INDEPENDENT SCHOOL DISTRICT NO. 271 (BLOOMINGTON), MINNESOTA

Transcription

1 ADDENDUM DATED MARCH 24, 2009 TO OFFICIAL STATEMENT DATED MARCH 12, 2009 New Issue MN Credit Enhancement Rating: Standard & Poor's "AAA" Underlying Rating: Standard & Poor's "AA+" $12,545,000 GENERAL OBLIGATION TAXABLE OPEB BONDS, SERIES 2009A INDEPENDENT SCHOOL DISTRICT NO. 271 (BLOOMINGTON), MINNESOTA Schedule of Maturity Dates, Principal Amounts, Interest Rates and Yields Serial Bonds Maturity (February 1) Amount Interest Rate Yield CUSIP Base Maturity (February 1) Amount Interest Rate Yield CUSIP Base $265,000 $285,000 $265,000 $270,000 $290, % 4.000% 4.000% 4.000% 5.000% 3.200% 3.400% 3.500% 3.750% 4.200% U62 U70 U88 U96 V $300,000 $320,000 $330,000 $5,795,000 $4,425, % 5.000% 5.000% 5.125% 5.250% 4.500% 4.600% *4.700% 5.200% 5.350% V38 V46 V53 V61 V79 *Priced to call Piper Jaffray & Co. has agreed to purchase the Bonds from the School District for an aggregate price of $12,423, plus accrued interest to the date of delivery. It is expected that the Bonds will be available for delivery on or about April 15, Book-Entry-Only: This offering will be issued as fully registered Bonds and will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York, to which principal and interest payments on the Bonds will be made. Paying Agent: Bond Trust Services Corporation, Roseville, Minnesota. THIS ADDENDUM TOGETHER WITH THE OFFICIAL STATEMENT DATED MARCH 12, 2009, SHALL CONSTITUTE A "FINAL OFFICIAL STATEMENT" OF THE ISSUER WITH RESPECT TO THE BONDS AS THAT TERM IS DEFINED IN RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION.

2 ORIGINAL ISSUE DISCOUNT The Bonds with a stated maturity of February 1, 2024 and subsequent dates (the "Discount Bonds") are being sold at a discount from the principal amount payable on such Bonds at maturity. The difference between the initial offering price at which a substantial amount of the Discount Bonds of a given maturity is sold to the public and the principal amount payable at maturity constitutes "original issue discount" under the Code. The amount of original issue discount that is deemed to accrue to a holder of a Discount Bond under Section 1288 of the Code is excluded from gross income for federal income tax purposes and from taxable net income of individuals, estates and trusts for Minnesota income tax purposes to the same extent that stated interest on such Discount Bond would be so excluded. The amount of the original issue discount that accrues with respect to a Discount Bond is added to the tax basis of the owner in determining, for such purposes, gain or loss upon disposition of such Discount Bond (whether by sale, exchange, redemption or payment at maturity). Interest in the form of original issue discount accrues under Section 1288 pursuant to a constant yield method that reflects semiannual compounding on days that are determined by reference to the maturity date of the Discount Bond. The amount of original issue discount that accrues for any particular semiannual accrual period generally is equal to the excess of (1) the product of (a) one-half of the yield on such Bonds (adjusted as necessary for an initial short period) and (b) the adjusted issue price of such Bonds, over (2) the amount of stated interest actually payable. For purposes of the preceding sentence, the adjusted price is determined by adding to the initial offering price for such Bonds the original issue discount that is treated as having accrued during all prior semiannual accrual periods. If a Discount Bond is sold or otherwise disposed of between semiannual compounding dates, then the original issue discount that would have accrued for that semiannual accrual period for federal income tax purposes is to be apportioned in equal amounts among the days in such accrual period. If a Discount Bond is purchased for a cost that exceeds the sum of (1) the initial public offering price, plus (2) accrued interest and accrued original issue discount, the amount of original issue discount that is deemed to accrue thereafter to the purchaser is reduced by an amount that reflects amortization of such excess over the remaining term of such Bond. Except for the Minnesota rules described above, no opinion is expressed as to state and local income tax treatment of original issue discount. It is possible under certain state and local income tax laws that original issue discount on a Discount Bond may be taxable in the year of accrual, and may be deemed to accrue differently than under federal law. Holders of Discount Bonds should consult their tax advisors for advice with respect to the state and local tax consequences of owning Discount Bonds. The foregoing is not intended to be an exhaustive discussion of collateral tax consequences arising from ownership of the Discount Bonds. Prospective purchasers or holders of Discount Bonds should consult their own tax advisors as to the tax consequences of, or tax considerations for, purchasing or holding the Discount Bonds, including without limitation the calculations of alternative minimum tax, environmental tax or foreign branch profits tax liability for corporations.

3 Interest on the Bonds is includable in gross income of the recipient for United States and State of Minnesota income tax purposes according to present federal and Minnesota laws, regulations, rulings and decisions. The Bonds are NOT "qualified tax-exempt obligations" pursuant to Section 265 of the Internal Revenue Code of 1986, as amended, which permits financial institutions to deduct interest expenses allocable to the Bonds to the extent permitted under prior law. New Issue Rating Application Made: Standard & Poor's (Minnesota School District Credit Enhancement Program) PRELIMINARY OFFICIAL STATEMENT DATED MARCH 12, 2009 INDEPENDENT SCHOOL DISTRICT NO. 271 (BLOOMINGTON), MINNESOTA $12,585,000* GENERAL OBLIGATION TAXABLE OPEB BONDS, SERIES 2009A PROPOSAL OPENING: March 23, 2009, 10:00 A.M., C.T. CONSIDERATION: March 23, 2009, 7:00 P.M., C.T. PURPOSE/AUTHORITY/SECURITY: The $12,585,000 General Obligation Taxable OPEB Bonds, Series 2009A (the "Bonds") are being issued pursuant to Minnesota Statutes, Section , Subdivision 6, by Independent School District No. 271 (Bloomington), Minnesota (the "District") in order to fund the District s actuarial determined liabilities to pay post employment benefits to its employees or officers after their termination of service under Statement No. 45 of the Governmental Accounting Standards Board ("GASB"). The Bonds will be general obligations of the District for which its full faith, credit and taxing powers are pledged. Delivery is subject to receipt of an approving legal opinion of Knutson, Flynn & Deans, P.A., Mendota Heights, Minnesota. DATE OF BONDS: April 15, 2009 MATURITY: February 1 as follows: Year Amount* Year Amount* Year Amount* 2013 $265, $300, $ , , ,795, , , ,465, , , MATURITY ADJUSTMENTS: * The District reserves the right to increase or decrease the principal amount of the Bonds on the day of sale, in increments of $5,000 each. Increases or decreases may be made in any maturity. If any principal amounts are adjusted, the purchase price proposed will be adjusted to maintain the same gross spread per $1,000. TERM BONDS: See "Term Bond Option" herein. INTEREST: February 1, 2010 and semiannually thereafter. OPTIONAL REDEMPTION: Bonds maturing February 1, 2020 and thereafter are subject to call for prior redemption on February 1, 2019 and any date thereafter, at par. MINIMUM PROPOSAL: $12,459,150. MAXIMUM PROPOSAL: $12,836,700. GOOD FAITH DEPOSIT: $251,700. PAYING AGENT: Bond Trust Services Corporation, Roseville, Minnesota. BOOK-ENTRY-ONLY: See "Book-Entry-Only System" herein. This Preliminary Official Statement will be further supplemented by an addendum specifying the offering prices, interest rates, aggregate principal amount, principal amount per maturity, anticipated delivery date, and Syndicate Manager and Syndicate Members, together with any other information required by law, and, as supplemented, shall constitute a "Final Official Statement" of the District with respect to the Bonds, as defined in S.E.C. Rule 15c2-12.

4 REPRESENTATIONS No dealer, broker, salesperson or other person has been authorized by the District to give any information or to make any representation other than those contained in this Preliminary Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the District. This Preliminary Official Statement does not constitute an offer to sell or a solicitation of an offer to buy any of these Bonds in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction. This Preliminary Official Statement is not to be construed as a contract with the Syndicate Manager or Syndicate Members. Statements contained herein which involve estimates or matters of opinion are intended solely as such and are not to be construed as representations of fact. Ehlers & Associates, Inc. prepared this Preliminary Official Statement and any addenda thereto relying on information of the District and other sources for which there is reasonable basis for believing the information is accurate and complete. Bond Counsel has not participated in the preparation of this Preliminary Official Statement except as described herein and is not expressing any opinion as to the completeness or accuracy of the information contained therein. Compensation of Ehlers & Associates, Inc., payable entirely by the District, is contingent upon the sale of the issue. COMPLIANCE WITH S.E.C. RULE 15c2-12 Certain municipal obligations (issued in an aggregate amount over $1,000,000) are subject to General Rules and Regulations, Securities Exchange Act of 1934, Rule 15c2-12 Municipal Securities Disclosure (the "Rule"). Preliminary Official Statement: This Preliminary Official Statement was prepared for the District for dissemination to potential customers. Its primary purpose is to disclose information regarding these Bonds to prospective underwriters in the interest of receiving competitive proposals in accordance with the sale notice contained herein. Unless an addendum is posted prior to the sale, this Preliminary Official Statement shall be deemed nearly final for purposes of the Rule subject to completion, revision and amendment in a Final Official Statement as defined below. Review Period: This Preliminary Official Statement has been distributed to members of the legislative body and other public officials of the District as well as to prospective bidders for an objective review of its disclosure. Comments or requests for the correction of omissions or inaccuracies must be submitted to Ehlers & Associates at least two business days prior to the sale. Requests for additional information or corrections in the Preliminary Official Statement received on or before this date will not be considered a qualification of a proposal received from an underwriter. If there are any changes, corrections or additions to the Preliminary Official Statement, interested bidders will be informed by an addendum at least one business day prior to the sale. Final Official Statement: Upon award of sale of these Bonds, the Preliminary Official Statement together with any previous addendum of corrections or additions will be further supplemented by an addendum specifying the offering prices, interest rates, aggregate principal amount, principal amount per maturity, anticipated delivery date, and Syndicate Manager and Syndicate Members, together with any other information required by law, and, as supplemented, shall constitute a "Final Official Statement" of the District with respect to the Bonds, as defined in S.E.C. Rule 15c2-12. Copies of the Final Official Statement will be delivered to the underwriter (Syndicate Manager) within seven business days following the proposal acceptance. Continuing Disclosure: Subject to certain exemptions, issues in an aggregate amount over $1,000,000 may be required to comply with provisions of the Rule which require that underwriters obtain from the issuers of municipal securities (or other obligated party) an agreement for the benefit of the owners of the securities to provide continuing disclosure with respect to those securities. This Preliminary Official Statement describes the conditions under which these Bonds are exempt or required to comply with the Rule. CLOSING CERTIFICATES Upon delivery of these Bonds, the purchaser (underwriter) will be furnished with the following items: (1) a certificate of the appropriate officials to the effect that at the time of the sale of these Bonds and all times subsequent thereto up to and including the time of the delivery of these Bonds, this Preliminary Official Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (2) a receipt signed by the appropriate officer evidencing payment for these Bonds; (3) a certificate evidencing the due execution of these Bonds, including statements that (a) no litigation of any nature is pending, or to the knowledge of signers, threatened, restraining or enjoining the issuance and delivery of these Bonds, (b) neither the corporate existence or boundaries of the District nor the title of the signers to their respective offices is being contested, and (c) no authority or proceedings for the issuance of these Bonds have been repealed, revoked or rescinded; and (4) a certificate setting forth facts and expectations of the District which indicates that the District does not expect to use the proceeds of these Bonds in a manner that would cause them to be arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or within the meaning of applicable Treasury Regulations. ii

5 TABLE OF CONTENTS INTRODUCTORY STATEMENT... 1 THE BONDS... 1 GENERAL... 1 OPTIONAL REDEMPTION... 1 AUTHORITY; PURPOSE... 2 ESTIMATED SOURCES AND USES... 2 SECURITY... 2 RATING... 3 MINNESOTA CREDIT ENHANCEMENT PROGRAM FOR SCHOOL DISTRICTS... 3 CONTINUING DISCLOSURE... 3 LEGAL OPINION... 4 TAXABILITY OF INTEREST... 4 NON-QUALIFIED TAX-EXEMPT OBLIGATIONS... 4 FINANCIAL ADVISOR... 4 RISK FACTORS... 5 VALUATIONS... 6 CURRENT PROPERTY VALUATIONS /08 NET TAX CAPACITY BY CLASSIFICATION.. 8 TREND OF VALUATIONS... 8 LARGER TAXPAYERS... 9 GENERAL INFORMATION LOCATION LARGER EMPLOYERS POPULATION TREND U.S. CENSUS DATA EMPLOYMENT/UNEMPLOYMENT DATA FINANCIAL SERVICES MEDICAL FACILITIES EXCERPTS FROM FINANCIAL STATEMENTS...A-1 FORM OF LEGAL OPINION... B-1 BOOK-ENTRY-ONLY SYSTEM... C-1 FORM OF CONTINUING DISCLOSURE CERTIFICATE... D-1 TERMS OF PROPOSAL... E-1 DEBT DIRECT DEBT EQUALIZED DEBT SERVICE BONDED DEBT LIMIT SCHEDULE OF BONDED INDEBTEDNESS OVERLAPPING DEBT DEBT PAYMENT HISTORY DEBT RATIOS FUTURE FINANCING LEVY LIMITS TAX LEVIES AND COLLECTIONS TAX COLLECTIONS TAX CAPACITY RATES THE ISSUER EMPLOYEES PENSIONS; UNIONS LIABILITIES FOR OTHER POST EMPLOYMENT BENEFITS STUDENT LITIGATION SCHOOL BUILDINGS FUNDS ON HAND SUMMARY GENERAL FUND INFORMATION iii

6 BOARD OF EDUCATION Maureen Bartolotta Jim Sorum Maureen Peterson Arlene Busch Tim Culver Mark Hibbs Chuck Walters Chairperson Vice Chairperson Clerk Treasurer Director Director Director ADMINISTRATION Les Fujitake, Superintendent of Schools Rod Zivkovich, Director of Finance PROFESSIONAL SERVICES Knutson, Flynn & Deans, P.A., Bond Counsel, Mendota Heights, Minnesota Ehlers & Associates, Inc., Financial Advisors, Roseville, Minnesota (Other offices located in Brookfield, Wisconsin and Lisle, Illinois) iv

7 INTRODUCTORY STATEMENT This Preliminary Official Statement contains certain information regarding Independent School District No. 271 (Bloomington), Minnesota (the "District") and the issuance of its $12,585,000 General Obligation Taxable OPEB Bonds, Series 2009A (the "Bonds"). Any descriptions or summaries of the Bonds, statutes, or documents included herein are not intended to be complete and are qualified in their entirety by reference to such statutes and documents and the form of the Bonds to be included in the resolution awarding the sale of the Bonds to be adopted by the Board of Education on March 23, Inquiries may be directed to Ehlers & Associates, Inc. ("Ehlers" or the "Financial Advisor"), Roseville, Minnesota, (651) , the District's Financial Advisor. A copy of this Preliminary Official Statement may be downloaded from Ehlers web site at by connecting to the link to the Bond Sales and following the directions at the top of the site. THE BONDS GENERAL The Bonds will be issued in fully registered form as to both principal and interest in denominations of $5,000 each or any integral multiple thereof, and will be dated, as originally issued, as of April 15, The Bonds will mature on February 1 in the years and amounts set forth on the cover of this Preliminary Official Statement. Interest will be payable on February 1 and August 1 of each year, commencing February 1, 2010, to the registered owners of the Bonds appearing of record in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. Interest will be computed upon the basis of a 360-day year of twelve 30- day months and will be rounded pursuant to rules of the MSRB. All Bonds of the same maturity will bear interest from date of issue until paid at a single, uniform rate. The Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). (See "Book-Entry-Only System" herein.) As long as the Bonds are held under the book-entry system, beneficial ownership interests in the Bonds may be acquired in book-entry form only, and all payments of principal of, premium, if any, and interest on the Bonds shall be made through the facilities of DTC and its Participants. If the book-entry system is terminated, principal of, premium, if any, and interest on the Bonds shall be payable as provided in the resolution awarding the sale of the Bonds. The District has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the "Paying Agent"). The District will pay the charges for Paying Agent services. The District reserves the right to remove the Paying Agent and to appoint a successor. OPTIONAL REDEMPTION At the option of the District, Bonds maturing on or after February 1, 2020 shall be subject to prior payment on February 1, 2019 or on any date thereafter, at a price of par plus accrued interest. 1

8 Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the selection of the amounts and maturities of the Bonds to be prepaid shall be at the discretion of the District. If only part of the Bonds having a common maturity date are called for redemption, the District or Paying Agent, if any, will notify DTC of the particular amount of such maturity to be redeemed. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed. Notice of such call shall be given by mailing a notice not more than 60 days and not fewer than 30 days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books. AUTHORITY; PURPOSE The $12,585,000 General Obligation Taxable OPEB Bonds, Series 2009A (the "Bonds") are being issued pursuant to Minnesota Statutes, Section , Subdivision 6, by Independent School District No. 271 (Bloomington), Minnesota (the "District") in order to fund the District s actuarial determined liabilities to pay post employment benefits to its employees or officers after their termination of service under Statement No. 45 of the Governmental Accounting Standards Board ("GASB"). ESTIMATED SOURCES AND USES Sources Par Amount of Bonds $12,585,000 Total Sources $12,585,000 Uses Deposit to Trust Fund for OPEB Costs $11,871,083 Discount Allowance 125,850 Finance Related Expenses 50,385 Capitalized Interest 537,682 Total Uses $12,585,000 SECURITY The Bonds are general obligations of the District to which its full faith, credit and taxing powers are pledged. In accordance with Minnesota Statutes, the District will levy each year an amount not less than 105% of the debt service requirements on the Bonds. In the event funds on hand for payment of principal and interest are at any time insufficient, the District is required to levy additional taxes upon all taxable properties within its boundaries without limit as to rate or amount to make up any deficiency. 2

9 RATING The District will be participating in the State of Minnesota Credit Enhancement Program ("MNCEP") for this issue and is requesting a rating from Standard & Poor s. Standard & Poor s has a policy which assigns a minimum rating of "AAA" to issuers participating in the State of Minnesota Credit Enhancement Program. The "AAA" rating is based on the State of Minnesota s current "AAA" rating from Standard & Poor s. See "Minnesota Credit Enhancement Program" for further details. The District has also requested an underlying rating from Standard & Poor s. MINNESOTA CREDIT ENHANCEMENT PROGRAM FOR SCHOOL DISTRICTS By resolution adopted for this issue on February 17, 2009 (the "Resolution"), the District has covenanted and obligated itself to be bound by the provisions of Minnesota Statutes, Section 126C.55, which provides for payment by the State of Minnesota in the event of a potential default of a school district obligation (herein referred to as the "State Payment Law" or the "Law"). The provisions of the State Payment Law shall be binding on the District as long as any obligations of the issue remain outstanding. Under the State Payment Law, if the District believes it may be unable to make a principal or interest payment for this issue on the due date, it must notify the Commissioner of the Department of Education as soon as possible, but not less than 15 working days prior to the due date, (which notice is to specify certain information) and will use the provisions of the Law to guarantee payment of the principal and interest when due. The District also covenants in the Resolution to deposit with the paying agent for the issue three business days prior to the date on which a payment is due an amount sufficient to make that payment or to notify the Commissioner of the Department of Education that it will be unable to make all or a portion of the payment. The Law also requires the paying agent for this issue to notify the Commissioner of the Department of Education if it becomes aware of a potential default in the payment of principal and interest on these obligations, or if, on the day two business days prior to the payment date, there are insufficient funds to make the payment or deposit with the paying agent. After receipt of a notice which requests a payment pursuant to the Law, after consultation with the paying agent and District, and after verifying the accuracy of the information provided, the Commissioner of the Department of Education shall notify the Commissioner of Finance of the potential default. The State Payment Law provides that "upon receipt of this notice... the Commissioner of Finance shall issue a warrant and authorize the Commissioner of the Department of Education to pay to the paying agent for the debt obligation the specified amount on or before the date due. The amounts needed for purposes of subdivision are annually appropriated to the Department of Education from the state general fund." CONTINUING DISCLOSURE In order to comply with the provisions of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), the District has entered into an undertaking (the "Undertaking") for the benefit of the holders of the Bonds. Through the Undertaking, the District covenants and agrees to provide certain annual financial information and operating data about the District and to provide notice of the occurrence of certain material events. This information shall be provided according to the time parameters described in the Undertaking and to the information repositories and the Municipal Securities Rulemaking Board as required by the Rule. The specific provisions of the Undertaking are set forth in the Continuing Disclosure Certificate 3

10 (the "Certificate") in substantially the form attached hereto as Appendix D. The Certificate will be executed and delivered by the District at the time the Bonds are delivered. The District is the only "obligated person" with respect to the Bonds within the meaning of the Rule. The District has complied in all material respects with any previous undertaking under the Rule. LEGAL OPINION An opinion as to the validity of the Bonds will be furnished by Knutson, Flynn & Deans, P.A., of Mendota Heights, Minnesota, bond counsel to the District, and will accompany the Bonds. The legal opinion will be issued on the basis of existing law and will state that the Bonds are valid and binding general obligations of the District enforceable in accordance with their terms, except to the extent to which enforceability may be limited by Minnesota or United States laws relating to bankruptcy, reorganization, moratorium or creditors' rights generally. TAXABILITY OF INTEREST Under present federal and Minnesota laws, regulations, rulings and decisions, interest on the Bonds of this offering is includable in gross income for federal income tax purposes and in taxable net income of individuals, estates or trusts for Minnesota income tax purposes. NON-QUALIFIED TAX-EXEMPT OBLIGATIONS The District will not designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. FINANCIAL ADVISOR Ehlers has served as Financial Advisor to the District in connection with the issuance of the Bonds. The Financial Advisor will not participate in the underwriting of the Bonds. The financial information included in this Preliminary Official Statement has been compiled by the Financial Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. Ehlers is not a firm of certified public accountants. 4

11 RISK FACTORS Following is a description of possible risks to holders of these Bonds without weighting as to probability. This description of risks is not intended to be all-inclusive, and there may be other risks not now perceived or listed here. Taxes: The Bonds of this offering are general obligations of the District, the ultimate payment of which rests in the District's ability to levy and collect sufficient taxes to pay debt service. State Actions: Many elements of local government finance, including the issuance of debt and the levy of property taxes, are controlled by state government. Past and future actions of the State may affect the overall financial condition of the District, the taxable value of property within the District, and the ability of the District to levy property taxes. Ratings; Interest Rates: In the future, the District's credit rating may be reduced or withdrawn, or interest rates for this type of obligation may rise generally, either possibility resulting in a reduction in the value of the Bonds for resale prior to maturity. Continuing Disclosure: A failure by the District to comply with the Undertaking for continuing disclosure (as described herein) will not constitute an event of default on the Bonds. Any such failure must be reported in accordance with the Rule and must be considered by any broker, dealer, or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. State Economy; State Aids: State cash flow problems could affect local governments and possibly increase property taxes. Book-Entry-Only System: The timely credit of payments for principal and interest on the Bonds to the accounts of the Beneficial Owners of the Bonds may be delayed due to the customary practices, standing instructions or for other unknown reasons by DTC participants or indirect participants. Since the notice of redemption or other notices to holders of these obligations will be delivered by the District to DTC only, there may be a delay or failure by DTC, DTC participants or indirect participants to notify the Beneficial Owners of the Bonds. Economy: A combination of economic, climatic, political or civil disruptions or terrorist actions could affect the local economy and result in reduced tax collections and/or increased demands upon local government. 5

12 VALUATIONS OVERVIEW All non-exempt property is subject to taxation by local taxing districts. Exempt real property includes Indian lands, public property, and educational, religious and charitable institutions. Most personal property is exempt from taxation (except investor-owned utility mains, generating plants, etc.). The valuation of property in Minnesota consists of two elements. (1) The estimated market value is set by city or county assessors. Not less than 20% of all real properties are to be appraised by local assessors each year. (2) The tax capacity (taxable) value of property is determined by class rates set by the State Legislature. The tax capacity rate varies according to the classification of the property. Tax capacity represents a percent of estimated market value. The property tax rate for a local taxing jurisdiction is determined by dividing the total tax capacity or market value of property within the jurisdiction into the dollars to be raised from the levy. State law determines whether a levy is spread on tax capacity or market value. Major classifications and the percentages by which tax capacity is determined are: Type of Property 2005/ / /08 Residential homestead 1 First $500, % Over $500, % Agricultural homestead 1 First $500,000 HGA % Over $500,000 HGA % First $600, % 2 Over $600, % 2 First $500, % Over $500, % First $500,000 HGA % Over $500,000 HGA % First $690, % 2 Over $690, % 2 First $500, % Over $500, % First $500,000 HGA % Over $500,000 HGA % First $790, % 2 Over $790, % 2 Agricultural non-homestead Land % 2 Land % 2 Land % 2 Seasonal recreational residential First $500, % 3 Over $500, % 3 First $500, % 3 Over $500, % 3 First $500, % 3 Over $500, % 3 Residential non-homestead: 1 unit - 1st $500, % Over $500, % 2-3 units % 4 or more % Small City % Industrial/Commercial/Utility 5 First $150, % Over $150, % 1 unit - 1st $500, % Over $500, % 2-3 units % 4 or more % Small City % First $150, % Over $150, % 1 unit - 1st $500, % Over $500, % 2-3 units % 4 or more % Small City % First $150, % Over $150, % A residential property qualifies as "homestead" if it is occupied by the owner or a relative of the owner on the assessment date. Applies to land and buildings. Exempt from referendum market value tax. Exempt from referendum market value tax. Cities of 5,000 population or less and located entirely outside the seven-county metropolitan area and the adjacent nine-county area and whose boundaries are 15 miles or more from the boundaries of a Minnesota city with a population of over 5,000. The estimated market value of utility property is determined by the Minnesota Department of Revenue. 6

13 CURRENT PROPERTY VALUATIONS Estimated Full Value of Taxable Property, 2007/08 $12,552,767, /08 Assessor's Taxable Market Value Hennepin County Scott County Total Real Estate $ 11,588,782,500 $4,021,700 $ 11,592,804,200 Personal Property 45,311,800 98,200 45,410,000 Total Valuation $ 11,634,094,300 $4,119,900 $ 11,638,214,200 Mobile Home Valuation 2 $1,636,000 $0 $1,636, /08 Net Tax Capacity Hennepin County Scott County Total Real Estate $154,087,553 $ 80,434 $ 154,167,987 Personal Property 896,364 1, ,328 Net Tax Capacity $154,983,917 $ 82,398 $ 155,066,315 Less: Captured Tax Increment Tax Capacity 3 (11,448,372) 0 (11,448,372) Fiscal Disparities Contribution 4 (23,183,364) (26,649) (23,210,013) Taxable Net Tax Capacity $120,352,181 $ 55,749 $ 120,407,930 Plus: Fiscal Disparities Distribution 3 8,998, ,998,818 Adjusted Taxable Net Tax Capacity $129,350,999 $ 55,749 $ 129,406,748 Mobile Home Valuation 2 $16,328 $0 $16,328 1 According to the Minnesota Department of Revenue, the Assessor's Taxable Market Value (the "ATMV") for Independent School District No. 271 (Bloomington) is about 92.7% of the actual selling prices of property most recently sold in the District. That sales ratio was calculated by comparing the selling prices with the ATMV. Dividing the ATMV of real estate by and adding personal property and mobile home ATMV, if any, results in an "Estimated Full Value of Taxable Property" for the District of $12,552,767, Mobile home valuations are not included in the net tax capacity for purposes of determining tax capacity rates. However, valuations of mobile homes are determined at the beginning of the collection year, and the same tax capacity rates are applied to mobile home net tax capacity valuations as to real estate and personal property. 3 The captured tax increment value shown above represents the captured net tax capacity of tax increment financing districts located in the District. 4 Each community in the seven-county metropolitan area contributes 40% of the growth in its commercialindustrial property tax base since 1972 to an area pool which is then distributed among the municipalities on the basis of population, special needs, etc. Each governmental unit makes a contribution and receives a distribution-- sometimes gaining and sometimes contributing net tax capacity for tax purposes. 7

14 2007/08 NET TAX CAPACITY BY CLASSIFICATION 2007/08 Net Tax Capacity Percent of Total Net Tax Capacity Residential homestead $ 72,953, % Agricultural 4, % Commercial/industrial 72,114, % Public utility 697, % Railroad operating property 72, % Non-homestead residential 8,321, % Commercial & residential seasonal/rec. 4, % Personal property 898, % Total $155,066, % TREND OF VALUATIONS Levy Year Assessor's Taxable Market Value Net Tax Capacity 1 Adjusted Taxable Net Tax Capacity 2 Percent +/- in Assessor's Taxable Market Value 2003/04 $8,685,824,100 $115,828,327 $115,805, % 2004/05 9,400,743, ,086, ,469, % 2005/06 10,174,273, ,191, ,172, % 2006/07 10,941,787, ,735, ,936, % 2007/08 11,638,214, ,066, ,406, % 1 Net Tax Capacity is before fiscal disparities adjustments and includes tax increment values. 2 Adjusted Taxable Net Tax Capacity is after fiscal disparities adjustments and does not include tax increment values. 8

15 LARGER TAXPAYERS Taxpayer Type of Property 2007/08 Assessor's Taxable Market Value 2007/08 Net Tax Capacity MOA Mall Holdings LLC Commercial $600,404,100 $12,006,582 United Properties Commercial 155,797,500 3,115,200 Teachers Ins & Annuity Assoc. Commercial 88,094,100 1,761,882 Kraus-Anderson, Inc. Commercial 53,900,000 1,077,250 Zeller Management Corp. Commercial 48,098, ,222 Decathlon Exchange LLC Commercial 44,990, ,050 Metropolitan Insurance Co. Commercial 44,543, ,122 Behringer Harvard Center Commercial 42,845, ,168 International Plaza Partners LLC Commercial 40,511, ,486 United Properties Invest Co. Commercial 35,201, ,276 Source: Current Property Valuations, Net Tax Capacity by Classification, Trend of Valuations and Larger Taxpayers have been furnished by Hennepin and Scott Counties. 9

16 DEBT DIRECT DEBT 1 General Obligation Debt (see schedule following) Total g.o. debt being paid from taxes (includes the Bonds of this offering) $126,030,000 EQUALIZED DEBT SERVICE The Minnesota Debt Service Equalization program provides state aid to finance a portion of the principal and interest payments on most school district bonds. Bonds not eligible for the program include most alternative facilities bonds, all capital facilities bonds, all OPEB bonds, and building bonds with relatively short maturities. Under the Debt Service Equalization Formula (the Formula) adopted by the 2001 Minnesota State Legislature, each school district is responsible for the amount of its qualifying annual debt service which is equal to 15% of its Adjusted Net Tax Capacity (ANTC). The District does not currently qualify for debt service equalization aid. BONDED DEBT LIMIT Minnesota Statutes, Section , subdivision 4, presently limits the "net debt" of a school district to 15% of its Estimated Full Value of Taxable Property and certain exempt property situated within the school district. The current debt limit of the District is computed as follows: 2007/08 Estimated Full Value of Taxable Property $12,552,767,899 Multiply by 15% 0.15 Statutory Debt Limit $ 1,882,915,185 Less: Long-Term Debt Outstanding Being Paid Solely from Taxes 2 (113,445,000) Unused Debt Limit $ 1,769,470,185 1 Outstanding debt is as of the dated date of the Bonds. 2 Does not include the $12,585,000 General Obligation Taxable OPEB Bonds, Series 2009A as they are not subject to the debt limit calculation. 10

17 INDEPENDENT SCHOOL DISTRICT NO. 271 (BLOOMINGTON), MINNESOTA Schedule of Bonded Indebtedness General Obligation Debt Being Paid From Taxes (As of 4/15/09) FISCAL YEAR BASIS Building Building Building Building Refunding 1) Dated Amount 8/01/99 $75,000,000 2/01/00 5/01/01 5/01/01 4/06/05 $18,000,000 $33,070,000 $8,600,000 $15,980,000 Maturity 2/01 2/01 2/01 2/01 2/01 Fiscal Year Ending Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest ,205,000 1,369, , , , , , , , ,440,000 2,570, ,000 1,645, , , , , ,000 1,637, , ,000 1,000, , ,000 1,628, , ,500 1,040, , ,025, , ,010, , ,700, , ,790, , ,875, , ,960, , ,925, , ,895,000 80, ,645,000 3,939, , , ,000 5,738,975 1,055,000 1,206,803 15,980,000 5,317,163 1) This issue refunded the 2010 through 2020 maturities of the $18,000,000 General Obligation School Building Bonds, Series 2000A, dated February 1, Continued on next page - Prepared by Ehlers 3/13/2009 GO Taxes 11

18 INDEPENDENT SCHOOL DISTRICT NO. 271 (BLOOMINGTON), MINNESOTA Schedule of Bonded Indebtedness, Continued General Obligation Debt Being Paid From Taxes (As of 4/15/09) FISCAL YEAR BASIS Refunding 2) Refunding 3) Refunding 4) This Issue Dated Amount 3/08/06 11/15/06 $45,470,000 $5,835,000 12/06/06 $38,045,000 4/15/09 $12,585,000 Maturity 2/01 2/01 2/01 2/01 Fiscal Year Estimated Total Total Total Principal Fiscal Year Ending Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest P & I Outstanding % Paid Ending ,038, , , , ,915,000 5,155,548 10,070, ,115, % ,076, , , ,625, ,682 5,525,000 9,692,807 15,217, ,590, % ,530,000 2,076, , , ,625, ,803 5,715,000 7,178,715 12,893, ,875, % ,670,000 1,935, , , ,625, ,803 5,940,000 6,946,446 12,886, ,935, % ,805,000 1,788, ,000 74, ,000 1,625, , ,803 6,510,000 4,765,478 11,275,478 97,425, % ,995,000 1,598, ,000 37, ,000 1,605, , ,058 6,810,000 4,468,883 11,278,883 90,615, % ,205,000 1,398, ,000 1,582, , ,083 7,125,000 4,152,908 11,277,908 83,490, % ,530,000 1,188, ,000 1,544, , ,145 7,465,000 3,809,520 11,274,520 76,025, % ,090, , ,000 1,509, , ,345 7,830,000 3,447,720 11,277,720 68,195, % ,290, , ,000 1,486, , ,875 8,215,000 3,064,000 11,279,000 59,980, % ,550, , ,000 1,459, , ,375 8,560,000 2,715,775 11,275,775 51,420, % ,805, , ,000 1,428, , ,855 8,925,000 2,351,968 11,276,968 42,495, % ,485,000 1,393, ,025 9,485,000 1,972,088 11,457,088 33,010, % ,885, , ,025 9,885,000 1,568,975 11,453,975 23,125, % ,230, , ,025 9,230,000 1,148,863 10,378,863 13,895, % ,635, ,488 5,795, ,025 9,430, ,513 10,163,513 4,465, % ,465, ,505 4,465, ,505 4,719, % ,470,000 15,499,894 5,140, ,600 38,045,000 21,036,956 12,585,000 9,582, ,030,000 63,427, ,457,709 2) This issue refunded the 2011 through 2020 maturities of the $75,000,000 General Obligation School Building Bonds, Series 1999, dated August 1, The District is responsible for paying the debt service on the refunded bonds through February 1, The escrow account is responsible for the payment of the debt service on the refunding bonds through February 1, 2010; thereafter, the District will be responsible for the payment of debt service. 3) This issue refunded the 2008 through 2014 maturities of the $8,555,000 General Obligation School Building Refunding Bonds, Series 1998, dated August 12, ) This issue refunded the 2013 through 2024 maturities of the $33,070,000 General Obligation School Building Bonds, Series 2001A, dated May 1, 2001; and the 2013 through 2022 maturities of the $8,600,000 General Obligation School Building Bonds, Series 2001B, dated May 1, The District is responsible for paying the debt service on the refunded bonds through February 1, The escrow account is responsible for the payment of the debt service on the refunding bonds through February 1, 2012; thereafter, the District will be responsible for the payment of debt service. Prepared by Ehlers 3/13/2009 GO Taxes 12

19 OVERLAPPING DEBT /08 Taxing District Adjusted Taxable Net Tax Capacity % In District Total G.O. Debt District's Proportionate Share Hennepin County $1,602,797, % $532,300,000 2 $ 42,958,356 Scott County 149,530, % 71,240,000 26,560 City of Bloomington 131,305, % 45,015,000 44,343,764 City of Edina 103,849, % 28,535,000 1,049 City of Savage 26,747, % 43,140,000 89,915 Metropolitan Council 3,594,085, % 157,950, ,684,615 Three Rivers Park District 4 1,192,261, % 75,800,000 8,223,703 District's Share of Total Overlapping Debt $101,327,962 DEBT PAYMENT HISTORY The District has never defaulted in the payment of principal and interest on its debt. 1 Only those taxing jurisdictions with general obligation debt outstanding are included in this section. Does not include non-general obligation debt, self-supporting g.o. revenue debt, short-term general obligation debt, or general obligation tax/aid anticipation certificates of indebtedness. 2 Hennepin County also has General Obligation Solid Waste Revenue Bonds outstanding which are payable entirely from the County s solid waste enterprise fund; General Obligation Bonds (Century Plaza Debt) which are expected to be paid from building rental fees from County departments and non-county tenants; and General Obligation Ice Arena Revenue Bonds which are expected to be paid from building rental payments from Augsburg College. These issues have not been included in the overlapping debt or debt ratios. 3 The above debt includes all outstanding general obligation debt supported by taxes of the Metropolitan Council. The Council also has general obligation sewer revenue, wastewater revenue, and radio revenue bonds and lease obligations outstanding all of which are supported entirely by revenues and have not been included in the Overlapping Debt or Debt Ratios sections. 4 Formerly listed as Suburban Hennepin Regional Park District. 13

20 DEBT RATIOS Debt/Estimated Full Value of Taxable Property ($12,552,767,899) Debt/85,832 Estimated Population G.O. Debt Direct G.O. Debt Being Paid From: Taxes $126,030, % $1, District's Share of Total Overlapping Debt $101,327, % $1, FUTURE FINANCING The District reports no plans for additional financing in the next three months. LEVY LIMITS Minnesota school district tax levies for most purposes are subject to statutory limitations. No limit, however, is placed on the debt service levy, and districts are required to levy 105% of actual principal and interest requirements to allow for delinquencies. School districts receive a basic revenue amount per pupil unit from aid and levy proceeds in a variety of categorical state aids. They are also allowed to certify additional levies within limits for certain specified purposes. The State Department of Education and the applicable County Auditors review the levies of each school district to determine compliance with state levy limits. 14

21 TAX LEVIES AND COLLECTIONS TAX COLLECTIONS Tax Year Original Gross Tax Levy 1 Total Collected Following Year Collected to Date 2 % Collected 2003/04 $28,046,021 $27,889,117 $28,043, % 2004/05 28,871,643 28,654,843 28,845, % 2005/06 31,484,739 31,213,273 31,428, % 2006/07 32,528,845 32,251,369 32,397, % 2007/08 35,301,247 In process of collection Property taxes are collected in two installments in Minnesota--the first by May 15 and the second by October 15. Mobile home taxes are collectible in full by August 31. Minnesota Statutes require that levies (taxes and special assessments) for debt service be at least 105% of the actual debt service requirements to allow for delinquencies. 1 The Original Gross Tax Levy reflects the property tax levy certified by the District prior to reductions for state credits and aids, e.g. disparity reduction aid, education homestead credit, and education agricultural credit, etc. 2 Collections are through October 31, 2008 for Hennepin County and through December 31, 2008 for Scott County and include abatements, cancellations, mobile home collections, and homestead and agricultural credits. 15

22 TAX CAPACITY RATES / / / / /08 I.S.D. No. 271 (Bloomington) 0.000% % % % % Hennepin County % % % % % City of Bloomington 0.000% % % % % City of Edina 0.000% % % % % City of Savage % % % % % HCRRA 0.317% 0.636% 0.559% 0.871% 0.979% Lower MN River Watershed 0.359% 0.327% 0.312% 0.279% 0.418% Metropolitan Council 1.212% 1.132% 0.873% 0.877% 0.812% Metropolitan Mosquito 0.566% 0.564% 0.509% 0.499% 0.486% Metropolitan Transit 1.724% 1.608% 1.542% 1.295% 1.264% Mosquito Control 0.545% 0.528% 0.493% 0.480% 0.480% Park Museum 0.774% 0.775% 0.685% 0.700% 0.719% Scott County CDA 1.410% 1.409% 1.351% 1.525% 1.642% Three Rivers Park District 2.599% 2.667% 2.830% 3.068% 3.137% Referendum Market Value Rates: City of Bloomington % % % % % City of Edina % % % % % City of Savage % % % % % I.S.D. No. 271 (Bloomington) % % % % % Source: Tax Collections and Tax Capacity Rates have been furnished by Hennepin and Scott Counties. 1 After reduction for state aids. Does not include the statewide general property tax against commercial/industrial, non-homestead resorts and seasonal recreational residential property. 16

23 THE ISSUER EMPLOYEES The District is governed by an elected school board and employs a staff of 1,824, including 956 non-licensed employees and 868 licensed employees (814 of whom are teachers). The District provides education for 10,291 students in grades kindergarten through twelve. PENSIONS; UNIONS Teachers Retirement Association (TRA) All teachers employed by the District are covered by defined benefit pension plans administered by the State of Minnesota Teachers Retirement Association (TRA). TRA members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. These plans are established and administered in accordance with Minnesota Statutes, Chapter 354 and 356. Public Employees Retirement Association (PERA) All full-time and certain part-time employees of the District (other than those covered by TRA) are covered by a defined benefit plan administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) which is a cost-sharing, multiple-employer retirement plan. This plan is established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. Recognized and Certified Bargaining Units Expiration Date of Bargaining Unit Current Contract Clerical June 30, 2009 Food Service June 30, 2009 Custodial/Bus Driver June 30, 2009 Health Service Association June 30, 2009 Paraprofessional June 30, 2009 Principal June 30, 2009 Teacher June 30,

24 LIABILITIES FOR OTHER POST EMPLOYMENT BENEFITS The District has obligations for some post-employment benefits (some mandated by State Statute and others that cover a portion of the cost of health insurance during retirement) for the majority of its employees. Accounting for these obligations will be dictated by new Governmental Accounting Standards Board Statements Nos. 43 and 45 (GASB 43 and 45). Although the District is not yet required to implement GASB 43 and 45, it has completed an actuarial study of its obligations. The preliminary study shows an actuarial accrued liability of $11,871,111 as of July 1, The District has been funding these obligations on a pay-as-you-go basis, but is now issuing bonds to fund a revocable trust to pay the obligation. STUDENT BODY The number of students enrolled for the past four years and for the current year have been as follows: Year Kindergarten Grades 1-6 Grades 7-12 Total 2004/ ,567 5,040 10, / ,588 5,129 10, / ,499 5,193 10, / ,542 5,104 10, / ,525 5,054 10,291 Enrollments for the next three years are projected to be as follows: Year Kindergarten Grades 1-6 Grades 7-12 Total 2009/ ,522 5,030 10, / ,580 4,919 10, / ,567 4,962 10,240 LITIGATION There is no litigation threatened or pending questioning the organization or boundaries of the District or the right of any of its officers to their respective offices or in any manner questioning their rights and power to execute and deliver these Bonds or otherwise questioning the validity of these Bonds. 18

25 SCHOOL BUILDINGS School Building Year Constructed Years of Additions/ Remodelings Hillcrest Elementary Indian Mounds Elementary Normandale Hills Elementary Oak Grove Elementary Olson Elementary Poplar Bridge Elementary Ridgeview Elementary Valley View Elementary Washburn Elementary Westwood Elementary Oak Grove Middle School Olson Middle School Valley View Middle School Thomas Jefferson High School John F. Kennedy High School Pond Center Southwood Center FUNDS ON HAND (as of January 31, 2009) Total Cash Fund and Investments General Fund $21,597,215 Food Service 1,721,711 Community Service 3,293,420 Debt Redemption 9,924,167 Construction 4,557,717 Agency & Trust 414,833 Self Insured Dental 767,800 Internal Service 7,641,994 Total Funds on Hand $49,918,858 19

26 SUMMARY GENERAL FUND INFORMATION Following are summaries of the revenues and expenditures and fund balances for the District's General Fund for the past five fiscal years. These summaries are not purported to be the complete audited financial statements of the District. Copies of the complete audited financial statements are available upon request. See Appendix A for excerpts from the District's 2008 audited financial statement. FISCAL YEAR ENDING JUNE 30 COMBINED STATEMENT Revenues: Local Property Taxes $ 11,978,961 $ 14,150,064 $ 10,555,117 $ 17,102,907 $ 18,519,228 Other Local and County Revenues 2,499,486 3,430,809 4,290,390 4,733,413 3,943,075 Revenue from State Sources 69,942,446 71,751,385 79,878,541 76,078,668 78,121,491 Revenue from Federal Sources 2,836,581 3,466,999 3,243,044 3,117,442 3,196,925 Sales and Other Conversion of Assets 91,641 36, ,745 11,191 21,965 Interdistrict Revenue 381, , , ,312 95,309 Total Revenues $ 87,730,823 $ 93,261,147 $ 98,903,653 $ 101,429,933 $ 103,897,993 Expenditures: Current: Administration $ 4,827,338 $ 4,792,877 $ 5,088,859 $ 5,494,474 $ 5,208,050 District Support Services 4,401,830 4,737,356 3,758,429 4,515,211 3,993,066 Elementary & Secondary Regular Instruction 39,942,580 42,016,874 45,153,795 45,749,477 45,188,784 Vocational Education Instruction 1,866,841 1,475,394 1,689,468 1,504,756 2,484,560 Special Education Instruction 15,544,557 19,624,757 20,971,352 19,329,351 20,016,427 Instructional Support Services 5,685,430 5,622,211 5,785,865 5,888,232 5,974,083 Pupil Support Services 8,504,179 7,455,385 8,031,563 8,577,401 8,029,869 Sites and Buildings 6,660,102 7,331,107 7,356,650 7,478,384 7,689,002 Fiscal and Other Fixed Cost Programs 753, , , , ,019 Capital Outlay ,012,461 Total Expenditures $ 88,186,351 $ 93,687,292 $ 98,422,117 $ 99,080,802 $ 100,934,321 Excess of revenues over (under) expenditures $ (455,528) $ (426,145) $ 481,536 $ 2,349,131 $ 2,963,672 Other Financing Sources (Uses) Sale of equipment $ 0 $ 47,800 $ 279,030 $ 0 $ 0 Proceeds from sale of capital assets , ,774 Operating transfers in Operating transfers out (507,658) (398,569) (721,618) (849,678) (579,972) Total Other Financing Sources (Uses) $ (507,658) $ (350,769) $ (442,588) $ (645,198) $ (398,198) Excess of revenues and other financing sources over (under) expenditures and other financing uses $ (963,186) $ (776,914) $ 38,948 $ 1,703,933 $ 2,565,474 General Fund Balance July 1 14,136,769 13,173,583 12,396,669 12,435,617 14,139,550 Prior Period Adjustment Residual Equity Transfer in (out) General Fund Balance June 30 $ 13,173,583 $ 12,396,669 $ 12,435,617 $ 14,139,550 $ 16,705,024 DETAILS OF JUNE 30 FUND BALANCE Reserved $ 6,638,627 $ 4,525,465 $ 4,081,933 $ 3,546,550 $ 4,510,951 Unreserved: Designated 2,665,075 1,764,498 1,836,559 2,420,653 5,275,803 Undesignated 3,869,881 6,106,706 6,517,125 8,172,347 6,918,270 Total $ 13,173,583 $ 12,396,669 $ 12,435,617 $ 14,139,550 $ 16,705,024 20

27 GENERAL INFORMATION LOCATION The District, with an estimated population of 85,832 and comprising an area of square miles, is located approximately 10 miles south of the City of Minneapolis. LARGER EMPLOYERS Larger employers in the District include the following: Firm Type of Business/Product No. of Employees 1 Mall of America Shopping center 13,000 Health Partners, Inc. Health insurance company 5,585 I.S.D. No. 271 (Bloomington) Elementary and secondary education 1,824 Seagate Technology, Inc. Design and develop disc drive heads 1,800 Express Scripts, Inc. Pharmacy benefit management company 1,600 Donaldson Co., Inc. Manufacture dust collectors and mufflers 1,300 City of Bloomington Municipal government and services 925 Toro Co., Inc. Manufacture landscaping machinery 867 NCS Pearson, Inc. Student assessment testing 720 General Dynamics Communications and networking services 702 Normandale Community College Post secondary education 634 Source: Written and telephone survey (February & March, 2009) and the 2009 Minnesota State Business Directory. 1 Includes full-time, part-time and seasonal. 21

28 POPULATION TREND Population Trend: Independent School District No. 271 (Bloomington), Minnesota 1990 Estimated population 86, Estimated population 85,158 Current Estimated population 85,832 Percent of Change % U.S. CENSUS DATA Income and Age Statistics (2000) Bloomington School District City of Bloomington Hennepin County State of Minnesota 1999 per capita income $29,788 $29,782 $28,789 $23, median household income $54,636 $54,628 $51,711 $47, median family income $67,148 $67,135 $65,985 $56,874 Median gross rent $753 $753 $654 $566 Median value owner occupied housing $147,000 $147,000 $143,400 $122,400 Median age N/A 40.1 yrs yrs yrs. Source: 2000 Census of Population and Housing, U.S. Department of Commerce. EMPLOYMENT/UNEMPLOYMENT DATA Rates are not compiled for individual communities within counties. Average Employment Average Unemployment Year Hennepin County Hennepin County State of Minnesota , % 4.2% , % 4.0% , % 4.6% , % 5.5% 2009, January 599, % 8.5% Source: Minnesota Department of Employment and Economic Development. 22

29 FINANCIAL SERVICES Financial institutions located in the District include the following: City of Bloomington: American Bank of St. Paul (Branch of St. Paul) Associated Bank, National Association (Branch of Green Bay, WI) Bridgewater Bank City-County Federal Credit Union (Branch of Brooklyn Center) First Commercial Bank Guaranty Bank (Branch of Milwaukee, WI) Highland Bank (Branch of St. Michael) M&I Marshall & Ilsley Bank (Branch of Milwaukee, WI) Premier Bank Minnesota (Branch of Farmington) Richfield-Bloomington Credit Union (Branch of Richfield) TCF National Bank (Branch of Wayzata) Toro Employees Federal Credit Union U S Federal Credit Union (Branch of Burnsville) United Bankers Bank U.S. Bank National Association (Branch of Cincinnati, OH) Venture Bank Wells Fargo Bank, National Association (Branch of Sioux Falls, SD) Wings Financial Federal Credit Union (Branch of Apple Valley) Source: American Financial Directory. 23

30 MEDICAL FACILITIES Following is a summary of in-patient health care facilities located in the District: Facility Location No. of Beds Nursing Homes: Friendship Village of Bloomington Bloomington 66 Golden Living Center Bloomington Bloomington 74 Martin Luther Care Center Bloomington 137 Minnesota Masonic Home Care Center Bloomington 214 Presbyterian Homes of Bloomington Bloomington 98 Supervised Living Facilities: Bloomington Outreach Home Bloomington 6 Carlson Drake House Bloomington 12 Gunderson Place Bloomington 6 MSOCS Bloomington Bloomington 6 MTAI Albert Place Bloomington 6 REM Hennepin (Bloomington) Bloomington 14 Wingspan Life Resources Bloomington 6 Source: Minnesota Department of Health. N:\MNSD\Bloomington\Analyst\os.mtr.2009A (opeb) GO/JS:dll/wl 24

31 APPENDIX A EXCERPTS FROM FINANCIAL STATEMENTS Reproduced on the following pages are excerpts from the District's audited Financial Statements for the fiscal year ending June 30, The Financial Statements have been prepared by the District and audited by a certified public accountant. The Management s Discussion and Analysis and the Notes to Financial Statements are an integral part of the audit and any judgment of the Financial Statements should be based on the Financial Statements as a whole. Copies of the complete audited financial statements for the past three years and the current budget are available upon request from Ehlers. A-1

32 A-2

33 A-3

34 A-4

35 A-5

36 A-6

37 A-7

38 A-8

39 A-9

40 A-10

41 A-11

42 A-12

43 A-13

44 A-14

45 A-15

46 A-16

47 A-17

48 A-18

49 A-19

50 A-20

51 A-21

52 A-22

53 A-23

54 A-24

55 A-25

56 A-26

57 A-27

58 A-28

59 A-29

60 A-30

61 A-31