information and operating data and to provide notices of the occurrence of certain material events to the Municipal Securities Rulemaking Board by filing at www.emma.msrb.org. This information must be provided according to the deadline in the Certificate as required by the Rule. The first deadline for providing the annual updated information is December 31, 2012 and on or before that date each year thereafter as long as the Bonds are outstanding. A copy of the Sale Resolution is included in Section 1. In the event of a failure of the City to comply with any provision as outlined, any holder of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order. You are responsible for reporting any of the material events listed below and in the Continuing Disclosure section of the Sale Resolution. It is imperative that you become familiar with what constitutes a material event. However, other events may occur that may be deemed "material" to the owners of these Bonds. If any one of the listed events occurs in relation to the above issue or if you are unsure whether some "event" is material, you may call Ehlers to discuss whether the event is "material," and for guidance on how to prepare the notice and report it properly. Effective December 1, 2010, the Securities and Exchange Commission (SEC) amended Rule 15c2-12, which impacts issuers of municipal securities. Specifically: a) issuers are required to provide material event notices within 10 days after the occurrence of the event b) the list of material events has expanded from previous requirements and are as follows: Event Notices • Principal and interest payment delinquencies • Non-payment related defaults, if material • Unscheduled draws on debt service reserves reflecting financial difficulties • Unscheduled draws on credit enhancements reflecting financial difficulties • Substitution of credit or liquidity providers or their failure to perform • Adverse tax opinions, IRS notices or material events affecting the tax status of the security • Modifications to rights of security holders, if material • Bond calls, if material • Defeasances • Release, substitution or sale of property securing repayment of the securities, if material • Rating changes • Tender offers • Bankruptcy, insolvency, receivership or similar event of the obligated person • Merger, consolidation, or acquisition of the obligated person, if material • Appointment of a successor or additional trustee, or the change of name of a trustee, if material Additional / Voluntary Event -Based Disclosures • Amendment to continuing disclosure undertaking • Change in obligated person • Notice to investors pursuant to bond documents • Certain communications from the Internal Revenue Service • Secondary market purchases • Bid for auction rate or other securities • Capital or other financing plan • Litigation / enforcement action • Change of tender agent, remarketing agent, or other on-going party • Derivative or other similar transaction • Other event -based disclosures If you have contracted with Ehlers or another company to provide continuing disclosure services, please notify them of these events as soon as they occur, so timely material event notices can be filed in compliance with the amended rules. STANDARD &DOOR'S December 8, 2011 City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 Attention: Mr. Kirk McDonald, City Manager 130 East Randolph Street Suite 2900 Chicago, IL 60601 tel 312 233-7001 reference no.: 1196801 Re: US$1,330,000 City of New Hope, Minnesota (Hennepin County) General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B, dated. January 11, 2012, due: February 01, 2015-2031 Dear Mr. McDonald: Pursuant to your request for a Standard & Poor's rating on the above -referenced issuer, we have reviewed the information submitted to us and, subject to the enclosed Terms and Conditions, have assigned a rating of "AA". Standard & Poor's views the outlook for this rating as stable. A copy of the rationale supporting the rating is enclosed. The rating is not investment, financial, or other advice and you should not and cannot rely upon the rating as such. The rating is based on information supplied to us by you or by your agents but does not represent an audit. We undertake no duty of due diligence or independent verification of any information. The assignment of a rating does not create a fiduciary relationship between us and you or between us and other recipients of the rating. We have not consented to and will not consent to being named an "expert" under the applicable securities laws, including without limitation, Section 7 of the Securities Act of 1933. The rating is not a "market rating" nor is it a recommendation to buy, hold, or sell the obligations. This letter constitutes Standard & Poor's permission to you to disseminate the above -assigned rating to interested parties. Standard & Poor's reserves the right to inform its own clients, subscribers, and the public of the rating. Standard & Poor's relies on the issuer/obligor and its counsel, accountants, and other experts for the accuracy and completeness of the information submitted in connection with the rating. This rating is based on financial information and documents we received prior to the issuance of this letter. Standard & Poor's assumes that the documents you have provided to us are final. If any subsequent changes were made in the final documents, you must notify us of such changes by sending us the revised final documents with the changes clearly marked. To maintain the rating, Standard & Poor's must receive all relevant financial information as soon as such information is available. Placing us on a distribution list for this information would Page 12 facilitate the process. You must promptly notify us of all material changes in the financial information and the documents. Standard & Poor's may change, suspend, withdraw, or place on CreditWatch the rating as a result of changes in, or unavailability of, such information. Standard & Poor's reserves the right to request additional information if necessary to maintain the rating. Please send all information to: Standard & Poor's Ratings Services Public Finance Department 55 Water Street New York, NY 10041-0003 Standard & Poor's is pleased to be of service to you. For more information on Standard & Poor's, please visit our website at www.standardandpoors.com. If we can be of help in any other way, please call or contact us at nypublicfinance(c-v standardandpoors.com.Thank you for choosing Standard & Poor's and we look forward to working with you again. 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PF Ratings U.S. (05/17/11) do not waive, and reserve the right to contest, any issues law and the appropriate forum for resolving any disputes Summary: New Hope, Minnesota; Appropriations; General Obligation Primary Credit Analyst: Blake Yocom, Chicago (1) 312-233-7056; blakeyoucom@standardandpoors.com Secondary Contact: Steffanie Dyer, Chicago (1( 312-233-7007; steffanie_dyergstandardandpoors.com Table Of Contents Rationale Outlook Related Criteria And Research www.standardandpoors.com/ratingsdirect Summary: New Hope, Minnesota; Appropriations; General Obligation US$2.76 mil GO TIF rfdg buds ser 2012A dtd 01/11/2012 due 02/01/2015-2025 Long Term Rating AA/Stable New US$1.33 mil GO taxable TIF rfdg buds ser 20120 dtd 01/11/2012 due 02/01/2015-2031 Long Term Rating AA/Stable New New Hope GO Long Term Hating AA/Stable Affirmed New Hope Econ Dev Auth, Minnesota New Hope, Minnesota New Hope Econ DevAuth (New Hope) taxable Ise rev buds qual energy consery bods Long Term Rating AA -/Stable Affirmed Rationale Standard & Poor's Ratings Services has assigned its 'AA' long-term rating to New Hope, Minn.'s series 2012A general obligation (GO) tax increment refunding bonds and series 2012B GO taxable tax increment refunding bonds. At the same time, we affirmed our 'AA' long-term rating on the city's existing GO debt. The outlook on all ratings is stable. Standard & Poor's also affirmed its 'AA-' long-term rating on the New Hope Economic Development Authority's series 2011A taxable lease revenue qualified energy conservation bonds, of which the city is the obligor. The rating on the series 2011A reflects the appropriation risk associated with the lease revenue bonds. The rating reflects our view of the city's: • Participation in the deep, diverse Minneapolis -St Paul, Minn. (Twin Cities) metropolitan economy; • Good income levels and strong market value per capita; • Maintenance of very strong reserves; and • Moderate overall debt burden. The city's full faith and credit unlimited -tax pledge secures the series 2012A and 2012B bonds. The city intends to use tax increment revenues generated by existing development within the tax increment financing districts to cover debt service on the bonds. The series 2012A bond proceeds will be used to advance crossover refund the city's series 2004 GO tax increment bonds for interest cost savings. The series 2012B bond proceeds will be used to advance crossover refund the city's series 2005A GO taxable tax increment bonds for interest cost savings. The crossover date for both series is Feb. 1, 2014. New Hope (population: 20,339) is located in Hennepin County ('AAA' GO debt rating), approximately 12 miles northwest of downtown Minneapolis. Residents have access to a deep and diverse economic base with ample Standard & Poors I RatingsDirect on the Global Credit Portal I December 9, 2011 Summary: New Hope, Minnesota; Appropriations; General Obligation employment opportunities in the Minneapolis -St Paul metropolitan area. Residents also have access to jobs in the city itself, with leading local employers including Robbinsdale's School District (2,000 employees), North Ridge Care Center (800), Saint Therese Home of New Hope (630), Navarre Corp. (computer software, 413), and Perrigo Co. (pharmaceutical, 280). In September 2011, the unemployment rate for Hennepin County was 6%, below the state's 6.9% and the nation's 9.1% during the same time period. Incomes remain good in our view, with median household effective buying income at 94% of the state's level and 103% of the nation's level. The city's tax base has decreased in recent years due to the broad-base decrease in residential values in the city. Net tax capacity has decreased by 4.7% in 2010 and 5.8% in 2011 to $19 million. Management has stated it expects a smaller decrease for fiscal 2012. Residential properties account for 52.6% of the city's tax base while commercial and industrial properties account for 34.2%. Estimated full value of taxable property, a more -accurate representation of market prices, is $1.48 billion, or, in our opinion, a strong $72,908 per capita. The property tax base is very diverse, with the 10 leading taxpayers accounting for just 7.4% of net tax capacity. The city maintains a very strong financial position, in our view. During the past five fiscal years, reserves have ranged between 41% and 51% of expenditures. At fiscal year-end 2010 (Dec. 31), the city's unreserved general fund balance totaled $4.53 million, or, in our opinion, a very strong 45.5% of expenditures. In fiscal 2010, the city generated a $237,000 operating surplus despite a local government aid (LGA) reduction of approximately $728,000 from the state; we understand that management budgeted for roughly the amount of LGA received and that expenditure savings in police and public works and higher miscellaneous revenues offset the LGA revenue loss. For fiscal 2011, officials indicate the city should produce at least break-even operations due to continued expenditure reductions, revenues from building permits and licenses tracking higher than budgeted and a special tax levy, approved by the legislature, to make up for a portion of the LGA reduction. The city's preliminary fiscal 2012 budget is breakeven and includes a 0% levy increase and assumes the receipt of no LGA and no market value homestead credit. Local property taxes were the primary revenue source at nearly 73% of general fund revenues in fiscal 2010 followed by charges for services at 12% and intergovernmental at only 6%. Standard & Poor's considers New Hope's financial management policies "good" under its Financial Management Assessment (FMA) methodology, indicating financial management practices exist in most areas, though not all might be formalized or regularly monitored by governance officials. Highlights of these policies include quarterly reports to the city council on budgeted figures compared with actual performance. The city implemented a five-year financial plan that includes ending fund balances, revenues, expenditures, and levy projections. The city also maintains a five-year capital plan. The city maintains an investment management policy and a general fund target of keeping 42% of budgeted expenditures in reserve for cash-flow purposes that is approved by resolution each year. The city lacks a debt management policy. The city's overall net debt burden (excluding self-supporting GO debt) is what we consider moderate at $2,630 per capita, or 3.6% of market value. The city's debt carrying charge was low at 7% of total governmental funds expenditures less capital outlay in fiscal 2010. Amortization is average, with officials planning to retire 53% of direct debt during the next 10 years. Management has stated it has no plans to issue additional debt in the near term. All full-time and certain part-time city employees are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing, multiple -employer www.standardandpoors.com/ratingsdirect Summary: New Hope, Minnesota; Appropriations; General Obligation retirement plans. The city made its statutorily required contributions for the past three fiscal years. The city provides health insurance for retired city employees and beneficiaries who meet PERA eligibility requirements as provided by state law. Eligible retirees are responsible for 100% of the premiums. As of Dec. 31, 2008, the unfunded actuarial accrued liability was $187,037. Outlook The stable outlook reflects our expectation that the city will maintain a very strong fund balance position in accordance with its target and that it will continue to take the necessary steps to maintain balanced operations while facing reductions in state aid. We do not expect to change the rating within the two-year outlook timeframe as we expect the maintenance of very strong reserves and prudent financial management practices to continue. The diversity of the Minneapolis -St. Paul economic base provides further rating stability. Related Criteria And Research USPF Criteria: GO Debt, Oct. 12, 2006 Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column. 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Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees. www.standardandpoors.com/ratingsdirect Cash Flow and Yield Verification Report City of New Hope, Minnesota January 11, 2012 Contents Letter Exhibit A Schedule of Sources and Uses of Funds Exhibit B 2004 Escrow Account Cash Flow Exhibit B-1 Cash Receipts From and Yield on the SLGS in the 2004 Escrow Account Exhibit C 2005A Escrow Account Cash Flow Exhibit C-1 Cash Receipts From and Purchase Price of the Open -Market Securities in the 2005A Escrow Account Exhibit D Debt Service Payments and Yield on the Series 2012A Bonds Exhibit D-1 Original Issue Premium on the Series 2012A Bonds Exhibit D-2 Debt Service Payments on the Series 20126 Bonds Appendix I Applicable schedules provided by Ehlers & Associates, Inc. rantThornton Report of Independent Certified Public Accountants On Applying Agreed -Upon Procedures City of New Hope 4401 Xylon Avenue North New Hope, Minnesota Dorsey & Whitney LLP 50 South Sixth Street, Suite 1500 Minneapolis, Minnesota U.S. Bank National Association 101 East Fifth Street St. Paul, Minnesota Ehlers & Associates, Inc. 3060 Centre Pointe Drive Roseville, Minnesota Audit • Tax • Advisory Grant Thornton LLP 200 S 6th Street, Suite 500 Minneapolis, MN 55402-1459 T 612.332.0001 F 612.332.8361 www.GrantThornton.com City of New Hope, Minnesota $2,695,000 General Obligation Tax Increment Refunding Bonds, Series 2012A $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B Dated January 11, 2012 We have performed the procedures described in this report, which were agreed to by the City of New Hope, Minnesota (the "City") and Ehlers & Associates, Inc. (the "Financial Advisor' to verify the mathematical accuracy of certain computations contained in the schedules attached in Appendix I provided by the Financial Advisor. The Financial Advisor is responsible for these schedules. These procedures were performed solely to assist you in the issuance of the above -captioned bond issues (the `Series 2012A Bonds" and the "Series 2012B Bonds", collectively referred to as the "Bonds' for the purpose of effecting a crossover refunding of portions of the City's outstanding General Obligation Tax Increment Bonds, Series 2004 (the "2004 Bonds") and General Obligation Taxable Tax Increment Bonds, Series 2005A (the "2005A Bonds") (collectively referred to as the "Refunded Bonds'D as summarized on the next page. This engagement was performed in accordance with Statements on Standards for Attestation Engagements established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the addressees of this report who are the specified parties. Consequently, we make no representation regarding the sufficiency of the procedures described in this report either fox the purpose for which this report has been requested or for any other purpose. Grant Thornton LLP U.S. member firm of Grant Thornton Interroumal Ltd Page 2 Principal Principal Maturities Redemption Redemption Series Issued Dated Refunded Redmded Date Price 2-1-15 to 2004 $4,080,000 April 1, 2004 $2,585,000 2-1-25 2-1-14 100% 2-1-15, 2-1-16, 2-1-23 and 2005A $1,370,000 March 1, 2005 $1,195,000 2-1-31 2-1-14 100% VERIFICATION OF ESCROW ACCOUNTS CASH FLOW SUFFICIENCY The Financial Advisor provided us with schedules (Appendix I) summarizing future escrow accounts cash receipts and disbursements. These schedules indicate that there will be sufficient cash available in (i) the 2004 Escrow Account to pay (a) the $2,585,000 of principal of the 2004 Bonds assuming the 2004 Bonds will be redeemed on February 1, 2014 at 100 percent of par, and (b) the first four interest payments on the Series 2012A Bonds (August 1, 2012 through February 1, 2014), and (ii) the 2005A Escrow Account to pay (a) the $1,195,000 of principal of the 2005A Bonds assuming the 2005A Bonds will be redeemed on February 1, 2014 at 100 percent of par, and (b) the first four interest payments on the Series 2012B Bonds (August 1, 2012 through February 1, 2014). The attached Exhibit A (Schedule of Sources and Uses of Funds) was compiled based upon information provided by the Financial Advisor. As part of our engagement to recalculate the schedules attached as Appendix I we prepared schedules attached hereto as Exhibits B, B-1, C and C-1, independently calculating future escrow accounts cash receipts and disbursements and compared the information used in our calculations to the information listed below contained in applicable pages of the following documents: • Subscription confirmation, dated December 12, 2011, and Schedule of U.S. Treasury Securities provided by the Financial Advisor used to acquire certain United States Treasury Securities - State and Local Government Series (the "SLGS") insofar as the SLGS are described as to the principal amounts, interest rates, maturity dates, issuance date and first interest payment date; Trade confirmations provided by the Financial Advisor used to acquire certain United States Treasury Bills (the "T -Bills"), Notes (the "T -Notes'), Federal National Mortgage Association Notes (the "FNMA") and Federal Home Loan Mortgage Corporation Notes (the "FHLMC") (collectively, the "Open -Market Securities") insofar as the Open -Market Securities are described as to the principal amounts, interest rates, purchase prices and maturity dates; • Resolutions for the Refunded Bonds provided by the Financial Advisor insofar as the Refunded Bonds are described as to the maturity dates, principal amounts and optional redemption date and price; and Addendum to the Preliminary Official Statement and the Preliminary Official Statement for the Bonds provided by the Financial Advisor insofar as the Bonds are described as to the maturity dates, dated date, principal amounts, interest rates and interest payment dates. Page 3 In addition, we compared the interest rates for each maturity of the SI.GS, as shown on the Schedule of U.S. Treasury Securities, with the maximum allowable interest rates shown on the Department of Treasury, Bureau of Public Debt, SLGS Table for use on December 12, 2011 and found that the interest rates were equal to the maximum allowable interest rates for each maturity. Our procedures, as summarized in Exhibits B, B-1, C and C-1, prove the mathematical accuracy of the schedules provided by the Financial Advisor summarizing future escrow accounts cash receipts and disbursements. The schedules provided by the Financial Advisor and those prepared by us reflect that (i) the anticipated receipts from the SLGS in the 2004 Escrow Account, together with an initial cash deposit of $0.30 to be deposited into the 2004 Escrow Account on January 11, 2012, will be sufficient to pay, when due, (a) the $2,585,000 of principal of the 2004 Bonds assuming the 2004 Bonds will be redeemed on February 1, 2014 at 100 percent of par, and (b) the first four interest payments on the Series 2012A Bonds (August 1, 2012 through February 1, 2014), and (ii) the anticipated receipts from the Open - Market Securities in the 2005A Escrow Account, together with an initial cash deposit of $984.72 to be deposited into the 2005A Escrow Account on January 11, 2012, will be sufficient to pay, when due, (a) the $1,195,000 of principal of the 2005A Bonds assuming the 2005A Bonds will be redeemed on February 1, 2014 at 100 percent of par, and (b) the first four interest payments on the Series 2012B Bonds (August 1, 2012 through February 1, 2014). VERIFICATION OF YIELDS The Financial Advisor provided us with schedules (Appendix I) which indicate that the yield on the cash receipts from the SLGS in the 2004 Escrow Account is less than the yield on the Series 2012A Bonds. These schedules were prepared based on the assumed settlement date of January 11, 2012 using a 360 -day year with interest compounded semi-annually. The term "yield", as used herein, means that yield which, when used in computing the present value of all payments of principal and interest to be paid or received on an obligation produces an amount equal to, in the case of the cash receipts from the SLGS in the 2004 Escrow Account, the purchase price, and in the case of the Series 2012A Bonds, the issue price. As part of our engagement to recalculate the schedules attached as Appendix I we prepared schedules attached hereto as Exhibits B-1 and D independently calculating the yields on (i) the cash receipts from the SLGS in the 2004 Escrow Account calculated on Exhibit B-1, and (ii) the Series 2012A Bonds using the Addendum to the Preliminary Official Statement and the Preliminary Official Statement provided by the Financial Advisor insofar as the Series 2012A Bonds arc described as to the maturity and interest payment dates, dated date, principal amounts; interest rates, optional redemption date and price, and issue price to the public. The results of our calculations, based on the aforementioned assumptions, are summarized below: Yield Exhibit • Yield on the cash receipts from the SLGS in the 2004 Escrow Account 0.208606% B-1 • Yield on the Series 2012A Bonds 1.865993% D Page 4 Our procedures, as summarized in Exhibits B-1 and D, prove the mathematical accuracy of the schedules provided by the Financial Advisor summarizing the yields. The schedules provided by the Financial Advisor and those prepared by us reflect that the yield on the cash receipts from the SLGS in the 2004 Escrow Account is less than the yield on the Series 2012A Bonds. We were not engaged to, and did not, perform an examination or a review in accordance with Statements on Standards for Attestation Engagements established by the American Institute of Certified Public Accountants, the objective of which would be the expression of an examination opinion or limited assurance on the items referred to above. Accordingly we do not express such an opinion or limited assurance. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of those to whom this letter is addressed and is not intended to be and should not be used by anyone other than these specified parties. Minneapolis, Minnesota January 11, 2012 Exhibit A City of New Hope, Minnesota (Hennepin County) SCHEDULE OF SOURCES AND USES OF FUNDS January 11, 2012 Series Series 2012A Bonds 2012B Bonds SOURCES: Principal amount of the Bonds $2,695,000.00 $1,330,000.00 Original issue premium 54,006.30 32,749,006.30 $1,330,000.00 USES: 2004 Escrow Account: - Purchase price of the SLGS $2,689,409.00 - Beginning cash deposit 0.30 2005A Escrow Account: - Purchase price of the Open -Market Securities $1,278,505.16 - Beginning cash deposit 984.72 Costs of issuance 37,875.00 30,205.00 Underwriter's discount 19,646.55 16,625.00 Deposit to Debt Service Fund (rounding amount) 2,075.45 3,680.12 $2,749,006.30 $1,330,000.00 Exhibit B City of New Hope, Minnesota (Hennepin County) 2004 ESCROW ACCOUNT CASH FLOW Cash receipts Cash disbursements for: from SLGS interest on in the 2004 the Series Escrow Account Principal of 2012A Bonds Cash Dates (Exhibit B-1) 2004 Bonds (Exhibit D) balance Cash deposit on January 11, 2012 $0.30 08-01-12 $31,290.42 $31,290.28 0.44 02-01-13 28,161.42 28,161.25 0.61 08-01-13 28,160.99 28,161.25 0.35 02-01-14 2,613,160.94 $2,585,000.00 28,161.25 0.04 $2,700,773.77 $2,585,000.00 $115,774.03 Receipt date 08-01-12 02-01-13 08-01-13 02-01-14 City of New Hope, Minnesota (Hennepin County) CASH RECEIPTS FROM AND YIELD ON THE SLGS IN THE 2004 ESCROW ACCOUNT Principal $28,198 25,390 25,401 2,610,420 $2,689,409 Interest rate 0.030% 0.090% 0.150% 0.210% Interest $3,092.42 2,771.42 2,759.99 2,740.94 $11,364.77 Purchase price of the SLGS in the 2004 Escrow Account Cash receipts from SLGS in the 2004 Escrow Account $31,290.42 28,161.42 28,160.99 2,613,160.94 $2,700,773.77 Exhibit B-1 Present value on January 11, 2012 using a yield of 0.208606% $31,254.20 28,099.51 28,069.80 2,601,985.49 $2,689,409.00 $2,689,409.00 The sum of the present values of the cash receipts from the SLGS in the 2004 Escrow Account on January 11, 2012, using a yield of 0.208606%, is equal to the purchase price of the SLGS in the 2004 Escrow Account. Dates Cash deposit on January 11, 2012 01-31-12 06-26-12 07-07-12 07-26-12 07-31-12 08-01-12 12-26-12 01-07-13 01-31-13 02-01-13 06-26-13 07-07-13 08-01-13 01-07-14 02-01-14 Exhibit City of New Hope, Minnesota (Hennepin County) 2005A ESCROW ACCOUNT CASH FLOW Cash receipts Cash disbursements for: from SLGS Interest on in the 2005A the Series Escrow Account Principal of 2012B Bonds Cash (Exhibit C-1) 2005A Bonds (Exhibit D-2) balance $984.72 $25.00 1,009.72 60.00 1,069.72 15,025.00 16,094.72 10,000.00 26,094.72 25.00 26,119.72 $25,497.22 622.50 60.00 682.5-0 15,025.00 15,707.50 8,025.00 23,732.50 22,947.50 785.00 8,060.00 8,845.00 15,025.00 23,870.00 22,947.50 922.50 1,217,025.00 1,217,947.50 $1,195,000.00 22,947.50 0.00 $1,288,355.00 $1,195,000.00 $94,339.72 Exhibit Gl City of New Hope, Minnesota (Hennepin County) CASH RECEIPTS FROM AND PURCHASE PRICE OF THE OPEN -MARKET SECURITIES IN THE 2005A ESCROW ACCOUNT Purchase price of the Open -Market Securities in the 2005A Escrow Account Maturity Principal Interest Cash Accrued Purchase Type receipts from amount rate Price Cost Open -Market price T -Bills 07-26-12 $10,000 Securities Receipt $9,998.36 Interest $9,998.36 in the 2005A date Principal rate Interest Escrow Account 01-31-12 8,062.28 FNMA $25.00 $25.00 06-26-12 101.843750% 8,147.50 60.00 60.00 07-07-12 01-07-14 1202,000 1.5,025.00 15,025.00 07-26-12 $10,000 0.000% 10,000.00 07-31-12 25.00 25.00 12-26-12 60.00 60.00 01-07-13 15,025.00 15,025.00 01-31-13 8,000 0.625% 25.00 8,025.00 06-26-13 8,000 1.500% 60.00 8,060.00 07 07-13 15,025.00 15,025.00 01-07-14 1,202,000 2.500% 15,025.00 1,217,025.00 $1,228,000 $60,355.00 $1,288,355.00 Purchase price of the Open -Market Securities in the 2005A Escrow Account Maturity Principal Interest Accrued Purchase Type date amount rate Price Cost interest price T -Bills 07-26-12 $10,000 0.000% 99.983583% $9,998.36 $9,998.36 T -Notes 01-31-13 8,000 0.6250/. 100.500000% 8,040.00 $22.28 8,062.28 FNMA 06-26-13 8,000 1.500% 101.843750% 8,147.50 5.00 8,152.50 FHLMC 01-07-14 1202,000 2.5000/. 104.1562500/. 1,251,958.13 333.89 1,252,292.02 $1,228,000 $1,278,143.99 $361.17 $1,278,505.16 Exhibit D City of New Hope, Minnesota (Hennepin County) DEBT SERVICE PAYMENTS AND YIELD ON THE SERIES 2012A BONDS $2,695,000 issue dated January 11, 2012 Interest Date Principal rate Interest 08-01-12 02-01-13 08-01-13 02-01-14 08-01-14 02-01-15 08-01-15 02-01-16 08-01-16 02-01-17 08-01-17 02-01-18 08-01-18 02-01-19 08-01-19 02-01-20 08-01-20 02-01-21 08-01-21 02-01-22 08-01-22 02-01-23 08-01-23 02-01-24 08-01-24 02-01-25 $215,000 2.000% 225,000 2.000% 225,000 2.000% 235,000 2.000% 240,000 2.000% 250,000 2.000% 250,000 2.000% 255,000 2.000% 260,000 2.150% 265,000 275,000 $2,695,000 2.300% 2.450% $31,290.28 28,161.25 28,161.25 28,161.25 28,161.25 28,161.25 26,011.25 26,011.25 23,761.25 23,761.25 21,511.25 21,511.25 19,161.25 19,161.25 16,761.25 16,761.25 14,261.25 14,261.25 11,761.25 11,761.25 9,211.25 9,211.25 6,416.25 6,416.25 3,368.75 3,368.75 $476,546.53 The present value of the future payments is equal to: Principal amount of the Series 2012A Bonds Original issue premium Total debt service $31,290.28 28,161.25 28,161.25 28,161.25 28,161.25 243,161.25 26,011.25 251,011.25 23,761.25 248,761.25 21,511.25 256,511.25 19,161.25 259,161.25 16,761.25 266,761.25 14,261.25 264,261.25 11,761.25 266,761.25 9,211.25 269,211.25 6,416.25 271,416.25 3,368.75 278,368.75 $3,171,546.53 Present value on January 11, 2012 using a yield of 1.865993% $30,969.07 27,614.52 27,359.26 27,106.36 26,855.79 229,745.62 24,348.99 232,798.25 21,833.46 226,465.96 19,402.28 229,224.10 16,964.64 227,330.44 14,566.69 229,690.98 12,165.94 223,351.23 9,848.62 221,315.21 7,571.36 219,237.78 5,176.91 216,966.01 2,668.03 218,428.85 $2,749,006.30 $2,695,000.00 54,006.30 $2,749,006.30 The sum of the present values of the debt service payments of the Series 2012A Bonds on January 11, 2012, using a yield of 1.865993%, is equal to the issue price of the Series 2012A Bonds. Exhibit D-1 City of New Hope, Minnesota (Hennepin County) ORIGINAL ISSUE PREMIUM ON THE SERIES 2012A BONDS Initial public Original Maturity Interest offering issue date Principal rate Yield price premium 02-01-15 $215,000 2.000% 0.900% 103.307% $7,110.05 02-01-16 225,000 2.000% 1.000% 103.964% 8,919.00 02-01-17 225,000 2.000% 1.050% 104.665% 10,496.25 02-01-18 235,000 2.000% 1.250% 104.360% 10,246.00 02-01-19 240,000 2.000% 1.450% 103.675% 8,820.00 02-01-20 250,000 2.000% 1.700% 102.249% 5,622.50 02-01-21 250,000 2.000% 1.850% 101.117% 2,792.50 02-01-22 255,000 2.000% 2.000% 100.000% 02-01-23 260,000 2.150% 2.150% 100.000% 02-01-24 265,000 2.300% 2.300% 100.000% 02-01-25 275,000 2.450% 2.450% 100.000% $2,695,000 $54,006.30 Exhibit D-2 City of New Hope, Minnesota (Hennepin County) DEBT SERVICE PAYMENTS ON THE SERIES 2012B BONDS $1,330,000 issue dated January 11, 2012 Interest Total debt Date Principal rate Interest service 08-01-12 $25,497.22 $25,497.22 02-01-13 22,947.50 22,947.50 08-01-13 22,947.50 22,947.50 02-01-14 22,947.50 22,947.50 08-01-14 22,947.50 22,947.50 02-01-15 $55,000 1.350% 22,947.50 77,947.50 08-01-15 22,576.25 22,576.25 02-01-16 50,000 1.350% 22,576.25 72,576.25 08-01-16 22,238.75 22,238.75 02-01-17 50,000 1.850% 22,238.75 72,238.75 08-01-17 21,776.25 21,776.25 02-01-18 55,000 1.850% 21,776.25 76,776.25 08-01-18 21,267.50 21,267.50 02-01-19 55,000 2.500% 21,267.50 76,267.50 08-01-19 20,580.00 20,580.00 02-01-20 60,000 2.500% 20,580.00 80,580.00 08-01-20 19,830.00 19,830.00 02-01-21 65,000 3.000% 19,830.00 84,830.00 08-01-21 18,855.00 18,855.00 02-01-22 75,000 3.000% 18,855.00 93,855.00 08-01-22 17,730.00 17,730.00 02-01-23 85,000 3.500% 17,730.00 102,730.00 08-01-23 16,242.50 16,242.50 02-01-24 90,000 3.500% 16,242.50 106,242.50 08-01-24 14,667.50 14,667.50 02-01-25 95,000 3.850% 14,667.50 109,667.50 08-01-25 12,838.75 12,838.75 02-01-26 95,000 3.850% 12,838.75 107,838.75 08-01-26 11,010.00 11,010.00 02-01-27 105,000 4.050% 11,010.00 116,010.00 08-01-27 8,883.75 8,883.75 02-01-28 100,000 4.250% 8,883.75 108,883.75 08-01-28 6,758.75 6,758.75 02-01-29 100,000 4.450% 6,758.75 106,758.75 08-01-29 4,533.75 4,533.75 02-01-30 100,000 4.650% 4,533.75 104,533.75 08-01-30 2,208.75 2,208.75 02-01-31 95,000 4.650% 2,208.75 97,208.75 $1,330,000 $624,229.72 $1,954,229.72 ;_ � Applicable schedLdes provided by Ehlers & Associates, Inc. New Hope, MN $2,695,000 G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $4,080,000 G.O Tax Increment Bonds, Series 2004 Sources & Uses Dated 01111120121 Delivered 01111 /2 01 2 Sources Of Funds Par Amount of Bonds Reoffering Premium _._ __. _._ _ _ __. _. 54,00630 Total Sources $2,749,006.30 Uses Of Funds Deposit to Crossover Escrow Puno Costs of issuance _ 37,875.00 Total Underwriter's Discount (0.729%) 19,646.55 Deposit to Debt Semee Pund(Rounding Amnun[) 2,075.45 Total Uses _. $2,749,006.30 Series 2012A GO TI F Bonds I SINGLE PU R POSE 11 W 2/2011112: 46 PM n EaHLERS New HODe. Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $1,370,000 Taxable G.0 Tax Increment Bonds, Series 2005A Sources & Uses Dated 01/1112012 1 Delivered 0 111112 01 2 Par Amount of Bonds $1,330,000.00 Total Sources _51,3301000.00 Total Uuderwriteis Discount 1.250/)____,., Deposit to Crossover Escrow Fund _ .. ._ __...__....___ 1,27M!E!L 6 Sorics 20128 Tax GO TIF B I SINGLE PURPOSE 1 12112/2011 1 1:18 PM _EHLERS LEADERS IN PUBLIC FINANCE Page 1 New Hope, MN $2,695,000 G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $4,080,000 GO Tax Increment Bonds, Series 2004 Crossover Escrow Fund Cashflow Date Principal Rate Interest Receipts Disbursements Cash Balance 01/11/2012 - - - 0.30 - OJO 08/01/2012 28,198.00 0.030% 3,092.39 31290.39 31,29028 0.41 02/01/2013 25,390.00 0.090% 2,77141 28,161.41 28,161.25 0.57 08/01/2013 25,401.00 0.150% 2,759.99 28,160.99 28,16125 0.31 02/01/2014 2,610,420.00 0.210% 2,74094 2,613,160.94 2,613,16125- - ------ rotal $2,689,409.00 $11,364.73 52,700,774.03 52,700,774.03 Investment Investment Model[ PV, GIC, or Securities] Default investment yield target Cash Deposit Cost of Investments Purchased with Band Proceeds Total Cost of Investments Target Cost of Investments at bond yield Actual positive or (negative) arbitrage Yield to Receipt Yield for Arbitrage Purposes State and Local Government Series (SLGS) rates for Series 2012A GO TIF Bonds I SINGLEPURPOSE 1 12/122011 112:46PM ,, EHLERS LEADERS IN PUBLIC FINANCE Securities Bond Yield 0.30 --- -- 2,689,409.00 $2,689,40930_ $2,601,21T47 - (88,191.83) 0.2086051% ......-.-. L8659934% 12/12/2011 New Hope, MN $2,695,000 G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $4,080,000 G.O Tax Increment Bonds, Series 2004 Crossover Escrow Summary Cost Crossover Escrow Cash Deposit with Bond PCO ..J, Delivcry Dale _ Series 2012A GO TIF BOWS I SINGLE PURPOSE 1 12/12/2011 1 12:46 PM EHLERS LEADERS IN PUBLIC FINANCE usu __. 2,689,409.00 $2,689,409,30 1/11/2012 Par Principal +Accrued Maturity Type Coupon Yield $ Price Amount Cost Interest = Total Cost Crossover Escrow 08/01/2012 SLGS-Cl 0.030% 0.030% 100.0000000% 28,198 28,198.00 - 28,198.00 02/01/2013 SLGS-NT 0.090% 0.090% 1000000000% 25,390 25,390.00 - 25,390.00 O8/OV2013 SLGS-NT 0.150% 0.150% 100.0000000% 25,401 25,401.00 - 25,401,00 02/01/2014 SLGS-NT 0.210% 0.210% 100.0000000% 2,610,420 2,610,420.00 - 2,610,420.00 Subtotal - - - $2,689,409 $2,689,409.00 - $2,689,409.00 Total $2,689,409 3;2,689,409.00 - $2,689,409.00 Crossover Escrow Cash Deposit with Bond PCO ..J, Delivcry Dale _ Series 2012A GO TIF BOWS I SINGLE PURPOSE 1 12/12/2011 1 12:46 PM EHLERS LEADERS IN PUBLIC FINANCE usu __. 2,689,409.00 $2,689,409,30 1/11/2012 New Hooe. Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Crossover Escrow Fund Cashflow Cash Date Principal Rate Interest Receipts Disbursements Balance 01/11/2012 - - - 984.72 - 984.72 01/31/2012 - - 25.00 25.00 - 1,009.72 06/26/2012 - - 60.00 60.00 - 1,069.72 07107/2012 - - 15,025.00 15,025.00 - 16,094.72. 07/26/2012 10,000;00 0030% .. 10,000.00 - 26,09472_ 07131/2012 - 25.00 25.00 - 26,119.72 08/0t/2012 - - - - 25,49722 622.50 12/26/2012 - - 60.00 60.00 - 682.50 01/07/2013 - - 15,025,00 15,025.00 - 15,707.50 01/31/2013 8,000.00 0.625% 25.00 8025.00 - 23,73250 02/01/2013 - - - 22947.50 785.00 06/26/2013 8,000.00 1.500% 60.00 8,060.00 - 8,845.00 07/07/2013 - - 15,025.00 15,025.00 - 23,870.00 08/01/2013 - - - - 22,947.50 922.50 01!0772014 1,202,000.00 2.500% 15,025.00 1,217,025.00 - 1,217,947.50 02/01/2014 - - - - 1,217,947.50 - Total $1,228,000.00 - $60,355.00 $1,289,339.72 $1,289,339.72 - Investment Parameters Investment Model [PV GIC, or Securities] - -Securities Default investment yield target.. ....... ....... ..... .... ...... ............... Bond Yield Cost of Investments Purchased with Bond Proceeds _ ---__L278,505 16 Total Cost of Investments $1,279,4819,81.8. Target Cost of Investments zt bond yield $1,196,444.80 Actualpos�bve or (negative) arbitrage _ (83,045.09),_ Yield for Arbllrs ePu�'r ores 3,7777884% Series 20128 Tax GO TIF 81 SINGLE PURPOSE 1 121122011 1 1:18 PM E_H_LE_R_S LEADERS IN PUBLIC FINANCE Page 5 New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Crossover Escrow Summary Cost Par Principal +Accrued _ Maturity Type Coupon Yield $ Price Amount Cost Interest =Total Cost Cusip Crossover Escrow 07/26/2012 T -RILL 0.030% 0.030% 99.9835833% 10,000 9,998.36 - 9,998.36 912795484 01/31/2013 T -NOTE 0.625% 0.150% 100.5000000% 8,000 8,040.00 22.28 8,062.28 912828PRS 06/26/2013 FNMA 1.500% 0.230% 101.8437500% 8,000 8,147.50 5.00 8,152.50 31398AT44 01/07/2014 FHLMC 2500% 0400% 1041562500% 1202000 1251958.13 333.89 1252292.02 3137EABX6 Subtotal - - - $1,228,000 $1,278,143.99 $361.17 $1,278,505.16 Tot.] $1228000 $1,278,143.99 $361.17 $1,278,505.16 Crossover Escrow Senes 20128 Tax GO TIE 61 SINGLE PURPOSE 1 121122011 1 1:18 PM EHLERS Ll AV RS ItilN ruutm FINANCE Page 11 New Hope, MN $2,695,000 G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $4,080,000 G.O Tax Increment Bonds, Series 2004 Debt Service Schedule Date Principal Coupon Interest Total P+I - Fiscal Total 01/112012 - - - - _. 21346135%.. - 08/0/2012 - - 31,290.28 31,290.28 _ _.... All Inclusive Cost (AIC) - 02/01/2013 - - 28,161.25 28,16125 59,45153 08/01/2013 - - 28,161.25 28,161.25 - 02/01/2014 - - 28,161.25 28,161.25 _-. 56,322.50 -08/01/2014 -- 2$161.25 28,161.25 - 02/012015 215,000.00 2.000% 28,161.25 243,161.25 271,322.50 08/01/2015 - - 26,011.25 26,011.25 - 02/012016 225,000.00 2.000% 26,011.25 251,011.25 277,022.50 08/01/2016 - - 23,761.25 23,761 25 - MAJIV2017 225,000.00 2.000% 23,7(51.25 248,761.25 272,522.50 08/01/2017 - - 21,511.25 21,511.25 - 02/01/2018 235,000.00 2.000% 21,511.25 256,511.25 278,022.50 08/012018 - - 19,161.25 19,161.25 - 02/012019 240,000.00 2.000% 19,16125 259,16125 278,322.50 02/01/2019 - 16,76125 16,76125 - 02/01/2020 250,000.00 2.000% 16,761 25 266,761.25 283,522.50 08/01/2020 - - 14,26125 14,261.25 - 02/01/2021 250,000.00 2.000% 14,261.25 264,261.25 278,522.50 08/01/2021 - - 11,761 25 11,76] 25 0,01/2022 255,00000 2000% 11,761.25 266,76125 278,522.50 08/01/2022 - - 9,211.25 9,211.25 - 02/01/2023 260,000.00 2.150% 9,211.25 269,211.25 278,422.50 08/01/2023 - - 6,416.25 6,416.25 - 02/01/2024 265,000.00 2:300%, 6,41625 271,4M25 277,832.50 --08/01/2024 - - 3,368.75 3,368.75 - 02/012025 275,000.00 2.450% 3,368.75 278,368.75 281,737.50 Total $2,695,000.00 - $476,546.53 $3,171,546.53 Yield Statistics Bond Year Dollars _ $22,324.72 Average Life _ ,..._ __. 8284 Years Average Coupon _. _.. .-... _ _. 21346135%.. Net Interest Cost (NIC) _ _,_ 19807045% True Interest Cost (TIC) 19614300% _. Bond Yield for Arbitrage Purposes - __... __. 1 8659934% _ _.... All Inclusive Cost (AIC) 21478886% IRS Form 8038 Net Interest Cost _.. _... _ _ 1.8671241% Weighted Average Maturity _. _ _ 8 232 Years Sedes2012AGOTIF Bonds I SINGLEPURPOSE 1 12/122011 112'A6PM ft EHLERS LEADERS IN PUBLIC FINANCE New Hope, MN $2,695,000 G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $4,080,000 G.O Tax Increment Bonds, Series 2004 Proof Of Bond Yield @ 1.8659934% Series 2012A GO TIE Bonds I SINGLE PURPOSE 1 12112/2011 1 12.46 PM EHLERS LEADERS IN PUBLIC FINANCE Cumulative Date Cashflow PV Factor Present Value PV 01/11/7012 - 1.000000ox - - 08/01/2012 31,290.28 0.9897345x 30,969.07 30,96907 02/01/2013 28,161 25 0.9805857x 27,614.52 58,583.59 08/01/2013 28,16125 0.9715214x 27,359.26 85,942.84 02/01/2014 28,161.25 09625409. 27,106.36 113,049.20 _ 08/01/2014 28,161.25 0,95364315x 26,855.79 139,904.99 02/01/2015 243,161.25 09448282x 229,745.62 369,650.61 08/012015 26,011.25 0.9360945x 24,348.99 393,99959 02/01/2016 251,011.25 0.9274415. 232 798.25 626,797 85 08/01/2016 23,761.25 09188685. 21,833.46 _ 648,631.31 02/01/2017 248,76125 09103747x 226,465.96 875,09727 08/01/2017 21,511,25 0.9019595x 19,402.28 894,499.54 02/01/2018 256,511.25 0.8936220x 229,224.10 1,123,723.64 08/01/2018 19,(61.25 0.8853616x 16,964.64 1,140,688.28 02/01/2019 259,161.25 087717762 227,33044 _.._ 1,368,018.72.,,,..,.._, 08/01/2019 16,761.25 08690692. 1456569 1,382,58540 02/01/2020 266,76125 0.8610356. 229,690.98 1,612,276.38 08/01/2020 14,261,25 0.8530766x 12,165.94 1,624,442.32 02/01/2021 264,261.25 0.8451910x 223,351.23 1,847,793.54 08/01/2021 11,761.25 08373783x 9,848.62 - 1857,642.16 02/01/2022 266,761.25 08296378x 221,315.21 2,078,957.37 08/01/2022 9,21125 0.8219688x 7,571.36 2,086,528.73 02/01/2023 269,211.25 0.8143708x 219,237.78 2,305,766.51 08/01/2023 6,416,25 0.8068430x 5,176.91 2,310,94341 02/01/2024 271,4 t6.25 07993847x 216,96601 _ _. 2,527,909.42 08/01 /2024 3,368 75 0 7919954r,, 2,668.03 2,530,57745 02/01/2025 278,368 75 0 7846745x 218,428.85 2,749,006.30 Total $3,171,546.53 - $2,749,006.30 - Derivation Of Target Amount Par Amount of Bon ds _. _. $2,695,000.00 Reoffering Premium or (Discount) _ __. _ _ 54,006.30 Original Issue Proceeds _.. _ .,,.,.- $2,749,00630 Series 2012A GO TIE Bonds I SINGLE PURPOSE 1 12112/2011 1 12.46 PM EHLERS LEADERS IN PUBLIC FINANCE New Hope, MN $2,695,000 G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $4,080,000 G.O Tax Increment Bonds, Series 2004 Pricing Summary Total - - - $2,695,000.00 - - $2,749,006.30 Bid Information Par Amount of Bonds _ $2,695,000.00 Reoffering Premium or (Discount) 54,006.30 Grass Production _ $2,749,006.30 Total Underwriters Discount (0.729%) Bid IIOI.MMb� Total Purchase Price Bond Year Dollars Average Life .._ Average Coupon Net Interest Cost (NIC) True Interest Cost (TIC) _., _... _... Series 2012A GO TIF Bonds I SINGLE PURPOSE 1 12112/2011 1 12:46 PM 19 EBH L E RS 1.9807045% 19614300% Type of Maturity Maturity Bond Coupon Yield Value Price Dollar Price 02/01/2015 Serial Coupon 2.000% 0.900% 215,000.00 103.307% 222,110.05 02/01/2016 Serial Coupon 2.000% 1.000% 225,000.00 103.964% 233,919.00 02/01/2017 Serial Coupon 2.000% 1.050% 225,000.00 104.665% 235,496.25 02/01/2018 Serial Coupon 2.000% 1250% 235,000.00 104360% 245,246.00 02/01/2019 Serial Coupon. 2.000% 1450% 240,000 00 103.675% 248,820.00 02/01/2020 Serial Coupon 2.0004 1.700% 250,000.00 102.249% 255 622.50 02/01/2021 Serial Coupon 2.000% 1.850% 250,000.00 101117% c 252,792.50 02/012022 Serial Coupon 2.000% 2.000% 255,000.00 100.000% 255,00000 02/01/2023 Serial Coupon 2.150% 2.150% 260,000.00 100.000% 260,000.00 02/012024 Serial Coupon 2.300% 2.300% 265,000 00 100000%, _ _ 265,000.00 02/01/2025 Serial Coupon 2.450% 2.450% 275,000.00 100.000% 275,000.00 Total - - - $2,695,000.00 - - $2,749,006.30 Bid Information Par Amount of Bonds _ $2,695,000.00 Reoffering Premium or (Discount) 54,006.30 Grass Production _ $2,749,006.30 Total Underwriters Discount (0.729%) Bid IIOI.MMb� Total Purchase Price Bond Year Dollars Average Life .._ Average Coupon Net Interest Cost (NIC) True Interest Cost (TIC) _., _... _... Series 2012A GO TIF Bonds I SINGLE PURPOSE 1 12112/2011 1 12:46 PM 19 EBH L E RS 1.9807045% 19614300% New Hope, Minnesota $1,330,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2012A Crossover Refunding of $1,370,000 Taxable G.O Tax Increment Bonds, Series 2005A Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 01/11/2012 - - 18,855.011 - 112,710.00 08/01/2022 M01/2012 - - 25,49722 25497.22 02/01/2023 - 02/01/2013 - - 22,947.50 22,947.50 48,444.12 - 08/01/2013 - - 22,947.50 22,947.50 3500% - 02/01/2014- 122,485.00 -_- 22,94750 ---,_ --22,947.50 22,94750 45,895.00. 14,667.50 - 08/0V2014- 02/01/2025 95,000.00 3.850% 22,947.50 109,667.50 - 02/01/2015 55,000-00 1.350% 22,94750 77,947.50 100,895-00 02/012026 08/01/2015 - - 22,576.25 22,576.25 08/01/2026 - 02/01/2016 50,000.00 1.350% 22,576.25 72,576.25 95,152.50 4.050% 08/01/2016 - - 22,238.75 22,23875 - - 02/01/2017 50,000.00 1.850% 22,238.75 72,23875 94,477.50 108,883.75 08/01/2017 - - 21,776.25 21,776.25 6,758.75 - 02/01/2018 55,000.00 1.850% 21,776.25 76,776.25 98,552.50 08/01/2029 08/01/2019 - - 21,267.50 21,267.50 02/012030. - 02/O1/2019 55,000.00 2.500%21,--- 109,067.50 -I- - .50 97,535.00 - 08/01/2019 - - 20,580.00 20,890.00 4.650% - 02/012020 60,000.00 2.500% 20,58000 80,58000 101,160.00 $1,954,229.72 08/01/2020 - - 19,830.00 19,830.00 - 02/01/2021 65,000.00 3.000% 19,830.00 84,83000 104,660.00 02/012022 75,00000 3.000% 18,855.011 93,855.00 112,710.00 08/01/2022 - - 17,730.00 17,730.00 - 02/01/2023 85,000.00 3.500% 17,730.00 102,730.00 120,460.00 08/01/2023 - - 16,242.50 16,242.50 - 02/0/2024 90,00000 3500% ,.._.-16,24250 106124250 122,485.00 08/012024 - - 14,667.50 14,667.50 02/01/2025 95,000.00 3.850% 14,667.50 109,667.50 124,335.00 08/012025 - - - 12,838.75 12,838 75 - 02/012026 95,000.00 3.850% 12,838.75 107,838.75 120,677.50 08/01/2026 11,010.00 111010. -Do _ _ _ 02/01/2027 105,000.00 4.050% 11,01000 116,010.00 127,020:00 08/01/2027 - - 8,883.75 8,883.75 - 02/012028 100,000.00 4.250% 8,883.75 108,883.75 117,767.50 08/012028 - - 6,758.75 6,758.75 - 02/01/2029 100000.00 4.450% 6,758.75 .1067758.75 113,517.50_ 08/01/2029 - - 4,53375 4,533.75 - 02/012030. 100,000.00 4.650% 4,533.75 104,53375 109,067.50 08101/2030 - - 2,208.75 2,208.75 - 02/012031 95,000.00 4.650% 2,208.75 97,208.75 99,417.50 Total $1,330,000.00 - $624,229.72 $1,954,229.72 - Bond Net Interest Cost (NIC) ,. _ -._ ,.._ 3.9.315712112171%- ....._ Truelnlelest C.st(TIC) _ % _ 3.9091120% Bond Yield for Arbitlxg-e Purposes -- 3 7777884%-. All Inclusive Cost (AIC) _ _ _-_ _ 4 1534778 % IRS Form 8038 Net Interest Cast3.8345966% _-Ya. Wei hied Avera c tuu Me _ . I2 240 Years Series 20128 Tax GO TIF 5 1 SINGLE PURPOSE 1 12/1212011 1 1:18 PM IFIL H L E..R LfhIIGRM PUBRIC FINAW Page 2. ESCROW AGREEMENT THIS ESCROW AGREEMENT, made and entered into by and between the City of New Hope, Minnesota (the Issuer), and U.S. Bank National Association, in St. Paul, Minnesota (the Agent); WITNESSETH, that the parties hereto recite and, in consideration of the mutual covenants and payments referred to and contained herein, covenant and agree as follows: 1. The Issuer has duly issued and presently has outstanding an issue of General Obligation Taxable Tax Increment Bonds, Series 2005A, in the original principal amount of $1,370,000, dated as of March 1, 2005, and has issued its $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B, dated as of January 11, 2012 (the Refunding Bonds), to advance refund on February 1, 2014, those outstanding bonds of the above issue maturing in the years 2015 through 2031, aggregating $1,195,000 in principal amount (the Refunded Bonds), in a crossover refunding pursuant to Minnesota Statutes, Section 475.67, subd. 13. 2. The Issuer has also, in accordance with a resolution adopted December 12, 2011 (the Resolution), simultaneously with the execution of this Agreement, transmitted proceeds of the Refunding Bonds in the amount of $1,313,375.00 to the Agent to be used as follows: (a) $1,278,505.16 to purchase an equivalent principal amount of open -market securities, as identified in Exhibit A attached hereto; (b) $984.72 to be deposited as a beginning cash balance in the Escrow Account hereinafter established; (c) $30,205.00 to pay Refunding Bond issuance expenses; and (d) $3,680.12 to be paid to the Issuer for deposit in the Debt Service Account for the Refunding Bonds. In the opinion of Grant Thornton LLP, certified public accountants, the federal securities designated in paragraph (a) mature at such times and bear interest at such rates that the collections of principal and interest thereon, together with the initial cash balance designated in paragraph (b), will produce the amounts shown on Exhibit B attached hereto to be applied against the interest due on the Refunding Bonds to and including February 1, 2014 (the Crossover Date), and will be sufficient to pay the principal amount of the Refunded Bonds called for redemption on the Crossover Date. 3. The Agent agrees to apply the funds received from the Issuer in the manner and for the purposes set forth in Section 2 hereof and this Section. The Agent acknowledges receipt of the cash and federal securities described in Section 2 and agrees that it will hold such cash and federal securities in a special escrow account (the Escrow Account) in the name of the Issuer, and will collect and receive on behalf of the Issuer all payments of principal and interest on such securities and, prior to and including the Crossover Date, will remit from the Escrow Account to the Paying Agent for the Refunding Bonds, the amounts shown in Exhibit B attached hereto to pay a portion of the interest on the Refunding Bonds on the dates shown in Exhibit B attached hereto. On the Crossover Date, the Agent will remit to The Depository Trust Company (DTC), or its successor, as securities depository for the Refunded Bonds, the sum of $1,195,000 from the Escrow Account to pay the principal of the Refunded Bonds called for redemption on the Crossover Date. Any remaining funds in the Escrow Account after such transfer shall be remitted to the Issuer. The Agent will, not less than 60 days prior to the Crossover Date, cause the Notice of Redemption relating to the Refunded Bonds attached hereto as Exhibit C to be mailed to DTC. 4. The federal securities described in Exhibit A hereto may, at the written direction of the Issuer, be replaced, in whole or in part, with general obligations of the United States or obligations the principal of and interest on which are guaranteed as to payment by the United States (Qualifying Government Securities) and which mature as to principal and interest without option of prior payment or redemption by the issuer thereof in such amounts and at such times as will assure the availability of sufficient moneys to make payment when due of the interest on the Refunded Bonds as set forth in Exhibit B attached hereto; provided, however, that concurrently with such written direction, the Issuer shall provide the Agent with a certification of an independent certified public accountant as to the sufficiency of the federal securities to be subject to this Agreement following such replacement and as to the yields thereof, setting forth in reasonable detail the calculations underlying such certification. Any replacement authorized by this paragraph 4 shall be accomplished by sale, transfer, request for redemption or other disposition of all or a portion of the federal securities described in Exhibit A hereto with the proceeds thereof being applied to the purchase of substitute federal securities, all as specified in the written direction of the Issuer. 5. The Agent acknowledges that arrangements satisfactory to it for payment of its compensation for all services to be performed by it as Agent under this Agreement have been made. The Agent expressly waives any lien upon or claim against the moneys and investments in the Escrow Account. 6. Within 60 days following the close of each fiscal year and close of the Escrow Account, the Agent shall submit to the Issuer a report covering all money it shall have received and all payments it shall have made or caused to be made hereunder during the preceding fiscal year or portion thereof. 7. It is recognized that title to the federal securities and money held in the Escrow Account from time to time shall remain vested in the Issuer but subject always to the prior charge and lien thereon of this Agreement and the use thereof required to be made by the provisions of this Agreement. The Agent shall hold all such money and obligations in a special trust fund and account separate and wholly segregated from all other funds and securities of the Agent or deposited therein. It is understood and agreed that the responsibility of the Agent under this Agreement is limited to the safekeeping and segregation of the moneys and securities deposited with it in the Escrow Account, and the collection of and accounting for the principal and interest payable with respect thereto. 2 8. This Agreement is made by the Issuer for the benefit of the holders of the Refunding Bonds and the Refunded Bonds, as their interests may appear, under and pursuant to Minnesota Statutes, Section 475.67, and is not revocable by the Issuer, and the investments and other funds deposited in the Escrow Account and all income therefrom have been irrevocably appropriated for the payment of interest on the Refunding Bonds prior to and including the Crossover Date and the payment and redemption of the Refunded Bonds on said date, in accordance with this Agreement. This Agreement may not be amended except to (i) sever any clause herein deemed to be illegal, (ii) provide for the reinvestment of funds or the substitution of securities as permitted by Section 4 hereof or (iii) cure any ambiguity or correct or supplement any provision herein which may be inconsistent with any other provision, provided that the Agent shall determine that any such amendment shall not adversely affect the owners of the Refunded Bonds. In the event an amendment to this Agreement is proposed to be made pursuant to this Section 8, prior notice shall be given by first class mail, postage prepaid, to the following organization at the following address (or such other address as may be provided by the addressee) and shall be deemed effective upon receipt: Moody's Municipal Rating Desk/Refunded Bonds, 99 Church Street, New York, New York 10007. 9. This Agreement shall be binding upon and shall inure to the benefit of the Issuer and the Agent and their respective successors and assigns. In addition, this Agreement shall constitute a third party beneficiary contract for the benefit of the holders of the Refunding Bonds and Refunded Bonds, as their interests may appear. Said third party beneficiaries shall be entitled to enforce performance and observance by the Issuer and the Agent of the respective agreements and covenants herein contained as fully and completely as if said third party beneficiaries were parties hereto. 10. Upon merger or consolidation of the Agent, if the resulting corporation is a bank or trust company authorized by law to conduct such business, such corporation shall be authorized to act as successor Agent. Upon the resignation of the Agent, which shall be communicated in writing to the Issuer, or in the event the Agent becomes incapable of acting hereunder, the Issuer reserves the power to appoint a successor Agent. No resignation shall become effective until the appointment of a successor Agent by the Issuer. 11. The duties and obligations of the Agent shall be as prescribed by the provisions of this Agreement and the Agent shall not be liable hereunder except for failure to perform its duties and obligations as specifically set forth herein or to act in good faith in the performance thereof and no implied duties or obligations shall be incurred by the Agent other than those specified herein. 3 IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, as of January 11, 2012. CITY OF NEW HOPE Its Mayor And \ \S� t Its City Manager [Signature Page — Escrow Agreement (Series 2012B Bonds)] U.S. BANK NATIONAL ASSOCIATION, Agent By ✓�J Its [Signature Page — Escrow Agreement (Series 2012B Bonds)] IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT: To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non -individual person such as a business entity, a charity, a Trust or other legal entity we will ask for documentation to verify its formation and existence as a legal entity. We may also ask to see financial statements, licenses, and identification and authorization documents from individuals claiming authority to represent the entity or other relevant documentation. Type of Maturity Par Accrued Total Security Date Amount Rate Interest Cost T -Bills 07/26/12 $ 10,000 0.000% $9,998.36 T Notes 01/31/13 8,000 0.625% $ 22.28 8,062.28 FNMA 06/26/13 8,000 1.500% 5.00 8,152.50 FHLMC 01/07/14 1,202,000 2.500% 333.89 1.252,292.02 TOTAL 122 0 $361.17 $1.278.505.16 Dates Cash deposit on January 11, 2012 01-31-12 06-26-12 07-07-12 07-26-12 07-31-12 08-01-12 12-26-12 01-07-13 01-31-13 02-01-13 06-26-13 07-07-13 08-01-13 01-07-14 02-01-14 EXHIBTr B City of New Hope, Minnesota (Hennepin County) 2005A ESCROW ACCOUNT CASH FLOW Cash receipts Cash disbursements for: from SLGS Interest on in the 2005A the Series Escrow Account Principal of 2012B Bonds Cash (Exhibit C-1) 2005A Bonds (Exhibit D-2) balance $984.72 $25.00 1,009.72 60.00 1,069.72 15,025.00 16,094.72 10,000.00 26,094.72 25.00 26,119.72 $25,497.22 622.50 60.00 682.50 15,025.00 15,707.50 8,025.00 23,732.50 22,947.50 785.00 8,060.00 8,845.00 15,025.00 23,870.00 22,947.50 922.50 1,217,025.00 1,217,947.50 $1,195,000.00 22,947.50 0.00 $1,288,355.00 $1,195,000.00 $94,339.72 EXHIBIT C Call Notification Department The Depository Trust Company 711 Stewart Avenue Garden City, NY 11530-4719 RE: NOTICE OF CALL FOR REDEMPTION $1,370,000 GENERAL OBLIGATION TAXABLE TAX INCREMENT BONDS, SERIES 2005A CITY OF NEW HOPE, HENNEPIN COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN That by order of the City Council of the City of New Hope, Minnesota, all bonds of the above issue which mature on February 1 in the following years and amounts: Year Principal Amount Interest Rate CUSIP 2015 $ 35,000 5.60% 64544P AK9 2016 35,000 5.60 64544P AK9 2017 35,000 5.65 64544P AS2 2018 40,000 5.65 64544P AS2 2019 40,000 5.65 64544P AS2 2020 50,000 5.65 64544P AS2 2021 55,000 5.65 64544P AS2 2022 65,000 5.65 64544P AS2 2023 75,000 5.65 64544P AS2 2024 85,000 5.65 64544P BAO 2025 90,000 5.65 64544P BAO 2026 90,000 5.65 64544P BAO 2027 100,000 5.65 64544P BAO 2028 100,000 5.65 64544P BAO 2029 100,000 5.65 64544P BAO 2030 100,000 5.65 64544P BAO 2031 100,000 5.65 64544P BAO are called for redemption and prepayment on February 1, 2014. The Bonds will be redeemed at a price of 100% of their principal amount plus accrued interest tot he date of redemption. The City will deposit federal or other immediately available funds sufficient for such redemption at the office of The Depository Trust Company on or before February 1, 2014. Such Bonds will cease to bear interest on February 1, 2014. BY ORDER OF THE CITY COUNCIL CITY OF NEW HOPE, MINNESOTA Valerie Leone, City Clerk GENERAL CERTIFICATE AS TO ORGANIZATION AND FINANCIAL CONDITION AND CHECKLIST OF ITEMS NEEDED FOR THE OFFICIAL STATEMENT City of New Hope, Minnesota 1. ELECTED OFFICERVIERMS OF OFFICE Date: mi MONTH, DAY & YEAR " This information is requested so that we can e-mail/mail the Official Statement to the home of each Council Member. You may attach a sheet listing this information. Please indicate if you would like the Official Statement sent via: e-mail—X— or U.S. mail_ The Mayor votes on all Council matters x only in case of a tie Current Current Name/Address/E-mail* Office Term Commenced 'Term Expires Kathi Hemken Mayor 01/05/09 12/31/12 3657 Maryland Ave N New Hope, MN 555427 khemken@ci.new-hope.mn.us John Elder Council Member 01/10/11 12/31/14 852527 th Place N. New Hope, MN 55427 j elderCaa�ci.new-hope.mn.us Andy Hoffe Council Member 01/05/09 12/31/12 4632 Flag Ave N New Hope, MN 55428 ahoffe@ci.n ew-hope.mn, us Eric r Ar,,..,leCau!+ci! blembPr nlrngtno 12/31/12 5535 Elm Grove Circle New Hope, MN 55428 elammle@ci.new-hope.mn is Daniel Stainer Council Member 01/10.111 12/31,114 8424 Meadow Lake Rd E New Hope, MN 55428 dstauner@ci.new-hope.mn.us " This information is requested so that we can e-mail/mail the Official Statement to the home of each Council Member. You may attach a sheet listing this information. Please indicate if you would like the Official Statement sent via: e-mail—X— or U.S. mail_ The Mayor votes on all Council matters x only in case of a tie 2. APPOINTED OFFICIALS (Cross out titles which do not anoly.) Title: Name and E-mail Address: Mailing Address: fit • Manager. Kirk McDonald 4401 Xylon Avenue North New Hope, MN 55428 4401 Xylon Avenue North City Clerk Valerie Leone New Hope, MN 55428 City Attorney: Steve SondralI Jensen, Sondrall, Persellin, P.A. 8525 Edinbrook Crossing Suite 201 Brooklyn Park, MN 55443 Architectiengineer - this project. (If IPlrlie�hlri 3. GENERAL LNFORNL4TION Tac ID Number 1 41-6008870 Date City Home [tine Attach Charter j Attach Charter Amendments I 1953 i he City contains: Sware miles OR 5.1 square miles Land acres Population: 2000 U S. Census 20,873 2010 U.S. Census 20,339 4a. COUNCIL MEETINGS Regular meetings held: 'When. 2nd & 4th Mondays of each month Where; City Hall Council Chambers Time: 7:00 P.M. 4b. SALE OF BONDS The Bonds are scheduled to be sold at a meeting to be held on October 24, 2011. Please mark below if this meeting will be a regular or special meeting, if the meeting will be held at the same time as listed in Item 4a, and also if the meeting will be held at a location which is different than listed in Item 4a: Regular Meeting _X Special Meeting Different Location: Time of Meeting the same as in Yes _X_ No Item 4a: If answered ANo@ above new time is 5. LONG-TERM BONDED Please review the attached schedules of bonded indebtedness and revise if necessary. Attach any principal and interest payment sch dules (showing semi-annual principal and interest payments for each individual issue) for additional debt the ty has outstanding. tUr7 L�f�f'tl�„S. 6. CAPITAL LEASE PURCHASE OBLIGATIONS Please include payment schedules for any capital lease purchase obligations outstanding for land, buildings, and/or equipment that will be owned by the City at the end of the lease period. 7. OTHER Has the City issued any debt on behalf of a 501(c)3 non-profit corporation (i.e. nursing home, hospital, etc.) during the current calendar year? Yes, _X_ No (If yes, please include payment schedule). Please list the total principal amount of any debt that the City anticipates issuing within thisfiscal year for any types of leases, Public Facilities Loans from the State of Minnesota, and including loans the City will be issuing on behalf of a 501(c)3 non-profit corporation (i.e. nursing home, hospital, etc.). CITY OF NEW HOPE, MINNESOTA Schedule of Bonded Indebtedness General Obligation Debt Being Paid From Revenues (As of 10!01111) C�Pys� NO 0 fiscal Year %Paid Endive 19.71% 2012 3978% 2013 5949% MU 64.96% 2016 7044% 2018 75.91% 2017 81.75% 2018 87.59% 2019 93.80% MM 100.0m 9021 1) A Nftn dMisissus nYurdeCthe 20t1 through M14 mawrtes d to City's $2,950,W0 Gores] Migation wily Revenue Bonds. Sedes 199K dated May 1. 1999. Prepared by Ehlers lw7ratt GO Revenues Utility Revenue t) Dated 5/06!10 Amwnt 81,580,000 Matudty 291 Flscai Year Towd Total Total Pdne"I Ending Pardllal bderest PdnciPal Interval, PSI !)Mata KKAg 2012 270.000 29,255 279000 29,255 290,255 1.100,000 W13 275,000 23,805 275,0W 23,805 299,805 825,(00 M14 270,900 10,355 270,090 10,355 200,355 550,000 2013 75,000 14,905 75,0W 14,990 89,905 490,900 2916 76,000 13.264 75.990 13,264 90,284 4W,00D 2017 75,W0 11,389 75,000 11,369 90,389 3W,W0 2018 60,900 9,290 so.oto 9205 89.205 250,900 2019 sopor 6,765 00,000 8,785 90,785 170,900 2920 85,900 4,141 65,000 4,144 89144 a5,000 2021 85,900 1,361 m,W0 1,381 90,381 0 1,379090 132,453 1,370,900 132,469 1.502,469 C�Pys� NO 0 fiscal Year %Paid Endive 19.71% 2012 3978% 2013 5949% MU 64.96% 2016 7044% 2018 75.91% 2017 81.75% 2018 87.59% 2019 93.80% MM 100.0m 9021 1) A Nftn dMisissus nYurdeCthe 20t1 through M14 mawrtes d to City's $2,950,W0 Gores] Migation wily Revenue Bonds. Sedes 199K dated May 1. 1999. Prepared by Ehlers lw7ratt GO Revenues CITY OF NEW HOPE, MINNESOTA Schedule of Bonded Indebtedness General Obligation Debt Being Paid From Tu Increment Revenues (As of 10!01111) Prepared by Ehieo 10RrOl I GC TF TIF T: TIF Dated 410104 301105 A.. 94050,500 51,370,000 Maturity 201 2501 Fleeal Year Total Total Tatai Pd.dpel Fiscal Year Ending pdml"l Interest Pdn4lpal lateral Pdnalpal wha'ast P31 DulaGndaq %P.W Ending 2012 17E.WO 115870 30,000 71,883 205.000 187,353 302,353 4,205,00❑ 4.85% 2012 2013 180,000 110,255 30,000 70,003 210,050 180,255 390,258 3,995,000 9.41% W13 21114 185,000 104,459 30,0❑❑ 68,323 215,000 172,781 387,781 3,78GWO 1429% W14 2015 190,= 98223 38,000 66,509 225,000 184,725 380,725 3,555,000 19.39% 2016 2018 200,000 91,493 35,000 64,543 m'om 156,035 391,IX15 3,320,000 2472% 2010 2017 205,000 84,303 35,000 62.574 240,000 148,876 386,876 3,080,OW 30.16% 2017 2018 215,000 78,635 40,000 60,455 255,000 137,09D 392,090 2,825,000 3.`..94`,. 2018 2019 225,000 68,383 40.000 58,195 265,000 126,578 391,576 2,560,000 41.95% 2019 mm 23,000 59,823 56,000 55,653 NO,= 115275 395x5 2,260.000 48.30% 2020 2021 240,000 50,338 65,000 52666 295,006 103,024 39sW4 1,965,000 54.99%. 2021 2022 200.OW 40413 65,DOD 49,298 315,(100 89,709 404,709 1,670,000 62,13% 2022 2023 265,000 29.723 75,050 45,341 340,000 J5,084 415,084 1,330,000 69.64V 2023 2024 275,000 18.314 85,000 40821 WOOD 59,135 419,135 970,000 78.00% 2024 2025 290,000 5'1 b 90,000 35,876 300,000 42,113 422,!13 590.000 66.62% 2025 2026 90,000 3,793 90,000 3,793 120,793 500.000 86.86% 2020 2027 100.000 25,425 100.000 25.425 125,425 400,000 90.93% my 2023 100,000 1%775 100,000 19,775 119,775 mo0ouc 932 2028 2020 190,000 14,125 iW,WO 14,125 114,125 200,0[0 95.46% 2029 2099 100,000 3,475 100,000 8,475 150,475 1W,GW 97.73% SWO 2031 100,000 2,825 100.000 2,825 102,825 ❑ Im.wk 2031 3125,00G 95'003 1,255,000 903,359 441O,OOO 1,657.431 6,257,431 Prepared by Ehieo 10RrOl I GC TF CITY OF NEW HOPE, MINNESOTA Schedule of Bonded Indebtedness General Obligation Debt Being Paid From Revenues and Teres )As of 10101111) ?) Bon issue Series 2002 tna 21112 evcu� 2022 ttutudtlesT ine rjys 5850,00 Gerlerai Odigebon Storm Sewer Re.+an_5 Banda, Sedes 20024, datatl Apra t, 2002. A ponfor.. ct t1,9;ssue is wbi= tc the debt Ihnit is! �25,900 G.O. Eqdpinent Oertfcate wton). Cert. of Indebtedness 6 Refunding 1) Ogled 11123110 Amount a1.85O,00 NebidtY Val Flseal Year Total Tobi Total Ptine4w Fiscal Year Ending Principal Interest PdrktPal bnonsot P & I EuKtaading X Paid Ending 2012 170,000 39900 170,000 38,90 208,500 i.580.0ci 9.19"0 2012 2013 180,wo 35400 imam 35,400 215,400 1,50,00 18.924 2013 2014 185,000 31,750 165,000 31,750 218,750 1,315,500 28.92°'1 2014 2016 190100 28 am Imom Max 218,OW 1.1259m 39.19% 2916 2016 195,00 24150 195,00 24.150 219,150 936,Om 49.73% tele 2017 195,00 20,250 195,000 20.250 215,250 735,00 6027"b 2017 2018 2m,DD0 18150 20,000 16,150 210.150 535,600 71.08% 2018 2019 205,00 11,510 205,00 11,540 210,540 =,am 82.16% 2019 2020 205,00 6,015 20500 6,415 211,415 12BOm 9324% 2020 M21 60,000 2860 50.000 2.850 62,650 65.00 %.4 % Man 2022 65,000 875 65,00 975 65,975 0 lOoW" 2023 1,850,00 216,380 1,850.000 210,380 2,08,380 ?) Bon issue Series 2002 tna 21112 evcu� 2022 ttutudtlesT ine rjys 5850,00 Gerlerai Odigebon Storm Sewer Re.+an_5 Banda, Sedes 20024, datatl Apra t, 2002. A ponfor.. ct t1,9;ssue is wbi= tc the debt Ihnit is! �25,900 G.O. Eqdpinent Oertfcate wton). CITY OF NEW HOPE, MINNESOTA Schedule of Banded Indebtedness Mon -General Obligation Debt Being Paid From Annual Appropriations (As of 10111111) Total Energy Lease Total bated 7XIM.d Interest Amount $36,632 1,339 Maturity MoMNy 11,813 6,307 Fnal Maturity 711 drain Fiscal Year 3,605 70 Ending Principal mannan 13,252 2011 1 Mig 1?1 2012 8,307 512 2013 3,806 7p 13,252 712 Total Tafel Total Principal Pdncipal Interest PAI Outstanding 1,339 131 'An 11,813 6,307 512 drain 3,606 3,605 70 3,870 0 13,252 7i2 13,964 Fiscal Year %Paid Ending lo.i7k 2011 72.79% W12 100.00% 2013 Pradamd by Ehlers 10f7rol t Non -GO Annual Appropnaticna CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS j Q DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The annual debt service to maturity for all general obligation revenue bonds are as follows: Year Ending _ Business -type Activities December 31, Principal Interest Total 2011 $ 955,000 $ 70,970 $ t,025,970 2012 315,000 42,807 357,807 2013 325,000 36,408 361,408 2014 320,000 29,958 349,958 2015 130,000 25,458 155,458 2016-2020 675,000 803149 755,149 2021-2022 210,000 5,205 215,205 Total $ 2.930.000 $ 290 955 $ 3,220,955 Capital lease On July 1, 2008, the City purchased an energy optimization system through a capital lease agreement. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, it has been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital Leases are as follows: Equipment Less: Accumulated depreciation Total Business -type Activities S 38,892 (23,336) $ 15.556 The City has entered into the following capital leases to finance various equipment purchases: Balance Authorized Interest Issue Maturity at Description and Issued Rate Date Date Year End Ice arena energy optimization system $ 38,245 _81- 3.05 % 07/01!08 07101.13 $ 19.756 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The future minimum lame obligations and the net present value of these minimum lease payments as of December 31, 2010, were as follows: Year Ending Governmental December 31 Activities 2011 S 8,819 2012 8,819 2013 3,675 Total minimum payments 21,313 Less amount representing interest (1,557) Present value of minimum least payments 19-756 Changes in long-term liabilities Long-term liability actii ity for the year ended December 31, 2010, was as follows: Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental activities: Special assessment bonds $ 910,000 S - $ (135,000) S 775,000 S 135,000 Tax increment bonds 4,795,000 - (190,000) 4,605,000 195,000 General obligation bonds and certificates 225,000 1,245,000 (1901000) 1,280,000 35.000 Add: Premiums on bonds - 16,173 (167) 16,006 Total bonds payable x,930,000 1,261,t73 (515,167) 6,676,006 362000 Compensated absences payable 505,621 497,139 (527,008) 475,772 475,772 Other postemployment benefits payable 27,079 17,961 (6,221) 38,819 Governmental activity long -tern liabilities $ 6.462.700 1.776.293 (1.048.396) $ 7.190.597 $ 840.772 Business -type activities: Bonds payable Revenuebonds S 2,265,000 S 2,185,000 S (1,520,000) $ 2,930.000 $ 955,000 Add: Premiums on bonds - 17,882 (l,8P) 16,005 - Less: Bond discount. (21785) 7,805 (12,980) Total bonds payable 2,244,215 2.202,882 (1,514,072) 2.933,025 955,000 Capital leases payable 27,161 - '17,405) 19,756 7,843 Other postemployment benefits payable 5,295 2.808 (973) 7,130 Business -type activity long-term liabilities S 2.276.671 $ 2.205.690 $ (1,522.450) S 2.959.911 S 962.843 Internal service funds predominantly serve the governmental finds. Accordingly, long-teiin liabiliries for internal service funds are included as part of the above totals for governmental activities. -82- r CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 4: OTHER INFORMATION — CONTINUED D. Risk management The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the City carries insurance. The City obtains insurance through participation in the League of Minnesota Cities Insurance Trust (LMCTr), which is a risk sharing pool with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers compensation and property and casualty insurance. The LMCIT is self sustaining through member premiums and will reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the City's coverage in any of the past three fiscal years. Liabilities are reported when it is probably that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities, if any, include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of any incurred but not reported claims. E. Conduit debt obligations At times, the City has issued industrial revenue bonds to provide financial assistance to private sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issuance. The City is not obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2010, there were five series of industrial revenue bonds outstanding. The original issue amounts totaled $12,910,000 and have been reduced through annual payments and partial call prepayments. The outstanding balance as of December 31, 2010 is undetermined. F. Joint ventures and governed organizations Joint ventures Joint Water Commission The City is a parry to a joint powers agreement through which the Golden Valley, Crystal, and New Hope Joint Water Commission (JWC) is formed. The agreement provides for the operation and ownership of a water supply, distribution, and support system in and for the cities of Golden Valley, Crystal, and New Hope. The City purchases water used by its residents from the JWC and shares in the JWC's operation, maintenance, repair, and replacement costs based on its water usage_ As provided for in the joint powers agreement, in the event of termination, all real and personal property and cash held by the JWC would be divided among the members by unanimous consent. Such division would be based on refunded monetary contributions made to the JWC by the member cities. Over the years, the costs of construction have been allocated among the member cities, generally on the basis of water purchased. These costs were expensed as incurred by the City in the cost of water purchased The City has no information on the total construction costs it has paid. Based on the above, the City has not recorded an interest in the JWC up to the present time. The asset recorded in the Water fund as an investment in the JWC represents the accumulated contributions for working capital. This amount approximates the City's share in the IWC fund balance at December 31, 2010. -89- 8. FUNDS ON HANDMEBT REDEMPTION FUNDS List ALL city cash and investments by fund, including debt redemption and utility funds or attach a copy of your most recent treasurer's report. Balances are as of / (most recent date available). Name of Fund I Amount (cash and inveatmentR) .I General Special Revenue Debt Service Capital Projects Enterprise Funds Internal Escrow 9a. CITY EMPLOYEES (EXCLUDING COUNCH. MEMBERS AND VOLUNTEER FIREFIGHTERS) Full-time 85 Part-time 8 Seasonal 42 Total 135 9b. List all of the City's recognized and certified bargaining units: Bargaining Unit Expiration Date Of Current Contract LELS Local 77 Police Officers 12/31/10 LELS Local 273 Police Supervisors 12/31/10 IUOE Local 49 12/31/10 0)i' lu CITY OF NEW HOPE, MINNESOTA UNAUDITED CASH BALANCES BY FUND DECEMBER 31, 2010 AND NNE 30, 2011 uc xen¢at garage - - 64982Gi Balance Balance Change from 451,219 4 8,176 12/31/2010 6/30/2011 12131/2010 9001 to neral $ 4351041 S 4924.'^52 'i 569')1( (}7 9008 CDBG 230,690 231,948 1.258 9010 1 aivar resetic .. 633;759 tr$7;795 .:2 036 . 9013 Bassett Creek watershed 16,769 4,649 t 12,120) ni U 9014 St" el CA "kwatcohed400 t a 3 640) 4,", H� 9015 Economic Development Authority 1.869,509 1,857,165 (12,344) 9015 Sohd uasfe:lnanagetxrx ; -. _ - 119 6V 9017 Ice arena endotwment 3,678 3.724 46 9024. pmlaimm 1,.ton'-ilub - - ,.. 152:926 15x,536 - '- 10 610 9024 Safetycamp 11,171 11,004 (1 671 911: 9118 EB* a,nkiitg 10 63-01 \\\ - _ EDA sinking #11 04-1 ih(� �0 46 $'i 3447&:.. (1'2438) 3s 1lj�l�Y1 t 1059) (68.112) 2.947 4119 BbA sml nK91' 04-2 _ (3L505) {'7'j 854} 9140 9213 Fire pension bond 199633.122 Imptevemeui bond redempuon 3-1j� t(),s—q47 ?:9$6.$34 ,9"4 3.744,m (11, 144) (3 9145 2010B GO Equipment - 77.3 L0 i731G 9145. SPe9tal. slssessmeut..refunding - 1495 1=6,344 US 135 i 591 - 9203 Street infrastructure3,413,336 =%'w 9X213 E,1)A conxuuchm 05.95-1 ,.. � � 1149 6- 67G.�5 -6r . p 9214 EDA construction #7. 86-1 1062,98& 155.676 97688 9'1,1- vb( 4215 T --DA conmiteuan#68,.352 - i<la,at i3i6 GJrt ' =3 , .((`• •� 9216 EDA construchon#9, 02-01 50,901 60,848 9,Q47 9217 1PA scros4 ueUo , 810, 03-0j - €811'791 11 81 491 9215 EDA construction #I1. 04-1 (406,612) (424,343) (. 7.73 4119 .. - -: {185.659) 115. 0i1 3tli 1S" 641 9220 EDA consTaction, l l-1 02956) (IZ,956; 92'� i PA* "avrucimg .. _ 1501 'Sf 1.}44_.-1 `. 9242 Temporary financing 7 '39 289 1 s57 620 rs�bb9' E 9300 Sewx 19a 423 i = 936 IraS U14 (61 9301 ' - Water (G 1,341) (541.638) (1729") 143 Eml!'murse .. - 50 °fi 044 9303Ice arena 417 649 , 4 ,178 59,529 9304_ Stcf2m aster - . .. 2,9073,94a t a 5 tl% (TI 9305 Street light/signal operation 161.105 168 645 1595,04") 7.549 uc xen¢at garage - - 64982Gi n i>.'.tg. 4"ie' 16,"8) 9407 Insurance 451,219 4 8,176 6 9�7 9408 �'acafrcxr kart 9410 Information technology 2:3,316 138.240 (Z5.07 I 9503 Agency - passthm 9. 51,387 48,164 (3223) Tool 3 33,524,364 S 32.930360 S (594,0041 Item Exohmation of changes areater than $100,000 (1) This decrease is farther detailed on the Statement of Rex enue and Expenditures on the previous page - (2) Decrease due to scheduled bond payments. (3) Decrease due to payments on current street projects. (4) Increase due to transfer of $300,000 from find 9215 EDA construction, #618, TEF 85-2 (PPL). (5) Decrease due to firm payment on bre trucks of 5613,144. (6) increase due to operations. (7) Decrease due to principal payments on bonds of $745,000. (8) Decease due to vehicle and equipment purchases of approximately $245,000 as approved by Council. -5- 9c. STATUS OF EMPLOYEE CONTRACTS What is the status of any of the above contracts that have expired? Recently began negotiation process. 10. INSURANCE COVERAGE Does the City currently carry the required statutory amount of insurance coverage as required by state law? Yes: X No: If no, please explain: 11. LITIGATION Is any litigation currently threatened which might affect the issuance of the bonds? If none, so state. None. 12. MISCELLANEOUS Has the City ever defaulted in the payment of any of its obligations? Yes: No: X If so, please state the date and describe circumstances. 13. FINANCLAL IINFORTMATION Please send us the fbllnwina• AUDITS..IMANCL4,L STATEMENTS for the City and any separate Enterprise Funds for: 2006 On file - do not send 2007 On file - do not send 2008 On file - do not send 2009 On file - do not send 2010 On file - do not send CURRENT BUDGET (2011) On file - do not send 14. Have there been any significant changes in the City=s financial position since your last auditor are there any other issues pending that could have a significant effect on the City=s financial condition? Listed below are situations for you to consider, any of which may have affected the City=s financial position. Significant increases or decreases in fund balances either experienced or anticipated. Significant courtjudgments imposing costs not accrued or previously anticipated. Settlements of labor contracts which may result in expenditures significantly in excess of budgeted dollars. Significant changes in accounting methods, procedures or re -statements of accounts. Yes: No: X If yes, please describe the change, the reason(s) for the change, and any action to be taken to remedy the change. 15. LIABILITIES FOR OTHER POST EMPLOYMENT BENEFITS Have you had an actuarial study completed of your OPEB liabilities since the last one completed with an aetuariai valuation date as of December, 2008? If so, please attach a copy o2 the study. Response attached (excerpt of December, 2010, CAFR) 16. REIMBURSENMENT RESOLUTION If the City has adopted a reimbursement resolution and/or a declaration of intent related to the project being financed, please attach a copy for our records. 17. FINAL LEVY CERTIFICATION Please enclose copies of the City=s Final Levy Certification forms or resolutions adopting the levies for those years -- including a breakdown of the General Tax Levy, LGA and any other aids -- for: Collectible irk - n2007 2007 On file - do not send 2008 On file - do not send 2009 On file - do not send x2010 Please send 2011 On file - do not send (Attached) CIIY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS / DLCE1dBER 31,2010 C a n Note 4: OTHER INFORMATION — CONTINUED 2. Funding policy Minnesota Stanties Chapter 353 set. the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The Curr makes annual contributions to the pension plans equal to the amount required by store statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute 9.10 percent and 6.0 percent. respectively, of their annual covered salary in 2010_ PEPFF members were required to contribute 9 4 percent of their annual cover -.,d salary in 20I0. PFCF members are required to contribute 5.83 percent of their amual covered salatv. The Cit; is required to contribute the following percentages of annual covered papmllt 1178 peiceni for Basic Plan GERF members, 7.0 percent for Coordinated Plan GERF mombers, and 14.1 percent for PEPFF members. Employar contribution rates for the Coordinated pian will increase to 7.25 percent, effective January 1, 2U 11. The City's contributions to the General Employees Retirement Fund for the Years ending December 31, 2010, 2009 and 2008 were 5217,614. 5231,739, and 5236.699, respectively. The City's contributions to the public Employees Police & Fue Fund for the years ending December 31, 2016, 2009 and 2008 were 5344,624, 5307257, and $277,898, respectively. The Cini's contribitions were equal to the contractuaih required contributions for each year as set by Minnesota statute_ ( B. ,!Postemployment benefits other than pensions 1. Plan description The City of New Hope administers a single -employer defined benefit healthcare plan ("the Retiree Health Plan"). The plan provides healthcare insurance for eligible retirees and their eligible dependents through the City's group health insurance plan, which covers both active and retired members. The benefit les els, employee contributions, and employer contributions are governed b} the City and can be amended by the City through the City's collective bargaining agreements with employee groups The Retiree Health Plan cines not issue a publicly available financial repnrt. Post -employment insurance benefits —All retirees of the City have the option under state law to continue their medical insurance coverage through the City from the time of ietuement until the employee reaches the age of eligib,lity for Medicare. For members of all employee groups. the cutiree must pay the full premium to continue coverage for medical insurance. The C rt; is legally required to include any retirees for whom it provides hearth insurance coverage in the same insurance as iN active etnpin;•eev a hether the pr?miunis are paid 1 y the Cit,., or the retiree. Consequently_ participating retirees are considered to receive a secondary benefit knovr as an `impticit rate suhsidy" This benefit relates to the asswnption that the retinae is recxiv'ng a more favorable premium rate than the- would otherwise be able to obtain if purchasing insurance on their oven, due to being included in the same pool with the City's younger and statistically healthier active employees. 2. Funding policy Contribution requirements are set by the City Council annually on a pay -as -y ou-go basis. The City contributes noue of the cost of cturen! year premiums fur eligible retired plan members and their spouses except for the implicit rate subsidy dos :ribed above. For fiscal year 2010, the City contributed $7,194 to the plan. Plan members reach ing benefits conttibute i00 percent of their premium costs. -85- CITY OFNEW HOPE, MINNESOTA NOTES TO FIAANCIAL STATEMENTS DECEMBER 31, 2010 Note 4: OTHER INFORMATION— CONTLNUED 3. Annual other postemployment benefit cost and net other postemplo} meat benefit obligation The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contriburion , fthe e npv yer (_IRC). The ARC represents a level of funding that, it paid on an ongoing hasis, is projected to cover normal cost each wear and to amortize any unfunded actuarial liabilities (or fimding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan,and changes in the City's net OPEB obligation to the retiree health plan: Annual required contribution $ 20,748 Interest on net OPEB obheation 1,133 Adjustment to annual required contribution (1,112) .Animal OPEB cost (expense) 20,769 Contributions made (7,194) Increase in net OPEB obligation 13,575 Net OPER obligation- beginning of year 32,374 Net OPEB obligation- end of ear $ 45,949 The City's annual OPEB cost, the percentage of annual OPEB c= contributed to the par,, and the net OPEB obligation for fiscal year 2010 and the preceding two fiscal tears are as follows -86- Trend Information Percentage Year Annual Anneal OPER Net OPER Ending OPFB Cosi Contributed Obligation 1-13L'I0 S 20,769 (121 2) as S 45,949 12.3109 20,759 (56 0) 32,3'4 12x31`08 20718 21.3 16,336 -86- 18a. LARGER EMPLOYERS To the best of our knowledge, listed below are the larger employers located in your City. Please review/revue and add any additional manufacturing firms, hotels, medical facilities, restaurants, service providers, retailer, etc. that are not listed. Firm Name Type of Business North Ridge Care Center/MN Masonic Homes Nursing home and senior living facilities Saint Therese Home of New Hope Nursing home and senior living facilities Perigo Co. (formerly Paddock Laboratories) Pharmaceutical and medicine manufacturing I.S.D. No. 281 (Robbinsdale) Elementary and secondary education Navarre Corporation Software, DVD's, video games & accessories All Around Tax Taxi service Waymouth Farms Snack foods Parker -Hannifin Oildyne Manufacturing North Education Center Intermediate school district Abel Conn LLC Manufacturing Sunshine Factory Restaurant Applebee's Grill & Bar Restaurant FYI: We will be sending out survey letters to the larger employers located in your city. The information we request will be used in the larger employer section of the Official Statement, 18b. Please review the following list of financial institutions in your community. Please note any changes in bank names, deletions, or additions. Associated Bank, National Association (Branch of Green Bay, WI) Wells Fargo Bank, National Association (Branch of Sioux Falls, SD) a� 19. BUILDING PERMIT DATA Review and revise the following: *Permits are as of 20. BOND ISSUE SUMMARY BOOK A Bond Issue Summary book which contains information pertaining to the bond issue will be prepared and provided to the City after the issue has closed. Please indicate whether you would like to receive this information in hard cover form or on a CD: Bard Cover Book: X OR CD: Would you like Ehlers to send a CD to the City's auditor? Yes: No: X If so, please include the auditor's name and mailing address below. 2007 2008 20_09 2010 2011 New Singje Family Homes: No. of building permits: 2 0 0 1 0 Valuahon: $1,458,542 $0 $0 $136,320 0 New %4ultiple Family Buildings: No. of building permits: 0 0 0 0 0 Valuation: $0 $0 $0 0 0 -------------- Now New CommerciaLrindustrial: No of building permits: 0 1 0 0 2 Valuation: $0 $910,000 $0 0 $26,571,703 No of All Building Permits rtnc1u&n.-a&h1zons, ren><&hnac) 1,627 2,560 616 405 286 Valuation of All Building Permits (ir:etuJing.aflitions remrtlelm;?s/ $17,205,133 $26,824,154 $9,043,344 $10,944,589 $33,708,487 20. BOND ISSUE SUMMARY BOOK A Bond Issue Summary book which contains information pertaining to the bond issue will be prepared and provided to the City after the issue has closed. Please indicate whether you would like to receive this information in hard cover form or on a CD: Bard Cover Book: X OR CD: Would you like Ehlers to send a CD to the City's auditor? Yes: No: X If so, please include the auditor's name and mailing address below. 21. EDA APPOINTED OFFICERS/TERMS OF OFFICE lu 0 x097 1 , : /_ t, * This information is requested so that we can mail the Official Statement to the home of each Officer of the EDA. Current Current NamefAddress/E-mail* Office Term Commenced Term Expires Kathi Hemken President 01/05/09 12/31/12 3657 Maryland Ave N New Hope, MN 55427 khemken@ci.new-hope.mn.us John Elder Commissioner 01/10111 12/31/14 8525 27h Place N. New Hope, MN 55427 je1der@ci.new-'hopc.mn.us Andy Hoffe Commissioner 01/05/09 12/31/12 4632 Flag Ave ?~T New Hope, MN 55428 ahoffe@ci.new-hope.mn.us Eric Lammle Commissioner 01/05/09 12/31/12 5535 Elm Grove Circle New Hope, MN 55428 eLamm1e@ci.new-hope.mn.us Daniel Stauner Commissioner 01/10/11 12/31/14 8424 Meadow Lake Rd E New Hope, MN 55428 dstauner@ci. new -hope. am. us * This information is requested so that we can mail the Official Statement to the home of each Officer of the EDA. STATE OF MDWESOTA COUNTY OF UENNEPIN The General Certificate as to Organization and Financial Condition and Checklist of Items for the Official Statement is true and correct to the best of my knowledge. WITNESS my hand and official seal of the City of New Hope, Minnesota this 10h day of October, 2011. By: d�CCLD7 Title: (SEAL) STATE OF MINNESOTA ) CERTIFICATE AS TO TAXES AND TAXABLE PROPERTY IN )ss THE CITY OF NEW HOPE OUNTY OF HENNEPIN ) (Herein called the "TAXING DISTRICT') I hereby certify that the TAXING DISTRICT is situated wholly in this County and that: 1. CURRENT VALUATION - The market value and net tax capacity of all taxable property in the TAXING DISTRICT in this County as assessed in 2010 for the purpose of computing the rates of taxes collectible in 2011. are as follows: MARKET VALUE Real Estate 1,492,408,000 Personal Property 8,162,100 Real & Personal Property 1,500,570,100 TAX CAPACITY Residential 9,785,819 Agricultural Public Utility 2,466,459 Railroad Operating Property 30,828 All Other Commercial & Industrial 6,375,638 Non -Homestead Residential/Multiple Dwelling 2,269,881 Commercial & Seasonal Recreational 630 Other Common Area Golf Course Non Profit Community Assn Neighborhood Trust Total Real Estate 18,462,796 Total Personal Property 159,492 Total Real & Personal Property 18,622,288 If applicable to TAXING DISTRICT, Subtract: Captured tax capacity of tax increment district 1,044,830 10% of 200KV transmission lines Fiscal disparity contribution value 2,466,459 Tax Capacity Rate Determination Value 15,110,999 Add: Fiscal disparity distribution Value 3,896,651 Total Adjusted Net Tax Capacity 19,007,650 1 2. Valuation History (Real & Personal Property) CITY OF NEW HOPE Levy Payable Taxable Adjusted Year Year Market Value Net Tax Capacity 2009 2010 1,625,802,600 20,180,906 2008 2009 1,732,235,700 21,179,543 2007 2008 1,750,807,800 20,859,409 2006 2007 1,692,662,000 19,858,810 2005 2006 1,571,305,700 18,725,973 3. Top Fifteen Taxpaying Parcels (if requested) Taxable Tax Property Real/Personal Taxpayer Market Value Capacity Classification Property ID GENEVA MANGMT SERV LLC 8,000,000 159,250 INDUSTRIAL 0811821230007 PADDOCK LABORATORIES LLC 7,874,000 156,730 INDUSTRIAL 1711821320008 ST THERESE HOME INC 11,884,000 148,763 APARTMENT 0611821410030 COBALT INDUSTRIAL REIT II 7,230,000 143,850 INDUSTRIAL 2011821310020 NEW HOPE DISTRBTN CTR LLC 7,000,000 139,250 INDUSTRIAL 0711821110002 LONG RIDGE INDUST PORTFOLIO 6,800,000 135,250 INDUSTRIAL 0711821120006 MINN MASONIC HOME NO RIDGE 10,676,000 133,450 APARTMENT 0611821430036 FLS PROPERTIES 6,650,000 132,250 INDUSTRIAL 0611821320004 NEW HOPE/US SWIM PARTNERSHIP 6,600,000 131,250 COMMERCIAL 1811821110016 WELSH CORPORATE HEADQUARTERS 6,500,000 129,250 INDUSTRIAL 0811821230009 WINNETKA MALL LLC 6,100,000 121,250 COMMERCIAL 1811821110018 BROADWAY LANEUGOLLE/HOLMES 9,431,000 117,888 APARTMENT 0511821210016 LANG NELSON ASSOC 9,427,000 117,838 APARTMENT 2011821220011 ROLAND A STINSKI 5,800,000 115,250 INDUSTRIAL 0711821110001 AX TC INDUSTRIAL L P 5,700,000 113,250 INDUSTRIAL 0811821240012 2 4. Taxing Authority and Tax Rate History CITY OF NEW HOPE The TAXING DISTRICT has power to tax property situated in the following county or counties: Hennepin (The HOME AUDITOR is listed in capital letters.) The following governmental units within Hennepin County also have the power to levy taxes in the TAXING DISTRICT: 5 Year Market Value Rate History Governmental Unit 2007 2008 2009 2010 2011 County of Hennepin City of New Hope ISD 281 0.14295% 0.11842% 0.22209% 0.22881% 0.23107% Metro Mosquito Metro Council Metro Transit Three Rivers Park Dist Park Museum HCRRA Hennepin HRA 3 4. Taxing Authority and Tax Rate History (continued) 0.499% 0.486% 0.489% CITY OF NEW HOPE 0.525% 5 Year Tax Capacity Rate History 0.817% 0.793% Governmental Unit 2007 2008 2009 2010 2011 County of Hennepin 39.110% 38.571% 40.413% 42.056% 45.187% City of New Hope 42.346% 41.995% 41.342% 45.542% 49.249% ISD 281 28.750% 27243% 27.214% 28.621% 34.387% Metro Mosquito 0.499% 0.486% 0.489% 0.461% 0.525% Metro Council 0.877% 0.812% 0.817% 0.793% 0.885% Metro Transit 1.295% 1.264% 1.273% 1.366% 1.539% Three Rivers Park Dist 3.068% 3.137% 3.334% 3.499% 3.765% Park Museum 0.700% 0.719% 0.771% 0.778% 0.815% HCRRA 0.871% 0.979% 0.380% 1.000% 1.246% Hennepin HRA 0.241% 0.397% rd 5. Bonded Indebtedness CITY OF NEW HOPE The TAXING DISTRICT and all the governmental units listed in section 3 having bonded debt, has such debt as shown below. Values shown are Adjusted Taxable Gross Tax Capacities which have been adjusted for Fiscal Disparities Contribution and Distribution, Tax Increment Captured Tax Capacity and 200 KV Transmission Lines. Taxable Net Tax Taxable Net Tax 2011 Capacity of Entire Capacity of Portion Bonded Debt Debt Service Governmental in TAXING DISTRICT as of Tax Capacity Governmental Unit Unit in County in County 12/31/10 Rate County of Hennepin $1,476,968,856 $19,007,650 $1,129,045,000 4.377% City of New Hope 19,007,650 19,007,650 9,590,000 1.025% ISD 281 96,972,904 19,007,650 207,440,000 17.156% Metro Council ** 1,475,835,261 19,007,650 1,283,405,536 0.223% Metro Transit *** 1,403,296,275 19,007,650 ** 1.539% Three Rivers Park Dist 1,082,056,515 19,007,650 83,155,000 1.012% HCRRA 1,476,968,856 19,007,650 41,865,000 1.246% Most recent data available Hennepin County Value Only -Not Hanover or Rockford ** Metropolitan Transit Debt is included in Metropolitan Council Debt 5 6. Tax Levies and Collections CITY OF NEW HOPE Levy Year/Collection Year 2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 Original Gross Tax Levy $ 8,402,567.17 $ 8,759,765.32 $ 8,769,580.51 $ 9,093,206.04 $ 9,229,402.36 Property Tax Credit (308,742.64) (3077671.60) (305,938.61) (335,252.87) (344,433.64) Levy Adjustments (Abatements, (11.62) 32.83 (6,295.46) (4,307.64) 13.09 Additions, Cancellations) Net Tax Levy 8,093,812.91 8,452,126.55 8,457,346.44 8,753,645.53 8,884,981.81 Amount collected during 7,984,889.25 8,343,629.36 8,382,201.89 8,647,588.35 4,450,776.94 collection year Balance due at the end 108,923.66 108,497.19 75,144.55 106,057.18 4,434,204.87 of the collection period Delinquencies Collected (96,691.37) 88,422.84 46,286.16 44,851.40 as of. 05/31/11 Delinquencies Abated or (8,195.67) (12,537.38) (11,988.45) - - Cancelled as of: 12/31/10 Total Remaining 4,036.62 7,536.97 16,869.94 61,205.78 4,434,204.87 Outstanding as of: 05/31/11 2010/2011 Original Gross Tax Levy $ 9,229,402.36 WITNESS my hand and official seal this 9th day of September, 2011. (SEAL) County Auditor If you have any questions about information contained in this certificate, please contact Ellen Bentzen at (612) 348-9959. 9 ADDENDUM DATED DECEMBER 13, 2011 TO PRELIMINARY OFFICIAL STATEMENT DATED DECEMBER 1, 2011 New Issue Rating: Standard & Poor's "AA" $1,330,000 GENERAL OBLIGATION TAXABLE TAX INCREMENT REFUNDING BONDS, SERIES 2012B CITY OF NEW HOPE, MINNESOTA Schedule of Maturity Dates, Principal Amounts, Interest Rates and Yields Term Bonds $105,000; 1.350% Term Bond due February 1, 2016; Yield 1.350%; CUSIP No. 64544P CV3; with mandatory redemption at par in 2015 - 2016 as noted below. Redemption (February 1) Amount 2015 $55,000 2016 $50,000 $105,000; 1.850% Term Bond due February 1, 2018; Yield 1.850%; CUSIP No. 64544P CX9; with mandatory redemption at par in 2017 - 2018 as noted below. Redemption (February 1) Amount 2017 $50,000 2018 $55,000 $115,000; 2.500% Term Bond due February 1, 2020; Yield 2.500%; CUSIP No. 64544P CZ4; with mandatory redemption at par in 2019 - 2020 as noted below. Redemption (February 1) Amount 2019 $55,000 2020 $60,000 $140,000; 3.000% Term Bond due February 1, 2022; Yield 3.000%; CUSIP No. 64544P DB6; with mandatory redemption at par in 2021 - 2022 as noted below. Redemption (February 1) Amount 2021 $65,000 2022 $75,000 $175,000; 3.500% Term Bond due February 1, 2024; Yield 3.500%; CUSIP No. 64544P DD2; with mandatory redemption at par in 2023 - 2024 as noted below. Redemption (February 1) Amount 2023 $85,000 2024 $90,000 $190,000; 3.850% Term Bond due February 1, 2026; Yield 3.850%; CUSIP No. 64544P DF7; with mandatory redemption at par in 2025 - 2026 as noted below. Redemption (Februaryl) Amount 2025 $95,000 2026 $95,000 Serial Bonds Term Bond $195,000; 4.650% Term Bond due February 1, 2031; Yield 4.650%; CUSIP No. 64544P 131-4; with mandatory redemption at par in 2030 - 2031 as noted below. Redemption (February 1) Amount 2030 $100,000 2031 $95,000 Bonds maturing, or subject to mandatory redemption, on February 1, 2023 and thereafter are subject to call for prior redemption on February 1, 2022 and any date thereafter at par. Northland Securities, Inc. has agreed to purchase the Bonds from the City for an aggregate price of $1,313,375.00 plus accrued interest to the date of delivery. It is expected that the Bonds will be available for delivery on or about January 11, 2012. 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 DECEMBER 1, 2011, 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. NORTHLAND SECURITIES, INC. Minneapolis, Minnesota CUSIP Maturity Interest Base (February 1) Amount Rate Yield 64544P 2027 $105,000 4.050% 4.050% DG5 2028 $100,000 4.250% 4.250% DH3 2029 $100,000 4.450% 4.450% DJ9 Term Bond $195,000; 4.650% Term Bond due February 1, 2031; Yield 4.650%; CUSIP No. 64544P 131-4; with mandatory redemption at par in 2030 - 2031 as noted below. Redemption (February 1) Amount 2030 $100,000 2031 $95,000 Bonds maturing, or subject to mandatory redemption, on February 1, 2023 and thereafter are subject to call for prior redemption on February 1, 2022 and any date thereafter at par. Northland Securities, Inc. has agreed to purchase the Bonds from the City for an aggregate price of $1,313,375.00 plus accrued interest to the date of delivery. It is expected that the Bonds will be available for delivery on or about January 11, 2012. 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 DECEMBER 1, 2011, 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. NORTHLAND SECURITIES, INC. Minneapolis, Minnesota In the opinion of Dorsey & nilneyLLP, Bond Counsel, based on presentfederal andMinnesoto laws, regulations, rulings and decisions, and assumingcompliance with certain covenants, interest to be paid on the Series 2012A 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 fax preference forfederal or Minnesota alternative minimum tax purposes; but is included in adjusted current earnings of corporations forfederal allcrnative minimum tax purposes. Such interest is included in taxable income forpurposes of the Minnesota franchise tax on corporations andfinancial institutions. See"Tax Exemption and Related Tax Considerations" herein. Interest on the Series 2012B Bonds is includable in gross income of the recipient for United States and State of Minnesota income tax purposes according to present federal and Minnesota laws, regulations, rulings and decisions. The City will designate the Series 2012A Bonds as "qualified tax-exempt obligations "forpurposes of Section 265(b)(3) ofthe Code relating to the ability offinancial institutions to deduct from income for federal income tax purposes, a portion of the interest expense that is allocable to carrying and acquiring tax-exempt obligations. Sections 265(a)(1) and 291 of the Code impose additional limitations on the deductibility of such interest expense. The City will not designate the Series 2012B Bonds as "qualified tax-exempt obligations"pursuant to Section 265 of the Internal Revenue Code of 1986, as amended. New Issues Rating Application Made: Standard 8 Poor's (Series 2012A Bonds and Series 2012B Bonds) PRELIMINARY OFFICIAL STATEMENT DATED DECEMBER 1, 2011 CITY OF NEW HOPE, MINNESOTA (Hennepin County) $2,760,000* GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2012A $1,330,000** GENERAL OBLIGATION TAXABLE TAX INCREMENT REFUNDING BONDS, SERIES 2012B PROPOSAL OPENING: December 12, 2011, 12:00 Noon., C.T. CONSIDERATION: December 12, 2011, 7:00 P.M., C.T. PURPOSE/AUTHORITY/SECURITY: The $2,760,000 General Obligation Tax Increment Refunding Bonds, Series 2012A (the "Series 2012A Bonds") me being issued by the City of New Hope, Minnesota (the "City"), pursuant to Minnesota Statutes, Chapters 469 and 475, for the purpose of effecting an advance crossover refunding of the 2015 through 2025 maturities of the City's $4,080,000 General Obligation Tax Increment Bonds, Series 2004, dated April 1, 2004. The $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B (the "Series 2012B Bonds") are being issued pursuant to Minnesota Statutes, Chapters 469 and 475, for the purpose of effecting an advance crossover refunding of the 2015 through 2031 maturities of the City's $1,370,000 General Obligation Taxable Tax Increment Bonds, Series 2005A, dated March 1, 2005. The Series 2012A Bonds and the Series 2012B 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 approving legal opinions of Dorsey & Whitney LLP, Minneapolis, Minnesota. SERIES 2012A BONDS 0128 BOND DATE OF SERIES 2012A BONDS: January 11, 2012 DATE OF SERIES 2012B BONDS: January 11, 2012 MATURITY: February I as follows: Year Amount* Year Amount* 2015 $225,000 2024 $275,000 2016 230,000 2025 285,000 2017 235,000 2018 240,000 2019 245,000 2020 245,000 2021 250,000 2022 260,000 2023 270,000 ADJUSTMENT: * See "Adjustment Option" herein. TERM BONDS: See "Terrn Bond Option" herein. INTEREST: August 1, 2012 and semiannually thereafter. REDEMPTION: Series 2012A Bonds maturing February 1, 2021 and thereafter are subject to call for prior redemption on February 1, 2020 and any date thereafter, at par. MINIMUM PROPOSAL: $2,732,400. GOOD FAITH DEPOSIT: $55,200. PAYING AGENT: Bond Trust Services Corporation, Roseville, MN. ESCROW AGENT: U.S. Bank National Association, St. Paul, MN. BOOK -ENTRY -ONLY: See "Book -Entry -Only System" herein. MATURITY: February I as follows Year Amount** Yew Amount** 2015 $55,000 2024 $90,000 2016 50,000 2025 95,000 2017 50,000 2026 95,000 2018 55,000 2027 105,000 2019 55,000 2028 100,000 2020 60,000 2029 100,000 2021 65,000 2030 100,000 2022 75,000 2031 95,000 2023 85,000 ADJUSTMENT: ** See "Adjustment Option" herein. TERM BONDS: See "Term Bond Option" herein. INTEREST: August 1, 2012 and semiannually thereafter. REDEMPTION: Series 2012B Bonds maturing February 1, 2023 and thereafter are subject to call for prior redemption on February 1, 2022 and any date thereafter, at par. MINIMUM PROPOSAL: $1,313,375. GOOD FAITH DEPOSIT: $26,600. PAYING AGENT: Bond Trust Services Corporation, Roseville, MN. ESCROW AGENT: U.S. Bank National Association, St. Paul, MN. 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 constitutes "Final Official Statement" of the City with respect to the Series 2012A Bonds and Series 2012B Bonds, as defined in S.E.C. Rule 15x2-12. EHLERS LEADERS IN PUBLIC FINANCE wm.GhleI"S-ICIC.com Minnesota phone 651-697-8500 3060 Centre Pointe Drive Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 5 511 3-11 22 CITY COUNCIL Term Expires Kathi Hemken Mayor January, 2013 John Elder Council Member January, 2015 Andy Hoffe Council Member January, 2013 Eric Lammle Council Member January, 2013 Daniel Sumner Council Member January, 2015 ADMINISTRATION Kirk McDonald, City Manager Valerie Leone, City Clerk PROFESSIONAL SERVICES Dorsey & Whitney LLP, Bond Counsel, Minneapolis, Minnesota Ehlers & Associates, Inc., Financial Advisors, Roseville, Minnesota (Other offices located in Brookfield, Wisconsin and Lisle, Illinois) iv INTRODUCTORY STATEMENT This Preliminary Official Statement contains certain information regarding the City of New Hope, Minnesota (the "City") and the issuance of its $2,760,000 General Obligation Tax Increment Refunding Bonds, Series 2012A (the "Series 2012A Bonds") and $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B (the "Series 2012B Bonds"), collectively referred to herein as 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 forms of the Series 2012A Bonds and the Series 2012B Bonds to be included in the resolutions authorizing the sale of the Series 2012A Bonds and the Series 2012B Bonds to be adopted by the City Council on December 12, 2011. 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 SERIES 2012A BONDS GENERAL The Series 2012A 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 January 11, 2012. The Series 2012A 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 August 1, 2012, to the registered owners of the Series 2012A 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 Series 2012A Bonds of the same maturity will bear interest from date of issue until paid at a single, uniform rate. The Series 2012A 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 Series 2012A Bonds are held under the book -entry system, beneficial ownership interests in the Series 2012A Bonds may be acquired in book -entry form only, and all payments of principal of, premium, if any, and interest on the Series 2012A 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 Series 2012A Bonds shall be payable as provided in the resolution awarding the sale of the Series 2012A Bonds. The City has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the "Paying Agent") and U.S. Bank National Association, St. Paul, Minnesota, to act as escrow agent (the "Escrow Agent"). The City will pay the charges for Paying Agent and Escrow Agent services. The City reserves the right to remove the Paying Agent and/or Escrow Agent and to appoint a successor. OPTIONAL REDEMPTION At the option of the City, Series 2012A Bonds maturing on or after February 1, 2021 shall be subject to redemption prior to maturity on February 1, 2020 and on any date thereafter, at a price of par plus accrued interest. Redemption may be in whole or in part of the Series 2012A Bonds subject to prepayment. If redemption is in part, the selection of the amounts and maturities of the Series 2012A Bonds to be redeemed shall be at the discretion of the City. If only part of the Series 2012A Bonds having a common maturity date are called for redemption, then 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 redemption shall be sent by mail not more than 60 days and not fewer than 30 days prior to the date fixed for redemption to the registered owner of each Series 2012A Bond to be redeemed at the address shown on the registration books. AUTHORITY; PURPOSE The $2,760,000 General Obligation Tax Increment Refunding Bonds, Series 2012A (the "Series 2012A Bonds") are being issued by the City ofNew Hope, Minnesota (the "City"), pursuant to Minnesota Statutes, Chapters 469 and 475, for the purpose of effecting an advance crossover refunding of the 2015 through 2025 maturities of the City's $4,080,000 General Obligation Tax Increment Bonds, Series 2004 (the "Series 2004 Bonds"), dated April 1, 2004. Following are the maturities of the Series 2004 Bonds which are being refunded by this issue: Date of Maturities Principal Refunded Call Call Being Interest to be Issue Being Refunded Issue Date Price Refunded Rates Refunded Series 2004 Bonds 4/01/04 2/01/14 Par 2015 3.40% $ 190,000 2016 3.50% 200,000 2017 3.60% 205,000 2018 3.70% 215,000 2019 3.80% 225,000 2020 3.90% 230,000 2021 4.00% 240,000 2022 4.10% 250,000 2023 4.20% 265,000 2024 4.25% 275,000 2025 4.30% 290.000 Total Series 2004 Bonds Being Refunded $2.585.000 The Series 2012A Bonds are being sold in advance of the call date of the Series 2004 Bonds and will be invested in accordance with the Internal Revenue Code of 1986, as amended. Acceptance of a proposal is dependent upon a satisfactory escrow account being established in an amount sufficient to pay interest on the Series 2012A Bonds through February 1, 2014 and to pay the callable principal on the February 1, 2014 call date. The City will establish an escrow account with direct obligations of the U.S. Government. Actuarial services necessary to insure adequacy of the escrow account to provide timely payment of the Series 2004 Bonds to be refunded on the call date will be performed by a certified public accountant. The City will continue to pay debt service on the Series 2004 Bonds until the call date. Interest on the Series 2012A Bonds due August 1, 2012 through February 1, 2014 will be paid from the escrow account established with proceeds of the Bonds. ESTIMATED SOURCES AND USES Sources Par Amount of Series 2012A Bonds $2,760,000 Total Sources $2,760,000 Uses Deposit to Crossover Escrow Fund $2,687,058 Contingency 4,342 Discount Allowance 27,600 Finance Related Expenses 41,000 Total Uses SECURITY $2,760,000 The Series 2012A 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. It is the intention of the City to pay principal and interest on the Series 2012A Bonds from tax increment revenues generated by existing development within Tax Increment Financing District No. 03-1, for which the Series 2004 Bonds were originally issued. If tax increment revenues are insufficient to meet principal and interest on the Series 2012A Bonds, the City is required to levy ad valorem taxes without limit as to rate or amount on all taxable property in the City to make up the deficiency. 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 Series 2012A 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 Series 2012A 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 Series 2012A Bond proceeds and the facilities financed with such proceeds; restrictions on the investment of Series 2012A 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 Series 2012A Bonds to be includable in federal gross income or in Minnesota taxable net income retroactively to their date of issue. Compliance with the Tax Covenants will satisfy the current requirements of the Code with respect to exemption of interest on the Series 2012A Bonds. No provision has been made for redemption of or for an increase in the interest rate on the Series 2012A Bonds in the event that interest on the Series 2012A Bonds becomes includable in federal gross income or in Minnesota taxable net income. Related Tax Considerations Interest on the Series 2012A Bonds is not an item of tax preference for federal 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 Series 2012A Bonds into account in determining the taxability of such benefits. Passive investment income, including interest on the Series 2012A 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 Series 2012A Bonds (see "QUALIFIED TAX-EXEMPT OBLIGATIONS" or, in the case of a financial institution, that portion of the Owner's interest expense allocated to the Series 2012B Bonds, and Minnesota law similarly denies a deduction for such interest in the case of individuals, estates and trusts. Indebtedness may be allocated to the Series 2012A Bonds for this purpose even though not directly traceable to the purchase of the Series 2012A Bonds. Federal and Minnesota laws also restrict the deductibility of other expenses allocable to the Series 2012A Bonds. Because of the Code's basis reduction rules for amortizable bond premium, Bondholders who acquire Series 2012A Bonds at a premium might recognize taxable gain upon sale of the Series 2012A Bonds, even if the Series 2012A Bonds are sold for an amount equal to or less than their original cost. The market value and marketability of the Series 2012A Bonds may be adversely affected by future changes in federal or Minnesota tax treatment of interest on the Series 2012A Bonds or by future reductions in income tax rates. THE FOREGOING IS NOT INTENDED TO BE AN EXHAUSTIVE DISCUSSION OF COLLATERAL TAX CONSEQUENCES ARISING FROM OWNERSHIP OR DISPOSITION OF THE SERIES 2012A BONDS OR RECEIPT OF INTEREST ON THE SERIES 2012A 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 Series 2012A 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. THE SERIES 2012B BONDS GENERAL The Series 2012B 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 January 11, 2012. The Series 2012B 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 August 1, 2012, to the registered owners of the Series 2012B 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 Series 2012B Bonds of the same maturity will bear interest from date of issue until paid at a single, uniform rate. The Series 2012B 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 Series 2012B Bonds are held under the book -entry system, beneficial ownership interests in the Series 2012B Bonds may be acquired in book -entry form only, and all payments of principal of, premium, if any, and interest on the Series 2012B 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 Series 2012B Bonds shall be payable as provided in the resolution awarding the sale of the Series 2012B Bonds. The City has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the "Paying Agent") and U.S. Bank National Association, St. Paul, Minnesota, to act as escrow agent (the "Escrow Agent"). The City will pay the charges for Paying Agent and Escrow Agent services. The City reserves the right to remove the Paying Agent and/or Escrow Agent and to appoint a successor. OPTIONAL REDEMPTION At the option of the City, Series 2012B Bonds maturing on or after February 1, 2023 shall be subject to prior payment on February 1, 2022 or any date thereafter, at a price of par plus accrued interest. Redemption may be in whole or in part of the Series 2012B Bonds subject to prepayment. If redemption is in part, the selection of the amounts and maturities of the Series 2012B Bonds to be prepaid shall be at the discretion of the City. If only part of the Series 2012B Bonds having a common maturity date are called for prepayment, the City or Paying Agent, if any, will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed. Notice of such call shall be given by mailing a notice not more than 60 and not fewer than 30 days prior to the date fixed for redemption to the registered owner of each Series 2012B Bond to be redeemed at the address shown on the registration books. AUTHORITY; PURPOSE The $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B (the "Series 2012B Bonds") are being issued by the City ofNew Hope, Minnesota (the "City"), pursuant to Minnesota Statutes, Chapters 469 and 475, for the purpose of effecting an advance crossover refunding of the 2015 through 2031 maturities of the City's $1,370,000 General Obligation Taxable Tax Increment Bonds, Series 2005A (the "Series 2005A Bonds"), dated March 1, 2005. Following are the maturities of the Series 2005A Bonds which are being refunded by this issue: Issue Being Refunded Series 2005A Bonds Date of Refunded Call Call Issue Date Price 3/01/05 2/01/14 Par Total Series 2005A Bonds Being Refunded Maturities Principal Being Interest to be Refunded Rates Refunded 2015 5.60% $ 35,000 2016 5.60% 35,000 2017 5.65% 35,000 2018 5.65% 40,000 2019 5.65% 40,000 2020 5.65% 50,000 2021 5.65% 55,000 2022 5.65% 65,000 2023 5.65% 75,000 2024 5.65% 85,000 2025 5.65% 90,000 2026 5.65% 90,000 2027 5.65% 100,000 2028 5.65% 100,000 2029 5.65% 100,000 2030 5.65% 100,000 2031 5.65% 100.000 The Series 2012B Bonds are being sold in advance of the call date of the Series 2005A Bonds and will be invested in accordance with the Internal Revenue Code of 1986, as amended. Acceptance of a proposal is dependent upon a satisfactory escrow account being established in an amount sufficient to pay interest on the Series 2012B Bonds through February 1, 2014 and to pay the callable principal on the February 1, 2014 call date. The City will establish an escrow account with direct obligations of the U.S. Government, securities whose principal and interest are guaranteed by the United States, or securities issued by agencies of the United States which are authorized under state law as permitted securities for refunding escrow accounts. Actuarial services necessary to insure adequacy of the escrow account to provide timely payment of the Series 2005A Bonds to be refunded on the call date will be performed by a certified public accountant. The City will continue to pay debt service on the Series 2005A Bonds until the call date. Interest on the Series 2012B Bonds due August 1, 2012 through February 1, 2014 will be paid from the escrow account established with proceeds of the Bonds. SOURCES AND USES Sources Par Amount of Series 2012B Bonds $1,330,000 Total Sources $1,330,000 Uses Deposit to Crossover Escrow Fund $1,282,632 Contingency 743 Discount Allowance 16,625 Finance Related Expenses 30,000 Total Uses $1,330,000 SECURITY The Series 2012B 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. It is the intention of the City to pay principal and interest on the Series 2012B Bonds from tax increment revenues generated by existing development within Tax Increment Financing District No. 04-02, for which the Series 2005A Bonds were originally issued. If tax increment revenues are insufficient to meet principal and interest on the Series 2012B Bonds, the City is required to levy ad valorem taxes without limit as to rate or amount on all taxable property in the City to make up the deficiency. TAXABILITY OF INTEREST Under present federal and Minnesota laws, regulations, rulings and decisions, interest on the Series 2012B Bonds of this offering is includable in gross income for federal income tax purposes and in taxable net income of individuals, estates or trusts for Minnesota income tax purposes. NON-QUALIFIED TAX-EXEMPT OBLIGATIONS The City will not designate the Series 2012B Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. PROVISIONS COMMON TO BOTH THE SERIES 2012A BONDS AND THE SERIES 2012B BONDS The following information pertains to both the Series 2012A Bonds and the Series 2012B Bonds which are collectively referred to hereinafter as the "Bonds." CONTINUING DISCLOSURE In order to permit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds, to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Rule"), the City will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds, in the Award Resolution, to provide annual reports of specified information and notice of the occurrence of certain events, if material, as hereinafter described (the "Disclosure Covenants"). The information to be provided on an annual basis, the events as to which notice is to be given, if material, and a summary of other provisions of the Disclosure Covenants, including termination, amendment and remedies, are set forth in Appendix D to this Official Statement. The City has complied in all material respects with any previous undertaking under the Rule. Breach of the Disclosure Covenants will not constitute a default or an "Event of Default" under the Bonds or the Award 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 in substantially the form attached hereto as Exhibit B will be furnished by Dorsey & Whitney LLP, Minneapolis, Minnesota, bond counsel to the City. RATING General obligation debt of the City, with the exception of any outstanding credit enhanced issues, is currently rated "AA-" by Standard & Poor's. The City has requested a rating on the Bonds 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. 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. PURCHASER Prior to delivery, the purchaser will be required to furnish the City, at closing, certifications that (i) all of the Bonds have been the subject of a bona fide initial offering to the general public (excluding bond houses, brokers, or other persons or organizations acting in the capacity of underwriters or wholesalers) (the "Public") at the prices set forth in the Official Statement, and (ii) as of the date of award of the Bonds to the purchaser, the purchaser reasonably expected that at least 10% of each maturity of the Bonds would be sold to the Public at such public offering prices or lower prices; in addition to certifications with respect to actual sales of the Bonds that are in form and substance satisfactory to the City and bond counsel. 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 (tax increment revenues) 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 Obligations 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 Agreement for continuing disclosure (see "Continuing Disclosure") 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 of Minnesota 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 Series 2012A 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. Proposed Legislation: On September 13, 2011, the Majority Leader of the U.S. Senate, at the request of the President, introduced the American Jobs Act of 2011 (the 'Jobs Bill"). A provision in the Jobs Bill, If enacted as introduced, would result in federal income tax being imposed on a portion of the interest received by certain individual owners of state and local bonds, for taxable years beginning on or after January 1, 2013. Although a revised version on the Jobs Bill failed on October 11, 2011 to receive the number of votes needed in the Senate to proceed to a vote on the merits, certain provisions in the Jobs Bill, including the provision relating to interest on state and local bonds, might still be considered. No prediction is made whether this provision will be enacted as proposed or concerning other future legislation affecting tax treatment of interest on the Series 2012A Bonds. Prospective purchasers should consult with their own tax advisors regarding the Jobs Bill and any other pending or proposed federal income tax legislation. 10 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 Residential homestead' Agricultural homestead' Agricultural non -homestead Seasonal recreational residential Residential non -homestead: Industrial/Commerciat[Utility4 2005/09 First $500,000 - 1.00% Over $500,000 - 1.25% First $500,000 HGA - 1.00% Over $500,000 HGA - 1.25% First $890,000 - 0.50%2 Over $890,000 - 1.00% 2 Land - 1.00%' First $500,000 - 1.00%' Over $500,000 - 1.25%' 1 unit - Ist $500,000 - 1.00% Over $500,000 - 1.25% 2-3 units - 1.25% 4 or more - 1.25% Small City' - 1.25% First $150,000 - 1.50% Over $150,000 - 2.00% 2009/10 First $500,000 - 1.00% Over $500,000 - 1.25% First $500,000 HGA - 1.00% Over $500,000 HGA - 1.25% First $1,010,000- 0.50%' Over $1,010,000 - 1.00%2 Land - 1.00%2 First $500,000 - 1.00%' Over $500,000 - 1.25%' 1 unit - I st $500,000 - 1.00% Over $500,000 - 1.25% 2-3 units - 1.25% 4 or more - 1.25% Small City 4 - 1.25% First $150,000 - 1.50% Over $150,000 - 2.00% 2010/11 First $500,000 - 1.00% Over $500,000 - 1.25% First $500,000 HGA - 1.00% Over $500,000 HGA - 1.25% First $1,140,000 - 0.50% 2 Over $1,140,000 - 1.00%' Land - 1.00%2 First $500,000 - 1.00%' Over $500,000 - 1.25%' 1 unit - 1 st $500,000 - 1.00% Over $500,000 - 1.25% 2-3 units - 1.25% 4 or more - 1.25% Small City"- 1.25% First $150,000 - 1.50% Over $150,000 - 2.00% I A residential property qualifies as "homestead" if it is occupied by the owner or a relative of the owner on the assessment date. z Applies to land and buildings. Exempt from referendum market value tax. 3 Exempt from referendum market value tax. 4 The estimated market value of utility property is determined by the Minnesota Department of Revenue. 11 CURRENT PROPERTY VALUATIONS Estimated Full Value of Taxable Property, 2010/11 Real Estate Personal Property Total Valuation Less: Captured Tax Increment Tax Capacity2 Fiscal Disparities Contribution' Taxable Net Tax Capacity Plus: Fiscal Disparities Distribution' Adjusted Taxable Net Tax Capacity 2010/11 Assessor's Taxable Market Value $1,492,408,000 8,162,100 $1,500,570,100 2010/11 Net Tax Capacity $18,462,796 159,492 $18,622,288 (1,044,830) (2,466,459) $15,110,999 3,896,651 $19,007,650 21 According to the Minnesota Department of Revenue, the Assessor's Taxable Market Value (the "ATMV") for the City of New Hope is about 101.2% 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 1.012 and adding personal property and mobile home ATMV, if any, results in an "Estimated Full Value of Taxable Property" for the City of $1,482,873,562. The captured tax increment value shown above represents the captured net tax capacity of tax increment financing districts in the City of New Hope. ' 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. 12 2010/11 NET TAX CAPACITY BY CLASSIFICATION Residential homestead Commercial/industrial Railroad operating property Non -homestead residential Commercial & residential seasonal/rec. Personal property Total TREND OF VALUATIONS 2010/11 Net Tax Capacity $ 9,785,819 6,375,638 30,828 2,269,881 630 159,492 $18,622,288 Percent of Total Net Tax Capacity 52.55% 34.24% 0.17% 12.19% 0.00% 0.86% 100.00% Adjusted Assessor's Taxable Levy Taxable Net Tax Year Market Value Capacity' 2006/07 $1,692,662,000 $17,052,108 2007/08 1,750,807,800 17,461,217 2008/09 1,732,235,700 17,357,938 2009/10 1,625,802,600 20,012,449 2010/11 1,500,570,100 18,622,288 2010/11 Net Tax Capacity $ 9,785,819 6,375,638 30,828 2,269,881 630 159,492 $18,622,288 Percent of Total Net Tax Capacity 52.55% 34.24% 0.17% 12.19% 0.00% 0.86% 100.00% Adjusted Taxable Net Tax Percent +/- in Assessor's Capacity Taxable Market Value $19,858,810 + 7.72% 20,859,409 + 3.44% 21,179,543 - 1.06% 20,180,906 - 6.14% 19,007,650 - 7.70% ' Net Tax Capacity is before fiscal disparities adjustments and includes tax increment values. z Adjusted Taxable Net Tax Capacity is after fiscal disparities adjustments and does not include tax increment values. 13 LARGER TAXPAYING PARCELS' City's Total 2010/11 Net Tax Capacity $18,622,288 Source: Current Property Valuations, Net Tax Capacity by Classification, Trend of Valuations and Larger Taxpaying Parcels have been furnished by Hennepin County. 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. z Previously listed as Paddock Laboratories LLC. 14 Percent of 2010/11 City's Total Net Tax Net Tax Taxpayer Type of Property Capacity Capacity Geneva Management Sery LLC Industrial $ 159,250 0.86% Perrigo Companyz Industrial 156,730 0.84% St. Therese Home Inc. Apartment 148,763 0.80% Cobalt Industrial Reit I1 Industrial 143,850 0.77% New Hope Distribution Center LLC Industrial 139,250 0.75% Long Ridge Industrial Portfolio Industrial 135,250 0.73% Minnesota Masonic Home No Ridge Apartment 133,450 0.72% FLS Properties Industrial 132,250 0.71% New Hope/US Swim Partnership Commercial 131,250 0.70% Welsh Corporate Headquarters Industrial 129.250 0.69% Total $1,409,293 7.57% City's Total 2010/11 Net Tax Capacity $18,622,288 Source: Current Property Valuations, Net Tax Capacity by Classification, Trend of Valuations and Larger Taxpaying Parcels have been furnished by Hennepin County. 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. z Previously listed as Paddock Laboratories LLC. 14 DEBT DIRECT DEBT' General Obligation Debt (see schedules following) Total g.o. debt being paid from revenues Total g.o. debt being paid from tax increment revenues (includes the Series 2012A Bonds and the Series 2012B Bonds of this offering) Total g.o. debt being paid from revenues and taxes Total General Obligation Debt Lease Purchase Obligations (see schedule following) Total lease purchase obligations paid by annual appropriations' Total EDA lease purchase obligations paid by annual appropriations' ' Outstanding debt is as of the dated date of the Bonds. 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Ul C n 0 a a Q L L Q E O LL "O Q o O a c cn V d W G m z Z. d y � a D v c W C C O 'U p y rn _ � a Wo m N N z p c c LL m y � LD 0 = U O U w z 4 d N r O F d P O C m m m o 0 o a m o m c r m a` N O C a m o m V t0 !O N c r vi a` `m a m i U C N N W IL 19 F O w W Z Z_ W IL O 2 W Z O LL O m Y O F a V a w a 2 a � C LL Q O r o F IL O �O 2 •L r Q c F C m Z y dao IL d c O o W 0 m rn W a G 00 ii m A N O 0 O d d r Q N O U 0 4 W fn Z a m H a � o Q `n m m Y c N m e �nm� m mo Nm e�nmrm N N N N N N N N N y C N N N N N N N N N N N N N N N N N N W LL a o 0 o v o e a e v o o e v o < e a0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 a MSM 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o 0 0 •� a o 0 o O o O o 0 0 0 0 0 0 0 0 0 1 N O O o O N N h N N N N i(l N N N N � ai of mai ai ai ai ai ai ai ai of aim moi O F y N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N O e F N O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N F d N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N O n n n r n n n` r n n n` r n n r 10 N O O O O O O O O O O O O O O O O 00 00 F .V O O L o 0 m m o 0 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N d N N N N N N N N N N N N N N N N N W y r` n n n r n n n n` n n n n n m n0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O o c N N 0 0 a N N ai m `m d m q'v o 0 0 0 o e o 0 0 0 0 0 0 0 0 0 0 y L N N N N N N N N N N N N N N N N N LL W 20 M n 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; (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; and (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 (e.g. the Series 2012A Bonds and the Series 2012B Bonds of this offering). Assessor's Taxable Market Value $1,500,570,100 Multiply by 3% 0.03 Statutory Debt Limit $ 45,017,103 Less: Long -Term Debt Outstanding Being Paid Solely from Taxes (1,245,000) Unused Debt Limit $ 43,772,103 Includes the equipment certificate portion of the City's $1,850,000 General Obligation Certificates of Indebtedness and Refunding Bonds, Series 2010B ($1,245,000 equipment certificate portion remaining). 21 OVERLAPPING DEBT' 2010/11 Adjusted City's Taxable Net % In Total Proportionate Taxing District Tax Capacity City G.O. Debt Share Hennepin County $1,476,968,856 1.2869% 2 $674,430,000 $ 8,679,485 I.S.D. No. 281 (Robbinsdale) 96,972,904 19.6010% 173,935,000 34,092,983 Metropolitan Council 3,312,665,183 0.5738% 3 213,645,000 1,225,895 Three Rivers Park District 1,082,056,515 1.7566% 71,045,000 1,247,993 City's Share of Total Overlapping Debt $45,246,356 Only those taxing jurisdictions with general obligation debt outstanding are included in this section. Does not include non -general obligation debt, self-supporting general obligation 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. 22 DEBT RATIOS Direct G.O. Debt Being Paid From: Revenues Tax Increment Revenues Revenues & Taxes Total General Obligation Debt Less: Funds on Hand' Less: G.O. Debt Paid Entirely from Revenues= Net General Obligation Debt City's Share of Total Overlapping Debt Total DEBT PAYMENT HISTORY Debt/Estimated Debtt20,339 Full Value of 2010 U.S. Taxable Property Census G.O. Debt ($1,482,873,562) Population $ 1,370,000 4,720,000 1,850,000 $ 7,940,000 (221,419) (1,975,000) $ 5,743,581 0.39% $282.39 $45,246,356 3.05% $2,224.61 $50,989,937 3.44% $2,507.00 The City has never defaulted in the payment of principal and interest on its debt. FUTURE FINANCING The City reports no plans for additional financing in the next three months. 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. z Debt service on the City's general obligation revenue debt is being paid entirely from revenues and therefore is considered self-supporting debt. Includes the portion of the City's $1,850,000 General Obligation Certificates of Indebtedness and Refunding Bonds, Series 2010B payable entirely from revenues ($605,000 remaining). 23 2008/09 TAX LEVIES AND COLLECTIONS TAX COLLECTIONS 9,092,711 2010/11 9,353,422 Certified Total Collected Collected Tax Year Levy' Following Year to Datez 2006/07 $ 8,402,096 $ 8,293,172 $ 8,398,059 2007/08 8,759,354 8,650,857 8,751,817 2008/09 8,768,965 2009/10 9,092,711 2010/11 9,353,422 8,693,820 8,752,095 % Collected 99.95% 99.91% 99.81% 8,986,654 9,031,505 99.33% r______________________________________________________ - ---- --- 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 RATES' City of New Hope 2006/07 42.346% 2007/08 41.995% 2008/09 2009/10 2010/11 41.342% 45.542% 49.249% Source: Tax Collections and Tax Capacity Rates have been famished by Hennepin County. 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. ' This reflects the Final Levy Certification of the City after all adjustments have been made. z Collections are through May 31, 2011. ' After reduction for state aids. Does not include the statewide general property tax against commercial/industrial, non -homestead resorts and seasonal recreational residential property. 24 THE CITY 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 85 full-time, 8 part-time, and 42 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 ofMinnesota(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 L.E.L.S. Local #77 Police Officers L.E.L.S. Local #273 Police Supervisors LU.O.E. Local #49 Status of Contracts Contracts which expired on December 31, 2010 are currently in negotiations. 25 Expiration Date of Current Contract December 31, 2010 December 31, 2010 December 31.2010 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 June 30, 2011) Total Funds on Hand $32,930,360 W. Total Cash Fund and Investments General $ 4,924,752 Special Revenue 3,048,563 Debt Service 4,169,586 Capital Projects 11,342,662 Enterprise Funds 2,044,428 Internal 7,316,090 Escrow 84,279 Total Funds on Hand $32,930,360 W. ENTERPRISE FUNDS Cash flows for the City's enterprise funds have been as follows as of December 31 each year: Water Utility' Total Operating Revenues 2008 2009 2010 Water and Sewer Utilities' N/A N/A (2,807,197) Total Operating Revenues $ 5,151,776 $ 5,110,945 N/A Less: Operating Expenses (4,861,765) (5,165,685) N/A Operating Income $ 290,011 $ (54,740) N/A Plus: Depreciation 246,010 182,683 N/A Revenues Available for Debt Service $ 536,021 $ 127,943 N/A Water Utility' Total Operating Revenues N/A N/A $ 3,047,304 Less: Operating Expenses N/A N/A (2,807,197) Operating Income N/A N/A $ 240,107 Plus: Depreciation N/A N/A 116,731 Revenues Available for Debt Service N/A N/A $ 356,838 Sewer Utility' Total Operating Revenues N/A N/A $ 2,292,300 Less: Operating Expenses N/A N/A (1,862,007) Operating Income N/A N/A $ 430,293 Plus: Depreciation N/A N/A 67,795 Revenues Available for Debt Service N/A N/A $ 498,088 Storm Water Utility Total Operating Revenues $ 951,699 $ 933,828 $ 943,883 Less: Operating Expenses (288,445) (316,216) (347,152) Operating Income $ 663,254 $ 617,612 $ 596,731 Plus: Depreciation 52,679 54,558 61,692 Revenues Available for Debt Service $ 715,933 $ 672,170 $ 658,423 Continued on next page - In 2010, the City split up the operation of the water utility and sewer utility funds. The revenues and expenses from water and sewer operations are reported separately in 2010 resulting in reporting classification differences between 2010 and 2009. 27 ENTERPRISE FUNDS, continued. W*, 2008 2009 2010 Ice Arena Total Operating Revenues $ 655,832 $ 723,476 $ 741,266 Less: Operating Expenses (774,152) (680,276) (697,321) Operating Income $ (118,320) $ 43,200 $ 43,945 Plus: Depreciation 101,614 101,613 101,613 Revenues Available for Debt Service $ (16,706) $ 144,813 $ 145,558 W*, 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 2010 audited financial statement. COMBINED STATEMENT REVENUES Property taxes Franchise taxes Licenses and permits Intergovernmental Charges for services Fines and forfeits Special assessments Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Current General government Public safety Public works Culture and recreation Capital outlay Total Expenditures Excess of revenues over (under) expenditures Other Financing Sources (Uses) FISCAL YEAR ENDING DECEMBER 31 2006 2007 2008 2009 2010 $ 5,368,368 $ 6,087,808 $ 6,228,780 $ 6,524,813 $ 7,044,686 295,431 314,543 312,308 340,497 430,494 289,534 332,351 415,012 226,303 236,378 1,200,712 741,307 960,620 1,298,631 562,450 829,308 954,186 916,889 948,074 1,127,194 266,750 247,794 285,255 236,173 238,961 3,017 3,615 7,293 2,203 1,835 0 0 0 0 43,369 252,554 304,682 255,309 148,774 16,626 3 8,505,674 $ 8,986,286 $ 9,381,466 $ 9,725,468 $ 9,701,993 $1,095,531 $ 1,176,580 $1,302,294 $ 1,183,593 $1,581,180 4,730,022 5,271,537 5,867,739 5,922,454 5,783,154 825,199 883,268 830,900 740,014 989,734 1,602,386 1,633,251 1,677,660 1,693,043 1,594,155 0 0 0 0 2,298 $ 8,253,138 $ 8,964,636 $ 9,678,593 $ 9,539,104 $ 9,950,521 $ 252,536 $ 21,650 $ (297,127) $ 186,364 $ (248,528) Proceeds from sale of capital assets $ 0 $ 0 $ 0 $ 0 $ 1,954 Transfers in 0 0 0 215,510 483,823 Transfers out 0 0 0 0 0 Total Other Financing Sources (Uses) $ 0 $ 0 $ 0 $ 215,510 $ 485,777 Excess of revenues and other financing sources over(under)expenditures and other financing $ 252,536 $ 21,650 $ (297,127) $ 401,874 $ 237,249 uses General Fund Balance January 1 3,975,418 4,227,954 4,249,604 3,952,477 4,354,351 Prior Period Adjustment 0 0 0 0 0 Residual Equity Transfer in (out) 0 0 0 0 0 General Fund Balance December 31 $ 4,227,954 $ 4,249,604 $ 3,952,477 $ 4,354,351 $ 4,591,600 DETAILS OF DECEMBER 31 FUND BALANCE Reserved $ 0 $ 0 $ 0 $ 0 $ 63,753 Unreserved: Designated 3,850,483 4,130,721 3,952,477 4,349,310 4,339,325 Undesignated 377,471 118,883 0 5,041 188,522 Total $4,227,954 $4,249,604 $3,952,477 $4,354,351 $4,591,600 29 GENERAL INFORMATION LOCATION The City of New Hope, with a 2010 U.S. Census population of 20,339 and comprising an area of 5.1 square miles, is located approximately 12 miles northwest of the City of Minneapolis. For additional information regarding the City, please visit their website at www.ci.new-hope.mn.us. LARGER EMPLOYERS Larger employers in the City of New Hope include the following: Firm I.S.D. No. 281 (Robbinsdale) North Ridge Care Center/ Minnesota Masonic Homes Saint Therese Home of New Hope Navarre Corporation Perrigo Company' Coborns Delivers Waymouth Farms, Inc. Parker -Hannifin Oildyne Division Liberty Diversified International Dakota Growers Pasta Co. Estimated No. Type of Business/Product of Employees i Elementary and secondary education 2,000 Nursing home and senior living facilities 800 Nursing home and senior living facilities 630 Compute software, DVD's video games and 413 accessories Pharmaceutical and medicine manufacturing 280 Online grocery and delivery service 240 Snack foods 200 Hydraulics 185 Portfolio management company 170 Agricultural cooperative 150 Includes the total number of school district employees. Not all employees work within the City of New Hope. ' Previously listed as Paddock Laboratories, Inc. El The City is located within the Minneapolis -St. Paul -Bloomington, MN -WI Metropolitan Statistical Area (the "MSA"). Larger employers in the MSA include the following: Firm Allina Hospitals & Clinics State of Minnesota Target Corporation University of Minnesota - Twin Cities Fairview Hospitals & Clinics Park Nicollet Hospitals & Clinics 3M West Thomson Reuters Ameriprise Financial Best Buy, Inc. Source: Infogroup (www.salesgenie.con), written and telephone survey (September, 2011), and the Minnesota Department of Employment and Economic Development. Employment by market sector in the MSA': % of Market Sector Employment Sector Estimated No. Type of Business/Product of Employees Healthcare 24,720 State government and services 21,656 Corporate headquarters and retail stores 18,170 Schools -Universities & Colleges Academic 17,053 Healthcare 16,510 Healthcare 15,670 Manufacturers, distributors and ind. products 12,000 Legal research 7,500 Financial advisory services 7,000 Electronics equipment and services 6,001 Source: Infogroup (www.salesgenie.con), written and telephone survey (September, 2011), and the Minnesota Department of Employment and Economic Development. Employment by market sector in the MSA': % of Market Sector Employment Sector within the MSA Mining & Logging& Construction 3.43% Manufacturing 10.2% Trade, Transportation & Utilities 18.1% Information 2.2% Financial Activities 7.9% Professional & Business Services 15.3% Education & Health Services 15.8% Leisure & Hospitality 9.3% Other Services 4.3% Government 13.4% Total' 100.0% Source: U.S. Bureau of Labor Statistics. Minnesota Management & Budget, Workforce Report 2010. 2 As of September, 2011. ' Non-farm wage and salary employment. 31 BUILDING PERMITS As of September 30, 2011. 32 2007 2008 2009 2010 2011, No. of All Building Permits 1,627 2,560 616 405 286 (including additions and remodelings) Valuation of All Building Permits $17,205,133 $26,824,154 $9,043,344 $10,944,589 $33,708,487 (including additions and remodelings) New Single Familv Homes No. of building permits 2 0 0 1 0 Valuation $1,458,542 $0 $0 $136,320 $0 New Commercial/Industrial No. of building permits 0 1 0 0 2 Valuation $0 $910,000 $0 $0 $26,571,703 As of September 30, 2011. 32 U.S. CENSUS DATA Population Trend: City of New Hope, Minnesota 2000 U.S. Census population 2010 U.S. Census population Percent of Change 2000 - 2010 Income and Age Statistics 1999 per capita income 1999 median household income 1999 median family income 2000 median gross rent 2000 median value owner occupied housing 2000 median age City % of per capita income City % of median family income Housing Statistics All Housing Units 20,873 20,339 -2.56% City of Hennepin State of United New Hope County Minnesota States $23,562 $28,789 $23,198 $21,587 $46,795 $51,711 $47,111 $41,994 $60,424 $65,985 $56,874 $50,046 $687 $654 $566 $602 $136,600 $143,400 $122,400 $119,600 38.3 yrs. 34.9 yrs. 35.4 yrs. 35.3 yrs. State of Minnesota 101.57% 106.24% City of New Hooe 2000 2010 8,744 9,051 Source: 2000 and 2010 Census of Population and Housing. EMPLOYMENT/UNEMPLOYMENT DATA Rates are not compiled for individual communities within counties. Avera¢e Emolovment Year Hennepin County 2007 629,433 2008 627,387 2009 608,275 2010 613,337 2011, October 627,261 United States 109.15% 120.74% Percent of Change 3.51% Average Unemployment Hennepin County State of Minnesota 4.1% 4.6% 4.9% 5.4% 7.6% 8.1% 6.9% 7.3% 5.5% 5.4% Source: Minnesota Department of Employment and Economic Development. 33 3•• ,►,1 1 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, 2010. 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. A-1 MMKR CERTIFIED PUBLIC A C C 0 U N T A N T S INDEPENDENT AUDPCOR' S REPORT City Council and Residents City of New Hope, Minnesota PRINCIPALS Tr,00nr M, Ytontapee, CPA ']Lomas A- Karnovski, CPA Paul A. Rod.,,, i&, CPA William j. Land; CPA Janes H. Eich:cn. CPA Aaron J. Nid.xcn, CPA Victoria L. Hulinka, CPA We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of New Hope, Minnesota (the City) as of and for the year ended December 31, 2010, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2010, and the respective changes in financial position and cash flows, where applicable thereof, and the respective budgetary comparisons for the General Fund and major special revenue funds for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated May 12, 2011 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. (continued) Mallay. Montague. Karnowski, Radoscvich & Co., P.A. 5313 V7a7�sta Boulevard • Suire 410 61i r_nexpoli s, AAN 55916 - Telephone. 952-545-0424 ^ Telefax: 552-545-0569 -•�n•w.mmkr.eom A-2 Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and the Schedule of Funding Progress for the Post -Employment Benefit Plan, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial siatements. The introductory section, combining and individual fund financial statements and schedules, supplementary information, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section, supplementary information, and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. WA&47, Maxair, k",A4Lv t, r; tea, a ' Co . , P. - May 12, 2011 A-3 Management Discussion & Analysis As management of the City of New Hope, we offer readers of the City of New Hope's financial statements this narrative overview and analysis of the financial activities of the City of New Hope for the fiscal year ended December 31, 2010. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which starts on page 9 of this report. Financial Highlights • The assets of the City of New Hope exceeded its liabilities at the close of the most recent fiscal year by $60,276,355 (net assets). Of this amount, $29,219,174 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The government's total net assets increased by $4,212,635. • As of the close of the current fiscal year, the City of New Hope's governmental funds reported combined ending fund balances of $26,535,931, an increase of $2,447,662 in comparison with the prior year. • At the end of the current fiscal year, unreserved fund balance for the General fund was 54,527,847 (45.5 percent) of total General fund expenditures and transfers out. • The City of New Hope's total bonded debt increased by $1,434,816 (17.6 percent) during the current fiscal year. The key factor in this increase was the issuance of new bonds daring 2010. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of New Hope's basic financial statements. The City of New Hope's basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. W Figure A-1 shows how the various parts of this annual report are arranged and related to one another. -------------------- Figure A-1 Fwd Annual Report Format Flnenclel FlnNCMI 9Xauagerxewr'a BOsle Sletemenis ?��� .r�rAr[ re�Yd L rsGafyala -------------------- Government-Wiao Fwd �� Flnenclel FlnNCMI fq r.{� Sla[emenL Sletemenis ?��� .r�rAr[ re�Yd Summary <� Detail Government -wide financial statements —The government -wide financial statements are designed to provide readers with a broad overview of the City of New Hope's finances in a manner similar to a private -sector business. The statement of net assets presents information on all of the City of New hope's assets and liabilities, with the difference between the two reported as net assets. Over time increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of New Hope is improving or deteriorating. The statement ofactivities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus, revenues and expenses are reported in the statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both of the government -wide financial statements distinguish functions of the City of New Hope that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of New Hope include general government, public safety, public works, culture and recreation, economic development, and interest on long-term debt. The business -type activities of the City of New Hope include water utility, sewer utility, golf course, ice arena, stonn water, and street lighting. The government -wide financial statements start on page 35 of this report. A-5 Fund financial statements — Afund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of New Hope, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City of New Hope can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds — Governmental funds are used to account for essentially the same functions reported as governmental activities in the govemment-wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements focus on near-term inflows and outflows ofspendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental.funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -terns impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of New Hope maintains several individual governmental funds. Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, Economic Development Authority, Improvement Bond Redemption, HRA Construction, and Street Infrastructure funds, all of which are considered to be major Rinds. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. The City of New Hope adopts annual appropriated budgets for its General fund and several special revenue funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance with the adopted budgets. The basic governmental fund financial statements start on page 40 of this report. Proprietary funds — The City of New Hope maintains two different types of proprietary funds. Enterpnsefunds are used to report the same functions presented as business-gpe activities in the government -wide financial statements. The City of New Hope uses enterprise funds to account for its water utility, sewer utility, golf course, ice arena, stone water, and street lighting operations. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water utility, sewer utility, golf course, ice arena, storm water, and street lighting funds, all of which are considered to be major funds of the City of New Hope. Internal service funds — These funds are an accounting device used to accumulate and allocate costs internally among the City of New Hope's various functions. The City of New Hope uses internal service funds to account for distribution of vehicle and equipment costs, government -wide costs of insurance coverage and employee leave, and information technology cost allocation. Because all of these services predominately benefit governmental rather than business -type functions, they have been included within governmental activities in the govermnental-wide financial statements. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements start on page 50 of this report. Fiduciaryfunds — These funds are used to account for resources held for the benefit of pal -ties outside the City. Fiduciary Rinds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary Rinds is much like that used for proprietary funds. The basic fiduciary fund financial statements start on page 60 of this report. Notes to the financial statements — The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements start on page 61 of this report. A-6 Other information — The combining statements referred to earlier, in connection with nonmajor governmental funds and internal service funds, are presented immediately following the required supplementary information. Combining and individual fund statements and schedules start on page 95 of this report. Other reports — Additional information related to the General fund start on page 120 of this report. Government -wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the City of New Hope, assets exceeded liabilities by $60,276,355 at the close of the most recent fiscal year. A portion of the City of New Hope's net assets (43.9 percent) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. The City of New Hope uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of New Hope's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. City of New Hope's Net Assets Governmental Activities Business -type Activities Increase Increase 2010 2009 (Decrease) 2010 2009 (Decrease) Assets Current and other assets $ 37,306,228 $ 34,909,537 $ 2,396,691 $ 3,534,787 $ 2,000,315 $ 1,534,472 Capital assets 18,531,181 17,476,454 1,054,727 12,347,186 11,666,444 680,742 Total assets Liabilities Other liabilities Noncurrent liabilities Total liabilities Net assets Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 55,837,409 52,385,991 3,451,418 15,881,973 13,666,7.59 2,215,214 901,018 905,229 (4,211) 391,501 344,430 47,071 7,190,597 6,462,700 727,897 2,959,911 2,276,671 683,240 8,091,615 7,367,929 723,686 3,351,412 2,621,101 730,311 16,495,175 16,411,454 83,721 4,572,601 6,730,905 (2,158,304) 26,678,018 21,875,703 4,802,315 $ 47,745,794 $ 45,018.062 $ 2.727.732 9,989,405 9,395,068 594,337 2,541,156 1,650,590 890,566 $ 12,530.561 $ 11,045,658 $ 1,484,903 The balance of unrestricted net assets ($29,219,174) may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the current fiscalyear, the City is able to report a positive balance in all three categories of net assets, as well as for its separate governmental and business -type activities. Governmental activities - Governmental activities increased the City of New Hope's net assets by $2,727,732. Business -Type activities - The net assets of business -type activities increased by $1,484,903. A-7 The following table indicates the changesin net assets for the City's governmental and business -type activities: City of New Hope's Changes in Net Assets Governmental Activities Business -type Activities Increase Increase 2010 2009 (Decrease) 2010 2009 (Decrease) Revenues Program revenues Charges for services $ 1,870,683 $ 1,710,308 $ 160,375 $ 7,495,808 S 7,293,823 $ 201,985 Operating grants and contributions 1,356,292 586,508 769,784 470,183 66,609 403,574 Capital grants and contributions 787,047 117,544 669,503 30,739 75,209 (44,470) General revenues Property taxes 8,730,979 8,760,482 (29,503) - - Tax increments 1,408,256 1,262,598 145,658 - - Franchise taxes 430,494 438,744 (8,250) - - - General aids and grants 79,529 755,762 (676,233) - - - Miscellaneous 360,242 870,245 (510,003) 17,400 27,234 (9,834) Total revenues 15,023,522 14,502,191 521,331 8,014,130 7,462,875 551,255 Expenses General government 2,552,425 2,244,977 307,448 - - - Public safety 5,964,775 6,218,996 (354,221) - - - Public works 1,625,959 1,191,983 333,976 - - - Culture and recreation 1,899,105 2,053,788 (154,683) - - - Economic development 192,431 - 192,431 - - Interest on long-term debt 252,224 275,532 (23,308) - - - Waterandsewerutility - - - - 5,265,147 (5,265,147) Water utility - - - 2,915,757 - 2,915,757 Sewer utility - - - 1,928,845 - 1,928,845 Golf course - - 346,345 369,579 (23,234) Ice arena - - - 712,153 694,039 18,114 Storm water - - 430,899 393,118 37,781 Street lighting 104,099 126,983 (22,884) Total expenses 12,386,919 12,085,276 301,643 6,438,098 6,848,866 (410,768) Increase (decrease) in net assets before transfers 2,636,603 2,416,915 219,688 1,576,032 614,009 962,023 Transfers 91,129 91,129 (91,129) (91,129) Change in net assets 2,727,732 2,416,915 310,817 1,484,903 614,009 870,894 Net assets, January 1 45,018,062 42,601,147 2,416,915 11,045.658 10,431,649 614,1109 Net assets, December 31 $ 47.745.794 $ 45.018.062 $ 27_27732 $ 12,530,561 $ 11,045,658 $ 1 484 903 During 2010 the City split up the operation of the water utility and sewer utility funds. The revenues and expenses from water and sewer operations will be reported separately in 2010 resulting in reporting classification differences between 2010 and 2009. M Governmental Activities Revenues - The following chart illustrates the City's revenue by source for its governmental activities: Revenues by Source - Governmental Activities rrTaxincrements Franchiset Propenytaxes� / 9.4"x° � 2.9% 58.1% / t l aids and grants unrestricted 0.5% Capital grants and -'`—_Unrestricted investment contrbutimts cammgs 5.2% 2.2% Operating grants and contributions Charges for services Gain on sale of capital 9.0% 12.5% assets 0.2% Expenses - The following chart illustrates the City's expenses and program revenues for its governmental activities: Expenses and Program Revenues - Governmental Activities $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 pS U V u > C 0 W � F A-9 Business -type activities - Business -type activities net assets increased in 2010. Below are the graphs showing the business -type activities revenue and expense comparisons. Charges for services 93.5% $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 Revenue Sources - Business -type Activities Unrestricted investment earnings Operating grants and v.Y io contributions 5.9% Expense and Program Revenues - Business -type Activities ad Waterutility Sewer utility Golf course Icearena Storm water Street fighting A-10 Financial Analysis of the Government's Funds As noted earlier, the City of New Hope uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. Governmental funds - The focus of the City of New Hope's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of New Hope's financing requirements. In particular, unreservedfund balance may serve as a usefid measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year the City of New Hope's governmental funds had combined ending fund balances of $26,535,931, an increase of $2,447,662 in comparison with the prior year. Approximately 65.7 percent of this total amount, $17,428,841, constitutes unreserved fund balance, which is available for spending at the City's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed for other purposes. General Fund — the General fund is the chief operating fund of the City of New Hope. At the end of the current fiscal year, unreserved fund balance of the General fund was $4,527,847, while total fund balance reached $4,591,600. As a measure of the General fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 45.5 percent of total General fund expenditures and transfers out, while total fund balance represents 46.1 percent of that same amount. The City's General fund balance increased $237,249 during the current fiscal year. This increase is primarily due to transfers in from other funds of $483,823, Expenditures were under budget by $201,435. Charges for services exceeded budget by $160,134, while interest on investments, property taxes, and fines and forfeits fell short of budgeted expectations by $93,453, $62,750, and $62,239 respectively. Economic DevelopmentAuthority — the increase of $7,956 in fund balance is due to revenues in excess of expenditures in the amount of $63,083 and a transfer to other funds of $55,127. Improvement Bond Redemption — the increase of $118,860 in fund balance is due to special assessment revenue and interest income exceeding debt service expenditures. HRA Construction — the increase of $1,760,415 is mainly due to tax increment revenue of $1,078,910 and transfers from other funds of $856,153. Street Infrastructure - The increase in fund balance of $917,307 is due to property tax and intergovernmental revenue exceeding capital outlay. Proprietaryfunds - The City of New Hope's proprietary funds provide the sante type of information found in the government - wide financial statements, but in more detail. At the end of the year, unrestricted net assets of the Water Utility, Sewer Utility, Golf Course, Ice Arena, Storm Water, and Street Lighting funds amounted to $2,933,937. Total net assets increased by $1,666,768. General Fund Budgetary Highlights Budget amendments were made during the year to reduce both the anticipated property tax revenue and current expenditures across all functions as well as capital outlay. Both the original and final budgets called for no increase or decrease to fund balance. Actual revenues were over budget by $36,563, and expenditures were under budget by $201,435. • The largest positive revenue variances were charges for services and intergovernmental revenues which were over budget by $160,134 and $99,718 respectively. • The largest negative revenue variances were in interest income, property taxes, and fines and forfeits which were under budget by $93,453, $62,750, and $62,239 respectively. • The largest positive expenditure variances were current public safety and current culture and recreation expenditures which were under budget by $148,737 and $69,526 respectively. • The largest negative expenditure variance was current public works which was over budget by $84,768 but this was offset by the Department of Agriculture's emerald ash borer grant. A-11 Capital Asset and Debt Administration Capital assets The City of New Hope's investment in capital assets for its governmental and business type activities as of December 31, 2010, was $30,878,367 (net of accumulated depreciation). This investment in capital assets includes land, buildings and system improvements, machinery and equipment, park facilities, roads, highways, and bridges. The total increase in the City of New Hope's investment in capital assets for the current fiscal year was 6.0 percent. Major capital asset events during the current fiscal year consisted of projects in process for Winnetka Avenue infrastructure, Bass Lake Road water main improvement, 45'' Avenue pond, 2009 lighted field improvement project, 2011 infrastructure project, and the 2009 retaining wall project. Additionally the City added several public works vehicles and pieces of equipment. Land Buildings and structures Vehicles and equipment Improvements other than buildings Construction in progress Total City of New Hope's Capital Assets (net of accumulated depreciation) Governmental Activities Business -type Activities Increase Increase 2010 2009 (Decrease) 2010 2009 (Decrease) $ 994,268 $ 994,268 $ - $ 485,043 $ 485,043 $ 4,614,974 4,794,884 (179,910) 3,532,432 3,660,499 (128,067) 2,101,082 1,718,680 382,402 889,125 993,997 (104,872) 9,206,129 8,114,641 1,091,488 6,446,689 5,481,573 965,116 1,614,728 1,853,981 (239,253) 993,897 1,045,332 (51,435) $ 18,531,181 $ 17,476,454 $ 1,054,727 $ 12,347,186 $ 11,666,444 $ 680742 Additional information on the City of New Hope's capital assets can be found in Note 3C starting on page 74 of this report. A-12 Debt administration At the end of the current fiscal year, the City of New Hope had total bonded debt outstanding of $9,609,031. Of this amount $1,296,006 will be paid from general property taxes and $4,605,000 from redevelopment district tax increments. Special assessment bonds outstanding at year end totaled $775,000. The remaining $2,933,025 of outstanding bonds at year end were revenue bonds, for which the City has pledged revenue streams from the water utility, sewer utility, and storm water utility for all principal and interest payments due on these bonds. The debt service funds have total fund balance of $4,288,603, all of which is reserved for the payment of debt service. The City has intentionally shifted the philosophy for financing major street improvements away from debt financing to the pay-as-you-go philosophy. The City established the Street and Park Infrastructure Capital Projects Funds in 2001 with dedicated portions of the property tax levy, thereby eliminating this type of debt issuance. City of New Hope's Outstanding Debt Special Assessment Bonds, Tax Increment Bonds, General Obligation Bonds, Revenue Bonds, and other Debt Special assessment bonds Tax increment bonds General obligation bonds and certificates Revenue bonds Capital leases Compensated absences Other postemployment benefits Total Governmental Activities Business -type Activities Increase Increase 2010 2009 (Decrease) 2010 2009 (Decrease) $ 775,000 $ 910,000 $ (135,000) $ 4,605,000 4,795,000 (190,000) 1,296,006 225,000 1,071,006 2,933,025 2244,215 688,810 19,756 27,161 (7,405) 475,772 505,621 (29,849) - - 38,819 27,079 11,740 7,130 5,295 1,835 $ 7,190,597 $ 6,462,700 $ 727,897 $ 2959,911 $ 2,276.671 $ G83,240 The City issued General Obligation Utility Revenue Bonds, General Obligation Certificates of Indebtedness, and Refunding Bonds during 2010. The City of New Hope maintains an "Al" rating from Moody's Investors Service. Additional information on the City of New Hope's long term debt can be found in Note 3E starting on page 78 of this report. Economic Factors and Next Year's Budgets and Rates • User charges have been increased to account for various utility improvements scheduled for 2011 and beyond. • The overall tax levy for 2011 was increased 1.5 percent. • The City is presenting a long-term plan to City Council in 2011 that will highlight the tax effect of major capital and operating decisions. All of these factors were considered in preparing the City of New Hope's budget for the 2011 fiscal year. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the finance department, City of New Hope, 4401 Xylon Avenue North, New Hope, Minnesota 55428. A-13 CITY OF NEW HOPE, MINNESOTA STATEMENT OF NET ASSETS DECEMBER 31, 2010 ASSETS Cash and temporary investments Temporarily restricted cash Receivables Accrued interest Delinquent taxes Unremitted tax collections Accounts Special assessments Internal balances Due from other governments Inventory Prepaid items Land held for resale Deferred charges Investment in joint ventures Capital assets Land and construction in progress Depreciable assets (net of accumulated deprecation) TOTAL ASSETS LIABILITIES Accounts and contracts payable Accrued salaries payable Accrued interest payable Deposits payable Due to other governments Noncurrent liabilities: Due within one year Compensated absences payable Lease payable Bonds payable Due in more than one year Other postemployment benefits payable Lease payable Bonds payable, net of unamortized discounts TOTAL LIABILITIES NET ASSETS Invested in capital assets, net of related debt Restricted for Debt service Unrestricted TOTAL NET ASSETS A-14 Governmental Business -type Activities Activities Total $ 31,071,320 $ 1,806,658 $ 32,877,978 - 595,000 595,000 1.41,250 - 141,250 157,969 - 157,969 18,727 - 18,727 697,171 1,015,944 1,713,115 489,208 206,402 695,610 772,342 (772,342) - 341,660 401,891 743,551 49,894 44,186 94,080 63,753 - 63,753 2,433,162 - 2,433,162 82,070 68,539 150.609 987,702 168,509 1,156,211 2,608,996 1,478,940 4,087,936 15,922,185 10,868,246 26,790,431 55,837,409 15,881,973 71,719,382 463,930 153,963 617,893 255,338 27,885 283,223 99,977 40,473 140,450 10,483 40,850 51,333 71,290 128,330 199,620 475,772 - 475,772 - 7,843 7,843 365,000 955,000 1,320,000 38,819 7,130 45,949 - 11,913 11,913 6,311,006 1,978,025 8,289,031 8,091,615 3,351,412 11,443,027 16,495,175 9,989,405 26,484,580 4,572,601 - 4,572,601 26,678,018 2,541,156 29,219,174 $ 47,745,794 $ 12,530,561 $ 60,276,355 CITY OF NEW HOPE, MINNESOTA STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2010 Business -type activities Water utility 2,915,757 3,082,771 Program Revenues Sewer utility 1,928,845 2,292,300 - Operating Capital Grants 313,941 - Charges for Grants and and Functions/Programs Expenses Services Contributions Contributions Governmental activities 104,099 121,647 - Total business -type activities General government $ 2,552,425 $ 984,855 $ 279,576 $ - Public safety 5,864,775 218,732 245,219 - Public works 1,625,959 - 741,910 787,047 Culture and recreation 1,899,105 562,383 54,418 - Economic development 192,431 104,713 35,169 - interest on long-term debt 252,224 - - - Total governmental activities 12,386,919 1,870,683 1,356,292 787.047 Business -type activities Water utility 2,915,757 3,082,771 271,441 Sewer utility 1,928,845 2,292,300 - Golf course 346,345 313,941 - lee arena 712,153 741,266 - - Stormwater 430,899 943,883 1.98,742 30,739 Street lighting 104,099 121,647 - Total business -type activities 6,438,098 7,495,808 470,183 30,739 Total $ 18,825,017 $ 9,366,491 $ 1,82(1,475 $ 817,766 General revenues Taxes Property taxes Tax increments Franchise taxes General aids and grants - unrestricted Unrestricted investment earnings Gain on disposal of assets Transfers Total general revenues Change in net assets Net Assets, January 1 Net Assets, December 31. A-15 Net Revenues (Expenses) and Changes in Net Assets Governmental Business -type 438,455 Activities Activities Total $ (1,287,994) S - S (1,287,994) (5,400,824) - (5,400,824) (97,002) - (97,002) (1,282,304) - (1,182,304) (52,549) - (52,549) (252,224) (252,224) (8,372,897) (8,372,897) 438,455 438,455 363,455 363,455 (32,404) (32,404) 29,113 29,113 742,465 742,465 17,548 17,548 1,558,632 1,558.632 (8,372,897) 1,558,632 (6,814,265) 8,730,979 8,730,979 1,408,256 1,408,256 430,494 430,494 79,529 79,529 337,312 17,400 354,712 22,930 - 22,930 91,129 (91,129) 11,100,629 (73,729) 11,026,900 2,727,732 1,484,903 4,212,635 45,018,062 11,045,658 56,063,720 $ 47.745.799 $ 12.530,561 $ 60'76.355 A-16 CITY OF NEW HOPE, MINNESOTA BALANCESHEET GOVERNMENTALFUNDS DECEMBER 31, 2010 LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable 9001 9015/9501 9143/9146 9211-9219 Accrued salaries payable 174,527 Economic Improvement - Advances from other funds - Development Bond HRA Due to other governments General Authority Redemption Construction ASSETS 419 6,950 - 2,586 Cash and temporary investments $ 4,355,041 $ 1,905,624 $ 3,913,374 $ 4,385,210 Receivables 472,862 462,270 383,975 2,269,060 Unremitted tax collections 16,421 - - 1,153 Delinquent taxes 157,969 - - Accounts 185,508 472,021 - - Accrued interest 141,250 - - - Special assessments Loans receivable - 55,098 - Delinquent 145 - 4,108 - Deferred 6,714 40,498 380,606 - Due from other funds - Advances to other funds - 2,266,474 - - Due from other governments 137,661 - - - Land held for resale - - - 2,433,162 Prepaid items 63,753 - - - TOTAL ASSETS $ 5,064,462 $ 4,684,617 $ 4,298 088 $ 6,819,525 LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable $ 121,410 $ - $ - $ - Accrued salaries payable 174,527 1,949 - - Advances from other funds - - - 2,266,474 Due to other governments 11,691 - - - Deposits payable 419 6,950 - 2,586 Deferred revenue 164,815 453,371 383,975 - TOTAL LIABILITIES 472,862 462,270 383,975 2,269,060 FUND BALANCES Reserved for Prepaid items 63,753 - - - Debt service - - 3,914,113 - Loans receivable - 55,098 - - Advances to other funds - 2,266,474 - - Land held for resale - - - 2,433,162 Unreserved Designated reported in: General fund 4,339,325 - - - Special revenue funds - - - - Capitalprojectsfunds - - - 2,117,303 Undesignated reported in: General fund 1.88,522 - - - Special revenue funds - 1,900,775 - - TOTAL FUND BALANCES 4,591,600 4,222,347 3,914,113 4,550,465 TOTAL LIABILITIES AND FUND BALANCES $ 5,064,462 $ 4,684,617 $ 4,298,088 $ 6,819,525 A-17 9203 1,925 6,178 - Other Total Street Governmental Governmental Infrastructure Funds Funds S 3,621,609 S 5,220,589 S 23,401,447 1,153 18,727 - 157,969 39,642 697,171 - 141,250 - 1,925 6,178 - 55,212 483,030 - 379,561 379,561 - - 2,266,474 155,054 48,945 341,660 - - 2,433,162 63,753 S 3,776.663 S 5,747.027 S 30,390,382 S 146,567 $ 59,056 S 327,033 96 - 176,572 • - 2,266,474 10,983 - 22,674 - 528 10.483 49,054 1,051,215 157,646 108,638 3.854,451 63,753 374,490 4,288,603 - 55,098 2,266,474 - - 2,433,162 - 4,339,325 - 230,690 230,690 3,619,017 4,035,612 9,771,932 - 188,522 997,597 2,898,372 3,619,017 5,638,389 26,535,931 S 3.776.663 S 5,747,027 $ 30.390.382 A-18 CITY OF NEW HOPE, MINNESOTA RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS GOVERNMENTALFUNDS DECEMBER 31, 2010 Total fund balances - governmental $ 26,535,931. Amounts reported for the governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. Cost of capital assets 23,186,940 Less: accumulated depreciation (8,020,448) Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-term liabilities at year-end consist of: Bond principal payable (6,660,000) Less deferred charges net of accumulated amortization 82,070 Unamortized premium on bonds (16,006) Internal service funds are used by management to charge certain costs to individual finds. The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Assets Internal service fund net assets included in governmental activities 10,305,586 Internal balances for internal services used by business -type activities 392,781 Some receivables are not available soon enough to pay for the current period's expenditures, and therefore are deferred in the funds Special assessments 480,373 Delinquent taxes 157,969 Accounts 412,873 Governmental funds do not report a liability for accrued interest until due and payable (99,977) The City's investment in a joint venture is not a financial resource and, therefore, is not reported as an asset in the governmental funds, but is included in the Statement of Net Assets 987,702 Total net assets - governmental activities $ 47.745,794 A-19 CITY OF NEW HOPE, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31. 2010 rdza 9001 9015/9501 9143/9146 9211-9219 Economic Improvement Development Bond HRA General Authority Redemption Construction REVENUES Property taxes $ 7,044,686 $ 85,000 $ - $ - Tax increments - - - 1,078,910 Franchise taxes 430,494 - - - Licenses and permits 236,378 - - - Intergovernmental 562,450 - - 197 Charges for services 1,127,194 - - - Fines and forfeits 238,961 - - - Special assessments 1,835 4,907 237,713 Investment income 43,369 130,438 55,128 57,320 Miscellaneous 16,626 35,169 TOTAL. REVENUES 9,701,993 255,514 292,841 1,136,427 EXPENDITURES Current General government 1,581,180 - - - Public safety 5,783,154 - - - Public works 989,734 - - - Culture and recreation 1,594,155 - - - Economic development - 192,431 - - Capital outlay General government 519 - - 232,165 Public safety - - - - Public works - - - - Culture and recreation 1,779 - - - Debt service Principal - - 135,000 - Interest 38,981 - TOTAL EXPENDITURES 9,950,521 192,431 173,981 232,165 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (248,528) 63,083 118,860 904,262 OTHER FINANCING SOURCES (USES) Transfers in 483,823 - 856,153 Proceeds from sale of capital assets 1,954 - - - - Bonds issued - - - - Premium on bonds issued. Transfers out (55,127) TOTAL OTHER FINANCING SOURCES (USES) 485,777 (55,127) 856.153 NET CHANGE IN FUND BALANCES 237,249 7,956 118,860 1.,760,415 FUND BALANCES, JANUARY 1 4,354,351 4,214,391 3,795,253 2,790,050 FUND BALANCES, DECEMBER 31 $ 4,591,600 $ 4,222347 S 3,914,113 $ 4 550,465 rdza 9203 2,596,321 - 1,954 Other Total Street Govemmental Governmental Infrastructure Funds Funds $ 1,182,500 s 382,059 $ 8,694,245 - 329,346 1,408,256 S 26,535,931 430,494 - 236,378 1,121,790 80,783 1,765,220 - 242,710 1,369,904 - 238,961 - 13,937 258,392 37,679 69,979 393,913 35,812 87,607 2,341969 1,154,626 14, 883,370 302,549 1,883,729 8,357 5,791,511 - 989,734 - 5,226 1,599,381 - 192,431 - 232,684 631,410 631,410 1,424,662 - 1,424,662 - 315,189 316,968 380,000 515,000 234,073 273,054 1,424,662 1,876,804 13,850,564 917,307 (722,178) 1,032,806 - 1,256,345 2,596,321 - 1,954 - 1,245,000 1,245,000 - 16,173 16,173 (2,389,465) (2,444,592) 128,053 1.414,856 917,307 (594,125) 2,447,662 2,701,710 6,232,514 24,088,269 $ 3,619.017 $ S,G38,389 S 26,535,931 A-21 CITY OF NEW HOPE, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 Total net change in fund balances $ 2,447,662 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Depreciation expense (861,051) Capital outlays 1,501,714 The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, govemmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Bonds issued (1,245,000) Less bond issuance costs 31,758 Add premium on bonds issued (1.6,173) Principal repayments on bonds 515,000 Amortization of deferred charges (3,263) Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. (7,665) Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Special assessments 3,029 Property taxes 36,734 Accounts (15,166) The City's investment in ajoint venture is not a financial resource and, therefore, is not reportedas an asset in the governmental funds, but is included in the Statement of Net Assets Contributions to joint venture 613,144 Internal service funds are used by management to charge the costs for equipment, information system, equipment replacement, employee benefits and major losses incurred by individual funds Internal service fund activity included in governmental activities (454,856) Internal balances for internal service activity for business -type activities 181,865 Change in net assets - governmental activities $ 2,727,732 A-22 CITY OF NEW HOPE, MINNESOTA GENERALFUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2010 REVENUES Property taxes Franchise taxes Licenses and permits Intergoventtnental Charges for services Fines and forfeits Special assessments Investment income Miscellaneous TOTAL REVENUES Current General. government Public safety Public works Culture and recreation Capital outlay General government Culture and recreation TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER)EXPENDITURES OTHER FINANCING SOURCES Transfers in Proceeds from sale of capital assets TOTAL OTHER FINANCING SOURCES NET CHANGE IN FUND BALANCE FUND BALANCES, JANUARY 1 FUND BALANCES, DECEMBER 31 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget $ 7,445,652 $ 7,107,436 $ 7,044,686 $ (62,750) 458,000 458,000 430,494 (27,506) 210,480 210,480 236,378 25,898 462,732 462,732 562,450 99,718 967,060 967,060 1.,127,194 160,134 301,200 301,200 238,961. (62,239) - - 1,835 1,835 136,822 136,822 43,369 (93,453) 1,700 21,700 16,626 (5,074) 9,983,646 9,665,430 9,701,993 36,563 1,636,838 1,611,868 1,581,180 30,688 6,044,335 5,931,891 5,783,154 148,737 929,364 904,966 989,734 (84,768) 1,698,464 1,663,681 1,594,155 69,526 43,000 36,050 519 35,531 3,500 3,500 1,779 1,721 10,355,501 10,151,956 9,950,521 201,435 (371,855) (486,526) (248,528) 237,998 371,855 486,526 483,823 (2,703) 1,954 1,954 371,855 486,526 485,777 (749) 237,249 237,249 4,354,351 4,354,351 4,354,351 - $ 4,354,351 $ 4,3.54,351 $ 4.591,600 $ 237,249 A-23 CITY OF NEW HOPE, MINNESOTA ECONOMIC DEVELOPMENT AUTHORITY FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED DECEMBER 31, 2010 REVENUES Property taxes Intergovernmental Other Special assessments Investment income Miscellaneous TOTAL REVENUES EXPENDITURES Economic development Current Personal services Supplies Other services and charges TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER)EXPENDITURES OTHER FINANCING USES Transfers out NET CHANGE IN FUND BALANCES FUND BALANCES, JANUARY I FUND BALANCES, DECEMBER 31 Budgeted Amounts Actual Variance with Original Final Amounts Final Budget $ 85,000 $ 85,000 $ 85,000 $ - 50,000 50,000 - (50,000) - - 4,907 4,907 32,000 32,000 130,438 98,438 35,169 35,169 167,000 167,000 255,514 88,514 100,311 100,311 113,408 (1.3,097) 850 850 138 712 157,265 157,265 78,885 78,380 258,426 258,426 192,431 65,995 (91,426) (91,426) 63,083 154,509 (55,127) (55,127) (91,426) (91,426) 7,956 99,382 4,214, 391 4,214,391 4,214,391 $ 4,122,965 $ 4,122,965 $ 4,222,347 $ 99,382 A-24 CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET ASSETS - CONTINUED ON FOLLOWING PAGES PROPRIETARY FUNDS DECEMBER31, 2010 NONCURRENT ASSETS Deferred charges Business -type Activities - Enterprise Funds - 9301. 9300 9302 - Water Utility Sewer Utility Golf Course ASSETS Land - - CURRENT ASSETS Buildings and structures - - Cash and temporary investments $ - $ 199,922 $ 50,375 Restricted cash Vehicles and equipment - - Receivables Construction in progress 701,807 72,309 Accounts 600,708 253,438 100 Special assessments Less accumulated depreciation (1,851,675) (1,838,292) Delinquent 5,043 3,090 - Deferred 101,285 60,480 - Due from other funds TOTAL ASSETS - - Due from other governments 247,576 - - Inventory 33,840 - 10,346 TOTAL CURRENT ASSETS 988.452 516,930 60,821 NONCURRENT ASSETS Deferred charges 28,171 8,276 - Investment in joint venture 168,509 - - Capital assets, at cost Land - - 250,625 Buildings and structures - - 973,145 Improvements other than buildings 3,389,036 3,076,266 106,694 Vehicles and equipment 1,392,767 293,139 149,758 Construction in progress 701,807 72,309 - Total capital assets, at cost 5,483,610 3,441,714 1,480,222 Less accumulated depreciation (1,851,675) (1,838,292) (758,855) Net capital assets 3,631,935 1,603,422 721,367 TOTAL NONCURRENT ASSETS 3,828,615 1,611,698 721,367 TOTAL ASSETS 4,817,067 2,128,628 782,188 A-25 A-26 Govemmental Business -type Activities - Enterprise Funds - Continued Activities - 9303 9304 9305 Intemal Ice Arena Storm Water Street Lighting Total Service Funds S 417,649 S 977,607 S 161,105 S 1,806,658 S 7,669.873 - 595,000 - 595,000 - 54,558 97,232 9,908 1,015,944 - - 4,371 680 13,184 - - 29,244 2,209 193,218 - - 501,341 - 501,341 - 39,059 115,256 - 401,891 - - - 44,186 49,894 511,266 2,320,051 173,902 4,571,422 7,719,767 - 32,092 68.539 168,509 - 234.417 - 485,042 85,647 5,617,003 - 6,590,148 3,032,156 - 3,249,119 - 9,821,115 - 196,363 - - 2,032,027 6,557,518 219,782 993,898 - 5,813,366 3,703,318 - 19.922,230 9,675,321 (2,718,809) (407,413) (7.575,044) (6,310,632) 3,094,557 3,295,905 - 12,347.186 3.364,689 3,094,557 3,327 X997 12,584,234 3,364,689 3,605,823 5,648,048 173,902 17.155,656 11,084,456 A-26 CITY OF NEW HOPE, MINNESOTA STATEMENTS OF NET ASSETS - CONTINUED PROPRIETARY FUNDS DECEMBER 31, 2010 LIABILITIES CURRENT LIABILITIES Accounts and contracts payable Accrued salaries payable Accrued interest payable Due to other funds Due to other governments Deposits payable Lease payable, current Bonds payable, current TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES Other postemployrnent benefits payable Lease payable Bonds payable, net TOTAL NONCURRENT LIABILITIES TOTAL LI.ABILITIES NET ASSETS Invested in capital assets, net of related debt Unrestricted TOTAL NFT ASSETS F -mm Business -type Activities - Enterprise Funds - Continued 9301 9300 9302 Water Utility Sewer Utility Golf Course $ 70,177 S 15,127 $ 1,992 9,247 4,502 1,036 16,961 3,838 - 501,341 - 379,561 116,757 76,515 76,515 - 790,998 99,982 382,589 2,387 1,577 970 993,512 218,164 - 995,899 219,741 970 1,786,897 319,723 383,559 2,561,908 1,308,743 721,367 468,262 500,162 (322,738) S 3.030,170 $ 1,808,91)5 S 398,629 Business -type Activities - Enterprise Funds - Continued 9303 9304 9305 lee Arena Storm Water Street Lighting Total Governmental Activities - Internal Service Funds $ 36,377 $ 20,327 $ 9.963 $ 153,963 $ 136,897 9,105 3,995 - 27,885 554,538 - 19,674 - 40,473 - - - - 880,902 - 11,573 - - 128,330 48,616 40,850 - - 40,850 - 7,843 - - 7,843 - - 801,970 955,000 - 105,748 845,966 9,963 2,235,246 740,051 1,680 516 - 7,130 38,819 11,913 - - 11,913 - 766,349 - 1,978,025 13,593 766,865 1,997,068 38,819 119,341 1,612,831 9,963 4,232,314 778,870 3,074,801 2,322,586 - 9,989,405 3,364,689 411,681 1,712,631 163,939 2,933 937 6,940,897 S 3,486.4,02 $ 4.035 217 S 163.939 $ 13 923.342 $ 10,305,586 Total net assets - enterprise funds S 12,923,342 Adjustment to reflect the consolidation of internal service fund activities related to the enterprise finds (392,781) Net assets - business -type activities S 12.5 30,561 A-28 CITY OF NEW HOPE, MINNESOTA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 OPERATING REVENUES Charges for services Billings to departments Other TOTAL OPERATING REVENUES OPERATING EXPENSES Cost of goods sold Personal services Supplies Other services and charges Utilities Depreciation TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATING REVENUES (EXPENSES) Investment income Intergovernmental Miscellaneous revenues Gain on disposal of assets Interest expense TOTAL NONOPERATING REVENUES (EXPENSES) INCOME (LOSS) BEFORE TRANSFERS AND CONTRIBUTIONS TRANSFERS IN CAPITAL CONTRIBUTIONS TRANSFERS OUT TOTAL TRANSFERS AND CONTRIBUTIONS CHANGE IN NET ASSETS NET ASSETS, JANUARY 1 NET ASSETS, DECEMBER 31 A-29 _ Business -type Activities - Enterprise Fund 9301 9300 9302 Water Utility Sewer Utility Golf Course $ 3,047,304 $ 2,292,300 $ 305,558 3,047,304 2,292,300 305,558 1,807,588 1,298,199 26,164 326,248 210,476 163,680 238,150 8,297 33,939 317,326 277,240 34,716 1,154 - 18,064 116,731 67,795 41,826 2,807,197 1,862,007 318,389 240,107 430,293 (12,831) (2,023) - 387 241,162 - 51,971 - 8,383 (32,561) (11,214) (24,048) 258,549 (11,214) (15,278) 498,656 419,079 (28,109) - 1,427,361 - 13,775 - (1,464,887) (37,535) (1,451,112) 1,389,826 (952,456) 1,808,905 (28,109) 3,982,626 426,738 $ 3 330,170 $ I R08,905 $ 398.629 Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds (181,865) Change in net assets - business -type activities $ 1.484.903 A-30 Govcmmental Business-type Activities - Enterprise Fund - Continued Activities - 9303 9304 9305 Internal Ice Arena Storm Water Street Lighting Totals Service Funds $ 741,266 $ 943,883 $ 121,647 $ 7,451,958 $ - - - - - 1,859,795 44,513 741,266 943,883 121,647 7,451,958 1,904,308 - - - 3,131,951 - 267,562 48,706 - 1,016,672 978,400 21,478 7,222 - 309,086 359,185 64,234 228,775 2,609 924,900 528,983 242,434 757 101,490 363,899 - 101,613 61,692 389,657 501,084 697,321 347,152 104,099 6,136,165 2,367,652 43,945 596,731 17,548 1,315,793 (463,344) 4,235 12,709 2,092 17,400 48,112 - 167,790 - 408,952 - - 61,691 - 122,045 - - - - - 20,976 (1,413) (50,832) (120,068) 2,822 191,358 2,092 428,329 69,088 46,767 788,089 19,640 1,744,122 (394,256) - - - 1,427,361 - • - - 13,775 - (16,068) (1,518,490) (60,600) (16,068) (77,354) (60,600) 46,767 772,021 19,640 1,666,768 (454,856) 3,439,715 3,263,196 144,299 11,256,574 10,760,442 3.486.482 $ 4,035.217 $ 163,939 $ 12.923,342 _L_10.305,586 Change in net assets - enterprise funds $ 1,666,768 Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds (181,865) Change in net assets - business -type activities $ 1.484.903 A-30 CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED ON FOLLOWING PAGES PROPRIETARY FUNDS FOR. THE YEAR ENDED DECEMBER 31, 2010 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Receipts from interfund services provided Otber operating cash receipts Payments to suppliers Payments to employees NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in Transfers out Interfund debt transfers Borrowing (payments) on interlard balances Intergovernmental receipts NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Intergovernmental receipts Acquisition and construction of capital assets Proceeds from sale of assets Proceeds from bonds issued (net) Principal paid on bonds and leases Interest paid on bonds and leases NET CASA PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Interest received from investments NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, JANUARY I CASH AND CASH EQUIVALENTS, DECEMBER31 RECONCILIATION TO THE PROPRIETARY FUNDS STATEMENT OF NET ASSETS: Cash and temporary investments Restricted cash TOTAL CASH AND CASH EQUIVALENTS A-31 Business -type Activities - Enterprise Funds 9301 9300 9302 Water Utility Sewer Utility Golf Course $ 3,049,579 $ 1,975,292 $ 305,758 51,971 - 8,383 (2,360,691) (1,579,422) (110,858) (330,755) (204,397) (163,526) 410,104 191,473 39,757 2,644 (40,170) (37,535) (358,098) 358,098 (384,097) - 379,561 241,162 (541,203) 323,207 379,561 (537,076) (235,687) - 1,078,395 291,815 - (355,250) (355,250) (400,000) (52,947) (15,636) (27,129) 133,122 (314,758) (427,129) (2,023) 387 199,922 (7,424) 57,799 $ $ 199.922 $ 50,375 199,922 50,375 $ $ 199,922 $ 50.375 30,739 (216,388) 832,672 (7,405) (409,500) (1,412) (72.524) (8,817) 164,999 30,739 (989,151) (828,240) - 20,977 2,202,882 - (1,527,405) (169,648) (452,583) (807,263) 4,235 12,709 2,092 17,400 48,112 141,308 1,245,320 15,287 1,594,413 (849,583) 276,341 327,287 145,818 807,245 8,519,456 $ 417.649 S 1.572,601 S 161.105 S 2.401.658 S 7.669.873 417,649 977,607 161,105 1,806,658 7,669,873 595,000 595,000 S 417,649 S 1572,607 S 161.105 S 2.401,658 S 7669.873 A-32 Govemmenial Business -type Activities - Enterprise Funds - Continued Activities - 9303 9304 9305 Intemal Ice Arena Storm Water Street Lighting Totals Service Funds S 751,240 S 826,391 S 118,800 S 7,027,060 S - - - - - 1,957,141 - 61,691 - 122,045 (340,329) (280,936) (105,605) (4,777,841) (954,156) (265.021) (44,614) (1,008,313) (1,032 817) 145,890 562,532 13,195 1,362,951 (29,832) - - - 2,644 - (16,068) - (93,773) (60,600) - 384.097 - 379,561 - 137,051 378,213 505,080 666,645 (60,600) 30,739 (216,388) 832,672 (7,405) (409,500) (1,412) (72.524) (8,817) 164,999 30,739 (989,151) (828,240) - 20,977 2,202,882 - (1,527,405) (169,648) (452,583) (807,263) 4,235 12,709 2,092 17,400 48,112 141,308 1,245,320 15,287 1,594,413 (849,583) 276,341 327,287 145,818 807,245 8,519,456 $ 417.649 S 1.572,601 S 161.105 S 2.401.658 S 7.669.873 417,649 977,607 161,105 1,806,658 7,669,873 595,000 595,000 S 417,649 S 1572,607 S 161.105 S 2.401,658 S 7669.873 A-32 CITY OF NEW HOPE, MINNESOTA STATEMENTS OF CASH FLOWS - CONTINUED PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2010 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation Other income Decrease (increase)in assets Receivables Accounts Special assessments Due from other governments Inventory Prepaid items Increase (decrease) in liabilities Accounts and contracts payable Accrued salaries payable Due to other governments Deposits payable Other postemployment benefits payable NET CASH PROVIDED BY OPERATING ACTIVITIES SUPPLEMENTAL SCHEDULE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Amortization of bond discount Amortization of bond premium Purchase of capital assets on account Transfer of capital assets from other funds Transfer of capital assets to other funds Transfer of bonds payable from other funds Transfer of bonds payable to other funds Capital contributions A-33 Business -type Activities - Enterprise Funds - Continued 9301 9300 9302 Water Utility Sewer Utility Golf Course 240,107 $ 430,293 $ (12,831) 116,731 67,795 41,826 51,971 - 8,383 179,941 (253,438) 200 64,699 (63,570) - (242,365) - - 11,085 - 1,719 (45,787) 4,314 306 (4,021) 4,502 (57) 38,229 (486) 1,577 211 $ 410,104 $ 191,473 $ 39,757 $ 673 S 673 S - $ 678 $ 657 S - $ 40,959 $ S 1.424,717 $ S 1424,717 S .0 158.098 5 S 358A98 S $ - S3,775 S $ A-34 Govemmental _ Business -type Activities - Enterprise Funds - Continued Activities - 9303 9304 9305 Intemal Ice Arena Storm Water Street Lighting Totals Service Funds S 43,945 $ 596,731 $ 17,548 $ 1,315,793 $ (463,344) 101,613 61,692 - 389,657 501,084 - 61,691 - 122,045 - (29,922) (4,057) (2,514) (109,800) 50,161 - 1,821 (323) 2,627 (954) (115,256) - (358,575) 2,672 • - - 12,804 - 75 75 811 (12,088) (43,912) (1,466) (98,633) (182,156) 2,105 3,995 - 6,524 584 (170) (270) (40) 37,749 48,616 40,850 - - 40,850 - 436 97 1,835 11,740 _ $ 145,890 $ 562 532 $ 13.195 $ 1.362.951 _L—_L29.8321 $ - $ 1.883 .S .$ 3.229 S $ 543 5 S 1.878 $ - S 15.701 S $ 67.473 c 86.008 $ $ S $ 1.42-4 .717 $ S S $ 1,424 717 5 S $ S S 358,098 $ $ S $ $ 358 098 $ S $ 13,775 S A-34 ASSETS Cash and temporary investments LIABILITIES Deposits payable CITY OF NEW HOPE, MINNESOTA STATEMENT OF FIDUCIARY NET ASSETS AGENCY FUND DECEMBER 31, 2010 A-35 9503 Pass -Through Grant Fund $ 51,385 $ S1385 A-36 YP 4i� 5 v°- -E au c.'. 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'=, s°A °3 9Es g�t,� .'FE S�`• =aE'o C D - EEmSS 5�0� P5'E 9.x 3Y 6�. 2 Ee T t 43 - oe., 96 i A cEo _ J n ve A-38 oe D n E12 3B 43 96 cEo _ J n ve E nn G � Jnr Rgb. c �E 'rEP �-y2 3 p FF R " v A-38 kot E e E E v r � H4 _3oEG]� 'Aq`'wa E$c5rio EKES <W Ese O>x�Y E� ts 'nc A-39 Ec�s En y4 E'rT- ]tom n`_Ew �o - yE `E c3'EE-Gv -S2 _3 ryas �soc<� RC1 mY c SSE S 2J '2 8 ._ JG RH Y cc,c °oEJ veg8 Se Env y�5 Er F 3r s o 4 §i� n y p E v �v > JG - Ca «.6wn coE v gSi EE� S ._iC°ua $ Lco kot E e E E v r � H4 _3oEG]� 'Aq`'wa E$c5rio EKES <W Ese O>x�Y E� ts 'nc A-39 sao EyN y _o � d �pe �E fl0 �Y fi I E Ee <v E i� � - 5 •�u � p =3 = e EE c'u ^ xp c u Ela§ s$P ` 9 79 - =m 2= ig 19 A.ya vE:. •� fr�� L' 3 Fo Fp < s a i z d A-40 _o �pe �E fl0 �Y fi c� o Ee kc Eo C � p =3 = e 3= "e Ela§ s$P 79 - A-40 A-4! {! ! / g a d a »• b az D f Q g @;_ !t - !a;\ /{\ �); \>! ` \$� .! .��• ;p!/:,/ @;! A-4! CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Minnesota statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank, or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The selection should be approved by the government entity. At year-end, the carrying amount of the City's deposits was $974,118 and the bank balance was $1,277,341. At December 31, 2010, all deposits were fully covered by federal depository insurance, surety bonds, or by collateral held by the City's agent in the City's name. A reconciliation of cash and investments as reported on the statement of net assets follows: Carrying amount of deposits S 974,118 Investments 32,547,295 Petty cash 2,950 Total $ 33,524.363 Cash and investments Statement of Net Assets Cash and temporary investments $ 32,877,978 Restricted cash 595,000 Statement of Fiduciary Net Assets 51,385 Total $ 33.524.363 lnveshnents As of December 3l, 2010, the City had the following investments that are insured or registered, or securities held by the City's agent in the City's name: I. Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk 2. interest rate risk is disclosed using the segmented time distribution method. N/A Indicated not applicable or available. A-42 Fair Value Credit Segmented and Quality/ Time Carrying Types of Investments Ratings (1) Distribution (2) Amount Pooled investments Broker Money Market Funds N/A Less than 6 months $ 7,666,930 Non -pooled investments Negotiable Certificates of Deposit N/A Less than 6 months 965,797 Negotiable Certificates of Deposit N/A 6 months to 1 year 243,636 Negotiable Certificates of Deposit N/A 1 to 3 years 1,259,241 U.S. Government Agency Securities AAA More than 3 years 1.5,329,592 State and Local Government Securities A+ 1 to 3 years 4,017,560 Slate and Local Government Securities AA- 1 to 3 years 1,470,260 State and Local Government Securities AAA More than 3 years 1,594,279 Total investments $ 32,547295 I. Ratings are provided by various credit rating agencies where applicable to indicate associated credit risk 2. interest rate risk is disclosed using the segmented time distribution method. N/A Indicated not applicable or available. A-42 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED 'The investments of the City are subject to the following risks: • Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota Statutes limit the City's investments to the list on page 65 of the notes. The City's investment policy does not address this risk any further. • Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City's investment policy does not address custodial credit risk but the City typically limits its exposure by purchasing insured or registered investments. • Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The City's investment policy does not limit the concentration of investments. As of December 31, 2010, the City had invested 5 percent or more of its total investment portfolio in securities issued by the following federal agencies: Federal Home Loan Bank — 15.7 percent, Federal Home Loan Mortgage Corporation — 13.9 percent, and Federal National Mortgage Association - 17.2 percent, Illinois State Tax Bond— 6.2 percent. • Interest rate risk. This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in interest rates (the longer period for which an interest rate is fixed, the greater the risk). The City's investment policy does not limit the duration of investments. B. Deferred revenue Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows A-43 Unavailable Delinquent property taxes receivable General $ 157,969 Special assessments General 6,846 Economic development authority 40,498 Improvement bond redemption 383,975 Nonmajor finds 49,054 Revenue not yet earned Economic development authority Accounts receivable 412;873 Total governmental funds $ 1,051,215 A-43 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED C. Capital assets Capital asset activity for the year ended December 31, 2010 was as follows: Governmental activities Capital assets not being depreciated Land Construction in progress Total capital assets not being depreciated Capital assets, being depreciated Buildings and structures Vehicles and equipment Improvements other than buildings Total capital assets being depreciated Less accumulated depreciation for Buildings and structures Vehicles and equipment Improvements other than buildings Total accumulated depreciation Total capital assets being depreciated, net Governmental activities capital assets, net Beginning Ending Balance Increases Decreases Balance $ 994,268 $ - $ - $ 994,268 1,853,981 1,441,660 (1,680,913) 1,614,728 2,848,249 1,441,660 (1.680,913) 2,608,996 9,153,714 88,001 - 9,241,715 6,936,762 850,817 (198,662) 7,588,917 11,705,336 1,717,297 13,422,633 27,795,812 2,656,115 (198,662) 30,253,265 (4,358,830) (267,911) - (4,626,741) (5,218,082) (468,415) 198,662 (5,487,835) (3,590,695) (625,809) (4,216,504) (13,167,607) (1,362,135) 198,662 (14,331,080) 14,628,205 1,293,980 15,922,185 $ 17,476,454 1 2.735.640 $ (1,680,913) $ 18,531,181 A-44 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED A-45 Beginning Ending Balance Increases Decreases Balance Business -type Activities Capital assets not being depreciated Land $ 485,042 $ - $ - S 485,042 Construction in progress 1,045,333 973,055 (1,024,490) 993,898 Total capital assets not being depreciated 1,530,375 973,055 (1.024,490) 1.478,940 Capital assets being depreciated: Buildings and structures 6,590,148 - - 6,590,148 Vehicles and equipment 2,032,027 - - 2,032,027 Improvements other than buildings 8,699,280 1,121,834 - 9,821,114 Total capital assets being depreciated 17,321,455 1,121.834 18,443,289 Less accumulated depreciation for Buildings and structures (2,929,649) (128,067) - (3,057,716) Vehicles and equipment (1,038,030) (104,872) - (1,142,902) Improvements other than buildings (3,217,707) (156,718) - (3,374,425) Total accumulated depreciation (7,185,386) (389,657) - (7,575,043) Total capital assets being depreciated, net 10,136,069 732,177 10,868,246 Business -type activities capital assets, net $ 11.666,444 $ 1.705.232 S (1.024,490) $ 12.347,186 A-45 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Depreciation expense was charged to functions/programs of the City as follows Governmental activities General government $ 110,020 Public safety 73,263 Public works 426,784 Culture and recreation 250,984 Internal service 501,084 Total depreciation expense - governmental activities $ 1362.135 Business -type activities Water Utility $ 116,731 Sewer Utility 67,795 Golf course 41,826 lee arena 101.613 Storm Water Utility 61,692 Total depreciation expense - business -type activities $ 389.657 D. Interfund Receivables, Payables, and Transfers Individual fund receivable and payable balances at December 31, 2010 are as follows: Receivable Fund Pavable Fund Amount Economic Development Authority HRA Construction $ 2,266,474 Nonmajor governmental GolrCourse 374,561 Storm Water Water Utility 501,341 Total $ 3,147,376 The $2,266,474 balance relates to financing $2,433,162 in 2008 for the purchase of land at Bass Lake Road. The $379,561 balance was a loan to the Golf Course fund from the Temporary Financing fund to allow the Golf Course to pay offs bond early. The $501,341 balance was to eliminate a temporary cash deficit in the Water Utility Fund at year end. A-46 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Interfund transfers at December 31, 2010 areas follows: Total transfers $ 483,823 $ 856353 $ 1.256.345 $ 1.427.361 $ 4.023.fi82 • A transfer of $97,296 was made from the Firemen's Relief fund to the General fund to close the Firemen's Relief fund. • A transfer of $856,153 was made from the HRA Bonds fiord to the HRA Construction fund for TIP related debt completed in 2009. • A transfer of $1,256,345 was made from the Refunding Bonds fund to the Temporary Financing fundto close the Refunding Bonds fund. • A transfer of $1,427,361 was made from the Water fund to the Sewer fund to separate the Water and Sewer funds. • A transfer of $65,000 was made from the Park Infrastructure fund to the General fund to cover pool operations. • A transfer of $114,671 was made from the Construction Projects fund to the General fund to cover budget shortfalls in the General fund. • Transfers were made out of the Water Utility Fund, Economic Development Authority Fund, Sewer Utility Fund, Storm Water Fund, Central Garage Fund, and Information Technology Fund for $37,526, $55,127, $37,535, $16,068, $20,964, and $39,636 respectively to the General Fund to cover administrative charges paid for by the General Fund. A-47 Transfer in: HRA Nonmajor General Construction Governmental Sewer Utility Fund Fund Fund Funds Fund Total Transfer out Economic Development Authority $ 55,127 $ $ - $ - $ 55,127 Nonmajor Governmental 276,967 856,153 1,256,345 - 2,389,465 Water Utility 37,526 - - 1,427,361 1,464,887 Sewer Utility 37,535 - - - 37,535 Storm Water 16,068 - - - 16,068 Central Garage 20,964 - - 20,964 Information'rechnology 39,636 - - - 39,636 Total transfers $ 483,823 $ 856353 $ 1.256.345 $ 1.427.361 $ 4.023.fi82 • A transfer of $97,296 was made from the Firemen's Relief fund to the General fund to close the Firemen's Relief fund. • A transfer of $856,153 was made from the HRA Bonds fiord to the HRA Construction fund for TIP related debt completed in 2009. • A transfer of $1,256,345 was made from the Refunding Bonds fund to the Temporary Financing fundto close the Refunding Bonds fund. • A transfer of $1,427,361 was made from the Water fund to the Sewer fund to separate the Water and Sewer funds. • A transfer of $65,000 was made from the Park Infrastructure fund to the General fund to cover pool operations. • A transfer of $114,671 was made from the Construction Projects fund to the General fund to cover budget shortfalls in the General fund. • Transfers were made out of the Water Utility Fund, Economic Development Authority Fund, Sewer Utility Fund, Storm Water Fund, Central Garage Fund, and Information Technology Fund for $37,526, $55,127, $37,535, $16,068, $20,964, and $39,636 respectively to the General Fund to cover administrative charges paid for by the General Fund. A-47 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED E. Lang -term debt General obligation bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds have been issued for both general government and proprietary activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues. In addition, general obligation bonds have been issued to refund both general obligation and revenue bonds. General obligation bonds are direct obligation and pledge the full faith and credit of the government. General obligation bonds currently outstanding are as follows: General obligation bonds The following bonds will be repaid from future lax levies. Description 1996 G.O. Taxable bonds 20106 G.O. Certificates of indebtedness Total General Obligation Bonds Authorized and Issued Interest Rate Issue Maturity Balance at Date Date Year End $ 380,000 6.50-6.85 % 03/01/96 02/01/11 $ 35,000 1,245,000 2.00-2.60 11/23/10 02/01/20 1,245,000 The annual debt service to maturity for general obligation bonds and equipment certificates are as follows: Year Ending December 31, 2011 2012 2013 2014 2015 2016-2020 Total A-48 Governmental Activities Principal Interest Total $ 35,000 $ 19,521 $ 54,521 125,000 25,348 150,348 130,000 22,798 152,798 135,000 20,148 155,148 13 5, 000 17,448 152,448 720,000 43,122 763,122 $ 1,280,000 $ 148 385 S 1,428,385 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED General obligation tax increment bonds The following bonds were issued for development projects. The additional tax increments resulting from increased tax capacity of the redevelopment properties will be used to retire the related debt. A-49 Authorized Interest Issue Maturity Balanco at Description and Issued Rate Date Date Year End G.U. Tax Increment Bondsof2004 S 4,080,000 2.75-4.30 % 04/01/04 02/01125 S 3,295,000 G.O. Tax Increment Bonds of 2005 1,370,000 4.65-5.65 03/01/05 02/01/31 1.310,000 Total G.O. Tax Increment Bonds S 4.605 6011 The animal debt service to maturity for general obligation tax increment bonds are as follows: Year Ending Governmental Activities December 3l, Principal Interest Total 2011 $ 195,000 $ 193,737 $ 388,737 2012 205,000 187,353 392,353 2013 210,000 180,259 390,259 2014 215,000 172,782 387,782 2015 225,000 164,725 389,725 2016-2020 1,275,000 681,856 1,956,856 2021 -2025 1,690,000 369,043 2,059,043 2026-2030 490,000 98,593 588,593 2031 100,000 2,820 102,820 Total $ 4.605,000 $ 2.051.168 $ G.656.1 G8 A-49 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED General obligation special assessment improvement bonds The following bonds will be repaid from assessments levied against benefiting properties and future tax levies Year Ending December 31, 2011 2012 2013 2014 2015 2016-2019 Total General obligation revenue bonds Governmental Activities Principal Interest Total Balance $ 32,425 Authorized Interest Issue Maturity at Description and Issued Rate Date Date Year End G.O. Special assessment 14,133 149,133 135,000 improvement bonds of 1999 $ 2,205,000 4.00-4.75 % 05/01/99 02/01/19 $ 775,000 The aminal service requirements to maturity for the general obligation special assessment improvement bonds are as follows: $ 110,000 2002 Storm water Year Ending December 31, 2011 2012 2013 2014 2015 2016-2019 Total General obligation revenue bonds Governmental Activities Principal Interest Total $ 135,000 $ 32,425 $ 1.67,425 135,000 26,418 161,418 135,000 20,309 155,309 135,000 14,133 149,133 135,000 7,889 142,889 100,000 9,500 109,500 $ 775,000 $ 110,674 $ 885,674 The following bonds were issued to finance improvements to the water, sewer and stonn water utility system. They will be retired by user charges and are backed by the full faith and credit of the City. A-50 Authorized Interest Issue Maturity Balance at Description and Issued Rale Date Date Year End 1995 Storm water revenue bonds $ 1,200,000 4.50-5.40 % 12/01/95 02/01/11 $ 110,000 2002 Storm water revenue bonds 850,000 4.00-5.20 04/01/02 02/01/22 635,000 2010A G.O. Utility revenue bonds 1,580,000 2.00 05/06/10 02/01/14 605,000 2010B Refunding bonds 605,000 2.00-3.00 11/23110 02/01/22 1,580,000 Total G.O, Revenue Bonds $ 2.930,000 A-50 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The annual debt service to maturity far all general obligation revenue bonds are as follows: Year Ending Business -type Activities December 31, Principal Interest Total 2011 $ 955,000 $ 70,970 $ 1,025.970 2012 315,000 42,807 357,807 2013 325,000 36,408 361,408 2014 320,000 29,958 349,958 2015 130,000 25,458 155,458 2016-2020 675,000 80,149 755,149 2021 -2022 210,000 5,205 215,205 Total $ 2.930 000 $ 290.955 $ 3.220.955 Capital lease On July 1, 2008, die City purchased an energy optimization system through a capital lease agreement. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, it has been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital leases are as follows: Business -type Activities Equipment $ 38,892 Less: Accumulated depreciation (23,336) "rota] $ 15.556 The City has entered into the following capital leases to finance various equipment purchases: Balance Authorized Interest Issue Maturity at Description and Issued Rate Date Date Year find Ice arena energy aptimization system $ 38,245 3.05 % 07/01/08 07/01/13 $ 19.756 A-51 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED The future minimum lease obligations and the net present value of these minimum lease payments as of December 31, 2010, were as follows: Year Ending Governmental December 31 Activities 2011 $ 8,819 2012 8,819 2013 3,675 Total minimum payments 21,313 Less amount representing interest (1,557) Present value of minimum least payments $ 19,756 Changes in long-term liabilities Long-term liability activity for the year ended December 31, 2010, was as follows: Beginning Ending Due Within Balance Increases Decreases Balance One Year Governmental activities: Special assessment bonds $ 910,000 $ - S (135,000) $ 775,000 $ 135,000 Tax increment bonds 4,795,000 - (190000) 4,605,000 195,000 General obligation bonds and certificates 225,000 1,245,000 (190,000) 1,280,000 35,000 Add: Premiums on bonds 16,173 (167) 16,006 Total bonds payable 5,930,000 1,261,173 (515,167) 6,676,006 365,000 Compensated absences payable 505,621 497,159 (527,008) 475,772 475,772 Otherpostemployment benefits payable 27,079 17,961 (6,221) 38,819 Governmental activity long-term liabilities 5 6,462,700 5 1.776,293 $ (1A48,396) $ 7190,597 $ 840772 Business -type activities: Bonds payable Revenue bonds $ 2,265,000 S 2,185,000 $ (1,520.000) $ 2,930,000 $ 955,000 Add: Premiums on bonds - 17,882 (1,877) 16,005 - Less: Bond discount (20,785) 7.805 (12,980) Total bonds payable 2,244.215 2,202,882 (1,514,072) 2,933,025 955,000 Capital leases payable 27,161 - (7,405) 19,756 7,843 Other postemployment benefits payable 5,295 2,808 (973) 7,130 Business -type activity long-term liabilities S 2,276,671 $ 2,205,690 $ (1,522.450) S 2.959,911 $ 962,843 Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for internal service funds are included as part of the above totals for governmental activities. A-52 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3: DETAILED NOTES ON ALL FUNDS - CONTINUED Refunding Issue On May 6, 2010, the City issued $1,580,000 of G.O. Utility Revenue Bonds, Series 2010A. The bonds bear an average interest rate of 2.60 percent andrefunded the Series 1999A G.O. Improvement Bonds. As a result of the refunding issue, the City saved $28,076 in debt service payments and achieved an economic gain (the present value of the difference between old debt service and new debt service) of $27,086. On November 23, 2010, the City issued $1,850,000 of General Obligation Certificates of Indebtedness and Refunding Bonds, Series 2010B. The bonds bear an average interest rate of 2.32 percent and will refund the $850,000 General Obligation Storm Sewer Revenue Bonds, Series, 2002A. As a result of the refunding issue, the City will save $90,253 in debt service payments and achieved an economic gain (the present value of the difference between old debt service and new debt service) of $77,269. F. Designated Fund Balances Designated fund balances at December 31, 2010 are summarized as follows: Fund Economic Improvement Development Bond HRA Governmental funds General Authority Redemption Construction Designated for: Working capital S 4,339,325 $ - $ - $ Special revenue programs - - - - Capital improvements - - 2.117,303 Total designated fund balance $ 4,339,325 Governmental funds Designated for: Working capital Special revenue programs Capital improvements Total designated fund balance A-53 Fund Other Street Governmental Infrastructure Funds Total $ - $ - $ 4,339,325 230,690 230,690 3,619,017 4,035,612 9,771,932 $ 3,619,017 $ 4,266,302 $ 14,341947 O- Z L uw e5 o -Y EE GC9y $Gz E o vu Ec acw ~2 mEEaE .;" EE �Y 80� -�a EcE .gi g'C E-ry? �CYgdn :eve Ert eEb uo., 9c_' ESL-a,CL,� vvd EiE:� �gy 5 E o<o n2�� E9.E Eoc ? 3E yE€ v3r c�'Ga 6ec Ng "� v2 2eo_agE '� ��� L3C E `nF u'ov anib c`Y�'�•�u �wG `i�E '__€o �.' A-54 pu�E7E Fiv =.. r0 `Ug �c r➢�a c �CEvE t pP� uE" �Crn w4oc rci? q'G SOL- DoE n�a`� _q 9. t.a r U ;�= eE 3 K kFCY�EO9 F22 G'nn coax q pc` 0m nY", u E vnEG =aha - vrc_ w k n CE vg _ E v _ •fr '°�_`on Ua n�:rYY Uci� ku .jA. g PyW ca eb y4oXE E E n Com. L pp uw e5 o -Y EE GC9y $Gz E o vu Ec acw ~2 mEEaE .;" EE �Y 80� -�a EcE .gi g'C E-ry? �CYgdn :eve Ert eEb uo., 9c_' ESL-a,CL,� vvd EiE:� �gy 5 E o<o n2�� E9.E Eoc ? 3E yE€ v3r c�'Ga 6ec Ng "� v2 2eo_agE '� ��� L3C E `nF u'ov anib c`Y�'�•�u �wG `i�E '__€o �.' A-54 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Nate 4: OTHER INFORMATION — CONTINUED 3. Annual other postemployment benefit cost and net other postemployment benefit obligation The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution ofthe employer (ARC). The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation to the retiree health plan: Annual required contribution $ 20,748 Interest on net OPEB obligation 1,133 Adjustment to annual required contribution (1,112) Annual OPEB cost (expense) 20,769 Contributions made (7,194) Increase in net OPEB obligation 13,575 Net OPEB obligation- beginning of year 32,374 Net OPEB obligation- end of year $ 45,949 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, andthe net OPEB obligation for fiscal year 2010 and the preceding two fiscal years are as follows: Trend Information Percentage Year Annual Annual OPEB Net OPEB Ending; OPEB Cost Contributed Obligation 12/31/10 $ 20,769 (121.2) S 45,949 12/31/09 20,759 (56.0) 32,374 12/31/08 20,748 21.3 16,336 A-55 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 3l, 2010 Note 4: OTHER INFORMATION — CONTINUED 4. Funded status and funding progress As of December 31, 2008, the actuarial accrued liability for benefits was $187,037, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $6,256,409 and the ratio of the unfunded actuarial accrued liability to the covered payroll was 3.0 percent. The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 5. Methods and assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The following simplifying assumptions were made: Retirement age for active employees—Based on the historical average retirement age for the covered group, active plan members were assumed to retire at age 60, or at the first subsequent year in which the member would qualify for benefits. Marital status — Marital status of members at the calculation date was assumed to continue throughout retirement. Mortality — Life expectancies were basedon mortality tables from the National Center for Health Statistics. The 2004 United States Life Tables for Males and Females were used. Turnover— Non -group -specific age -based turnover date from GASB Statement No. 45 was used as the basis for assigning active members a probability of remaining employed until the assumed retirement age and for developing an expected future working lifetime assumption for purposes of allocating to periods the present value of total benefits to be paid. Healthcare cost trend rate— The expected rate of increase in healthcare insurance premiums was based on projections of the Office of the Actuary at the Centers for Medicare & Medicaid Services. A rate of 6.8 percent initially, reduced to an ultimate rate of 6.0 percent after six years, was used. Health insurance premiums — 2007 health insurance premiums for retirees were used as the basis for calculation for the present value of total benefits to be paid. Inflation rate — The expected long-term inflation assumption of 3.3 percent was based on projected changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI -W) in the 2006 Annual Report of the Board of Trustees of the Federal Old -Age and Survivor Insurance and Disability Insurance Trust Funds for anintermediate growth scenario. A-56 CITY OF NEW HOPE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 4: OTHER INFORMATION —CONTINUED Payroll growth rate— The expected long-term payroll growth rate was assumed to equal the rate of inflation Based on the historical and expected returns of the City's short-term investment portfolio, a discount rate of 3.5 percent was used. In addition, a simplified version of the entry age actuarial cost method was used. The unfundedactuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at December 31, 2010 was 30 years. C. Contingencies Construction commitments The government has active construction projects as of December 31, 2010. The projects include infrastructure improvement projects. At year end the City's commitments with contractors are as follows: Project Northwood Lake West Inlet Cleaning 2009 Retaining Wall Project W innetka Avenue Infrastructure Bass Lake Road Water Main Improvement 2009 Lighted Field Improvement Project Cold storage building roof 2011 Sanitary Sewer Lining Total Federal and State Funds Spent Remaining to date Cormnitment $ 40,569 58,173 873,506 646,459 70,462 82,563 65,837 $ 1,801 3,062 45,974 34,024 3,709 4,345 3,465 $ 1,837,569 $ 96,380 The City receives financial assistance from federal and state government agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2010. Taz increment districts The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse of tax increment could become a liability of an applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. A-57 fr��F A-58 �9. a 78 i U Y.9 E 32 FET83i x`"''.Y E�cL v 6'V El Er 7t' 9EfiGE<-�� Ec FZy '".0-R e2 SCE - AA �GYLBe J €E= EU 3En `u CE3 `o�F t EG 72 oEy'Z,aE _ eEck _i z`Ou9 <v U 5t- FE5�a EjG vt� E" s C g 3 bs 5ST 5- -c85E �Ej 5 f J 4 V .Y 0 ti rS Tt5 - T>F c� G E`_�8_Vr °re y EmS UEUS = "v A-58 �9. a 78 i U Y.9 E 32 FET83i x`"''.Y E�cL El Er 9EfiGE<-�� Ec FZy '".0-R e2 SCE AA �GYLBe J €E= EU 3En `u CE3 `o�F t EG 72 oEy'Z,aE _ eEck _i v'z nc3 FE5�a vt� s g 3 bs 5ST 5- -c85E �Ej 5 f J 4 V .Y 0 ti rS A-58 \\ A-59 \} // � •!!! )/ Rg ©\(/# \Q;e/ \/!// )\/§ HI A-59 CITY OF NEW HOPE, MINNESOTA GENERALFUND BALANCESHEET DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) ASSETS Cash and temporary investments Receivables Unremitted tax collections Delinquent taxes Accounts Accrued interest Special assessments Delinquent Deferred Due from other governments Prepaid items TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable Accrued salaries payable Due to other governments Deposits payable Deferred revenue TOTAL LIABILITIES FUND BALANCES Reserved for Prepaid items Unreserved Designated for working capital Undesignated TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES A-60 2010 2009 $ 4,355,041 $ 3,910,596 16,421 156,974 157,969 121,235 185,508 246,056 141,250 256,323 145 299 6,714 2,535 137,661 53.739 63,753 59.799 $ 5,064,462 $ 4,807.556 $ 121,410 $ 135,670 174,927 171,367 11,691 21,978 419 120 164,815 124,070 472,862 453,205 63,753 59,799 4,339,325 4,294,552 188,522 - 4,591,600 4,354,351 S 5.064.462 S 4,807,556 CITY OF NEW HOPE, MINNESOTA GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES COMPARED TO BUDGET - CONTINUED ON THE FOLLOWING PAGES FOR. THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) REVENUES Taxes Property taxes Franchise taxes Totaltaxes Licenses and permits Business regulatory licenses Non -business licenses and permits Total licenses and permits Intergovernmental Market value and other tax credits Local government aid Highway maintenance aid Other federal, state, mid local grants State insurance premium tax Total intergovernmental Charges for services General government Public safety Public works Culture and recreation Total charges for services Fines and forfeits Special assessments Investment income Miscellaneous TOTAL REVENUES 2010 2009 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts $ 7,445,652 $ 7,107,436 $ 7,044,686 $ (62,750) $ 6,524,813 458,000 458,000 430,494 (27,506) 340,497 7,903,652 7,565,436 7,475,180 (90,256) 6,865,310 40,580 40,580 60,471 19,891 43,675 169,900 169,900 175,907 6,007 182,629 210,480 210,480 236,378 25,898 226,304 - - 1,021 1,021 305,938 44,807 44,807 41,843 (2,964) 423,735 150,000 150,000 145,746 (4,254) 144,028 75,425 75,425 173,635 98,210 223,520 192,500 192,500 200,205 7,705 201,410 462,732 462,732 562,450 99,718 1,298,631 152,860 152,860 219,581 66,721 223,106 282,440 282,440 261,421 (21,019) 188,646 17,950 17,950 92,025 74,075 91,773 513,810 513,810 554,167 40,357 496,389 967,060 967,060 1,127,194 160,134 999,914 301,200 301,200 238,961 (62,239) 236,173 1,835 1,835 2,203 136,822 136,822 43,369 (93,453) 59,478 1,700 21,700 16,626 (5,074) 37,456 9,983,646 9,665,430 9,701,993 36,563 9,725.469 A-61 A-62 CITY OF NEW HOPE, MINNESOTA GENERALFUND ' SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES COMPARED TO BUDGET - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) 2010 2009 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES Current Expenditures General government Mayor and City Council Personal services $ 45,059 S 45,059 $ 44,006 $ 1,053 $ 44,065 Supplies 4,500 3,000 1,418 1,582 4,032 Other services and charges 29,673 28,873 27,513 1,360 35,315 Total 79,232 76,932 72,937 3,995 83,412 Advisory Personal services - - 103 (103) 497 Supplies 29 Total 103 (103) 526 City (tall Personal services - - 8,125 (8,125) 12,604 Supplies 12,150 12,150 18,197 (6,047) 20,454 Other services attd charges 279,173 270,403 244,061 26,342 (44,918) Total 291,323 282,553 270,383 12,170 (11,860) City manager Personal services 289,390 289,390 293.169 (3,779) 136,918 Supplies 1,000 1,000 1,620 (620) 2,685 Other services and charges 20,342 19,842 21,592 (1,750) 64,263 Total 310,732 310,232 316,381 (6,149) 203,866 Elections Personal services 56,348 56,348 33,439 22,909 - Supplies 1,400 1,400 2,429 (1,029) 220 Other services and charges 6,400 6,400 5,464 936 4,127 Total 64,148 64,148 41,332 22,816 4,347 Administrative services Personal services - - - 13,427 - Supplies - - - - 112 Other services and charges 223 Total 13,762 Finance Personal services 79,808 79,808 83,511 (3,703) (24,132) Supplies 2,550 1,000 1,819 (819) 1,463 Other services and charges 133,419 132,419 141,720 (9,301) 213,765 Total 215,777 213,227 227,050 (13,823) 191,096 Auditing Other services and charges 32,150 32,150 28,975 3,175 61,750 A-62 A-63 CITY OF NEW HOPE, MINNESOTA GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES COMPARED TO BUDGET- CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) 2010 2009 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES-CONTINUED Current Expenditures - continued General government - continued Assessing Other services and charges S 107,000 $ 107,000 S 103,449 $ 3,551 S 106,580 Legal Other services and charges 15,000 15,000 27,722 (12,722) 31,822 Human resources Personal services 181,939 181,939 179,532 2,407 136,844 Supplies 800 800 964 (164) 307 Other services and charges 41,900 41,700 26,387 15,313 29,753 Total 224,639 224,439 206,883 17,556 166,904 Planning and zoning Personal services 101,322 101,322 90,313 11,009 85,492 Supplies 3,500 3,000 153 2,847 978 Other services and charges 59,366 54,066 68,076 (14,010) 52,705 Total 164,188 158,388 158,542 (154) 139,175 Communication Personal services 83,977 83,977 85,474 (1,497) 72,177 Supplies 2,025 1,425 1,607 (182) 150 Other services and charges 46,647 42,397 40,342 2,055 38,427 Total 132,649 127,799 127,423 376 110,754 Other functions Other services and charges - 27,721 Total general government 1,636,838 1,611,868 1,581,180 30,688 1,129,855 Public safety Police Personal services 3,608,305 3,564,605 3,425,621 138,984 3,290,399 Supplies 81,950 76,950 82,516 (5,566) 60,319 Other services and charges 754,856 730,264 726,353 3,911 933,779 Total 4,445,111 4,371,819 4,234,490 137,329 4,284,497 Police reserves Personal services 15,845 15,845 5,660 10,185 11,247 Supplies 12,820 12,820 7,913 4,907 6,231 Other services and charges 14,486 12,112 13,849 (1,737) 15,025 Total 43,151 40,777 27,422 13,355 32,503 A-63 A-64 CITY OF NEW HOPE, MINNESOTA GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES COMPARED TO BUDGET - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) 2010 2009 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current Expenditures - continued Public safety - continued Fire and safety Personal services $ - $ - $ 1,716 $ (1,716) $ 978 Supplies 500 500 534 (34) 69 Other services and charges 1,025,425 990,126 990,026 100 1,022,723 Total 1,025,925 990,626 992,276 (1,650) 1,023,770 Anitnal control Personal services 75,749 75,749 79,755 (4,006) 83,599 Supplies 1,870 1,870 832 1,038 1,567 Other services and charges 27,032 26,586 27,018 (432) 31,318 Total 104,651 104,205 107,605 (3,400) 116,484 Protective inspection Personal services 347,251 347,251 340,570 6,681 335,907 Supplies 3,600 3,600 1,537 1063 2,547 Other services and charges 74,646 73,613 79,254 (5,641) 116,267 Total 425,497 424,464 421,361 3,103 454,721 Total public safety 6,044,335 5,931,891 5,783,154 148,737 5,911,975 Public works Street maintenance Personal services 470,673 470,673 456,499 14,174 303,796 Supplies 85,360 75,160 89,732 (14,572) 59,310 Other services and charges 358,331 344,133 428,981 (84,848) 360,963 Total 914,364 889,966 975,212 (85,246) 724,069 Engineering Other services and charges 15,000 15,000 14,522 478 15,945 Total public works 929,364 904,966 989,734 (84,768) 740,014 Culture and recreation Recreation Pcmonal services 517,039 512,039 523,049 (11,()10) 572,482 Supplies 50,456 50,456 61,261 (10,805) 54,056 Other services and charges 151,368 147.165 149,616 (2,451) 174,146 Total 718,863 709,660 733,926 (24,266) 800,684 Parks Personal services 499,350 499,350 .427,408 71,942 356,559 Supplies 36,360 35,360 26,517 8,843 27,370 Other services and charges 251,639 232,459 240,321 (7,862) 318,374 Total 787,349 767,169 694,246 72,923 702,303 A-64 A-65 CITY OF NEW HOPE, MINNESOTA GENERALFUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES COMPARED TO BUDGET - CONTINUED FOR THE YEAR ENDED DECEMBER 31, 2010 (With Comparative Actual Amounts For The Year Ended December 31, 2009) 2010 2009 Budgeted Amounts Actual Variance with Actual Original Final Amounts Final Budget Amounts EXPENDITURES - CONTINUED Current Expenditures - continued Culture and recreation - continued Swimming pool Personal services $ 103,930 $ 103,930 S 95,589 $ 8,341 S 106,409 Supplies 34,030 34,030 35,882 (1,852) 37,598 Other services and charges 54,292 48.892 34,512 14,380 46,049 Total 192,252 186,852 165,983 20,869 190,056 Total culture and recreation 1,698,464 1,663,681 1,594,155 69,526 1,693,043 Total current expenditures 10,309,001 10,112,406 9,948,223 164,183 9,474,887 Capital outlay General government 43,000 36,050 519 35,531 53,739 Public safely - - - - 10,479 Culture and recreation 3,500 3,500 1,779 1,721 Total capital outlay 46,500 39,550 2,298 37,252 64,218 TOTAL EXPENDITURES 10,355,501 10,151,956 9,950,521 201,435 9,539,105 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (371,855) (486,526) (248,528) 237,998 186,364 OTHER FINANCING SOURCES Transfers in 371,855 486,526 483,823 (2,703) 215,510 Proceeds from sale of capital assets 1,954 1,954 TOTAL OTHER FINANCING SOURCES 371,855 486,526 485,777 (749) 215,510 NET CHANGE IN FUND BALANCES - - 237,249 237,249 401,874 FUND BALANCES, JANUARY 1 4,354351 4,354,351 4,354,351 3,952,477 FUND BALANCES, DECEMBER 31 $ 4.354,351 $ 4,354351 $ 4,591,600 S 237,249 S 4 354,351 A-65 FORM OF LEGAL OPINION City of New Hope New Hope, Minnesota [Original Purchaser] APPENDIX B >)) C>ORSEE: Y buR,' EV a WHII :er LLP Re: $2,760,000 General Obligation Tax Increment Refunding Bonds, Series 2012A 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 its General Obligation Tax Increment Refunding Bonds, Series 2012A dated, as originally issued, as of January 11, 2012, in the total principal amount of $2,760,000 (the "Bonds"), we have examined certified copies of certain proceedings taken, and certain affidavits and certificates furnished, by the City in the authorization, sale and issuance of the Bonds, including the form of the Bonds. As to questions of fact material to our opinion we have assumed the authenticity of and relied upon the proceedings, affidavits and certificates famished to us without undertaking to verify the same by independent investigation. From our examination of such proceedings, affidavits and certificates, and based upon laws, regulations, rulings and decisions in effect on the date hereof, 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 primarily from tax increment revenues generated from the captured net tax capacity of taxable property within tax increment financing districts in the City, the collections of which the governing body of the City has estimated will produce amounts at least five percent in excess of the amounts needed to meet, when due, the principal and interest payments on the Bonds; but, if necessary for the payment of such principal and interest, ad valorem taxes are required by law to be levied on all taxable property in the City without limitation of 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 the federal alternative minimum tax imposed on corporations. RIM 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. The opinions expressed in paragraphs 1 and 2 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 exercise of judicial discretion. The opinions expressed in paragraphs 3 and 4 above are subject to the condition of the City's compliance with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon 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 income, retroactive to the date of issuance of the Bonds. Except as stated in this opinion, we express no opinion regarding federal, state or other tax consequences to holders of the Bonds. We have not been asked, and have not undertaken, to review the accuracy, completeness or sufficiency of any offering materials relating to the Bonds, and accordingly, we express no opinion with respect thereto. Dated: January_, 2012. Very truly yours, Im FORM OF LEGAL OPINION C >» HORSEY DOR_I :.LY LLP City of New Hope New Hope, Minnesota [Original Purchaser] Re: $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B 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 its General Obligation Taxable Tax Increment Refunding Bonds, Series 2011B dated, as originally issued, as of January 11, 2012, in the total principal amount of $1,330,000 (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 based upon Laws, regulations, rulings and decisions in effect on the date hereof, 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 onthe Bonds are payable primarily from tax increment revenues generated from the captured net tax capacity of taxable property within tax increment financing districts in the City, the collections of which the governing body of the City has estimated will produce amounts at least five percent in excess of the amounts needed to meet, when due, the principal and interest payments on the Bonds; but, if necessary for the payment of such principal and interest, ad valorem taxes are required by law to be levied on all taxable property in the City without limitation of rate or amount. 3. Interest on the Bonds will be includable in gross income for federal and State of Minnesota income tax purposes. The opinions expressed in paragraphs 1 and 2 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 exercise of judicial discretion. We have not been asked, and have not undertaken, to review the accuracy, completeness or sufficiency of any offering materials relating to the Bonds, and accordingly, we express no opinion with respect thereto. Dated: January _, 2012. Very truly yours, ME 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 ofthe 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 a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of 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 tum 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-1 5. Conveyance ofnotices 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. 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). S. 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. 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 oftendered 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. C-2 APPENDIX D FORM OF CONTINUING DISCLOSURE COVENANTS (Excerpts from sale resolution) (a) Pumose and Beneficiaries. To provide for the public availability of certain information relating to the Bonds and the security therefor and to permit the Purchaser and other participating underwriters in the primary offering of the Bonds to comply with amendments to Rule 15c2-12 promulgated by the SEC under the Securities Exchange Act of 1934 (17 C.F.R. § 240.15c2-12), relating to continuing disclosure (as in effect and interpreted from time to time, the "Rule"), which will enhance the marketability of the Bonds, the City hereby makes the following covenants and agreements for the benefit of the Owners (as hereinafter defined) from time to time of the Outstanding Bonds. The City is the only obligated person in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of which continuing disclosure must be made. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. If the City fails to comply with any provisions of this section, any person aggrieved thereby, including the Owners of any Outstanding Bonds, may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any agreement or covenant contained in this section, including an action for a writ of mandamus or specific performance. Direct, indirect, consequential and punitive damages shall not be recoverable for any default hereunder to the extent permitted by law. Notwithstanding anything to the contrary contained herein, in no event shall a default under this section constitute a default under the Bonds or under any other provision of this resolution. As used in this section, Owner or Bondowner means, in respect of a Bond, the registered owner or owners thereof appearing in the bond register maintained by the Registrar or any Beneficial Owner (as hereinafter defined) thereof, if such Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, Beneficial Owner means, in respect of a Bond, any person or entity which (a) 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 (b) is treated as the owner of the Bond for federal income tax purposes. (b) Information To Be Disclosed. The City will provide, in the manner set forth in subsection (c) hereof, either directly or indirectly through an agent designated by the City, the following information at the following times: (1) on or before 365 days after the end of each fiscal year of the City, commencing with the fiscal year ending December 31, 2012, the following financial information and operating data in respect of the City (the "Disclosure Information"): (A) the audited financial statements of the City for such fiscal year, containing balance sheets as of the end of such fiscal year and a statement of operations, changes in fund balances and cash flows for the fiscal year then ended, showing in comparative form such figures for the preceding fiscal year of the City, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Minnesota law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the City, noting the discrepancies therefrom and the effect thereof, and certified as to accuracy and completeness in all material respects by the fiscal officer of the City; and D-1 (B) to the extent not included in the financial statements referred to in paragraph (A) hereof, the information for such fiscal year or for the period most recently available of the type contained in the Official Statement under headings: Current Property Valuations; Direct Debt; Tax Levies & Collections; Population Trend; and Employment/Unemployment, which information may be unaudited. Notwithstanding the foregoing paragraph, if the audited financial statements are not available by the date specified, the City shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of the Disclosure Information and, within 10 days after the receipt thereof, the City shall provide the audited financial statements. Any or all of the Disclosure Information may be incorporated by reference, if it is updated as required hereby, from other documents, including official statements, which have been submitted to each of the repositories hereinafter referred to under subsection (c) or the SEC. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board (the "MSRB"). The City shall clearly identify in the Disclosure Information each document so incorporated by reference. If any part of the Disclosure Information can no longer be generated because the operations of the City have materially changed or been discontinued, such Disclosure Information need no longer be provided if the City includes in the Disclosure Information a statement to such effect, provided, however, if such operations have been replaced by other City operations in respect of which data is not included in the Disclosure Information and the City determines that certain specified data regarding such replacement operations would be a Material Fact (as defined in paragraph (2) hereof), then, from and after such determination, the Disclosure Information shall include such additional specified data regarding the replacement operations. If the Disclosure Information is changed or this section is amended as permitted by this paragraph (b)(1) or subsection (d), then the City shall include in the next Disclosure Information to be delivered hereunder, to the extent necessary, an explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. (2) In a timely manner not in excess of ten business days after the occurrence of the event, notice of the occurrence of any of the following events (each, a "Material Fact'): (A) Principal and interest payment delinquencies; (B) Non-payment related defaults, if material; (C) Unscheduled draws on debt service reserves reflecting financial difficulties; (D) Unscheduled draws on credit enhancements reflecting financial difficulties; (E) Substitution of credit or liquidity providers, or their failure to perform; (F) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (G) Modifications to rights of security holders, if material; (H) Bond calls, if material, and tender offers; (I) Defeasances; (J) Release, substitution, or sale of property securing repayment of the securities; (K) Rating changes; (L) Bankruptcy, insolvency, receivership or a similar event with respect to the City; (M) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material and (I) Appointment of a successor or additional trustee or the change of name of a trustee, if material. D-2 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. For the purposes of the event identified in (L) hereinabove, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (3) In a timely manner, notice of the occurrence of any of the following events or conditions: (A) the failure of the City to provide the Disclosure Information required under paragraph (b)(1) at the time specified thereunder; (B) the amendment or supplementing of this section pursuant to subsection (d), together with a copy of such amendment or supplement and any explanation provided by the City under subsection (d)(2); (C) the termination of the obligations of the City under this section pursuant to subsection (d); (D) any change in the accounting principles pursuant to which the financial statements constituting a portion of the Disclosure Information are prepared; and (E) any change in the fiscal year of the City. (c) Manner of Disclosure. The City agrees to make available the information described in subsection (b) to the following entities by telecopy, overnight delivery, mail or other means, as appropriate: (1) the information described in paragraphs (1), (2) and (3) of subsection (b), to the MSRB through EMMA; (2) the information described in subsection (b), to any rating agency then maintaining a rating of the Bonds at the request of the City and, at the expense of such Bondowner, to any Bondowner who requests in writing such information, at the time of transmission under paragraph (1) of this subsection, or, if such information is transmitted with a subsequent time of release, at the time such information is to be released; (3) all documents provided to the MSRB shall be accompanied by identifying information as prescribed by the MSRB. (d) Term; Amendments; Interpretation. (1) The covenants of the City in this section shall remain in effect so long as any Bonds are Outstanding. Notwithstanding the preceding sentence, however, the obligations of the City under this section shall terminate and be without further effect as of any date on which the City delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or proceedings, the failure of the City to comply with the requirements of this D-3 section will not cause participating underwriters in the primary offering of the Bonds to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof. (2) This section (and the form and requirements of the Disclosure Information) may be amended or supplemented by the City from time to time, without notice to (except as provided in paragraph (c)(3) hereof) or the consent of the Owners of any Bonds, by a resolution of this Council filed in the office of the recording officer of the City accompanied by an opinion of Bond Counsel, who may rely on certificates of the City and others and the opinion may be subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection with a change in circumstances that arises from a change in law or regulation or a change in the identity, nature or status of the City or the type of operations conducted by the City, or (b) is required by, or better complies with, the provisions of paragraph (b)(5) of the Rule; (ii) this section as so amended or supplemented would have complied with the requirements of paragraph (b)(5) of the Rule at the time of the primary offering of the Bonds, giving effect to any change in circumstances applicable under clause (i)(a) and assuming that the Rule as in effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) such amendment or supplement does not materially impair the interests of the Bondowners under the Rule. If the Disclosure Information is so amended, the City agrees to provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of financial information or operating data being provided hereunder. (3) This section is entered into to comply with the continuing disclosure provisions of the Rule and should be construed so as to satisfy the requirements of paragraph (b)(5) of the Rule. D-4 APPENDIX E TERMS OF PROPOSAL $2,760,000' GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2012A CITY OF NEW HOPE, MINNESOTA Proposals for the purchase of $2,760,000 General Obligation Tax Increment Refunding Bonds, Series 2012A (the "Series 2012A 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 12:00 Noon., Central Time, and ELECTRONIC PROPOSALS will be received via PARITY, in the manner described below, until 12:00 Noon. Central Time, on December 12, 2011, at which time they will be opened, read and tabulated. The proposals will be presented to the City Council for consideration for award by resolution at a meeting to be held at 7:00 P.M., Central Time, on the same date. The proposal offering to purchase the Series 2012A Bonds upon the terms specified herein and most favorable to the City will be accepted unless all proposals are rejected. PURPOSE The Series 2012A Bonds are being issued by the City, pursuant to Minnesota Statutes, Chapters 469 and 475, for the purpose of effecting an advance crossover refunding of the 2015 through 2025 maturities of the City's $4,080,000 General Obligation Tax Increment Bonds, Series 2004 (the "Series 2004 Bonds"), dated April 1, 2004. The Series 2012A Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. DATES AND MATURITIES The Series 2012A Bonds will be dated January 11, 2012, will be issued as fully registered Series 2012A Bonds in the denomination of $5,000 each, or any integral multiple thereof, and will mature on February 1 as follows: Year Amount* 2015 $225,000 2016 230,000 2017 235,000 2018 240,000 Year Amount* 2019 $245,000 2020 245,000 2021 250,000 2022 260,000 ADJUSTMENT OPTION Year Amount* 2023 $270,000 2024 275,000 2025 285,000 * The City reserves the right to increase or decrease the principal amount of the Series 2012A 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 Series 2012A 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-1 INTEREST PAYMENT DATES AND RATES Interest will be payable on February 1 and August 1 of each year, commencing August 1, 2012, to the registered owners of the Series 2012A 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 Series 2012A 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 Series 2012A 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 Series 2012A 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 Series 2012A 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 Series 2012A Bonds. So long as Cede & Co. is the registered owner of the Series 2012A 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 Series 2012A Bonds. PAYING AGENTIESCROW AGENT The City has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the "Paying Agent") and U.S. Bank National Association, St. Paul, Minnesota, to act as escrow agent (the "Escrow Agent"). The City will pay the charges for Paying Agent and Escrow Agent services. The City reserves the right to remove the Paying Agent and/or Escrow Agent and to appoint a successor. OPTIONAL REDEMPTION At the option of the City, Series 2012A Bonds maturing on or after February 1, 2021 shall be subject to redemption prior to maturity on February 1, 2020 and on any date thereafter, at a price of par plus accrued interest. Redemption may be in whole or in part of the Series 2012A Bonds subject to prepayment. If redemption is in part, the selection of the amounts and maturities of the Series 2012A Bonds to be redeemed shall be at the discretion of the City. If only part of the Series 2012A Bonds having a common maturity date are called for redemption, then 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 redemption shall be sent by mail not more than 60 days and not fewer than 30 days prior to the date fixed for redemption to the registered owner of each Series 2012A Bond to be redeemed at the address shown on the registration books. E-2 DELIVERY On or about January 11, 2012, the Series 2012A Bonds will be delivered without cost to the winning bidder at DTC. On the day of closing, the City will fo mish to the winning bidder the opinion of bond counsel hereinafter described, an arbitrage certification, and certificates verifying that no litigation in any manner questioning the validity of the Series 2012A Bonds is then pending or, to the best knowledge of officers of the City, threatened. Payment for the Series 2012A Bonds must be received by the City at its designated depository on the date of closing in immediately available funds. LEGAL OPINION An opinion in substantially the form attached hereto as Exhibit B will be furnished by Dorsey & Whitney LLP, Minneapolis, Minnesota, bond counsel to the City. SUBMISSION OF PROPOSALS Proposals must not be for less than $2,732,400 plus accrued interest on the principal sum of $2,760,000 from date of original issue of the Series 2012A 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 12:00 Noon. 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 $55,200, 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 HIeinBank, 1550 Audubon Road, Chaska, Minnesota, ABA No. 091915654 for credit: Ehlers & Associates Good Faith Account No. 3208138. 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 winning bidder at the closing for the Series 2012A 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. 3208138. 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 winning bidder at the closing; 4) Ehlers shall bear all costs of maintaining the escrow account and returning the funds E-3 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. 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 Series 2012A 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 Series 2012A Bonds is adjourned, recessed, or continued to another date without award of the Series 2012A Bonds having been made. AWARD The Series 2012A 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 Series 2012A 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. BONDINSURANCE If the Series 2012A Bonds are qualified for any bond insurance policy, the purchase of such policy shall be at the sole option and expense of the winning bidder. Any cost for such insurance policy is to be paid by the winning bidder, except that, if the City requested and received a rating on the Series 2012A 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 winning bidder. Failure of the municipal bond insurer to issue the policy after the Series 2012A Bonds are awarded to the winning bidder shall not constitute cause for failure or refusal by the winning bidder to accept delivery of the Series 2012A Bonds. CUSIP NUMBERS The City will assume no obligation for the assignment or printing of CUSIP numbers on the Series 2012A Bonds or for the correctness of any numbers printed thereon, but will permit such numbers to be printed at the expense of the winning bidder, if the winning bidder waives any delay in delivery occasioned thereby. QUALIFIED TAX-EXEMPT OBLIGATIONS The City will designate the Series 2012A Bonds as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. E-4 CONTINUING DISCLOSURE In order to permit bidders for the Series 2012A Bonds and other participating underwriters, in the primary offering of the Series 2012A 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 Series 2012A Bonds, in the resolution awarding the sale and prescribing the terms of the Series 2012A Bonds, to provide annual reports of specified information and notice of the occurrence of certain events. The City is the only "obligated person" in respect of the Series 2012A Bonds within the meaning of the Rule for the purposes of disclosing information on an ongoing basis. 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 Series 2012A Bonds. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. INFORMATION FROM WINNING BIDDER The successful purchaser will be required to provide, in a timely manner, certain information relating to the initial offering prices of the Series 2012A Bonds necessary to compute the yield on the Series 2012A 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 Series 2012A Bonds prior to the proposal opening by request from Ehlers at www.elilers-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 City Clerk City of New Hope, Minnesota E-5 TERMS OF PROPOSAL $1,330,000*' GENERAL OBLIGATION TAXABLE TAX INCREMENT REFUNDING BONDS, SERIES 2012B CITY OF NEW HOPE, MINNESOTA Proposals for the purchase of $1,330,000 General Obligation Taxable Tax Increment Refunding Bonds, Series 2012B (the "Series 2012B 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 12:00 Noon., Central Time, and ELECTRONIC PROPOSALS will be received via PARITY, in the manner described below, until 12:00 Noon. Central Time, on December 12, 2011, 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 Series 2012B Bonds upon the terms specified herein and most favorable to the City will be accepted unless all proposals are rejected. PURPOSE The Series 2012B Bonds are being issued by the City, pursuant to Minnesota Statutes, Chapters 469 and 475, for the purpose of effecting an advance crossover refunding of the 2015 through 2031 maturities of the City's $1,370,000 General Obligation Taxable Tax Increment Bonds, Series 2005A (the "Series 2005A Bonds"), dated March 1, 2005. The Series 2012B Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. DATES AND MATURITIES The Series 2012B Bonds will be dated January 11, 2012, will be issued as fully registered Series 2012B 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** 2015 $55,000 2021 $65,000 2027 $105,000 2016 50,000 2022 75,000 2028 100,000 2017 50,000 2023 85,000 2029 100,000 2018 55,000 2024 90,000 2030 100,000 2019 55,000 2025 95,000 2031 95,000 2020 60,000 2026 95,000 ADJUSTMENT OPTION ** The City reserves the right to increase or decrease the principal amount of the Series 2012B Bonds on the day of sale, in increments of $5,000. 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 Series 2012B 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-6 INTEREST PAYMENT DATES AND RATES Interest will be payable on February I and August 1 of each year, commencing August 1, 2012, to the registered owners of the Series 2012B 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 Series 2012B 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 Series 2012B 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 Series 2012B 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 Series 2012B 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 Series 2012B Bonds. So long as Cede & Co. is the registered owner of the Series 2012B 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 Series 2012B Bonds. PAYING AGENT/ESCROW AGENT The City has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the "Paying Agent") and U.S. Bank National Association, St. Paul, Minnesota, to act as escrow agent (the "Escrow Agent"). The City will pay the charges for Paying Agent and Escrow Agent services. The City reserves the right to remove the Paying Agent and/or Escrow Agent and to appoint a successor. OPTIONAL REDEMPTION At the option of the City, Series 201213 Bonds maturing on or after February 1, 2023 shall be subject to prior payment on February 1, 2022 or any date thereafter, at a price of par plus accrued interest. Redemption may be in whole or in part of the Series 2012B Bonds subject to prepayment. If redemption is in part, the selection of the amounts and maturities of the Series 2012B Bonds to be prepaid shall be at the discretion of the City. If only part of the Series 2012B Bonds having a common maturity date are called for prepayment, the City or Paying Agent, if any, will notify DTC of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed. Notice of such call shall be given by mailing a notice not more than 60 and not fewer than 30 days prior to the date fixed for redemption to the registered owner of each Series 2012B Bond to be redeemed at the address shown on the registration books. E-7 DELIVERY On or about January 11, 2012, the Series 2012B Bonds will be delivered without cost to the original purchaser at DTC. On the day of closing, the City will famish to the winning bidder the opinion of bond counsel hereinafter described, an arbitrage certification and certificates verifying that no litigation in any manner questioning the validity of the Series 2012B Bonds is then pending or, to the best knowledge of officers of the City, threatened. Payment for the Series 2012B Bonds must be received by the City at its designated depository on the date of closing in immediately available funds. LEGAL OPINION An opinion as to the validity of the Series 2012B Bonds will be famished by Dorsey & Whitney LLP, of Minneapolis, Minnesota, bond counsel to the City, and will accompany the Series 2012B Bonds. The legal opinion will be issued on the basis of existing law and will state that the Series 2012B 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 $1,313,375 plus accrued interest on the principal sum of $1,330,000 from date of original issue of the Series 2012B 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: I ) 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 12:00 Noon. 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, 2' 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 $26,600, 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. 3208138. 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 winning bidder at the closing for the Series 2012B 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 10einBank,1550 Audubon Road, Chaska, Minnesota, ABA No. 091915654 for credit: Ehlers & Associates Good Faith Account No. 3208138. 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 dunes: 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 winning bidder 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. 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 Series 2012B Bonds are awarded to a bidder using a financial surety bond, then that winning 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 Series 2012B Bonds is adjourned, recessed, or continued to another date without award of the Series 2012B Bonds having been made. AWARD The Series 2012B 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 Series 2012B 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. BONDINSURANCE If the Series 2012B Bonds are qualified for any bond insurance policy, the purchase of such policy shall be at the sole option and expense of the winning bidder of the Series 2012B Bonds. Any cost for such insurance policy is to be paid by the winning bidder, except that, if the City requested and received a rating on the Series 2012B 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 winning bidder. Failure of the municipal bond insurer to issue the policy after the Series 2012B Bonds are awarded to the winning bidder shall not constitute cause for failure or refusal by the winning bidder to accept delivery of the Series 2012B Bonds. CUSIP NUMBERS The City will assume no obligation for the assignment or printing of CUSIP numbers on the Series 2012B Bonds or for the correctness of any numbers printed thereon, but will permit such numbers to be printed at the expense of the winning bidder, if the winning bidder waives any delay in delivery occasioned thereby. NON-QUALIFIED TAX-EXEMPT OBLIGATIONS The City will not designate the Series 2012B Bonds as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. E-9 CONTINUING DISCLOSURE In order to permit bidders for the Series 2012B Bonds and other participating underwriters, in the primary offering of the Series 2012B 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 Series 2012B Bonds, in the resolution awarding the sale and prescribing the terms of the Series 2012B Bonds, to provide annual reports of specified information and notice of the occurrence of certain events. The City is the only 'obligated person" in respect of the Series 2012B Bonds within the meaning of the Rule for the purposes of disclosing information on an ongoing basis. 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 Series 2012B Bonds. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. INFORMATION FROM WINNING BIDDER The winning bidder will be required to provide, in a timely manner, certain information relating to the initial offering prices of the Series 2012B Bonds necessary to compute the yield on the Series 2012B Bonds pursuant to the provisions of the Internal Revenue Code of 1986, as amended. PRELIMINARY OFFICIAL STATEMENT Underwriters may obtain a copy of the Preliminary Official Statement relating to the Series 2012B Bonds prior to the proposal opening by request from Ehlers at www.ehiers-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 of the Final Official Statement upon request 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 City Clerk City of New Hope, Minnesota E-10