CITY OF MAPLE PLAIN, MINNESOTA (Hennepin County)

Transcription

1 This Preliminary Official Statement and the information contained herein are subject to completion and amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy these securities nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This Preliminary Official Statement is in a form deemed final as of its date for purposes of SEC Rule 15c2-12(b) (1), but is subject to revision, amendment and completion in a Final Official Statement. PRELIMINARY OFFICIAL STATEMENT DATED APRIL 12, 2018 In the opinion of Eckberg Lammers, P.C., Bond Counsel, assuming continued compliance with the requirements of the Internal Revenue Code of 1986, as amended, (the "Code"), under existing law, interest on the Bonds is not includable in gross income for federal income tax purposes and is not an item of tax preference for the purposes of federal alternative minimum tax imposed on individuals. See "TAX EXEMPTION" herein for a more detailed discussion. The interest on the Bonds is exempt from taxable income of individuals, trusts and estates, for Minnesota income tax purposes, but such interest is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax. The City will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. New Issue CITY OF MAPLE PLAIN, MINNESOTA (Hennepin County) Rating Application Made: S&P Global Ratings (Minnesota City Credit Enhancement Program) $1,990,000* GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2018A PROPOSAL OPENING: April 23, 2018, 11:00 A.M., C.T. CONSIDERATION: April 23, 2018, 6:30 P.M., C.T. PURPOSE/AUTHORITY/SECURITY: The $1,990,000* General Obligation Improvement Bonds, Series 2018A (the "Bonds") are being issued pursuant to Minnesota Statutes, Chapters 429 and 475, by the City of Maple Plain, Minnesota (the "City") for the purpose of financing various public improvements within the City. The Bonds will be general obligations of the City for which its full faith, credit and taxing powers are pledged. Delivery is subject to receipt of an approving legal opinion of Eckberg Lammers, P.C., Stillwater, Minnesota. DATE OF BONDS: May 15, 2018 MATURITY: February 1 as follows: Year Amount* Year Amount* Year Amount* 2020 $80, $90, $115, , , , , , , , , , , , , , , , , ,000 MATURITY ADJUSTMENTS: * The City reserves the right to increase or decrease the principal amount of the Bonds on the day of sale, in increments of $5,000 each. Increases or decreases may be made in any maturity. If any principal amounts are adjusted, the purchase price proposed will be adjusted to maintain the same gross spread per $1,000. TERM BONDS: See "Term Bond Option" herein. INTEREST: February 1, 2019 and semiannually thereafter. OPTIONAL REDEMPTION: Bonds maturing February 1, 2028 and thereafter are subject to call for prior redemption on February 1, 2027 and any date thereafter, at a price of par plus accrued interest. MINIMUM PROPOSAL: $1,966,120 GOOD FAITH DEPOSIT: A good faith deposit in the amount of $39,800 shall be made by the winning bidder by wire transfer of funds. PAYING AGENT: Bond Trust Services Corporation BOND COUNSEL: Eckberg Lammers, P.C. MUNICIPAL ADVISOR: Ehlers and Associates, Inc. BOOK-ENTRY-ONLY: See "Book-Entry-Only System" herein (unless otherwise specified by the purchaser).

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

3 TABLE OF CONTENTS INTRODUCTORY STATEMENT... 1 THE BONDS... 1 GENERAL... 1 OPTIONAL REDEMPTION... 2 AUTHORITY; PURPOSE... 2 ESTIMATED SOURCES AND USES... 2 SECURITY... 2 RATING... 3 CONTINUING DISCLOSURE... 4 LEGAL OPINION... 4 TAX EXEMPTION... 5 QUALIFIED TAX-EXEMPT OBLIGATIONS... 5 MUNICIPAL ADVISOR... 6 MUNICIPAL ADVISOR AFFILIATED COMPANIES... 6 INDEPENDENT AUDITORS... 6 RISK FACTORS... 6 FINANCIAL STATEMENTS...A-1 FORM OF LEGAL OPINION... B-1 BOOK-ENTRY-ONLY SYSTEM... C-1 FORM OF CONTINUING DISCLOSURE CERTIFICATE... D-1 TERMS OF PROPOSAL... E-1 VALUATIONS... 8 OVERVIEW /18 NET TAX CAPACITY BY CLASSIFICATION TREND OF VALUATIONS LARGER TAXPAYING PARCELS DEBT DIRECT DEBT SCHEDULES OF BONDED INDEBTEDNESS DEBT LIMIT OVERLAPPING DEBT DEBT RATIOS DEBT PAYMENT HISTORY FUTURE FINANCING TAX RATES, LEVIES AND COLLECTIONS TAX LEVIES AND COLLECTIONS TAX CAPACITY RATES LEVY LIMITS THE ISSUER CITY GOVERNMENT EMPLOYEES; PENSIONS; UNIONS POST EMPLOYMENT BENEFITS LITIGATION MUNICIPAL BANKRUPTCY FUNDS ON HAND ENTERPRISE FUNDS SUMMARY GENERAL FUND INFORMATION GENERAL INFORMATION LOCATION LARGER EMPLOYERS BUILDING PERMITS U.S. CENSUS DATA EMPLOYMENT/UNEMPLOYMENT DATA iii

4 CITY COUNCIL Term Expires Julie Maas-Kusske Mayor January 2021 Mike DeLuca Council Member January 2019 John Fay Council Member January 2021 Caitlin Cahill Council Member January 2019 Dominic Broda Council Member January 2021 ADMINISTRATION Robert Schoen, City Administrator Nicole Kathman, Assistant to the City Administrator Sharon Spicer, Deputy Clerk PROFESSIONAL SERVICES Eckberg Lammers, P.C., Bond Counsel, Stillwater, Minnesota Ehlers & Associates, Inc., Municipal Advisors, Roseville, Minnesota (Other offices located in Waukesha, Wisconsin, Chicago, Illinois and Denver, Colorado) iv

5 INTRODUCTORY STATEMENT This Preliminary Official Statement contains certain information regarding the City of Maple Plain, Minnesota (the "City") and the issuance of its $1,990,000* General Obligation Improvement Bonds, Series 2018A (the "Bonds" or the "Obligations"). Any descriptions or summaries of the Bonds, statutes, or documents included herein are not intended to be complete and are qualified in their entirety by reference to such statutes and documents and the form of the Bonds to be included in the resolution awarding the sale of the Bonds (the "Award Resolution") to be adopted by the City Council on April 23, Inquiries may be directed to Ehlers & Associates, Inc. ("Ehlers" or the "Municipal Advisor"), Roseville, Minnesota, (651) , the City's Municipal Advisor. A copy of this Preliminary Official Statement may be downloaded from Ehlers web site at by connecting to the Bond Sales link and following the directions at the top of the site. THE BONDS GENERAL The Bonds will be issued in fully registered form as to both principal and interest in denominations of $5,000 each or any integral multiple thereof, and will be dated, as originally issued, as of May 15, The Bonds will mature on February 1 in the years and amounts set forth on the cover of this Preliminary Official Statement. Interest will be payable on February 1 and August 1 of each year, commencing February 1, 2019, to the registered owners of the Bonds appearing of record in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the Municipal Securities Rulemaking Board ("MSRB"). The rate for any maturity may not be more than 1.00% less than the rate for any preceding maturity. (For example, if a rate of 4.50% is proposed for the 2019 maturity, then the lowest rate that may be proposed for any later maturity is 3.50%.) All Bonds of the same maturity must bear interest from the date of issue until paid at a single, uniform rate. Each rate must be expressed in an integral multiple of 5/100 or 1/8 of 1%. Unless otherwise specified by the purchaser, the Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). (See "Book-Entry-Only System" herein.) As long as the Bonds are held under the book-entry system, beneficial ownership interests in the Bonds may be acquired in book-entry form only, and all payments of principal of, premium, if any, and interest on the Bonds shall be made through the facilities of DTC and its participants. If the book-entry system is terminated, principal of, premium, if any, and interest on the Bonds shall be payable as provided in the Award Resolution. The City has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the "Paying Agent"). Bond Trust Services Corporation and Ehlers are affiliate companies. The City will pay the charges for Paying Agent services. The City reserves the right to remove the Paying Agent and to appoint a successor. *Preliminary, subject to change. 1

6 OPTIONAL REDEMPTION At the option of the City, the Bonds maturing on or after February 1, 2028 shall be subject to optional redemption prior to maturity on February 1, 2027 and on any date thereafter, at a price of par plus accrued interest. Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the selection of the amounts and maturities of the Bonds to be redeemed shall be at the discretion of the City. If only part of the Bonds having a common maturity date are called for redemption, then the City or Paying Agent, if any, will notify DTC of the particular amount of such maturity to be redeemed. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interest in such maturity to be redeemed. Notice of redemption shall be sent by mail not more than 60 days and not less than 30 days prior to the date fixed for redemption to the registered owner of each Bond to be redeemed at the address shown on the registration books. AUTHORITY; PURPOSE The Bonds are being issued pursuant to Minnesota Statutes, Chapters 429 and 475, by the City for the purpose of financing construction of the 2018 street and utility improvements within the City. ESTIMATED SOURCES AND USES* Sources Par Amount of Bonds $1,990,000 Total Sources $1,990,000 Uses Total Underwriter's Discount (1.200%) $23,880 Costs of Issuance 45,000 Deposit to Capitalized Interest (CIF) Fund 21,643 Deposit to Project Construction Fund 1,898,050 Rounding Amount 1,427 Total Uses $1,990,000 *Preliminary, subject to change SECURITY The Bonds are general obligations of the City for which its full faith, credit and taxing powers are pledged without limitation as to rate or amount. The City anticipates that the debt service will be paid from a combination of special assessments levied against properties benefitted by improvements financed by the Bonds and from ad valorem property taxes. Receipt of special assessments and collection of ad valorem taxes will be sufficient to provide not less than 105% of principal and interest on the Bonds as required by Minnesota law. Should the revenues pledged for payment of the Bonds be insufficient to pay the principal and interest as the same shall become due, the City is required to pay maturing principal and interest from moneys on hand in any other fund of the City not pledged for another purpose and/or to levy additional taxes for this purpose upon all the taxable property in the City, without limitation as to rate or amount. 2

7 RATING The City will be participating in the State of Minnesota Credit Enhancement Program ("MNCEP") for this issue and is requesting a rating from S&P Global Ratings ("S&P"). S&P has a policy which assigns a minimum rating of "AA+" to issuers participating in the MNCEP. The "AA+" rating is based on the State of Minnesota s current "AA+" rating from S&P. See "STATE OF MINNESOTA CREDIT ENHANCEMENT PROGRAM" for further details. The City currently has a "AA" underlying rating from S&P and will be requesting an underlying rating on this issue. Such rating reflects only the views of such organization and explanations of the significance of such rating may be obtained from the rating agency furnishing the same. 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 judgement of such rating agency circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. Such rating is not to be construed as a recommendation of the rating agency to buy, sell or hold the Bonds, and the rating assigned by the rating agency should be evaluated independently. Except as may be required by the Disclosure Undertaking described under the heading "CONTINUING DISCLOSURE" neither the City nor the underwriter undertake responsibility to bring to the attention of the owner of the Bonds any proposed changes in or withdrawal of such rating or to oppose any such revision or withdrawal. STATE OF MINNESOTA CREDIT ENHANCEMENT PROGRAM By resolution adopted for this issue on March 26, 2018 (the "Resolution"), the City has covenanted and obligated itself to be bound by the provisions of Minnesota Statutes, Section 446A.086 (the "Act"), which provides for payment by the State of Minnesota in the event of a potential default of certain obligations. The City has entered into a Credit Enhancement Program Agreement (the "Agreement") with the Minnesota Public Facilities Authority (the "Authority"), which is acting on behalf of the State of Minnesota. The provisions of the Agreement shall be binding on the City as long as any obligations of the issue remain outstanding. The City covenants in the Agreement to deposit with the paying agent for the issue three business days prior to the date on which a payment is due an amount sufficient to make that payment. Under the Agreement, if the City believes it may be unable to make a principal or interest payment for this issue on the due date, it must notify the Authority not less than 15 business days prior to the date a payment is due on the Bonds if the City will be unable to make all or a portion of the payment. The City s agreement with the Paying Agent for the Bonds requires the Paying Agent to immediately inform the Minnesota Commissioner of Management and Budget, with a copy to the Authority, if the Paying Agent becomes aware of a default or potential default in the payment of principal or interest on the Bonds, or if, on the day two business days before the date a payment is due on the Bonds, there are insufficient funds on deposit with the Paying Agent to make the payment. If the City is unable to make any portion of the payment on the Bonds on or before the date due, the State of Minnesota, acting through the Authority, shall make such payment in its place pursuant to the Act, providing that funds are available in the State General Fund. The obligation to make a payment under the Act is not a general obligation of the State of Minnesota. The Act does not obligate the Minnesota legislature to provide for the availability of funds in the General Fund for this purpose. 3

8 CONTINUING DISCLOSURE In order to assist the Underwriters in complying with SEC Rule 15c2-12 promulgated by the Securities and Exchange Commission, pursuant to the Securities Exchange Act of 1934 (hereinafter the "Rule"), the City shall covenant to take certain actions pursuant to the Award Resolution by entering into a Continuing Disclosure Undertaking (the "Disclosure Undertaking") for the benefit of holders, including beneficial holders. The Disclosure Undertaking requires the City to provide electronically or in the manner otherwise prescribed certain financial information annually and to provide notices of the occurrence of certain events enumerated in the Rule. The details and terms of the Disclosure Undertaking for this issue are set forth in Appendix D to be executed and delivered by the City at the time of delivery of the Bonds. Such Disclosure Undertaking will be in substantially the form attached hereto. The City did not meet its disclosure obligation by not filing the following in the last five years as required by the Rule. The City notes the following: Prior continuing disclosure undertakings entered into by the City included language stating that an Annual Report including the City s audited financial statements would be filed as soon as available. Although the City did not always comply with this requirement, the Annual Reports were timely filed within the required twelve (12) month timeframe as provided for in each undertaking. Except to the extent that the following are deemed to be material, the City believes it has not failed to comply in all material respects with its prior undertakings under the Rule. The City has reviewed its continuing disclosure responsibilities to help ensure compliance in the future. Disclosure Deficiency Description Due Date/Date of Event Date Filed The budget for fiscal year 2014 was not filed December 31, 2014 July 29, 2015 timely. A failure by the City to comply with any Disclosure Undertaking will not constitute an event of default on this issue or any issue outstanding. However, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. The City will file its continuing disclosure information using the Electronic Municipal Market Access ("EMMA") system or any system that may be prescribed in the future. Investors will be able to access continuing disclosure information filed with the MSRB at Ehlers is currently engaged as disclosure dissemination agent for the City. LEGAL OPINION An opinion as to the validity of the Bonds and the exemption from taxation of the interest thereon will be furnished by Eckberg Lammers, P.C., Stillwater, Minnesota, Bond Counsel to the City, and will be available at the time of delivery of the Bonds. The legal opinion will state that the Bonds are valid and binding general obligations of the City; provided that the rights of the owners of the Bonds and the enforceability of the Bonds may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights and by equitable principles (which may be applied in either a legal or equitable proceeding). See "FORM OF LEGAL OPINION" found in Appendix B. Bond Counsel has not participated in the preparation of this Official Statement and is not passing upon its accuracy, completeness or sufficiency. Bond Counsel has not examined, nor attempted to examine, or verify, any of the financial or statistical statements or data contained in this Official Statement, and will express no opinion with respect thereto. 4

9 TAX EXEMPTION The following discussion is not intended to be an exhaustive discussion of collateral tax consequences arising from ownership or disposition of the Bonds or receipt of interest on the Bonds. Prospective purchasers should consult their tax advisors with respect to collateral tax consequences, including without limitation, the determination of gain or loss on the sale of a bond, the calculation of alternative minimum tax liability; the inclusion of Social Security or other retirement payments in taxable income, the disallowance of deductions for certain expenses attributable to the Bonds, and applicable state and local tax rules. In the opinion of Eckberg Lammers, P.C., as Bond Counsel, based on present federal laws, regulations, rulings and decisions, and on certifications to be furnished at closing, and assuming compliance by the City with certain tax covenants, interest to be paid on the Bonds is excluded from gross income for purposes of federal income taxation. Interest on the Bonds is not an item of tax preference includable in alternative minimum taxable income for purposes of the federal alternative minimum tax on individuals. Certain provisions of the Internal Revenue Code of 1986, as amended (the "Code"), however, impose continuing requirements that must be met after the issuance of the Bonds in order that interest on the Bonds be and remain excludable from federal gross income. These requirements include, but are not limited to, provisions regarding the use of bond proceeds and the facilities financed or refinanced with such proceeds; restrictions on the investment of bond proceeds and other amounts; and provisions requiring that certain investment earnings be rebated periodically to the federal government. Noncompliance with such requirements of the Code may cause interest on the Bonds to be includable in federal gross income retroactively to their date of issue. Compliance with the City's tax covenants will satisfy the current requirements of the Code with respect to exclusion of interest on the Bonds from federal gross income. No provision has been made for redemption of or for an increase in the interest rate on the Bonds in the event that interest on the same becomes includable in federal gross income. Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Bonds may affect the tax exempt status of interest on the Bonds or the tax consequences of ownership of the Bonds. No assurance can be given that future legislation, if enacted into law, will not contain provisions which could directly or indirectly affect the exclusion of the interest on the Bonds from gross income for federal income tax purposes. The interest on the Bonds is exempt from taxable net income for purposes of State of Minnesota income tax, other than Minnesota franchise taxes measured by income and imposed on corporation and financial institutions. Proposed Federal Legislation From time to time legislation is proposed, and there are or may be legislative proposals pending in the Congress of the United States that, if enacted, could alter or amend the federal tax matters referred to above or adversely affect the market value of the Bonds. It cannot be predicted whether, or in what form, any proposal if enacted could alter one or more of the federal tax matters referred to above or adversely affect the market value of the Bonds. Prospective purchasers of Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending litigation or proposed federal tax legislation. QUALIFIED TAX-EXEMPT OBLIGATIONS The City will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations. 5

10 MUNICIPAL ADVISOR Ehlers has served as municipal advisor to the City in connection with the issuance of the Bonds. The Municipal Advisor cannot participate in the underwriting of the Bonds. The financial information included in this Preliminary Official Statement has been compiled by the Municipal Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. Ehlers is not a firm of certified public accountants. Ehlers is registered with the Securities and Exchange Commission and the MSRB as a Municipal Advisor. MUNICIPAL ADVISOR AFFILIATED COMPANIES Bond Trust Services Corporation ("BTSC") and Ehlers Investment Partners, LLC ("EIP") are affiliate companies of Ehlers. BTSC is chartered by the State of Minnesota and authorized in Minnesota, Wisconsin, and Illinois to transact the business of a limited purpose trust company. BTSC provides paying agent services to debt issuers. EIP is a Registered Investment Advisor with the Securities and Exchange Commission. EIP assists issuers with the investment of bond proceeds or investing other issuer funds. This includes escrow bidding agent services. Issuers, such as the City, have retained or may retain BTSC and/or EIP to provide these services. If hired, BTSC and/or EIP would be retained by the City under an agreement separate from Ehlers. INDEPENDENT AUDITORS The basic financial statements of the City for the fiscal year ended December 31, 2016 have been audited by Abdo, Eick & Meyers, LLP, Minneapolis, Minnesota, independent auditors (the "Auditor"). The report of the Auditor, together with the basic financial statements, component units financial statements, and notes to the financial statements are attached hereto as "APPENDIX A FINANCIAL STATEMENTS". The Auditor has not been engaged to perform and has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. The Auditor also has not performed any procedures relating to this Preliminary Official Statement. RISK FACTORS Following is a description of possible risks to holders of the Bonds without weighting as to probability. This description of risks is not intended to be all-inclusive, and there may be other risks not now perceived or listed here. Taxes: The Bonds are general obligations of the City, the ultimate payment of which rests in the City's ability to levy and collect sufficient taxes to pay debt service should other revenue (special assessments) be insufficient. In the event of delayed billing, collection or distribution of property taxes, sufficient funds may not be available to the City in time to pay debt service when due. State Actions: Many elements of local government finance, including the issuance of debt and the levy of property taxes, are controlled by state government. Future actions of the state may affect the overall financial condition of the City, the taxable value of property within the City, and the ability of the City to levy and collect property taxes. Future Changes in Law: Various State and federal laws, regulations and constitutional provisions apply to the City and to the Bonds. The City can give no assurance that there will not be a change in or interpretation of any such applicable laws, regulations and provisions which would have a material effect on the City or the taxing authority of the City. 6

11 Ratings; Interest Rates: In the future, the City's credit rating may be reduced or withdrawn, or interest rates for this type of obligation may rise generally, either possibility resulting in a reduction in the value of the Bonds for resale prior to maturity. Tax Exemption: If the federal government or the State of Minnesota taxes all or a portion of the interest on municipal obligations, directly or indirectly, or if there is a change in federal or state tax policy, the value of the Bonds may fall for purposes of resale. Noncompliance following the issuance of the Bonds with certain requirements of the Code and covenants of the Award Resolution may result in the inclusion of interest on the Bonds in gross income of the recipient for United States income tax purposes or in taxable net income of individuals, estates or trusts for State of Minnesota income tax purposes. No provision has been made for redemption of the Bonds, or for an increase in the interest rate on the Bonds, in the event that interest on the Bonds becomes subject to federal or State of Minnesota income taxation, retroactive to the date of issuance. Continuing Disclosure: A failure by the City to comply with the Disclosure Undertaking for continuing disclosure (see "CONTINUING DISCLOSURE") will not constitute an event of default on the Bonds. Any such failure must be reported in accordance with the Rule and must be considered by any broker, dealer, or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. State Economy; State Aids: State of Minnesota cash flow problems could affect local governments and possibly increase property taxes. Book-Entry-Only System: The timely credit of payments for principal and interest on the Bonds to the accounts of the Beneficial Owners of the Bonds may be delayed due to the customary practices, standing instructions or for other unknown reasons by DTC participants or indirect participants. Since the notice of redemption or other notices to holders of these obligations will be delivered by the City to DTC only, there may be a delay or failure by DTC, DTC participants or indirect participants to notify the Beneficial Owners of the Bonds. Economy: A combination of economic, climatic, political or civil disruptions or terrorist actions outside of the control of the City, including loss of major taxpayers or major employers, could affect the local economy and result in reduced tax collections and/or increased demands upon local government. Real or perceived threats to the financial stability of the City may have an adverse effect on the value of the Bonds in the secondary market. Secondary Market for the Bonds: No assurance can be given that a secondary market will develop for the purchase and sale of the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. The underwriters are not obligated to engage in secondary market trading or to repurchase any of the Bonds at the request of the owners thereof. Prices of the Bonds as traded in the secondary market are subject to adjustment upward and downward in response to changes in the credit markets and other prevailing circumstances. No guarantee exists as to the future market value of the Bonds. Such market value could be substantially different from the original purchase price. Bankruptcy: The rights and remedies of the holders may be limited by and are subject to the provisions of federal bankruptcy laws, to other laws, or equitable principles that may affect the enforcement of creditors rights, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against local governments. The opinion of Bond Counsel to be delivered with respect to the Bonds will be similarly qualified. 7

12 VALUATIONS OVERVIEW All non-exempt property is subject to taxation by local taxing districts. Exempt real property includes Indian lands, public property, and educational, religious and charitable institutions. Most personal property is exempt from taxation (except investor-owned utility mains, generating plants, etc.). The valuation of property in Minnesota consists of three elements. (1) The estimated market value is set by city or county assessors. Not less than 20% of all real properties are to be appraised by local assessors each year. (2) The taxable market value is the estimated market value adjusted by all legislative exclusions. (3) The tax capacity (taxable) value of property is determined by class rates set by the State Legislature. The tax capacity rate varies according to the classification of the property. Tax capacity represents a percent of taxable market value. The property tax rate for a local taxing jurisdiction is determined by dividing the total tax capacity or market value of property within the jurisdiction into the dollars to be raised from the levy. State law determines whether a levy is spread on tax capacity or market value. Major classifications and the percentages by which tax capacity is determined are: Type of Property 2015/ / /18 Residential homestead 1 First $500, % Over $500, % Agricultural homestead 1 First $500,000 HGA % Over $500,000 HGA % First $2,140, % 2 Over $2,140, % 2 First $500, % Over $500, % First $500,000 HGA % Over $500,000 HGA % First $2,050, % 2 Over $2,050, % 2 First $500, % Over $500, % First $500,000 HGA % Over $500,000 HGA % First $1,940, % 2 Over $1,940, % 2 Agricultural non-homestead Land % 2 Land % 2 Land % 2 Seasonal recreational residential First $500, % 3 Over $500, % 3 First $500, % 3 Over $500, % 3 First $500, % 3 Over $500, % 3 Residential non-homestead: 1 unit - 1st $500, % Over $500, % 2-3 units % 4 or more % Small City % Affordable Rental: First $106, % Over $106, % Industrial/Commercial/Utility 5 First $150, % Over $150, % 1 unit - 1st $500, % Over $500, % 2-3 units % 4 or more % Small City % Affordable Rental: First $115, % Over $115, % First $150, % Over $150, % 1 unit - 1st $500, % Over $500, % 2-3 units % 4 or more % Small City % Affordable Rental: First $121, % Over $121, % First $150, % Over $150, % 1 A residential property qualifies as "homestead" if it is occupied by the owner or a relative of the owner on the assessment date. 2 Applies to land and buildings. Exempt from referendum market value tax. 3 Exempt from referendum market value tax. 4 Cities of 5,000 population or less and located entirely outside the seven-county metropolitan area and the adjacent nine-county area and whose boundaries are 15 miles or more from the boundaries of a Minnesota city with a population of over 5, The estimated market value of utility property is determined by the Minnesota Department of Revenue. 8

13 CURRENT PROPERTY VALUATIONS 2016/17 Economic Market Value $181,341, /18 Assessor's Estimated Market Value 2017/18 Net Tax Capacity Real Estate $180,437,900 $ 2,207,136 Personal Property 1,762,900 34,508 Total Valuation $182,200,800 $ 2,241,644 Less: Fiscal Disparities Contribution 2 (330,563) Taxable Net Tax Capacity $ 1,911,081 Plus: Fiscal Disparities Distribution 3 273,933 Adjusted Taxable Net Tax Capacity $ 2,185,014 1 According to the Minnesota Department of Revenue, the Assessor's Estimated Market Value (the "AEMV") for the City of Maple Plain is about 93.19% of the actual selling prices of property most recently sold in the City. The sales ratio was calculated by comparing the selling prices with the AEMV. Dividing the AEMV of real estate by the sales ratio and adding the AEMV of personal property and utility, railroads and minerals, if any, results in an Economic Market Value ("EMV") for the City of $181,341, Each community in the seven-county metropolitan area contributes 40% of the growth in its commercialindustrial property tax base since 1972 to an area pool which is then distributed among the municipalities on the basis of population, special needs, etc. Each governmental unit makes a contribution and receives a distribution-- sometimes gaining and sometimes contributing net tax capacity for tax purposes. 9

14 2017/18 NET TAX CAPACITY BY CLASSIFICATION 2017/18 Net Tax Capacity Percent of Total Net Tax Capacity Residential homestead $ 1,082, % Commercial/industrial 931, % Railroad operating property 33, % Non-homestead residential 159, % Personal property 34, % Total $ 2,241, % TREND OF VALUATIONS Levy Year Assessor's Estimated Market Value Assessor's Taxable Market Value Net Tax Capacity 1 Adjusted Taxable Net Tax Capacity 2 Percent +/- in Estimated Market Value 2013/14 $151,703,000 $141,906,940 $ 1,833,441 $ 1,751, % 2014/15 152,662, ,043,694 1,850,160 1,750, % 2015/16 162,436, ,293,364 1,975,280 1,896, % 2016/17 168,330, ,515,967 2,040,973 1,968, % 2017/18 182,200, ,738,882 2,241,644 2,185, % 1 Net Tax Capacity is before fiscal disparities adjustments. 2 Adjusted Taxable Net Tax Capacity is after fiscal disparities adjustments. 10

15 LARGER TAXPAYING PARCELS 1 Percent of Taxpayer Type of Property 2017/18 Net Tax Capacity City's Total Net Tax Capacity Proto Labs, Inc. Commercial $127, % Kieler Construction & HLD Industrial 59, % Electrochemicals, Inc. Industrial 49, % 5130 Industrial Street LLC Industrial 42, % Windmill Properties LTD Commercial 34, % Antioch Partnership LLC Industrial 32, % Herc-U-Lift, Inc. Industrial 32, % Outcome Limited Partners Industrial 29, % Maple Plain LLC Industrial 29, % Spectralytics, Inc. Industrial 23, % Total $460, % City's Total 2017/18 Net Tax Capacity $2,241,644 Source: Current Property Valuations, Net Tax Capacity by Classification, Trend of Valuations and Larger Taxpayers have been furnished by Hennepin County. 1 Hennepin County has provided only the ten largest taxpaying parcels which appear on the tax rolls of the County, and therefore the information stated above may not be reflective of the entire valuation of all parcels and may not include all classifications of property. 11

16 DEBT DIRECT DEBT 1 General Obligation Debt (see schedules following) Total g.o. debt being paid from revenues $1,843,000 Total g.o. debt being paid from revenues and taxes 660,000 Total g.o. debt being paid from special assessments and taxes (includes the Bonds)* 4,630,000 Total g.o. debt being paid from revenues, special assessments, and taxes 2,680,000 Total General Obligation Debt* $9,813,000 *Preliminary, subject to change. 1 Outstanding debt is as of the dated date of the Bonds. 12

17 CITY OF MAPLE PLAIN, MINNESOTA Schedule of Bonded Indebtedness General Obligation Debt Being Paid From Revenues (As of 5/15/18) Water (MPFA Loan) Dated Amount 7/09/07 $3,468,767 Maturity 8/20 Fiscal Year Total Total Total Principal Fiscal Year Ending Principal Interest Principal Interest P & I Outstanding % Paid Ending ,000 19, ,000 19, ,812 1,655, % ,000 35, ,000 35, ,583 1,463, % ,000 31, ,000 31, ,455 1,267, % ,000 27, ,000 27, ,241 1,067, % ,000 22, ,000 22, , , % ,000 18, ,000 18, , , % ,000 14, ,000 14, , , % ,000 9, ,000 9, , , % ,000 4, ,000 4, , % ,843, ,922 1,843, ,922 2,026,922 Prepared by Ehlers GO Revenues 13

18 CITY OF MAPLE PLAIN, MINNESOTA Schedule of Bonded Indebtedness General Obligation Debt Being Paid From Revenues and Taxes (As of 5/15/18) G.O. Bonds 1) Series 2013A Dated Amount 9/19/13 $1,010,000 Maturity 2/01 Fiscal Year Total Total Total Principal Fiscal Year Ending Principal Interest Principal Interest P & I Outstanding % Paid Ending , ,150 9, , % ,000 17,469 95,000 17, , , % ,000 15,640 95,000 15, , , % ,000 13,526 95,000 13, , , % ,000 11,175 95,000 11, , , % ,000 8, ,000 8, , , % ,000 6,300 35,000 6,300 41, , % ,000 4,900 35,000 4,900 39, , % ,000 3,500 35,000 3,500 38,500 70, % ,000 2,100 35,000 2,100 37,100 35, % , , , % ,000 92, ,000 92, ,930 1) The Equipment Certificate Portions of this issue are payable entirely by taxes and are subject to the debt limit ($205,000 current principal outstanding). The revenue portions of this issue are payable entirely from revenues ($455,000 current principal outstanding). Prepared by Ehlers GO Revenues & Taxes 14

19 CITY OF MAPLE PLAIN, MINNESOTA Schedule of Bonded Indebtedness General Obligation Debt Being Paid From Special Assessments and Taxes (As of 5/15/18) Improvement Series 2014A Improvement Series 2018A Dated Amount 6/25/14 $3,000,000 5/15/18 $1,990,000* Maturity 2/01 2/01 Fiscal Year Estimated Total Total Total Principal Fiscal Year Ending Principal Interest Principal Interest Principal Interest P & I Outstanding % Paid Ending , ,166 39,166 4,630, % ,000 77, , , , ,954 4,510, % ,000 74,631 80,000 57, , , ,369 4,300, % ,000 71,981 80,000 56, , , ,199 4,085, % ,000 68,606 80,000 54, , , ,204 3,870, % ,000 64,481 85,000 52, , , ,283 3,645, % ,000 60,281 85,000 50, , , ,128 3,420, % ,000 56,081 85,000 48, , , ,888 3,195, % ,000 51,731 85,000 46, ,000 98, ,413 2,960, % ,000 47,231 90,000 44, ,000 91, ,636 2,720, % ,000 42,581 95,000 41, ,000 84, ,488 2,465, % ,000 37,781 95,000 39, ,000 77, ,028 2,210, % ,000 32,831 95,000 36, ,000 69, ,323 1,945, % ,000 27,519 95,000 33, ,000 61, ,184 1,680, % ,000 21, ,000 30, ,000 52, ,603 1,405, % ,000 16, ,000 27, ,000 43, ,571 1,125, % ,000 9, ,000 24, ,000 33, , , % ,000 3, ,000 20, ,000 23, , , % ,000 15, ,000 15, , , % ,000 11, ,000 11, , , % ,000 7, ,000 7, , , % ,000 2, ,000 2, , % ,640, ,057 1,990, ,854 4,630,000 1,576,911 6,206,911 *Preliminary, subject to change. Prepared by Ehlers GO Special Assessments & Taxes 15

20 CITY OF MAPLE PLAIN, MINNESOTA Schedule of Bonded Indebtedness General Obligation Debt Being Paid From Revenues, Special Assessments & Taxes (As of 5/15/18) G.O. Bonds 1) Series 2012A G.O. Imp & Water Revenue Bonds 2) Series 2016A Dated Amount 7/24/12 $1,465,000 7/28/16 $1,685,000 Maturity 2/01 2/01 Fiscal Year Total Total Total Principal Fiscal Year Ending Principal Interest Principal Interest Principal Interest P & I Outstanding % Paid Ending , , ,966 28,966 2,680, % ,000 23,370 70,000 33, ,000 56, ,633 2,515, % ,000 21,470 70,000 32, ,000 54, ,033 2,350, % ,000 19,470 70,000 31, ,000 51, ,245 2,175, % ,000 17,318 70,000 30, ,000 48, ,218 2,000, % ,000 15,113 70,000 30, ,000 45, ,138 1,825, % ,000 12,718 80,000 28, ,000 41, ,505 1,635, % ,000 10,133 80,000 27, ,000 37, ,320 1,445, % ,000 7,410 80,000 25, ,000 32, ,998 1,255, % ,000 4,550 80,000 23, ,000 28, ,538 1,065, % ,000 1,560 85,000 22, ,000 23, , , % ,000 20,638 85,000 20, , , % ,000 18,831 85,000 18, , , % ,000 16,863 90,000 16, , , % ,000 14,838 90,000 14, , , % ,000 12,638 95,000 12, , , % ,000 10, ,000 10, , , % ,000 7, ,000 7, , , % ,000 4, ,000 4, , , % ,000 1, ,000 1, , % ,065, ,270 1,615, ,450 2,680, ,720 3,236,720 1) The Utility Portions of this issue is payable entirely by revenues ($825,000 current principal outstanding.) 2) The Water Project Portion of this issue is payable entirely by revenues ($535,000 current principal outstanding.) Prepared by Ehlers GO Rev SA & Tax 16

21 DEBT LIMIT The statutory limit on debt of Minnesota municipalities other than school districts or cities of the first class (Minnesota Statutes, Section , subd. 1) is 3% of the Assessor's Estimated Market Value of all taxable property within its boundaries. "Net debt" (Minnesota Statutes, Section , subd. 4) is the amount remaining after deducting from gross debt: (1) obligations payable wholly or partly from special assessments levied against benefitted property (includes the Bonds); (2) warrants or orders having no definite or fixed maturity; (3) obligations issued to finance any public revenue producing convenience; (4) obligations issued to create or maintain a permanent improvement revolving fund; (5) funds held as sinking funds for payment of principal and interest on debt other than those deductible under 1-4 above; and (6) other obligations which are not to be included in computing the net debt of a municipality under the provisions of the law authorizing their issuance. 2017/18 Assessor's Estimated Market Value $182,200,800 Multiply by 3% 0.03 Statutory Debt Limit $ 5,466,024 Less: Long-Term Debt Outstanding Being Paid Solely from Taxes 1 (205,000) Unused Debt Limit* $ 5,261,024 *Preliminary, subject to change. 1 Includes the Equipment Certificate Portions of the City's General Obligation Bonds, Series 2013A ($205,000 current principal outstanding). 17

22 OVERLAPPING DEBT /18 Taxing District Adjusted Taxable Net Tax Capacity % In City Total G.O. Debt 2 City's Proportionate Share Hennepin County $1,838,226, % $ 950,945,000 3 $ 1,130,674 I.S.D. No. 278 (Orono Public Schools) 40,679, % 68,235,000 3,665,107 Metropolitan Council 3,548,816, % 148,045, ,196 Three Rivers Park District 1,304,690, % 53,355,000 89,370 City's Share of Total Overlapping Debt $ 4,976,346 1 Overlapping debt is as of the dated date of the Bonds. Only those taxing jurisdictions with general obligation debt outstanding are included in this section. Does not include non-general obligation debt, self-supporting general obligation revenue debt, short-term general obligation debt, or general obligation tax/aid anticipation certificates of indebtedness. 2 Outstanding debt is based on information in Official Statements obtained on EMMA and the Municipal Advisor's records. 3 Hennepin County also has General Obligation Solid Waste Revenue Bonds outstanding which are payable entirely from the County s solid waste enterprise fund; General Obligation Bonds (Century Plaza Debt) which are expected to be paid from building rental fees from County departments and non-county tenants; and General Obligation Ice Arena Revenue Bonds which are expected to be paid from building rental payments from Augsburg College. These issues have not been included in the overlapping debt or debt ratios. 4 The above debt includes all outstanding general obligation debt supported by taxes of the Metropolitan Council. The Council also has general obligation sewer revenue, wastewater revenue, and radio revenue bonds and lease obligations outstanding all of which are supported entirely by revenues and have not been included in the Overlapping Debt or Debt Ratios sections. 18

23 DEBT RATIOS Debt/Economic Market Value ($181,341,998) Debt/ Current Population Estimate (1,812) G.O. Debt Direct G.O. Debt Being Paid From: Revenues $ 1,843,000 Revenues & Taxes 660,000 Special Assessments & Taxes* 4,630,000 Revenues, Special Assessments & Taxes 2,680,000 Total General Obligation Debt (includes the Obligations)* $ 9,813,000 Less: G.O. Debt Paid Entirely from Revenues 1 (3,898,000) Tax Supported General Obligation Debt* $ 5,915, % $3, City's Share of Total Overlapping Debt $ 4,976, % $2, Total* $ 10,891, % $6, *Preliminary, subject to change. DEBT PAYMENT HISTORY The City has no record of default in the payment of principal and interest on its debt. FUTURE FINANCING The City has no current plans for additional financing in the next 12 months. 1 Debt service on the City s general obligation revenue debt is being paid entirely from revenues and therefore is considered self-supporting debt. Includes the utility portions of the City's $1,465,000 General Obligation Bonds, Series 2012A ($825,000 current principal outstanding), the Water Project portion of the City's $1,685,000 General Obligation Improvement and Water Revenue Bonds, Series 2016A ($535,000 current principal outstanding), and the utility portions of the City's $1,010,000 General Obligation Bonds, Series 2013A ($455,000 current principal outstanding). 19

24 TAX RATES, LEVIES AND COLLECTIONS TAX LEVIES AND COLLECTIONS Tax Year Net Tax Levy 1 Total Collected Following Year Collected to Date 2 % Collected 2013/14 $ 1,268,260 $ 1,248,622 $ 1,267, % 2014/15 1,414,453 1,395,304 1,411, % 2015/16 1,466,061 1,434,675 1,460, % 2016/17 1,482,990 1,452,607 1,452, % 2017/18 1,477,542 In process of collection Property taxes are collected in two installments in Minnesota--the first by May 15 and the second by October Mobile home taxes are collectible in full by August 31. Minnesota Statutes require that levies (taxes and special assessments) for debt service be at least 105% of the actual debt service requirements to allow for delinquencies. 1 This reflects the Final Levy Certification of the City after all adjustments have been made. 2 Collections are through January 1, Second half tax payments on agricultural property are due on November 15th of each year. 20

25 TAX CAPACITY RATES / / / / /18 Hennepin County % % % % % City of Maple Plain % % % % % I.S.D. No. 278 (Orono Public Schools) % % % % % HCRRA 1.777% 1.817% 1.879% 1.925% 1.962% Hennepin County HRA 0.514% 0.471% 0.439% 0.497% 0.457% Metropolitan Mosquito 0.563% 0.507% 0.483% 0.475% 0.456% Metropolitan Council 1.069% 0.976% 0.925% 0.883% 0.844% Metropolitan Transit 1.703% 1.523% 1.491% 1.463% 1.383% Park Museum 0.766% 0.702% 0.712% 0.711% 0.710% Three Rivers Park District 4.169% 3.789% 3.601% 3.365% 3.161% Referendum Market Value Rates: I.S.D. No. 278 (Orono Public Schools) % % % % % Source: Tax Levies and Collections and Tax Capacity Rates have been furnished by Hennepin County. LEVY LIMITS The State Legislature has periodically imposed limitations on the ability of municipalities to levy property taxes. For taxes levied in 2013, payable in 2014, only, the Legislature imposed a one year levy limit on all counties with a population greater than 5,000, and all cities with a population greater than 2,500. While these limitations have expired, the potential exists for future legislation to limit the ability of local governments to levy property taxes. All previous limitations have not limited the ability to levy for the payment of debt service on bonded indebtedness. For more detailed information about Minnesota levy limits, contact the Minnesota Department of Revenue or Ehlers & Associates. 1 After reduction for state aids. Does not include the statewide general property tax against commercial/industrial, non-homestead resorts and seasonal recreational residential property. 21

26 THE ISSUER CITY GOVERNMENT The City of Maple Plain was organized as a municipality in The City operates under a statutory form of government consisting of a five-member City Council of which the Mayor is a voting member. The City Administrator, Assistant to the City Administrator and Deputy Clerk are responsible for administrative details and financial records. EMPLOYEES; PENSIONS; UNIONS The City currently has 5 full-time and 1 part-time employees. All full-time and certain part-time employees of the City are covered by defined benefit pension plans administered by the Public Employee Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing multiple-employer retirement plans. PERA members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security. See the Notes to Financial Statements in Appendix A for a detailed description of the Plans. The City does not have any recognized Bargaining Units. POST EMPLOYMENT BENEFITS The City does not pay directly for retirees post-employment benefits. The City has some obligations for postemployment benefits as mandated by State Statutes. Specifically, the City is required to allow retirees to be covered by the City s health care plan as long as the retiree pays his/her premiums. Retiree membership in a health care plan typically increases costs of the premiums. This increased cost is commonly known as implicit price subsidy. LITIGATION There is no litigation threatened or pending questioning the organization or boundaries of the City or the right of any of its officers to their respective offices or in any manner questioning their rights and power to execute and deliver the Bonds or otherwise questioning the validity of the Bonds. 22

27 MUNICIPAL BANKRUPTCY Municipalities are prohibited from filing for bankruptcy under Chapter 11 (reorganization) or Chapter 7 (liquidation) of the U.S. Bankruptcy Code (11 U.S.C ) (the "Bankruptcy Code"). Instead, the Bankruptcy Code permits municipalities to file a petition under Chapter 9 of the Bankruptcy Code, but only if certain requirements are met. These requirements include that the municipality must be "specifically authorized" under State law to file for relief under Chapter 9. For these purposes, "State law" may include, without limitation, statutes of general applicability enacted by the State legislature, special legislation applicable to a particular municipality, and/or executive orders issued by an appropriate officer of the State s executive branch. As of the date hereof, Minnesota Statutes, , authorizes municipalities to file for bankruptcy relief under Chapter 9 of the Bankruptcy Code. A municipality is defined in United States Code, title 11, section 101, as amended through December 31, 1996, but limited to a county, statutory or home rule charter city, or town; or a housing and redevelopment authority, economic development authority, or rural development financing authority established under Chapter 469, a home rule charter or special law. FUNDS ON HAND (As of December 31, 2017) Total Cash Fund and Investments General $ 1,131,943 Special Revenue 781,791 Debt Service 338,641 Capital Projects 1,639,019 Enterprise Funds 1,679,767 Total Funds on Hand $ 5,571,161 23

28 ENTERPRISE FUNDS Revenues available for debt service on the City's enterprise funds have been as follows as of December 31 each year: Water Total Operating Revenues 1 $ 425,596 $427,870 $ 425,976 Less: Operating Expenses (311,030) (318,552) (362,407) Operating Income $ 114,566 $109,318 $ 63,569 Plus: Depreciation 143, , ,393 Revenues Available for Debt Service $ 257,681 $265,065 $ 235,962 Sewer Total Operating Revenues 1 $ 351,945 $353,151 $ 351,891 Less: Operating Expenses (288,581) (375,349) (366,516) Operating Income $ 63,364 $ (22,198) $ (14,625) Plus: Depreciation 32,679 44,285 57,285 Revenues Available for Debt Service $ 96,043 $ 22,087 $ 42,660 Storm Water Total Operating Revenues 1 $ 85,434 $ 82,701 $ 81,539 Less: Operating Expenses (42,176) (35,886) (67,695) Operating Income $ 43,258 $ 46,815 $ 13,844 Plus: Depreciation 8,569 10,572 28,644 Revenues Available for Debt Service $ 51,827 $ 57,387 $ 42,488 1 Includes connection fees. 24

29 SUMMARY GENERAL FUND INFORMATION Following are summaries of the revenues and expenditures and fund balances for the City's General Fund. These summaries are not purported to be the complete audited financial statements of the City, and potential purchasers should read the included financial statements in their entirety for more complete information concerning the City. Copies of the complete statements are available upon request. Appendix A includes the City s 2016 audited financial statements. COMBINED STATEMENT 2014 Audited FISCAL YEAR ENDING DECEMBER Audited Audited Unaudited 1 Adopted Budget 2 Revenues Property taxes $ 1,252,023 $ 1,285,935 $ 1,271,636 $ 1,299,291 $ 1,230,273 Licenses and permits 63,221 39,106 73,044 42,347 39,920 Intergovernmental 255, , , , ,346 Charges for services 27,392 40,719 11,778 2,350 14,000 Fines and forfeitures 11,892 15,014 22,078 26,706 22,700 Special assessments 0 1,334 1, Interest on investments 3,973 5,309 4,525 4,679 0 Miscellaneous 50,988 57,751 59,226 47,400 88,160 Total Revenues $ 1,665,275 $ 1,704,655 $ 1,708,594 $ 1,714,657 $ 1,656,399 Expenditures Current: General government $ 453,711 $ 422,191 $ 439,230 $ 429,351 $ 468,383 Public safety 687, , , , ,456 Public works 185, , , , ,885 Culture and recreation 63,524 69,348 55,225 40,792 54,460 Economic development 12,549 6,125 5,009 2,061 0 Capital outlay 11, ,623 27,356 11,797 0 Debt service 21,438 21,438 21,438 21,438 0 Total Expenditures $ 1,435,457 $ 1,536,613 $ 1,443,555 $ 1,422,968 $ 1,452,184 Excess of revenues over (under) expenditures $ 229,818 $ 168,042 $ 265,039 $ 291,689 $ 204,215 Other Financing Sources (Uses) Sale of capital assets $ 40,417 $ 0 $ 0 $ 0 $ 0 Operating transfers in Operating transfers out (190,614) (224,215) (224,215) (204,215) (204,215) Total Other Financing Sources (Uses) $ (150,197) $ (224,215) $ (224,215) $ (204,215) $ (204,215) Net Changes in Fund Balances $ 79,621 $ (56,173) $ 40,824 $ 87,474 $ 0 General Fund Balance January 1 987,373 1,066,994 1,010,821 1,051,645 Prior Period Adjustment Residual Equity Transfer in (out) General Fund Balance December 31 $ 1,066,994 $ 1,010,821 $ 1,051,645 $ 1,139,119 DETAILS OF DECEMBER 31 FUND BALANCE Nonspendable $ 3,986 $ 0 $ 60,284 $ 4,000 Assigned 16,230 6,230 6,230 7,754 Unassigned 1,046,778 1,004, ,131 1,127,365 Total $ 1,066,994 $ 1,010,821 $ 1,051,645 $ 1,139, Unaudited data is as of December 31, The 2018 budget was adopted on December 18,

30 GENERAL INFORMATION LOCATION The City of Maple Plain, with a 2010 U.S. Census population of 1,768, and a current population estimate of 1,812, and comprising an area of 1.1 square miles, is located approximately 20 miles west of the City of Minneapolis. LARGER EMPLOYERS 1 Larger employers in the City of Maple Plain include the following: Estimated No. Firm Type of Business/Product of Employees I.S.D. No. 278 (Orono Public Schools) Elementary and secondary education Proto Labs, Inc. Injection molding services 500 Service Master Co. Cleaning service- industrial 200 Herc-U-Lift, Inc. Farm equipment manufacturer 120 American Custom Rotomolding Plastic and plastic product manufacturer 110 Wenck Associates, Inc. Environmental engineering 70 Windsong Farm Gold Club Golf course 60 OMG Electrochemical, Inc. Printed wiring board fabricators 60 Haven Homes of Maple Plain Residential care- nursing home 60 Maple Plain Family Center & Drug Grocery, bakery and pharmacy 50 Source: ReferenceUSA, written and telephone survey (March 2018), and the Minnesota Department of Employment and Economic Development. 1 This does not purport to be a comprehensive list and is based on available data obtained through a survey of individual employers, as well as the sources identified above. Some employers do not respond to inquiries for employment data. 2 Reflects employees for entire district, including those outside of City Limits. 26

31 BUILDING PERMITS New Single Family Homes No. of building permits Valuation $270,000 $344,500 $875,000 $0 $0 All Building Permits (including additions and remodelings) No. of building permits Valuation $2,678,616 $838,006 $1,849,688 $1,922,657 $98,833 Source: City of Maple Plain, Minnesota 1 As of March 30,

32 U.S. CENSUS DATA Population Trend: City of Maple Plain, Minnesota 2000 U.S. Census population 2, U.S. Census population 1, State Demographer's Estimate 1,812 Percent of Change % Income and Age Statistics City of Maple Plain Hennepin County State of Minnesota United States 2016 per capita income $31,403 $39,939 $33,225 $29, median household income $63,698 $67,989 $63,217 $55, median family income $86,458 $90,932 $79,595 $67, median gross rent $834 $982 $873 $ median value owner occupied units $213,300 $235,800 $191,500 $184, median age 38.9 yrs yrs yrs yrs. State of Minnesota United States City % of 2016 per capita income 94.52% % City % of 2016 median family income % % Housing Statistics City of Maple Plain Percent of Change All Housing Units % Source: 2000 and 2010 Census of Population and Housing, and 2016 American Community Survey (Based on a five-year estimate), U.S. Census Bureau ( EMPLOYMENT/UNEMPLOYMENT DATA Rates are not compiled for individual communities within counties. Average Employment Average Unemployment Year Hennepin County Hennepin County State of Minnesota , % 4.9% , % 4.2% , % 3.7% , % 3.8% 2018, February 684, % 3.9% Source: Minnesota Department of Employment and Economic Development. 28

33 APPENDIX A FINANCIAL STATEMENTS Potential purchasers should read the included financial statements in their entirety for more complete information concerning the City s financial position. Such financial statements have been audited by the Auditor, to the extent and for the periods indicated thereon. The City has not requested the Auditor to perform any additional examination, assessments or evaluation with respect to such financial statements since the date thereof, nor has the City requested that the Auditor consent to the use of such financial statements in this Official Statement. Although the inclusion of the financial statements in this Official Statement is not intended to demonstrate the fiscal condition of the City since the date of the financial statements, in connection with the issuance of the Bonds, the City represents that there have been no material adverse change in the financial position or results of operations of the City, nor has the City incurred any material liabilities, which would make such financial statements misleading. Copies of the complete audited financial statements for the past three years and the current budget are available upon request from Ehlers. A-1

34 A-2

35 A-3

36 A-4

37 A-5

38 A-6

39 A-7

40 A-8

41 A-9

42 A-10

43 A-11

44 A-12

45 A-13

46 A-14

47 A-15

48 A-16

49 A-17

50 A-18

51 A-19

52 A-20

53 A-21

54 A-22

55 A-23

56 A-24

57 A-25

58 A-26

59 A-27

60 A-28

61 A-29

62 A-30

63 A-31

64 A-32

65 A-33

66 A-34

67 A-35

68 A-36

69 A-37

70 A-38

71 A-39

72 A-40

73 A-41

74 A-42

75 A-43

76 A-44

77 A-45

78 A-46

79 A-47

80 APPENDIX B FORM OF LEGAL OPINION (See following page) B-1

81 1809 Northwestern Avenue Stillwater, Minnesota (651) Fax (651) $ General Obligation Improvement Bonds Series 2018A City of Maple Plain, Minnesota We have acted as bond counsel to the City of Maple Plain, Minnesota (the Issuer ) in connection with the issuance by the Issuer of its General Obligation Improvement Bonds, Series 2018A (the Bonds ), originally dated as of May 15, 2018, and issued in the original aggregate principal amount of $. In such capacity and for the purpose of rendering this opinion we have examined certified copies of certain proceedings, certifications and other documents, and applicable laws as we have deemed necessary. Regarding questions of fact material to this opinion, we have relied on certified proceedings and other certifications of public officials and other documents furnished to us without undertaking to verify the same by independent investigation. Under existing laws, regulations, rulings and decisions in effect on the date hereof, and based on the foregoing we are of the opinion that: 1. The Bonds have been duly authorized and executed, and are valid and binding general obligations of the Issuer, enforceable in accordance with their terms. 2. The principal of and interest on the Bonds are payable from (i) special assessments levied or to be levied on property specially benefited by local improvements and (ii) ad valorem taxes, but, if necessary for the payment thereof, additional ad valorem taxes are required by law to be levied on all taxable property located in the Issuer, which taxes are not subject to any limitation as to rate or amount. 3. Interest on the Bonds is excludable from gross income of the recipient for federal income tax purposes and, to the same extent, from taxable net income of individuals, trusts, and estates for State of Minnesota income tax purposes, and is not a preference item for purposes of the computation of the federal alternative minimum tax, or the computation of the Minnesota alternative minimum tax imposed on individuals, trusts and estates. However, such interest is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income. The opinions set forth in this paragraph are subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes and, to the same extent, from taxable net income for State of Minnesota income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes and taxable net income for State of Minnesota income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding federal or state tax consequences arising with respect to the Bonds other than as expressly set forth herein. B-2