PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 10, 2018 $3,330,000 CITY OF AUBURN, INDIANA Waterworks Revenue Bonds of 2018

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1 This Preliminary Official Statement and the information contained herein are subject to completion and amendment. The Bonds may not be sold nor may an offer to buy be accepted prior to the time the Official Statement is delivered in final form. 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 the Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. NEW ISSUE Book-Entry-Only Bank Qualified PRELIMINARY OFFICIAL STATEMENT IS DEEMED NEARLY FINAL AND DATED OCTOBER 10, 2018 RATING: Standard & Poor s: (See Rating herein.) In the opinion of Ice Miller LLP, Indianapolis, Indiana ("Bond Counsel") under federal statutes, decisions, regulations and rulings, interest on the Bonds is excludable from gross income under Section 103 of the Internal Revenue Code of 1986, as amended to the date hereof (the "Code"), for federal income tax purposes and is not a specific preference item for purposes of the federal alternative minimum tax, although Bond Counsel observes that it is included in adjusted current earnings in calculating corporate alternative minimum taxable income for taxable years that began prior to January 1, Such exclusion is conditioned on continuing compliance with the Tax Covenants (as hereinafter defined). In the opinion of Bond Counsel, existing laws, regulations, judicial decisions and rulings, interest on the Bonds is exempt from income taxation in the State of Indiana. The Bonds have been designated qualified tax-exempt obligations pursuant to Section 265(b)(3) of the Code. See "TAX MATTERS" herein. PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 10, 2018 $3,330,000 CITY OF AUBURN, INDIANA Waterworks Revenue Bonds of 2018 Dated: Date of Delivery (Expected November 15, 2018) Due: January 1 and July 1, as shown below The City of Auburn, in DeKalb County, Indiana (the City ), is issuing the $3,330,000 Waterworks Revenue Bonds of 2018 (the Bonds ) for the purpose of providing funds, along with cash on hand, for the costs of certain additions, extensions and improvements to the municipal waterworks, funding a debt service reserve fund for the Bonds and paying the cost of issuance of the Bonds. The Bonds are being issued pursuant to Ordinance No , adopted by the Common Council of the City on September 5, 2017 (the Ordinance or Bond Ordinance ). The Bonds will be issued in fully registered form, in $5,000 denominations, or integral multiples thereof, and shall be numbered consecutively from R-1 upward. Interest on the Bonds shall be payable, semi-annually, on January 1 and July 1, commencing January 1, Interest is payable by check, mailed one business day prior to the interest payment date to the registered owner, as of the fifteenth day of the month preceding an interest payment date, at the address as it appears on the registration books kept by the Registrar or at such other address as is provided to the Paying Agent, in writing, by the registered owner, or if the Bonds are registered in the name of the nominee of the Depository Trust Company (the DTC ) or other clearing agency, payments will be made by the Paying Agent for the Bonds by wire transfer to the DTC. Principal of the Bonds is payable, as set forth below, at the principal corporate trust office of, located in Indianapolis, Indiana as Registrar and Paying Agent (the Registrar and the Paying Agent )(See DESCRIPTION OF THE BONDS herein). Maturity Date Principal Amount Maturity Date Principal Amount 7/1/2019 $ 110,000 1/1/2026 $ 130,000 1/1/ ,000 7/1/ ,000 7/1/ ,000 1/1/ ,000 1/1/ ,000 7/1/ ,000 7/1/ ,000 1/1/ ,000 1/1/ ,000 7/1/ ,000 7/1/ ,000 1/1/ ,000 1/1/ ,000 7/1/ ,000 7/1/ ,000 1/1/ ,000 1/1/ ,000 7/1/ ,000 7/1/ ,000 1/1/ ,000 1/1/ ,000 7/1/ ,000 7/1/ ,000 1/1/ ,000 The Bonds are subject to optional redemption, prior to maturity, and may be subject to mandatory sinking fund redemption, as more fully described in this Official Statement (See DESCRIPTION OF THE BONDS Redemption of the Bonds herein). THE PRINCIPAL AND INTEREST ON THE BONDS ARE PAYABLE SOLELY FROM AND CONSTITUTE A FIRST CHARGE AGAINST THE NET REVENUES (AS DEFINED HEREIN) OF THE WATERWORKS ON PARITY WITH THE CITY S OUTSTANDING WATERWORKS REFUNDING REVENUE BONDS OF THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY WITHIN THE PROVISIONS AND LIMITATIONS OF THE CONSTITUTION OF THE STATE OF INDIANA (SEE SECURITY AND SOURCES OF PAYMENT FOR THE BONDS AND RIGHTS AND REMEDIES OF REVENUE BONDHOLDERS HEREIN). Legal Opinion Legal matters incident to the authorization and issuance of the Bonds are subject to the approving opinion of Bond Counsel, substantially in the form set forth in APPENDIX F. Certain legal matters will be passed upon by for the City by its counsel, Mefford, Weber and Blythe, PC, Auburn. The City has authorized the distribution of this Preliminary Official Statement to prospective purchasers and other interested parties. The City has designated this Preliminary Official Statement as a nearly final Official Statement as of the date hereof, subject to the inclusion of certain additional information to be determined at the time of the award of the Bonds. This cover page contains certain 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.

2 The information contained in this Official Statement, which includes the Cover Page, Official Notice of Intent to Sell Bonds, Summary Statement and the Appendices, has been obtained from the City of Auburn, Indiana (the City ) and other sources which are deemed reliable. No representation or warranty is made, however, as to the accuracy or completeness of such information. This Official Statement is submitted in connection with the sale of securities, as referred to herein, and may not be reproduced or be used, in whole or in part, for any other purpose. This Official Statement speaks only as of its date. The information, estimates and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of the Bonds shall, under any circumstances, create any implication there has been no material change in the affairs of the City since the date of this Official Statement. No dealer, broker, salesman or other person has been authorized by the City or the Underwriter to give any information or to make any representations other than those contained in this Official Statement in connection with the offering of the Bonds, and, if given or made, such information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The 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 Bonds shall, under any circumstances, create any implication that there have been no changes in the information presented herein since the date hereof. Issue Price Determination: As set forth in Appendix G to this Preliminary Official Statement, the winning bidder agrees by submission of its bid to assist the City in establishing the issue price of the Bonds under the terms outlined in Appendix G and shall execute and deliver to the City at closing an issue price certificate, together with the supporting pricing wires or equivalent communications, with such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder, the City and bond counsel. Provided the winning bidder is purchasing the Bonds as an Underwriter (as defined in Appendix G) and is not purchasing the Bonds with the intent to hold the Bonds for its own account, then the City and the winning bidder shall agree to the process by which issue price will be established on the date of sale of the Bonds in the event that the Competitive Sale Requirements (as defined in Appendix G) are not met. All interested bidders should read Appendix G regarding the City s requirement for the winning bidder to establish the issue price of the Bonds within the meaning of the Code. Upon issuance, the Bonds will not be registered by the City under the Securities Act of 1933, as amended, or any state securities law and will not be listed on any stock or securities exchange. The City has not applied to the Securities Exchange Commission or any other federal or state authority for review of the adequacy of disclosures made in this Official Statement. REFERENCES TO WEB SITE ADDRESSES PRESENTED HEREIN ARE FOR INFORMATIONAL PURPOSES ONLY AND MAY BE IN THE FORM OF A HYPERLINK SOLELY FOR THE READER'S CONVENIENCE. UNLESS SPECIFIED OTHERWISE, SUCH WEB SITES AND THE INFORMATION OR LINKS CONTAINED THEREIN ARE NOT INCORPORATED INTO, AND ARE NOT PART OF, THIS OFFICIAL STATEMENT FOR THE PURPOSES OF, AND AS THAT TERM IS DEFINED IN, SEC RULE 15C

3 CITY OF AUBURN, INDIANA Mayor The Honorable Norman E. Yoder Common Council Mr. Wayne Madden, District #1 Mr. Kevin Webb, District #2 Mr. Matthew Kruse, District #3 Mr. Mike Watson, District #4 Mr. Michael Walter, District #5 Mr. Jim Finchum, At-Large Mr. Denny Ketzenberger, At-Large Clerk-Treasurer Ms. Patricia M. Miller City Attorney Mefford, Weber and Blythe, PC Auburn, Indiana Municipal Advisor Financial Solutions Group, Inc. (dba FSG Corp.) Plainfield, Indiana Bond Counsel Ice Miller LLP Indianapolis, Indiana -2-

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5 CITY OF AUBURN, INDIANA $3,330,000 Waterworks Revenue Bonds of 2018 T A B L E O F C O N T E N T S SUMMARY STATEMENT... 6 AMENDED OFFICIAL NOTICE OF INTENT TO SELL BONDS OFFICIAL STATEMENT INTRODUCTORY STATEMENT DESCRIPTION OF THE BONDS PURPOSE OF THE BOND ISSUE ESTIMATED SOURCES AND USES OF FUNDS SECURITY AND SOURCES OF PAYMENT FOR THE BONDS FLOW OF FUNDS RATE REGULATION RATES AND CHARGES ISSUANCE OF ADDITIONAL REVENUE BONDS DEFEASANCE ACCOUNTS AND REPORTS INVESTMENT OF FUNDS RIGHTS AND REMEDIES OF REVENUE BONDHOLDERS MISCELLANEOUS ORDINANCE COVENANTS LITIGATION LEGAL OPINIONS AND ENFORCEABILITY OF REMEDIES RATING TAX MATTERS ORIGINAL ISSUE DISCOUNT AMORTIZABLE BOND PREMIUM CONTINUING DISCLOSURE UNDERTAKING UNDERWRITING CONCLUDING STATEMENT

6 CITY OF AUBURN, INDIANA $3,330,000 Waterworks Revenue Bonds of 2018 T A B L E O F C O N T E N T S (Continued) APPENDIX A - RATE CONSULTANT S REPORT... A-1 APPENDIX B - DESCRIPTION OF THE WATERWORKS UTILITY, THE CITY AND THE COUNTY... B-1 APPENDIX C - OUTSTANDING DEBT AND TAXATION... C-1 APPENDIX D - ORDINANCE NO D-1 APPENDIX E - CONTINUING DISCLOSURE UNDERTAKING... E-1 APPENDIX F - FORM OF BOND COUNSEL OPINION... F-1 APPENDIX G - ISSUE PRICE DETERMINATION... G-1 APPENDIX H - BID FORM (OPTIONAL)... H-1-5-

7 SUMMARY STATEMENT CITY OF AUBURN, INDIANA $3,330,000 Waterworks Revenue Bonds of 2018 (This Summary Statement is not intended to be complete and is qualified by the information contained in the entire Official Statement. A PROSPECTIVE PURCHASER SHOULD READ THE COMPLETE OFFICIAL STATEMENT, INCLUDING THE APPENDICES.) Issuer... Securities Offered... Bonds Presently Outstanding... Security... Rating... Closing Date... Interest Payment Dates... City of Auburn, Indiana (the City ) $3,330,000 Waterworks Revenue Bonds of 2018 (the Bonds ) $143,530 Waterworks Refunding Revenue Bonds of 2010 (the 2010 Bonds ) The Bonds are secured by an irrevocable pledge of and shall constitute a first charge upon all of the Net Revenues (defined as gross revenue of the works after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) derived from the City s Waterworks (the Waterworks ) on parity with the 2010 Bonds. The Bonds will bear the current rating of by Standard & Poor s (S&P). Such rating is not a recommendation to buy, sell or hold the Bonds. There is no assurance that such rating will remain in effect for any given period of time or that such rating will not be lowered or withdrawn entirely by S&P if, in their judgment, circumstances so warrant. Any such downward revision or withdrawal of the rating may have an adverse effect on the market price or marketability of the Bonds. The City anticipates delivery of the Bonds on or about November 15, Interest is payable January 1 and July 1, commencing January 1, Maturity Dates... The Bonds will mature January 1 and July 1, commencing July 1, 2019, in the years and amounts shown on the cover page. -6-

8 Redemption... Other Terms and Conditions... Bank Qualification... Use of Proceeds... Continuing Disclosure... Business and Service Area... The Bonds maturing on or after July 1, 2027 shall be subject to redemption at the option of the City, in whole or in part, upon thirty (30) days written notice to the registered owner or owners of Bond to be redeemed, on any date on or after January 1, 2027, in the order of maturity as determined by the City and by lot within any such maturity or maturities by the Registrar, at face value plus accrued interest to the redemption date. The Bonds may be issued as Term Bonds, subject to mandatory sinking fund redemption, prior to maturity. The Bonds will be issued in fully registered form, in $5,000 denominations, or integral multiples thereof, and shall be numbered consecutively from R-1 upward. The City has designated the Bonds as qualified taxexempt obligations for the purposes of Paragraph (3) of Section 265 (b) of the Internal Revenue Code of 1986 as amended, relating to the disallowance of 100% of the deduction for interest expense allocable to tax-exempt obligations. The Bonds are being issued for the purpose of providing funds, along with cash on hand, for the costs of certain additions, extensions and improvements to the municipal waterworks, funding a debt service reserve for the Bonds and paying the cost of issuance of the Bonds. The City will execute and deliver a Continuing Disclosure Undertaking on the date of issuance of the Bonds, pursuant to which the City will covenant to provide continuing disclosure of certain information (See CONTINUING DISCLOSURE herein). The City owns and operates the Waterworks, which serves approximately 5,177 customers in and around the City. The Waterworks presently has a water distribution system primarily consisting of two well fields, two water-treatment facilities (South Plant 4.4 MGD and North Plant 4.0 MGD) and a distribution system comprised of approximately 103 miles of water main, ranging in size from 4-inch to 16-inch in diameter. The City also owns and operates the local municipal wastewater and electric utilities -7-

9 Waterworks Rates... The Common Council promulgates water rates. Rates are subject to statutory tests for reasonableness by the Indiana Regulatory Commission (the IURC ). Rates currently in effect were approved on April 18, 2018 by the IURC and approved on June 5, 2018 by the City of Auburn Common Council. Financial Information City of Auburn Waterworks FINANCIAL INFORMATION Pro Forma Net Revenue Available for Debt Service (Estimated 2019)... $ 3,106,960 Estimated Debt Service Requirement (Proposed) - Average Annual Requirement ( )... $ 319,005 - Maximum Annual Requirement (1/1/2019)... $ 323,720 - Coverage Based on Average Annual Requirement Times Coverage Based on Maximum Annual Requirement Times

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11 AMENDED OFFICIAL NOTICE OF INTENT TO SELL BONDS Upon not less than twenty-four (24) hours notice given by telephone by the undersigned Clerk-Treasurer, the City of Auburn, Indiana ( City ) will receive and consider bids for the purchase of the bonds described below. Any person interested in submitting a bid for the bonds must furnish in writing to the undersigned Clerk-Treasurer of the City, c/o Financial Solutions Group, Inc., 2680 East Main Street, Suite 223, Plainfield, Indiana 46168, (317) or via to greg@fsgcorp.com, on or before 11:00 a.m. (EDST) on August 22, 2018, the person s name, address, and telephone number. The persons may also furnish a telex number or an address. Bids may also be submitted electronically via PARITY in accordance with this notice. To the extent any instructions or directions set forth in PARITY conflict with this notice, the terms of this notice shall control. For further information about PARITY, potential bidders may contact the City s municipal advisor, Financial Solutions Group, Inc., at (317) or PARITY at (212) The undersigned Clerk-Treasurer will notify (or cause to be notified) each person so registered of the date and time bids will be received not less than twenty-four (24) hours before the date and time of sale. The notification shall be made by telephone at the number furnished by such person and also by telex or telecopy or if a telex or telecopy number or address has been received. The sale is expected to take place on or about August 23, At the time designated for the sale, the Clerk-Treasurer will receive and consider bids for the purchase of the bonds of the City designated as Waterworks Revenue Bonds of 2018 in the aggregate amount of $3,330,000. Bidders may bid a discount not to exceed 1% of the par value of the bonds. The bonds will bear interest at a rate or rates not to exceed 6% per annum (the exact interest rate or rates will be determined by bidding). Interest will be payable semiannually on January 1 and July 1 of each year beginning on January 1, Interest will be calculated on a 360-day year consisting of twelve 30-day months. Said bonds will be dated as of the date of delivery of the bonds, will be in the denominations of $5,000 or integral multiples thereof and will mature semiannually on January 1 and July 1 on the dates and in the amounts as follows: Date Amount Date Amount 07/01/19 $110,000 07/01/25 $120,000 01/01/20 110,000 01/01/26 130,000 07/01/20 110,000 07/01/26 130,000 01/01/21 110,000 01/01/27 130,000 07/01/21 120,000 07/07/27 130,000 01/01/22 110,000 01/01/28 140,000 07/01/22 120,000 07/01/28 140,000 01/01/23 120,000 01/01/29 140,000 07/01/23 120,000 07/01/29 140,000 01/01/24 120,000 01/01/30 140,000 07/01/24 130,000 07/01/30 140,000 01/01/25 120,000 01/01/31 150,000 07/01/31 150,000 01/01/32 150,

12 All or a portion of the bonds may be issued as one or more term bonds, upon election of the successful bidder. Such term bonds shall have a stated maturity or maturities of January 1 or July 1, on the dates as determined by the successful bidder through the final maturity as described above for the bonds. The term bonds shall be subject to mandatory sinking fund redemption and final payment(s) at maturity at 100% of the principal amount thereof, plus accrued interest to the redemption date, on dates consistent with the above schedule. The bonds of this issue maturing on or after July 1, 2027 are redeemable at the option of the City on January 1, 2027, or any date thereafter, on thirty (30) days notice, in whole or in part, in the order of maturity determined by the City and by lot within a maturity, at face value, with no premium, plus in each case accrued interest to the date fixed for redemption. Principal is payable at the office of a registrar and paying agent to be designated by the City. Interest shall be paid by check mailed to the registered owners or by wire transfer to depositories. The bonds will be issued in fully registered form. Each bid must be for all of the bonds and must state the rate or rates of interest in multiples of 1/8 or 1/100 of 1%. Any bids specifying two or more interest rates shall also specify the amount and maturities of the bonds bearing each rate, but all bonds maturing on the same date shall bear the same single interest rate. The rate on any maturity shall be equal to or greater than the rate on the immediately preceding maturity. The award will be made to the best bidder complying with the terms of sale and offering the lowest net interest cost to the City, to be determined by computing the total interest on all of the bonds to their maturities and adding thereto the discount bid, if any, and deducting therefrom the premium bid, if any. Although not a term of sale, it is requested that each bid show the net dollar interest cost to final maturity and the net effective average interest rate on the entire issue. No conditional bid or bids for less than 99% of the par value of the bonds will be considered. The right is reserved to reject any and all bids. In the event no satisfactory bids are received at the time of the sale, the sale will be continued from day to day thereafter, without further advertisement for a period of thirty (30) days during which time no bid which provides a higher net interest cost to the City than the best bid received at the time of the advertised sale will be considered. Each bid not submitted via PARITY must be on a customary bid form which shall be enclosed in a sealed envelope addressed to the undersigned Clerk-Treasurer and marked Bid for City of Auburn Waterworks Revenue Bonds of The winning bidder will be notified and instructed to submit a good faith deposit which may consist of either a certified or cashier s check or a wire transfer in the amount of $33,300 ( Deposit ). If a check is submitted, it shall be drawn on a bank or trust company which is insured by the Federal Deposit Insurance Corporation and shall be submitted to the City (or shall wire transfer such amount as instructed by the City) not later than 3:30 p.m. (Auburn time) on the next business day after the date of the award. In either case, the Deposit shall be payable to the City of Auburn, and shall be held as a guaranty of the performance of the bid. No interest on the Deposit will accrue to the successful bidder. In the event the successful bidder fails to honor its accepted bid, the Deposit will be retained by the City. The successful bidder will be required to make payment for such bonds in Federal Reserve funds or other immediately available funds and accept delivery of the bonds within five days after being notified that the bonds are ready for delivery, at such bank in the City of Indianapolis, Indiana, or the City, as the purchaser shall designate, or at such other -11-

13 location which may be mutually agreed to by the City and such bidder. It is anticipated that the bonds will be ready for delivery within thirty days after the date of the sale and if not ready for delivery within forty-five days after the sale date, the purchaser shall be entitled to rescind the sale and obtain the return of the Deposit. The successful bidder is expected to apply to a securities depository registered with the SEC to make such bonds depository-eligible. The opinion of Ice Miller LLP, Bond Counsel of Indianapolis, Indiana, approving the legality of said bonds, together with a transcript of the bond proceedings, and closing certificates in the usual form showing no litigation, will be furnished to the successful bidder at the expense of the City. The bonds may be issued, at the option of the successful bidder, by means of a bookentry-only system with no physical distribution of bond certificates made to the public. In this case, one bond certificate for each maturity will be issued to and registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ), and immobilized in its custody. The successful bidder, as a condition of delivery of the bonds, shall be required to deposit the bond certificates with DTC, registered in the name of Cede & Co., nominee of DTC. It is anticipated that CUSIP identification numbers will be printed on the bonds, but neither the failure to print such numbers on any bond nor any error with respect thereto shall constitute cause for failure or refusal by the successful bidder therefor to accept delivery of and pay for the bonds in accordance with the terms of its bid. No CUSIP identification number shall be deemed to be a part of any bond or a part of the contract evidenced thereby and no liability shall hereafter attach to the City or any of its officers or agents because of or on account of such numbers. All expenses in relation to the printing of CUSIP identification numbers on the bonds shall be paid for by the City; provided, however, that the CUSIP Service Bureau charge for the assignment of said numbers shall be the responsibility of and shall be paid for by the successful bidder. The successful bidder will also be responsible for any other fees or expenses it incurs in connection with the resale of the bonds. The bonds are being issued under the provisions of Indiana Code for the purpose of providing funds to be applied on the costs of improvements to the municipal waterworks of the City. The bonds will be payable solely out of a special fund from the net revenues of the waterworks of the City. In the opinion of bond counsel, under the federal statutes, decisions, regulations and rulings existing on this date, the interest on the bonds is excludable from gross income for purposes of federal income taxation. The City has outstanding certain Waterworks Refunding Revenue Bonds of 2010, dated December 7, 2010 ( 2010 Bonds ), now outstanding in the amount of $284,380 and maturing semiannually over a period ending January 1, The bonds now being offered will rank on a parity with the 2010 Bonds. The City has reserved the right to issue additional bonds ranking on a parity with the bonds now being offered, upon certain terms and conditions specifically set forth in the ordinance authorizing issuance of the bonds. The bonds are subject to the Internal Revenue Code of 1986 as in effect on the date of their issuance ( Code ) which imposes limitations on the issuance of obligations like the bonds under federal tax law. The City has covenanted to comply with those limitations to the extent required to preserve the exclusion of interest on the bonds from gross income for federal income tax purposes. The City has designated the bonds for purposes of Section 265(b) of the Code to -12-

14 qualify for the $10,000,000 annual exception from the 100% disallowance, in the case of banks and other financial institutions, of the deduction for interest expense allocable to tax-exempt obligations. The City has prepared an Official Statement relating to the bonds which it deems to be nearly final. A copy of the nearly final Official Statement ( Preliminary Official Statement ) may be obtained from the City s Municipal Advisor, Financial Solutions Group, Inc., 2680 East Main Street, Suite 223, Plainfield, Indiana All provisions of the bid form and Preliminary Official Statement are incorporated herein. As set forth in the Preliminary Official Statement, the winning bidder agrees by submission of its bid to assist the City in establishing the issue price of the bonds under the terms outlined therein and shall execute and deliver to the City at closing an issue price certificate, together with the supporting pricing wires or equivalent communications, with such modifications as may be appropriate or necessary, in the reasonable judgment of the winning bidder, the City and Bond Counsel. Within seven (7) business days of the sale, the City will provide the successful bidder with up to 25 copies of the final Official Statement at the City s expense and such additional copies as may be requested, within five (5) business days of the sale, by the successful bidder at the expense of the successful bidder. Inquiries concerning matters contained in the Preliminary Official Statement must be made and pricing and other information necessary to complete the final Official Statement must be submitted by the successful bidder within two (2) business days following the sale to be included in the final Official Statement. In the ordinance approving the bonds and pursuant to a Continuing Disclosure Undertaking to be delivered by the City upon delivery of the Bonds, the City will covenant to comply with Securities and Exchange Commission Rule 15c2-12, as in effect of the date of delivery of the bonds ( Rule 15c2-12 ). The City will covenant to provide the most recent annual financial information and operating data relating to the City as described in the Preliminary Official Statement prepared in connection with the sale of the bonds. Further, with respect to the bonds, the City will undertake to provide notice of those material events required by Rule 15c2-12. Dated this 8th day of August, /s/ Patricia M. Miller, Clerk-Treasurer, City of Auburn -13-

15 OFFICIAL STATEMENT CITY OF AUBURN, INDIANA $3,330,000 Waterworks Revenue Bonds of 2018 INTRODUCTORY STATEMENT The purpose of this Official Statement, including the Cover Page, the Summary Statement, Official Notice of Intent to Sell Bonds and the Appendices, is to provide information relating to the Waterworks Revenue Bonds of 2018 (the Bonds ) to be issued by the City of Auburn, Indiana (the City ). All financial and other information presented in this Official Statement has been provided by the City from its records, except for information expressly attributed to other sources. The presentation of information concerning the City and its utilities, including financial statements, rate schedules and tax tables, is intended to show recent historic information and is not intended to indicate or project future or continuing trends in the financial position or other affairs of the City. No representation is made or implied hereby that any past experience, as might be shown by the financial and other information, will necessarily continue in the future. References to provisions of Indiana law or of the Indiana Constitution are references to current provisions, which may be amended, repealed or supplemented. General DESCRIPTION OF THE BONDS The Bonds are being issued pursuant to Ordinance No , adopted by the Common Council of the City on September 5, 2017 (the Ordinance ), for the purpose of providing funds for the costs of certain additions, extensions and improvements to the municipal waterworks, funding a debt service reserve for the Bonds and paying the cost of issuance of the Bonds. The Bonds shall be designated as the Waterworks Revenue Bonds of 2018, in the aggregate principal amount of Three Million Three Hundred Thirty Thousand Dollars ($3,330,000). The principal of, redemption premium, if any, and any interest on the Bonds shall be payable solely from the Net Revenues of the Waterworks, as defined herein, on parity with the City s outstanding Waterworks Refunding Revenue Bonds of 2010 (the 2010 Bonds ). The Bonds will be issued in fully registered form, in $5,000 denominations, or integral multiples thereof, not exceeding the aggregate principal amount of such Bonds maturing in any one year. -14-

16 Interest on the Bonds shall be calculated on the basis of twelve (12) thirty (30)-day months for a three hundred and sixty (360)-day year and shall be payable, semi-annually, on January 1 and July 1, commencing January 1, The principal of the Bonds shall mature serially and semi-annually or be subject to mandatory sinking fund redemption, if term bonds are issued, on January 1 and July 1 each year, in the amounts set forth on the Cover Page of this Official Statement. When issued, the Bonds will be registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ). Purchases of beneficial interests in the Bonds will be made in book-entry-only form. Purchasers of beneficial interests in the Bonds (the Beneficial Owners ) will not receive physical delivery of certificates representing their interests in the Bonds. For so long as the Bonds are held in book-entry-only form, payments of principal of and interest on the Bonds will be paid by the Paying Agent only to DTC or its nominee. Neither the City nor the Paying Agent will have any responsibility for a Beneficial Owner s receipt from DTC or its nominee, or from any Direct Participant (as hereinafter defined) or Indirect Participant (as hereinafter defined), of any payments of principal of or interest on any Bonds (See Book-Entry-Only System in this Official Statement). Redemption of Bonds Optional Redemption. The Bonds maturing on or after July 1, 2027 shall be subject to redemption at the option of the City, in whole or in part, upon thirty (30) days written notice to the registered owner or owners of Bond to be redeemed, on any date on or after January 1, 2027, in the order of maturity as determined by the City and by lot within any such maturity or maturities by the Registrar, at 100% of face value plus accrued interest to the redemption date. The Term Bonds are also subject to mandatory sinking fund redemption at a redemption price equal to 100% of the principal amount thereof, plus accrued interest to the redemption date, but without premium, in accordance with the following schedule: Date * * Final Maturity* Amount If any Bond is issued as a Term Bond, the Registrar and Paying Agent shall credit against the mandatory sinking fund requirement for the Bonds maturing as Term Bonds, and corresponding mandatory redemption obligation, in the order determined by the City, any Bonds maturing as Term Bonds which have previously been redeemed (otherwise and as a result of a previous mandatory redemption requirement) or delivered to the Registrar and Paying Agent for cancellation or purchased for cancellation by the Registrar and Paying Agent and not theretofore applied as a credit against any redemption obligation. Each Bond maturing as a Term Bond so delivered or cancelled shall be credited by the Registrar and Paying Agent at one hundred percent (100%) of the principal amount thereof against the mandatory sinking fund obligation on such mandatory sinking fund date, and any excess of such amount shall be credited on future redemption obligations, and the principal amount of the Bonds to be redeemed by operation of the mandatory sinking fund requirement shall be accordingly -15-

17 reduced; provided, however, the Registrar and Paying Agent shall credit only such Bonds maturing as term bonds to the extent received on or before forty-five (45) days preceding the applicable mandatory redemption date. Selection of Bonds to be Redeemed. Each Five Thousand Dollars ($5,000) principal amount shall be considered a separate Bond for purposes of optional and mandatory redemption. If less than an entire maturity is called for redemption, the Bonds to be called shall be selected, by lot, by the Registrar. If some Bonds are to be redeemed by optional redemption and mandatory sinking fund redemption on the same date, the Registrar shall select, by lot, the Bonds for optional redemption before selecting the Bonds, by lot, for the mandatory sinking fund redemption. Notice of Redemption: Payment of Redeemed Bonds. Notice of such redemption shall be mailed by the Registrar and Paying Agent by first-class mail not less than thirty (30) days prior to the date fixed for redemption to each of the registered owners of the Bonds called for redemption (unless waived by any such registered owner) at the address shown on the registration books of the Registrar and Paying Agent or at such other address as is furnished in writing by such registered owner to the Registrar; provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any Bonds shall not affect the validity of the proceedings for the redemption of any other Bonds. The notice shall specify the date and place of redemption and sufficient identification of the Bonds called for redemption. The place of redemption may be at the principal corporate trust office of the Registrar and Paying Agent or as otherwise determined by the City. Interest on the Bonds so called for redemption shall cease on the redemption date fixed in such notice, if sufficient funds are available at the place of redemption to pay the redemption price on the date so named, and thereafter, such bonds shall no longer be protected by the Ordinance and shall not be deemed to be outstanding and the holders thereof shall have the right only to receive the redemption price. For so long as the Bonds are held in book-entry-only form, the Registrar will send notices of redemption of the Bonds only to DTC or its nominee, as the registered owner of the Bonds, in accordance with the preceding paragraphs. Neither the City nor the Registrar will have any responsibility for any Beneficial Owners receipt from DTC or its nominee, or from any Direct Participant or Indirect Participant, of any notices of redemption (See Book-Entry-Only System below). Book-Entry-Only System DTC will act as securities depository for the Bonds. The Bonds will be issued as fullyregistered 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 Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world s largest 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 -16-

18 and provides asset servicing for over 2.2 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 posttrade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation, (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. 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 Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bond ( 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 Bonds 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 the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds 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 Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds 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. Beneficial Owners of the Bonds -17-

19 may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, defaults, and proposed amendments to the Bond Ordinance. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the Record Date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Principal, premium and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the City or the Paying Agent on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Paying Agent or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the 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. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City or the Registrar. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. The information in this sub caption concerning DTC and DTC s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. -18-

20 Discontinuation of Book-Entry System In the event that the book-entry system for the Bonds is discontinued, the Registrar would provide for the registration of the Bonds in the name of the Beneficial Owners thereof. The City and the Registrar would treat the person in whose name any Bond is registered as the absolute owner of such Bond for the purposes of making and receiving payment of the principal thereof and interest thereon, and for all other purposes, except as otherwise described under the caption, CONTINUING DISCLOSURE, and neither the City nor the Registrar would be bound by any notice or knowledge to the contrary. Each Bond would be transferable or exchangeable only upon the presentation and surrender thereof at the corporate trust office of the Registrar, duly endorsed for transfer or exchange, or accompanied by a written assignment duly executed by the owner or its authorized representative in form satisfactory to the Registrar. Upon due presentation of any Bonds for transfer or exchange, the Registrar would authenticate and deliver in exchange therefore, within a reasonable time after such presentation, a new Bond or Bonds, registered in the name of the transferee or transferees (in the case of a transfer), or the owner (in the case of an exchange), in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented. The City or the Registrar would require the owner of any Bonds to pay a sum sufficient to cover any tax, fee or other governmental charge required to be paid in connection with the transfer or exchange of such Bonds. PURPOSE OF THE BOND ISSUE The Bonds are being issued for the purpose of providing funds for the costs of certain additions, extensions and improvements to the municipal waterworks, funding a debt service reserve for the Bonds and paying the cost of issuance of the Bonds. See EXHIBIT A of the Bond Ordinance in APPENDIX D for a full description of the project. ESTIMATED SOURCES AND USES OF FUNDS The City discloses the following estimated sources and uses of funds, excluding accrued interest: Estimated Sources of Funds Par Amount of Bonds $3,330, Reoffering Premium 0.00 Current Debt Service Reserve 199, Total Estimated Sources of Funds $3,529,

21 Estimated Uses of Funds Construction Fund 50% of Meter Project $ 1,231, Construction Fund Water Line 1,424, Construction Fund Tank Project 330, Debt Service Reserve Fund (Combined Max) 323, Cost of Issuance and Rounding 186, Underwriter s Discount (1.0%) 33, Total Estimated Uses of Funds $3,529, SECURITY AND SOURCES OF PAYMENT FOR THE BONDS The Bonds, when fully paid for and delivered to the purchaser or purchasers thereof, as to principal, premium, if any, and interest, together with the 2010 Bonds and together with any bonds hereafter issued on parity therewith (to be referred to hereinafter collectively as the Bonds, unless the context otherwise requires), shall be valid and binding special revenue obligations of the City, payable solely from and secured by an irrevocable pledge of and constituting a first charge upon all of the Net Revenues (defined as the gross revenues of the Waterworks after deduction of current expenses for operation, repair and maintenance) of the Waterworks. The City shall not be obligated to pay the Bonds or the premium, if any, or the interest thereon except from the Net Revenues of the Waterworks and the Bonds shall not constitute an indebtedness of the City within the meaning of the provisions and limitations of the Constitution of the State of Indiana. The City has reserved the right to issue additional bonds ranking on parity with the Bonds now being offered, upon certain terms and conditions specifically set forth in the Ordinance authorizing issuance of the Bonds. FLOW OF FUNDS Application of Revenue. The City has covenanted that the Revenue Fund, Operation and Maintenance Fund, Improvement Fund and that the Sinking Fund, with its accounts, will be established and all revenue of the Waterworks will be segregated and distributed as follows: (a) (b) Revenue Fund. There shall be deposited in the Revenue Fund, upon receipt, all income and revenue derived from the operation of the Waterworks and from the collection of water rates and charges of the Waterworks. This fund shall be maintained separate and apart from all other accounts of the City. Of this revenue, the proper and reasonable expenses of operation, repair and maintenance of the works shall be paid, the principal and interest of all bonds and fiscal agency charges of registrars or paying agents shall be paid, the reserve shall be funded and the costs of replacements, extensions, additions and improvements to the Waterworks shall be paid. Operation and Maintenance Fund. The Ordinance continues a fund designated as the Operation and Maintenance Fund (the O&M Fund ). On the last day of each calendar month, revenue of the Waterworks shall thereafter be transferred from the Revenue Fund to the O&M Fund. The balance maintained in this Fund shall be sufficient to pay the expenses of operation, repair and maintenance for the then next succeeding two -20-

22 calendar months. The moneys credited to this Fund shall be used for the payment of the reasonable and proper operation, repair and maintenance expenses of the Waterworks on a day-to-day basis. Any monies in said Fund may be transferred to the Waterworks Sinking Fund if necessary to prevent a default in the payment of principal of or interest on the outstanding bonds of the Waterworks. (c) Waterworks Sinking Fund. The Ordinance continues a fund for the payment of the principal of and interest on revenue bonds which, by their terms, are payable from the Net Revenues of the Waterworks and the payment of any fiscal agency charges in connection with the payment of bonds, which fund shall be designated the Waterworks Sinking Fund (herein, Waterworks Sinking Fund or Sinking Fund ). There shall be set aside and deposited in the Sinking Fund, as available, and as hereinafter provided, a sufficient amount of the Net Revenues of the Waterworks to meet the requirements of the Bond and Interest Account and the Reserve Account in the Sinking Fund. Such payments shall continue until the balances in the Bond and Interest Account and the Reserve Account equal the principal of and interest on all of the then outstanding bonds of the Waterworks to the final maturity and provide for payment of all fiscal agency charges. (1) Bond and Interest Account. There shall be credited on the last day of each calendar month from the Revenue Fund to the Bond and Interest Account, an amount of the Net Revenues equal to at least one-sixth (1/6) of the interest on all then outstanding bonds payable on the then next succeeding interest payment date and (ii) at least one-sixth (1/6) of the principal on all then outstanding bonds payable on the then next succeeding principal payment date, until the amount of interest and principal payable on the then next succeeding interest and principal payment date shall have been so credited. There shall similarly be credited to the account any amount necessary to pay the bank fiscal agency charges for paying principal and interest on outstanding bonds as the same become payable. The City shall, from the sums deposited in the Sinking Fund and credited to the Bond and Interest Account, remit promptly to the registered owner or to the bank fiscal agency sufficient moneys to pay the interest and principal on the due dates thereof together with the amount of bank fiscal agency charges. (2) Reserve Account. The Ordinance continues, within the Sinking Fund, the Reserve Account ( Reserve Account ). On the date of delivery of the Bonds, funds on hand of the Waterworks, Bond proceeds (or a combination thereof) may be deposited into the Reserve Account. The initial deposit (or the balance maintained in the Reserve Account) shall equal, but not exceed, the least of (i) maximum annual debt service on the Bonds and the 2010 Bonds, (ii) 125% of average annual debt service on the Bonds and the 2010 Bonds or (iii) 10% of the proceeds of the Bonds and the 2010 Bonds ( Reserve Requirement ). If the initial deposit into the Reserve Account does not equal the Reserve Requirement, or if no deposit is made, an amount of Net Revenues shall be deposited to the Reserve Account on the last day of each calendar month until the balance therein equals the Reserve Requirement. The monthly deposits shall be equal in amount and sufficient to accumulate the Reserve Requirement -21-

23 within five years of the date of delivery of the Bonds. The City anticipates fully funding the Reserve Requirement on the date of delivery of the Bonds. The Reserve Account may be satisfied with cash, a debt service reserve surety bond or a combination thereof. If such surety bond is purchased, the Mayor and the Clerk-Treasurer are hereby authorized to execute and deliver all agreements with the provider of the surety bond to the extent necessary to comply with the terms of such surety bond and the commitment to issue such surety. Such agreement shall be deemed a part of the Ordinance for all purposes and is incorporated therein by reference. The Reserve Account shall constitute the margin for safety and protection against default in the payment of principal of and interest on the 2010 Bonds and the Bonds, and the moneys in the Reserve Account shall be used to pay current principal and interest on the 2010 Bonds and the Bonds to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. Any deficiency in the balance maintained in the Reserve Account shall be made up from the next available Net Revenues remaining after credits into the Bond and Interest Account. Any moneys in the Reserve Account in excess of the Reserve Requirement shall either be transferred to the Waterworks Improvement Fund or be used for the purchase of outstanding bonds or installments of principal of fully registered outstanding bonds at a price not exceeding par, plus accrued interest and redemption premium, if any. (d) Waterworks Improvement Fund. After meeting the requirements of the O&M Fund and the Sinking Fund, any excess revenue may be transferred or credited from the Revenue Fund to a special fund designated the Waterworks Improvement Fund ( Improvement Fund ), hereby continued, and said Fund shall be used for replacements, additions, improvements or extensions to the Waterworks or any other lawful purpose. Moneys in the Improvement Fund shall be transferred to the Sinking Fund, if necessary, to prevent a default in the payment of principal and interest on the then outstanding bonds, or, if necessary, to eliminate any deficiencies in credits to or minimum balance in the Reserve Account of the Sinking Fund or may be transferred to the O&M Fund to meet unforeseen contingencies in the operation, repair and maintenance of the Waterworks. RATE REGULATION The Common Council of the City determines rates, based on the recommendation of the Board of Public Works and Safety for water service in the territory served by the Waterworks, subject to the approval of the Indiana Utility Regulatory Commission (the IURC ). The IURC renders its decisions after holding public hearings and adducing the evidence presented at such hearings. The IURC Order is subject to appeal, by unsatisfied parties, to the Indiana Court of Appeals. The IURC also has jurisdiction to approve the issuance of bonds and notes, except refunding bonds. The Bonds and the present water rates were approved by the IURC on April 18, No appeal has been filed and the time period to file such appeal has expired. -22-

24 RATES AND CHARGES The City shall, by ordinance, establish, maintain and collect reasonable and just rates and charges for facilities and services afforded and rendered by the Waterworks which shall, to the extent permitted by law, produce sufficient revenue (at all times) to pay all the legal and other necessary expense incident to the operation of such Waterworks, to include maintenance costs, operating charges, upkeep, repairs, interest charges on bonds or other obligations, to provide a Sinking Fund and debt service reserve for the liquidation of bonds or other evidences of indebtedness, to provide adequate funds to be used as working capital, as well as funds for making extensions, additions, and replacements, and also, for the payment of any taxes that may be assessed against such Waterworks, it being the intent and purpose hereof that such charges shall produce an income sufficient to maintain such Waterworks property in a sound physical and financial condition to render adequate and efficient service. So long as any of the Bonds are outstanding, none of the facilities or services afforded or rendered by said system shall be furnished without a reasonable and just charge being made therefore. The City shall pay like charges for any and all services rendered by said Waterworks to the City, and all such payments shall be deemed to be revenue of the Waterworks. Such rates or charges shall, if necessary, be changed and readjusted (from time to time) so that the revenue therefrom shall always be sufficient to meet the expenses of operation, repair and maintenance, and said requirements of the Sinking Fund. ISSUANCE OF ADDITIONAL REVENUE BONDS Additional Bond Provisions. The City reserves the right to authorize and issue additional bonds payable out of the Net Revenues of its waterworks ranking on a parity with the Bonds for the purpose of financing the cost of future additions, extensions and improvements to its waterworks, or to refund obligations, subject to the following conditions: (a) The interest on and principal of all bonds or other obligations payable from the Net Revenues of the waterworks shall have been paid to date in accordance with the terms thereof, and all credits required to be made into the Sinking Fund and the accounts thereof shall have been made to date. (b) The amount of Net Revenues of the waterworks in the fiscal year immediately preceding the issuance of any such bonds ranking on a parity with the Bonds shall be not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of the then outstanding bonds and the additional parity bonds proposed to be issued; or, prior to the issuance of the parity bonds the water rates and charges shall be increased sufficiently so that said increased rates and charges applied to the previous fiscal year's operations would have produced Net Revenues for said year equal to not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of all bonds payable from the revenues of the waterworks, including the additional parity bonds proposed to be issued. For purposes of this subsection, the records of the waterworks shall be analyzed and all showings prepared by a certified public accountant employed by the City for that purpose. -23-

25 (c) The principal, or mandatory sinking fund redemption dates, of the additional parity bonds shall be payable semiannually on January 1 and July 1 and the interest on said additional parity bonds shall be payable semiannually on January 1 and July 1 in the years in which such principal and interest are payable. DEFEASANCE If, when the Bonds or a portion thereof shall have become due and payable in accordance with their terms or shall have been duly called for redemption or irrevocable instructions to call the Bonds or a portion thereof for redemption shall have been given, and the whole amount of the principal and the interest and the premium, if any, so due and payable upon all of the Bonds or a portion thereof then outstanding shall be paid; or (i) sufficient moneys or (ii) direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury, the principal of and the interest on which when due will provide sufficient moneys for such purpose, shall be held in trust for such purpose, and provision shall also be made for paying all fees and expenses for the redemption, then and in that case the Bonds or any designated portion thereof issued hereunder shall no longer be deemed outstanding or entitled to the pledge of the Net Revenues of the City s Waterworks. ACCOUNTS AND REPORTS The City shall keep proper books of records and accounts, separate from all of its other records and accounts, in which complete and correct entries shall be made showing all revenue collected from the Waterworks and deposited in the special accounts continued by the Ordinance and all disbursements made wherefrom and all transactions relating to the Waterworks. Copies of all such statements and reports, together with all audits of the Waterworks made available to the City by the Indiana State Board of Accounts or any successor body authorized by law to audit municipal accounts, shall be kept on file in the office of the Clerk-Treasurer. INVESTMENT OF FUNDS The funds and accounts described above shall be accounted for separate and apart from each other and from all other funds and accounts of the City. All moneys deposited in the funds and accounts shall be deposited, held and secured as public funds in accordance with the Public Depository Laws of the State of Indiana; provided that moneys therein may be invested in obligations in accordance with applicable laws, including particularly Indiana Code, Title 5, Article 13, as amended or supplemented, and in the event of such investment the income wherefrom shall become a part of the funds invested and shall be used only as provided in the Ordinance. RIGHTS AND REMEDIES OF REVENUE BONDHOLDERS The provisions of the Ordinance will constitute a contract by and between the City and the owners of the Bonds, all the terms of which shall be enforceable by any such owner by any and all appropriate proceedings in law or in equity. After the issuance of the Bonds, and so long as any of the principal thereof or interest or premium, if any, thereon remains unpaid, the -24-

26 Ordinance shall not be repealed, amended or modified in any respect which will adversely affect the rights of such owners; nor shall the Council or any other body of the City adopt any law, ordinance or resolution which in any way adversely affects the rights of such owners. Excluding the changes described below in (a) (f), the Common Council is permitted to amend the Ordinance without the consent of the owners of the Bonds, if the City determines, in its discretion, that such amendment would not adversely affect the owners of the Bonds. Subject to the terms and provisions contained in the Ordinance, the owners of not less than sixty-six and two-thirds percent (66-2/3%) in aggregate principal amount of the Bonds issued pursuant to the Ordinance and then outstanding shall have the right, from time to time, to consent to and approve the adoption by the Common Council of such ordinance or ordinances supplemental to the Ordinance as shall be deemed necessary or desirable by the City for the purpose of amending, any particular terms or provisions contained in the Ordinance, or in any supplemental ordinance; provided, however, that nothing contained in the Ordinance shall permit or be construed as permitting except with certain consents of holders of all the affected Bonds: (a) An extension of the maturity of the principal of or interest on, or any mandatory sinking fund redemption date for, any Bond or an advancement of the earliest redemption date on any Bond; or (b) A reduction in the principal amount of any Bond or the redemption premium or the rate of interest thereon; or (c) The creation of a lien upon or a pledge of the Net Revenues ranking prior to the pledge thereof created by the Ordinance; or (d) A preference or priority of any Bond over any other Bond; or (e) A reduction in the aggregate principal amount of the Bonds required for consent to such supplemental ordinance; or (f) A reduction in the Reserve Requirement. MISCELLANEOUS ORDINANCE COVENANTS The City shall, at all times, maintain the Waterworks in good condition and operate the Waterworks in an efficient manner and at a reasonable cost. The City shall acquire and maintain insurance on the insurable parts of the Waterworks of a kind and in an amount such as is customarily carried by private companies engaged in a similar type of business. All insurance shall be placed with responsible insurance companies, qualified to do business under the laws of the State of Indiana. Any insurance proceeds collected shall be used in replacing or repairing the property destroyed or damaged; or, if not used for such purpose, shall be treated and applied as Net Revenues of the Waterworks. So long as any of the Bonds are outstanding, the City shall not mortgage, pledge or otherwise encumber such Waterworks, or any part thereof, nor shall it sell, lease or otherwise -25-

27 dispose of any portion thereof except to replace equipment which may become worn out or obsolete or no longer suitable for use in the Waterworks. Except as provided in Section 20 of the Ordinance, so long as any of the Bonds are outstanding, no additional bonds, bond anticipation notes or other obligations pledging any portion of the revenue of the Waterworks shall be authorized, executed or issued by the City except as shall be made subordinate and junior in all respects to the Bonds, as the case may be, or unless the Bonds, as the case may be, are defeased, redeemed or retired or, as provided in Section 18 of the Ordinance, funds sufficient to affect such redemption are available and set aside for such purpose at the time of issuance of such additional bonds, bond anticipation notes or obligations, and, with respect to the issuance of obligations on parity with the Bonds, coincidentally with the delivery of such additional bonds or other obligations. The provisions of the Ordinance shall constitute a contract by and between the City and the owners of the Bonds, and after the issuance of the Bonds, the Ordinance shall not be repealed or amended in any respect which will adversely affect the rights of the owners of the Bonds, nor shall the Common Council adopt any law, ordinance or resolution which, in any way, adversely affects the rights of such owners so long as any of the Bonds or the interest thereon remains unpaid; provided that the City shall have the right to amend the Ordinance in accordance with Sections 21 and 22 of the Ordinance. The provisions of the Ordinance shall be construed to create a trust in the proceeds of the sale of the Bonds for the uses and purposes set forth in the Ordinance, and the owners of the Bonds shall retain a lien on such proceeds until the same are applied in accordance with the provisions of the Ordinance and the Act. So long as any of the Bonds are outstanding, the provisions of the Ordinance shall also be construed to create a trust in the portion of the Net Revenues directed to be set apart and paid into the Sinking Fund for the uses and purposes of such account as set forth in the Ordinance. The owners of the Bonds shall have all the rights, remedies and privileges provided under Indiana law, in the event of a default in the payment of the principal of or interest on any of the Bonds or in the event of a default in respect to any of the provisions of the Ordinance or the Act. LITIGATION To the knowledge of the City officials and City Attorney, no litigation or administrative action or proceeding is pending or threatened, restraining or enjoining, or seeking to restrain or enjoin, any proceeding or transactions relating to the issuance, sale or delivery of the Bonds or which questions or affects the validity of the Bonds. To the knowledge of the City officials and City Attorney, no litigation or administrative action or proceeding is pending or threatened concerning the issuance, validity and delivery of the Bonds. Certificates to such effect will be delivered at the time of the original delivery of the Bonds. LEGAL OPINIONS AND ENFORCEABILITY OF REMEDIES The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become -26-

28 an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of parties to such transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. The remedies available to the Bondholders upon a default under the Bond Ordinance are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically Title 11 of the United States Code (the federal bankruptcy code), the remedies provided in the Bond Ordinance may not be readily available or may be limited. Under federal and state environmental laws, certain liens may be imposed on property of the City from time to time, but the City has no reason to believe, under existing law, that any such lien would have priority over the lien on the Net Revenues of the waterworks pledged to the payment of the Bonds under the Bond Ordinance. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by the valid exercise of the constitutional powers of the City, the State of Indiana and the United States of America and bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). These exceptions would encompass any exercise of federal, State or local police powers (including the police powers of the City), in a manner consistent with the public health and welfare. Enforceability of the Bond Ordinance in a situation where such enforcement may adversely affect public health and welfare may be subject to these police powers. RATING Standard & Poor s ( S&P) has assigned a rating of to the Bonds. Such a rating reflects only the view of the organization and any such desired explanation of the significance of such rating should be obtained from the rating agency furnishing the same, at the following address: S&P,, Chicago, Illinois Generally, a rating agency bases its rating on information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. TAX MATTERS In the opinion of Ice Miller LLP, Indianapolis, Indiana, Bond Counsel, under federal statutes, decisions, regulations and rulings, interest on the Waterworks Revenue Bonds of 2018 ( Bonds ) is excludable for federal income tax purposes from gross income pursuant to Section 103 of the Internal Revenue Code of 1986, as amended ( Code ). Interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax, although Bond Counsel observes that it is included in adjusted current earnings in calculating corporate alternative minimum taxable income for taxable years that began prior to January 1, Such -27-

29 exclusion is conditioned on continuing compliance by the City of Auburn, Indiana ( City ) with the Tax Covenants (as hereinafter defined). Failure to comply with the Tax Covenants could cause interest on the Bonds to lose the exclusion from gross income for federal income tax purposes retroactive to the date of issue. In the opinion of Ice Miller LLP, under existing laws, regulations, judicial decisions and rulings, interest on the Bonds is exempt from income taxation in the State of Indiana ( State ). The Code imposes certain requirements which must be met subsequent to the issuance of the Bonds as a condition to the exclusion from gross income of interest on the Bonds for federal income tax purposes. The City will covenant not to take any action, within its power and control, nor fail to take any action with respect to the Bonds that would result in the loss of the exclusion from gross income for federal income tax purposes of interest on the Bonds pursuant to Section 103 of the Code (collectively, Tax Covenants ). The Bond Ordinance and certain certificates and agreements to be delivered on the date of delivery of the Bonds establish procedures to permit compliance with the requirements of the Code. It is not an event of default under the Bond Ordinance if interest on the Bonds is not excludable from gross income for federal tax purposes or otherwise pursuant to any provision of the Code which is not in effect on the issue date of the Bonds. IC imposes a franchise tax on certain taxpayers (as defined in IC 6-5.5) which, in general, include all corporations which are transacting the business of a financial institution in Indiana. The franchise tax is measured in part by interest excluded from gross income under Section 103 of the Code minus associated expenses disallowed under Section 265 of the Code. Although Bond Counsel will render an opinion that interest on the Bonds is excluded from federal gross income and exempt from State income tax, the accrual or receipt of interest on the Bonds may otherwise affect a bondholder s federal income tax or state tax liability. The nature and extent of these other tax consequences will depend upon the bondholder s particular tax status and a bondholder s other items of income or deduction. Taxpayers who may be affected by such other tax consequences include, without limitation, financial institutions, certain insurance companies, S corporations, certain foreign corporations, individual recipients of Social Security or railroad retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry the Bonds. Bond Counsel expresses no opinion regarding any other such tax consequences. Prospective purchasers of the Bonds should consult their own tax advisors with regard to the federal and State tax consequences of owning the Bonds other than those consequences set forth in the form of opinion of Bond Counsel. Under existing laws, judicial decisions, regulations and rulings, the Bonds have been designated as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Code relating to the disallowance of the deduction for interest expense allocable to interest on taxexempt obligations acquired by financial institutions. The designation is conditioned on continuing compliance with the Tax Covenants. -28-

30 ORIGINAL ISSUE DISCOUNT The initial public offering price of the Bonds maturing on 1, 20 through and including 1, 20 (collectively, Discount Bonds ) is less than the principal amount payable at maturity. As a result the Discount Bonds will be considered to be issued with original issue discount. The difference between the initial public offering price of the Discount Bonds, as set forth on the cover page of this Official Statement (assuming it is the first price at which a substantial amount of that maturity is sold) (the Issue Price for such maturity), and the amount payable at maturity of the Discount Bonds will be treated as original issue discount. A taxpayer who purchases a Discount Bond in the initial public offering at the Issue Price for such maturity and who holds such Discount Bond to maturity may treat the full amount of original issue discount as interest which is excludable from the gross income of the owner of that Discount Bond for federal income tax purposes and will not, under present federal income tax law, realize taxable capital gain upon payment of the Discount Bond at maturity. The original issue discount on each of the Discount Bonds is treated as accruing daily over the term of such Bond on the basis of the yield to maturity determined on the basis of compounding at the end of each six-month period (or shorter period from the date of the original issue) ending on June 30 and December 31 (with straight line interpolation between compounding dates). Section 1288 of the Code provides, with respect to tax-exempt obligations such as the Discount Bonds, that the amount of original issue discount accruing each period will be added to the owner s tax basis for the Discount Bonds. Such adjusted tax basis will be used to determine taxable gain or loss upon disposition of the Discount Bonds (including sale, redemption or payment at maturity). Owners of Discount Bonds who dispose of Discount Bonds prior to maturity should consult their tax advisors concerning the amount of original issue discount accrued over the period held and the amount of taxable gain or loss upon the sale or other disposition of such Discount Bonds prior to maturity. As described above in Tax Matters, the original issue discount that accrues in each year to an owner of a Discount Bond may result in certain collateral federal income tax consequences. Owners of any Discount Bonds should be aware that the accrual of original issue discount in each year may result in a tax liability from these collateral tax consequences even though the owners of such Discount Bonds will not receive a corresponding cash payment until a later year. Owners who purchase Discount Bonds in the initial public offering but at a price different from the Issue Price for such maturity should consult their own tax advisors with respect to the tax consequences of the ownership of the Discount Bonds. The Code contains certain provisions relating to the accrual of original issue discount in the case of subsequent purchasers of bonds such as the Discount Bonds. Owners who do not purchase Discount Bonds in the initial offering should consult their own tax advisors with respect to the tax consequences of the ownership of the Discount Bonds. -29-

31 Owners of Discount Bonds should consult their own tax advisors with respect to the state and local tax consequences of owning the Discount Bonds. It is possible under the applicable provisions governing the determination of state or local income taxes accrued interest on the Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment until a later year. AMORTIZABLE BOND PREMIUM The initial offering price of the Bonds maturing on 1, 20 through and including 1, 20 (collectively, Premium Bonds ), is greater than the principal amount payable at maturity. As a result, the Premium Bonds will be considered to be issued with amortizable bond premium ( Bond Premium ). An owner who acquires a Premium Bond in the initial public offering of the Bonds will be required to adjust the owner s basis in the Premium Bond downward as a result of the Bond Premium, pursuant to Section 1016(a)(5) of the Code. Such adjusted tax basis will be used to determine taxable gain or loss upon disposition of the Premium Bonds, including sale, redemption or payment at maturity. The amount of amortizable Bond Premium will be computed on the basis of the taxpayer s yield to maturity, with compounding at the end of each accrual period. Rules for determining (i) the amount of amortizable Bond Premium and (ii) the amount amortizable in a particular year are set forth in Section 171(b) of the Code. No income tax deduction for the amount of amortizable Bond Premium will be allowed pursuant to Section 171(a)(2) of the Code, but amortization of Bond Premium may be taken into account as a reduction in the amount of tax-exempt income for purposes of determining other tax consequences of owning Premium Bonds. Owners of the Bonds should consult their tax advisors with respect to the precise determination for federal income tax purposes of the treatment of Bond Premium upon the sale or other disposition of such Premium Bonds and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. Special rules governing the treatment of Bond Premium, which are applicable to dealers in tax-exempt securities are found at Section 75 of the Code. Dealers in tax-exempt securities are urged to consult their tax advisors concerning treatment of Bond Premium. CONTINUING DISCLOSURE UNDERTAKING Pursuant to continuing disclosure requirements promulgated by the Securities and Exchange Commission in SEC Rule 15c2-12, as amended to the date hereof (the Rule ), the City will execute and deliver a Continuing Disclosure Undertaking (the Undertaking ), to be dated as of the date of the closing of the Bonds. Pursuant to the terms of the Undertaking, the City will agree to provide the following information while any of the Bonds are outstanding: Audited Financial Statements. To the MSRB, the report of the Indiana State Board of Accounts ( SBOA ), which may consist of either the Independent Accountant s Report or the Independent Clerk-Treasurer s Report, and the financial statements of the Obligor, as audited or examined by the SBOA, on an annual basis for each fiscal year, together with the opinion of the SBOA and all notes thereto (collectively, the SBOA Report ), by the June 30 immediately following each annual period. Such disclosure of SBOA Report shall first occur by June 30, -30-

32 2019, and shall be made by June 30 of every year thereafter, if the SBOA Report is delivered to the Obligor by June 30 of each annual period. If, however, the Obligor has not received the SBOA Report by such June 30 annual date, the Obligor agrees to (i) post a voluntary notice to the MSRB by June 30 of such annual period that the SBOA Report has not been received, and (ii) post the SBOA Report within 60 days of the Obligor s receipt thereof; and Financial Information in this Official Statement. To the MSRB, no later than June 30 of each year, beginning June 30, 2019, the most recent annual financial information for the Obligor including (i) unaudited financial statements of the Obligor, and (ii) operating data (excluding any demographic information or forecast) of the general type included under the following headings in Appendix A and Appendix B in the Final Official Statement (together, with the SBOA Report, the Annual Information ), provided, however, that the updated Annual Information may be provided in such format as the Obligor deems appropriate: APPENDIX A - STATEMENT OF DEBT SERVICE COVERAGE APPENDIX B - TEN LARGEST WATER CUSTOMERS Reportable Events. Within ten business days, to the MSRB, notice of the following events, if material, with respect to the Bonds (which determination of materiality shall be made by the City): 1. non-payment related defaults; 2. modifications to rights of Bondholders; 3. bond calls; 4. release, substitution or sale of property securing repayment of the Bonds; 5. the consummation of a merger, consolidation, or acquisition, or certain asset sales, involving the obligated person, or entry into or termination of a definitive agreement relating to the foregoing; and 6. appointment of a successor or additional trustee or the change of name of a trustee. Within ten business days, to the MSRB, notice of the following events, regardless of materiality: 1. principal and interest payment delinquencies; 2. unscheduled draws on debt service reserves reflecting financial difficulties; 3. unscheduled draws on credit enhancements reflecting financial difficulties; 4. substitution of credit or liquidity providers, or their failure to perform; 5. defeasances; 6. rating changes; -31-

33 7. adverse tax opinions or other material events affecting the status of the Bonds; the issuance by the IRS of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material events, notices or determinations with respect to the tax status of the securities; 8. tender offers; and 9. bankruptcy, insolvency, receivership or similar event of the obligated person. Failure to Disclose. In a timely manner, to the MSRB, notice of the City failing to provide the Annual Information and Audited Information as described above. The City may, from time to time, amend or modify the Undertaking without the consent of or notice to the owners of the Bonds if either (a)(i) such amendment or modification is 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 the City, or type of business conducted; (ii) the Undertaking, as so amended or modified, would have complied with the requirements of the SEC Rule on the date of execution of the Undertaking, after taking into account any amendments or interpretations of the SEC Rule, as well as any change in circumstances; and (iii) such amendment or modification does not materially impair the interests of the holders of the Bonds, as determined either by (A) nationally recognized bond counsel or (B) an approving vote of the holders of the Bonds pursuant to the terms of the Bond Ordinance at the time of such amendment or modification; or (b) such amendment or modification (including an amendment or modification which rescinds the Undertaking) is permitted by the SEC Rule, then in effect. The City may, at its sole discretion, utilize an agent in connection with the dissemination of any annual financial information required to be provided by the City pursuant to the terms of the Undertaking. The purpose of the Undertaking is to enable the Underwriter to purchase the Bonds by providing for an undertaking by the City in satisfaction of the SEC Rule. The Undertaking is solely for the benefit of the owners of the Bonds and creates no new contractual or other rights for the SEC, underwriters, brokers, dealers, municipal securities dealers, potential customers, other obligated persons or any other third party. The sole remedy against the City for any failure to carry out any provision of the Undertaking shall be for specific performance of the City s disclosure obligations under the Undertaking and not for money damages of any kind or in any amount or any other remedy. The City s failure to honor its covenants under the Undertaking shall not constitute a breach or default of the Bonds, the Bond Ordinance or any other agreement. In order to assist the Underwriter in complying with the Underwriter s obligations pursuant to the Rule, the City represents that in the previous five years it has not fully complied with its previous undertakings including, but not limited to, the following instances: The City filed its 2011 Audit and 2012 Audit more than 60 days after the City received them. The City has not yet received its 2015, 2016 or 2017 Audit. The City makes no representation as to any potential materiality of such prior instances, as materiality is dependent upon individual facts and circumstances. -32-

34 UNDERWRITING The Bonds are being purchased by (the Underwriter ) at a purchase price of $, which is the par amount of the Bonds of $ less the underwriter s discount of $ plus the original issue premium of $. The Notice of Intent to Sell Bonds provides that all of the Bonds will be purchased by the Underwriter if any of such Bonds are purchased. The Underwriter intends to offer the Bonds to the public at the offering prices set forth on the cover page of this Official Statement. The Underwriter may allow concessions to certain dealers (including dealers in a selling group of the Underwriter and other dealers depositing the Bonds into investment trusts), who may reallow concessions to other dealers. After the initial public offering, the public offering price may be varied from time to time by the Underwriter. CONCLUDING STATEMENT The foregoing summaries and statements in this Official Statement do not purport to be complete and are expressly made subject to the exact provisions of the complete documents. For details of all terms and conditions, prospective purchasers are referred to the Ordinance and the Official Notice of Intent to Sell Bonds for details. Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and are not presented as unqualified statements of fact. The information contained herein has been carefully compiled from sources deemed reliable, and to the best knowledge and belief of the City, there are neither untrue statements nor omissions of material fact in the Official Statement that would make the statements and representations therein misleading. Certain supplemental information concerning the financial condition of the City, which is exhibited hereafter, is considered part of this Official Statement. The presentation of historical tax and other financial data exhibited elsewhere herein is intended to show recent trends and conditions. There is no intention to represent, by such data, that such trends will continue in the future or that any pending improvement or diminution of local conditions is indicated thereby. Financial Solutions Group, Inc., has served as Municipal Advisor to the City in connection with the sale of the Bonds. The Municipal Advisor makes no representation as to the completeness or the accuracy of the information set forth in this Official Statement. Inquiries concerning information with respect to the Bonds should be directed to Financial Solutions Group, Inc., Attention: Gregory T. Guerrettaz; Phone: (317) ; greg@fsgcorp.com and carbon copy tina@fsgcorp.com. The City of Auburn has duly authorized the execution of this Official Statement. Date: October 10, 2018 THE CITY OF AUBURN, INDIANA /s/ Patricia M. Miller, Clerk-Treasurer -33-

35 APPENDIX A AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Rate Consultant s Report July 11, 2018 F i n a n c i a l S o l u t i o n s G r o u p, I n c.

36 AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Rate Consultant's Report T A B L E O F C O N T E N T S Page LETTER OF TRANSMITTAL EXHIBIT A - Comparative Water Detail Balance Sheet for Calendar Years 2007 through EXHIBIT B - Comparative Water Income Statement for Calendar Years 2007 through EXHIBIT C - Detail of Expense for the Twelve Months Ended 12/31/2016 and 12/31/ EXHIBIT D - Adjusted Statement of Receipts and Disbursements 7 SCHEDULE D-1 - Detail of Adjustments 8 EXHIBIT E - Waterworks Refunding Revenue Bonds of 2010 Final Debt Service Schedule 9 EXHIBIT F - Waterworks Revenue Bonds of 2018 Estimated Sources & Uses of Funds 10 EXHIBIT G - Waterworks Revenue Bonds of Estimated Tax-Exempt Debt Service 11 EXHIBIT H - Combined Debt Service 12 EXHIBIT I - Statement of Debt Service Coverage 13 EXHIBIT J - Schedule of Present Rates and Charges (Reflects The 43.75% Rate Increase) 14 EXHIBIT K - Schedule of Present Rates and Charges 16 EXHIBIT L - Typical Billing Analysis (5/8-3/4 Inch Meter) 17

37 July 11, 2018 Financial Solutions Group, Inc. The Honorable Norman E. Yoder Mayor, City of Auburn 210 E. 9 th Street P.O. Box 506 Auburn, IN RE: WATER UTILITY RATE CONSULTANT S REPORT 2680 East Main Street Suite 223 Plainfield, IN Phone: Addresses: greg@fsgcorp.com tina@fsgcorp.com Mayor Yoder: Pursuant to your request, we have made a study and analysis of the financial reports, budgets and other data pertaining to Auburn Municipal Water Utility (the Utility ). The results of our analysis are contained in the report (the Report ) attached hereto. The purpose of our Report is to estimate the Utility s cash flow and financial capacity to meet its ongoing revenue requirements for operation, maintenance and debt service, as well as to improve the system and set forth financing. This Report is based on data for the Calendar Years 2007 through In the course of preparing this Report, we have not conducted an audit of any financial data. We have made certain projections of revenues and expenses, which may vary from actual results, because of events and circumstances unknown to us as of the date of this Report. Sincerely, Financial Solutions Group, Inc. Gregory T. Guerrettaz

38 EXHIBIT A AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Comparative Water Detail Balance Sheet for Calendar Years 2007 through 2017 As of As of As of As of As of As of As of As of As of As of As of Assets and Other Debits 12/31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Capital Assets Utility Plant in Service, Original Cost $ 18,117,588 $ 18,324,969 $ 19,136,680 $ 19,313,182 $ 19,313,182 $ 19,328,607 $ 19,337,470 $ 23,489,069 $ 23,516,970 $ 23,666,689 $ 24,014,004 Less: Accumulated Depreciation 3,899,804 4,155,384 4,423,313 4,698,847 4,981,599 5,264,352 5,547,459 5,811,828 6,449,132 6,910,059 7,359,626 Utility Plant - Net $ 14,217,784 $ 14,169,585 $ 14,713,367 $ 14,614,335 $ 14,331,583 $ 14,064,255 $ 13,790,011 $ 17,677,241 $ 17,067,838 $ 16,756,630 $ 16,654,378 Construction in Progress $ 345,185 $ 935,731 $ 149,444 $ 129,631 $ 362,176 $ 2,120,930 $ 2,363,030 $ 31,183 $ 34,037 $ 40,012 $ 52,067 Capital Assets Totals $ 14,562,969 $ 15,105,316 $ 14,862,811 $ 14,743,966 $ 14,693,759 $ 16,185,185 $ 16,153,041 $ 17,708,424 $ 17,101,875 $ 16,796,641 $ 16,706,445 Cash & Equivalents / Receivables Cash - Bond & Interest Sinking Fund $ 8,188 $ 11,211 $ 14,336 $ 34,994 $ 10,619 $ 10,628 $ 3 $ - $ 15 $ 25 $ - Cash - Depreciation 1,419,879 1,068,534 1,307,108 1,378,591 1,348,235 1,343,777 1,274,690 1,023, , , ,607 Cash - Water Meter Deposit 47,573 51,227 48,004 56,042 53,112 53,307 59,239 52,440 58,467 62,272 64,537 Cash - Debt Service Reserve 542, , , , , , , , , , ,670 Cash - Construction Fund 368, , , Cash - O & M Fund 875, , , , , ,200 77, , , ,403 52,487 Petty Cash - Water Customer Accounts Receivable 86,327 96,214 99,465 71,568 84,387 79,894 71,341 68,635 65,576 84,315 88,655 Prepayments (3,940) (8,459) 6,754 6,167 5,881 6,015 5,395 5,499 5,451 5,695 6,206 Inventory 72,833 69,780 65,829 62,143 68, ,141 52,300 78, , , ,694 Transportation Equipment 264, , , , , , , , , , ,652 Cash & Equivalents / Receivables Totals $ 3,682,409 $ 3,014,908 $ 2,909,301 $ 2,247,606 $ 2,212,297 $ 2,229,213 $ 2,012,274 $ 1,802,875 $ 1,694,157 $ 1,534,221 $ 1,260,038 Deferred Debits Unamortized Issuance Costs 2010 Bond $ 73,795 $ 62,375 $ 56,138 $ 87,107 $ 76,219 $ 65,331 $ - $ - $ - $ - $ - Unamortized Discount on Bonds 37,826 33,600 30, Total Deferred Debits $ 111,621 $ 95,975 $ 86,378 $ 87,107 $ 76,219 $ 65,331 $ - $ - $ - $ - $ - ASSETS TOTALS $ 18,356,999 $ 18,216,199 $ 17,858,490 $ 17,078,679 $ 16,982,275 $ 18,479,728 $ 18,165,315 $ 19,511,299 $ 18,796,032 $ 18,330,862 $ 17,966,483-1-

39 EXHIBIT A AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Comparative Water Detail Balance Sheet for Calendar Years 2007 through 2017 (Continued) As of As of As of As of As of As of As of As of As of As of As of Liabilities and Other Credits 12/31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Long-Term Debt * Waterworks Revenue Bonds of 2000 $ 3,405,000 $ 3,165,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - Waterworks Refunding Bonds of ,915,000 1,996,700 1,783,160 1,556,270 1,320,670 1,076, , , ,380 Long-Term Liabilities $ 3,405,000 $ 3,165,000 $ 2,915,000 $ 1,996,700 $ 1,783,160 $ 1,556,270 $ 1,320,670 $ 1,076,030 $ 822,020 $ 558,260 $ 284,380 Current Liabilities Accounts Payable $ 80,569 $ 40,896 $ 27,236 $ 25,693 $ 49,045 $ 49,426 $ 43,791 $ 23,961 Accrued Tax Liability $ 7,630 $ 8,048 $ 8,377 10,199 (222) 9,444 9,372 9,202 9,149 10,122 9,916 Lease Payable - Copier 3,794 1,322 3, Compensated Absences Payable ,082 23,277 24,299 21,922 27,684 33,800 36,624 16,725 Accrued Interest Payable In Lieu of Tax Payable Wages Payable ,247 17,688 21,997 26,782 26,455 28,531 15,482 40,030 Deposits Payable 47,573 51,227 48,003 56,042 53,112 53,307 59,239 52,440 58,467 62,272 64,537 Current Liabilities Totals $ 11,424 $ 9,370 $ 12,171 $ 191,139 $ 134,751 $ 136,283 $ 143,009 $ 164,826 $ 179,372 $ 168,291 $ 155,169 Unamortized Premium Water 2010 Bond $ - $ - $ - $ 87,285 $ 76,375 $ 65,464 $ - $ 54,554 $ 32,733 $ 21,823 $ 10,912 Liabilities Totals $ 3,463,997 $ 3,225,597 $ 2,975,174 $ 2,275,124 $ 1,994,286 $ 1,758,017 $ 1,463,679 $ 1,295,411 $ 1,034,125 $ 748,374 $ 450,461 Fund Equity Proprietary Interest $ 55,356 $ 55,356 $ 55,356 $ 55,356 $ 55,356 $ 55,356 $ 55,356 $ 55,356 $ 55,356 $ 55,356 $ 55,356 Invested in Capital Assets 3,628,260 3,770,281 3,770,281 3,770,280 3,770,280 3,770,280 3,770,280 3,770,280 3,770,280 3,770,280 3,770,280 Retained Earnings 10,943,095 11,197,237 11,091,444 10,977,919 11,162,353 12,896,075 12,876,000 14,390,251 14,390,251 13,936,270 13,756,851 Current Year's Earned Surplus (Loss) 266,291 (32,272) (33,765) (453,982) (179,419) (66,465) Fund Equity Totals $ 14,893,002 $ 14,990,602 $ 14,883,316 $ 14,803,555 $ 14,987,989 $ 16,721,711 $ 16,701,636 $ 18,215,888 $ 17,761,907 $ 17,582,488 $ 17,516,022 LIABILITIES & FUND EQUITY TOTALS $ 18,356,999 $ 18,216,199 $ 17,858,490 $ 17,078,679 $ 16,982,275 $ 18,479,728 $ 18,165,315 $ 19,511,299 $ 18,796,032 $ 18,330,861 $ 17,966,483 * NOTE: Bonds refinanced in

40 EXHIBIT B AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Comparative Water Income Statement for Calendar Years 2007 through 2017 Operating Revenue Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Year Year Year Year Year Year Year Year Year Year Year 12/31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Metered Revenue - Residential $ 1,091,544 $ 1,067,017 $ 1,043,029 $ 1,051,125 $ 1,043,586 $ 1,076,309 $ 1,032,677 $ 1,036,426 $ 1,023,005 $ 1,041,836 $ 1,038,409 Metered Revenue - Commercial 437, , , , , , , , , , ,213 Metered Revenue - Industrial 576, , , , , , , , , , ,874 Metered Revenue - Private Fire Protection 124, , , , , , , , , , ,460 Metered Revenue - Hydrant Usage 3,451 5,196 2,899 5,004 3,376 7,608 4,530 3,769 9,680 6,691 5,430 Interest Income 148,935 45,177 4,127 3,283 2,122 2,274 1,961 1,310 1, Contribution Revenue , ,628 1,806, ,825 1,737, , ,057 Miscellaneous 70,360 81,466 82,999 82,306 85,138 77,891 73,088 81,253 76,039 91, ,187 Total Operating Revenue $ 2,452,739 $ 2,234,488 $ 2,136,135 $ 2,341,821 $ 2,272,395 $ 3,955,452 $ 2,318,330 $ 3,892,173 $ 2,166,237 $ 2,285,587 $ 2,481,036 Operating Expense Personal Services Totals $ 854,279 $ 885,932 $ 892,118 $ 897,271 $ 922,382 $ 937,813 $ 927,653 $ 976,896 $ 982,852 $ 961,039 $ 968,745 Supplies Totals 73,601 58,276 94,473 71,503 76,505 87,099 85,156 83,146 96,967 82,415 96,501 Transmission & Distribution Totals 286, , , , , , , , , , ,201 Depreciation & Amortization Totals 245, , , , , , , , , , ,073 Utility Receipts Tax 32,052 31,012 29,775 28,837 27,051 28,445 27,055 30,478 28,777 28,295 28,648 Salaries & Wages - Elected 30,166 32,883 36,001 33,706 35,054 33,347 35,406 34,501 40,100 40,903 41,324 Purchased Power 223, , , , , , , , , , ,669 Chemicals 16,880 14,200 16,766 17,196 13,252 11,201 13,807 9,708 9,450 9,482 10,406 Contractual Services Totals 58,751 71,274 97, ,470 44,832 70,457 65,069 74,115 69,404 73, ,258 Rentals ,555 7,797 9,683 7,551 5,275 4,892 5,672 Transportation 25,924 30,986 19,637 23,851 30,027 27,295 32,015 33,507 18,998 18,258 20,274 Insurance - Other 31,487 46,487 28,720 29,006 28,158 28,374 26,514 25,946 25,866 26,774 28,845 Contribution in Lieu of Taxes 81,000 81,000 81,000 81,000 81, , , , , , ,000 Bad Debt (12,197) (11,860) (16,604) 204 1,516 (267) 1,392 1,059 (345) Loss on Refinancing , Miscellaneous Expense 32,171 36,452 31,449 54,281 23,522 31,648 42,021 28,850 29,792 51,672 44,784 Total Operating Expense $ 1,979,517 $ 2,071,437 $ 1,992,750 $ 2,121,213 $ 2,019,899 $ 2,167,017 $ 2,292,395 $ 2,275,483 $ 2,603,541 $ 2,447,162 $ 2,539,775 Net Revenue (Expense) $ 473,222 $ 163,051 $ 143,385 $ 220,608 $ 252,496 $ 1,788,435 $ 25,935 $ 1,616,689 $ (437,304) $ (161,574) $ (58,739) -3-

41 EXHIBIT B AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Comparative Water Income Statement for Calendar Years 2007 through 2017 (Continued) Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Calendar Year Year Year Year Year Year Year Year Year Year Year 12/31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/ /31/2017 Other Utility Expenses Interest Expense $ 206,931 $ 195,323 $ 177,150 $ 142,288 $ 68,060 $ 54,715 $ 46,010 $ 47,883 $ 16,678 $ 17,844 $ 7,726 Total Other Utility Expenses $ 206,931 $ 195,323 $ 177,150 $ 142,288 $ 68,060 $ 54,715 $ 46,010 $ 47,883 $ 16,678 $ 17,844 $ 7,726 Net Receipts $ 266,291 $ (32,272) $ (33,765) $ 78,321 $ 184,435 $ 1,733,721 $ (20,075) $ 1,568,806 $ (453,982) $ (179,418) $ (66,465) -4-

42 EXHIBIT C AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Detail of Expense for the Twelve Months Ended 12/31/2016 and 12/31/2017 Expense Salaries & Wages $ 663,556 $ 666,513 Employee Benefits 297, ,232 Personal Services Total $ 961,039 $ 968,745 Materials & Supplies $ 22,177 $ 34,612 Materials & Supplies - Office Supplies 9,342 9,800 Materials & Supplies - Computer Supplies 50,896 52,089 Supplies Total $ 82,415 $ 96,501 Maintenance $ 23,702 $ 26,322 Maintenance - Wells 67,938 32,294 Maintenance - Water Tower 1,366 1,168 Maintenance - Misc. Equipment 7,542 31,940 Maintenance - Hydrants 16,422 16,099 Maintenance - Main Maintenance 61,821 62,805 Maintenance - Service Maintenance 54,096 34,992 Maintenance - Meter Maintenance 39,843 50,581 Transmission & Distribution Total $ 272,729 $ 256,201 Depreciation $ 460,927 $ 464,073 Depreciation & Amortization Total $ 460,927 $ 464,073-5-

43 EXHIBIT C AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Detail of Expense for the Twelve Months Ended 12/31/2016 and 12/31/2017 (Continued) Utility Receipts Tax $ 28,295 $ 28,648 Salaries & Wages - Elected 40,903 41,324 Employee Benefits - - Purchased Power 276, ,669 Chemicals 9,482 10,406 Contractual Service - Eng 1,196 4,631 Contractual Service - Acct 15,494 18,960 Contractual Service - Legal - - Contractual Service - Mgt Fees - - Contractual Service - Testing 4,803 5,155 Contractual Service - Other 51, ,511 Rentals 4,892 5,672 Rent Equipment - - Transportation Expense 18,258 20,274 Insurance - Vehicles - - Insurance - General Liability - - Insurance - Workman's Comp - - Insurance - Other 26,774 28,845 Bad Debt Expense Loss on Refinancing - - Miscellaneous Expense 51,672 44,785 Interest Expense 17,844 7,726 Payment in Lieu of Taxes ("PILOT") 139, ,000 Other Utility Expense Total $ 687,897 $ 761,981 Expense Total $ 2,465,006 $ 2,547,501-6-

44 EXHIBIT D AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Adjusted Statement of Receipts and Disbursements Operating Receipts Calendar Year Adjustments 12/31/2017 Amount Ref. Adjusted Metered Revenue - Residential $ 1,038,409 $ 454,304 (1) $ 1,492,713 Metered Revenue - Commercial 358, ,718 (1) 514,931 Metered Revenue - Industrial 562, ,257 (1) 809,131 Metered Revenue - Private Fire Protection 126,460 55,326 (1) 181,786 Metered Revenue - Hydrant Usage 5,430 2,376 (1) 7,806 Interest Income Contribution Revenue 289,057 (289,057) (2) - Miscellaneous 100, ,187 Total Operating Receipts $ 2,481,036 $ 625,924 $ 3,106,960 Operating Disbursements Operation and Maintenance Expenses $ 1,818,940 1,818,940 PILOT 139,000 $ 47,425 (4) 186,425 Depreciation & Amortization 460, ,927 Utility Receipts Tax 28,295 12,290 (3) 40,585 Total Operating Disbursements $ 2,447,162 $ 59,715 $ 2,506,877 Net Operating Receipts (Disbursements) $ 33,874 $ 600,083-7-

45 SCHEDULE D-1 AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Detail of Adjustments (1) To adjust "Operating Receipts" to reflect the 43.75% rate increase effective July 1, Metered Revenue - Residential Increase: $ 454,304 Metered Revenue - Commercial Increase: 156,718 Metered Revenue - Industrial Increase: 246,257 Metered Revenue - Private Fire Protection Increase: 55,326 Metered Revenue - Hydrant Usage Increase: 2,376 (2) To adjust "Operating Receipts" to remove Contribution Revenue. Adjustment - Decrease: $ (289,057) (3) To adjust "Operating Disbursements" to allow for the adjusted level of Utility Receipts Tax. Adjusted Operating Revenue $ 3,106,960 Less: Public Fire Protection (181,786) Exemption (1,000) Taxable Revenue $ 2,924,174 Rate 1.40% Adjusted Utility Receipts Tax $ 40,938 Less: Test Year 28,648 Adjustment - Increase: $ 12,290 (4) To adjust "Operating Disbursements" to reflect PILOT. Description Amount Computed PILOT $ 186,425 Less: Test Year 139,000 Adjustment - Increase: $ 47,425-8-

46 EXHIBIT E AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Waterworks Refunding Revenue Bonds of 2010 Final Debt Schedule Principal Interest Interest Semi-Annual Annual Date Amount Rate Amount Debt Service Debt Service 1/1/2018 7/1/2018 $ 140, % $ 5,403 $ 146,253 1/1/ , % 2, ,257 $ 292,510 Total $ 284,380 $ 8,130 $ 292,510 $ 292,510 Average $ 73,128-9-

47 EXHIBIT F AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Waterworks Revenue Bonds of 2018 Estimated Sources & Uses of Funds Sources of Funds 15-Year Par Amount of Bonds $ 3,330,000 Current Debt Service Reserve 199,670 Total Sources of Funds $ 3,529,670 Uses of Funds Construction Fund - 50% of Meter Project $ 1,231,992 Construction Fund - Water Line 1,424,000 Construction Fund - Tank Project 330,003 Debt Service Reserve Fund (Combined Max) 323,487 Cost of Issuance and Rounding 186,888 Underwriter's Discount (1.0%) 33,300 Total Uses of Funds $ 3,529,

48 EXHIBIT G AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Waterworks Revenue Bonds of Estimated Tax-Exempt Debt Service Principal Interest Interest Semi-Annual Annual Date Amount Rate Amount Debt Service Debt Service 9/1/2018 1/1/2019 $ 30,977 $ 30,977 $ 30,977 7/1/2019 $ 110, % 46, ,465 1/1/ , % 45, , ,830 7/1/ , % 44, ,265 1/1/ , % 43, , ,375 7/1/ , % 41, ,955 1/1/ , % 40, , ,590 7/1/ , % 39, ,425 1/1/ , % 37, , ,350 7/1/ , % 36, ,425 1/1/ , % 34, , ,350 7/1/ , % 33, ,425 1/1/ , % 31, , ,095 7/1/ , % 30, ,050 1/1/ , % 28, , ,480 7/1/ , % 26, ,675 1/1/ , % 24, , ,400 7/1/ , % 22, ,775 1/1/ , % 20, , ,600 7/1/ , % 18, ,725 1/1/ , % 16, , ,350 7/1/ , % 14, ,525 1/1/ , % 12, , ,950 7/1/ , % 10, ,325 1/1/ , % 7, , ,200 7/1/ , % 5, ,250 1/1/ , % 2, , ,875 Total $ 3,330,000 $ 748,422 $ 4,078,422 $ 4,078,

49 EXHIBIT H AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Combined Debt Service Semi-Annual Annual Date Bonds Bonds Debt Service Debt Service 7/1/2018 $ 146,253 $ - $ 146,253 1/1/ ,257 30, ,234 $ 323,487 7/1/ , ,465 1/1/ , , ,830 7/1/ , ,265 1/1/ , , ,375 7/1/ , ,955 1/1/ , , ,590 7/1/ , ,425 1/1/ , , ,350 7/1/ , ,425 1/1/ , , ,350 7/1/ , ,425 1/1/ , , ,095 7/1/ , ,050 1/1/ , , ,480 7/1/ , ,675 1/1/ , , ,400 7/1/ , ,775 1/1/ , , ,600 7/1/ , ,725 1/1/ , , ,350 7/1/ , ,525 1/1/ , , ,950 7/1/ , ,325 1/1/ , , ,200 7/1/ , ,250 1/1/ , , ,875 Total $ 292,510 $ 4,078,422 $ 4,370,932 $ 4,370,

50 EXHIBIT I AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Statement of Debt Service Coverage Operating Revenue Adjusted Pro-Forma Metered Revenue - Residential $ 1,492,713 Metered Revenue - Commercial 514,931 Metered Revenue - Industrial 809,131 Metered Revenue - Private Fire Protection 181,786 Metered Revenue - Hydrant Usage 7,806 Interest 406 Miscellaneous 100,187 Total Operating Revenue $ 3,106,960 Operating Expense Operation and Maintenance Expense $ 2,506,877 Less: Depreciation (460,927) Total Operating Expense $ 2,045,950 Net Operating Revenue (Expense) $ 1,061,010 Proposed Maximum Annual Debt Service $ 323,487 Debt Service Coverage - $ $ 737,523 Debt Service Coverage - Times

51 EXHIBIT J AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Schedule of Present Rates and Charges (Reflects The 43.75% Rate Increase) Monthly Metered Rates per 1,000 Gallons Applicable to Residential, Commercial, Industrial and Institutional Meter Classes Present Monthly Rates Monthly Usage Rate per 1,000 Gallons First 15,000 Gallons $ 3.58 Next 185,000 Gallons 3.48 Next 300,000 Gallons 3.31 Over 500,000 Gallons 2.83 Monthly Service Charge in Addition to Monthly Meter Rates Applicable to Residential, Commercial, Industrial and Institutional Meter Classes Meter Size Charge 5/8-3/4 Inch Meter $ Inch Meter /2 Inch Meter Inch Meter Inch Meter Inch Meter Inch Meter Inch Meter Inch Meter Inch Meter 1, Monthly Fire Protection Surcharge in Addition to Monthly Meter Rates and Service Charge Applicable to Residential, Commercial, Industrial and Institutional Meter Classes Meter Size Charge 5/8-3/4 Inch Meter $ Inch Meter /2 Inch Meter Inch Meter Inch Meter Inch Meter Inch Meter Inch Meter 1, Inch Meter 2, Inch Meter 3,

52 EXHIBIT J AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Schedule of Present Rates and Charges (Reflects The 43.75% Rate Increase) (Continued) Present Annual Rates Charge Private Fire Hydrants $ 1, Private Sprinklers - per Annum - per Connection Connection Size Charge 2 Inch Connection $ Inch Connection Inch Connection Inch Connection 1, Inch Connection 1, Inch Connection 3, Inch Connection 4, Miscellaneous Public Drinking Fountain per Annum $ Water Meter and Set Fee The following charge applies when all necessary connection parts except for the utility provided meter is installed. Meter Size (Set Fee) Present 3/4 Inch Meter $ Inch Meter *All meters will be charged at actual cost for the following: meter with remote, meter yoke, transportation and labor. NOTE Rates were effective July 1, They were approved on April 18, 2018 by the Indiana Utility Regulatory Commission and on June 5, 2018 by the City of Auburn Common Council. -15-

53 EXHIBIT K AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Schedule of Present Rates and Charges Water Service Attachments All applications for service attachments to the water distribution for the purpose of introducing water into any premise, as well as applications for the use of water, must be made at the Department of Building, Planning and Development Office by the owner of the premise into which water is proposed to be introduced. The application shall be upon forms prescribed by the Department and signed by the applicant or his authorized agent. The applicant shall pay, in advance, the following water tap charges, which shall include a corporation stop, curb stop, service box, copper tubing, backhoe, operator service and labor: Short Run Present Long Run Present Tap Size Rates Rates 3/4 Inch Tap $ $ 1, Inch Tap , /2 Inch Tap 1, , Inch Tap 1, , Inch Tap 1, N/A 6 Inch Tap 1, N/A 8 Inch Tap 2, N/A 10 Inch Meter 3, N/A 12 Inch Meter 4, N/A In addition, the customer will pay, to the Utility, the actual cost of the meter. Non-Recurring Charges The following non-recurring charges shall be made for the transaction and/or services as specifically set forth: Present Rates Remote Installation Charge $ Frozen Meter Installation Charge * In addition, the customer will pay, to the Utility, the actual cost of the meter. Temporary User Water furnished to temporary users, such as contractors, etc shall be charged on the basis of the above gallonage rates as estimated by the Waterworks Superintendent. When a meter is installed for such purposes, the regular water rates and service charges shall apply and the temporary user shall pay for the installation and removal of the meter. Collection and Deferred Payment Charges All bills for water services not paid within seventeen (17) days from the due date thereof, as stated in such bills, shall be subject to a collection or deferred payments charge of 10% on the first $3.00 and 3% on the excess over $3.00. Rates were effective July 1, They were approved on April 18, 2018 by the Indiana Utility Regulatory Commission and on June 5, 2018 by the City of Auburn Common Council. -16-

54 EXHIBIT L AUBURN MUNICIPAL WATER UTILITY Auburn, Indiana Typical Billing Analysis (5/8-3/4 Inch Meter) Gallons Used Current Rate 1,000 $ , , , , , , , , ,

55 APPENDIX B Description of the Waterworks and the City TABLE OF CONTENTS Description of the Waterworks... B-3 Ten Largest Water Customers B-3 Number of Customers Historically... B-4 Annual Volume... B-4 Description of the City... B-4 Location... B-4 Government... B-5 General Characteristics... B-5 Population... B-5 Employment... B-5 Personal Income (as reported in the U.S. Census)... B-6 Education... B-6 Transportation... B-6 Utilities... B-6 Financial Institutions... B-7 Major Employers of Auburn... B-7 Pension Plans... B-7 Source of Data and Information... B-9 The information included in this Appendix B is provided for background purposes only. The debt service payments are payable solely from, and secured exclusively by, the City s pledge of Net Revenues of the Waterworks, as defined in this Official Statement. B-1

56 THIS PAGE INTENTIONALLY LEFT BLANK B-2

57 CITY OF AUBURN, INDIANA Description of the Waterworks and the City Description of the Waterworks The City owns and operates the Waterworks, which serves approximately 5,200 customers in and around the City. The Waterworks presently has a water distribution system primarily consisting of two well fields, two water-treatment facilities (South Plant 4.4 MGD and North Plant 4.0 MGD) and a distribution system comprised of approximately 103 miles of water main ranging in size from 4-inch to 16-inch in diameter and has approximately 950 fire hydrants. The City also owns and operates the local municipal Wastewater Utility and Electric Utility. Ten Largest Water Customers 2017 Customer Name Carlex Glass of Indiana Dickmans West Edge Cooper Eng Prod Div DeKalb Metal Finishing Inc Rieke Corp DeKalb County Jail DeKalb Health Jerrys Junction Apts Westwood Car Wash LTD Marion Co. Health & Hospital Corp. Usage 38,512,000 22,883,000 22,758,000 18,694,000 8,265,000 4,862,000 4,745,000 4,666,000 3,415,000 2,940,000 Annual Billings (Dollars) $82, , , , , , , , , , B-3

58 Number of Customers Historically Number of Water Customers Year Total , , , , ,929 Annual Volume Year Annual Billings (Million Gallons) , , , , ,872 Description of the City Location The City of Auburn (the City ) is located in DeKalb County near the Ohio State line. The City is located in the northeast corner of Indiana, approximately 20 miles north of Fort Wayne, Indiana and ninety miles southwest of Toledo, Ohio. Interstate 69 is located on the western edge of the City. The City also serves as the County seat. B-4

59 Government The City is governed by a seven-member Common Council, who are responsible for the administration of all City ordinances. The Common Council members are elected by district, to four-year terms. General Characteristics The proximity of the City to Fort Wayne, Indiana provides many additional cultural, educational and employment opportunities. The City benefits from having an even distribution of its labor force, with comparable numbers in manufacturing, retail trade and agriculture. Population Year Auburn DeKalb County ,731 42, ,074 40, ,379 35, ,122 33, ,388 30, ,350 28,271 Source: Indiana Department of Workforce Development, in cooperation with the U.S. Bureau of Labor Statistics Employment (Labor Force in May 2018) 22,214 Employed; 602 Unemployed; Labor Force of 22,816 (DeKalb County); 2.6% Unemployment Rate Year DeKalb County Unemployment Rate DeKalb County Labor Force State of Indiana Unemployment Rate % 22, % % 22, % % 21, % % 21, % % 20, % Source: Department of Workforce Development, Indiana s New Economy Workforce B-5

60 Personal Income (as reported in the U.S. Census) DeKalb County 2016 Median Household Income $ 52, Per Capita Income 39,682 Education There are two public school districts in the City and surrounding area: Garrett-Keyser- Butler School Corporation and DeKalb County Central United School District. They both provide public education for school-aged children, offering a comprehensive academic curriculum and a variety of extra-curricular activities. Colleges and Universities in the area include: Name Purdue University FW Ivy Tech Community College Indiana Wesleyan University Harrison College ITT Technical Institute Transportation The City has an excellent location from which to access major transportation links. Interstate 69 runs along the western edge of the City and US Routes 6 and 27, SR 1, SR 4 and SR 8 all serve the City. Air service is available at the DeKalb County airport, located south of the City and regularly scheduled commercial flights are available at Fort Wayne s International Airport. Utilities Utility services in the City are provided as follows: Telephone Electric Natural Gas Water Sewage - Verizon - Municipally Owned - NiSource - Municipally Owned - Municipally Owned B-6

61 Financial Institutions The following institutions have branches in the City: Name Horizon Bank Wells Fargo Bank, National Association PNC Bank, National Association Lake City Bank Community State Bank The Campbell & Fetter Bank The Hicksville Bank The Farmers & Merchants State Bank Woodforest National Bank Major Employers of Auburn Name Reported Employment Cooper Standard 800 DeKalb Memorial Hospital 600 Carlex Glass 550 Rieke Corporation 500 WalMart Supercenter 375 Metal Technologies 360 Tower Automotive 350 Eaton Corporation 160 Auburn Gear 144 C & A Tool 112 Source: DeKalb County Economic Development Partnership website Pension Plans A. Public Employees Retirement Fund Plan Description The Indiana Public Employees Retirement Fund (PERF) is a defined benefit pension plan. PERF is a cost-sharing multiple-employer public employee retirement system, which provides retirement benefits to plan members and beneficiaries. All full-time employees are eligible to participate in this defined benefit plan. State statutes (IC and ) govern, through the Indiana Public Retirement System (INPRS) Board, most requirements of the system, and give the City authority to contribute to the plan. The PERF retirement benefit B-7

62 consists of the pension provided by employer contributions plus an annuity provided by the member s annuity savings account. The annuity savings account consists of members contributions, set by state statute at 3 percent of compensation, plus the interest credited to the member s account. The employer may elect to make the contributions on behalf of the member. INPRS administers the plan and issues a publicly available financial report that includes financial statements and required supplementary information for the plan as a whole and for its participants. That report may be obtained by contacting: Indiana Public Retirement System One North Capitol, Suite 001 Indianapolis, IN Phone: (888) Funding Policy and Annual Pension Cost The contribution requirements of the plan members for PERF are established by the Board of Trustees of INPRS. B Police Officers Pension Plan Plan Description The 1925 Police Officers Pension Plan is a single-employer defined benefit pension plan. The plan is administered by the local pension board as authorized by state statute (IC ). The plan provides retirement, disability, and death benefits to plan members and beneficiaries. The plan was established by the plan administrator, as provided by state statute. The plan administrator does not issue a publicly available financial report that includes financial statements and required supplementary information of the plan. Funding Policy The contribution requirements of plan members for the 1925 Police Officers Pension Plan are established by state statute. On Behalf Payments The 1925 Police Officers Pension Plan is funded by the State of Indiana through the Indiana Public Retirement System as provided under Indiana Code B-8

63 C Police Officers and Firefighters Pension and Disability Fund Plan Description The 1977 Police Officers and Firefighters Pension and Disability Fund is a costsharing multiple-employer defined benefit pension plan administered by the Indiana Public Retirement System (INPRS) for all police officers and firefighters hired after April 30, State statute (IC ) regulates the operations of the system, including benefits, vesting, and requirements for contributions by employers and by employees. Covered employees may retire at age 52 with 20 years of service. An employee with 20 years of service may leave service, but will not receive benefits until reaching age 52. The plan also provides for death and disability benefits. INPRS issues a publicly available financial report that includes financial statements and required supplementary information for the plan as a whole and for its participants. That report may be obtained by contacting: Indiana Public Retirement System One North Capitol, Suite 001 Indianapolis, IN Phone: (888) Funding Policy The contribution requirements of plan members and the City are established by the Board of Trustees of INPRS. Source of Data and Information The City s Municipal Advisor, Financial Solutions Group, Inc., from sources deemed to be reliable, has compiled statistical data and other information set forth under this Description of the Water Utility and the City. B-9

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65 APPENDIX C Outstanding Debt and Taxation TABLE OF CONTENTS Direct Debt, Lease Obligations and Overlapping Debt (City of Auburn)... C-3 Overlapping and Underlying Debt (as of July 2, 2018)... C-3 Per Capita and Debt Ratio Analysis... C-3 Analysis of the City of Auburn Tax Rate... C-4 Five-Year History of Property Taxes... C-4 Assessed Value... C-5 Top Ten Taxpayers... C-5 Source of Data and Information... C-5 The information included in this Appendix C is provided for background purposes only. The debt service payments are payable solely from, and secured exclusively by, the City s pledge of Net Revenues of the Waterworks, as defined in this Official Statement. C-1

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67 CITY OF AUBURN, INDIANA Outstanding Debt and Taxation Direct Debt, Lease Obligations and Overlapping Debt (City of Auburn) Direct Debt Total Debt Percent Applicable Amount Applicable None $ 0 $ 0 Total Direct Debt $ 0 $ 0 Overlapping and Underlying Debt (as of July 2, 2018) Overlapping Debt and Lease Obligations DeKalb County Debt $ 9,495, % $ 2,250,315 DeKalb County Central School District 22,822, % 10,658,014 Garrett-Keyser-Butler School District 25,051, % 3,507,212 Total Overlapping Debt and Lease Obligations $ 57,368,817 $16,415,541 Total Direct Debt and Overlapping Debt and Lease Obligations $ 57,368,817 $16,415,541 Per Capita and Debt Ratio Analysis Population ,731 Assessed Value 2007 Payable 2018 $556,132,786 C-3

68 Description Amount Debt per Capita Ratio of Debt/ Assessed Value Total Direct Debt $ 0 $ 0 0 % Total Overlapping Debt and Lease Obligations 16,415,541 1, Total Direct Debt and Overlapping Debt and Lease Obligations $16,415,541 $ 1, % NOTE: The City does not currently have any property tax supported debt outstanding. The City does have the following revenue supported debt outstanding: $143,530 Waterworks Refunding Revenue Bonds of 2010, $2,760,000 Economic Development Income Tax Revenue Bonds of 2011 and $12,385,000 Sewage Works Revenue Bonds of Analysis of the City of Auburn Tax Rate City of Auburn-Union, DeKalb County (per $100 Assessed Value) County Township School Library Corporation Total Five-Year History of Property Taxes Year Taxes Levied Taxes Collected Percent Collected 2017 $ 5,910,984 $ 5,874, % ,709,607 5,771, ,553,066 5,686, ,303,991 4,960, ,350,634 4,984, C-4

69 Assessed Value Assessment/Collection Year Assessed Value Percentage Growth 2017/2018 $ 556,132, % 2016/ ,723, / ,749, / ,543, / ,223,616 Top Ten Taxpayers Taxpayer Net AV Carlex Glass America LLC $ 23,497,430 Scot Industries Inc 21,444,010 Metal Technologies Auburn LLC 12,636,340 Cooper Standard Automotive 11,549,530 Artistic Carton Company 8,986,640 Walmart Real Estate Business 7,396,900 Rieke Corporation 7,110,170 Auburn Plaza LLC 6,067,200 Wesley Healthcare Property 5,527,400 Eaton Corporation 4,837,220 Source of Data and Information Statistical data and other information set forth under the Outstanding Debt and Taxation have been compiled by the City s Municipal Advisor, Financial Solutions Group, Inc., from sources deemed to be reliable. C-5

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71 APPENDIX D Ordinance No D-1

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