NOTICE OF SALE CITY OF LEAWOOD, KANSAS $2,055,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES

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1 NOTICE OF SALE CITY OF LEAWOOD, KANSAS $2,055,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES $5,155,000 * TAXABLE GENERAL OBLIGATION IMPROVEMENT BONDS SERIES 2011-A (GENERAL OBLIGATIONS PAYABLE FROM UNLIMITED AD VALOREM TAXES) Bids. Sealed, facsimile and electronic (as explained below) bids for the purchase of $2,055,000 General Obligation Temporary Notes, Series (the Series Notes or the Notes ) and $5,155,000* Taxable General Obligation Improvement Bonds, Series A Bonds (the Series 2011-A Bonds or the Bonds ), of the City of Leawood, Kansas (the City ) will be received (1) in the case of sealed and facsimile bids by the City Interim Finance Director at the address and fax number hereinafter set forth and (2) in the case of electronic bids through PARITY electronic bid submission system ( PARITY ), until 12:00 noon, Central Daylight Time, for the Series Notes, and until 1:00 p.m., Central Daylight Time, for the Series 2011-A Bonds, on Monday, August 15, 2011 at which time such bids will be publicly read and will be acted upon by the Governing Body of the City at its meeting to be held at 7:30 p.m. local time that day. No oral or auction bids will be considered. THE NOTES Note Details. The Notes will be dated August 15, 2011 and will become due on September 1, The Notes will consist of fully registered notes in the denomination of $5,000 or any integral multiple thereof. The Notes will bear interest from the dated date at the rates determined when the Notes are sold. The interest on the Notes will be payable at maturity on September 1, Book-Entry Only System. The Notes will initially be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York, to which payments of principal of and interest on the Notes will be made. Individual purchases of Notes will be made in book-entry form only. Purchasers will not receive certificates representing their interest in Notes purchased. Place of Payment and Note Registration. The principal and interest on the Notes will be payable at the principal office of the State Treasurer of the State of Kansas (the Paying Agent and Bond Registrar ) to the registered owners appearing on the books maintained by the Bond Registrar upon presentation of the Notes for payment and cancellation. * Subject to change. 1

2 Redemption of Notes Prior to Maturity. redemption prior to maturity. The Notes shall not be subject to Authority, Purpose and Security. The Notes are being issued pursuant to the laws of the State of Kansas, including without limitation K.S.A , et seq., K.S.A , et seq., and K.S.A , et seq., each as amended and supplemented, for the purpose of paying the cost of certain street and other improvements to public buildings and facilities in the City. The Notes and the interest thereon will constitute general obligations of the City. The Notes are payable as to both principal and interest from proceeds of future general obligation bonds or notes of the City payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The full faith, credit and resources of the City are irrevocably pledged for the prompt payment of the principal and interest on the Notes as the same become due. THE BONDS Bonds Details. The Bonds will consist of fully registered certificated bonds, each in the denomination of $5,000, or any integral multiple thereof. The Bonds will be dated August 15, 2011, and will become due annually on September 1 in the years and in the amounts set forth below: SERIES 2011-A BONDS MATURITY SEPTEMBER 1 PRINCIPAL * AMOUNT MATURITY SEPTEMBER 1 PRINCIPAL* AMOUNT 2012 $340, $345, , , , , , , , , , , , , ,000 The Bonds will bear interest from the dated date at rates to be determined when the Bonds are sold, which interest will be payable semiannually on March 1 and September 1, beginning on March 1, Adjustment of Issue Size. The City reserves the right to increase or decrease the total principal amount of the Bonds and the principal amount of any maturity, depending on the purchase price and interest rates bid and the offering price specified by the successful bidder. Such adjustments to principal amounts may be made by the City in order to properly size the Bond issue based on the purchase price and interest rates bid on the Bonds. The successful bidder may not withdraw its bid or change the interest rates bid as a result of any changes made to the principal amount of the Bonds or principal of any maturity as described herein. If there is an increase or decrease in the final aggregate principal amount of the Bonds or the schedule of principal payments as described above, the City will notify the successful bidder by means of telephone or facsimile transmission, subsequently confirmed in writing, no later than 3:00 p.m., Central Time, on the Sale Date. The net production as a percentage of the * Subject to change. 2

3 principal amount of the Bonds generated from the bid of the successful bidder will not be decreased as a result of any change in the total principal amount of the Bonds or in the principal amount per maturity. In order to properly size the Bonds, the reoffering prices to the public by the original purchaser of the Bonds must be furnished to the City, if requested, immediately after the opening of the bids. Book-Entry Only System. The Bonds will initially be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York, to which payments of principal of and interest on the Bonds will be made. Individual purchases of Bonds will be made in book-entry form only. Purchasers will not receive certificates representing their interests in Bonds purchased. Place of Payment and Bond Registration. Interest on the Bonds will be payable to the registered owners appearing on the books maintained by the Bond Registrar as of the 15th day of the month preceding each interest payment date. The principal of the Bonds will be payable at the principal office of the Paying Agent to the registered owners thereof upon presentation of the Bonds for payment and cancellation. Optional Redemption. Bonds maturing on or after September 1, 2020 will be subject to redemption prior to maturity at the option of the City on September 1, 2019, and thereafter, in whole or in part at any time, in such principal amounts for such series and maturities as shall be determined by the City (selection of Bonds for partial redemption of Bonds of the same maturity to be made in such manner as the Bond Registrar shall determine), at a redemption price of 100% of the principal amount of Bonds redeemed plus accrued interest to the redemption date, without a premium. Mandatory Redemption. A bidder may elect to have all or a portion of the Bonds scheduled to mature consecutively in 2020 through 2026, inclusive, issued as term bonds scheduled to mature in the latest of said consecutive years and subject to mandatory redemption requirements consistent with the schedule of serial maturities set forth above, subject to the following conditions: (1) not less than all Bonds of the same series and serial maturity shall be converted to term bonds with mandatory redemption requirements, and (2) a bidder shall make such an election by completing the applicable paragraph on the Official Bid Form or including such information in an electronic bid submitted via PARITY. Authority, Purpose and Security. The Bonds are being issued pursuant to the provisions of the laws of the State of Kansas, including without limitation K.S.A , et seq., K.S.A. 12-6a01, et seq., as amended and supplemented, and the City s Home Rule Authority under Article 12, Section 5 of the Kansas Constitution for the purpose of financing the cost of constructing certain street and storm water improvements in the City. The principal of and interest on the Bonds will be payable from special assessments levied on property benefited by certain improvements financed by the Bonds and, if not so paid, from ad valorem taxes levied on all taxable tangible property including land and improvements thereon located within the territorial limits of the City of Leawood, Johnson County, Kansas. The full faith, credit and resources of the City are irrevocably pledged for the payment of the principal and interest on the Bonds as the same become due. 3

4 BIDS FOR NOTES AND BONDS Conditions of Bids. Bids may be submitted for the Series Notes and/or for the Series 2011-A Bonds. A separate bid must be submitted for the Series Notes and for the Series 2011-A Bonds. Bids will be received for the Notes and for the Bonds bearing such rate or rates of interest as may be specified by the bidders, subject to the following conditions: For the Notes: The same interest rate shall apply to all Series Notes. The interest rate specified shall be a multiple of one-eighth (1/8 th ) or one-one hundredth (1/100 th ) of one percent (1%). The interest rate may not exceed a rate equal to the daily yield for 10- year treasury bonds published by The Bond Buyer in New York, New York, on the Monday next preceding the day on which the Notes are sold, plus 3%. No bid of less than 99.50% of the principal amount of the Notes and accrued interest thereon to the date of delivery, will be considered and no supplemental interest payments will be considered. Bids for less than an entire series of the Notes will not be considered. Each bid for the Notes must specify the total interest cost to the City during the term of such Notes on the basis of such bid, the discount, if any, the premium, if any, offered by the bidder, and the net interest cost to the City on the basis of such bid, all certified by the bidder to be correct and the City will be entitled to rely on the certificate of correctness of the bidder. Each bid for the Notes must also specify the average annual net interest rate to the City on the basis of such bid. For the Bonds: The same rate shall apply to all Series 2011-A Bonds of the same maturity. Each interest rate specified shall be a multiple of one-eighth (1/8 th ) or one-twentieth (1/20 th ) of one percent (1%). The difference between the highest and lowest rates specified in any bid for the Bonds shall not exceed four percent (4.0%). No interest rate may exceed a rate equal to the daily yield for 10-year treasury bonds published by The Bond Buyer in New York, New York, on the Monday next preceding the day on which the Bonds are sold, plus 7%. No bid of less than par and accrued interest will be considered and no supplemental interest payments will be considered. Bids for less than the entire series of Bonds will not be considered. Each bid for Bonds must specify the total interest cost to the City during the term of the series of Bonds on the basis of such bid, the premium, if any, offered by the bidder, the net interest cost on the basis of such bid and the TIC (as hereinafter defined) on the basis of such bid, all certified by the bidder to be correct and the City will be entitled to rely on the certificate of correctness of the bidder. Good Faith Deposit. For the Notes: Each bid for the Notes must be accompanied by a good faith deposit ( Deposit ) in the form of a wire transfer, certified or cashier s check or a Financial Surety Bond in the amount of 1% of the principal amount of the Notes, payable to the order of the City. If a check is used, it must accompany each bid. Wire transfer instructions can be obtained from the City s financial advisor at the phone number listed herein. Contemporaneously with submission of a wire transfer Deposit, such bidder shall send an to the City and the Financial Advisor at the address set forth below, including the following information: (a) notification that the wire transfer has been made; (b) the amount of the wire transfer; and (c) the return wire transfer instructions in the event such bid is 4

5 unsuccessful. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Kansas, and such bond must be submitted to the City or the Financial Advisor hereinafter referred to prior to the opening of the bids. The Financial Surety Bond must identify each bidder whose Deposit is guaranteed by such Financial Surety Bond. If the Notes are awarded to a bidder utilizing a Financial Surety Bond, that successful bidder is required to submit its Deposit to the City in form of a cashier s check (or wire transfer such amount as instructed by the City or its Financial Advisor) not later than 1:00 P.M., Central Standard Time on the next business day following the award. The Deposit of the successful bidder shall constitute a good faith deposit and shall be retained by the City to insure performance of the requirements of the sale by the successful bidder. In the event the successful bidder shall fail to comply with the terms of its bid, the Deposit will be forfeited as full and complete liquidated damages. Upon delivery of the Notes, the Deposit will be applied to the purchase price of the Notes, but no interest shall be allowed thereon. After the award is made to the successful bidder, the Deposit of the unsuccessful bidders will be returned forthwith; wire transfer Deposits submitted by unsuccessful bidders will not be accepted and shall be returned in the same manner received on the next business day following the date of sale. The City reserves the right to withhold reasonable charges for any fees or expenses incurred in returning a wire transfer Deposit. For the Bonds: Each bid for the Bonds must be accompanied by a good faith deposit ( Deposit ) in the form of a wire transfer, certified or cashier s check or a Financial Surety Bond in the amount of 2% of the principal amount of the Bonds, payable to the order of the City. If a check is used, it must accompany each bid. Wire transfer instructions can be obtained from the City s financial advisor at the phone number listed herein. Contemporaneously with submission of a wire transfer Deposit, such bidder shall send an to the City and the Financial Advisor at the address set forth below, including the following information: (a) notification that the wire transfer has been made; (b) the amount of the wire transfer; and (c) the return wire transfer instructions in the event such bid is unsuccessful. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Kansas, and such bond must be submitted to the City or the Financial Advisor hereinafter referred to prior to the opening of the bids. The Financial Surety Bond must identify each bidder whose Deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded to a bidder utilizing a Financial Surety Bond, that successful bidder is required to submit its Deposit to the City in form of a cashier s check (or wire transfer such amount as instructed by the City or its Financial Advisor) not later than 1:00 P.M., Central Standard Time on the next business day following the award. The Deposit of the successful bidder shall constitute a good faith deposit and shall be retained by the City to insure performance of the requirements of the sale by the successful bidder. In the event the successful bidder shall fail to comply with the terms of its bid, the Deposit will be forfeited as full and complete liquidated damages. Upon delivery of the Bonds, the Deposit will be applied to the purchase price of the Bonds, but no interest shall be allowed thereon. After the award is made to the successful bidder, the Deposit of the unsuccessful bidders will be returned forthwith; wire transfer Deposits submitted by unsuccessful bidders will not be accepted and shall be returned in the same manner received on the next business day following the date of sale. The City reserves the right to withhold reasonable charges for any fees or expenses incurred in returning a wire transfer Deposit. Basis of Award. For the Notes: The award of the Notes will be made on the basis of the lowest net interest cost to the City, which will be determined by adding the amount of the discount bid, if 5

6 any, and subtracting the amount of the premium bid, if any, from the total interest cost to the City. If there is any discrepancy between the stated net interest cost and the interest rate and premium/discount specified, the specified interest rate and the premium/discount shall govern and the net interest cost specified in the bid shall be adjusted accordingly. If two or more proper bids providing for identical amounts for the lowest net interest cost are received, the governing body will determine by lot which bid, if any, will be accepted, and its determination is final. For the Bonds: The award of the Bonds will be made on the basis of the lowest true interest cost ( TIC ) for such Bonds determined as follows: the TIC is the discount rate (expressed as a per annum percentage rate) which, when used in computing the present value of all payments of principal and interest to be paid on such Bonds, from the payment dates to August 15, 2011 (the dated date), produces an amount equal to the principal amount of such series of Bonds, plus a premium, if any. Payments of principal and interest on the Bonds will be based on the principal amounts set forth in this Notice and the interest rates specified by each bidder. Present value will be computed on the basis of semiannual compounding and a 360-day year of twelve 30-day months. In the event there is a discrepancy between the TIC specified by a bidder and their indicated interest rates and premium, the indicated interest rates and premium shall govern and the TIC shall be adjusted accordingly. If two or more proper bids providing for the same lowest TIC are received, the governing body will determine by lot which bid, if any, will be accepted, and its determination is final. The City reserves the right to reject any and/or all bids and to waive any irregularities in a submitted bid. Any bid for the Series Notes received after 12:00 noon, Central Daylight Time, on the date of sale will not be considered. Any bid for the Series 2011-A Bonds received after 1:00 p.m. Central Daylight Time, on the date of the sale will not be considered. Submission of Bids. Bids for the Notes and the Bonds shall be submitted as follows: All sealed and facsimile bids must be submitted on the Official Bid Form which may be procured from the City Interim Finance Director or the City s financial advisor, George K. Baum & Company, Kansas City, Missouri. No additions or alterations in such forms shall be made and any erasures may cause rejection of any bid. Sealed bids must be submitted to the City Interim Finance Director at the address shown below. Facsimile bids may be faxed to the City Interim Finance Director at (913) Electronic bids must be submitted via PARITY and must be submitted in accordance with this Notice of Sale. If provisions of this Notice of Sale conflict with those of PARITY, this Notice of Sale shall control. Bids for the Series Notes must be received before 12:00 noon, local time, on Monday, August 15, Bids for the Series 2011-A Bonds must be received before 1:00 p.m., local time, on Monday, August 15, The City and the City s financial advisor shall not be responsible for any failure, misdirection, delay or error in the means of transmission selected by the bidder. PARITY. Information about the electronic bidding services of PARITY may be obtained from i-deal LLC, 40 West 23rd Street, 5th Floor, New York, New York (800/ ) and from the following web site: CUSIP Numbers. It is anticipated that CUSIP identification numbers will be printed on or assigned to the Bonds and the Notes, but neither the failure to print such number on or assign such number to any Note or Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the 6

7 Notes or Bonds in accordance with the terms of the purchase contract. All expenses in relation to the assignment and printing of CUSIP numbers on the Notes and Bonds will be paid by the City. Delivery and Payment. The City will pay for preparing the Notes and the Bonds. The Notes and Bonds will be delivered in book-entry form only through the facilities of The Depository Trust Company, New York, New York, on or about August 30, The successful bidders will be furnished with a certified transcript of the proceedings evidencing the authorization and issuance of the Notes or Bonds, as applicable, and the usual closing documents, including a certificate that there is no litigation pending or threatened at the time of delivery of the Notes or Bonds affecting their validity and a certificate regarding the completeness and accuracy of the Official Statement. Payment for Notes and Bonds must be made in funds immediately subject to use by the City by approximately 10:00 a.m., local time, on the day for delivery. The City will pay for the fees of the Note and Bond Registrar for registration and transfer of the Notes and Bonds. Any additional costs or fees that might be incurred in the secondary market, other than fees of the Note and Bond Registrar, will be the responsibility of the note and bond owners. Additionally, the reoffering price of the Notes must be provided by the original purchaser of the Notes to the City within 24 hours of the opening of bids. A certificate stating that at least 10 percent of the Notes has been sold to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at such reoffering price must be furnished to the City by the original purchaser at closing. Ratings. The City has applied to Moody s Investors Service for ratings on the Notes and Bonds. Such applications and ratings are further described in the City s Preliminary Official Statement relating to the Notes and Bonds, copies of which may be obtained from the City or the City s financial advisor. Official Statement. The City has prepared a Preliminary Official Statement with respect to the Notes and the Bonds, deemed final by the City except for the omission of certain information as provided in Securities and Exchange Commission Rule 15c2-12, copies of which may be obtained from the City Clerk. Upon the sale of the Notes and Bonds, the City will adopt the final Official Statement and will furnish the successful bidder(s), within seven business days of the award of the bids, with a reasonable number of Official Statements at the City s expense. Additional copies may be ordered by a successful bidder at its expense. Assessed Valuation and Bonded Indebtedness. The 2011 equalized assessed valuation of the City for computation of bonded debt limitations is $816,371,220. The total general obligation indebtedness of the City as of the date of the Notes and Bonds, including the Notes and Bonds being sold but excluding the temporary notes to be retired with the proceeds of the Notes and Bonds, is $68,035,000. Legal Matters. The Notes and the Bonds will be sold subject to the approving legal opinion of Bryan Cave LLP, Kansas City, Missouri, Bond Counsel, which opinion will be furnished and paid for by the City, will accompany the Bonds and the Notes and be delivered to the successful bidder when the Bonds/Notes are delivered. The opinion will also include 7

8 the opinion of Bond Counsel relating to the exclusion of the interest on the Series Notes (but not the Series 2011-A Bonds) from gross income for federal income tax purposes and from computation of Kansas adjusted gross income. Reference is made to the Preliminary Official Statement for further discussion of federal and Kansas income tax matters relating to the interest on the Notes and Bonds. Continuing Disclosure. The City has agreed in the resolutions authorizing the Bonds and the Notes to provide certain annual financial information and notices of certain events to certain national repositories in accordance with SEC Rule 15c2-12, as more particularly described in the Preliminary Official Statement with respect to the Notes and the Bonds. Official Information. Additional copies of this Notice of Sale, Official Bid Forms or further information may be obtained from the undersigned or George K. Baum & Company, Plaza Colonnade, 4801 Main Street, Suite 500, Kansas City, Missouri ( ), the City s financial advisor. Dated: July 18, LEAWOOD, KANSAS /s/dawn Long Interim Finance Director City of Leawood, Kansas City Hall 4800 Town Center Drive Leawood, Kansas Telephone: (913) Fax: (913)

9 OFFICIAL BID FORM OF THE CITY OF LEAWOOD, KANSAS TAXABLE GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2011-A TO THE CITY OF LEAWOOD, KANSAS: For $5,155,000 * principal amount of Taxable General Obligation Improvement Bonds, Series 2011-A, of the City of Leawood, Kansas, to be dated August 15, 2011, as described in your Notice of Sale, dated July 18, 2011 said bonds to bear interest as follows: SERIES 2011-A BONDS Maturity (September 1) Principal Amount Interest Rate Per Annum Maturity (September 1) Principal Amount Interest Rate Per Annum 2012 $340,000 % 2020 $345,000 % ,000 % ,000 % ,000 % ,000 % ,000 % ,000 % ,000 % ,000 % ,000 % ,000 % ,000 % ,000 % ,000 % 345,000 % The undersigned will pay 100% of the principal amount of said Bonds plus accrued interest to date of delivery, plus a total premium of $. We hereby elect to have the following issued as term bonds: Principal Amount Years (Inclusive) Maturity (September 1) $ to to to Subject to mandatory redemption in the amounts and at the times shown above. The following information is provided on the basis of this bid: Total interest cost to maturity on the rates specified above Less Premium (if any) Net Interest Cost True interest cost $ $ $ % * Subject to change. 1

10 This proposal is subject to all of the terms and conditions contained in said Notice of Bond Sale, and if the undersigned is the successful bidder, the undersigned will comply with all of said provisions. A wire transfer, cashier s or certified check, or financial surety bond, in the amount of $103,100 payable to the order of the City of Leawood, Kansas, accompanies this proposal as a good faith deposit. Said deposit shall be returned to the undersigned if the bid of the undersigned is not accepted. If the bid of the undersigned is accepted but said City shall fail to deliver its bonds to the undersigned in accordance with the terms of this proposal, said deposit shall be delivered to the undersigned. If the bid herein contained is accepted, then the deposit shall be held by the City until the undersigned shall have complied with all of the terms of said notice and such bid, at which time the amount of said deposit shall be applied to the purchase price of the Bonds. If the bid herein contained is accepted and if the undersigned shall default in the performance of any of the terms and conditions of such bid, the amount of such check shall be retained by the City as and for liquidated damages. Dated:, 2011 (Name of Firm) By:, (Name) (Office) Phone Number: ( ) Account Members: The City hereby agrees to deliver or cause to be delivered to you, within seven business days of the date of acceptance of this proposal, a reasonable number of copies of the final Official Statement of the City setting forth, among other matters, information concerning the City and the Bonds that is complete and accurate as of the date of the delivery to you of the final Official Statement. 2

11 Pursuant to action duly taken by the Governing Body of the City of Leawood, Kansas, the above proposal is hereby accepted this day of August, THE CITY OF LEAWOOD, KANSAS Peggy J. Dunn, Mayor ATTEST: Debra Harper, City Clerk (Note: No additions or alterations in the above proposal shall be made and any erasures may cause a rejection of any bid. Bids must be filed with the City Interim Finance Director of the City of Leawood, Kansas, at City Hall, 4800 Town Center Drive, Leawood, Johnson County, Kansas, sealed at or prior to 1:00 p.m. Central Standard Time, on Monday, August 15, 2011, or delivered to said officer at City Hall in Leawood, Kansas at or immediately prior to that time on said date.) 3

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13 OFFICIAL BID FORM PROPOSAL FOR THE PURCHASE OF NOTES OF THE CITY OF LEAWOOD, KANSAS TO: THE GOVERNING BODY OF THE CITY OF LEAWOOD, KANSAS For $2,055,000 principal amount of General Obligation Temporary Notes, Series , of the City of Leawood, Kansas, to be dated August 15, 2011, as described in your Notice of Sale dated July 18, 2011, said notes to pay interest at the rate of % per annum, the undersigned will pay the par value of the notes plus accrued interest to the date of delivery less a total discount or plus a total premium in the amount set forth below. Total interest cost to maturity at the rate specified... $ Plus Discount (if any) not to exceed 0.50%... Less Premium (if any)... ( ) Net interest cost... $ Average annual net interest rate... % This proposal is subject to all terms and conditions contained in the Notice of Sale, and if we are the successful bidder, we will comply with all of the provisions contained in the Notice of Sale. We hereby certify that all of the information we have provided in this bid is true and correct. A wire transfer, cashier s or certified check, or financial surety bond, in the amount of $20,550 payable to the order of the City of Leawood, Kansas, accompanies this proposal as a good faith deposit. Said deposit shall be returned to the undersigned if the bid of the undersigned is not accepted. If the bid of the undersigned is accepted but said City shall fail to deliver its notes to the undersigned in accordance with the terms of this proposal, said deposit shall be delivered to the undersigned. If the bid herein contained is accepted, then the deposit shall be held by the City until the undersigned shall have complied with all of the terms of said notice and such bid, at which time the amount of said deposit shall be applied to the purchase price of the Notes. If the bid herein contained is accepted and if the undersigned shall default in the performance of any of the terms and conditions of such bid, the amount of such check shall be retained by the City as and for liquidated damages. 1

14 Bidder hereby acknowledges sole responsibility for delivering its signed, completed bid form prior to the time of the sale and agrees to hold harmless the City and the City s financial advisor for any error in a bid that is transmitted telephonically or by facsimile. LIST ANY ACCOUNT MEMBERS: Submitted by: By: Telephone Number: Fax Number: Pursuant to action duly taken by the governing body of the City of Leawood, Kansas, the above and foregoing bid is hereby accepted this, (SEAL) Attest: City Clerk Mayor NOTE: No additions or alterations shall be made to this proposal form and any erasures may cause rejection of any bid. Bids may be filed with the City Interim Finance Director, City of Leawood, City Hall, 4800 Town Center Drive, Leawood, Kansas 66211, may be sent by facsimile to (913) or may be submitted electronically through PARITY, at or before 12:00 noon, Central Daylight Time, on Monday, August 15, Any bid received after such time will not be considered. 2

15 This Preliminary Official Statement and the information contained herein are subject to completion and amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the PRELIMINARY OFFICIAL STATEMENT DATED JULY 18, 2011 In the opinion of Bryan Cave LLP, Kansas City, Missouri, Bond Counsel, under existing laws and regulations and assuming continued compliance with the covenants contained in the Note Ordinance and the Bond Ordinance, the interest on the Notes [(including any original issue discount properly allocable to an owner thereof)] is exempt from federal and Kansas income taxation, except with respect to certain taxpayers as more specifically described herein. Interest on the Bonds is subject to federal income taxation but is exempt from Kansas income taxation. See TAX EXEMPTION herein. New Issues Moody s Ratings: Notes- MIG 1 Book-Entry Only Bonds- Aaa Bank Qualified-Notes Only Outlook-Negative (see RATINGS herein) CITY OF LEAWOOD, KANSAS $2,055,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES securities laws of any such jurisdiction. This Preliminary Official Statement is intended solely for solicitation of initial bids to purchase the Bonds. Dated: August 15, 2011 $5,155,000 (subject to change) TAXABLE GENERAL OBLIGATION IMPROVEMENT BONDS SERIES 2011-A Due: As Shown Herein The Series Notes (the Notes ) and the Series 2011-A Bonds (the Bonds ) will be issued as fully registered notes/bonds, without coupons, in the denomination of $5,000 or any integral multiple thereof. The Notes and Bonds shall be initially registered in the name of Cede & Co., as nominee of The Depository Trust Company ( DTC ), New York, New York, to which payment of principal and interest will be made. Principal and interest on the Notes and Bonds will be payable by check, draft, or wire transfer from the State Treasurer of Kansas (the Note Paying Agent and the Bond Paying Agent ) to DTC. Purchases of Notes and Bonds will be made in book-entry form. Purchasers will not receive certificates representing their interest in the Notes and Bonds purchased. Interest on the Notes will be payable at maturity on September 1, The Notes are not subject to optional redemption prior to maturity. See THE NOTES Redemption Provisions herein Interest on the Bonds will be payable on each March 1 and September 1, beginning on March 1, The Bonds are subject to redemption as described herein. See THE BONDS Redemption Provisions herein. MATURITY SCHEDULES (see inside front cover) The Notes and interest thereon constitute general obligations of the City and are payable as to both principal and interest from ad valorem taxes which may be levied without limitation as to rate or amount upon all taxable tangible property within the territorial boundaries of the City. The Notes and interest thereon are further payable from proceeds of future general obligation bonds or notes of the City. See THE NOTES - Security herein. The Bonds and interest thereon constitute general obligations of the City and are payable as to both principal and interest in part from special assessments levied against property benefited by certain improvements, but any part of such special assessments not so paid and the remainder of principal and interest not payable from special assessments will be payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all taxable tangible property within the territorial boundaries of the City. The Notes and interest thereon are further payable from proceeds of future general obligation bonds or notes of the City. See THE BONDS - Security herein. The Notes and Bonds are offered when, as and if issued by the City and received by the Underwriters subject to the approval of Bond Counsel. It is expected that the Notes and Bonds will be available for delivery through the facilities of DTC on or about August 30, BIDS FOR THE PURCHASE OF THE NOTES AND BONDS WILL BE RECEIVED PURSUANT TO THE NOTICE OF SALE: The Notes: On or before Noon, Central Daylight Time The Bonds: On or before 1:00 p.m., Central Daylight Time On Monday, August 15, 2011 THIS COVER PAGE CONTAINS INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THE ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

16 MATURITY SCHEDULES $2,055,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES Base CUSIP (1) Maturity Amount Rate Yield $2,055,000 The Notes are not subject to optional redemption prior to maturity. $5,155,000 (subject to change) TAXABLE GENERAL OBLIGATION IMPROVEMENT BONDS SERIES 2011-A Base CUSIP (1) Maturity Amount Rate Yield $340, , , , , , , , * 345, * 345, * 345, * 345, * 345, * 345, * 345,000 *The Bonds maturing on or after September 1, 2020, will be subject to redemption prior to maturity at the option of the City of Leawood, Kansas (the City ), in whole or in part, on September 1, 2019 and anytime thereafter in principal amounts of $5,000 or any integral multiple thereof, at a price equal to 100% of the principal amount of Bonds to be redeemed plus accrued interest to the date fixed for redemption. [The Term Bonds are also subject to mandatory redemption.] See THE BONDS Redemption Provisions herein. (1) CUSIP numbers have been assigned to this issue by Standard & Poor s CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc., and are included solely for the convenience of the Owners of the Notes and Bonds. Neither the Issuer nor the Underwriter shall be responsible for the selection or correctness of the CUSIP numbers set forth above.

17 CITY HALL 4800 Town Center Drive Leawood, Kansas CITY COUNCIL Peggy Dunn, Mayor Debra Filla, Councilmember Louis Rasmussen, Councilmember Jim Rawlings, Councilmember Andrew Osman, Councilmember Carrie Rezac, Councilmember Julie Cain, Councilmember James Azeltine, Councilmember Gary L. Bussing, Councilmember CITY STAFF Scott M. Lambers, City Administrator Dawn Long, Interim Finance Director/Treasurer Patricia A. Bennett, City Attorney Debra Harper, City Clerk Joe Johnson, Public Works Director BOND COUNSEL Bryan Cave LLP Kansas City, Missouri FINANCIAL ADVISOR George K. Baum & Company Kansas City, Missouri

18 No person has been authorized by the City or the Underwriter to give any information or to make any representations with respect to the Notes and Bonds to be issued other than those contained in this Official Statement, and if given or made, such other information or representations not so authorized must not be relied upon as having been given or authorized by the City or the Underwriter. This Official Statement is not to be used in connection with an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. All financial and other information presented herein, except for information expressly attributed to other sources, has been provided by the City from its records and is intended to show recent historic information. Such information is not guaranteed as to accuracy or completeness. No representation is made that past performance, as might be shown by such financial and other information, will necessarily continue or be expected in the future. All descriptions of laws and documents contained herein are only summaries and are qualified in their entirety by reference to such laws and documents. Information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of the Notes and Bonds shall, under any circumstances, create any implication that the information contained herein has remained unchanged since the respective dates as of which such information is given. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT... 1 General... 1 Additional Information... 1 THE NOTES... 2 Description... 2 Redemption Provisions... 2 Registration and Transfer... 2 Authority... 2 Security... 2 THE BONDS... 3 Description... 3 Redemption Provisions... 3 Registration and Transfer... 4 Authority... 4 Security... 4 BOOK-ENTRY ONLY SYSTEM... 4 THE FINANCING PLAN... 6 Description of the Note Projects... 6 Description of the Bond Projects... 6 Sources and Uses of Funds... 6 FINANCIAL OVERVIEW... 7 GENERAL INFORMATION... 8 Location and Size... 8 Government... 8 Employee Relations... 8 Kansas Public Employees Retirement System. 9 Kansas Police and Fire Retirement... 9 Population... 9 Police and Fire Protection... 9 Socioeconomic Characteristics Economic Development Johnson County, Kansas Major Employers Employment and Labor Force Education Transportation Utilities Financial Institutions Churches Medical Facilities Recreation and Cultural Facilities Media Page DEBT STRUCTURE OF THE CITY Current Indebtedness Annual Debt Payments Overlapping Debt TDD Special Obligation Bonds Historical Debt Information Future Debt Legal Debt Limits Debt Payment Record FINANCIAL INFORMATION Financial Reporting Assessed Valuation Real Property Composition Estimated Actual Valuation Major Taxpayers Special Assessments Property Tax Collections Tax Levies Sales and Use Tax Building Permits Budgeting Procedures Appraisal and Assessment Procedures Property Assessment Rates Equalization Ratios LEGAL MATTERS TAX EXEMPTION Original Issue Discount Securities Original Issue Premium Securities RATINGS FINANCIAL ADVISOR UNDERWRITING ABSENCE OF MATERIAL LITIGATION CONTINUING DISCLOSURE CERTIFICATION OF THIS OFFICIAL STATEMENT APPENDIX A - Continuing Disclosure Certificate APPENDIX B - Financial Statements

19 CITY OF LEAWOOD, KANSAS $2,055,000 GENERAL OBLIGATION TEMPORARY NOTES SERIES $5,155,000 (subject to change) TAXABLE GENERAL OBLIGATION IMPROVEMENT BONDS SERIES 2011-A INTRODUCTORY STATEMENT General The purpose of this Official Statement is to present certain information concerning the City of Leawood, Kansas (the City ), and the issuance of its General Obligation Temporary Notes, Series (the Notes ) and its Taxable General Obligation Improvement Bonds, Series 2011-A (the Bonds ) both dated August 15, The Notes and Bonds are being issued to provide funds to finance certain capital improvements within the City. See THE FINANCING PLAN herein. The Notes and interest thereon will constitute general obligations of the City, payable from the proceeds of general obligation notes or bonds, or from both, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. See THE NOTES - Security herein. The Bonds and interest thereon constitute general obligations of the City and are payable as to both principal and interest in part from special assessments levied against property benefited by certain improvements, but any part of such special assessments not so paid and the remainder of principal and interest not payable from special assessments will be payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all taxable tangible property within the territorial boundaries of the City. See THE BONDS Security herein. APPENDIX B, containing selected financial data relating to the City, is an integral part of this Official Statement and should be read in its entirety. All financial and other information presented herein has been compiled by the Underwriter, George K. Baum & Company, Kansas City, Missouri. Such information has been provided by the City and other sources deemed to be reliable. The presentation of information herein is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City. Bryan Cave LLP, Kansas City, Missouri, Bond Counsel, has not assisted in the preparation of this Official Statement, except for the sections titled INTRODUCTORY STATEMENT, THE NOTES, THE BONDS, LEGAL MATTERS, TAX EXEMPTION, ABSENCE OF MATERIAL LITIGATION, CONTINUING DISCLOSURE, and APPENDIX A and, accordingly, expresses no opinion as to the accuracy or sufficiency of any other information contained herein. Additional Information Additional information regarding the City, the Notes, or the Bonds may be obtained from George K. Baum & Company, 4801 Main Street, Suite 500, Kansas City, Missouri 64112, telephone 816/

20 THE NOTES Description The Notes will be issued in the principal amount shown on the cover page hereof, will be dated August 15, 2011, and will consist of fully registered notes without coupons. When issued, the Notes will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). Purchases of the Notes will be made in book-entry only form as described herein (without certificates) in the denomination of $5,000 or any integral multiple thereof. Principal and interest on the Notes will be payable at maturity on September 1, Interest will be paid on the basis of a 360-day year consisting of twelve 30-day months. Principal will be payable upon presentation and surrender of the Notes by the registered owners thereof at the office of the State Treasurer of the State of Kansas in Topeka, Kansas (the Note Paying Agent ). Interest shall be paid to the registered owners of such Notes as shown on the registration books maintained by the Note Paying Agent as of the fifteenth day of the month next preceding the date on which the interest is payable (the Record Date ) by check or draft mailed by the Note Paying Agent to the address of such registered owner shown on the registration books; provided that, payment of principal of and interest on the Notes registered in the name of Cede & Co. shall be payable in same-day funds on each payment date (or the equivalent under existing arrangements with the City and the Note Paying Agent). So long as the Notes are registered in the name of Cede & Co., principal and interest payments on the Notes shall be made to DTC for disposition as hereinafter described. (See Book-Entry Only System herein). Redemption Provisions The Notes are not subject to optional redemption and payment prior to maturity. Registration and Transfer As long as any Note remains outstanding, the Note Paying Agent will maintain a note register in which all transfers and exchanges of the Notes will be registered. All Notes presented for transfer or exchange must be accompanied by a written instrument of transfer or authorization for exchange in a form and with guarantee of a signature satisfactory to the Note Paying Agent. Notes may be exchanged for Notes in the same aggregate principal amount upon presentation to the Note Paying Agent, and upon payment of any tax, fee or other governmental charge required to be paid with respect to any such registration, exchange, or transfer. The foregoing provisions for the registration, transfer and exchange of the Notes will not be applicable to Beneficial Owners of the Notes so long as the Notes are subject to the DTC or other book-entry only system. Authority The Notes are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including particularly K.S.A et seq., K.S.A et seq., and an ordinance and related resolution adopted by the City on, 2011, authorizing the issuance of the Notes (jointly, the Note Ordinance ). Security The Notes and interest thereon will constitute general obligations of the City, payable from the proceeds of general obligation notes or bonds, or from both, and if not so paid, from ad valorem taxes which may be levied without limitation as to rate or amount upon all the taxable tangible property, real and personal, within the territorial limits of the City. The Notes and interest thereon are further payable from proceeds of future general obligation bonds or notes of the City. 2

21 THE BONDS Description The Bonds will be issued in the principal amount shown on the cover page hereof, will be dated August 15, 2011, and will consist of fully registered bonds without coupons. When issued, the Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ). Purchases of the Bonds will be made in book-entry only form as described herein (without certificates) in the denomination of $5,000 or any integral multiple thereof. The Bonds will mature, subject to optional redemption as described herein, on September 1 in the years and in the principal amounts set forth on the inside cover page of this Official Statement. Interest on the Bonds will be payable semiannually on March 1 and September 1 in each year, beginning on March 1, Interest will be paid on the basis of a 360-day year consisting of twelve 30-day months. Principal will be payable upon presentation and surrender of the Bonds by the registered owners thereof at the office of the State Treasurer of the State of Kansas in Topeka, Kansas (the Bond Paying Agent ). Interest shall be paid to the registered owners of such Bonds as shown on the registration books maintained by the Bond Paying Agent as of the fifteenth day of the month next preceding the date on which the interest is payable (the Record Date ) by check or draft mailed by the Bond Paying Agent to the address of such registered owner shown on the registration books; provided that, payment of principal of and interest on the Bonds registered in the name of Cede & Co. shall be payable in same-day funds on each payment date (or the equivalent under existing arrangements with the City and the Bond Paying Agent). So long as the Bonds are registered in the name of Cede & Co., principal and interest payments on the Bonds shall be made to DTC for disposition as hereinafter described. (See Book-Entry Only System herein). Redemption Provisions Optional Redemption. The Bonds maturing on or before September 1, 2019 shall become due without option of prior payment. At the option of the City, Bonds maturing on or after September 1, 2020, may be called for redemption and payment prior to maturity, in whole or in part, on September 1, 2019 and anytime thereafter, at a redemption price of 100% of the principal amount thereof, without premium, plus accrued interest to the date fixed for redemption. Selection of Bonds to be Redeemed. Bonds called for optional redemption in advance of their stated maturities may be selected by the City as it determines in its sole discretion. In the event of a partial redemption of Bonds of a given maturity, the Bonds to be redeemed will be selected in such manner as the Bond Paying Agent acting on behalf of the City may deem equitable. Bonds will be redeemed in integral multiples of $5,000. If fewer than all Bonds of a given maturity are called for redemption, the City and the Bond Paying Agent shall, in the case of Bonds in denominations greater than $5,000, treat each $5,000 of face value as though it were a separate Bond. Notice and Effect of Redemption. If the City elects to call any Bonds for optional redemption and payment prior to the maturity thereof, the City will give the Bond Paying Agent written notice of its intention to redeem said Bonds on a specified date, the same being described by maturity. The Bond Paying Agent will notify holders of the Bonds of such call by mailing, or causing to be mailed, the notice of call to the bondholders by first class mail at least thirty days prior to the redemption date. Interest on any Bond so called for redemption and payment will cease from and after the date for which such call is made, provided funds are available for payment thereof. So long as DTC is effecting book-entry transfers of the Bonds, the Bond Paying Agent shall provide the notices specified above to DTC. It is expected that DTC will, in turn, notify the DTC Participants and that the DTC Participants, in turn, will notify or cause to be notified the Beneficial Owners. Any failure on the part of DTC or a DTC Participant, or failure on the part of a nominee of a Beneficial Owner of a Bond (having been mailed notice from the Bond Paying Agent, a DTC Participant or otherwise) to notify the Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond. 3

22 Registration and Transfer As long as any Bond remains outstanding, the Bond Paying Agent will maintain a bond register in which all transfers and exchanges of the Bonds will be registered. All Bonds presented for transfer or exchange must be accompanied by a written instrument of transfer or authorization for exchange in a form and with guarantee of a signature satisfactory to the Bond Paying Agent. Bonds may be exchanged for Bonds in the same aggregate principal amount and maturity upon presentation to the Bond Paying Agent, and upon payment of any tax, fee or other governmental charge required to be paid with respect to any such registration, exchange, or transfer. The foregoing provisions for the registration, transfer and exchange of the Bonds will not be applicable to Beneficial Owners of the Bonds so long as the Bonds are subject to the DTC or other book-entry only system. Authority The Bonds are issued pursuant to and in full compliance with the Constitution and statutes of the State of Kansas, including particularly K.S.A. 12-6a01 et seq., as amended and supplemented, and the City s home rule authority of Article 12, Section 5 of the Kansas Constitution, and an ordinance and related resolution adopted by the City on, 2011, authorizing the issuance of the Bonds (collectively, the Bond Ordinance ). Security The Bonds and interest thereon constitute general obligations of the City and are payable as to both principal and interest in part from special assessments levied against property benefited by certain improvements, but any part of such special assessments not so paid and the remainder of principal and interest not payable from special assessments will be payable from ad valorem taxes which may be levied without limitation as to rate or amount upon all taxable tangible property within the territorial boundaries of the City. BOOK-ENTRY ONLY SYSTEM The Depository Trust Company ( DTC ), New York, NY, will act as securities depository for the Bonds and Notes (the Securities ). The Securities will be issued as fully registered securities, registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Security certificate will be issued for each maturity of such series of the Securities, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized bookentry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has Standard & Poor s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and 4

23 Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC s records. The ownership interest of each actual purchaser of each Security ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the Issuer, the Bond Paying Agent or the Note Paying Agent, on the payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Bond Paying Agent, the Note Paying Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer, the Bond Paying Agent, or the Note Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the Bond Paying Agent and the Note Paying Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant s interest in the Securities, on DTC s records, to the Bond Paying Agent and Note Paying Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC s records and followed by a book-entry credit of tendered Securities to the Bond Paying Agent s and Note Paying Agent s DTC account. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Issuer, the Bond Paying Agent, or the Note Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 5

24 The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the Issuer, Bond Counsel, and the Financial Advisor believe to be reliable, but the Issuer, Bond Counsel, and the Financial Advisor take no responsibility for the accuracy thereof, and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters but should instead confirm the same with DTC or the DTC Participants, as the case may be. Description of the Note Projects THE FINANCING PLAN Proceeds from the sale of the Notes will be used to provide temporary construction period financing for improvements to City Hall and to certain residential streets within the City (the Note Projects ) and to pay for costs associated with the issuance of the Notes. Description of the Bond Projects Proceeds from the sale of the Bonds will be used to provide permanent financing for certain infrastructure improvements in a newly developing retail and commercial project in the west central portion of the City (the Bond Projects ). The Bond Projects costs were initially funded with proceeds from the sale of general obligation temporary notes of the City. Proceeds from the sale of the Bonds will be used to redeem the outstanding temporary notes, pay additional project costs, and pay for costs associated with the issuance of the Bonds. Sources and Uses of Funds The following is a list of the sources and uses of funds associated with the Financing Plan, exclusive of accrued interest. Series Series 2011-A Notes Bonds Sources: Note and Bond Proceeds Other Available Funds Total Sources of Funds Uses: Deposit to Improvement Fund Additional Project Costs Issuance Costs (including underwriter s discount and rounding amount) Total Application of Funds REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY 6

25 FINANCIAL OVERVIEW CITY OF LEAWOOD, KANSAS 2011 Estimated Actual Valuation (1) $ 6,137,984, Estimated Equalized Assessed Valuation (2) $ 811,580, Outstanding General Obligation Bonds (3) 65,980, Population (2010 Census Estimate) 31,867 General Obligation Bonded Debt Per Capita $ Ratio of General Obligation Debt to Estimated Actual Valuation 1.07% Ratio of General Obligation Debt to Estimated Equalized Assessed Valuation 8.13% Outstanding Temporary Notes (4) $ 2,055, Outstanding Lease Obligations $ 1,136, Outstanding Utility Revenue Bonds $ 0.00 Overlapping General Obligation Debt (5) $ 125,805, Direct and Overlapping Debt (6) $ 193,840, Direct and Overlapping Debt Per Capita $ 6, Ratio of Direct and Overlapping Debt to Estimated Actual Valuation 3.16% Ratio of Direct and Overlapping Debt to Estimated Equalized Assessed Valuation 23.88% (1) For further details of how estimated actual value has been calculated see the section titled FINANCIAL INFORMATION Estimated Actual Valuation. (2) Represents preliminary assessed valuation figures released by the Johnson County Clerk s Office in June 2011 and used for budgeting purposes motor vehicle valuation has not yet been released figure was used. (3) Includes the Bonds. (4) Includes the Notes. Does not include notes to be redeemed with proceeds from the sale of the Bonds. (5) Includes general obligation bonds of overlapping jurisdictions. Does not include temporary notes, revenue bonds, lease obligations, or no fund warrants of overlapping jurisdictions. For further details see DEBT STRUCTURE OF THE CITY Overlapping Debt. (6) Includes outstanding general obligation bonds and temporary notes of the City and overlapping general obligation bonded indebtedness. 7

26 GENERAL INFORMATION Location and Size The City of Leawood is located approximately 10 miles southwest of downtown Kansas City, Missouri, and occupies 14.7 square miles of land in northeastern Johnson County, Kansas. The U. S. Census Bureau estimated the City s 2010 population to be 31,867. Johnson County encompasses 476 square miles and with a 2010 estimated population of 544,179 is the most populous county in the State of Kansas. Over the last twenty years the City has had one of the fastest growing populations in the state of Kansas and is considered one of the top growth areas in the country. The City s land area is currently approximately 75% developed, and growth is expected to continue in the future. The City is bounded to the east by the Kansas-Missouri state line and on all other sides by incorporated cities of Johnson County. Government Leawood was incorporated as a city of the third class in 1948, with slightly more than 1,000 inhabitants. On December 31, 1998 the City became a city of the first class. The City operates under a Mayor-Council form of government with a city administrator. The mayor is elected on an at-large, non-partisan basis and serves a four-year term. The eight council members are elected (non-partisan) by ward and serve four-year staggered terms of office. Every other year in the even numbered years, an election for council members is held with one council member from each of the four wards being chosen at each election. The City Administrator is appointed by the Mayor and City Council as the chief administrative officer of the City and is charged with the efficient and effective administration of the City. The following tables list the principal elected and appointed executive officers of the City. Elected Officials Name Title Term Expires Peggy Dunn Mayor April 2014 Debra Filla Councilmember April 2012 Andrew Osman Councilmember April 2014 Jim Rawlings Councilmember April 2014 Louis Rasmussen Councilmember April 2012 Gary L. Bussing Councilmember April 2012 Carrie Rezac Councilmember April 2014 Julie Cain Councilmember April 2012 James Azeltine Councilmember April 2014 City Staff Name Title Employed Since Scott M. Lambers City Administrator Dawn Long Interim Finance Director/Treasurer Debra Harper City Clerk Joe Johnson Public Works Director Patricia Bennett City Attorney Employee Relations The City s Human Resources Department describes its formalized relationship with its 256 full-time employees, including police and fire, as good. The City does not recognize any organized bargaining units. 8

27 Kansas Public Employees Retirement System The City participates in the Kansas Public Employees Retirement System (KPERS) established by the 1961 Kansas Legislature. There are approximately 277,000 active and inactive vested members of KPERS, as well as retired members. These members represent over 1,500 state and local agencies and include the state, all counties, all unified school districts, community junior colleges, area vocational technical schools, various cities, and other instrumentalities. With the exception of eligible firefighters and police officers, who are covered under the Kansas Police and Firemen s Retirement Act (see below), all of the City s full-time employees are eligible for the KPERS program. The purpose of the KPERS program is to provide an orderly means of financing the pension benefits of retiring public employees and to extend life insurance coverage, long-term disability and service-connected death and disability benefits to members and their beneficiaries. City employees participating in the KPERS Program annually contribute 4.0% of their gross earnings to the KPERS program if hired prior to July 1, If after this date, they contribute 6.0%. The City s contribution varies from year to year based upon the annual actuarial valuation and appraisal made by the actuary of the KPERS program. Currently, the City contributes 7.74% of each employee s gross earnings. In 2000 the City implemented a supplemental voluntary retirement plan. This defined contribution plan allows employees, except for police and fire personnel, to contribute up to 5% of their annual gross earnings and will be matched by the City at the 50% level. Kansas Police and Fire Retirement The City has established membership in the Kansas Police and Fire Retirement System ( KP&F ) for its police and fire personnel. Benefits are determined by total years of service and final average salary. The plan is administered by the State of Kansas. An actuarial study is made annually and the City s annual contribution is adjusted to meet current fund requirements. Payment of employee retirement benefits is the sole responsibility of KP&F. The City currently contributes 15.16% of each employee s gross salary and employees contribute 7.0%. Population Since 1980, the City has experienced an increase in population of approximately 190%. According to the City, the following table shows the historic population of the City and Johnson County. Year Leawood Johnson County 2010 (Census) 31, , , , , , , , , , , , , ,152 Police and Fire Protection Currently, the Leawood Police Department employs 61 commissioned police officers operating out of approximately 45 police vehicles, as well as 22 support staff. Planning is essential in managing the 12,524 calls for service received by the Police Department in In addition, the Department issued approximately 7,204 traffic citations, investigated over 875 cases, and made approximately 566 warrant arrests. The City has three fire stations. The Fire Department has a staff of 52 full-time equivalent fire fighters and a support staff providing round-the-clock fire protection from ten, city-owned fire fighting vehicles. In addition, the Fire Department owns and operates an incident command vehicle. 9

28 Socioeconomic Characteristics The City of Leawood s socioeconomic profile can be characterized by high levels of population growth, income, educational attainment, and home values. The City attracts many upper-middle to high-income families moving into the area for the first time or from surrounding cities. Leawood is home to the State s wealthiest zip code, The following is a list of certain socioeconomic characteristics of the City and other areas based on the 2000 U.S. Census, unless otherwise noted: City of Johnson Kansas City State of United Leawood County MSA Kansas States Population (2010) 31, ,179 2,035,334 2,853, ,745,538 Population (2000) 27, ,086 1,776,062 2,688, ,421,906 Population Change ( ) 15.2% 20.6% 14.6% 6.1% 9.7% Median Age Owner Occupied Housing Units 92.8% 72.3% 68.0% 69.2% 66.2% Percent of Adult Population with at Least a Bachelor s Degree 68.0% 47.7% 28.5% 25.8% 24.4% Per Capita Income $ 49,139 $ 30,919 $ 23,327 $20,506 $ 21,587 Families Below Poverty Level 0.5% 2.1% 6.1% 6.7% 9.2% Median Home Value $274,900* $150,100 $107,307 $83,500 $119,600 *According to information released by the Johnson County Appraiser s Office, the average appraised value for residential property in the City for 2010 was $427,000. Economic Development The City of Leawood continued to see development activity in Although the national economic situation has impacted development in all areas, Leawood continues to issue permits for development in commercial, retail, office, residential and business park uses. And while the economy continues to struggle, 2010 saw a turnaround in the commercial and residential development trend in Leawood. Mixed-use developments had a number of permits approved for construction. In Park Place, development continued with the construction of Building G and the associated parking garage. Building G office space is occupied by Northwest Mutual Insurance. Office and retail Building J, approximately 60,000 square feet, is under construction. The office portion will be occupied by Generali Insurance Company. Planning has begun on the expansion of Building F which will have two floors of office above parking and retail on the ground floor. New retail businesses that have opened or are planned include, Michael Shae Salon, Picasso Aquatics, The Bar Method, and Gordon Biersch brew pub. In the Mission Farms development the following businesses have opened; Avenues Restaurant, Los Cabos restaurant, and Arvest Bank. Parkway Plaza saw the opening of Emily Hart Bridal; Sazzy s; Laser Sharp Fitness; and Mohn & Smiley Dental. Two new office and retail buildings are scheduled to be constructed this year in the center. In the One Nineteen center, 2010 saw the opening of La Bodega restaurant, Charming Charlie s, and the Roasterie Café. In One Nineteen, plans have been approved and construction has commenced for the much anticipated opening of Trader Joe s. Fo Thai Restaurant is also scheduled to open in Town Center Plaza had a number of new projects approved including Anthropologie, Body and Bath Works, Clark s, Dr. Deb s, Sunglass Hut, and a new 14,000 square foot Walgreen s at the corner of Town Center Drive and Roe Avenue. In 2010, residential construction included 20 new single home permits, with many of those being re-builds in the Old Leawood (northern part of the city) area. The total residential construction value was $30 million more than twice that of Additionally, Manors at Mission Farms re-platted 20 townhomes and created 20 residential lots. In 2010, 86 commercial building permits were issued with a construction valuation of $65 million, higher than the valuation in Total construction value for 2010 was $99,301, more than double for In 2011 Projects under construction include a new office/retail building (60,000 square feet) at Park Place and Water One has a new water reservoir and pumping station under construction at 147 th and Nall. The Reece Nichols building in the Town Center Business Park is nearing completion. 10

29 Johnson County, Kansas Originally developed as a suburban community to Kansas City, Missouri, Johnson County has experienced tremendous growth in population, wealth, and industry over the past 30 years. From a 1960 population of 143,792 to the 2010 Census population of 544,179, few counties in the country have experienced such a rapid rate of growth. Between 1980 and 2000, U.S. Census Bureau data reports that the number of business establishments located in Johnson County increased more than 76% from 6,539 firms to 11,550. Correspondingly, the total employment in the County increased over 78% from 101,769 to 181,606. The main types of industries in the County are retail trade, financial, professional services, and health related, in descending order of employment. Johnson County currently maintains AAA and Aaa general obligation bond ratings by Standard & Poor s and Moody s Investors Service, respectively. Major Employers The following is a list of some of the largest employers within the City of Leawood. Estimated Full Time Employer Product/Business Employment CBiZ Accounting, Tax and Advisory Services Tax and Advisory Services 450 American Academy of Family Physicians National Headquarters 350 Unified School District No. 229 Public School District 329 Reece & Nichols Realtors/Real Estate 314 City of Leawood Government 256 Weight Watchers Health/Wellness 190 Headache & Pain Center Medical 149 Hy Vee Grocery Store 147 AB May Air Conditioning Contractors and Service 125 Cosentino s Price Chopper Grocery Store 125 Employment and Labor Force According to the Kansas Department of Labor, the following table shows the unemployment figures in the years indicated for Leawood, Johnson County, and the State of Kansas. City of Leawood Johnson County State of Kansas Unemployment Labor Unemployment Labor Unemployment Labor Year Rate Force Rate Force Rate Force 2011 (June 4.2% 15, % 297, % 1,515, , , ,502, , , ,518, , , ,493, , , ,485,237 Education The City is served by Shawnee Mission Unified School District No. 512 and Blue Valley Unified School District No. 229, with a combined total of four elementary schools and two middle schools located within the city limits. Other schools in both districts are located nearby in adjacent communities. Currently, there are three parochial schools serving grades K-8, one each located in the northern, central, and southern portions of the City. 11

30 A wide variety of high level educational opportunities are available in communities surrounding the City. Johnson County Community College is less than four miles west of the city limits. The junior college, located on a 220-acre campus, is the largest of 19 junior colleges in Kansas and is the fourth largest college in the state, with a full time equivalent student population of 7,900. The University of Kansas operates a Regents Center approximately five miles west of the City, offering a variety of undergraduate and graduate classes. Numerous additional private and public colleges and universities such as Avila University, Rockhurst University, and the University of Missouri, Kansas City, are all located in the Kansas City metropolitan area within ten miles of the City. Transportation Interstate 435, which circles the entire greater Kansas City area, bisects the City and provides direct access to other U. S., Interstate, and State highways in the metropolitan area. Kansas City International Airport (MCI) is located about 25 miles north of the City and is easily accessible via the interstate system. The County operates Johnson County Industrial Airport and New Century Air Center, both located less than 15 miles southwest of the City. The New Century Air Center is FAA certified with full instrument control approach systems. Johnson County provides daily bus service for city commuters to and from downtown Kansas City through its Commuteride bus system. Utilities The City is served by Johnson County Water District No. 1 which provides water for all of northeast Johnson County from its well fields in the Kansas River Valley and water supply intakes on the Kansas River and Missouri River. Johnson County United Wastewater District now serves all areas of the City. Private hauling companies serve specific areas through contractual arrangements with homes associations for handling solid waste disposal. Kansas City Power & Light Company provides electricity for the City as well as the majority of the greater Kansas City metropolitan area. Kansas City Power & Light is tied into a major regional power network designed to augment electrical capacity and lessen the potential for power outages and brownouts. Ample electricity is available to meet the City s future needs. The City receives its natural gas supply from Western Resources. Telephone service is supplied by AT&T, which serves the entire metropolitan area. AT&T provides prototype fiber optic network services to a large, upscale residential subdivision in the City. Several wireless phone companies service the City. Financial Institutions Two banks are headquartered in the City with combined total deposits of $184.3 million as of December 31, Fourteen additional banks with a total of seventeen locations are also located within the City. One savings and loan association and one savings bank have branch offices located in Leawood. Churches There are currently ten churches located in the City including seven Protestant churches and three Catholic churches. The City is home to the United Methodist Church of the Resurrection, one of the largest and fastest growing churches in the nation. The church was founded in 1989 and has grown to a current membership of over 15,000. The church consists of a 3,050-seat sanctuary and an education wing, resulting in 975,000 square feet of building space. Christ Community Evangelical Free Church recently added 16,972 square feet of office space and education space. Covenant Chapel is in the process of an expansion, which will consist of 99,000 square feet of total construction divided into four phases. 12

31 Medical Facilities Menorah Medical Center, a division of HCA, is a full-service, acute care hospital on the corner of 119 th and Nall, immediately outside the city limits in the eastern part of Overland Park, Kansas. Saint Joseph Medical Center, a full-service, privately owned facility, sits immediately outside city limits in the western part of Kansas City, Missouri. Shawnee Mission Medical Center operates a 504-bed acute care facility located approximately 3-1/2 miles northwest of the City. St. Luke s South is a 125-bed acute care facility located in south Overland Park approximately one mile west of the City. Overland Park Regional Medical Center is a 343-bed, acute care facility located approximately four miles west of the City on I-435. All hospitals offer a full range of medical services including 24-hour emergency care. Johnson County Med-Act provides emergency medical assistance with Type I equipment and personnel training to Leawood residents. Recreation and Cultural Facilities The City currently maintains six municipal park facilities encompassing a total of 423 acres. Leawood City Park at Lee Boulevard, includes an aquatic center, picnic shelters, soccer and t-ball/coach pitch fields, tennis and basketball courts, sand volleyball courts, trails and open green space. Several pieces of public art also enhance the park including Llloopi at the park s entrance; Run Red Run at the east end, and For the Goal adjacent to the soccer fields. I-Lan Park at 126 th and Nall is a neighborhood park that is dedicated to Leawood s sister city of I-Lan Taiwan. The 13-acre facility features two shelter houses, a Taiwanese garden, playground, restrooms, an open play area, and public art titled Cloud Gate. Gezer Park, located at 133 rd and Mission Road, is dedicated to the sister city of the Gezer Region of Israel. The unique park design reflects the contours of Israel, replicated by a wadi that represents the river Jordan with the Sea of Galilee on one end and the Dead Sea on the other. Other amenities within the 10 acre site include two shelters, a Havdalah garden, celebratory fire pit, playground with fossil dig site, and two pieces of public art Stones and Steps and Harvest Tablet. Ironwoods Park is located at 146 th and Mission Road and includes 70 acres of mixed open space and indoor/outdoor facilities including the Prairie Oak Nature Center, the Lodge at Ironwoods, a challenge course and climbing wall, the historic Oxford Schoolhouse, four unique cabins with bathhouse, an outdoor amphitheater, shelter, two miles of trails, and a playground. Tomahawk Park is located on 119 th street between Mission Road and Tomahawk Creek Parkway. The 8.5 acre park is part of the 148-acre greenway system and includes a baseball field, shelter, rain garden,and playground as well as open space. Brook Beatty Park is located at 87 th and Lee Boulevard and was named after the cities first fire chief. The ¾ acre pocket park includes a public art bench titled Faith and the City s first rain garden. Ironhorse Golf Course, a city-owned facility, is located at the southern edge of the City at 154 th and Mission Road. The facility includes an 18-hole championship course, clubhouse with full service food and beverage banquet facilities, a retail golf shop, The First Tee program and a state of the art practice facility with range, putting and chipping greens. The City contracts with a professional golf management company to oversee the daily operations and maintenance of the course. Ironhorse has received several awards recognizing it as one of the best public courses in the Country. Residents of the city enjoy access to many cultural and recreational programs and numerous others in the greater metropolitan area. Sports enthusiasts have access to a number of programs sponsored by the Leawood Parks and Recreation Department and the Blue Valley Recreation Commission. Community organizations serving the City include the Leawood Foundation, the Leawood Woman s Club, the Leawood Historic Commission, the Leawood Lions, Rotary, and Kiwanis Clubs. 13

32 The Kansas City metropolitan area is home to many nationally recognized attractions, including the American Royal, the Country Club Plaza shopping area, the SPRINT Center, the Power & Light Entertainment District, the Kansas City Zoo, the Nelson Atkins Museum of Art, Starlight Theater, the Kauffman Performing Arts Center, Union Station, the Kansas Speedway and Legends Shopping area, Missouri river boat gambling, Worlds of Fun amusement park, Oceans of Fun water park, and the Science City Museum. Professional sports teams include the Kansas City Chiefs football team, the Kansas City Royals baseball team, Mavericks hockey team, Sporting KC soccer team, and the Explorers tennis team. The Kansas City Symphony, Lyric Opera, and State Ballet of Missouri present annual seasons in Kansas City. Johnson County Community College, located just west of the City, operates a performing arts center that has become a venue for larger cultural events in Johnson County. Shopping facilities are abundant in Johnson County. Town Center Plaza, a large, upscale, open-air shopping center is located in the City and three other large regional shopping malls are located within five miles of the City. Two neighborhood shopping centers sit at the eastern boundary of the city limits, and other commercial developments have occurred and continue to expand along 135 th Street, the City s primary commercial corridor, and Roe Avenue in the western portion of the City. Park Place, which is located in the City, opened in It is the first mixed use destination of its kind in Johnson County. It consists of retail shopping, professional office space, and the City s first hotel. Construction continues in the development. One Nineteen is another shopping destination located in the City. It contains 160,000 square feet of open-air unique retail and restaurant offerings on a 16-acre site. Opening in 2011 is Trader Joe s, Fo Thai, Standard Style, and Baldwin. Media In addition to the numerous area publications available to City residents, three community newspapers are distributed within the City. Information about City events can also be obtained via the Internet by logging on to the City s own web site: Current Indebtedness DEBT STRUCTURE OF THE CITY The following is a presentation of the debt structure of the City. Figures shown do not include bonds that will be paid from funds provided by previously established irrevocable escrow accounts. As of the dated date of this Official Statement, the outstanding indebtedness of the City will be as follows: General Obligation Bonds: Dated Principal Final Original Project Date Series Outstanding Maturity Par Amount Improvement A $ 5,155, $ 5,155,000 Improvement A 16,980, ,980,000 Improvement C 2,340, ,700,000 Improvement B 8,455, ,675,000 Refunding A 2,685, ,500,000 Improvement A 5,640, ,040,000 Refunding B 6,255, ,405,000 Improvement A 4,430, ,050,000 Improvement A 2,715, ,090,000 Improvement B 2,840, ,280,000 Refunding A 5,805, ,360,000 Improvement A 2,680, ,060,000 Total $65,980,000 14

33 Temporary Notes: Dated Maturity Series Project Date Date Amount Various Improvements $5,005,000* Various Improvements ,055,000 $2,055,000 *To be redeemed with proceeds from the sale of the Notes and Bonds and cash on hand from the City. Lease Purchase Obligations (as of December 31, 2010): The City periodically finances certain equipment acquisition and capital improvements with lease purchase agreements. Initial Year of Principal Year Amount Final Item Amount Issued Outstanding Payment City Hall* $2,835, $ 580, Fire Rescue Vehicles 893, , Total $1,136,992 *Represents a lease the City has entered into with the Leawood Public Building Commission. The payments due by the City under this lease are not subject to annual appropriation and are used by the Public Building Commission to make payments due on revenue bonds it has issued. Annual Debt Payments The following is a list of annual debt service requirements for the City s currently outstanding general obligation bonded indebtedness as of the dated date of the Bonds. All amounts are rounded to the nearest whole dollar. Existing Bonds Series 2011-A Bonds Year Principal Interest Principal Interest Total 2011 $ 4,980,000 $ 1,076,226 $ ,790,000 1,988, , ,850,000 1,829, , ,825,000 1,665, , ,880,000 1,500, , ,710,000 1,333, , ,810,000 1,159, , ,895, , , ,635, , , ,525, , , ,855, , , ,020, , , ,510, , , ,480, , , ,260,000 72, , ,000 30, , ,000 8, ,000 4,400 0 $60,825,000 $14,188,228 $5,155,000 15

34 Overlapping Debt The following table shows the outstanding general obligation bonded debt for jurisdictions whose boundaries overlap those of the City and the amount of such debt that is applicable to the taxpayers of the City. The percentage of debt applicable to the taxpayers of the City is determined by the Johnson County Clerk s Office and is calculated by dividing the assessed valuation of that part of the City which overlaps another jurisdiction with the total assessed valuation of such jurisdiction. All debt is as of June 30, 2010 unless otherwise noted. Amount Net Debt to Percent Applicable Jurisdiction Nearest Date Applicable to Leawood Johnson County (as of ) $240,565, % $ 23,623,483 Johnson County Parks and Recreation 3,625, ,975 U.S.D. No. 229, Blue Valley 335,360, ,406,976 U.S.D. No. 512, Shawnee Mission 236,370, ,362,151 Fire District No. 2 4,645, ,134 Total $125,805,719 Source: Johnson County Clerk s Office TDD Special Obligation Bonds A Transportation Development District ( TDD ) was created to finance some of the cost involved in burying power lines for two development projects in the City. Monies to retire these bonds will be paid solely by special assessments paid by the owners of property benefited. The bonds are considered special obligations to the City, secured by a pledge of the special assessments. They are not a general obligation of the City, nor do they count against the City s debt limit. Dated Maturity Series Project Date Date Amount 2006 Church of the Resurrection Project $ 130, Cornerstone Commercial Project , Villaggio Project , One Nineteen ,985,000 $4,200,000 Historical Debt Information The following table shows historical indebtedness represented by general obligation bonds of the City outstanding during the most recent five-year period. Bonds Debt to Outstanding Bonds Debt to Estimated Debt Less Debt Outstanding Assessed Actual Per Service Fund Year December 31 Valuation Valuation Capita Balance 2010 $60,825, % 1.01% 1,909 $53,049, ,160, ,633 45,555, ,735, ,841 50,757, ,665, ,651 43,842, ,920, ,596 43,997,234 16

35 Future Debt The City regularly finances, on a temporary basis, the costs of improvement projects under construction through the issuance of temporary notes. The City customarily conducts a public sale of its general obligation bonds to finance completed improvement projects payable from ad valorem taxes or special assessments. The City also periodically enters into lease agreements for equipment and other assets. The City plans to undertake $38,415,987 in projects, with expected contributions from outside sources, such as the federal, state, and county governments, other municipalities, and private developers to equal $16,304,000. All amounts and dates listed represent current estimates and are subject to additions, deletions, or revisions in accordance with future planning efforts of the City. The following table lists the anticipated future bonding requirements of the City over the next several years based on the City s Capital Improvements Program. Project Estimated City At-Large Year Bonding Requirement* 2012 $ 780, ,275, ,253, ,000, $6,308,426 *Does not include transportation development districts or special benefit districts for which the City has future general obligation borrowing plans. Legal Debt Limits Cities within Kansas are permitted to issue bonds in an aggregate amount not to exceed 30% of the total assessed valuation of the city. Bonds issued for the purpose of improving, acquiring, enlarging, or extending municipal utilities including storm sewers; bonds issued to pay the cost of improvements to intersections and streets in front of city or school district property; bonds for bridges as authorized by a vote of the electors of a city; bonds issued to refund outstanding bonds; and bonds payable from revenue sources other than the general taxing authority of the city are not included in total aggregate debt for purposes of computing a city s debt limitation. Debt Payment Record The City has always met principal and interest payments on all outstanding bonds when due and payable. Financial Reporting FINANCIAL INFORMATION The City has established a uniform system of accounting maintained in accordance with the laws of the State of Kansas and generally accepted accounting principles. The accounts are maintained on the modified accrual basis for all budgetary funds and on the accrual basis for all other funds. An independent post audit of the City s accounts has been conducted each year and an unqualified opinion has been issued for each year. A portion of the latest audit and opinion has been included as part of this Official Statement. The following is a summary of the combined revenues, expenditures, and fund balances for the City s General Fund over the last four years as shown in the City s General Purpose Financial Statements. This summary has not been prepared or reviewed by the City s auditor. 17

36 Audited Audited Audited Audited Revenues: Taxes $19,915,347 $23,182,315 $23,535,204 $23,802,551 Licenses and Permits 2,120,409 1,821,978 1,203,842 1,245,510 Intergovernmental 6,624,559 6,379,353 6,060,314 6,059,523 Charges for Services 1,220,845 2,035,411 2,466,140 2,387,857 Fines and Forfeitures 1,752,614 1,798,526 1,591,763 1,685,388 Interest 835, ,921 75,950 52,185 Other 210, , , ,800 Total Revenues $32,679,156 $36,001,964 $35,249,857 $35,462,814 Expenditures: Current: General Government $ 4,896,564 $ 5,591,701 $ 5,740,799 $ 5,533,025 Public Safety 11,491,384 12,238,900 12,623,748 12,716,489 Public Works 5,082,036 5,066,565 5,297,652 5,625,473 Parks & Recreation 3,799,153 5,069,612 5,291,556 5,275,494 Debt Service: 155, , , ,092 Total Expenditures $25,424,430 $28,122,072 $29,213,550 $29,351,573 Excess of Revenues Over (Under) Expenditures $ 7,254,726 $ 7,879,892 $ 6,036,307 $ 6,111,241 Other Financing Sources (Uses) (6,806,815) (8,350,897) (6,036,307) (9,714,180) Net Changes in Fund Balances $ 447,911 $ (471,005) $ 0 $(3,602,939) Fund Balance January 1 $14,706,792 $15,154,703 $14,683,698 $14,683,698 Fund Balance December 31 $15,154,703 $14,683,698 $14,683,698 $11,080,759 Assessed Valuation Assessed valuation information for tax roll purposes is released in November each year and is used to calculate tax levies to fund the following year s budget. The following table shows a breakdown of the November equalized assessed valuation of the City (unless otherwise noted) for the years indicated. Motor vehicle valuations are released in January of each year for the preceding year. State Motor/ Equalized Levy/ Real Personal Assessed Recreational Assessed Budget Year Property Property (1) Utilities Vehicles Value 2011/12 (2) $731,001,797 $5,405,188 $7,117,875 $68,055,736 $811,580, /11 734,409,862 6,249,693 7,655,929 68,055, ,371, /10 761,494,540 7,801,915 7,800,453 67,975, ,072, /09 756,413,919 10,455,746 7,945,694 70,141, ,957, /08 721,902,784 12,883,030 7,609,052 71,377, ,772, /07 669,149,548 15,152,446 7,342,923 70,244, ,889, /06 615,197,839 15,600,418 7,319,540 68,791, ,909, /05 571,882,830 15,239,935 6,864,743 65,869, ,856, /04 539,398,377 13,900,623 (3) 6,294,133 63,422, ,015, /03 508,588,824 16,334,865 6,296,797 60,598, ,818,867 (1) Legislation passed in 2006 will impact personal property valuations in subsequent years. See FINANCIAL INFORMATION Property Assessment Rates herein. (2) Represents preliminary assessed valuation figures released by the Johnson County Clerk s Office in June 2011 and used for budgeting purposes motor vehicle valuation has not yet been released figure was used. (3) Due to improvements in tracking personal property and depreciation, numerous jurisdictions around the County experienced decreases in personal property assessed valuation in 2003/04. Source: Johnson County Clerk s Office 18

37 Real Property Composition The following table provides a breakdown by classification for the City s November 2010 Real Property assessed valuation. Real Property % of Total Equalized Classification Assessed Valuation Assessed Valuation Residential $564,578, % Commercial and Industrial 164,345, % Agricultural Land 27, % Vacant Lots 4,809, % Not-for-Profit 571, % All Other 77, % Total $734,409, % Source: Johnson County Clerk s Office Estimated Actual Valuation Based on assessment percentages provided by Kansas Statutes and appraised real estate valuations provided by the Johnson County Clerk s Office, the following table provides actual valuations for the City of Leawood in the years indicated. Levy/ Actual Budget Year Valuation 2011/12 (June 30) $6,137,984, /11 6,000,006, /10 6,196,925, /09 6,225,221, /08 6,036,126, /07 5,662,359, /06 5,255,710, /05 4,876,031, /04 4,607,478, /03 4,368,415,305 Major Taxpayers According to the 2010 tax rolls maintained by the Johnson County Clerk s Office, the following is a list of the largest property tax payers, real and personal, in the City and their assessed valuations. Assessed Taxpayer Property Use Valuation Town Center Plaza Shopping Center $18,974, th Street Development Mixed Use 10,408,173 Park Place Village Mixed Use 8,592, West L.P. Shopping Center 6,540,062 Hallbrook Office Center Offices 5,998,354 Academy 1740, Inc. Offices 4,989,501 PCC Two, LLC Offices 4,005,751 Kansas City Power & Light Utility 3,637,789 KC Orthopaedic Institute Healthcare 3,257,251 BP Market Square Shopping Center 3,033,855 $69,438,284 19

38 Special Assessments The City has pursued a policy of utilizing special benefit districts to assign the cost of certain improvement projects that directly benefit private property. Kansas statutes allow for the creation of special benefit districts to pay for the cost of a variety of improvements including street construction, storm water drains, sanitary sewer system improvements, street lighting, water system improvements, recreational facilities, flood control projects, bridges, and parking facilities. The City has typically utilized special benefit districts to pay for the costs associated with street improvements in new or expanding developments within the City. The creation of special benefit districts, the determination of property benefited, and the method of allocating the cost of the improvement is at the discretion of the City subject to applicable law. Property owners have the ability to suggest improvements to be made through a petition process and to comment on the final amount of their assessment. The City may or may not participate in the cost of the special benefit district improvement. Generally, all property owners have the option to pay their portion of the improvement cost with a one-time payment during a thirty-day assessment prepayment period or pay in annual installments with interest over a certain number of years. Upon completion of the special benefit district improvement projects and expiration of a thirty-day prepayment period, the City issues general obligation bonds to provide for permanent project financing. The payment of the principal of and interest on such bonds is paid from the special assessments levied annually on the benefited property owners. Special assessments are paid at the same time and in the same manner as ad valorem property taxes. If at any time the special assessments received from the property owners are insufficient to provide for the payment of the principal of and interest on the bonds, the City is obligated to provide for the balance of such payments through its ability to levy unlimited ad valorem property taxes across the City. Upon issuance of the Bonds, approximately 33% of the City s outstanding general obligation debt will be supported by special assessments. The City has also periodically levied special assessments associated with improvements to property located within certain transportation development districts created within the City. Such assessments are pledged to the repayment of the TDD special obligation bonds. TDD special obligation bonds do not represent a general obligation of the City. Property Tax Collections Real estate property tax statements are mailed November 1 each year and may be paid in full or one-half on or before December 20 with the remaining one-half due on or before May 10 of the following year. Taxes that are unpaid on the due dates are penalized at the rate of 8% per annum (pro-rated monthly) until paid or until the property is sold for taxes. Real estate bearing unpaid taxes is advertised for sale in July of each year and is sold to the County for taxes and all legal charges on the first Tuesday in September. Properties that are sold to the County and not redeemed by the delinquent taxpayer within two years after the tax sale are subject to foreclosure sale, except properties defined as homesteads under the Kansas Constitution, which are subject to sale after three years. Personal property taxes are assessed, due and may be paid in the same manner as real estate taxes. Motor vehicle property taxes are based on valuations provided by the Kansas Department of Revenue and the county average tax rate for the county in which the vehicle is registered. Motor vehicle taxes are payable to the county treasurer at the time of the vehicle s annual registration. Vehicle registration dates are assigned by the State in a manner such as to equal registration over a twelve-month period. Motor vehicle taxes are distributed by the county to the state, city and other taxing jurisdictions based on their proportionate tax levies. Delinquent personal and motor vehicle taxes are penalized at the same rate as delinquent real property taxes. If personal or motor vehicle taxes are not paid in full within approximately 30 days of their respective due dates, warrants are issued and placed in the hands of the Sheriff for collection. If taxes remain uncollected after a certain period, legal judgment is entered and the delinquent tax becomes a lien on all taxable tangible property of the delinquent taxpayer, except property defined as homesteads under the Kansas Constitution. Unenforced liens expire after five years. 20

39 Current Current & Delinquent Collections Collections Budget Year Taxes Levied Amount % Amount % 2010 for 2011* $18,245,464 $17,572, % $17,906, % 2009 for ,756,996 18,369, ,559, for ,692,644 18,360, ,458, for ,996,395 17,742, ,854, for ,759,939 16,502, ,615, for ,453,936 15,277, ,419, for ,329,935 14,189, ,300, for ,471,645 13,270, ,397, for ,591,232 11,374, ,587, for ,887,313 10,611, ,677, Note: Figures above include levies for ad valorem taxes and miscellaneous charges and fees. The following table shows the total special assessments payable within the City for the years indicated and the associated collections thereon: *Collections above as of May 16, 2011 Amount Current Taxes Budget Year Assessed Amount % 2010 for 2011* $2,229,073 $1,992, % 2009 for ,837,770 1,612, for ,104,435 1,705, for ,712,551 1,706, for ,554,088 1,549, for ,611,951 1,604, for ,338,557 1,334, for ,400,903 1,398, for ,006,383 1,002, for ,254,233 1,207, Note: The figures shown above represent special assessment that are collected by the City and used to provide for the payment of a portion of the City s outstanding general obligation bonds. These figures do not include other special assessments that are collected by the City and used to provide for the payment of special revenue bonds issued my certain transportation development districts created within the City. TDD special revenue bonds do NOT represent a general obligation of the City. Source: Johnson County Treasurer s Office Tax Levies The City may levy taxes in accordance with the requirements of its adopted budget. The County Clerk determines property tax levies based on the assessed valuation provided by the appraiser and spreads the levies on the tax rolls. Property owners within the City pay taxes to either Unified School District No. 512 (Shawnee Mission) or Unified School District No. 229 (Blue Valley). The following tables give the total tax levy for all taxing jurisdictions serving the City for the last five years. One mill equals $1 in taxes per $1,000 of assessed valuation. 21

40 Taxpayers within U.S.D. No Shawnee Mission Mill Levy Mill Levy Mill Levy Mill Levy Mill Levy for for for for for Jurisdiction Budget Budget Budget Budget Budget State of Kansas Johnson County City of Leawood Johnson County Library Johnson County Parks Community College U.S.D. No Total Note: Figures do not include sewer charges levied by the City. Taxpayers within U.S.D. No. 229, located in the developing southern portion of the City, have experienced the following levies over the same time period: Taxpayers within U.S.D. No Blue Valley Mill Levy Mill Levy Mill Levy Mill Levy Mill Levy for for for for for Jurisdiction Budget Budget Budget Budget Budget U.S.D. No Other Jurisdictions (same as above) Source: Johnson County Clerk s Office Sales and Use Tax The State of Kansas is responsible for collection and distribution of all sales and use tax. Citywide local option taxes are distributed directly to the City each month. Countywide local option taxes are distributed monthly by the State to all incorporated cities within the County based on population and relative property tax levies. Statewide taxes are retained by the State and not distributed to local municipalities. The 2010 session the Kansas State Legislature approved a 1.00-percent sales tax increase changing the state sales tax from 5.3 percent to 6.3 percent effective July 1, After three years, the tax would be scaled back to 5.7-percent. This action was intended to close a budget gap and preserve spending for schools and social services. As of April 1, 2011, the City of Leawood levies a percent local option sales and use tax on all applicable goods and services purchased or provided within city limits. In November 2006, voters approved a.4- percent retailers sales tax in addition to the percent to be used for the purpose of constructing public safety improvements. This tax began on April 1, 2007 and ended on March 31, The tax was to end on March 31, 2012 or when $10 million had been collected, whichever happened first. Effective April 1, 2011, total sales and use tax in the City is 8.65-cents, or 8.65-percent of cost, which includes a 1.10-percent countywide local option sales and use tax, a 6.30-percent state sales and use tax, a percent local option sales and use tax, and a percent Johnson County Education Research Triangle tax. 22

41 The City currently has four Transportation Development Districts (TDD), two of which impose a percent sales tax in which the total sales tax charged is 9.65-percent. In addition to sales and use tax, the City also collects a transient guest tax. The City s first hotel opened in late summer of The aloft Hotel is located in the Park Place development area. The City began receiving this revenue in late In 2010, the ten largest remitters of local option sales tax in the City generated approximately 53% of total collections and consisted of grocery stores, utilities, retail stores, and restaurants. The single largest remitter comprised approximately 6% of total collections. The following table shows receipts for citywide and the City s portion of the countywide local option sales tax in recent years. Citywide City s Portion Combined Sales and Use of Countywide Sales Sales & Use Year Tax Receipts and Use Tax Receipts Tax Receipts 2011* $ 3,959,720 (3) $2,053,530 $ 6,013, ,543,365 4,474,876 15,018, ,204,502 (1) 4,593,935 14,798, ,680,990 4,911,857 15,592, ,698,350 5,121,489 14,819, ,085,114 5,137,783 12,222, ,898,123 5,025,810 11,923, ,601,912 4,828,339 11,430, ,749,665 3,986,812 (2) 9,736, ,964,003 3,314,506 8,278,509 *Collections through July (which reflects sales through May). (1) In 2009, the City had to refund certain tax collections received from a large telecommunications company that had misfiled its use tax payments. Certain refunds are also anticipated in Absent these refunds, the amount of sales and use tax collections in 2009 would have been approximately equal to (2) Includes sales tax collected from the.25 percent local option sales tax. This tax was approved on August 6, 2002 by voters in Johnson County. Proceeds from the tax are to be distributed to the County and the underlying cities, with the County s share being used to fund grants to its public school districts. (3) The City s.4-percent sales tax ended on March 31, The purpose of this voter-approved sales tax was to provide for public safety improvements. It began on April 1, 2007 and was to end on March 31, 2012 or when a total of $10 million had been collected, whichever was achieved first. This tax ended one year earlier than expected. Building Permits The following table shows the number, type and estimated new construction costs of building permits issued by the City during the last five years. Commercial Construction Residential Construction Number of Estimated Number of Estimated Year Permits* Cost Permits* Cost $66,087, $18,180, ,831, ,704, ,952, ,937, ,151, ,393, ,052, ,777,566 *Permits include new construction, additions, alterations and modifications. 23

42 Budgeting Procedures Applicable Kansas statutes require that budgets be legally adopted for all funds (including debt service and enterprise funds) unless exempted by a specific statute. All budgets are prepared utilizing the modified accrual basis further modified by the encumbrance method of accounting. For example, commitments such as purchase orders and contracts, in addition to disbursements and accounts payable, are recorded as expenditures. The statutes provide that the budget for the succeeding calendar year must be prepared on or before August 1 and published on or before August 5 of each year. A public hearing is required to be held on or before August 15, with the final budget being adopted on or before August 25 of each year. Supplemental appropriations and transfers among budget categories may modify original appropriations. The City Council must approve all significant changes from the adopted budget. Kansas law prohibits cities and other governmental units from creating indebtedness unless there is money on hand in the proper fund and unencumbered by previous commitments with which to pay the indebtedness. The execution of a contract, or the issuing of a purchase order, automatically encumbers the money in the fund for the payment of the amount represented by the commitment. It makes no difference that the amount may not have to be paid until more moneys are in the fund or until the following year. An exception to this cash basis law is the issuance of debt in the form of bonds, notes, or warrants pursuant to statutory authority or referendum. In the event debt is issued, funds need not be on hand for future payments. Appraisal and Assessment Procedures The determination of appraised and assessed valuation and the collection of property taxes for all political subdivisions in the State of Kansas are the responsibility of the various counties. The Johnson County appraiser annually determines the appraised valuation of property located in the City. The appraiser s determination is based on a number of criteria established by Kansas statute. All property, with the exception of agricultural land, is appraised based on estimated fair market value. Agricultural property is appraised based on productivity value. Kansas statutes require that each parcel of real property be reviewed and inspected by the county appraiser once every four years for taxation purposes. Once appraised valuations have been determined, they are multiplied by the applicable statutory assessment rates to arrive at the assessed valuations. The total assessed valuation is then used to establish property tax rates. Property Assessment Rates In order to determine the assessed valuation of a parcel of property for taxation purposes, the county appraiser multiplies the appraised value of the parcel by the applicable assessment rate. Current property assessment rates were established in 1986, effective in 1989, and slightly modified in The most significant 1992 modifications involved lowering the assessment rate on commercial and industrial real property from 30% to 25% and on residential property from 12% to 11.5%. The following table shows the current assessment rates for the different classes of taxable tangible property within the State of Kansas. Real Property: Residential 11.5% Commercial and Industrial- Real Property 25.0 Agricultural Land (1) 30.0 Agricultural Improvements 25.0 Vacant Lots 12.0 Not-for-Profit (2) 12.0 All Other 30.0 Personal Property: (3) Mobile Homes 11.5% Mineral Leaseholds (large) 30.0 Mineral Leaseholds (small)

43 Commercial & Industrial Machinery & Equipment 25.0 All Other 30.0 Utilities: Railroads federally mandated rate All Other Public Utilities 33.0% Motor Vehicles: 20.0% Property Exempt: Property used for the following purposes, or portions thereof, are exempt from taxation provided certain statutory requirements are met: religious, educational, literary, scientific, benevolent, alumni associations, veterans organizations, or charitable purposes, including parsonages and community service organizations providing humanitarian services. (1) Agricultural land is valued based on the productivity value of the property and not estimated market valuation. (2) A bill passed by the Kansas Legislature in 1994 clarified this class of property to include all property owned and operated by not-for-profit organizations not subject to federal income taxation pursuant to paragraphs (2), (3), (4), (7), (8), or (10) of Subsection C of Section 501 of the federal internal revenue code. This bill specifically established that private, not-for-profit country clubs would be assessed at 12% for all land that does not accommodate buildings or improvements. (3) The 2006 Kansas Legislature exempted from all property or ad valorem property taxes levied under the laws of the State, all commercial, industrial, telecommunications, and railroad machinery and equipment acquired by qualified purchase or lease after June 30, 2006 or transported into the State after June 30, 2006 for the purpose of expanding an existing business or creation of a new business. Equalization Ratios Annually, the Property Valuation Division of the Kansas Department of Revenue conducts a study to compare the assessed valuation of real property to estimated market value based on property sale prices. The study derives an equalization ratio which, when divided into assessed valuation, provides a means to approximate actual market value. According to the 2010 Preliminary Kansas Appraisal/Sales Ratio Study, in Johnson County the equalization ratio for residential real property has been set to 11.45% and commercial and industrial real property to 22.43%. LEGAL MATTERS Legal matters incident to the authorization, issuance, and sale of the Notes and Bonds by the City and the tax-exempt status thereof are subject to the approval of Bryan Cave LLP, Kansas City, Missouri, Bond Counsel, whose approving opinion accompanies the Notes and Bonds. The opinion is to the effect that the Notes and Bonds are valid general obligations of the City and that, under existing laws and regulations, assuming continued compliance with the covenants contained in the Ordinances, the interest on the Notes is exempt from federal income taxation, except with respect to certain taxpayers (see TAX EXEMPTION herein). Interest on the Bonds is subject to federal income taxation. The opinion is dated and given on and speaks only as of the date of original delivery of the Notes and Bonds. Bond Counsel has not participated in the preparation of this Official Statement except for the sections titled INTRODUCTORY STATEMENT, THE NOTES, THE BONDS, LEGAL MATTERS, TAX EXEMPTION, ABSENCE OF MATERIAL LITIGATION, and CONTINUING DISCLOSURE. TAX EXEMPTION In the opinion of Bond Counsel, the interest on the Notes [(including any original issue discount properly allocable to an owner thereof)] (a) is excluded from gross income for federal income tax purposes, and (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, it should be noted that with respect to corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative 25

44 minimum tax imposed on such corporations. The opinion described in this paragraph is subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Notes in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements could cause the interest on the Notes to be so included in gross income retroactive to the date of issuance of the Notes. The City has covenanted to comply with all such requirements. Bond Counsel expresses no opinion regarding any other federal tax consequences arising with respect to the Notes. Interest on the Bonds is subject to federal income taxation. Interest on the Notes and the Bonds is, however, exempt from Kansas income taxation. [Original Issue Discount Securities In the opinion of Bond Counsel, subject to the conditions set forth above, the original issue discount in the selling price of any Bond or Note purchased in the original offering at a price less than the par amount thereof (hereinafter referred to as the OID Securities ), to the extent properly allocable to each owner of such Note or Bond, is excluded from gross income for federal income tax purposes with respect to such owner. Original issue discount is the excess of the stated redemption price at maturity of an OID Security over the initial offering price to the public (excluding underwriters and intermediaries) at which price a substantial amount of the OID Securities were sold. Under Section 1288 of the Code, original issue discount on tax-exempt bonds accrues on a compound basis. For an owner who acquires an OID Security in this offering, the amount of original issue discount that accrues during any accrual period generally equals (i) the issue price of such OID Security plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity on such OID Security (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), less (iii) any interest payable with respect to such OID Security during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excluded from gross income for federal income tax purposes, and will increase the owner s tax basis in such OID Security. Any gain realized by an owner from a sale, exchange, payment or redemption of an OID Security would be treated as gain from the sale or exchange of such Security. Owners of OID Securities should consult with their individual tax advisors to determine whether the application of the proposed original issue discount federal regulations will required them to include, for State and local income tax purposes, an amount of the interest with respect to the OID Securities as income even though no corresponding cash interest payment is actually received during the tax year.] [Original Issue Premium Securities Certain of the Bonds and/or Notes may be sold at a premium to their stated value. The excess of the initial offering prices of the Bonds and/or Notes to the public (excluding bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) over the stated redemption price of such Bonds and/or Notes at maturity will constitute original issue premium for federal income tax purposes. For federal income tax purposes, original issue premium on such Bonds and/or Notes will be amortized at a constant rate on a daily basis over the entire term of such Bonds and/or Notes. The amortization of original issue premium will reduce a bondholder s basis in such Bonds and/or Notes for federal income tax purposes. Accordingly, bondholders may realize a taxable gain upon the disposition of a Bond prior to maturity even if the amount realized on the disposition was less than the price the bondholder originally paid for the Bond. The Bonds have not been designated qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Code. The Notes have been designated qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Code. Prospective purchasers of the Notes should be aware that (i) Section 265 of the Internal Revenue Code of 1986 (the Code ), denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Notes or, in the case of a financial institution, that portion of a holder s interest expense allocated to interest on the 26

45 Notes, except with respect to certain financial institutions (within the meaning of Section 265(b)(5) of the Code), (ii) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, Section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15 percent of the sum of certain items, including interest on the Notes, (iii) interest on the Notes earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code, (iv) passive investment income, including interest on the Notes, may be subject to federal income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income, and (v) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account in determining gross income, receipts, or accruals of interest on the Notes.] RATINGS Moody s Investors Service has assigned ratings of Aaa and MIG 1 to the Bonds and Notes, respectively. Moody s Outlook - On August 2 Moody s confirmed the Aaa rating of the United States government and assigned a negative outlook to its debt obligations. On August 4 Moody s confirmed the Aaa rating of 5 U.S. states and 303 other public finance issuers and assigned negative outlooks to those issuers. The City of Leawood was among the Aaa rated issuers assigned a negative outlook. The decision to assign a negative outlook to these issuers was based on these issuers potential vulnerability to sovereign risk. In the coming weeks Moody s will assess the City s degree of vulnerability to sovereign risk in terms of its reliance on capital markets, dependence on federal revenues, sensitivity to macroeconomic cycles, and available financial resources to offset risks related to the U.S. government, in order to determine whether to maintain the negative outlook. Please see the press release from August 4 titled Moody s Confirms Aaa Ratings of 5 U.S. States and 303 Other Public Finance Issuers Indirectly Linked to U.S. Government Bond Rating; Negative Outlooks Assigned for more information on this rating action. Any explanation of the significance of such ratings may be obtained only from said rating agency. There is no assurance that the ratings will remain for any given period of time or that it may not be lowered or withdrawn entirely by the rating service if, in its judgment, circumstances so warrant. Any such downward change in or withdrawal of the ratings may have an adverse effect on the market price of the Notes and Bonds. Appropriate periodic credit information will be provided by the City to the rating agency rating the Notes and Bonds. FINANCIAL ADVISOR George K. Baum & Company, Kansas City, Missouri, has acted as Financial Advisor to the Issuer in connection with the sale of the Notes and Bonds. The Financial Advisor has assisted the Issuer in the preparation of this Official Statement and in other matters relating to the issuance of the Notes and Bonds. The Financial Advisor retains the right to bid on the Notes and Bonds and has received written consent to do so from the Issuer. The fees of the Financial Advisor are contingent upon the issuance of the Notes and Bonds. UNDERWRITING The Bonds were purchased at public sale on, 2011, by (the Bonds Successful Bidder ) at a price equal to plus accrued interest to the date of closing. The Notes were purchased at public sale on, 2011, by (the Notes Successful Bidder ) at a price equal to plus accrued interest to the date of closing. The Notes Successful Bidder and the Bonds Successful Bidder are collectively referred to herein as the Successful Bidders. 27

46 ABSENCE OF MATERIAL LITIGATION The Transcript of Proceedings will contain a certificate of non-litigation dated as of the closing date and executed by the City to the effect that there is no controversy, suit, or proceeding of any kind pending or, to the knowledge of the City, threatened wherein or whereby any question is raised, or may be raised, questioning, disputing, or affecting in any way the legal organization of the City or its boundaries or the legality of any official act shown to have been done regarding the issuance of the Notes or Bonds or the constitutionality or validity of the obligation represented by the Notes or Bonds or the means provided for the payment of the Notes or Bonds. CONTINUING DISCLOSURE The Securities and Exchange Commission (the SEC ) has promulgated amendments to Rule 15c2-12 (the Rule ), requiring continuous secondary market disclosure for issues sold on or after July 3, In the Ordinances and the Continuing Disclosure Certificate, the City has covenanted to provide annually certain financial information and operating data and other information necessary to comply with the Rule, and to transmit the same or cause the same to be transmitted to certain national repositories, any state repository, and the Municipal Securities Rulemaking Board, as applicable. The City has always complied with its previous continuing disclosure undertakings. This covenant is for the benefit of and is enforceable by the owners of the Notes and Bonds. See APPENDIX A for further details concerning continuing disclosure requirements. The City is in compliance with any prior continuing disclosure undertaking. CERTIFICATION OF THIS OFFICIAL STATEMENT The preparation and distribution of this Official Statement has been authorized by the City. This Official Statement is hereby duly approved by the governing body of the City as of the date on the cover page hereof. The Transcript of Proceedings will contain a certificate dated as of the closing date and executed by the City to the effect that the Official Statement contains no untrue statement of material fact or no omission of material fact. THE CITY OF LEAWOOD, KANSAS By /s/ Mayor ATTEST: /s/ City Clerk 28

47 APPENDIX A Continuing Disclosure Certificate

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49 APPENDIX A CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the Disclosure Certificate ) is executed and delivered by the City of Leawood, Kansas (the Issuer ) in connection with the issuance of $2,055,000 General Obligation Temporary Notes, Series (the Series Notes or the Notes ), and $5,155,000 Taxable General Obligation Improvement Bonds, Series 2011-A (the Series 2011A Bonds or the Bonds ). The Notes are being issued pursuant to Ordinance No. and Resolution No. adopted by the Governing Body of the Issuer on August 15, 2011 (collectively, the Note Ordinance ). The Bonds are being issued pursuant to Ordinance No. and Resolution No. adopted by the Governing Body of the Issuer on August 15, 2011 (collectively, the Bond Ordinance ). The Notes and the Bonds are collectively referred to as the Obligations. The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders of the Obligations and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: Annual Audited Financial Statements shall mean the City s general purpose financial statements for each fiscal year (currently ended December 31) maintained in accordance with generally accepted principles of fund accounting together with the auditor s report thereon. Annual Report shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. Dissemination Agent shall mean any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. EMMA shall mean the Electronic Municipal Market Access System as described in 1934 Act Release No and maintained by the MSRB for purposes of the Rule. Holders shall mean either the registered owners of the Notes or the Bonds, or, if the Notes or the Bonds are registered in the name of Depository Trust Company or another recognized depository, any applicable participant in its depository system including Beneficial Owners. Listed Events shall mean any of the events listed in Section 5 of this Disclosure Certificate. MSRB means the Municipal Rule Making Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information which may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. A-1

50 Participating Underwriter shall mean any of the original underwriters of the Notes or Bonds required to comply with the Rule in connection with offering of the Obligations. Rule shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. Tax-exempt shall mean that interest on the Notes or Bonds, as the case may be, is excluded from gross income for federal income tax purposes, whether or not such interest is includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax or environmental tax. Section 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than 180 days after the end of the Issuer s fiscal year (which currently would be December 31), commencing with the report for the 2011 Fiscal Year, provide to the MSRB via EMMA an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than fifteen (15) Business Days prior to said date, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if not available by that date. (b) If the Issuer is unable to provide to the MSRB via EMMA an Annual Report by the date required in subsection (a), the Issuer shall send a notice to the MSRB via EMMA in substantially the form attached as Exhibit A. (c) If the Dissemination Agent is other than the Issuer, the Dissemination Agent shall file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided. (d) The Issuer (or the Dissemination Agent on its behalf) shall transmit such filing, or notice to the continuing disclosure service portal provided through EMMA as provided at or any similar system that is acceptable to the Securities and Exchange Commission. Section 4. Content of Annual Reports. The Issuer s Annual Report shall contain or incorporate by reference the following: (a) Annual Audited Financial Statements (b) Other Operating Data of the Issuer, updated for the fiscal year then ended, in substantially the scope and form contained in the Official Statement dated August 15, 2011, relating to the Obligations set forth in the following tables: A-2

51 1. FINANCIAL OVERVIEW - CITY OF LEAWOOD, KANSAS 2. DEBT STRUCTURE OF THE CITY 3. FINANCIAL INFORMATION - Assessed Valuation 4. FINANCIAL INFORMATION - Estimated Actual Valuation 5. FINANCIAL INFORMATION - Tax Levies 6. FINANCIAL INFORMATION - Tax Collections 7. FINANCIAL INFORMATION - Major Taxpayers 8. FINANCIAL INFORMATION - Sales and Use Tax Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. (a) Reportable Events. Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Notes or Bonds: 1. Principal and interest payment delinquencies. 2. Unscheduled draws on any reserve fund reflecting financial difficulties. 3. Unscheduled draws on any credit enhancements reflecting financial difficulties. 4. Substitution of the provider of any letter of credit/bond insurance policy, or any failure by any credit bank/insurer to perform on the letter of credit/bond insurance policy. 5. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Notes or Bonds, or other material events affecting the tax status of the Notes or Bonds. 6. Tender offers. 7. Defeasances. 8. Rating changes on the Notes or Bonds. A-3

52 9. Bankruptcy, insolvency, receivership or similar event of the Issuer. (b) Material Reportable Events. Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Notes or Bonds, if material: 1. Non-payment related defaults. 2. Modifications to rights of the Holders of the Notes or Bonds. 3. Note or Bond calls. 4. The release, substitution, or sale of property securing repayment of the Notes or Bonds. 5. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to such actions other than pursuant to its terms. 6. Appointment of a successor or additional trustee or the change of name of a trustee, if material. (c) Time to Disclose. Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, the Issuer shall, or shall cause the Dissemination Agent to, file a notice of such occurrence with EMMA, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of ten (10) Business Days after the occurrence of a Listed Event. Section 6. Identifying Information for Filings with EMMA. All documents provided to EMMA under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB. Section 7. Termination of Reporting Obligation. The Issuer s obligations and the Dissemination Agent s obligations, if any, under this Disclosure Certificate shall terminate upon the defeasance, prior redemption or payment in full of all of the Notes or Bonds. If such termination occurs prior to the final maturity of the Notes or Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5(c). Section 8. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate and may discharge any such agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign and be relieved of its duties and obligations hereunder by providing thirty (30) days prior written notice to the Issuer. Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate (and the Dissemination Agent shall agree to any amendment so requested by the Issuer that does not impose any greater A-4

53 duties or risk of liability on the Dissemination Agent), and any provision of this Disclosure Certificate may be waived, provided that all of the following conditions are satisfied: (1) Change in Circumstances. If the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a) or (b), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Notes or Bonds, or the type of business conducted. (2) Compliance as of Issue Date. The undertaking, as amended or taking into account such waiver, would, in the opinion of a nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Notes or Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances. (3) Consent of Holders; Non-impairment Opinion. The amendment or waiver either (i) is approved by the Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners. If this Disclosure Certificate is amended or any provision of this Disclosure Certificate is waived, the Issuer shall describe such amendment or waiver in the next following Annual Report and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Holder may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer or a Dissemination Agent to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Note Ordinance or the Bond Ordinance, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. A-5

54 Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and no implied duties shall be read into this Disclosure Certificate against the Dissemination Agent. The Dissemination Agent shall have no duty or obligation to review or determine if any Annual Report or other document provided to it pursuant to this Disclosure Certificate is adequate or complete for the purpose intended. The Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent s gross negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of any Dissemination Agent and payment of the Notes and Bonds. Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders from time to time of the Notes and Bonds, and shall create no rights in any other person or entity. Date: August, 2011 ISSUER CITY OF LEAWOOD, KANSAS By: A-6

55 Acceptance of Dissemination Agent The undersigned, for and on behalf of,,, hereby accepts the duties and responsibilities of Dissemination Agent as set forth in the above and foregoing Continuing Disclosure Certificate. Date:, By: Printed Name: Title: A-7

56 EXHIBIT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Leawood, Kansas Name of Issue: General Obligation Temporary Notes, Series , dated August 15, 2011 Date of Issuance: August 30, 2011 Taxable General Obligation Improvement Bonds, Series 2011-A, dated August 15, 2011 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to the above-named Bonds as required by Section 1302 of Resolution No. and Section 1202 of Resolution No. adopted August 15, 2011 by the Governing Body of the Issuer. The Issuer anticipates that the Annual Report will be filed by. Date: ISSUER CITY OF LEAWOOD, KANSAS By: A-8

57 APPENDIX B Financial Statements The following is a copy of a portion of the report on examination of the City of Leawood, Kansas, for the fiscal year ended December 31, 2010, prepared by the firm of Rubin Brown, LLP, Certified Public Accountants & Business Consultants, Overland Park, Kansas.

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