AMERITAS INVESTMENT CORP.

Transcription

1 REFUNDING ISSUE--BOOK-ENTRY ONLY RATING: MOODY'S Aa2 BANK QUALIFIED Official Statement Dated November 20, 2012 In the opinion ofbond Counsel, under existing laws, regulations and court decisions and subject to the qualifications set forth herein under "TAX EXEMPTION," interest on the Series 2012 Bonds is not includable in gross income for purposes of regular federal and Nebraska state income taxation. Interest on the Series 2012 Bonds is not subject to the alternative minimum tax imposed on individuals under the Internal Revenue Code of 1986, as amended (the "Code"), but is required to be included in the calculation of adjusted current earnings to be used in computing corporate alternative minimum taxable income. See the caption "TAX EXEMPTION" herein. $7,950,000 CITY OF PAPILLION, NEBRASKA GENERAL OBLIGATION REFUNDING BONDS SERIES 2012 Dated: Date of Delivery Due: December 15, as shown below The $7,950,000 General Obligation Refunding Bonds, Series 2012 (the "Series 2012 Bonds") are issuable as fully registered bonds and, when initially issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as securities depository for the Series 2012 Bonds. Purchases of the Series 2012 Bonds will be made in book-entry only form, in the principal amount of $5,000 or any integral multiple thereof, through brokers and dealers who are, or who act through, DTC participants. Beneficial owners of the Series 2012 Bonds will not receive physical delivery of bond certificates so long as DTC or a successor securities depository acts as the securities depository with respect to the Series 2012 Bonds. Interest is payable semiannually on June 15 and December 15 of each year commencing June 15, So long as DTC or its nominee is the registered owner of the Series 2012 Bonds, payments of the principal or redemption price of and interest on the Series 2012 Bonds will be made directly to DTC. Disbursement of such payments to DTC participants is the responsibility of DTC and disbursement of such payments to the beneficial owners is the responsibility of DTC participants. See "THE SERIES 2012 BONDS -Global Book-Entry Bonds." The Treasurer of the City of Papillion, Papillion, Nebraska, will act as Paying Agent and Registrar for the Series 2012 Bonds. For terms relating to payments made to DTC or its nominee or in the event that the use of book-entry form is discontinued, see "THE SERIES 2012 BONDS." The Series 2012 Bonds are subject to optional redemption prior to maturity at any time on or after the fifth anniversary of the date of delivery thereof, as described herein. December 15 Maturity MATURITY SCHEDULE December 15 Maturity Principal Amount Interest Rate Price Principal Amount Interest Rate Price 2013 $ 60, % % 2021 $ 675, % % , , , , , , , , , , , , , The proceeds of the Series 2012 Bonds shall be used for the purpose of refunding on December 21, 2012, $7,895,000 General Obligation Various Purpose Bonds, Series 2007D, of the City, date of original issue - October 23, 2007, maturing on and after December 15, 2017, and paying the cost of issuance of the Series 2012 Bonds. The principal of and interest on the Series 2012 Bonds are payable by an unlimited ad valorem tax levied against all taxable property located in the City. FOR THE PROMPT PAYMENT OF THE SERIES 2012 BONDS, PRINCIPAL AND INTEREST AS THE SAME BECOME DUE, THE FULL FAITH, CREDIT AND RESOURCES OF SAID CITY ARE IRREVOCABLY PLEDGED. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire official statement to obtain information essential to the making of an informed investment decision. The Series 2012 Bonds are offered in book-entry form, when, as and if issued and received by the Underwriter and subject to the approval of legality by Baird Holm LLP, Omaha, Nebraska, Bond Counsel, and certain other conditions. It is expected that the Series 2012 Bonds will be available for delivery through The Depository Trust Company, in New York, New York, on or about December 21, AMERITAS INVESTMENT CORP.

2 No dealer, broker, salesman or other person has been authorized by the City of Papillion or the Underwriter to give any information or to make any representations with respect to the Series 2012 Bonds other than the information and representations contained in this Official Statement, and, if given or made, such other 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 Series 2012 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been furnished by the City and such information is not guaranteed as to accuracy or completeness, and is not to be construed as a representation, by the Underwriter. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. IN CONNECTION WITH THE OFFERING OF THE SERIES 2012 BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2012 BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. TABLE OF CONTENTS Page No. INTRODUCTION THE SERIES 2012 BONDS 1 SOURCES AND APPLICATION OF FUNDS 6 DEBT SERVICE ON THE SERIES 2012 BONDS 6 BONDHOLDERS' RISKS 6 NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION 7 TAX EXEMPTION 8 TAX OPINION--STATE INCOME TAX 10 LITIGATION 10 RATING 10 UNDERWRITING 10 CONTINUING DISCLOSURE UNDERTAKING 11 FINANCIAL STATEMENTS 11 APPROVAL OF LEGAL PROCEEDINGS 12 MISCELLANEOUS 12 THE CITY Appendix A FINANCIAL REPORT Appendix B FORM OF CONTINUING DISCLOSURE Appendix C SUCH SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS ANY DOCUMENT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATIONS OF THE TERMS OF THE OFFERING. THE SECURITIES DESCRIBED HEREIN HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS OFFICIAL STATEMENT.

3 OFFICIAL STATEMENT RELATING TO $7,950,000 CITY OF PAPILLION, NEBRASKA GENERAL OBLIGATION REFUNDING BONDS SERIES 2012 INTRODUCTION The purpose of this Official Statement, which includes the cover page and appendices, is to set forth information concerning the City of Papillion, Nebraska ("Papillion" or the "City"), and the City's $7,950,000 of General Obligation Refunding Bonds, Series 2012 (the "Series 2012 Bonds") offered hereby. The Series 2012 Bonds have been authorized by Ordinance No passed and approved by the Mayor and Council of the City on November 20, 2012 (the "Ordinance"). Sources of Certain Information There follow in this Official Statement brief descriptions of the Series 2012 Bonds and the City. All descriptions of documents herein are only summaries and are qualified in their entirety by reference to each such document. During the offering period, copies of such documents may be obtained from the City or from Ameritas Investment Corp. Information in this Official Statement concerning the City has been furnished by the City. Forward Looking Statements This Official Statement contains statements which should be considered "forward-looking statements," meaning they refer to possible future events or conditions. Such statements are generally identifiable by the words such as "plan," "expect," "estimate," "budget" or similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The City does not expect or intend to issue any updates or revisions to those forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur. THE SERIES 2012 BONDS The Series 2012 Bonds will be issued in the aggregate principal amount of $7,950,000, will be dated the date of delivery, bear interest (computed on the basis of a year of 360 days consisting of twelve thirty-day months) at specified rates, payable semiannually on June 15 and December 15 of each year, commencing June 15, 2013 (collectively, the "Interest Payment Dates"), and mature on the dates, all as set forth on the cover page of this Official Statement. The Series 2012 Bonds are issuable only in fully registered form in the denomination of $5,000 or any integral multiple thereof. Initially, the Series 2012 Bonds will be issued using the services of The Depository Trust Company ("DTC") and will be registered in the name of Cede & Co. and will be made available to beneficial owners in book-entry only form, as described below. Purpose and Authority The proceeds of the Series 2012 Bonds shall be used for the purpose of refunding on December 21, 2012, $7,895,000 General Obligation Various Purpose Bonds, Series 2007D, of the City, date of original issue - October 23, 2007, maturing on and after December 15, 2017, and paying the cost of issuance of the Series 2012 Bonds. The Series 2012 Bonds have been duly authorized by the Ordinance and by proceedings duly had by the Mayor and Council of the City of Papillion, Nebraska, pursuant to Section , R.R.S. Neb. 2007, as amended.

4 Security The principal of and interest on the Series 2012 Bonds are payable by an unlimited ad valorem tax levied against all taxable property located in the City. FOR THE PROMPT PAYMENT OF THE SERIES 2012 BONDS, PRINCIPAL AND INTEREST AS THE SAME BECOME DUE, THE FULL FAITH, CREDIT AND RESOURCES OF SAID CITY ARE IRREVOCABLY PLEDGED. General The principal of and interest on the Series 2012 Bonds due at maturity or upon redemption prior to maturity are payable at the office of the Treasurer of the City of Papillion, Papillion, Nebraska (the "Registrar") or of any successor paying agent and registrar appointed by the City, as provided in the Ordinance, upon presentation and surrender thereof. Interest on the Series 2012 Bonds due prior to maturity or earlier date of redemption will be paid to the registered owners thereof as of the close of business on the fifteenth day immediately preceding the Interest Payment Date (the "Record Date") and will be paid by check or draft drawn on the Registrar and mailed on each Interest Payment Date to the registered owners thereof at the addresses shown on the registration books maintained by the Registrar notwithstanding the cancellation of any such Series 2012 Bond upon any exchange or transfer thereof subsequent to the Record Date and prior to such Interest Payment Date. The principal of and interest on the Series 2012 Bonds will be paid in lawful money of the United States of America. The foregoing procedures and methods for payment will apply in the event that provisions for global book-entry bonds as described below cease to be in effect and will apply to the holding and transfer of Series 2012 Bonds by DTC subject to certain modifications provided for in a Letter of Representations between the City, the Registrar and DTC. Global Book-Entry Bonds The Series 2012 Bonds will be available to the ultimate purchasers in global book-entry form only, in the principal amount of $5,000 or integral multiples thereof. Purchasers of the Series 2012 Bonds will not receive certificates representing their interests in the Series 2012 Bonds purchased, except as described below. The following description of the procedures and record-keeping with respect to beneficial ownership interests in the Series 2012 Bonds, payment of interest and other payments on the Series 2012 Bonds to Participants (as hereinafter defined) or Beneficial Owners (as hereinafter defined) of the Series 2012 Bonds, confirmation and transfer of beneficial ownership interests in the Series 2012 Bonds and other related transactions by and between DTC, Participants and Beneficial Owners of the Series 2012 Bonds, is based solely on information furnished by DTC to the City for inclusion in this Official Statement. Accordingly, the City and the Registrar do not make any representations concerning these matters, and the Beneficial Owners of the Series 2012 Bonds should not rely on the following information with respect to such matters, but should instead confirm the same with the Participants from whom they purchased the Series 2012 Bonds. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Series 2012 Bonds. The Series 2012 Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Series 2012 Bond certificate will be issued for each separate maturity of the Series 2012 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 and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants 2

5 ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participant's accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and at Purchases of the Series 2012 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2012 Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2012 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 Series 2012 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 Series 2012 Bonds, except in the event that use of the book-entry system for the Series 2012 Bonds is discontinued. To facilitate subsequent transfers, all Series 2012 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 Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2012 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Series 2012 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 Series 2012 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Series 2012 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the documents relating to the Series 2012 Bonds. For example, Beneficial Owners of Series 2012 Bonds may wish to ascertain that the nominee holding the Series 2012 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 Series 2012 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 issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2012 Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City (or the Registrar) as soon as possible after the record date. The Omnibus 3

6 Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Series 2012 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, principal, and interest payments on the Series 2012 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 Registrar, 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 nor its nominee, the Registrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, principal, and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Registrar (from funds provided by the City), 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 Series 2012 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, certificates for the Series 2012 Bonds are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, certificates for the Series 2012 Bonds will be printed and delivered to DTC. The information under this subcaption 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. The City and the Registrar will not have any responsibility or obligation to Participants, to Indirect Participants or to any Beneficial Owner with respect to (i) the accuracy of any records maintained by DTC, any Direct Participant or any Indirect Participant; (ii) the payment by DTC or any Direct Participant or Indirect Participant of any amount with respect to the principal or redemption price of or interest on the Series 2012 Bonds; (iii) any notice which is permitted or required to be given to bondholders under the Ordinance; (iv) the selection by DTC or any Direct or Indirect Participant of any person to receive payment in the event of a partial redemption of the Series 2012 Bonds; or (v) any consent given or other action taken by DTC as Bondholder. The information included under this subcaption, other than in this paragraph, the preceding paragraph hereof and the first two full paragraphs under this subcaption, has been provided by DTC. No representation is made by the City or the Registrar as to the accuracy or adequacy of such information provided by DTC or as to the absence of material adverse changes in such information subsequent to the date hereof. The Beneficial Owners of the Series 2012 Bonds will rely on DTC Participants or Indirect Participants for timely payments and other notices and for otherwise making available to the Beneficial Owners the rights of a bondholder. No assurances can be given, in the event of the bankruptcy or insolvency of DTC or the Direct Participant or Indirect Participant through which a Beneficial Owner holds beneficial interest in the Series 2012 Bonds, that payment will be made by DTC, the Direct Participant or the Indirect Participant on a timely basis. Notice to Bondholders Notice of any proposed modification or amendment of the Ordinance by means of a supplemental ordinance that is to be effective with the consent of the registered owners of the Series 2012 Bonds as well as all notices of redemption will be mailed to DTC, as the registered owner of the Series 2012 Bonds then outstanding. No assurance can be given by the City or the Registrar that DTC will distribute to the Participants, or that the Participants will distribute to the Beneficial Owners, (i) payment of debt service on the Series 2012 Bonds paid 4

7 to DTC, or its nominee, as the registered owner, or (ii) any redemption or other notices, or that DTC or the Participants will serve and act on a timely basis or in the manner described in this Official Statement. Optional Redemption The Series 2012 Bonds are subject to redemption at the option of the City prior to maturity at any time on or after the fifth anniversary of the date of delivery thereof, in whole or in part, at par plus accrued interest to the date fixed for redemption. The City may select Series 2012 Bonds to be redeemed in its sole discretion. Redemption--Series 2012 Bonds Held by DTC If the Series 2012 Bonds are being held by DTC under the book-entry system and less than all of such Series 2012 Bonds within a maturity are being redeemed, DTC's current practice is to determine by lot the amount of the interest of each Participant in such maturity to be called for redemption, and each Participant is to then select by lot the ownership interest in such maturity to be redeemed. See "THE SERIES 2012 BONDS - Global Book-Entry Bonds" herein. Notice of Redemption; Effect of Redemption Notice of call for redemption, identifying the Series 2012 Bonds or portions thereof to be redeemed shall be given by the Registrar by mail (or other means acceptable to DTC in the case of Series 2012 Bonds registered to Cede & Co. or any other nominee of DTC), sent to the registered owners of the Series 2012 Bonds to be redeemed (initially, Cede & Co.) at their registered addresses as shown on the registration books maintained by the Registrar, first class, postage prepaid, not less than thirty (30) days prior to the date fixed for redemption. Failure to give notice to any registered owner or any defect in the notice shall not affect the validity of the proceedings calling the Series 2012 Bonds or the redemption of any Series 2012 Bonds for which proper notice has been given. The City shall have the right to direct further notice of redemption for any Series 2012 Bond for which defective notice has been given. Transfer of Series 2012 Bonds The Series 2012 Bonds are transferable upon presentation for cancellation to the Registrar at its office in Papillion, Nebraska. To be transferred, any Series 2012 Bonds must be accompanied by a written instrument of transfer in form satisfactory to the Registrar and must be accompanied by such signature guaranties and other evidence as the Registrar may require. Upon surrender of any Series 2012 Bond in proper form, the Registrar will deliver at its office or send by registered mail to the transferee owner or owners at such transferee owner's or owners' risk and expense, a new Series 2012 Bond or Series 2012 Bonds of the same maturity, interest rate and aggregate principal amount registered in the name of the transferee owner or owners. To the extent of the denominations permitted by the Ordinance, one Series 2012 Bond may be transferred for several Series 2012 Bonds of a like maturity, interest rate and aggregate principal amount and several Series 2012 Bonds may be transferred for one or several Series 2012 Bonds, respectively, of the same maturity, interest rate and aggregate principal amount. Transfer of interests by Beneficial Owners, so long as there is a securities depository serving will be governed by the procedures described under "THE SERIES 2012 BONDS - Global Book-Entry Bonds" herein.

8 SOURCES AND APPLICATION OF FUNDS Sources of Funds: Principal Amount of Series 2012 Bonds $ 7,950, Deposit of City Funds on Hand 97, Less Original Issue Discount (25,820.10) Total $8,021, Application of Funds: Payment of Refunded Bonds $ 7,900, Issuance Costs (including rating agency fees and Underwriter's Discount) 121, Total $8,021, DEBT SERVICE ON THE SERIES 2012 BONDS The following table shows the debt service on the Series 2012 Bonds. It is based upon the maturity schedule and interest rates shown on the cover page of this Official Statement. Fiscal Year Ending Sept. 30., Principal Interest Total 2013 $ 60, $ 60, $ 60, , , , , , , , , , , , , , ; , , , , , , , , , ,000 93, , ,000 82, , ,000 70, , ,000 56, , ,000 41, , ,000 25, , ,000 8, , Total $ 7,950,000 $1,389, $9339, BONDHOLDERS' RISKS The Series 2012 Bonds are payable from an unlimited tax to be levied against all the taxable property in the City. The following items, among others, should be considered by potential investors: 6

9 1. Limitation of Rights Upon Insolvency. The United States Bankruptcy Code enables debtors, including cities, which are insolvent to obtain relief through petition and plan which may result in the modification or delay of payments to creditors, including bondholders. In the event of any insolvency upon the part of the City, the holders of the Series 2012 Bonds would be treated as general creditors of the City along with other unsecured claimants. The extent to which holders of Series 2012 Bonds are to be treated as a separate class or otherwise given priority over other claimants is a matter that would be subject to future determinations of Nebraska state and federal courts interpreting and applying both state law and the United States Bankruptcy Code. Procedures under the Bankruptcy Code or other insolvency laws could result in delays in payment and modifications of payment rights. The State of Nebraska has authorized its political subdivisions to seek relief under the United States Bankruptcy Code by statute. 2. Nebraska Developments Related to Budgets and Taxation. The Nebraska Legislature has taken actions designed to reduce the reliance of local governmental units on property taxation, see "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION." 3. Economic Downturn/Decreased Nebraska State Tax Revenues. The State of Nebraska, like many other states, recently experienced decreased collections of revenues as a result of the impact of general economic conditions on enterprises in Nebraska. In response to this change in revenue receipts certain changes were made in a special session called by the Governor in In 2011, the Legislature passed and the Governor signed LB 383 which eliminates or reduces state aid to certain political subdivisions, including counties and cities. In 2011, the Legislature also passed and the Governor signed LB 235, which may reduce state aid to school districts. Further reductions in state expenditures affecting political subdivisions generally are likely to be considered from time to time in connection with proposed tax cuts or as a result of economic conditions. Legislation affecting the taxing powers of political subdivisions, particularly with respect to occupation taxes has also been considered. The recent economic downturn also impacted sales tax receipts and may have a delayed impact on determinations of valuations for local property taxes. See "NEBRASKA DEVELOPMENTS RELATING TO BUDGETS AND TAXATION State Aid Limitations" herein. 4. Proposed Tax Legislation. President Obama has released legislative and budget proposals that would, among other things, subject interest on tax-exempt bonds (including the Series 2012 Bonds) to a federal income tax for taxpayers with incomes above certain thresholds. Additional proposals affecting tax-exempt interest may be considered from time to time which could limit the availability of or eliminate federally tax-exempt interest on tax-exempt bonds. Neither house of Congress has passed any such proposal, and it is not possible to predict whether President Obama' s, or another proposal with similar effects, will be enacted into law. If enacted into law, such a proposal could affect the value or marketability of tax-exempt bonds (including the Series 2012 Bonds) and bondholders' tax liability. Prospective purchasers of the Series 2012 Bonds should consult their own tax advisors regarding the impact of any change in law on the Series 2012 Bonds. NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION The Nebraska Legislature has enacted legislation intended to reduce the level of property taxation and political subdivision expenditures in the State. The legislature has enacted legislation to provide for budget limitations and legislation requiring reductions in the rate of taxation for general property taxes. Budget limitations relating to cities, villages, counties and other political subdivisions (Sections to , R.R.S. Neb. 2007, as amended, and related sections, the "Budget Limitations") limit the growth in amounts which may be budgeted with respect to certain restricted funds. Restricted funds include sales taxes, property taxes and 7

10 certain other revenue sources. The limitation imposed does not apply to tax revenues pledged to retire bonded indebtedness. The Budget Limitations currently provide for a base limitation of 2.5% upon increases. Such base limitation is subject to review by the Nebraska Legislature from year to year. The base limitation may be exceeded by an additional 1% upon an affirmative vote of at least 75% of the governing body. These limitations are to be enforced through the office of the Auditor of Public Accounts of the State of Nebraska and state aid may be withheld from governmental units which fail to comply. The Budget Limitations do not apply to (i) restricted funds pledged to retire bonded indebtedness or (ii) to the revenues of proprietary funds unless such revenues are transferred to fund a service or function not directly related to the charges and activity for which the charges are imposed. Tax levy limitations (Section , R.R.S. Neb. 2009, as amended, and related sections, the "Levy Limitations") provide for overall limitations on the tax levies of political subdivisions, including cities. The Levy Limitations provide for an express exclusion from the limitations for property tax levies for bonded indebtedness. Under the Levy Limitations the rates for levying property taxes have been reduced for each type of governmental unit in the State of Nebraska. The rate for cities is set at 450 per $100 of taxable valuation with an additional 50 available for payments under interlocal cooperation agreements. Taxes to pay principal and interest on the City's general obligation bonds or limited tax bonds are thus not subject either to the Budget Limitations or the Levy Limitations. The future methods for providing for financing cities, schools and other local units may be altered depending upon future actions to be taken by the Nebraska Legislature, further decisions of the Nebraska Supreme Court and federal courts and future initiative petitions proposed by voters. TAX EXEMPTION Under the Internal Revenue Code of 1986, as amended (the "Code"), interest on the Series 2012 Bonds will not be includable in gross income for purposes of determining federal income taxes. Certain features of the Code with respect to interest on the Series 2012 Bonds are described in the following paragraphs. 1. The Series 2012 Bonds are not Private Activity Bonds. The Series 2012 Bonds are being issued for essential governmental purposes of the City and will not be "private activity bonds" as described in the Code. In connection with the issuance of the Series 2012 Bonds, the City will certify that none of the proceeds of the Series 2012 Bonds will be used to acquire property for which any person will be a user other than as a member of the general public under the terms of the Code, subject to certain limitations provided for in the Code. The City will also certify that none of the proceeds of the Series 2012 Bonds will be used to make or fmance loans to any persons. Because the Series 2012 Bonds will not be "private activity bonds," as described in the Code, they will not be subject to the alternative minimum tax for individuals or corporations. For corporations, however, the Series 2012 Bonds, like all other tax-exempt bonds, will be subject to the additional minimum tax on "adjusted current earnings," which is referred to below. 2. The Series 2012 Bonds will not be Arbitrage Bonds under the Terms of the Code. In connection with the issuance of the Series 2012 Bonds, the City will certify certain of its expectations and anticipations with respect to the Series 2012 Bonds. The Series 2012 Bonds are expected to be subject to the rebate requirements as described in the Code. Under certain circumstances, failure to pay rebates on a timely basis can result in a retroactive loss of tax-exempt status for municipal Series 2012 Bonds. Although the Code provides that the determination of whether or not a bond is an arbitrage bond is to be based upon reasonable expectations at the time

11 of issuance, it also contains language which indicates that a bond is to be treated as an arbitrage bond "if the issuer intentionally uses any portion of the proceeds of the issue" to acquire higher yielding investments or replace funds which were used directly or indirectly to acquire such higher yielding investments. The Ordinance will include a covenant on the part of the City to take all actions necessary to preserve the tax-exempt status of interest on the Series 2012 Bonds under the Code. 3. Tax Consequences for Tax-Exempt Interest Income Under Certain Other Provisions of Federal Tax Laws. Under the Code while interest on the Series 2012 Bonds is exempt as to taxpayers generally, such income may be taken into consideration for purposes of computing, certain other taxes imposed. Investors with social security or railroad retirement income may have a tax imposed upon such social security or railroad retirement income depending upon whether or not they have received tax-exempt income such as interest on the Series 2012 Bonds. Corporations subject to the additional minimum tax on "adjusted current earnings" will be required to pay taxes on a portion of the interest income which is attributable to the Series 2012 Bonds. Such corporate income may also be subject to additional tax such as the environmental tax imposed by Section 59A of the Code, currently no longer in effect. Casualty and insurance companies will be required to take into consideration tax-exempt interest income in determining losses for certain purposes. Foreign corporations may be required to take into account interest on the Series 2012 Bonds in computing the branch profits tax under Section 884 of the Code. Certain S Corporations may also be required to take interest on the Series 2012 Bonds into consideration for certain federal income tax purposes. Taxpayers with social security income or railroad retirement income, corporations subject to the additional minimum tax on "adjusted current earnings," casualty and insurance companies, foreign corporations and S Corporations should consult with their own tax advisors concerning the consequences of investment in the Series 2012 Bonds. 4. Financial Institutions - Deductibility of Attributable Interest. Under the Code, financial institutions are not allowed to deduct any portion of the interest expense allocable to the acquisition or carrying of certain tax-exempt bonds acquired after August 7, 1986, unless such bonds have been designated by the issuer as "qualified tax-exempt obligations" under the provisions of Section 265 of the Code. Financial institutions considering a purchase of the Series 2012 Bonds are advised that the Ordinance contains the following provision: The City hereby designates the Series 2012 Bonds as its "qualified tax-exempt obligations" pursuant to Section 265(b)(3)(B)(i)(BI) of the Code and covenants and warrants that it does not reasonably expect to issue tax-exempt bonds or other tax-exempt interest bearing obligations aggregating in principal amount more than $10,000,000 during calendar 2012 (taking into consideration the exception for current refunding issues), provided that the amount of the Series 2012 Bonds hereby designated shall be reduced as and to the extent that a portion of the Series 2012 Bonds may be determined to be "deemed designated" in accordance with the provisions of Section 265(b)(3)(D) of the Code. 5. Changes in Federal and State Tax Law. From time to time, there are legislative proposals in the Congress and in the states and regulatory action that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Series 2012 Bonds. It cannot be predicted whether or in what form any such proposals or regulatory actions might be enacted or whether, if enacted, such proposals would apply to bonds issued prior to enactment. In addition, there could be litigation or administrative proceedings relating to the federal and state tax matters referred to above. It cannot be predicted whether any such legislative proposals or regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Series 2012 Bonds or the market value thereof would be impacted thereby. Purchasers of the Series 2012 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation 9

12 and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Series 2012 Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending legislation, regulatory initiatives or litigation. In such regard, see "BONDHOLDERS' RISKS Proposed Tax Legislation" herein. Prospective investors should consult with their tax advisors concerning the tax consequences of investing in the Series 2012 Bonds. TAX OPINION--STATE INCOME TAX Baird Holm LLP will render their opinion concerning the tax-exempt status of interest payable on the Series 2012 Bonds. Under existing laws, interest on the Series 2012 Bonds is not subject to the Nebraska state income tax except to the extent that such interest is subject to federal income taxes. Such firm on occasion serves as special counsel for the City. LITIGATION No litigation is pending or, to the knowledge of the City, threatened in any court to restrain or enjoin the issuance or delivery of any of the Series 2012 Bonds or attacking in a material way the City's ability to levy taxes to pay the Series 2012 Bonds, or in any way contesting or affecting the validity of the Series 2012 Bonds or the Ordinance, or contesting the powers or authority of the City to issue the Series 2012 Bonds or adopt the Ordinance. RATING Moody's Investors Service has assigned the Series 2012 Bonds a rating of "Aa2". Such rating reflects only the views of such organization and any desired explanation of the significance of such rating should be obtained from the rating agency furnishing the same at the following address: 7 World Trade Center, 23rd Floor, 250 Greenwich Street, New York, NY Generally, a rating agency bases its rating on the 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 it will not be revised downward or withdrawn entirely by such 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 Series 2012 Bonds. UNDERWRITING Ameritas Investment Corp., as Underwriter, has agreed, subject to certain conditions, to purchase the Series 2012 Bonds at an aggregate discount of $125,195.10, from the face amount thereof which takes into consideration underwriter's discount of $99, and aggregate original issue discount of $25,820.10, plus accrued interest, if any, to date of delivery. The Underwriter intends to offer the Series 2012 Bonds to the public initially at the offering prices or yields as set forth on the cover page of this Official Statement, which may subsequently change without any requirement of prior notice. The Underwriter will be obligated to purchase all such Series 2012 Bonds if any such Series 2012 Bonds are purchased. The Series 2012 Bonds may be offered and sold to certain dealers at prices lower than the public offering prices, and the public offering prices may be changed, from time to time, by the Underwriter. 10

13 While the Underwriter expects, insofar as possible, to maintain a secondary market for the Series 2012 Bonds, no assurance can be given concerning the future maintenance of such a market by the Underwriter or others, and prospective purchasers of the Series 2012 Bonds should therefore be prepared to hold their Series 2012 Bonds to their maturity. Undertaking CONTINUING DISCLOSURE UNDERTAICING The City has covenanted for the benefit of the Beneficial Owners of the Series 2012 Bonds to provide certain financial information and operating data relating to the City by not later than May 1 of each year (the "Annual Report"), commencing May 1, 2013, and to provide notices of the occurrence of certain enumerated events, if material, using the Electronic Municipal Market Access System ( "EMMA") established by the Municipal Securities Rulemaking Board (the "MSRB"). The Annual Report, together with notices of material events, will be filed by the City with the MSRB using EMMA. The proposed form of the Continuing Disclosure Undertaking to be made by the City in the Ordinance in connection with the issuance of the Series 2012 Bonds is attached to this Official Statement as "APPENDIX C FORM OF CONTINUING DISCLOSURE UNDERTAKING." These covenants have been made in order to assist the Underwriter in complying with SEC Rule 15c2-12(b)(5) (the "Rule"). A failure by the City to comply with the Continuing Disclosure Undertaking will not constitute a default under the Ordinance, although Beneficial Owners are to have an available remedy to require performance. Any such failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Series 2012 Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Series 2012 Bonds and their market price. Compliance with Existing Continuing Disclosure Undertakings The City failed to timely file required information in certain of the past five years. The City believes that it is now in substantial compliance with its existing continuing disclosure undertakings in that (1) its audited fmancial statements for each of the past five years have now been filed with the MSRB, (2) each of its official statements for its various bond issues (with no less than one issue per year) were filed with each of the NRMSIRs within 10 days from the date of sale, and (3) the financial statements for fiscal year September 30, 2011 were timely filed. FINANCIAL STATEMENTS The City's Financial Statements were audited by Orizon CPAs LLC, Certified Public Accountants, Omaha, Nebraska, for the fiscal year ended September 30, An extract from such fmancial statement is included as Appendix B and the complete fmancial statement is available at the office of the City Clerk, 122 East 3rd Street, Papillion, Nebraska or from Ameritas Investment Corp., 440 Regency Parkway Drive, Suite 222, Omaha, NE

14 APPROVAL OF LEGAL PROCEEDINGS Legal matters incident to the authorization and issuance of the Series 2012 Bonds are subject to the unqualified approving opinion of Baird Holm LLP, Bond Counsel. MISCELLANEOUS The information contained in this Official Statement has been compiled or prepared from information obtained from the City and other sources deemed to be reliable and, while not guaranteed as to completeness or accuracy, is believed to be correct as of this date. Any statements involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. CITY OF PAPILLION, NEBRASKA 12

15 APPENDIX A THE CITY FINANCIAL STATEMENT Taxable Valuation (2012) $1,353,972,678 General Obligation Debt(1) (including the Series 2012 Bonds and not including the Refunded Bonds) 29,570,000 Highway Allocation Fund Bonds, Series ,000 Highway Allocation Fund Pledge Bonds, Series ,840,000 Highway Allocation Fund Pledge Bonds, Series ,095,000 Highway Allocation Fund Pledge Rfdg Bonds, Series 2011B 1,645,000 Lease Purchase Debt(2) Municipal Facilities Corporation Series 2012 (Public Works Facility) $ 2,000,000 Series 2009 (Refunding - Eagle Hills Golf Course) 2,260,000 Series 2005 (Refunding - Eagle Hills Golf Course) 1,675,000 Direct Debt $43,225,000 Ratio of Direct Debt to Taxable Valuation 3.19% Direct, Overlapping and Underlying G.O. Debt $73,541,380 Ratio of Direct, Overlapping and Underlying Debt to Taxable Valuation 5.43% Revenue Debt: Water Revenue Refunding Bonds, Series 2011B $ 3,765,000 Water Revenue Bonds, Series ,950,000 Water System Revenue Bond Anticipation Notes, Series ,500,000 Sarpy County Population (2010 Census) 158,840 Papillion Population (2010 Census) 18,894 Overlapping Debt: Sarpy County Taxable Valuation (2012) $11,451,696,861 General Obligation DebtP) 43,410,000 (11.8% applicable to City) 5,122,380 Sarpy County School District 0027 Taxable Valuation (2012) $4,196,246,197 General Obligation Debe ) 78,000,000 (32.3% applicable to City) 25,194,000 ('Includes $360,000 Public Safety Equipment Tax Anticipation Bonds, Series 2003 which are payable from a special ad valorem tax levy of not to exceed five cents annually per $100 of actual valuation of the City. (2)See Appendix A, Notes to Financial Statements, Note E, for a description of certain other non-bonded debt. (3)Includes $18,985,000 Lease Rental Bonds issued by the Sarpy County Leasing Corporation for the Omaha Storm Chasers Stadium Project and $8,070,000 Recovery Zone Facility Certificates of Participation for the same project (4)$59,600,000 of general obligation bonds were approved at the general election held November 6, It is anticipated that a portion of said bonds will be issued prior to year-end. A-1

16 The issuers listed above represent the principal obligors for overlapping debt. The Papio-Missouri River Natural Resources District, Educational Service Unit No. 3 and Metropolitan Community College have or may have debt obligations outstanding. Such obligations are supported by multi-county taxing bases with large taxable valuations which result in relatively small allocations of overlapping debt to the City and are not included in the tables shown above. Total General Obligation Debt Service The following table shows the debt service due on the City's outstanding general obligation bonded indebtedness (includes the Series 2012 Bonds). Fiscal Year Total Fiscal Year Total Ending Sept. 30 Debt Service Ending Sept. 30 Debt Service 2013 $ 4,087, $ 2,562, ,264, ,335, ,839, ,611, ,660, ,606, ,686, ,181, ,476, ,187, ,717, , ,714, , ,729, , ,538, Future Borrowing Plans/Annexations The City has issued and outstanding a total of $6,500,000 of water revenue bond anticipation notes to fund water system improvements, and for which permanent revenue bonds or further temporary notes will need to be issued in The City also expects to review the viability of annexation of surrounding sanitary and improvement districts as well as general capital improvements to City infrastructure that may require the issuance of future debt. However, no accurate estimate of these financings can be made at this time. Debt Limitations Under Nebraska law, there is no general limitation on general obligation or revenue indebtedness. Authority to Levy Property Taxes The City's authority to levy and collect property taxes is limited to not more than 450 per $100 of taxable valuation plus an additional 50 per $100 to provide financing for the City's share of revenue required under interlocal agreements. (See "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION".) The City's 2012/13 general fund tax levy for municipal purposes as described above is expected to be $ on each $100 of taxable value (bond fund is expected to be $ and capital improvement fund $ ) on all the taxable property within the City. Such levy limitations do not apply to the City's levy for bonded indebtedness approved according to law and secured by a levy on property. City Budget Limitations The Nebraska Legislature has enacted revised budget limitations applicable to certain prior, the current and following budget years. (See "NEBRASKA DEVELOPMENTS RELATED TO BUDGETS AND TAXATION".) A-2

17 THE CITY The City of Papillion, incorporated in 1883, is the county seat of Sarpy County and is located approximately ten miles south of the City of Omaha, approximately 45 miles east of Lincoln, Nebraska and approximately 186 miles north of Kansas City, Missouri. The City is principally a residential community for persons working in the Omaha Metropolitan area including STRATCOM, located in Sarpy County south of Bellevue, Nebraska. The City's economy is dependent upon the diverse general economy of the metropolitan area and in part upon the agricultural economy of Sarpy County. Population Papillion is estimated to be the 11th largest city in Nebraska and covers an area of approximately 4.2 square miles, all within Sarpy County. Historical population statistics for the City are as follows: City of Year Papillion Sarpy County ,235 31, ,606 63, ,399 86, , , , , , ,840 Source: U.S. Bureau of the Census, Dept. of Economic Development, The Nebraska Databook Government Papillion is a municipal corporation and a city of the first class, organized under the Mayor-Council plan of government and governed by a Mayor and an eight-member City Council. The City provides general municipal governmental services, including sewer and water service, sanitation service, street construction and maintenance, library facilities, parks and recreational facilities and police and fire protection. The City's budget is governed by the Nebraska Budget Act. The City has in the course of recent years maintained capital improvements needed in each year to serve the sustained growth and economic development of the community. As the City is presently organized, the Mayor has supervisory control of the officers and affairs of the City. In addition to the professional staff, advisory boards and committees are used for advice and operations support. Dayto-day operations are supervised by the City Administrator. City officials are as follows: David Black Bob Stubbe Steve Engberg James Glover Troy Florance Gene Jaworski LuAnn Kluch Tom Mumgaard Brian Liesveld Dan Hoins Nancy Purscell Mayor Council Member Council Member Council Member Council Member Council Member Council Member Council Member Council Member City Administrator Finance Director/Treas. A-3

18 Eliza Butler Marty Leming Karla Rupiper. City Clerk Director of Public Works City Attorney City Employees The City has 162 full-time employees and approximately 24 part-time and 150 seasonal employees not including the Mayor, Council and City Attorney. The City's employees are represented by three unions covering civilian employees and police officers and firefighters. The number of City employees has remained relatively stable over the past five years. Pension Fund The City provides retirement benefits for its police officers and firefighters through defined contribution plans. The City provides retirement benefits to other employees through a deferred compensation plan. For full information on retirement benefits, see Note G and Note H to the City's Financial Statements, as included in Appendix B. Education Educational needs of the community are provided by the Papillion-LaVista Public Schools, providing public education for kindergarten through grade twelve and covering approximately 18,000 acres. The District is a Class DT public school district, created by the State of Nebraska. The District operates two senior high schools, two junior high schools, twelve elementary schools and one alternative school. One private K-8 Catholic school is located in Papillion. Current K-12 total enrollment of the District is approximately 10,393 students. The District employs approximately 1,490 persons and is accredited by the Nebraska Department of Education. The District's secondary schools are accredited by the North Central Association of Colleges and Schools. Also serving the community are colleges and universities in the surrounding area including Bellevue University, Metropolitan Community College, University of Nebraska at Omaha, University of Nebraska Medical Center, College of Saint Mary, Grace University and Creighton University. Health Care Health care needs of the community are provided by Alegent Creighton Health Midlands Hospital, located south of Highway 370 and 84th Street in Papillion. Midlands Hospital is licensed for 131 beds and is part of the Alegent Creighton Health System, one of the nation's top 20 fully integrated health care systems. A medical office complex is located adjacent to the hospital. Opened in May of 2010, the Bellevue Medical Center located to the east of the City on Highway 370 is a full-service hospital that houses 266,000 square feet of comprehensive patient services which includes 55 private inpatient suites and 47 outpatient beds. A new 60,000 square foot medical office building connected to the main hospital houses family medicine and specialty physicians. Additional health facilities located in the Omaha metropolitan area include Alegent Creighton Health Bergan Mercy Medical Center, Alegent Creighton Health Immanuel Medical Center, Alegent Creighton Health Lakeside Hospital, Boys Town National Research Hospital, Children's Hospital, Douglas County Community Mental Health Center, Alegent Creighton Health, the Nebraska Medical Center, the Nebraska Orthopaedic Hospital and Nebraska Methodist Hospital A-4

19 Recreational The City has a variety of fully equipped neighborhood and city parks, athletic fields and complexes and the Papio Bay Water Park. Two 18-hole golf courses and clubhouses and a par-three, 18-hole golf course are located within the community. Walnut Creek is a 500-acre lake with features that include camping, hiking and biking trails, horseback riding trails, an archery range and fishing. Financial Institutions Banking services in the City are provided by American National Bank (Branch of Omaha), First National Bank of Omaha (Branch of Omaha), Pinnacle Bank (Branch of Lincoln), SAC Federal Credit Union (Branch of Bellevue), Great Western Bank (Branch of Watertown, SD), Wells Fargo Bank, National Association (Branch of Sioux Falls, South Dakota) and Omaha Police Federal Credit Union (Branch of Omaha). Housing and Construction The records of the City's Building Inspector indicate the value of permits issued within the City limits and its zoning jurisdiction as follows: Calendar Year Value of Permits 2012 (9 months) $ 88,542, ,697, ,987, ,890, ,900, ,244, ,775, ,248, ,648, ,899, ,863,929 (1)Increase in permits due to residential and commercial development. Note: Value of permits in 2012 includes SAC Federal Credit Union, 2010 includes Werner Park and 2009 includes the Midlands Data Center. There were no major permits in New residential development surrounding the City occurs primarily in sanitary and improvement districts which are independently responsible for indebtedness incurred for street, sewer, water and other local improvements, unless and until annexed. Valuation attributable to the permits shown above may not become part of the City's taxable valuation for several years. Utilities The City owns and operates its own water and sanitary sewer systems. Electric service within the City is provided by Omaha Public Power District. Sanitary sewage treatment is provided by the City of Omaha. Solid waste disposal is provided by independent contractors currently using a County-owned landfill as the primary A-5

20 disposal site. Such landfill is scheduled to close in the near future and other arrangements will need to be made. Natural gas is supplied by Black Hills Energy. The City's water system serves both City residents and residents in certain outlying sanitary and improvement districts. Water for the City's system is provided by wells located within the City and by a well field located upon the Platte River. The City completed a 10 mgd water treatment plant and expansion in mid-2008 along with an additional transmission main extension from the plant to the ground water reservoir for service redundancy. The wells have an average static water level of 16 feet. The system has a combined pumping capacity of 14,400 gallons per minute including the in-town peak demand/emergency wells. The water system facilities have total storage capacity of 6 million gallons. The average daily water demand is 3.5 million gallons and historic peak daily demand of 11.2 million gallons. The system has a maximum capacity of 20 million gallons per day. Employment (Sarpy County) Nebraska Unemployme nt Rate (%) National Unemployment Rate (%) Year Total Labor Force Number Employed Unemployme nt Rate (%) ,002 78, % 4.4% 8.9% ,529 76, ,021 75, ,501 76, ,034 74, Source: NE Department of Labor, Labor Market Information Retail Sales Year Papillion Net Taxable Sales Sarpy County Net Taxable Sales 2011 $ 359,372,357 $ 1,118,043, ,899,977 1,073,751, ,478,428 1,020,721, ,414,957 1,047,406, ,688,319 1,002,214,274 Source: NE Dept. of Revenue

21 Principal Area Employers - Sarpy County Employer Type of Business No. of Employees STRATCOM (Offutt AFB Base) Military 9,049 PayPal Inc. Financial Services 3,000 Papillion-LaVista Public Schools Public Education 1,492 Werner Enterprises Trucking Service 1,425 Bellevue Public Schools Public Education 1,422 Ameritrade Financial 1,050 InfoGroup Compilation Center Service 931 Ehrling Bergquest Clinic Health 679 Bellevue University Education 608 Sarpy County Government 560 Northrop Grumman Info Services 550 Alegent Health-Midlands Healthcare 501 Source: Sarpy County Dept. of Labor Planning & Development Values for Tax Levy Purposes TAX BASE DATA Sarpy County City of County of Year School District 0027 Papillion Sarpy 2008 $ 3,885,209,412 $ 1,310,376,494 $ 10,716,83 1, ,009,753,916 1,302,772,969 10,977,324, ,067,974,861 1,340,423,861 11,076,469, ,113,352,450 1,352,359,049 11,197,8 86, ,196,246,197 1,353,972,678 11,451,696,861 Source: Sarpy County Assessors' Office/Nebraska Education Directory Tax Levy History ($ per $100) Fiscal School Metro Comm Papio Nat Year City County District College Res Dist Ag Soc. ESU 3 Total 2006/ / / / (1) / (2) / (3) (1)Includes Learning Community General Fund Levy of.9500, Special Building Levy of.0100 and capital projects of (2) Includes Learning Community General Fund Levy of.9500, Elementary Learning Center of.0100 and Capital Projects of (3)Includes Learning Community General Fund Levy of.9500 and Elementary Learning Center levy of Source: Sarpy County Treasurer/City of Papillion A-7

22 Tax Collection History The fiscal year of the City begins October 1 and ends September 30. Taxes are levied in September based upon a valuation as of the preceding January 1. First installments of real estate taxes are due the following April 1, second installment due August 1; personal property taxes are due April 1 and August 1. Delinquent taxes bear 14% interest. Property taxes collected on the City levy for the most recent years are as follows: Actual Receipts Taxes Received as of as a % of Fiscal Year Taxes Levied September 30* Taxes Levied* 2005 $4,369,770 $4,246, % ,150,617 4,034, ,125,024 4,114, ,741,899 4,574, ,308,846 5,226, ,277,611 5,179, ,430,137 5,338, ,118,921 6,038, *Includes receipts from previous years, interest and penalties. Largest Taxpayers Listed below are the largest taxpayers in the City of Papillion. Taxpayer Type of Business 2012 Valuation % of Total (Real Estate Only) Shadow Lake Towne Center LLC Retail Business $ 97,013, % Cole Mt Papillion NE LLC Retail Business 21,860, Papillion Building LLC Data Provider 15,000, Wal Mart Real Estate Bus Trst Retail Business 14,301, Papillion Apartments LP Housing 11,610, Tara Hills Villas Inc Housing & Retail 11,513, Dayton Hudson Corp Retail Business 10,240, Hy-Vee Inc. Retail. Business 9,280, SGD Huntington LLC Apartment Complex 6,800, Midland Heights Apartments LLC Housing 5,740, Source: Sarpy County Sales Tax Collections from the City's Local Sales and Use Tax of 1.5% are as follows: Fiscal Year Amount Collected 2005/06 $ 2,986, /07 5,597, /08 5,992, /09 6,019, /10 6,291, /11 6,456, /12 6,953,373 A-8

23 Highway Allocation Fund Revenues received by the City of Papillion from the State of Nebraska Highway Allocation Fund are as follows: Fiscal Year Revenues 2004/05 $ 1,066, /06 1,052, /07 1,150, /08 1,247, /09 1,220, /10 1,167, /11 1,298, /12 1,428,995 ENVIRONMENTAL MATTERS The City of Papillion and its water and sewer utilities are subject to extensive and evolving environmental laws and regulations enacted in response to growing public concern over environmental issues. The regulations are administered and enforced by the United States Environmental Protection Agency ("EPA"), the Nebraska Department of Environmental Quality ("NDEQ") and the Nebraska Department of Health and Human Services, Division of Public Health ("NDHHS"). The primary measures impacting the City's municipal water system are the federal Safe Drinking Water Act and the Nebraska Safe Drinking Water Act. These laws established a program requiring compliance with national drinking water standards for contaminants that may have an adverse effect on the health of persons. Periodic tests of all water sources as well as tests of tap water are required. Regulations adopted by the EPA and NDHHS under these laws also establish standards and requirements for the design, construction, upgrade and operation of the City's municipal water system. The City utilizes a well field and a treatment and filtration plant that are believed to meet all current standards and requirements. In the event of changes in regulatory requirements or of diminished quality of the water sources, costs for additional required improvements could be substantial. Water system operations, particularly the development of new wells, may be impacted by LB 962, legislation adopted and approved in 2004 and amended by LB 1226 in 2006 and LB 483 in In areas designated as fully appropriated or over-appropriated, LB 962 requires the local natural resources district ("NRD") in cooperation with the Department of Natural Resources ("DNR") to develop and implement an integrated ground water management plan ("Management Plan") to conserve and protect ground water supplies and to resolve conflicts between ground water users and surface water appropriators arising from water shortages. Management Plan controls may include allocations of the amount of ground water that may be withdrawn by ground water users, prohibitions on the construction of new wells, and prohibitions on the withdrawal and transport of ground water for use on property other than where the well is located. The Platte River location of the City's well field is annually evaluated by the DNR for designation as fully appropriated. The City has applied to DNR for a Municipal Ground Water Transfer Permit ("Transfer Permit") authorizing withdrawal of ground water from Well Field and transport to the City's users. As part of its Transfer Permit Application, the City acknowledged that operation of the Well Field may impact the spawning periods of endangered species in the Platte River. The City agreed to comply with the recommendations of the Nebraska Game and Parks Commission for the City to offset any realized depletions to the River during the spawning period (February 15th to July 31st). If granted, the terms of the Transfer Permit will authorize the transportation of the water and determine the minimum allocation available to the City for purposes of any Management Plan that may be adopted. If the Transfer Permit authorization amount is insufficient to meet municipal needs or if depletion offsets are required, the City, with DNR and NRD approval, may purchase additional water from other users in the Platte River Basin through discontinuation of existing water usage. The A-9

24 costs of any such purchases would depend upon economic and environmental circumstances prevailing at the time any such purchasing was determined necessary and then effected. Apart from the Water System, the City operates a sewage collection system that is subject to regulation under the federal Clean Water Act. The EPA has delegated to NDEQ responsibility for processing and evaluating applications and for issuance of National Pollutant Discharge Elimination System ("NPDES") permits under applicable regulatory standards. Pursuant to this delegation NDEQ regulates the discharge of effluent into the waters of the State and determines whether discharges comply with standards imposed under the Act and those additional standards adopted by NDEQ. The City has a Wastewater Service Agreement with the City of Omaha for the transportation and treatment of wastewater produced within the City in accordance with applicable laws and regulations. The City also operates storm sewers and discharges storm water at numerous locations. Along with Sarpy County, the City is a member of the Papillion Creek Watershed Partnership ("PCWP") which includes seven surrounding cities, the NRD and Sarpy County. The PCWP has obtained a Phase II NPDES Stormwater Permit from NDEQ and has adopted a Stormwater Management Plan for the combined entities. The City's annual cost to implement the Permit and Plan requirements varies from year to year, and exceeded $75,000 in FY Apart from its utilities, the City has used and expects to continue using landfill disposal provided through other parties. The federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") impacts solid waste disposal facilities. Strict joint and several liability is imposed on all past and present owners and operators of properties where hazardous substances have been released or where there is a threat of release. Liability also extends to generators and transporters who selected or arranged for disposal of materials at a contaminated site. More than 20 per cent of the sites listed on the CERCLA ("Superfund") National Priority List ("NPL") are past or current solid waste landfills. The cost of CERCLA investigations, studies, cleanups and oversight can be very substantial. The City is not aware of any claims arising from past or current disposal of solid waste. It licenses solid waste haulers who use NDEQ permitted landfills for waste disposal, primarily the Sarpy County Landfill. The Sarpy County Landfill is scheduled to close within the next two years. They have built a transfer station for waste disposal operations. Under the Nebraska Petroleum Release Remedial Action Act, owners of underground petroleum storage tanks and underground piping for storage tanks which have leaked are responsible for remediation. The City has experienced a leaking underground storage tank at its Public Works facility and is continuing to comply with NDEQ requirements for periodic monitoring and observations at this site. The City has obtained authorization to abandon the monitoring wells at that facility.

25 APPENDIX B EXTRACT FROM COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF PAPILLION, NEBRASKA FOR THE YEAR ENDED SEPTEMBER 30, 2011

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27 CITY OF PAPILLION, NEBRASKA COMPREHENSIVE ANNUAL FINANCIAL REPORT for the fiscal year ended September 30, 2011 Prepared by: The Finance Department

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29 CITY OF PAPILLION, NEBRASKA TABLE OF CONTENTS September 30, 2011 Page(s) INTRODUCTORY SECTION Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting. Organization Chart Listing of Officials FINANCIAL SECTION Independent Auditors' Report Managements Discussion and Analysis BASIS FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net Assets 21 Statement of Activities 22 FUND FINANCIAL STATEMENTS Governmental Funds Financial Statements Balance Sheet..., Reconciliation of the Balance Sheet to the Statement of Net Assets 24 Statement of Revenues, Expenditures and Changes in Fund Balances. 25 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 26 Proprietary Funds Financial Statements Statement of Net Assets Statement of Revenues, Expenditures and Changes in Net Assets State of Cash Flows Fiduciary Funds Financial Statements Statement of Net Assets Statement of Changes in Net Assets Notes to Financial Statements REQUIRED SUPPLIEMENTARY INFORMATION Schedule of Revenues and Expenditures General Fund Budget and Actual Budgetary Basis 53 Schedule of Revenues and Expenditures Budget and Actual Budgetary Basis All Special Revenue Funds 54 Note to Required Supplementary Information Budgetary Comparison Schedules... 55

30 CITY OF PAPILLION, NEBRASKA TABLE OF CONTENTS September 30, 2011 Page(s) OTHER SUPPLEMENTARY INFORMATION Schedule of Revenues and Expenditures Budget and Actual Budgetary Basis Capital Improvement Fund 56 Debt Service Fund Schedules of General Fund Cash Expenditures Budget and Actual Budgetary Basis General and Administrative 58 Building Permits and Inspections 59 Planning Library 61 Parks Department 62 Police Department 63 Fire Department 64 Street Department Recreation Department 66 Senior Center 67 Information Systems Department 68 Amphitheater 69 Schedules of Bond Principal and Interest Requirements by Fiscal Year of Maturity Governmental Funds Proprietary Funds 71

31 CITY OF PAPILLION, NEBRASKA TABLE OF CONTENTS September 30, 2011 Page(s) STATISTICAL SECTION Table # Net Assets by Components 1 72 Changes in Net Assets Fund Balances of Governmental Funds 3 75 Changes in Fund Balances of Governmental Funds Total City Taxable Sales 5 78 Sales Tax Rates 6 79 Net Taxable Sales by Business Classification Assessed and Estimated Actual Value of Taxable Property 8 81 Property Tax Rates-Direct and Overlapping Governments 9 82 Principal Property Taxpayers Property Tax Levies and Collections Ratios of Outstanding Dept by Type Ratios of General Bonded Dept Outstanding Direct and Overlapping Governmental Activities Debt Pledged Revenue Coverage Demographic and Economic Statistics Principal Employers Full-Time Equivalent City Governmental Employees by Function " Operating indicators by Function Capital Asset Statistics by Function INTERNAL CONTROL AND COMPLIANCE AUDIT SECTION Schedule of Expenditures of Federal Awards 94 Notes to Schedule of Expenditures of Federal Awards Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report on Compliance with Requirements That Could Have a Direct And Material Effect on Each Major Program and on Internal Control Over Compliance In Accordance with OMB Circular A Schedule of Findings and Question Costs 100

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33 INTRODUCTORY SECTION

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35 C Y F PAN:IA.10N David P. Black, Mayor Nancy Purkell, Finance Director 122 East Third Street Papillion, Nebraska Phone Fax npurscellopapillion,org,1.411.(1a;ly17, 202 Honorable Mayor, City Council, And Citizens of Papillion City of Papillion, Nebraska The comprehensive annual financial report at the City of Papillion, Nebraska (the title or City of Papillion") for the fiscal year ended September 30, 2011 is hereby submitted. State law requires cities to issue within six months of fiscal year end a set of audited financial statements. This report fulfills this requirement for the fiscal year ended September 36, t )810114for'. both. the accuracy... the data, and the. completeness.,... fairness, of ihehresentatiani including all disclosures, rests with themonagement. In developingood:svoluating the City's accounting system, consideration is given to the'edequacy,of.internataccounting controls. Internal Accounting. controls are designed to provide Toa on00% Opt:00 :04010te;'.assprpnge.fegardigato.AafeaggrOjAg of assets against loss, theft, or Mituse,ondlo ensure the reliability of financial records for preparing financial statements in accoroanoe with. accounting principles accepted in.#10.,1104e) States of America (GAAR"). and maintaining accountability tassels, The:consp140.:rossonsOls.a svranoe recognizes that.(1) the cost of-asoriltol..s1) :no :Vexess4:ittla)?enarits likehrtooaderived',',ond (2) the voluation:af::pp00..apcl.100n0fitt:.rocipirps,e0tjmatw.an0..04rnonta Wrponsgsmatit, As a recipient of feder0 state and local financial assistance, the Oty10,0sotesponsible for ensuring that an adequate internal control structure is in place..to...ensurethedactitneritoomplianceviith applicable laws and regulations related to these programs..the leopral government, under therevisedoms:circhlat, A-133, requires lacetgovernments that,expend. :$300,000: or- more in tederal'funds in any fiscal year ta ))4Ve.A141;i9c,i010-t compliance audit performed, As part of the Single Audit, teotsweremode:of the Oitftinternoicaritrotsiructureavercampliance and its compliance with applicable laws and regulations, including those related to major federal financial assittance programs- TheSingleAudit for the year ended September 30, 2011, disclotedriomaterialinternal control weaknestet. The independent reports are included in the Single section found at the endat the Comprehensive Annual Report e0apikl Taltieheatotrnanagement's*noWledge andbellet, the enclosed data are accurate in material respects and repartedins manner tietignedtopretent fairly the financial position and financial activities Of iheciti, Alidisdlosurestiecessary toenablethe reader tagain an understanding of the government's financial activities as specified by all currently 'effective statements of the Accounting Standards Board have been included. The City's tinandial statements bave been audited by OrizattePAS:11C,.efirin of ide :Med certified public ascotintants. The adal at the independent eilditielaprovidei'eatanable..atttitanaethattlia::::fihaitial statements of the City fiscal year ended September 30, 2011, are free of material misstatement. The independent atidititiviziliedekethirilikant test batikevidettettippartingaheatittinteend disclosures inlhelleititiltitattiternerit* assessing the accountingprinciples 0Sadaild significant estimates made by management; and evaluating the overall financial tatettiel# 00Aentatibit. The independent auditor concluded, based upon that thetemee#teasonable:batislor rendering an ("clean") ahinion that,. City's financial for the fiscal yearended September 30,;2041, are faillyiketentettlkooafortnity with generally accepted accounting principles (OAAP). The independent auditor's report ISOreSatilattaitha first 'ootopoavitottio :aoot1060 this report.

36 Generally accepted accounting principles require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis ("MD&A"). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City's MD&A can be found in the Financial Section immediately following the Independent Auditors' Report. CITY PROFILE The City of Papillion, incorporated on May 9, 1883, is the county seat of Sarpy County, Nebraska and is located approximately ten miles south of the City of Omaha. It occupies a land area of approximately 6.65 square miles with opportunities to grow in all direction except to the north. The City has legal control over the development (planning, zoning and building permit issuance) within approximately 3 miles of City limits in the directions where growth exists. The City of Papillion is empowered by State statute to extend its corporate limits by annexation, which it has done from time to time. The City of Papillion utilizes the mayor and council form of government. The City Council is elected on a nonpartisan basis. City Council members serve four year staggered terms with four council members elected every two years. The mayor serves a four-year term. The City is divided into four wards and each ward is represented by two council members with staggered terms. The City of Papillion provides a full range of services, including public safety (police and fire); the construction and maintenance of highways, streets, and other infrastructure; planning and zoning; a public library; two 18-hole golf courses; an aquatic facility; parks and recreation; water and sewer utilities. Many of these services are also used by those within the extra territorial jurisdiction, including but not limited to the fact that the City provides water and sewer utilities to those in sanitary improvement districts within the City's ETJ. The City Council is required to adopt a final budget by no later than September 20 of the prior fiscal year. This annual budget serves as the foundation for the City's financial planning and control. The budget is prepared by fund, and department. The budget includes all funds of the City, except fiduciary funds (Pension Trust Funds). Department directors may transfer resources within a department as they see fit. Transfers between departments or additional appropriations need special approval from the city council. LOCAL ECONOMY The City continues its transformation from the residential suburb to a major retail and commercial area within the metropolitan area. This transformation is helping to diversify the tax base of the City and at the same time increase the sales tax revenue for the City. Shadow Lake Towne Center, location in Papillion, is one of the largest retail shopping areas in the Omaha metro area. The City is the developer of a business and technology park. During the fiscal year ended September 30, 2011 construction of two new buildings was completed and the business opened. One is a data center for a large retailer, providing new jobs to Papillion and the metro area. The second is a regional corporate office for a major gas utility company which relocated to Papillion from downtown Omaha. The federal government has a significant economic presence thanks to STATCOM (Offutt AFB) located approximately 7 miles to the east. The City continued to receive national recognition in 2011 when Money Magazine ranked Papillion #5 on its list of America's Best Small Towns to live in. This is the fourth consecutive award from Money Magazine. In 2010, BusinessWeek named Papillion the Best Affordable Suburb in Nebraska, as well as the #2 Best Affordable Suburb in the United States. These national recognitions have helped promote the city at a national level sparking additional business and residential interest in the City and surrounding area. During 2011, Moody's rated the City of Papillion's bonds at Aa2. This positive rating helped provide the City with low interest rates on refunding of various purpose bonds. -2-

37 LONG-TERM FINANCIAL PLANNING On September 7,(2010, the City Council approved a General Fund Cash Reserve Policy. The purpose of the policy is to insure that the General Fund Cash Reserve balance will be accumulated and maintained to protect the stability of tax rates, fiscal solvency and creditworthiness of the City. The policy establishes a minimum limit of 28% of general fund expenditures and a maximum of 40%. Based on the fiscal 2012 budget and the unrestricted cash balance in the General Fund at September 30, 2011, the City was at 34%, therefore within the policy limits. The policy requires an annual review during the budget process. The City has recently adopted a Capital Improvement Plan Policy (the "Plan") to establish a proactive approach to assessing existing and future capital needs. The Plan will cover a period of five years and be updated, annually, in conjunction with the budget process. The Plan will establish priorities and funding of capital projects requirements which the City of Papillion should make to assure its continued economic viability and to protect public health and safety. MAJOR INITIATIVES The City of Papillion wastewater is sent to the City of Omaha for treatment. The federal government has mandated the separation of sanitary and storm sewer systems, which will result in increased costs to the City of Papillion. This is going to have a major impact on the sewer fund and Papillion's utility customers. The City has already implemented a change in user fees due to this program. The approved resolution contains annual rate changes for the next three years based on a rate study which included the increased charges from the City of Omaha. The City is required by state statute to approve a one and six year road plan annually by March 1. The next major improvement will be Washington Street (84th Street) reconstruction from Cedardale Road to Capehart Road. Federal funding of 80% is anticipated for this project, along with cost sharing with Sarpy County and Sanitary Improvement District 264. The improvement is necessary impart due to the commercial and residential development occurring in this southern section of the City, as well as increasing the safety and traffic flow of this area. Based on a City Council retreat, they established the five following goals including strategies and objectives for the next three years in order to accomplish the goals. 1, Preserve Mid-town Papillion 2. Expand/Improve Recreational Facilities 3. Maintain a Strong Financial Position 4. Improve and Maintain the Road System to Foster Efficient Movement of Traffic 5. Protect the Small-town Feel and Sense of Community The City will be starting the construction of a new public works facility in This facility will be an investment in the City's future both as it relates to the City being able to service the community and the removal of the public works maintenance facility from "Mid-town Papillion". AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association ("GFOA") awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Papillion for its comprehensive annual finance report ("CAFR") for the fiscal year ended September 30, This was the first year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR will meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for a certificate. -3-

38 The preparation Of this report on,a: thely,batis could not a-cdohiplithed without `the efficient and dedicated services of the entire staff of the FinenCe Department. I would like to express my.appreolation to all members of thedepartmentaiiiho assisted and 60iiktibUte.ci to its preparation. would also like to thank the Mayor and Members of the City Council for their interest and support in planning,and conducting the financial operations of the City in eresporitible end progrestivsmanner. RespeCtfUlly stibmitted, NAtity Pkirsceil, CPA Finance_Director -4--

39 The Government Finance Officers Association ("GFOA") awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Papillion for its comprehensive annual finance report ("CAFR") for the fiscal year ended September 30, This was the first year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR will meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for a certificate.

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41 Certificate of Achievement for Excellence in Financial Reporting Presented to City of Papillion Nebraska For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2010 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive amid funinclid reports (CAFRs) achieve the highest standards in govemniret accounting and financial reporting. -6-

42 City of Papillion, Nebraska Organization Chart l-itt /efts it', 01 l'ttitillion -.Dtt \itt Viiltteli. Ciry Couthil N lentheys Bthard (Nlavocal k ft a Ri..1011)..e.i'-.. Fxecittive. Appointments).Asd.:31-. tkot..doilse Boever... s Admit s.ttamt. lltristit,ealyet -; -Chief of.. I..eotht.ed wthtsi!. Littc.ntr,,, Director Robin.Clarlt l'inttnee Dieector Vinci Pufsei.'ll Reeretttion 1)ivector Lori Hanson public \N. I itiecloy Nlartv Lenti 9 Difector Niftik K 111f Sal ;I. Nlainienance - GE 'Vow fames Chief Building - Oftici.al 9«\i int Citv Fcti nay Jeff Thomr.on I Intim 1`;.C..;.1:1111TC.5 SVC tid5i-11 P',111,S )ire cow (oar,,,ov.,an.communitt, Relations Ditryen caylson

43 City of Papillion, Nebraska List of Elected and Appointed Officials September 30, 2011 Elected Officials Mayor Council Members Ward I Council Members Ward II Council Members Ward III Council Members Ward IV David P. Black Gene Jaworski James Glover Steve Engberg Brian Liesveld Troy Florence Lu Ann Kluch Bob Stubbe Tom Mumgaard Appointed Officials City Administrator Assistant City Administrator City Attorney City Clerk Recreation Director Public Works Director Fire Chief Police Chief Finance Director Planning Director Manager of Engineering Services Director of Golf Maintenance City Physician Dan Hoins Christine Myers Karla Rupiper Eliza Butler Lori Hansen Marty Leming Bill Bowes Len Houloose Nancy Purscell Mark Stursma Jeff Thompson Tom James Dr. Jeff Strohmyer -8-

44 FINANCIAL SECTION

45 s lil,gon -CPA.. 1.,Le C15fi : 0.1,1: 13 Lie A pc0.1ita T$ 'hi A.XCE:$ :Si/ I 'FE: 2 p hia 11 A,:N1:13ft ASkA: PIION 3311./4,8 51. Gluon CPAs C In January 17, 2012 INDEPENDENT AUDITOR'S REPORT HotiOrable.1116VOi,,and.Meitters. of thecitytotitioil City of Papilitok Nebratika. WellaVeaUdited the accompanying financial statements of thegovemmehtat:aotivitiekttio. business-type,eotivitios; and each :major fund tif City ofpapitlion, Nehreaka. re.4. br. as of and for the year ended SePterribeint,.2Q11, which collectively comprise City of Papillion's basic fittiatidiai::.stateffatits=as Elated 00*A44100f contents.. Theeefinahciatetaterheotearelhe responsibility of the City of Papillioree:yottegeoetit.. out responsibility 10 :0.1exprees,opitione on theaelibehoial State** based on our audit. We cooducted.. aoctittlatita:with'',auditiwatatidati ,..:g6neraily7aocaptecita accepted the United $tates :'0.,AtsariOa ahoithatootlatolka00001)10. to.tihohoiat:guditwwtaitio.# Government Auditing Standards, resuect oy.the'.goroptrollaf General of the United States. Those standards teivite that we *wand.perform the audit to obtain reasonable assu tame aboot whotherthellhaticiai statements are fteeofirhaterialmjesfaterheit An audit includes examining, chit test hasje,evidehdeeopportingthe amounts arid diolosta.nas in the statements An telsOlno l0.0e$ assessing the accounting principles used s:jargtthe significant 000Mate*rhade bymatiopmeht: asveltee evaluating the overall financial statement PrISraItiIrt. We belliviint0prviit'proidee*ii../sprabli basis for our na: ihodropthion,.the4ihanotai statements referred present fairly, in all material tt*:'tesp!:otivp,fmatioiat.ppsitiohpfthavoyethroghtat activities, the business-type activities, and each major fun0.0toity..01.:papillton, as of September 30, 011. Ah0.,itte respective changes firlandietioosition'andi"*hereeppljoahleisoash flows thereof for the yeeohervoiielfinvolforph with accounting principles generally accepted in the Voited States of Arne** :Acqgtdaoce:with:Owernme0Auclitihg.. Standards, NehavI,IiII1s.sPed.. our reporf4a dated. January 17,;2012.,ohodr 000Oderatiohiat Otyoti Papilfio0.110ternatoohtroi over finaholat reprting,',ori0 on our tests Cifita :000.angellAkPAMO Pro.Y109n :*. ;layoat regulations, dohtrapts. ellsctgrehtegreordentk:arld other matters... Tjwputpceoflhot:Tappit.*:ta*mptillia-the scope of our testing of internal cohtropver ffhahotatreportipg gnct pomponoe..w4inelopults:::0ffiat testing,and not provide an.opinion on the internal control over financial o:806e06g or on compliance. That report is an integratpartiof emat4 :.POPOTII0 irr!ccorciance:*.10' Obverhthant. ApOing,rBfahOard.a.endehould'Oe feoheidered ithassesathg the resultsof our audit. Theiiilanagemeletfieopseion.ahrl : Analysis ipages 1440) andboctoetarycomponsortinfotmatiom (pages 53-55) are not a required part vfthe.baiielhanciar statements but are information required by tha,governmentallkesountirkg Standards Board: We:haveappliettoettain limited procedures, which consisted principally of inquiries of management regarding the methods of theaeuterrientand;oretentationtflhereqdiredaugpletherita0 s. information. However, NVetlidhot audit the information and.expresshoophilohortit