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Home My WebLink About11/18/1993 TENTATIVE AGENDA HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF SHAKOPEE, MINNESOTA Special Meeting November 18, 1993 1 . Roll Call at 5 : 00 P.M. 2 . Approve a Special Call 3 . Tax Increment Pledge Agreement Relating to $1, 000, 000 G.O. Tax Increment Refunding Bonds . 4 . Other Business a) b) 5 . Adjourn Dennis R. Kraft Executive Director SHAKOPEE November 10, 1993 Members of the Shakopee Housing and Redevelopment Authority 129 Holmes Street South Shakopee, MN 55379 Michael Beard, Chairman of the HRA, has notified me, Dennis R. Kraft, HRA Executive Director of the City of Shakopee, that a special session of the HRA will be held at 5 : 00 p .m. on Thursday, November 18 , 1993 for the purpose of considering actions on the following matters : 1) Tax Increment Pledge Agreement Relating to $1, 000, 000 G.O. Tax Increment Refunding Bonds . 2) Any other business which may come before the HRA. Respectfully, Dennis R. Kraft HRA Executive Director CC: Shakopee Valley News Amzak Cable Co. KCHK City Hall Bulletin Board DRK:trw CONEN UNTIY PRIDE SL\CE 1857 129 Holmes Street South Shakopee,Minnesota 55379-1351 612-443-3650 • FAX 612-445-67:S TO: Dennis R. Kraft, HRA Director FROM: Gregg Voxland, Finance Director RE: Tax Increment Pledge Agreement For 1993 GO TIF Refunding Bonds DATE: November 10, 1993 Introduction HRA authorization for the execution of a TIF pledge agreement for the 1993C bonds is requested. Background An agreement between the HRA and the City is part of the package of documents prepared by bond counsel for the 1993C TIF refunding bonds. The agreement provides for the HRA to remit to the City tax increment revenues in order for the city to make debt payments on the new bonds. Action Requested Move to authorize the appropriate HRA officials to execute the Tax Increment Pledge Agreement for the 1993C GO TIF Refunding Bonds. TENTATIVE AGENDA ADJ.REG.SESSION SHAKOPEE, MINNESOTA NOVEMBER 18, 1993 LOCATION: City Hall, 129 Holmes Street South Mayor Gary Laurent presiding 1] Roll Call at 5: 00 P.M. 2] Awarding Sale of Bonds: a] Res. No. 3902 , Awarding Sale of $1, 400, 000 General Obligation Improvement Bonds, Series 1993-B b] Res. No. 3903 , Awarding Sale of $1, 400, 000 General Obligation Tax Increment Refunding Bonds, Series 1993-C 3 ] Other Business 4] Adjourn Dennis R. Kraft City Administrator VASPRINGSTED S,:e : PUBLIC FINANCE ADV.S_PS s. "t�l 27 �� 55402-13O3 .2) 333.3;77 Fax: ;612) 349.5230 Home Office 85 East Seventh Place 16655 Nest Sluemound Road Suite 100 Suite 290 Ea nt Paul. MN 55101.2143 Brock(:ed. WI 53005-5935 (612) 223-3000 ;414) 782-8222 Fax: (612) 223.3002 Fax: :414) 782-2904 6800 Coi(ege Boulevard Suite 600 Overland Park, KS 66211-1533 t913) 345-8062 Fax: 1913) 345.1770 1800 K Street NW Suite 831 Washington. DC 20006.2200 (202) 466-3344 Fax: 202) 223.1362 $1,000,000* CITY OF SHAKOPEE, MINNESOTA GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1993C AWARD: FBS INVESTMENT SERVICES, INC. And Associates SALE: November 18, 1993 Moody's Rating: A Interest Net Interest True Interest Bidder Rates Price Cost Rate FBS INVESTMENT SERVICES, INC. 2.90% 1995 $993,200.00 $97,604.17 3.6028% Juran & Moody, Incorporated 3.10% 1996 American National Bank Saint Paul 3.30% 1997 3.60% 1998 NORWEST INVESTMENT SERVICES, INC. 2.80% 1995 $994,000.00 $97,868.33 3.6105% Cronin &Company, Incorporated 3.20% 1996 Peterson Financial Corporation 3.40% 1997 3.60% 1998 COUNTRY CLUB BANK 2.90% 1995 $994,300.00 $97,916.67 3.6117% 3.20% 1996 3.375% 1997 3.625% 1998 PIPER JAFFRAY INC. 2.90% 1995 $994,050.00 $98,496.25 3.6339% DOUGHERTY, DAWKINS, STRAND & 3.20% 1996 BIGELOW, INCORPORATED 3.45% 1997 3.60% 1998 DAIN BOSWORTH INCORPORATED 3.00% 1995 $995,700.00 $99,445.83 3.6642% 3.25% 1996 3.50% 1997 3.75% 1998 (Continued) Interest Net interest True Interest Bidder Rates Price Cost Rate FIRSTAR BANK MILWAUKEE, N.A. 3.10% 1995 $994,550.00 $100,583.33 3.7099% 3.30% 1996 3.50% 1997 3.70% 1998 KEMPER SECURITIES, INC. 3.50% 1995-1998 $993,000.00 $102,083.33 3.7729% NATIONAL CITY BANK 3.20% 1995 $995,200.00 $103,053.75 3.7993% 3.40% 1996 3.65% 1997 3.80% 1998 CLAYTON BROWN &ASSOCIATES, 3.00% 1995 $993,050.00 $103,720.83 3.8284% INCORPORATED 3.30% 1996 3.60% 1997 3.80% 1998 These Bonds are being reoffered at par. BBI: 5.46 Average Maturity: 2.72 Years * Subsequent to bid opening, the issue size was not changed. SPRINGSTED i20 5c;,u, A:- 3tree: Suite 2507 PUBLIC FINANCE ADVISORS M.nneaDoils. MN 55-02.1800 (612) 333-9177 Fax: (612) 349-5233 Home Office 85 East Seventh Place 16655 West Bluemound Road Suite 100 Suite 290 Saint Paul. MN 55101.2143 Brookfield. WI 53005-5935 (612) 223-3000 (414) 782.8222 Fax: (612) 223-3002 Fax: (414) 782-2904 6800 College Boulevard Suite 600 Overland ?ark. K3 662:1-1533 (913) 345-8062 Fax: (913) 345-1773 1800 K Street NW Suite 83: Wash!ngtcn. DC 20006.2200 (202) 466-334' Fax: (202) 223.1362 $1,400,000 CITY OF SHAKOPEE, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1993B AWARD: PIPER JAFFRAY INC. DOUGHERTY, DAWKINS, STRAND & BIGELOW, INCORPORATED SALE: November 18, 1993 Moody's Rating: A Interest Net Interest True Interest Bidder Rates Price Cost Rate PIPER JAFFRAY INC. 3.20% 1996 $1,388,562.00 $402,162.58 4.3473% DOUGHERTY, DAWKINS, STRAND & 3.45% 1997 BIGELOW, INCORPORATED 3.60% 1998 3.80% 1999 4.00% 2000 4.15% 2001 4.30% 2002 4.40% 2003 4.60% 2004 4.75% 2005 NORWEST INVESTMENT SERVICES, INC. 3.20% 1996 $1,388,800.00 $404,426.25 4.3698% Cronin & Company, Incorporated 3.40% 1997 Peterson Financial Corporation 3.60% 1998 3.80% 1999 4.00% 2000 4.15% 2001 4.30% 2002 4.50% 2003 4.65% 2004 4.80% 2005 (Continued) Interest Net Interest True Interest Bidder Rates Price Cost Rate FBS INVESTMENT SERVICES, INC. 3.10% 1996 $1,387,400.00 $405,382.50 4.3815% Juran & Moody, Incorporated 3.30% 1997 American National Bank Saint Paul 3.60% 1998 3.75% 1999 4.00% 2000 4.15% 2001 4.30% 2002 4.50% 2003 4.70% 2004 4.80% 2005 DAIN BOSWORTH INCORPORATED 3.20% 1996 $1,388,660.00 $408,906.25 4.4207% 3.50% 1997 3.75% 1998 3.95% 1999 4.10% 2000 4.20% 2001 4.35% 2002 4.50% 2003 4.65% 2004 4.80% 2005 FIRSTAR BANK MILWAUKEE, N.A. 3.30% 1996 $1,386,560.00 $411,774.58 4.4570% 3.60% 1997 3.75% 1998 3.95% 1999 4.10% 2000 4.20% 2001 4.35% 2002 4.50% 2003 4.65% 2004 4.80% 2005 CLAYTON BROWN &ASSOCIATES, 3.30% 1996 $1,385,275.05 $412,965.99 4.4734% INCORPORATED 3.60% 1997 3.80% 1998 3.90% 1999 4.10% 2000 4.25% 2001 4.40% 2002 4.50% 2003 4.625% 2004 4.75% 2005 KEMPER SECURITIES, INC. 3.70% 1996-1997 $1,384,875.00 $413,435.00 4.4821% 3.75% 1998 3.90% 1999 4.10% 2000 4.25% 2001 4.375% 2002 4.50% 2003 4.60% 2004 4.70% 2005 (Continued) Interest Net Interest True Interest Bidder Rates Price Cost Rate JOHN G. KINNARD & COMPANY 3.75% 1996 $1,384,880.00 $443,530.83 4.8042% INCORPORATED 3.90% 1997 4.10% 1998 4.25% 1999 4.40% 2000 4.50% 2001 4.65% 2002 4.75% 2003 5.00% 2004 5.20% 2005 These Bonds are being reoffered at par. BBI: 5.46 Average Maturity: 6.61 Years cO b TO: Dennis R. Kraft, City Administrator FROM: Gregg Voxland, Finance Director RE: Bond Sale Resolutions And TIF Pledge Agreement DATE: November 10, 1993 Introduction Bond counsel has prepared three documents that require council approval in order to issue an annual improvement bond issue and a TIF refunding bond issue. Background Resolution No. 3902 provides for issuance of bonds to cover the construction of improvements in 1993. Projects covered are Minnesota/Dakota Alleys, VIP sewer extension and Valley Park/11th. This is a routine annual improvement bond issue. Resolution No. 3903 provides for issuance of GO TIF bonds to refund older tax increment bonds in order to save interest costs. The older bonds are the 1984 SO TIF Refunding bonds. Anticipated savings have a present value of about $193,000. An agreement between the HRA and the City is part of the package of documents prepared by bond counsel for the 1993C TIF refunding bonds. The agreement provides for the HRA to remit to the City tax increment revenues in order for the city to make debt payments on the new bonds. Action Requested 1. Offer Resolution Number 3902 A Resolution Authorizing Issuance, Awarding Sale, Prescribing The Form And Details And Providing For The Payment Of $1,400,000 General Obligation Improvement Bonds, Series 1993B, and move its adoption. 2. Offer Resolution Number 3903 A Resolution Authorizing Issuance, Awarding Sale, Prescribing The Form And Details And Providing For The Payment Of $1,000,000 General Obligation Tax Increment Refunding Bonds, Series 1993C, and move its adoption. CERTIFICATION OF MINUTES RELATING TO $1, 400, 000 GENERAL SOOBLIGATION BIMPROVEMENT BONDS, Issuer: City of Shakopee, Minnesota Governing Body: City Council Kind, date, time and place of meeting: A regular meeting held on Thursday, November 18, 1993 at 5 :00 o'clock P .M. , at the City Hall . Members present : Members absent : Documents Attached: Minutes of said meeting (including) : RESOLUTION NO. 3902 RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $1, 400, 000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1993B I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the bonds 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 said corporation in my legal custody, from which they have been transcribed; that said . documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said bonds; and that said 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 of such meeting given as required by law. WITNESS my hand officially as such recording officer this day of November, 1993 . Judith Cox City Clerk Pursuant to authorization conferred by Resolution No. , Springsted Incorporated presented proposals solicited and negotiated by it for the purchase of $1, 400, 000 General Obligation Improvement Bonds, Series 1993B of the City. The terms of the proposals were as follows : Bid for Interest Total Interest Cost Name of Bidder principal Rates - Net Average Rate Councilmember then introduced the following resolution and moved its adoption: RESOLUTION NO. 3902 RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $1, 400, 000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1993B BE IT RESOLVED by the City Council of the City of Shakopee, Minnesota, as follows : Section 1 . Authorization and Sale . 1 .01 . Authorization of Bonds . This Council, by its Resolution No. adopted on October 19, 1993, has determined that is necessary for the City to sell and issue its General Obligation Improvement Bonds, Series 1993B in the aggregate principal amount of $1, 400, 000 (the Bonds) to finance the cost of the local improvements designated in said Resolution (the Improvements) . Resolution No. is incorporated herein by reference . 1 .02 . proposals Received. The City has received proposals for the purchase of the Bonds, and does hereby find and determine that the most favorable proposal received is that of and , of , ' associates (the "Underwriter") , to purchase the Bonds at a price of $ plus accrued interest on all Bonds to the day of delivery and payment, on the further terms and conditions hereinafter set forth . 1 . 03 . Sale of Bonds . The sale of the Bonds is hereby awarded to the Underwriter, and the Mayor and City Clerk are hereby authorized and directed on behalf of the City to execute a contract for the sale of the Bonds in accordance with the terms of said bid. The good faith check of the successful bidder shall be retained and deposited by the finance Director. The good faith checks of other bidders shall be returned to them forthwith. Section 2 . Bond Terms: Registration: Execution and Delivery. 2 . 01 . Maturities: Interest Rates: Denominations; payments. The Bonds shall be designated General Obligation Improvement Bonds, Series 1993B, shall be originally dated as of December 1, 1993, shall be in the denomination of $5, 000 each, or any integral multiple thereof, shall mature on February 1 in the respective years and amounts stated below, and shall bear interest from date of issue until paid or duly called for redemption at the respective annual rates set forth opposite such years and amounts, as follows : Year Amount Rate Year Amount Rate 1996 $150, 000 2001 $140, 000 % 1997 140, 000 2002 140, 000 1998 140, 000 2003 140, 000 1999 140, 000 2004 135, 000 2000 140, 000 2005 135, 000 The Bonds shall be issuable only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, shall be payable by check or draft issued by the Registrar for the Bonds appointed herein. 2 .02 . Dates; Interest Payment Dates . Each Bond shall be authenticated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case such Bond shall be dated as of the date of authentication, or (ii) the date of authentication is prior to August 1, 1994, in which case such Bond shall be dated as of December 1, 1993 . The interest on the Bonds shall be payable on February 1 and August 1 in each year, commencing August 1, 1994, to the owner of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. 2 . 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) Register . The Registrar shall keep at its principal corporate trust 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. (b) Transfer of Bonds . Upon surrender for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall 2 authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until such interest payment date . (c) Exchange of Bonds . Whenever any Bonds are surrendered by the registered owner for exchange the Registrar shall authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity, as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. All Bonds surrendered 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 the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners . The City and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of 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 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, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to such transfer or exchange . (h) Mutilated. Lost, Stolen or Destroyed Bonds . In case any Bond shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond 3 destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that such Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees . All Bonds so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment . 2 .04 . Appointment of Registrar and Paying Agent. The City hereby appoints , Minnesota, as the initial Registrar and Paying Agent for the Bonds, which, together with any successor entity is sometimes referred to herein as the Registrar or the Registrar and Paying Agent . The Mayor and the City Clerk are authorized to execute and deliver, on behalf of the City, a contract with said 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 the 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 and shall deliver the bond register to the successor Registrar. 2 . 05 . Redemption. Bonds maturing in the years 1996 through 2002 shall not be subject to redemption prior to maturity, but Bonds maturing in the years 2003 through 2005 shall be subject to redemption and prepayment at the option of the City, in whole or in part, in such order as the City shall determine and by lot as to Bonds having the same maturity date, on February 1, 2002 and on any date thereafter (whether or not an interest payment date) , at a price equal to the principal amount thereof and accrued interest to the date of redemption. Prior to the date set for redemption of any Bond prior to its stated maturity date, the Clerk shall cause notice of the call for redemption thereof to be published as required by law and, at least twenty (20) days prior to the designated redemption date, shall cause notice of the call 4 to be mailed to the registered holders of any Bonds to be redeemed at their addresses as they appear on the bond register described in Section 2 .03 hereof. 2 .06 . Execution, Authentication and Deliver". The Bonds shall be prepared under the direction of the City Clerk and shall be executed on behalf of the City by the signatures of the Mayor and the City Clerk, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals . In case any officer whose signature or a facsimile of whose signature shall appear on 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 he 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 prepared, executed and authenticated, the Clerk shall deliver the same to the purchaser thereof upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and said purchaser shall not be obligated to see to the application of the purchase price . 2 .07 . Form of Bonds . The Bonds shall be printed in substantially the following form: 5 [Face of the Bonds] UNITED STATES OF AMERICA R- STATE OF MINNESOTA $ COUNTY OF SCOTT CITY OF SHAKOPEE GENERAL OBLIGATION IMPROVEMENT BOND, SERIES 1993B Interest Maturity Date of Rate Date Original Issue CUSIP February 1, December 1, 1993 Registered Owner: Principal Amount : Dollars KNOW ALL PERSONS BY THESE PRESENTS that the City of Shakopee, a duly organized and existing municipal corporation of Scott 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 sum specified above on the maturity date specified above, and to pay interest thereon from the date hereof at the annual rate specified above, payable on February 1 and August 1 in each year, commencing August 1, 1994, 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 month immediately preceding the payment date, all subject to the provisions referred to herein with respect to the redemption of the principal of this Bond before maturity. The interest hereon and, upon presentation and surrender of this Bond, the principal hereof, are payable in lawful money of the United States of America by check or draft issued by , in , Minnesota, Bond Registrar and Paying Agent (the Registrar) , or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. 6 Additional provisions of this Bond are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth in this place. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution described herein until the Certificate of Authentication hereon shall have been executed by the Registrar by manual signature of one of its authorized representatives . IN WITNESS WHEREOF, the City of Shakopee, Scott County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the printed facsimile signatures of the Mayor and City Clerk, and has caused this Bond to be dated as of the Date of Original Issue set forth above . CITY OF SHAKOPEE, MINNESOTA (facsimile) Mayor Attest : (facsimile) City Clerk CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within . Date of Authentication: Registrar By Authorized Representative 7 (Reverse of the Bonds] This Bond is one of an issue in the aggregate principal amount of $1, 400, 000, all of like date and tenor, except as to maturity date, interest rate, denomination and redemption privilege, issued pursuant to a resolution adopted by the City Council on November 18, 1993 (the Resolution) , for the purpose of financing the cost of local improvements in the City, and is issued pursuant to and in full conformity with the constitution and laws of the State of Minnesota thereunto enabling, including Minnesota Statutes, Chapters 429 and 475 . The Bonds of this series are issuable only as fully registered Bonds, in denominations of $5, 000 or any multiple thereof, of single maturities . In the Resolution the City Council determinedthat in calendar year 1993 the City does not expect to issue tax-exempt obligations in an aggregate principal amount greater than $10, 000, 000 (exclusive of "private activity bonds") , and designated the Bonds as "qualified tax exempt obligations" within the meaning of Section 265 of the Internal Revenue Code of 1986. Bonds of this issue maturing in 2002 and earlier years are payable on their respective stated maturity dates without option of prior payment, but Bonds having stated maturity dates in 2003 and later years are each subject to redemption and prepayment at the option of the City, in whole or in part, and if in part in such order as the City shall determine and by lot as to Bonds maturing on the same date, on February 1, 2002 and any date thereafter (whether or not an interest payment date) , at a price equal to the principal amount thereof plus interest accrued to the date of redemption. Prior to the date specified for the redemption of any Bond prior to its stated maturity date, she City will cause notice of the call for redemption to be published as required by law, and, at least 20 days prior to the designated redemption date, will cause notice of the call to be mailed to the registered owner of any Bond to be redeemed at the owner's address as it appears on the bond register maintained by the Registrar. Upon partial redemption of any Bond, a new Bond or Bonds will be delivered to the owner without charge, representing the pr:_ncipal amount remaining outstanding. As provided in the Resolution and subject to cer•:ain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner 's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations . Upon such transfer or exchange the City will cause 8 the name f a new Bond or Bonds to be issued in principalhamountsfbearing eree or registered owner, of the same aggregate interest at the same rate and maturing on the same date, subject to reimbursement for any oasuchfee transfergovernmental exchangecharge required to be paid with respect t The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar 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 the laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required; that, prior to the issuance hereof the City has covenanted and agreed to levy special assessments upon property specially benefited by the local improvements financed by the Bonds, and has levied ad valorem taxes on all taxable property in the City, which special assessments and taxes will be collectible for the years and in amounts sufficient to produce sums not less than 5% in excess of the principal of and interest on the Bonds of this issue when due, and has appropriated such special assessmentsand taxes to the payment of such principal and interest; that if necessary for payment of such principal and interest, additional ad valorem taxes are required to be levied upon all taxable property in the City, without limitation as to rate or amount; and that the issuance of this Bond does not cause the indebtedness of the City to exceed any consitutional or statutory limitation of indebtedness . (Form of certificate to be printed on the reverse side of each Bond, following a full copy of the legal opinion) We certify that the above is a full, true and correct copy of the legal opinion rendered by bond counsel on the issue of Bonds of the City of Shakopee, Minnesota, which includes the within Bond, dated as of the date of delivery of and payment for the Bonds . (Facsimile Signature) (Facsimile Signature) (FaMayor City Clerk 9 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 UTMA Custodian - in common (Cust) (Minor) TEN ENT -- as tenants under Uniform Transfers to Minors by entireties JT TEN -- as joint tenants Act with right of (State) survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list . ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises . Dated: Notice : The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever. Signature Guaranteed: 10 Signatures) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges . The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address : (Include information for all joint owners if this Bond is held by joint account) Please insert social security or other identifying number of assignee 11 Section 3 . Use of Proceeds; Series 1993B Improvement Bond Construction Fund. There is hereby created on the official books and records of the City, a special fund to be designated as the "Series 1993B Improvement Bond Construction Fund" (hereinafter referred to as the Construction Fund) , to be held and administered by the Finance Director separate and apart from all other funds of the City. The City appropriates to the Construction fund (a) the proceeds of the sale of the Bonds, less the amount required by Section 4 hereof to be deposited in the Series 1993B Improvement Bond Account therein created, and (b) all collections of special assessments levied for the Improvements until completion and payment of all costs of the Improvements . The Construction Fund shall be used solely to defray expenses of the Improvements, including but not limited to the transfer to the Bond Account created in Section 4 hereof, of amounts sufficient for the payment of interest due upon the Bonds prior to the completion and payment of all costs of the Improvements and the payment of the expenses incurred by the City in connection with the issuance of the Bonds . Upon completion and payment of all costs of the Improvements, any balance of the proceeds of the Bonds remaining in the Construction Fund may be used to pay the cost, in whole or in part, of any other local improvements instituted pursuant to the Minnesota Statutes, Chapter 429, as directed by the City Council, but any balance of such proceeds not so used and any remaining special assessments shall be credited and paid to the Bond Account. . Section 4 . Series 1993E Improvement Bond Account. So long as any of the Bonds are outstanding and any principal of or interest thereon unpaid, the Finance Director shall maintain a separate debt service account on the official books and records of the City to be known as the Series 1993B Improvement Bond Account (hereinafter referred to as the Bond Account) , and the principal of and interest on the Bonds shall be payable primarily from the Bond Account . The City irrevocably appropriates to the Bcnd Account (a) $ of the Bond proceeds, which includes any unused discount and accrued interest, which shall be used to pay interest accruing on the Bonds through August 1, 1994; (b) all collections of special assessments levied with respect to the Improvements as provided in Section 5, from and after completion and payment of all costs of the Improvements; (c) all ad valorem taxes levied in accordance with this resolution; and (d) all such other moneys as shall be received and appropriated to the Bond Account from time to time . If the balance in the Bond Account is at any time insufficient to pay all interest and principal then due on all Bonds payable therefrom, the payment shall be made from any fund of the City which is available for that purpose, subject to reimbursement from the Bond Account when the balance therein is 12 sufficient, and the Council covenants and agrees that it will each year levy an amount sufficient to take care of any accumulated or anticipated deficiency, which levy is not subject to any constitutional or statutory tax limitation. Section 5 . Special Assessments . The City hereby covenants and agrees that, for the payment of the cost of improvements permanently financed by the Bonds the City has done or will do and perform all acts and things necessary for the final and valid levy of special assessments in an amount not less than 20% of the cost of each of the Improvements permanently financed by the Bonds; and that the City will levy assessments in the estimated aggregate principal amount of $ . The principal of said assessments is payable over a fifteen year period, withinterest on unpaid installments thereof from time to time at the estimated rate of % per annum. It is presently estimated that the principal and interest on such special assessments will be collected in the years and amounts as follows : Collection Collection Year Amount Year Amount 1994 $ 2000 1995 2001 1996 2002 1997 2003 1998 2004 1999 In the event that any such assessment shall at any time be held invalid with respect to any lot or tract of land, due to any error, defect or irregularity in any action or proceeding taken or to be taken by the City or by this Council or by any of the officers or employees of the City, either in the making of such assessment or in the performance of any condition precedent thereto, the City hereby covenants and agrees that it will forthwith do all such further things and take all such further proceedings as shall be required by law to make such assessment a valid and binding lien upon said property. Section 6 . Pledge of Taxing Powers . For the prompt and full payment of the principal of and interest on the Bonds when due, the full faith and credit and unlimited taxing powers of the City shall be and are hereby irrevocably pledged. In order to produce sums which, together with Bond proceeds and special assessment collections appropriated to the payment of the Bonds, will be not less than 5% in excess of the amounts needed to pay the principal of and interest on the Bonds when due, there is 13 hereby levied on all taxable property in the City, a direct, irrepealable ad valorem tax, for the years and in the amounts as follows : Levy Collection Levy Collection Year Year Amount Year Year Amount 1993 1994 1998 1999 1994 1995 1999 2000 1995 1996 2000 2001 1996 1997 2001 2002 1997 1998 2002 2003 1998 1999 2003 2004 The collections of such tax levy shall be deposited in the Series 1993B Bond Account . The City reserves the right to reduce or cancel such tax levy in accordance with Minnesota Statutes, Section 475 . 61 . Section 7 . Defeasance. When all of the Bonds have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of t:he Bonds shall cease. The City may discharge its obligations with respect to any Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for t:he payment thereof in full; or, if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued from the due date to the date of such deposit . The City may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the Registrar on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due, . provided that notice of such redemption has been duly given as provided herein . The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities which are authorized by law to be so deposited, bearing interest payable at such time and at such rates and maturing or callable at the holder's option on such dates as shall be required to pay all principal, interest and redemption premiums to become due thereon to maturity or said redemption date. Section 8 . Registration of Bonds and Tax Levy. The Clerk is hereby authorized and directed to file a certified copy of this resolution with the County Auditor of Scott County, together with such additional information as they shall require, 14 and to obtain from said County Auditor a certificate that the Bonds have been duly entered upon his bond register and that the tax required for the payment thereof has been levied. Section 9 . Official Statement . The Official Statement dated November , 1993, relating to the Bonds, prepared distributed by Springsted Incorporated, the financial consultant for the City, is hereby approved, and the officers of the City are authorized in connection with the delivery of the Bonds to sign such certificates as may be necessary with respect to the completeness and accuracy of the Official Statement . Section 10 . Tax Covenant; Arbitrage. (a) The City covenants and agrees with the holders from time to time of the Bonds herein authorized, that it will not take, or permit to be taken by any of its officers, employees or agents, any action which would cause the interest payable on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code") , and the regulations issued thereunder, in effect at the time of such action, and that it will take, or it will cause its officers, employees or agents to take, all affirmative actions within its powers which may be necessary to insure that such interest will not become subject to taxation under the Code and applicable treasury regulations, asopresently Bonds . existing or as hereafter amended and made app (b) The Mayor and the City Clerk being the officers of the city charged with the responsibility for issuing the Bonds pursuant to this resolution, are authorized and directed to execute and deliver to the purchaser a certification in order to satisfy the provisions or Section of the Code regulations promulgated thereunder relating to arbitrage bonds and other tax matters . Section 11 . Qualified Tax-Exempt Obligations . This Council hereby determines and declares that the City does not reasonably expect to issue in calendar year 1993 tax-exempt obligations in an aggregate principal amount greater than $10, 000, 000 (exclusive of "private activity bonds") . This Council hereby specifically designates the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265 of the Code, and covenants that it will not in any event designate in calendar year 1993 more than $10, 000, 000 of its obligations as such "qualified tax-exempt obligations . " Section 12 . Authentication of Transcript . The officers of the City and said County Auditor are hereby authorized and directed to prepare and furnish to the purchasers of the Bonds, and to the attorneys rendering an opinion as to the legality thereof, certified copies of all proceedings and records relating to the Bonds and such other affidavits, certificates and 15 information as may be required to show the facts relating to the legality and marketability of the Bonds, as the same appear from the books and records in their custody and control or as otherwise known to them, and all such certified copies, affidavits and certificates, including any heretofore furnished, shall be deemed representations of the City as to the correctness of all statements contained therein. The motion for the adoption of the foregoing resolution was duly seconded by Councilmember and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same : whereupon said resolution was declared duly passed and adopted. 16 COUNTY AUDITOR'S CERTIFICATE AS TO BOND REGISTRATION AND TAX LEVY I, the undersigned, being the duly qualified and acting County Auditor of Scott County, Minnesota, hereby certify that there has been filed in my office a certified copy of a resolution adopted November 18, 1993, by the City Council for the City of Shakopee, Minnesota, setting forth the form and details of an issue of $1, 400, 000 General Obligation Improvement Bonds, Series 19938, dated, as originally issued, as of December 1, 1993 . I further certify, as originally issued, that said Bond issue has been entered on my bond register and that the tax necessary for the payment thereof has been levied as required by Minnesota Statutes, Chapter 475 . WITNESS my hand and official seal this day of , 1993 . County Auditor (SEAL) 17 CERTIFICATION OF MINUTES RELATING TO $1, 000, 000 GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1993C Issuer: City of Shakopee, Minnesota Governing Body: City Council Kind, date, time and place of meeting: A special meeting held on Thursday, November 18, 1993 at 5 :00 o'clock P .M. , at the City Hall . Members present : Members absent : Documents Attached: Minutes of said meeting (including) : RESOLUTION NO. 3903 RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $1, 000, 000 GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1993C I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the bonds 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 said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said bonds; and that said 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 of such meeting given as required by law. WITNESS my hand officially as such recording officer this day of November, 1993 . Judith Cox City Clerk Pursuant to authorization conferred by Resolution No. , Springsted Incorporated presented proposals solicited and negotiated by it for the purchase of $1, 000, 000 General Obligation Tax Increment Refunding Bonds, Series 1993C of the City. The terms of the proposals were as follows : Bid for Interest Total Interest Cost Name of Bidder principal Rates -Net Average Rate Councilmember then introduced the following resolution and moved its adoption: RESOLUTION NO. 3903 RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE, PRESCRIBING THE FORM AND DETAILS AND PROVIDING FOR THE PAYMENT OF $1, 000, 000 GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1993C BE IT RESOLVED by the City Council of the City of Shakopee, Minnesota, as follows : Section 1 . Authorization and Sale . 1 .01 . Authorization of Bonds . This Council, by its Resolution No. adopted on October 19, 1993, has determined that it is necessary for the City to sell and issue its General Obligation Tax Increment Refunding Bonds, Series 1993C in the aggregate principal amount of $1, 000, 000 (the Bonds) to provide moneys to be used together with other funds of the City, to redeem and prepay on February 1, 1994, $1, 400, 000 Tax Increment Revenue Refunding Bonds, Series 1984 of the City's Housing and Redevelopment Authority (the Authority) , which mature on February 1 in the years 1995 through 1998 (the Outstanding Bonds) . Resolution No. is incorporated herein by reference. 1 .02 . proposals Received. The City has received proposals for the purchase of the Bonds, and does hereby find and determine that the most favorable proposal received is that of , of , , and associates (the "Underwriter") , to purchase the Bonds at a price of $ plus accrued interest on all Bonds to the day of delivery and payment, on the further terms and conditions hereinafter set forth. 1 .03 . Sale of Bonds . The sale of the Bonds is hereby awarded to the Underwriter, and the Mayor and City Clerk are hereby authorized and directed on behalf of the City to execute a contract for the sale of the Bonds in accordance with the terms of said bid. The good faith check of the successful bidder shall be retained and deposited by the Finance Director. The good faith checks of other bidders shall be returned to them forthwith. Section 2 . Bond Terms: Registration; Execution and Delivery. 2 . 01 . Maturities; Interest Rates; Denominations; Payment . The Bonds shall be designated General Obligation Tax Increment Refunding Bonds, Series 1993C, shall be originally dated as of December 1, 1993, shall be in the denomination of $5, 000 each, or any integral multiple thereof, shall mature on February 1 in the respective years and amounts stated below, and shall bear interest from date of issue until paid at the respective annual rates set forth opposite such years and amounts, as follows : te Year Bmaunt Ra 1995 $235, 000 1996 245, 000 1997 255, 000 1998 265, 000 The Bonds shall be issuable only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, shall be payable by check or draft issued by the Registrar for the Bonds appointed herein. 2 .02 . D. • • - uu- e ,• - • Each Bond shall be authenticated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case such Bond shall be dated as of the date of authentication, or (ii) the date of authentication is prior to August 1, 1994, in which case such Bond shall be dated as of December 1, 1993 . The interest on the Bonds shall be payable on February 1 and August 1 in each year, commencing August 1, 1994, to the owner of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. 2 .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) Register. The Registrar shall keep at its principal corporate trust office a bond register in which the Registrar shall provide for the registration of ecageof Bonds enttthe itledrtolberatin of transfers and registered, transferred or exxchhanngess of Bonds exchanged. (b) Transfer of Bonds . Upon surrender for transfer of any Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new of fead likbyehe aggregate principal amount and maturity, as transferor . The Registrar may, however, close the books for registration of any transfer interestafter paymentthe datetandtuntil suchof he month preceding each interest payment date . 2 (c) Exchange of Bonds . Whenever any Bonds are surrendered by the registered owner for exchange the Registrar shall authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity, as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. All Bonds surrendered 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 the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners . The City and the Registrar may treat the person in whose name any Bond is at any time registered in the bond register as the absolute owner of 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 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, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid • with respect to such transfer or exchange . (h) Mutilated. Lost. Stolen or Destroyed Bonds . In case any Bond shall become mutilated or be destroyed, stolen or lost, the Registrar shall deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of any such mutilated Bond or in lieu of and in substitution for any such Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that such Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it, in which both the City and the Registrar shall be named as obligees . All Bonds so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the City. If 3 the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with hrits terms it shall not be necessary to issue a new Bond p payment . 2 .04 . Appointment of Registrar and Paying Agent . The City hereby appoints , Minnesota, as the initial Registrar and Paying Agent for the Bonds, which, together with any successor entity is sometimes referred to herein as the Registrar or the Registrar and Paying Agent . The Mayor and the City Administrator-Clerk are authorized to execute and deliver, on behalf of the City, a contract with said 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 the 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 and shall deliver the bond register to the successor Registrar. 2 . 05 . Redemption. The Bonds shall not be subject to redemption and prepayment prior to their stated maturity dates . 2 .06 . Execution, Authentication and Delivery. The Bonds shall be prepared under the direction of the City Clerk and shall be executed on behalf of the City by the signatures of the Mayor and the City Clerk, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals . In case any officer whose signature or a facsimile of whose signature shall appear on 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 he 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 prepared , executed and authenticated, the Clerk shall deliver the same to the purchaser thereof upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and said purchaser shall not be obligated to see to the application of the purchase price . 2 . 07 . Form of Bonds . The Bonds shall be printed in substantially the following form: 4 (Face of the Bonds) UNITED STATES OF AMERICA R- STATE OF MINNESOTA $ COUNTY OF SCOTT CITY OF SHAKOPEE GENERAL OBLIGATION TAX INCREMENT REFUNDING BOND, SERIES 1993C Interest Maturity Date of Rate Date Original Issue CUSIP February 1, December 1, 1993 Registered Owner: Principal Amount : Dollars KNOW ALL PERSONS BY THESE PRESENTS that the City of Shakopee, a duly organized and existing municipal corporation of Scott 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 sum specified above on the maturity date specified above, without option of prior payment, and to pay interest thereon from the date hereof at the annual rate specified above, payable on February 1 and August 1 in each year, commencing August 1, 1994, 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 month immediately preceding the payment date . The interest hereon and, upon presentation and surrender of this Bond, the principal hereof, are payable in lawful money of the United States of America by check or draft issued by , in , Minnesota, Bond Registrar and Paying Agent (the Registrar) , or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. Additional provisions of this Bond are contained on the reverse hereof and such provisions shall for all purposes have the same effect as though fully set forth in this place . 5 This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution described herein until the Certificate of Authentication hereon eshall itshave authorizedexecute representativesistrar by manual signature of on IN WITNESS WHEREOF, the City of Shakopee, Scott County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the printed facsimile signatures of the Mayor and City Clerk, and has caused this Bond to be dated as of the Date of Original Issue set forth above . CITY OF SHAKOPEE, MINNESOTA (facsimile.) Mayor Attest : (facsimile) City Clerk CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within . Registrar Date of Authentication: By Authorized Representative 6 [Reverse side of the Bonds] This Bond is one of an issue in the aggregate principal amount of $1, 000, 000, all of like date and tenor, except as to maturity date, interest rate, denomination and redemption privilege, issued pursuant to a resolution adopted by the City Council on November 18, 1993 (the Resolution) , to provide moneys to be used, together with other moneys of the City, to refund certain outstanding tax increment bonds of the City's Housing and Redevelopment Authority, and is issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota thereunto enabling, including Minnesota Statues, Chapters 469 and 475 . The Bonds of this series are issuable only as fully registered Bonds, in denominations of $5, 000 or any multiple thereof, of single maturities . In the Resolution the City Council determined that in calendar year 1993 the City does not expect to issue tax-exempt obligations in an aggregate principal amount greater than $10, 000, 000 (exclusive of "private activity bonds") , and designated the Bonds as "qualified tax exempt obligations" within the meaning of Section 265 of the Internal Revenue Code of 1986. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner 's attorney duly authorized in writing upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner's attorney; and may also be surrendered in exchange for Bonds of other authorized denominations . Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange . The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar 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 preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required; that, prior to the issuance hereof, the City has pledged and appropriated ad valorem tax increments to be derived from its Tax Increment District No. 1 to the payment of the principal of and interest on 7 the Bonds of this issue when due; that if necessary for payment of such principal and interest, ad valorem taxes are required to be levied upon all taxable property in the City, without limitation as to rate or amount; and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional or statutory limitation of indebtedness . (Form of certificate to be printed on the reverse side of each Bond, following a full copy of the legal opinion) We certify that the above is a full, true and correct copy of the legal opinion rendered by bond counsel on the issue of Bonds of the City of Shakopee, Minnesota, which includes the within Bond, dated as of the date of delivery of and payment for the Bonds . (Facsimile Signature) (Facsimile Signature) City Clerk Mayor 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 UTMA Custodian in common (Cust) (Minor) TEN ENT -- as tenants under Uniform Transfers to Minors by entireties JT TEN -- as joint tenants Act with right of (State) survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list . 8 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises . Dated: Notice : The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or enlargement or any change whatever. Signature Guaranteed: Signatures (s) must be guaranteed by a national bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges . The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address : (Include information for all joint owners if this Bond is held by joint account) Please insert social security or other identifying number of assignee 9 Section 3 . Use of Proceeds . $ of the proceeds of the Bonds shall be paid to First Trust, National Association, as Trustee for the Outstanding Bonds, for deposit in the Bond Fund held by the Trustee for payment of the Outstanding Bonds, with instructions that (a) such proceeds shall be used, together with investment earnings thereon and moneys held by the Trustee in the Reserve Fund for the Outstanding Bonds, to redeem and prepay the Outstanding Bonds on February 1, 1994, and (b) to give notice of redemption of the Outstanding Bonds on such date in accordance with their terms . Section 4 . Series 1993C Tax Increment Refunding Bond Account . So long as any of the Bonds are outstanding and any principal of or interest thereon unpaid, the Finance Director shall maintain a separate debt service account on the official books and records of the City to be known as the Series 1993C Tax Increment Refunding Bond Account (hereinafter referred to as the Bond Account) , and the principal of and interest on the Bonds shall be payable primarily from the Bond Account . The City irrevocably appropriates to the Bond Account : (a) $ of the Bond proceeds, including any unused discount and accrued interest, which shall be used to pay interest accruing on the Bonds; (b) from and after February 1, 1994, all collections of ad valorem tax increments received by the City from Tax Increment District No. 1 of Minnesota River Valley Housing and Redevelopment Project No. 1, pursuant to the Tax Increment Pledge Agreement described in Section 5; (c) all other ad valorem taxes levied in accordance with Section 6; and (d) all such other moneys as shall be received and appropriated to the Bond Account from time to time. If the balance in the Bond Account is at any time insufficient to pay all interest and principal then due on all Bonds payable therefrom, the payment shall be made from the general fund of the City which is available for that purpose, subject to reimbursement from the Bond Account when the balance therein is sufficient and the Council covenants and agrees that it will each year levy a amount sufficient to take care of any accumulated or anticipated deficiency, which levy is not subject to any constitutional or statutory tax limitation . Section 5 . Tax Increment Pledge Agreement . There has been presented to this Council a form of Tax Increment Pledge Agreement to be dated as of December 1, 1993 (the Tax Increment Pledge Agreement) , between the City and the Authority, whereby the Council has agreed to issue the Bonds to provide for the redemption and prepayment of the Outstanding Bonds and the Authority has agreed to remit to the City the Tax Increments described in Section 4, and that the City may pledge them to the payment of the Bonds . The Tax Increment Pledge Agreement is approved and the Mayor and City Clerk are authorized and directed to execute and deliver it on behalf of the City. Section 6 . Pledge of Taxing Powers . For the prompt and full payment of the principal of and interest on the Bonds when due, the full faith and credit and unlimited taxing powers of the City shall be and are hereby irrevocably pledged. However, the ad valorem Tax Increments pledged to the payment of the Bonds are expected to be collectible for the years and in amounts not less than 5% in excess of the amounts needed to pay the principal of and interest on the Bonds when due, and accordingly no tax is levied at this time. Section 7 . Defeasance . When all of the Bonds have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds shall cease. The City may discharge its obligations with respect to any Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full; or, if any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued from the due date to the date of such deposit . The City may also discharge its obligations with respect to any prepayable Bonds called for redemption on any date when they are prepayable according to their terms, by depositing with the Registrar on or before that date an amount equal to the principal, interest and redemption premium, if any, which are then due, provided that notice of such redemption has been duly given as provided herein . The City may also at any time discharge its obligations with respect to any Bonds, subject to the provisions of law now or hereafter authorizing and regulating such action, by depositing irrevocably in escrow, with a bank qualified by law as an escrow agent for this purpose, cash or securities which are authorized by law to be so deposited, bearing interest payable at such time and at such rates and maturing or callable at the holder' s option on such dates as shall be required to pay all principal, interest and redemption premiums to become due thereon to maturity or said redemption date. Section 8 . Registration of Bonds . The Clerk is hereby authorized and directed to file a certified copy of this resolution with the County Auditor of Scott County, together with such additional information as they shall require, and to obtain from said County Auditor a certificate that the Bonds have been duly entered upon his bond register. Section 9 . Official Statement . The Official Statement dated , 1993, relating to the Bonds, prepared and distributed by Springsted Incorporated, the financial consultant for the City, is hereby approved, and the officers of the City are authorized in connection with the delivery of the Bonds to sign such certificates as may be necessary with respect to the completeness and accuracy of the Official Statement . 11 Section 10 . • - T- •- • - n. •• ' • • • This Council hereby determines and declares that the City does not reasonably expect to issue in calendar year 1993 tax-exempt obligations in an aggregate principal amount greater than $10, 000, 000 (exclusive of "private activity bonds") . This Council hereby specifically designates meaningthe of Sections265uof1thedCode,eandpt obligations" within covenants that it will not in any event designate in calendar year 1993 more than $10, 000, 000 of its obligations as such "qualified tax-exempt obligations . " Section 11 . Tax Covenant: Arbitrage. (a) The City covenants and agrees with the holders from time to time of the Bonds herein authorized, that it will not take, or permit to be taken by any of its officers, employees or agents, any action which would cause the interest payable on the Bonds to become subject to taxation under the Code and regulations issued thereunder, in effect at the time of such action, and that it will take, or it will cause its officers, employees or agents to take, all affirmative actions within its powers which may be necessary to insure that such interest will not become subject to taxation under the Code and applicable treasury regulations, as prso resentlys . ly existing or as hereafter amended and made app (b) The Mayor and the City Clerk being the officers of the City charged with the responsibility for issuing the Bonds pursuant to this resolution, are authorized and directed to execute and deliver to the purchaser a certification in order to satisfy the provisions or Section of the Code relating to arbitrage bonds and the regulations promulgated thereunder. Section 12 . 8uthentication of Transcript . The officers of the City and said County Auditor are hereby authorized and directed to prepare and furnish to the purchasers of the Bonds, and to the attorneys rendering an opinion as to the legality thereof, certified copies of all proceedings and records relating to the Bonds and such other affidavits, certificates and information as may be required to show the facts relatingto legality and marketability of the Bonds, as the same appear the books and records in their custody and control or as otherwise known to them, and all such certified copies, affidavits and certificates, including any heretofore furnished, shall be deemed representations of the City as to the correctness of all statements contained therein. 12 The motion for the adoption of the foregoing resolution was duly seconded by Councilmember and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 13 COUNTY AUDITOR'S CERTIFICATE AS TO BOND REGISTRATION I, the undersigned, being the duly qualified and acting County Auditor of Scott County, Minnesota, hereby certify that there has been filed in my office a certified copy of a resolution adopted November 18, 1993, by the City Council for the City of Shakopee, Minnesota, setting forth the form and details of an issue of $1, 000, 000 General Obligation Tax Increment Refunding Bonds, Series 1993C, dated, as originally issued, as of December 1, 1993 . I further certify, as originally issued, that said Bond issue has been entered on my bond register as required by Minnesota Statutes, Chapter 475 . WITNESS my hand and official seal this day of , 1993 . County Auditor (SEAL) 14 Tax Increment Pledge Agreement This Tax Increment Pledge Agreement dated as of December 1, 1993 (the Agreement) , is by and between the City of Shakopee, Minnesota, and The Housing and Redevelopment Authority In and For The City of Shakopee, Minnesota (the Authority) . In consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto recite and agree as follows : Section 1 . Recitals . 1 .01 . The Authority has issued and now has outstanding $1, 400, 000 principal amount of its Tax Increment Revenue Refunding Bonds, Series 1984, which mature on February 1 in the years 1995 through 1998, bear interest at rates ranging from 10 . 40% to 10 . 75%, and are subject to redemption and prepayment on February 1, 1994 at a price of 102% of par plus accrued interest (the Outstanding Bonds) . 1 .02 . The Outstanding Bonds are payable solely from ad valorem tax increments to be derived by the Authority from Tax Increment District No . 1 in its Minnesota Valley Housing and Redevelopment Project No. 1 (the Tax Increments) . 1 .03 . The interest rates on the Outstanding Bonds are far in excess of the rates available in the public debt markets at the present time, and it is in the best interests of the Authority and the City and its residents that the Outstanding Bonds be refunded and called for redemption and prepayment on February 1, 1994 . 1 . 04 . The City has authority under Minnesota Statutes, Chapters 469 and 475, to issue its general obligation refunding bonds to provide moneys to be used, with moneys now held for the payment of the Outstanding Bonds, for the refunding and redemption of the Outstanding Bonds and is willing to issue its refunding bonds for such purpose, if the Authority agrees to remit the Tax Increments pledged to the payment of the Outstanding Bonds to the City for payment of the City' s refunding bonds . 1 . 05 . The Authority is willing to remit the Tax Increments to the City for payment of the City' s refunding bonds . 1 . 06 . Each of the parties has authority to enter into this Agreement and has duly authorized its execution and delivery. Section 2 . City Obligations . 2 .01 . The City shall on or before December 15, 1993, sell and issue its General Obligation Tax Increment Refunding Bonds in the principal amount of $1, 000, 000 (the Refunding Bonds) and remit $ of the proceeds thereof to First Trust, National Association as Trustee under the Indenture of Trust dated October 1, 1984 (the Indenture) , pursuant to which the Outstanding Bonds were issued. 2 .02 . The City shall direct the Trustee to deposit such proceeds in the Bond Fund established by Section of the Indenture for the payment of the Outstanding Bonds, and to use such proceeds for the redemption and prepayment of the Outstanding Bonds on February 1, 1994 . Section 3 . Authority Obligations . 3 .01 . Upon deposit of the proceeds of the Refunding Bonds with the Trustee the Authority shall direct the Trustee to give notice that the Outstanding Bonds are called for redemption and prepayment on February 1, 1994, in accordance with the terms of the Indenture . 3 . 02 . The Authority shall direct the Trustee to use the Refunding Bond proceeds deposited by the City and the moneys on hand in the Reserve Fund established by Section 4 .02 of the Indenture . 3 .03 . From and after February 1, 1994, and so long as the City' s Refunding Bonds are outstanding and unpaid, the Authority shall remit to the City for payment of the City' s Refunding Bonds as received: (a) any moneys paid to it by the Trustee upon discharge of the Indenture, and (b) all collections of Tax Increments, which the City is authorized to pledge to the payment of the Outstanding Bonds . In Witness Whereof, the parties have caused this Agreement to be executed and delivered by their duly authorized officers . CITY OF SHAKOPEE, MINNESOTA By Its Mayor And Its City Clerk -2- THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF SHAKOPEE, MINNESOTA By Its Chair And Its Executive Director -3- OFFICIAL STATEMENT DATED NOVEMBER 4, 1993 Ratings: Requested from Moody's NEW ISSUES Investors Service In the opinion of Dorsey& Whitney, Bond Counsel, on the basis of laws in effect on the date of issuance of the Bonds, interest on the Bonds is not includable in gross income of the recipient for federal income tax purposes or in taxable net income of individuals, estates and trusts for Minnesota income tax purposes, but is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax. (For a discussion of related issues see'Tax Exemption'herein.) City of Shakopee, Minnesota $1 ,400,000 General Obligation Improvement Bonds, Series 1993B (the "Improvement Bonds") $1 ,000,000* General Obligation Tax Increment Refunding Bonds, Series 1993C (the 'Refunding Bonds") (collectively referred to as the 'Bonds' or the "Issues') Dated Date: December 1, 1993 Interest Due: Each February 1 and August 1 commencing August 1, 1994 The Improvement Bonds will mature February 1 as follows: 1996 $150,000 1998 $140,000 2000 $140,000 2002 $140,000 2004 $135,000 1997 $140,000 1999 $140,000 2001 $140,000 2003 $140,000 2005 $135,000 The City may elect on February 1, 2002, and on any day thereafter, to prepay the Improvement Bonds due on or after February 1, 2003 at a price of par plus accrued interest. The Refunding Bonds will mature February 1 as follows: 1995 $235,000 1996 $245,000 1997 $255,000 1998 $265,000 * The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Refunding Bonds offered for sale. Any such increase or reduction will be in a total amount not to exceed$50,000 and will be made in multiples of$5,000 in any of the maturities. In the event the principal amount of the Refunding Bonds is increased or reduced, any premium offered or any discount taken will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Refunding Bonds is increased or reduced. The Refunding Bonds will not be subject to payment in advance of their respective stated maturity dates. Common to Both Issues A separate proposal for not less than the amounts shown below, must be submitted for each Issue, along with a certified or cashier's check or a Financial Surety Bond, payable to the order of the City. Proposals shall specify rates in integral multiples of 5/100 or 1/8 of 1%. Rates must be in ascending order. Award of the Bonds will be on the basis of True Interest Cost (TIC). Minimum Bid Good Faith Deposit The Improvement Bonds $1,384,875 $14,000 The Refunding Bonds S 993,000 $10,000 The Bonds will be bank-qualified tax-exempt obligations pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, and will not be subject to the alternative minimum tax for individuals. The Bonds will be issued in integral multiples of$5,000, as requested by the Purchaser(s), and will be fully registered as to principal and interest. The Bonds will be delivered without cost to the Purchaser(s) within 40 days following the date of their award. The City will name the Registrar and pay for registration services. PROPOSALS RECEIVED: November 18, 1993 (Thursday) at 10:30 A.M., Central Time AWARD: November 18, 1993 (Thursday) at 5:00 P.M., Central Time IISPRINGSTED Further information may be obtained from SPRINGSTED Incorporated, Financial Advisor to the Issuer, 85 East „ Seventh Place. Suite 100, Saint Paul, Minnesota 55101 PUBLIC FINANCE ADVISORS (612)223-3000. For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the Issuer from time to time (collectively, the "Official Statement"), may be treated as an Official Statement with respect to the Obligations described herein that is deemed final as of the date hereof (or of any such supplement or correction) by the Issuer, except for the omission of certain information referred to in the succeeding paragraph. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Obligations, together with any other information required by law, shall constitute a "Final Official Statement" of the Issuer with respect to the Obligations, as that term is defined in Rule 15c2-12. Any such addendum shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. By awarding the Obligations to any underwriter or underwriting syndicate submitting a Proposal therefor, the Issuer agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Obligations are awarded copies of the Official Statement and the addendum or addenda described in the preceding paragraph in the amount specified in the Terms of Proposal. The Issuer designates the senior managing underwriter of the syndicate to which the Obligations are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a Proposal with respect to the Obligations agrees thereby that if its bid is accepted by the Issuer (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Obligations for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. No dealer, broker, salesman or other person has been authorized by the Issuer to give any information or to make any representations with respect to the Obligations other than as contained in the Official Statement or the Final Official Statement, and, if, given or made, such other information or representations must not be relied upon as having been authorized by the Issuer. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the Issuer and, while believed to be reliable, is not guaranteed as to completeness or accuracy. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE ISSUER SINCE THE DATE THEREOF. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. TABLE OF CONTENTS Pages) $1,400,000 General Obligation Improvement Bonds, Series 1993B Terms of Proposal i-iii Schedule of Bond Years iv $1,000,000 General Obligation Improvement Bonds, Series 1993C Terms of Proposal v-vii Schedule of Bond Years viii Introductory Statement 1 The Improvement Bonds 1-2 The Refunding Bonds 2 Future Financing 2 Litigation 3 Legality 3 Tax Exemption 3-4 Bank-Qualified Tax-Exempt Obligations 4 Ratings 4 Financial Advisor 4 Certification 4 City Property Values 5-6 City Indebtedness 6-9 City Tax Rates, Levies and Collections 9-10 Funds on Hand 10 General Information Concerning the City 10-13 Governmental Organization and Services 13-14 Proposed Form of Legal Opinions Appendix I Summary of Tax Levies, Payment Provisions, and Minnesota Real Property Valuation Appendix II Annual Financial Statements Appendix III Proposal Forms Inserted THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,400,000 CITY OF SHAKOPEE, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1993B Proposals for the Bonds will be received on Thursday, November 18, 1993, until 10:30 A.M., Central Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul, Minnesota, after which time they will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at 5:00 P.M., Central Time, of the same day. DETAILS OF THE BONDS The Bonds will be dated December 1, 1993, as the date of original issue, and will bear interest payable on February 1 and August 1 of each year, commencing August 1, 1994. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Bonds will be issued in the denomination of $5,000 each, or in integral multiples thereof, as requested by the purchaser, and fully registered as to principal and interest. Principal will be payable at the main corporate office of the registrar and interest on each Bond will be payable by check or draft of the registrar mailed to the registered holder thereof at the holder's address as it appears on the books of the registrar as of the close of business on the 15th day of the immediately preceding month. The Bonds will mature February 1 in the years and amounts as follows: 1996 $150,000 2000 $140,000 2003 $140,000 1997 $140,000 2001 $140,000 2004 $135,000 1998 $140,000 2002 $140,000 2005 $135,000 1999 $140,000 OPTIONAL REDEMPTION The City may elect on February 1, 2002, and on any day thereafter, to prepay Bonds due on or after February 1, 2003. Redemption may be in whole or in part and if in part, at the option of the City and in such order as the City shall determine and within a maturity by lot as selected by the registrar. All prepayments shall be at a price of par plus accrued interest. SECURITY AND PURPOSE The Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition the City will pledge special assessments against benefited property. The proceeds will be used to finance construction of various improvements in the City. TYPE OF PROPOSALS Proposals shall be for not less than $1,384,875 and accrued interest on the total principal amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ("Deposit") in the form of a certified or cashier's check or a Financial Surety Bond in the amount of $14,000, - i - payable to the order of the City. If a check is used, it must accompany each proposal. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota, and preapproved by the City. Such bond must be submitted to Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time, on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement. The City will deposit the check of the purchaser, the amount of which will be deducted at settlement and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or 1/8 of 1%. Rates must be in ascending order. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will be accepted. AWARD The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and, (iii) reject any proposal which the City determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the underwriter, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating agency fees shall be the responsibility of the purchaser. Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Bonds. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the - ii - Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT Within 40 days following the date of their award, the Bonds will be delivered without cost to the purchaser at a place mutually satisfactory to the City and the purchaser. Delivery will be subject to receipt by the purchaser of an approving legal opinion of Dorsey & Whitney of Minneapolis, Minnesota, which opinion will be printed on the Bonds, and of customary closing papers, including a no-litigation certificate. On the date of settlement payment for the Bonds shall be made in federal, or equivalent, funds which shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall have been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non-compliance with said terms for payment. OFFICIAL STATEMENT The City has authorized the preparation of an Official Statement containing pertinent information relative to the Bonds, and said Official Statement will serve as a nearly-final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 223-3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded 55 copies of the Official Statement and the addendum or addenda described above. The City designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated October 19, 1993 BY ORDER OF THE CITY COUNCIL /s/Judith Cox Clerk - iii - SCHEDULE OF BOND YEARS $1,400,000 CITY OF SHAKOPEE, MINNESOTA GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1993B Cumulative Year Principal Bond Years Bond Years 1996 $150,000 325.0000 325.0000 1997 $140,000 443.3333 768.3333 1998 $140,000 583.3333 1 ,351 .6666 1999 $140,000 723.3333 2,074.9999 2000 $140,000 863.3333 2,938.3332 2001 $140,000 1 ,003.3333 3,941 .6665 2002 $140,000 1 ,143.3333 5,084.9998 2003 $140,000 c 1 ,283.3333 6,368.3331 2004 $135,000 c 1 ,372.5000 7,740.8331 2005 $135,000 c 1 ,507.5000 9,248.3331 Average Maturity: 6.61 Years Bonds Dated: December 1 , 1993 Interest Due: August 1 , 1994 and each February 1 and August 1 to maturity. Principal Due: February 1 , 1996-2005 inclusive. Optional Call: Bonds maturing on or after February 1 , 2003 are callable commencing February 1 , 2002 and any date thereafter at par. (See Terms of Proposal. ) c: subject to optional call - iv - THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $1,000,000* CITY OF SHAKOPEE, MINNESOTA GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1993C Proposals for the Bonds will be received on Thursday, November 18, 1993, until 10:30 A.M., Central Time, at the offices of Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul, Minnesota, after which time they will be opened and tabulated. Consideration for award of the Bonds will be by the City Council at 5:00 P.M., Central Time, of the same day. DETAILS OF THE BONDS The Bonds will be dated December 1, 1993, as the date of original issue, and will bear interest payable February 1 and August 1 of each year, commencing August 1, 1994. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Bonds will be issued in the denomination of $5,000 each, or in integral multiples thereof, as requested by the purchaser, and fully registered as to principal and interest. Principal will be payable at the main corporate office of the registrar and interest on each Bond will be payable by check or draft of the registrar mailed to the registered holder thereof at the holder's address as it appears on the books of the registrar as of the close of business on the 15th day of the immediately preceding month. The Bonds will mature February 1 in the years and amounts as follows: 1995 $235,000 1997 $255,000 1998 $265,000 1996 $245,000 * The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Bonds offered for sale. Any such increase or reduction will be in a total amount not to exceed$50,000 and will be made in multiples of$5,000 in any of the maturities. In the event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. OPTIONAL REDEMPTION The Bonds will not be subject to payment in advance of their respective stated maturity dates. SECURITY AND PURPOSE The Bonds will be general Bonds of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition the City will pledge tax increments generated in the Tax Increment Financing District No. 1 in the Minnesota River Valley Housing and Redevelopment Project No. 1 of the City. The proceeds will be used to refund the 1995 through 1998 maturities of the Tax Increment Revenue Refunding Bonds, Series 1984, dated October 1984 issued by the Housing and Redevelopment Authority in and for the City of Shakopee. - v - TYPE OF PROPOSALS Proposals shall be for not less than $993,000 and accrued interest on the total principal amount of the Bonds. Proposals shall be accompanied by a Good Faith Deposit ("Deposit") in the form of a certified or cashier's check or a Financial Surety Bond in the amount of $10,000, payable to the order of the City. If a check is used, it must accompany each proposal. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota, and preapproved by the City. Such bond must be submitted to Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded to an underwriter using a Financial Surety Bond, then that purchaser is required to submit its Deposit to Springsted Incorporated in the form of a certified or cashier's check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time, on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement. The City will deposit the check of the purchaser, the amount of which will be deducted at settlement and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Bonds is adjourned, recessed, or continued to another date without award of the Bonds having been made. Rates shall be in integral multiples of 5/100 or 1/8 of 1%. Rates must be in ascending order. Bonds of the same maturity shall bear a single rate from the date of the Bonds to the date of maturity. No conditional proposals will be accepted. AWARD The Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Bonds, (ii) reject all proposals without cause, and, (iii) reject any proposal which the City determines to have failed to comply with the terms herein. BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the underwriter, the purchase of any such insurance policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Bonds from a rating agency, the City will pay that rating fee. Any other rating agency fees shall be the responsibility of the purchaser. Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Bonds. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. - vi - CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT Within 40 days following the date of their award, the Bonds will be delivered without cost to the purchaser at a place mutually satisfactory to the City and the purchaser. Delivery will be subject to receipt by the purchaser of an approving legal opinion of Dorsey & Whitney of Minneapolis, Minnesota, which opinion will be printed on the Bonds, and of customary closing papers, including a no-litigation certificate. On the date of settlement payment for the Bonds shall be made in federal, or equivalent, funds which shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Except as compliance with the terms of payment for the Bonds shall have been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non-compliance with said terms for payment. OFFICIAL STATEMENT The City has authorized the preparation of an Official Statement containing pertinent information relative to the Bonds, and said Official Statement will serve as a nearly-final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the City, Springsted Incorporated, 85 East Seventh Place, Suite 100, Saint Paul, Minnesota 55101, telephone (612) 223-3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in Rule 15c2-12. By awarding the Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded 40 copies of the Official Statement and the addendum or addenda described above. The City designates the senior managing underwriter of the syndicate to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Bonds agrees thereby that if its proposal is accepted by the City (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated October 19, 1993 BY ORDER OF THE CITY COUNCIL /s/Judith Cox Clerk - vii - SCHEDULE OF BOND YEARS $1,000,000 CITY OF SHAKOPEE, MINNESOTA GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1993C Cumulative Year Principal Bond Years Bond Years 1995 $235,000 274.1667 274.1667 1996 $245,000 530.8333 805.0000 1997 $255,000 807.5000 1 ,612.5000 1998 $265,000 1 ,104.1667 2,716.6667 Average Maturity: 2.72 Years Bonds Dated: December 1 , 1993 Interest Due: August 1 , 1994 and each February 1 and August 1 to maturity. Principal Due: February 1 , 1995-1998 inclusive. Optional Call: None. - viii - (This page was left blank intentionally.) OFFICIAL STATEMENT CITY OF SHAKOPEE, MINNESOTA $1,400,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 1993B $1,000,000* GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 1993C Introductory Statement This Official Statement contains certain information regarding the City of Shakopee, Minnesota (the "City") and its issuance of $1,400,000 General Obligation Improvement Bonds, Series 1993B (the "Improvement Bonds") and $1,000,000 General Obligation Tax Increment Refunding Bonds, Series 1993C (the "Refunding Bonds"), together referred to as the "Bonds" or the "Issues." The Bonds are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes without limit as to rate or amount. Additional sources of pledged security for each Issue are described in the following sections. Additional financial and bond information may be obtained from Mr. Gregg M. Voxland, Finance Director/Treasurer, City of Shakopee, 129 Holmes Street South, Shakopee, MN 55379-1351, or by telephoning (612) 445-3650. Information can also be obtained from Springsted Incorporated, 85 East Seventh Place, Suite 100, St. Paul, MN 55101-2143, or by telephoning (612) 223-3000. If information of a specific legal matter is desired, requests may be directed to Mr. Thomas S. Hay, Dorsey & Whitney of Minneapolis, Minnesota, Bond Counsel, (612) 340-2600. The Improvement Bonds Authority and Purpose The Improvement Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475. Proceeds of the Improvement Bonds will be used to finance three improvement projects currently under construction within the City. The composition of the Improvement Bonds is as follows: Project Costs* $1,668,700 Less: City Cash on Hand (11,450) Storm Sewer Funds (24,000) Sewer Funds (303,375) Net Project Costs $1,329,875 Capitalized Interest 55,000 . Allowance for Discount Bidding 15,125 Total Improvement Bond Issue $1,400,000 * Includes construction, engineering, administration and costs of issuance. * The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Refunding Bonds offered for sale. Any such increase or reduction will be in a total amount not to exceed$50,000 and will be made in multiples of$5,000 in any of the maturities. In the event the principal amount of the Refunding Bonds is increased or reduced, any premium offered or any discount taken will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Refunding Bonds is increased or reduced. - 1 - Security and Financing In addition to its general obligation pledge, the City also pledges special assessments against benefitted properties for payment of the Improvement Bonds. Special assessments totaling $36,000 are expected to be filed on or before December 1, 1993 for first collection in 1994. The remaining assessments, totaling $1,293,875 are expected to be filed on or before July 1, 1994, for first collection in 1995. All assessments will be spread over a term of 10 years in equal annual installments of principal with interest charged on the unpaid balance at approximately 1.5% over the net interest rate received on the Improvement Bonds. The first interest payment due August 1, 1994 will be made from a combination of capitalized interest included in the Improvement Bonds and special assessment collections. The subsequent February 1 principal and interest payment is expected to be made with capitalized interest and second-half assessment collections, plus surplus first-half collections. Thereafter, special assessment collections are expected to be sufficient to pay almost 100% of debt service on the Improvement Bonds. A general ad valorem tax levy may be required to pay a small portion of the debt service on the Improvement Bonds maturing in the years 2003 through 2005. The Refunding Bonds Authority and Purpose The Refunding Bonds are being issued pursuant to Minnesota Statutes, Chapters 469 and 475. Proceeds of the Refunding Bonds will be used to refund the 1995 through 1998 maturities of the City of Shakopee's Housing and Redevelopment Authority (the "Authority") $3,140,000 Tax Increment Revenue Refunding Bonds, Series 1984, dated October 1, 1984 (the "1984 Bonds"). The 1984 Bonds refunded the Authority's $5,300,000 Special Obligation Tax Increment Bonds, Series 1979, dated November 1, 1979 (the "1979 Bonds") which were used to finance land acquisition and water tower improvements in the City's Tax Increment Financing District No. 1. As a result of the refunding, the 1984 Bonds will be converted from special obligations of the Authority to general obligations of the City. The refunding of the 1984 Bonds will be conducted as a current refunding, since the redemption date (February 1, 1994) is within 90 days of issuance of the Refunding Bonds. Therefore, an escrow account will not be established. The proceeds of the Refunding Bonds, plus $444,800 currently held in the Reserve Fund for the 1984 Bonds, will be sufficient to redeem the 1984 Bonds on February 1, 1994 at a premium of 2% or $28,000. The February 1, 1994 principal and interest payment on the 1984 Bonds will be paid by the Authority as originally scheduled. Security and Financing In addition to its general obligation pledge, the City pledges tax increment revenues from the City's Tax Increment Financing District No. 1, which were originally pledged to the 1979 Bonds and the 1984 Bonds. Tax increment revenues will be used to pay each August 1 interest payment due in the year of collection and each February 1 payment of principal and interest due in the year following collection. The City does not anticipate the need to make a tax levy for this Issue. Future Financing The City does not expect any additional financing within the next 90 days. - 2 - Litigation The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. Legality The Bonds are subject to approval as to certain matters by Dorsey & Whitney of Minneapolis, Minnesota as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement except for guidance concerning the following section, 'Tax Exemption," and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify, any of the financial or statistical statements, or data contained in this Official Statement, and will express no opinion with respect thereto. Legal opinions in substantially the form set out in Appendix I herein will be delivered at closing. Tax Exemption In the opinion of Dorsey & Whitney, as Bond Counsel, under federal and Minnesota laws, regulations, rulings and decisions in effect on the date of issuance of the Bonds, interest on the Bonds is not includable in gross income for federal income tax purposes or in taxable net income of individuals, estates and trusts for Minnesota income tax purposes. Interest on the Bonds is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax. Certain provisions of the Internal Revenue Code of 1986, as amended (the "Code"), however, impose continuing requirements that must be met after the issuance of the Bonds in order for interest thereon to be and remain not includable in federal gross income and in Minnesota taxable net income. Noncompliance with such requirements by the City may cause the interest on the Bonds to be includable in gross income for purposes of federal income taxation and in taxable net income for purposes of Minnesota income taxation, retroactive to the date of issuance of the Bonds, irrespective in some cases of the date on which such noncompliance is ascertained. No provision has been made for redemption of or for an increase in the interest rate on the Bonds in the event that interest on the Bonds becomes includable in federal gross income or Minnesota taxable income. Interest on the Bonds 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, but is includable in adjusted current earnings in determining the alternative minimum taxable income of corporations for purposes of the alternative minimum tax and the environmental tax imposed by Section 59A of the Code. Interest on the Bonds may be includable in the income of a foreign corporation for purposes of the branch profits tax imposed by Section 884 of the Code and is includable in the net investment income of foreign insurance companies for purposes of Section 842(b) of the Code. In the case of an insurance company subject to the tax imposed by Section 831 of the Code, the amount which otherwise would be taken into account as losses incurred under Section 832(b)(5) of the Code must be reduced by an amount equal to fifteen percent of the interest on the Bonds that is received or accrued during the taxable year. Section 86 of the Code requires recipients of certain Social Security and railroad retirement benefits to take into account, in determining the taxability of such benefits, receipts or accruals of interest on the Bonds. Passive investment income, including interest on the Bonds, may be subject to federal income taxation under Section 1375 of the Code for a Subchapter S corporation that has Subchapter C earnings and profits at the close of the taxable year if greater than twenty-five percent of the gross receipts of such Subchapter S corporation is passive investment income. Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of the holder's interest expense allocated to interest on the - 3 - Bonds, except with respect to certain financial institutions (within the meaning of Section 265(b) of the Code). The foregoing is not intended to be an exhaustive discussion of collateral tax consequences arising from receipt of interest on the Bonds. Prospective purchasers or holders of the Bonds should consult their tax advisors with respect to collateral tax consequences, including without limitation the calculations of alternative minimum tax, environmental tax or foreign branch profits tax liability or the inclusion of Social Security or other retirement payments in taxable income. Bank-Qualified Tax-Exempt Obligations The City will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, relating to the ability of financial institutions to deduct from income, for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. Ratings An application for ratings of the Bonds has been made to Moody's Investors Service ("Moody's"), 99 Church Street, New York, New York. If ratings are assigned, they will reflect only the opinion of Moody's. Any explanation of the significance of the ratings may be obtained only from Moody's. There is no assurance that a rating, if assigned, will continue for any given period of time, or that such rating will not be revised or withdrawn, if in the judgment of Moody's, circumstances so warrant. A revision or withdrawal of the rating may have an adverse effect on the market price of the Bonds. Financial Advisor The City has retained Springsted Incorporated, Public Finance Advisors, of St. Paul, Minnesota, as financial advisor (the "Financial Advisor") in connection with the issuance of the Bonds. In preparing the Official Statement, the Financial Advisor has relied upon governmental officials, and other sources, who have access to relevant data to provide accurate information for the Official Statement, and the Financial Advisor has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. The Financial Advisor is not a public accounting firm and has not been engaged by the City to compile, review, examine or audit any information in the Official Statement in accordance with accounting standards. The Financial Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities and therefore will not participate in the underwriting of the Bonds. Certification The City has authorized the distribution of this Official Statement for use in connection with the initial sale of the Bonds. As of the date of the settlement of the Bonds, the Purchaser(s) will be furnished with a certificate signed by the appropriate officers of the City. The certificate will state that as of the date of the Official Statement, it did not and does not as of the date of the certificate contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. -4 - CITY PROPERTY VALUES 1992 Indicated Market Value of Taxable Property: $616,975,764* * Calculated by dividing the county assessor's estimated market value of $544,789,600 by the 1992 sales ratio of 88.3%for the City as determined by the State Department of Revenue. 1992 Taxable Net Tax Capacity: $9,942,149 1992 Net Tax Capacity $14,669,065 Less: Contribution to Fiscal Disparities (2,993,071) Captured Tax Increment Tax Capacity (3,070,427) Plus: Distribution from Fiscal Disparities 1,336,582 1992 Taxable Net Tax Capacity $ 9,942,149 1992 Taxable Net Tax Capacity by Class of Property Residential Homestead $3,021,496 30.4% Commercial/Industrial, Public Utility(a) and Personal Property(b) 5,440,840 54.7 Residential Non-Homestead 1,121,748 11.3 Agricultural 339,025 3.4 Other 19,040 0.2 Total $9,942,149 100.0% (a) Northern States Power Company's$20 million Blue Lake Substation, completed in 1975, accounts for the major share of the City's public utility property. The plant is located on an 80-acre site in the northeast section of the City and houses oil-fueled gas turbine generators, an electrical substation, and fuel storage and maintenance facilities. (b) Reflects adjustments for fiscal disparities and captured tax increment tax capacity. Trend of Values Assessor's Indicated Estimated Taxable Tax Market Value(a) Market Value CapacitY(C) 1992 $616,975,764 $544,789,600 $ 9,942,149 1991 529,555,364 523,200,700 9,672,496 1990 588,885,409 496,430,400 9,662,278 1989 524,636,084 476,894,200(3) 10,619,183 1988 559,542,068 476,170,300 11,500,261 (a) Calculated by dividing the county assessor's estimated market value by the sales ratio for each year. The decline in value from 1990 to 1991 is a result of an increase in the sales ratio from 84.3% to 98.8%;the decline from 1988 to 1989 is a result of an increase in the sales ratio from 85.1%to 90.9% (also see footnote b). (b) The 1989 estimated market value of the City showed little increase from the prior year's value due to a reduction in value of several properties within the City including the following: Canterbury Downs Racetrack value was reduced to$42,300,000 from$48,000,000, Canterbury Inn value was reduced to $2,679,200 from $7,837,000, Valleyfair Amusement Park value was reduced by $1,300,000 and Wesray Container value was reduced by$1,000,000. In the case of Canterbury Downs Racetrack and Canterbury Inn, the values were reduced as a result of resale of the properties. The Valleyfair and Wesray Container values were reduced as a result of court actions challenging the County's valuation of the properties. (c) After adjustments for fiscal disparities and captured tax increment value. See Appendix II for an explanation of tax capacity and Minnesota property tax law. - 5 - Ten of the Largest Taxpayers in the City 1992 Net Taxpayer Type of Property Tax Capacity Northern States Power Company Utility $ 951,709 K-Mart Corporation Warehouse and Retail Store 872,125 Rahr Properties Inc. Malting Company 790,924 Canterbury Downs Racetrack 659,825(x) Tsumura International Manufacturing 546,156 Cedar Fair Inc. (Valleyfair) Amusement Park 520,108 Certain-Teed Corporation Asphalt Shingles 266,026 Minneapolis Northstar Auto Auction Auto Auction Facility 232,952 Wesray Container Associates (formerly Anchor Glass) Glass Manufacturing 211,323 Valley Green Industrial Park Industrial 198,508 Total $5,249,656(b) (a) Pursuant to an amended assessment agreement between the City and Canterbury Downs, the minimum market value of the racetrack has been reduced from$43 million to$14 million, effective for taxes payable in 1993. (b) Represents 52.8%of the City's 1992 taxable net tax capacity. CITY INDEBTEDNESS Legal Debt Limit Legal Debt Limit (2% of Estimated Market Value) $10,895,792 Less: Outstanding Debt Subject to Limit -0- Legal Debt Margin at October 2, 1993 $10,895,792 General Obligation Debt Supported by Taxes and/or Special Assessments Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 10-2-93 1-1-85 $ 120,000 Local Improvements 2-1-1994 $ 15,000 1-1-86 255,000 Local Improvements 2-1-1996 100,000* 7-1-86 355,000 Local Improvements 2-1-1997 160,000 10-1-87 705,000 Local Improvements 2-1-1999 360,000* 9-1-88 1,100,000 Local Improvements 2-1-2000 655,000 12-1-90 1,930,000 Local Improvements 2-1-2002 1,710,000 10-1-91 1,725,000 Local Improvements 2-1-2003 1,725,000 12-1-92 1,665,000 Local Improvements 2-1-2004 1,665,000 12-1-93 1,400,000 Local Improvements (this Issue) 2-1-2005 1,400,000 Total $7,790,000 * All of the outstanding principal maturities of these issues will be called by the City for early redemption on February 1, 1994. - 6 - General Obligation Debt Supported by Tax Increments Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 10-2-93 7-1-86 $1,645,000 Tax Increment 2-1-1995 $ 235,000 7-15-86 2,105,000 Tax Increment Refunding 2-1-1994 185,000 10-1-87 2,660,000 Tax Increment 2-1-1995 775,000 12-1-88 1,015,000 Tax Increment 2-1-1995 765,000 11-1-89 3,600,000 Tax Increment, Series 1989A 2-1-1995 470,000 12-1-92 1,885,000 Tax Increment Refunding 2-1-2001 1,885,000 7-1-93 2,675,000 Tax Increment Refunding 2-1-2003 2,675,000 12-1-93 1,000,000 Tax Increment Refunding (this Issue) 2-1-1998 1,000,000* Total $7,990,000 * This Issue is refunding the City of Shakopee's Housing and Redevelopment Authority$3,140,000 Tax Increment Revenue Bonds, Series 1984 which are special obligations of the Authority. Revenue Debt Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 10-2-93 8-24-93 $4,250,000 Utility Improvements 8-1-2005 $4,250,000* * This issue was sold by the Shakopee Public Utilities Commission to finance capital improvements, replacements and additions to the electric and water utilities comprising the Shakopee Public Utilities. Annual Calendar Year Debt Service Payments Including These Issues G.O. Debt Supported G.O. Debt Supported by Taxes and/or Primarily by by Special Assessments Tax Increments Principal Principal Year Principal & Interest(b) Principal & Interest(d) 1993 (at 10-2) 1994 $ 645,000 $1,036,652.94 $ 980,000 $1,425,927.08 1995 805,000 1,174,197.50 1,295,000 1,629,826.25 1996 935,000 1,256,057.50 990,000 1,227,886.25 1997 885,000 1,155,601.25 1,030,000 1,227,613.75 1998 845,000 1,067,197.50 1,080,000 1,233,157.50 1999 765,000 942,326.25 595,000 710,512.50 2000 715,000 851,400.00 620,000 705,617.50 2001 685,000 782,787.50 645,000 698,262.50 2002 665,000 725,475.00 365,000 392,778.75 2003 445,000 475,265.00 390,000 399,555.00 2004 265,000 277,007.50 1005 135,000 137,767.50 Total $7,790,000(a) $9,881,735.44 $7,990,000(0 $9,651,137.08 (a) 94.9%of this debt will be retired within ten years. (b) Includes the Improvement Bonds at an assumed annual rate of 4.10%. (c) 100%of this debt will be retired within ten years. (d) Includes the Refunding Bonds at an assumed annual rate of 3.20%. -7 - Annual Calendar Year Debt Service Payments Including These Issues (continued) Revenue Debt Principal Year Principal & Interest 1993 (at 10-2) -- -- 1994 -- $ 211,713.23 1995 $ 100,000 326,162.50 1996 100,000 322,462.50 1997 100,000 318,562.50 1998 100,000 314,462.50 1999 100,000 310,162.50 2000 125,000 330,662.50 2001 125,000 324,787.50 2002 125,000 318,725.00 2003 125,000 312,475.00 2004 150,000 331,100.00 2005 150,000 323,225.00 2006 175,000 340,200.00 2007 175,000 330,400.00 2008 175,000 320,600.00 2009 200,000 335,800.00 2010 200,000 324,600.00 2011 200,000 313,400.00 2012 225,000 327,200.00 2013 225,000 314,600.00 2014 250,000 327,000.00 2015 250,000 313,000.00 2016 275,000 324,000.00 2017 300,000 333,600.00 2018 300,000 316.800.00 Total $4,250,000* $7,965,700.73 23.5%of this debt will be retired within 10 years. Summary of Direct General Obligation Debt Including These Issues Gross Less: Debt Net Debt Service Funds(a) Direct Debt G.O. Debt Supported by Taxes and/or Special Assessments $7,790,000 $(3,106,317) $4,683,683 G.O. Debt Supported by Tax Increments 7,990,000 (6,011,307)(b) 1,978,693 Revenue Debt 4,250,000 (c) 4,250,000 (a) Debt service funds are as of September 30, 1993 and include money to pay both principal and interest. (b) Includes $5,914,766 of tax increment funds in the City's Trust and Agency Fund, which funds are available, but not dedicated, for debt service. (c) Monies from the City's various utility enterprises are transferred to the debt service fund only as required. A Reserve Fund of $340,200 has been established for the Shakopee Public Utilities Commission's$4,250,000 Shakopee Public Utilities Revenue Bonds, Series 1993. - 8 - Indirect General Obligation Debt Debt Applicable to 1992 Taxable G.O. Debt Tax Capacity in City Taxing Unit Net Tax Capacity As of 10-2-93(4 Percent Amount Scott County $ 39,396,724 $11,590,000 25.2% $ 2,920,680 ISD 720 (Shakopee) 10,971,099 10,930,000 84.7 9,257,710 ISO 191 (Burnsville) 45,077,634 10,700,000 1.5 160,500 Dakota County Technical College 200,118,640 2,090,000 0.3 6,270 Metropolitan Council 1,862,579,652 40,840,000(b) 0.6 245,040 Regional Transit District 1,701,455,732 64,400,000 0.5 322,000 Total $12,912,200 (a) Excludes general obligation tax and aid certificates, general obligation debt supported by revenues and revenue debt. (b) The Metropolitan Council also has outstanding$517,690,000 general obligation sanitary sewer bonds and loans which are paid from system revenues. Debt Ratios* G.O. Net G.O. Indirect & Direct Debt Net Direct Debt To 1992 Indicated Market Value 1.08% 3.17% Per Capita (12,344- 1992 Metropolitan Council Estimate) $540 $1,586 * Excludes revenue supported debt. CITY TAX RATES, LEVIES AND COLLECTIONS Tax Capacity Rates for a City Resident in ISD 720 1992/93 For 1988/89 1989/90 1990/91 1991/92 Total Debt Only Scott County 36.093% 34.080% 39.043% 41.839% 45.564% 2.328% City of Shakopee 15.008 16.929 23.426 23.979 28.162 0 ISD 720 (Shakopee) 69.594 45.748 52.668 66.508 61.499 4.367 Special Districts* 4.312 4.669 5.029 3.116 4.563 0.669 Total 125.007% 101.426% 120.166% 135.442% 139.788% 7.364% * Special districts include the Metropolitan Council and Regional Transit District. NOTE: For property taxes payable in 1989, taxes were determined by multiplying the gross tax capacity by the tax capacity rate, expressed as a percentage. This replaced the use of assessed value multiplied by mill rates. Beginning with taxes payable in 1990, net tax capacity has replaced gross tax capacity as the basis on which taxes are levied(see Appendix ll). -9 - Tax Levies and Collections Collected During Collected Amount Collection Year As of 4-30-93 Levy/Collect of Levy Amount Percent Amount Percent 1992/93 $3,114,951* (In Process of Collection) 1991/92 2,646,943 $2,625,071 99.2% $2,625,071 99.2% 1990/91 2,484,042 2,389,380 96.2 2,458,990 99.0 1989/90 2,197,859 2,121,935 96.5 2,193,108 99.8 1988/89 1,760,198 1,700,687 96.6 1,760,079 99.9 * The 1992/93 gross tax levy includes $417,015 of Homestead and Agricultural Credit Aid ('HACA'). The net levy of$2,697,936 after subtracting HACA is the basis for computing the 1992/93 tax capacity rates. FUNDS ON HAND As of September 30, 1993 Fund Cash and Investments General $ 1,203,022 Special Revenue 1,597,275 Debt Service: G.O. Special Assessment 3,106,317 G.O. TIF 96,541 Capital Projects 3,852,965 Enterprise 10,444,498 Trust and Agency 6,365,949* Total $26,666,567 * Includes$5,914,766 of tax increment funds which are available, but not dedicated, for debt service. GENERAL INFORMATION CONCERNING THE CITY Shakopee is located in northeastern Scott County, approximately 25 miles southwest of the City of Minneapolis. Shakopee is the Scott County Seat and is part of the Minneapolis/St. Paul seven-county metropolitan area. The Minnesota River forms the City's northern boundary. The 1980 census population of 9,941 represented a 44.6% increase over the 1970 census count. The 1990 U.S. Census population count for the City is 11,739, an 18% increase since 1980. The City's 1991 population, as estimated by the Metropolitan Council, is 11,966. The City encompasses an area of 29 square miles (18,560 acres). - 10 - Major Employers in the City Approximate Number Employer Product/Service of Employees Valleyfair Entertainment Center 67-1,200* K-Mart Corporation Distribution Center 396 Wesray Glass Container Glass Container Mfg. 384 St. Francis Regional Medical Center Health Care 375 Scott County Government 365 Tsumura International Manufacturing 300 Toro Company Turf Care Products 300 Independent School District 720 Education 280 Conklin Company, Inc. Chemicals Mfg. 240 Certain-Teed Corp. Asphalt Shingles Mfg. 197 Shakopee Friendship Manor Corp. Nursing Home 150 Rahr Malting Company Malt 115 Shakopee Valley Printing Newspaper 115 Owens-Illinois, Inc. Corrugated Cartons 100 * Higher number indicates seasonal peak. Source: 'Shakopee Community Profile', Minnesota Department of Trade and Economic Development, April, 1993. Labor Force Data July, 1993 July, 1992 Civilian Unemployment Civilian Unemployment Labor Force Rate Labor Force Rate Scott County 34,958 3.9% 34,329 3.6% Minneapolis/St. Paul MSA 1,477,041 4.0 1,453,289 3.8 Minnesota 2,513,988 4.3 2,476,438 4.1 Source: Minnesota Department of Jobs and Training. 1993 data is preliminary. City-Issued Building Permits Total Permits New Single Family Homes Number Value Number Value 1993 (to 9-30) 438 $51,938,013(4 131 $12,184,349 1992 472 29,328,483 151 13,625,485 1991 426 18,513,241 115 9,634,950 1990 381 30,500,706 100 7,488,490 1989 407 61,598,8520) 94 6,995,265 1988 347 11,769,593 93 7,012,737 1987 345 14,533,490 61 5,749,600 1986 354 31,452,685 64 5,360,124 1985 354 24,445,409 63 5,295,991 1984 373 34,677,908 56 4,543,541 1983 332 9,578,424 86 4,592,837 (a) Includes American Can at$6,140,000, Rahr Malting Company at$20,000,000, Woman's Correctional Facility at$8,000,000 and Independent School District 720 (Shakopee)at$6,600,000. (b) Includes an addition to the Blue Lake Treatment Plant valued at$45,000,000. - 11 - Recent Development American Can currently has a new 300,000 square foot warehouse facility under construction valued at approximately $6,140,000. Rahr Malting Company has a new$20,000,000 malt house under construction. The Woman's Correctional Facility has several new buildings under construction valued at approximately$8,000,000. Independent School District 720 (Shakopee) has additions and improvements under construction at two of its elementary schools located within the City. The improvements are valued at approximately $6,600,000. Aurora Casket Company Inc. completed construction of a new 12,000 square foot distribution center in the City's Valley Green Business Park in 1992. In July of 1991, the City of Shakopee acquired from Marquette Bank a 20,000-square foot facility at the corner of 2nd Avenue and Holmes Street in Shakopee. The existing City Hall services were relocated to the newly-acquired site in February 1993. A number of road and highway related projects surrounding Shakopee are in various stages of development. Construction for the Downtown Mini By-Pass project has been completed and includes the roadway approaches on the north side of First Avenue and a new four-lane bridge over the Minnesota River. In the spring of 1991, construction commenced on Shakopee Southerly By-Pass. Phase 1 of construction was initiated on the eastern boundary of Shakopee city limits. Several other construction phases are scheduled for completion in the fall of 1997. A new County Road 18 bridge over the Minnesota River is under construction. Phase 1 of the project includes actual construction of the bridge over the river proper. Completion of the entire project and roadway enhancements is scheduled for 1995. Financial Institutions Full service banks in the City are Citizens State Bank and Marquette Bank of Shakopee. Total deposits for the two banks totaled $95,779,000 as of December 31, 1992. A branch of the Mankato Family Bank and a Minneapolis branch of Norwest Bank, Minnesota, N.A. are also located in the City. Health Care Facilities The 126-bed St. Francis Regional Medical Center provides general and acute care facilities and is located in the City. The Center has an active medical staff of 54 physicians and a consulting and courtesy staff of approximately 100 physicians. The Center's total full- and part-time employment is approximately 410. Also located in the City is Shakopee Friendship Manor, a 116-bed privately owned nursing home. - 12 - Education Most Shakopee residents are part of Independent School District 720 (Shakopee); a very small percentage of City residents are within the boundaries of ISD 191 (Burnsville). Independent School District 720 has a fall 1993 enrollment (kindergarten through grade 12) of approximately 2,800 students, and has approximately 300 employees. The District maintains three elementary schools, a junior high school and a senior high school. The Shakopee Area Catholic School provides parochial education for grades kindergarten through eight. The school has approximately 342 students enrolled. GOVERNMENTAL ORGANIZATION AND SERVICES Organization Shakopee was incorporated as a City in 1870 and became a statutory city in April, 1975, having previously been governed under a home rule charter. The City has a mayor-council form of government, with the Mayor elected to a two-year term of office and the four Council members elected to overlapping four-year terms. The present Mayor and Council members are as shown below: Expiration of Term Gary L. Laurent Mayor December 31, 1993 Robert O. Sweeney Council Member December 31, 1993 Gloria M. Vierling Council Member December 31, 1993 Joan Lynch Council Member December 31, 1995 Michael Beard Council Member December 31, 1995 The City's chief administrative officer is the City Administrator, Mr. Dennis Kraft, who is appointed by the Council. Mr. Kraft served as the City's Community Development Director for two and one-half years prior to being appointed City Administrator in 1988. Mr. Gregg M. Voxland, the City's Finance Director/Treasurer, has been with the City since 1978. Ms. Judith S. Cox is the City Clerk. The City has 76 full-time and 56 part-time employees. Services Police and fire protection for the City is provided by the Police Department, comprised of 18 full-time officers, and a volunteer Fire Department, comprised of 38 members. The City has a class 5 rating for insurance purposes. Municipal water and sewer services are provided for all developed areas of the City. Water is supplied by eight wells and stored in a two million gallon standpipe, a 1.5 million-gallon elevated tank, and a 250,000-gallon elevated tank. The water system has a pumping capacity of 6,487 gallons per minute; average demand is estimated to be 2.4 million gallons per day, while peak demand reaches 6.0 million gallons per day. The water system is designed to handle major extensions in the future. The Shakopee Public Utilities Commission is responsible for the management and maintenance of the municipal water system and electrical distribution system. The electric - 13 - system purchases power from Northern States Power Company and has 5,878 metered customers. The Commission is comprised of three members appointed by the City Council to three-year terms. The Commission makes an annual contribution in lieu of taxes to the City in the amount of 23.77% of gross margin, or $240,384 (a limit established by ordinance), whichever is greater. Effective January 1, 1991, the Shakopee Public Utilities Commission purchased all the facilities located within the City of Shakopee which were owned and operated by the Minnesota Valley Electrical Cooperative. The Commission has begun financing its long-range program of capital improvements, replacements and additions to the electric and water utilities comprising the Shakopee Public Utilities with the issuance of $4,250,000 Shakopee Public Utilities Revenue Bonds, Series 1993, dated August 24, 1993. Interceptor sewer lines and wastewater treatment plants in the seven-county metropolitan area are under the jurisdiction of the Metropolitan Waste Control Commission ("MWCC"), an agency of the Metropolitan Council. MWCC finances its operations through user charges based on volume. MWCC's Blue Lake Treatment Plant is located in the City and has undergone a major expansion. Employee Pensions All full-time and certain part-time employees of the City of Shakopee are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employers Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing multiple-employer retirement plans. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. All police officers who qualify for membership by statute are covered by the PEPFF. The City's contribution for employees covered by PERA for the year ended December 31, 1992 was $189,055. The City contributes to the Shakopee Fire Department Relief Association, a single-employer public employee retirement system that acts as a common investment and administrator for the City's volunteer fire fighters. Contributions to the relief association in 1993 are expected to total $48,290 from the City and $34,714 from State aids. Regional Government - Metropolitan Council The Metropolitan Council is comprised of 17 members who are appointed by the governor with the advice and consent of the State Senate. Sixteen members are appointed to four-year terms from districts of equal population size within the seven-county metropolitan area. The Council Chair, the 17th member, represents the Region as a whole and serves at the pleasure of the governor. The Council is accountable, in law, to the State Legislature. The Council's primary mission, as described in the 1967 Council enabling act, is to undertake those planning and coordinative actions that are necessary to insure the "orderly and economic" development of the Twin Cities Area. - 14 - APPENDIX I PROPOSED FORM OF LEGAL OPINIONS DORSEY & WHITNEY A P.xmczasaxa bracan+o Pao>cssxoxaL Coaroa noxs 220 SOUTH SIXTH STREET MINNEAPOLIS,MINNESOTA 55402-1498 (612) 340-2600 TELEX 29-0605 FAX(612)340-2868 $1, 400, 000 General Obligation Improvement Bonds, Series 1993B City of Shakopee, Scott County, Minnesota As Bond Counsel in connection with the authorization, issuance and sale by the City of Shakopee, Scott County, Minnesota (the City) , of the obligations described above, dated have originally issued as of December 1, 1993 (the Bonds) , 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 upon the basis of existing law, it is our opinion that : 1 . The Bonds are valid and binding general obligations of the City enforceable in accordance with their terms, except to the extent the enforceability thereof may be limited by the exercise of judicial discretion or by the application of state or federal laws relating to bankruptcy, reorganization, moratorium or creditors ' rights . 2 . The principal of and interest on the Bonds are payable primarily from special assessments levied with respect to local improvements in the City and ad valorem taxes levied on all taxable property in the City which have been pledged and appropriated for this purpose, but if necessary for payment thereof additional ad valorem taxes are required by law to be levied on all taxable property in the City, which taxes are not subject to any limitation as to rate or amount . 3 . The Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the Code) , and applicable Treasury Regulations . 4 . Interest on the Bonds (a) is not -includable in gross income for federal income tax purposes or in taxable net income of individuals, estates or trusts for Minnesota income tax purposes; (b) is includable in taxable income of corporations and 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 I-1 DORSEY & WHITNEY $1, 400, 000 General Obligation City of Shakopee, Improvement Bonds, Series 1993B Scott County, Minnesota -2- Minnesota alternative minimum tax applicable to individuals, estates and trusts; but (d) is includable in book income or alternative minimum taxable income for purposes of the federal alternative minimum tax imposed on corporations . 5 . The City has designated the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265 (b) (3) of the Code, and financial institutions described in Section 265 (b) (5) of the Code may treat the Bonds for purposes of Sections 265 (b) (2) and 291 (e) (1) (B) of the Code as if they were acquired on August 7, 1986. 6. The opinions expressed in paragraphs 3, 4 and 5 above are subject to the condition of the City' s compliance with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon may be, and continue to be, excluded from gross income for federal income tax purposes . The City has covenanted to comply with these continuing requirements . Its failure to do so could result in the inclusion of interest on the Bonds in federal gross income and in Minnesota taxable net income, retroactive to the date of issuance of the Bonds . Except as stated in this opinion, we express no opinion regarding federal or state 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 we express no opinion with respect thereto. Dated: December , 1993 . 1-2 D0RSEY 8c WHITNEY A P.szxsssan.bee:AmWO Paortss:ox.s Coaros.�.swam 220 SOUTH SIXTH STREET MINNEAPOLIS,MINNESOTA 55402-1498 • (612)340-2600 TELEX 29-0605 FAX(612)340-2868 $1, 000, 000 General Obligation Tax Increment Refunding Bonds, Series 1993C City of Shakopee, Scott County, Minnesota As Bond Counsel in connection with the authorization, issuance and sale by the City of Shakopee, Scott County, Minnesota (the City) , of the obligations described above, dated we have originally issued as of December 1, 1993 (the Bonds) , 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 upon the basis of existing law, it is our opinion that : 1 . The Bonds are valid and binding general obligations of the City enforceable in accordance with their terms, except to the extent the enforceability thereof may be limited by the exercise of judicial discretion or by the application of state or federal laws relating to bankruptcy, reorganization, moratorium or creditors ' rights. 2 . The principal of and interest on the Bonds are payable primarily from ad valorem tax increments to be derived by the City from its Tax Increment District No. 1 which have been pledged and appropriated for this purpose, but if necessary for payment thereof ad valorem taxes are required by law to be levied on all taxable property in the City, which taxes are not subject to any limitation as to rate or amount . 3. The Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the Code) , and applicable Treasury Regulations . 4 . Interest on the Bonds (a) is not includable in gross income for federal income tax purposes or in taxable net income of individuals, estates or trusts for Minnesota income tax purposes; (b) is includable in taxable income of corporations and 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 1-3 • DORSEY & WHITNEY • $1, 000, 000 General Obligation Tax Increment Refunding Bonds, City of Mhnnopoe, Series 1993C Scott County, Minnesota -2- Minnesota alternative minimum tax applicable to individuals, estates and trusts; but (d) is includable in book income or alternative minimum taxable income for purposes of the federal alternative minimum tax imposed on corporations . 5 . The City has designated the Bonds as "qualified tax-exempt obligations" within- the meaning of Section 265 (b) (3) of the Code, and financial institutions described in Section 265 (b) (5) of the Code may treat the Bonds for purposes of Sections 265 (b) (2) and 291 (e) (1) (B) of the Code as if they were acquired on August 7, 1986. 6. The opinions expressed in paragraphs 3, 4 and 5 above are subject to the condition of the City' s compliance with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon may be, and continue to be, excluded from gross income for federal income tax purposes . The City has covenanted to comply with these continuing requirements. Its failure to do so could result in the inclusion of interest on the Bonds in federal gross income and in Minnesota taxable net income, retroactive to the date of issuance of the Bonds . Except as stated in this opinion, we express no opinion regarding federal or state 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 we express no opinion with respect thereto. Dated: December , 1993 . 1-4 APPENDIX II SUMMARY INNESOTA REAL PROPERTY VALUPAYMENT ATION PROVISIONS, AND ATION Following is a summary of certain statutory provisions effective through 1992 relative to tax levy procedures, tax payment and credit procedures, and the mechanics of real property valuation. The summary does not purport to be inclusive of all such provisions or of the specific provisions discussed, and is qualified by reference to the complete text of applicable statutes, rules and regulations of the State of Minnesota in reference thereto. This summary reflects changes to Minnesota property tax laws enacted by the State Legislature during the 1992 Regular Session. Property Valuations (Chapter 273, Minnesota Statutes) Assessor's Estimated Market Value Each parcel of real property subject to taxation must, by statute, be appraised at least once every four years as of January 2 of the year of appraisal. With certain exceptions, all property is valued at its market value which is the value the assessor determines to be the price he believes the property to be fairly worth, and which is referred to as the "Estimated Market Value." Indicated Market Value Because the Estimated Market Value as determined by an assessor may not represent the price of real property in the marketplace, the "Indicated Market Value" is generally regarded as more representative of full value. The Indicated Market Value is determined by dividing the Estimated Market Value of a given year by the same year's sales ratio determined by the State Department of Revenue. The sales ratio represents the overall relationship between the Estimated Market Value of property within the taxing unit and actual selling price. Tax Capacity For property taxes payable in 1989, the value of the property used to determine the property tax was "Gross Tax Capacity." Gross Tax Capacity, like Assessed Value, was calculated by applying a statutory formula to the Estimated Market Value. Generally, Gross Tax Capacity is approximately 12.5% of Assessed Value for most classifications of property. The Gross Tax Capacity multiplied by the Tax Capacity Rate, instead of the Mill Rate, determined the tax payable on a parcel of property. Beginning with taxes payable in 1990, Net Tax Capacity has replaced Gross Tax Capacity as the basis on which taxes are levied. The Estimated Market Value multiplied by the appropriate class rate (gross or net) yields the tax capacity (gross or net). Net Tax Capacity differs from Gross Tax Capacity primarily by having lower values for homesteaded residential and certain agricultural property. The formulas for converting Estimated Market Value to Assessed Value and Tax Capacity represent a basic element of the State's property tax relief system and are therefore subject to annual revisions by the State Legislature. For taxes payable in 1988 and for prior years, property taxes were levied based on "Assessed Value." Assessed Value of real property was calculated by applying the statutory formula applicable to the property's classification. Property Tax Payments and Delinquencies (Chapters 276, 279-282 and 549, Minnesota Statutes) Ad valorem property taxes levied by local governments in Minnesota are extended and collected the variouscounties State. Each working days after ti jurisdiction required the December0 of the the annual tax levy to the county auditorwithinfive (5) ork II-1 year preceding the collection year. A listing of property taxes due is prepared by the county auditor and turned over to the county treasurer on or before the first business day in March. The county treasurer is responsible for collecting all property taxes within the county. Real estate and personal property tax statements were to be mailed out no later than April 15 for property taxes payable in 1990 and are to be mailed out no later than March 31 thereafter. One-half (1/2) of the taxes on real property is due on or before May 15. The remainder is due on or before October 15. Real property taxes not paid by their due date are assessed a penalty which, depending on the type of property, increases from 2% to 4% on the day after the due date. In the case of the first installment of real property taxes due May 15, the penalty increases to 4% or 8% on June 1. Thereafter, an additional 1% penalty shall accrue each month through October 1 of the collection year for unpaid real property taxes. In the case of the second installment of real property taxes due October 15, the penalty increases to 6% or 8% on November 1 and increases again to 8% or 12% on December 1. Personal property taxes remaining unpaid on May 16 are deemed to be delinquent and a penalty of 8% attaches to the unpaid tax. However, personal property owned by a tax-exempt entity, but which is treated as taxable by virtue of a lease agreement, is subject to the same delinquent property tax penalties as real property. On the first business day of January of the year following collection all delinquencies are subject to an additional 2% penalty, and those delinquencies outstanding as of February 15 are filed for a tax lien judgment with the district court. By March 20 the clerk of court files a publication of legal action and a mailing of notice of action to delinquent parties. Those property interests not responding to this notice have judgment entered for the amount of the delinquency and associated penalties. The amount of the judgment is subject to a variable interest determined annually by the Department of Revenue, and equal to the adjusted prime rate charged by banks, but in no event is the rate less than 10% or more than 14%. Property owners subject to a tax lien judgment generally have five years (5) in the case of all property located outside of cities or in the case of residential homestead, agricultural homestead and seasonal residential recreational property located within cities or three (3) years with respect to other types of property to redeem the property. After expiration of the redemption period, unredeemed properties are declared tax forfeit with title held in trust by the State of Minnesota for the respective taxing districts. The county auditor, or equivalent thereof, then sells those properties not claimed for a public purpose at auction. The net proceeds of the sale are first dedicated to the satisfaction of outstanding special assessments on the parcel, with any remaining balance in most cases being divided on the following basis: county - 40%; town or city - 20%; and school district - 40%. Property Tax Credits (Chapter 273, Minnesota Statutes) In addition to adjusting the taxable value for various property types, primary elements of Minnesota's property tax relief system are: property tax levy reduction aids; the circuit breaker credit, which relates property taxes to income and provides relief on a sliding income scale; and targeted tax relief, which is aimed primarily at easing the effect of significant tax increases. The circuit breaker credit and targeted credits are reimbursed to the taxpayer upon application by the taxpayer. Property tax levy reduction aid includes educational aids, local governmental aid, equalization aid, homestead and agricultural credit aid (HACA) and disparity reduction aid. The homestead credit, a direct subsidy by the State to the taxpayer which was available to residential and agricultural homestead properties in prior years, has been omitted and is now accounted for in the designation of lower class rates. Levy Limitations Historically, the ability of local governments in Minnesota to levy property taxes was controlled by various statutory limitations. These limitations have expired for taxes payable in 1993 and future years, but may be reinstated in the future. Under prior law the limitations generally did 11-2 not affect debt service levies. For county governments, cities of 2,500 population or more, and smaller cities and towns that receive taconite municipal aid, taxes could be levied outside the overall levy limitation for, among others, bonded indebtedness and certificates of indebtedness, unfunded accrued pension liability, social service programs and the residual income maintenance program for which the county share of costs has not been taken over by the State. Debt Limitations All Minnesota municipalities (counties, cities, towns and school districts) are subject to statutory "net debt' limitations under the provisions of Minnesota Statutes, Section 475.53. Net debt is defined as the amount remaining after deducting from gross debt the amount of current revenues which are applicable within the current fiscal year to the payment of any debt and the aggregation of the principal of the following: 1. Obligations issued for improvements which are payable wholly or partially from the proceeds of special assessments levied upon benefited property. 2. Warrants or orders having no definite or fixed maturity. 3. Obligations payable wholly from the income from revenue producing conveniences. 4. Obligations issued to create or maintain a permanent improvement revolving fund. 5. Obligations issued for the acquisition and betterment of public waterworks and public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which revenue is or may be derived. 6. Certain debt service loans and capital loans made to school districts. 7. Certain obligations to repay loans. 8. Obligations specifically excluded under the provisions of law authorizing their issuance. 9. Debt service funds for the payment of principal and interest on obligations other than those described above. Levies for General Obligation Debt (Sections 475.61 and 475.74, Minnesota Statutes) Any municipality which issues general obligation debt must, at the time of issuance, certify levies to the county auditor of the county(ies) within which the municipality is situated. Such levies shall be in an amount that if collected in full will, together with estimates of other revenues pledged for payment of the obligations, produce at least five percent in excess of the amount needed to pay principal and interest when due. Notwithstanding any other limitations upon the ability of a taxing unit to levy taxes, its ability to levy taxes for a deficiency in prior levies for payment of general obligation indebtedness is without limitation as to rate or amount. Metropolitan Revenue Distribution (Chapter 473F, Minnesota Statutes) "Fiscal Disparities Law" The Charles R. Weaver Metropolitan Revenue Distribution Act, more commonly known as "Fiscal Disparities," was first implemented for taxes payable in 1975. Forty percent of the increase in commercial-industrial (including public utility and railroad) net tax capacity valuation since 1971 in each assessment district in the Minneapolis/St. Paul seven-county metropolitan area (Anoka, Carver, Dakota, excluding the City of Northfield, Hennepin, Ramsey, Scott, excluding the City of New Prague, and Washington Counties) is contributed to an area-wide tax base. A distribution index, based on the factors of population and real property market value per capita, is employed in determining what proportion of the net tax capacity value in the area- wide tax base shall be distributed back to each assessment district. 11-3 0 0 N 0 0 0 V' OR 000 C c \ 0 0 O 0) 00 00?� 0�0 r)� . 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Z COw LL no 0 0 w O Cn O ^ co w Z -� NNO p C MO O O 0 O Q 0 0 a 0. 0 Vx WW W� `O N W� (00 UJ O m °° h ° y O)Q(Ni °° �_ Z • 00 N 8 O o m O N p 0 N co 0 N �� U o0 c) o 0 C) o co r") CM co Oto L 0 oo 0Wi t-. < ER co,._r) 0 C ci ° 0 O C N o C m>yt O H> > 0> y>r 0 U)) 071) LLZW C LLW 2^2 -2 a) r) 0.1 \N W W li W 0) uj in n Eg '0 -0 0 0 0 0 N an .0..C O as 0 O 0 E a) E is m i c m 0 Io 0 o o 0 0 .° E r I 0 m •N 0 O C O C i 0 O N = Z 7 = Z c U� O� _ 0 O O a) E¢0 O c E .O-. 0 0 O J C h C O • O 'a .a O U V E O a C' 0RC - E 0 0 0 O0O 0 m APPENDIX III ANNUAL FINANCIAL STATEMENTS The City is audited annually by an independent certified public accounting firm. Data on the following pages was extracted from the audited financial statements for fiscal years ending December 31, 1992, 1991 and 1990. For all years presented, the modified accrual basis of accounting is used for governmental fund types; the accrual basis is used for proprietary funds. The reader should be aware that the complete audits may contain additional information which may interpret, explain or modify the data presented here. The City's comprehensive annual financial reports for the years ended 1984 through 1991 were awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA). The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City has submitted its CAFR for the 1992 fiscal year to GFOA. 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V 4. 2 0.0 0 : 8 tpp 00x7 C c • X O: 47 47 0 4; 4. 4. .r--;2 CITY OF SHAKOPEE, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOSS FOR THE YEARS ENDED DECEMBER 31, 1992 AND 1991 Storm Totals Electric Water Sewer Drainage Fund Fund Fund Fund 1992 1991 Increase (Decrease) in Cash and Cash Equivalents Cash Flow From Operating Activities Operating Income (Loss) S 297,022 S 146,397 S (93,623) S 92,333 S 442,129 S 787,471 Adjustments To Reconcile Operating Income To Net Cash Provided By (Used For) Operating Activities Depreciation And Amortization 231,085 180,079 95,150 126,832 633,146 609,380 Change In Assets And Liabilities (Increase) Decrease In Accrued Interest Receivable (7,627) (4,321) 86 (3,283) (15,145) 14,381 (increase) Decrease In Accounts Receivable -60,668 (27,435) (237) 729 33,725 (210,198) (Increase) Decrease In Due From Other Funds - (1,683) (560) 5,998 3,755 (1,338) (Increase) Decrease In Due From Other Governments (166,531) (102) (166,633) (59,396) (Increase) Decrease In Inventory (4,041) 1,771 270) 500 (Increase) Decrease In Prepaid Expense (11,094) (201) (11 ,295) (2,359) Increase (Decrease) In Accounts Payable (104,272) 1,485 9,833 8,930 (84,024) 182,027 Increase (Decrease) In Due To Other Funds (92,348) 189,748 (170,267) (164,361) (237,228) 237,456 Increase (Decrease) In Due To Other Governments (4,504) (45) (4,549) (68,513) Increase (Decrease) In Customer Deposits 9,400 9,400 9,570 Rents And Miscellaneous Income 10,717 3,390 14,107 12,639 Other Expense (52,058) Net Cash Provided By (Used For) Operating Activities 387,827 490,353 (324,095) 61,033 615,118 "1,459,562 Cash Flows From Noncapital Financing Activities Operating Transfers To Other Funds (319,165) (115,016) (434,181) (518,381) Net Cash Used For Noncapital Financing Activities (319,165) (115,016) (434,181) (518,381) Cash Flows From Capital And Related Financing Activities Acquisition Of Fixed Assets (571,596) (326,852) (123,681) (1,022,129) (1,712,394) Proceeds From Sale Of Fixed Assets 62,547 3,160 65,707 Principal Payments On Long Term Debt (67,558) (67,558) (138,799) interest Paid (84,035) (84,035) (88,811) Increase (Decrease) In Accrued Interest Payable (2,915) Trunk Charges 29,554 29,554 27,719 Contributions 2,724 Net Cash Used For Capital And Related Financing Activities (660,642) (297,298) (120,521) (1,078,461) (1,912,476) Cash Flows From Investing Activities Interest Income 203,471 93,420 148,530 140,333 585,754 586,168 Investments Purchased (1,149,108) ' (193,961) (1,343,069) (254,976) Investments Sold Or Matured 1,540,827 22,772 148,965 1,712,564 474,766 Net Cash Provided By (Used For) Investing Activities 595,190 (77,769) 297,495 140,333 955,249 805,958 Net Increase (Decrease) In Cash and Cash Equivalents 3,210 270 (147,121) 201,366 57,725 (165,337) Cash and Cash Equivalents - January 1 491,096 9,002 1,608,374 1,435,882 3,544,354 3,709,691 Cash and Cash Equivalents - December 31 S 494,306 S 9,272 S1,461,253 $1,637,248 S 3,602,079 $ 3,544,354 Non Cash Investing, Capital And Financing Activities Contributions From Other Funds S S S 297,447 S 267,173 S 564,620 S 141,591 Developers 160,955 149,800 142,467 453,222 336,445 Increase In Long Term Debt 1,106,247 Sale Of Fixed Assets 110,560 110,560 Increase In Long Term Receivable (110,560) (110,560) Acquisition Of Fixed Assets (160,955) (447,247) (409,640) (1,017,842) (1,584,283) __:===IIIis SflSZ ZZZZ IIIIsa=II=I I =====x III-13 CITY OF SHAROPEE, MINNESOTA- ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FOR TEE YEARS ENDED DECEMBER 31, 1991 AND 1990 Storm Totals Electric Water Sever Drainage Fund Fund Fund Fund 1991 1990 Operating Revenue Sales $7,133,373 $ 530,991 $1,079,640 $ 299,012 $ 9,043,016 $7,743,657 Cost Of Sales 5,350,071 5,350,071 4,479,500 1,783,302 530,991 1,079,640 299,012 3,692,945 3,264,157 Operating Expense Operations And Maintenance 862,995 357,797 65,676 44,450 1,330,918 1,220,148 Treatment 965,176 965,176 983,134 Depreciation And Amortization 231,465 170,285 87,222 120,408 609,380 518,603 Total Operating Expense 1,094,460 528,082 1,118,074 164,858 2,905,474 2,721,885 Operating Income (Loss) 688,842 2,909 (38,434) 134,154 787,471 542,272 Other Income (Expense) Interest Income 233,200 87,867 154,481 110,620 586,168 631,524 Other Income 10,820 29,538 40,358 34,228 Interest Expense (88,228) (583) (88,811) (8,125) Other Expense (52,058) (52,058) Total Other Income (Net) 155,792 65,347 153,898 110,620 485,657 657,627 Net Income Before Operating Transfers 844,634 68,256 115,464 244,774 1,273,128 1,199,899 Transfers To Other Funds (418,677) (99,704) (518,381) (434,233) Net Income (Loss) To Retained Earnings 425,957 (31,448) 115,464 244,774 754,747 765,666 : Retained Earnings January 1 5,301,925 1,137,906 2,264,206 881,821 9,585,858 8,820,192 Retained Earnings December 31 $5,727,882 $1,106,458 $2,379,670 $1,126,595 $10,340,605 $9,585,858 II!-14 CITY OF SHAKOPEE, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1990 AND 1989 Electric Water Storm Totals Fund Sever Drainage Fund Fund Fund 1990 1989 Operating Revenue Sales $5,825,944 $ 467,840 $1,262,371 $ 296,033 $7,852,188 $7,364,264 Cost Of Sales 4,479,500 4,479,500 4,015,945 1,346,444 467,840 1,262,371 296,033 3,372,688 3,348,319 Operating Expense Operations And Maintenance 827,603 283,831 55,092 Treatment 53,622 1,220,148 1,084,190 ,134 Depreciation 141,750 176,799 98381,767 118,287983,134 904,611 518,603 480,303 Total Operating Expense 969,353 460,630 1,119,993 171,909 2,721,885 2,469,104 Operating Income 377,091 7,210 142,378 124,124 650,803 879,215 Other Income (Expense) Interest Income 308,396 92,467 Tb7,619 Other Income 83,042 631,524 596,178 15,527 18,701 34,228 Interest Expense (952) (78) 49,196 Other Expense C7,095) (8,125) (8,571) ;147,302) Total Other Iacome (Net) 322,971 111,090 140,524 83,042 657,627 489,501 Net Income Before Operating Transfers 700,062 118,300 282,902 207,166 1,308,430 1,368,716 Transfers To Other Funds (360,508) (73,725) (434,233) (432.391) Net income To Retained Earnings 339,554 44,575 282,902 207,166 874,197 936,325 Retained Earnings January 1 4,962,371 1,093,331 2,089,835 674,655 8,820,192 7,883,867 Retained Earnings December 31 $5,301,925 $1,137,906 $2,372,737 $ 881,821 $9,694,389 S8,820,192 Ili-'