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2015 06-08 CCP Regular Session
AGENDA CITY COUNCIL STUDY SESSION June 8, 2015 6:00 p.m. City Council Chambers A copy of the full City Council packet is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. 1.City Council Discussion of Agenda Items and Questions 2.Miscellaneous 3.Discussion of Work Session Agenda Items as Time Permits 4.Adjourn CITY COUNCIL MEETING REVISED City of Brooklyn Center June 8, 2015 AGENDA 1. Informal Open Forum with City Council – 6:45 p.m. –provides an opportunity for the public to address the Council on items which are not on the agenda. Open Forum will be limited to 15 minutes, it is not televised, and it may not be used to make personal attacks, to air personality grievances, to make political endorsements, or for political campaign purposes. Council Members will not enter into a dialogue with citizens. Questions from the Council will be for clarification only. Open Forum will not be used as a time for problem solving or reacting to the comments made but, rather, for hearing the citizen for informational purposes only. 2. Invocation – 7 p.m. 3. Call to Order Regular Business Meeting –The City Council requests that attendees turn off cell phones and pagers during the meeting. A copy of the full City Council packet is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. 4. Roll Call 5. Pledge of Allegiance 6. Approval of Agenda and Consent Agenda –The following items are considered to be routine by the City Council and will be enacted by one motion. There will be no separate discussion of these items unless a Councilmember so requests, in which event the item will be removed from the consent agenda and considered at the end of Council Consideration Items. a. Approval of Minutes 1. May 26, 2015 – Special Session 2. May 26, 2015 – Study/Work Session 3. May 26, 2015 – Regular Session 4. June 1, 2015 – Joint Work Session with Financial Commission b. Licenses c. Resolution Accepting the 2014 Comprehensive Annual Financial Report d. Application and Permit for Temporary On-Sale Liquor License Submitted by St. Alphonsus Catholic Church, 7025 Halifax Avenue North, for a Social Event to be Held July 10 through 12, 2015 7. Presentations/Proclamations/Recognitions/Donations –None. CITY COUNCIL AGENDA -2- June 8, 2015 8. Public Hearings a. An Ordinance Amending Chapter 6, Section 6.02, Subdivision 3, of the Brooklyn Center City Charter –This item was first read on May 11, 2015; published in the official newspaper on May 14, 2015; and is offered this evening for second reading and Public Hearing. Requested Council Action: –Motion to open Public Hearing. –Take public input. –Motion to close Public Hearing. –Motion to adopt ordinance. 9. Planning Commission Items –None. 10. Council Consideration Items a. Consideration of Type IV 6-Month Provisional Rental Licenses 1. 5617 Logan Avenue North 2. Resolution Approving a Type IV Rental License for 1510 69th Avenue North Requested Council Action: –Mayor poll audience for applicants to address Council. –Receive staff report. –Motion to open hearing. –Receive testimony from applicants in order. –Motion to close hearing. –Take action on rental license applications and mitigation plans. b. Resolution Awarding the Sale of $6,900,000 General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A; Fixing Their Form and Specifications; Directing Their Execution and Delivery; and Providing for Their Payment Requested Council Action: –Motion to adopt resolution. c. Resolution Awarding the Sale of $6,600,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B; Fixing Their Form and Specifications; Directing Their Execution and Delivery; and Providing for Their Payment Requested Council Action: –Motion to adopt resolution. 11. Council Report 12. Adjournment E&U!II tWill iIMIJiEi MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL SESSION MAY 26, 2015 CITY HALL - COMMISSION CONFERENCE ROOM 1.CALL TO ORDER SPECIAL MEETING The Brooklyn Center City Council met in Special Session called to order by Mayor Tim Willson at 5:30 p.m. 2.ROLL CALL Mayor Tim Willson and Councilmembers April Graves, Kris Lawrence-Anderson (arrived at 5:58 p.m.), Lin Myszkowski, and Dan Ryan. Also present were City Manager Curt Boganey and Carla Wirth, TimeSaver Off Site Secretarial, Inc. 3.DISCUSSION REGARDING POLICE CHIEF RECRUITMENT PROCESS City Manager Curt Boganey introduced Sharon Klumpp of Waters & Company Executive Recruitment, described her professional background, and the listening sessions that have been scheduled with various groups. He explained the purpose of this agenda item is to gain feedback from the City Council relating to the recruitment profile of the new Police Chief. Ms. Klumpp introduced her assistant, Sara Haselbauer, outlined the nationwide recruitment process, and presented milestone dates with recruitment anticipated near the end of August. Mr. Boganey answered questions of the City Council relating to the process that will be used to review applications and interview the final candidates. The City Council acknowledged this involves a hiring process that is under the purview of the City Manager. Ms. Klumpp engaged the City Council to gain its input on desirable candidate attributes and Department goals. The City Council acknowledged the Police Department is highly professional, courteous, and empathetic with the City's constituents, which it does not want to negatively impact. It also does not support change only for the sake of change. Ms. Klumpp and Mr. Boganey thanked the City Council for sharing its perspective. 4.ADJOURNMENT Mayor Willson declared the City Council Special meeting adjourned at 6:36 p.m. 05/26/15 -1- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA STUDY SESSION MAY 26, 2015 CITY HALL - COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Study Session called to order by Mayor Tim Willson at 6:52 p.m. ROLL CALL Mayor Tim Willson and Councilmembers April Graves, Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan. Also present were City Manager Curt Boganey, Finance Director Nate Reinhardt, Public Works Director/City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. CITY COUNCIL DISCUSSION OF AGENDA ITEMS AND QUESTIONS Councilmember Myszkowski requested discussion on Consent Agenda Item No. 6e, Resolution Calling for a Public Hearing on the Issuance of Conduit Charter School Lease Revenue Bonds and Authorizing the Publication of a Notice of the Hearing (New Millennium Academy Project). She noted that Columbus, Minnesota, will be issuing the bonds and asked if host approval is a courtesy request. City Manager Curt Boganey explained that because the bonds will be used in Brooklyn Center, the City is required to authorize it to occur in Brooklyn Center. City Attorney Charlie LeFevere confirmed that is the case. Mayor Willson noted there is no liability on the part of the City by approving this request. Councilmember Myszkowski asked if any transaction has been made on the property at this time. Mr. Boganey stated his understanding is the New Millennium Group has entered into a Purchase Agreement but he does not know the terms of that Agreement. Director of Business and Development Gary Eitel stated they have not closed on the sale. Councilmember Lawrence-Anderson stated she was absent and excused from the May 11, 2015, meetings and requested additional information on the City Council's Work Session discussion pertaining to the topic E-Cigarettes in Public Places. Mr. Boganey stated the City Council agreed it wanted to implement a change to prohibit e- cigarettes anywhere within the park system. But, the City Council was somewhat divided as to 05/26/15 -1- DRAFT the means to accomplish that whether through an ordinance adoption or modification of the policy. It was agreed that staff would bring back both a policy change and an ordinance amendment for future consideration by the City Council. Councilmember Lawrence-Anderson asked if that also includes the smoking of tobacco in public places. Mr. Boganey answered in the affirmative. Councilmember Ryan requested discussion on Consent Agenda No. Item 6c, Resolution Establishing Improvement Project Nos. 2016-01, 02, 03, and 04, Palmer Lake West Area Street and Utility Improvements, in particular the illustrations provided in the project summary. He asked why Palmer Lake Circle is not within the project illustration as provided. He also asked about the project description for extension of storm sewer lines and if it will be explained at the neighborhood meetings that a future replacement would cause a major disruption. Public Works Director/City Engineer Steve Lillehaug explained the Palmer Lake Circle cul-de- sac was not included as it has already been reconstructed and has concrete curb and gutter. With regard to the storm sewer line, he stated it is a reinforced concrete pipe that can last a long period of time. However, staff will look at this closer during this year's budgeting process to assure capacity issues are adequately addressed, as the City's storm sewer modeling was just completed. MISCELLANEOUS None. ADJOURNMENT Councilmember Lawrence-Anderson moved and Councilmember Graves seconded to adjourn the Study Session at 7:00 p.m. Motion passed unanimously. 05/26/15 -2- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA REGULAR SESSION MAY 26, 2015 CITY HALL - COUNCIL 1.INFORMAL OPEN FORUM WITH CITY COUNCIL CALL TO ORDER INFORMAL OPEN FORUM The Brooklyn Center City Council met in Informal Open Forum called to order by Mayor Tim Willson at 6:45 p.m. ROLL CALL Mayor Tim Willson and Councilmembers April Graves, Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan. Also present were City Manager Curt Boganey, Finance Director Nate Reinhardt, Public Works Director/City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Planning and Zoning Specialist Tim Benetti, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, City Attorney Charlie LeFevere, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. Mayor Tim Willson opened the meeting for the purpose of Informal Open Forum. Jim Waters, 5332 Morgan Avenue N., reviewed the process he followed to obtain a Type III Rental License and asked if there is a way to obtain a higher rental license as he feels the violations listed were not severe. Mayor Willson stated there is that ability the next time this license is considered. City Manager Curt Boganey explained the current City Ordinance does not provide an option for having a license type modified by the City Council or staff. Mr. Waters stated he understands the concerns with rental problems and will be in touch with Assistant City Manager/Director of Building and Community Standards Vickie Schleuning. Councilmember Graves moved and Councilmember Lawrence-Anderson seconded to close the Informal Open Forum at 6:51 p.m. Motion passed unanimously. 2.INVOCATION 05/26/15 -1- DRAFT As the invocation, Councilmember Ryan read a quote from the great abolitionist Fredrick Douglass. 3.CALL TO ORDER REGULAR BUSINESS MEETING The Brooklyn Center City Council met in Regular Session called to order by Mayor Tim Willson at 7:02 p.m. 4.ROLL CALL Mayor Tim Willson and Councilmembers April Graves, Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan. Also present were City Manager Curt Boganey, Finance Director Nate Reinhardt, Public Works Director/City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Planning and Zoning Specialist Tim Benetti, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, City Attorney Charlie LeFevere, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. 5.PLEDGE OF ALLEGIANCE The Pledge of Allegiance was recited. 6.APPROVAL OF AGENDA AND CONSENT AGENDA Councilmember Myszkowski moved and Councilmember Ryan seconded to approve the Agenda and Consent Agenda, and the following consent items were approved: 6a. APPROVAL OF MINUTES 1.May 4, 2015 - Board of Appeal and Equalization Reconvene 2.May 11, 2015—Study Session 3. May 11,2015—Regular Session 6b. LICENSES MECHANICAL Heating and Cooling Design, Inc. Royalton Heating and Cooling RENTAL INITIAL (TYPE II— two-year license) 4906 Howe Lane 5338 Humboldt Avenue N. 6437 June Avenue N. 6124 Lee Avenue N. 10830 Able Street NE, Blame 412085 th Avenue N, Brooklyn Park Chen Zhou Kevin Landwehr Brian Nguyen Jennifer Kuria RENEWAL (TYPE III— one-year license) 6100 Summit Drive - Earle Brown Terrace 05/26/15 -2- DRAFT Passed w/Weather Deferral 6031 Colfax Avenue N. 713 Fremont Avenue N. 6349 Halifax Drive 5713 Humboldt Avenue N. 5412 Penn Avenue N. 7030 Regent Avenue N. Passed w/Weather Deferral 6605 Xerxes Place N. RENEWAL (TYPE H— two-year license) 4100 61St Avenue N. 4507 66 th Avenue N. 5639 Humboldt Avenue N. 5801 Irving Avenue N. 6424 Lee Avenue N. Rod Olsen Steven Sapoum Phyllis Weisberg Missing CPTED and ARM Charles Bright Janice Biorn Missing Action Plan Anthony Martin Douglas Wahl Missing ARM and CPTED Ryan Bernard Emmanuel Coker Cathy Steinke Matthew Resong Invitation Homes Yang yang RENEWAL (TYPE I— three-year license) 3715 69th Avenue N.Christian Knutson 3223 49th Avenue N.Hamid Safdari 7200 Dallas Road Brian Natzel 2812 O'Henry Road Mains'l Properties 6e. RESOLUTION NO. 2015-85 ESTABLISHING IMPROVEMENT PROJECT NOS. 2016-01, 02, 03, AND 04, PALMER LAKE WEST AREA STREET AND UTILITY IMPROVEMENTS 6d.RESOLUTION NO. 2015-86 APPROVING PLANS AND SPECIFICATIONS AND AUTHORIZING ADVERTISEMENT FOR BIDS, IMPROVEMENT PROJECT NO. 2014-11, 2014 CAPITAL MAINTENANCE BUILDING PROJECT 6e.RESOLUTION NO. 2015-87 CALLING FOR A PUBLIC HEARING ON THE ISSUANCE OF CONDUIT CHARTER SCHOOL LEASE REVENUE BONDS AND AUTHORIZING THE PUBLICATION OF A NOTICE OF THE HEARING (NEW MILLENNIUM ACADEMY PROJECT) Motion passed unanimously. 7.PRESENTATIONS/PROCLAMATIONS/RECOGNITIONS/DONATIONS - None. 8.PUBLIC HEARINGS 05/26/15 -3- DRAFT - None. 9. PLANNING COMMISSION ITEMS 9a. PLANNING COMMISSION APPLICATION NO. 2015-002, SUBMITTED BY OSSEO AREA SCHOOLS ISD NO. 279 FOR SITE PLAN APPROVAL OF A RE- DESIGNED PARKING LOT WITH BUS DROP-OFF AREA AND STAFF-ONLY PARKING AREA FOR THE WILLOW LANE EARLY CHILDHOOD EDUCATION CENTER, LOCATED AT 7020 PERRY AVENUE NORTH Planning and Zoning Specialist Tim Benetti provided an overview of Planning Commission Application No. 2015-002 and advised the Planning Commission recommended approval of the application at its May 14, 2015 meeting. Mr. Benetti answered questions of the City Council regarding the request for Site Plan approval and staff-only parking area for the Willow Lane Early Childhood Education Center located at 7020 Perry Avenue North. Councilmember Ryan stated concern was expressed at the Planning Commission meeting about parking on Perry Avenue and staff had indicated one of the objectives was to provide an off- street parking option. Mr. Benetti responded affirmatively and said the school representative had indicated at the Planning Commission meeting that some of those parking on Perry Avenue work at the school, as it is a location close to the entry door. He stated the school has indicated it intends to address a parking plan and on-site parking management with its employees to address that issue. Mr. Benetti stated staff will continue to monitor that situation and address it with the school should it become an issue. Councilmember Graves asked about the number of parking spaces and projected growth, Mr. Benetti stated under this plan, 73 parking spaces will be created and they still have use of the parking ramp next door. Staff finds that adequate parking is being provided. 1. RESOLUTION NO. 2015-88 REGARDING THE DISPOSITION OF PLANNING COMMISSION APPLICATION NO. 2015-002, SUBMITTED BY OSSEO AREA SCHOOLS ISD NO. 279 FOR SITE PLAN APPROVAL OF A RE-DESIGNED PARKING LOT AND NEW STAFF PARKING LOT FOR WILLOW LANE EARLY CHILDHOOD EDUCATION CENTER, LOCATED AT 7020 PERRY AVENUE NORTH Councilmember Ryan moved and Councilmember Myszkowski seconded to adopt Resolution No. 2015-88 Regarding the Disposition of Planning Commission Application No. 2015-002, submitted by Osseo Area Schools ISD No. 279 for Site Plan Approval of a Re-Designed Parking Lot and New Staff Parking Lot for Willow Lane Early Childhood Education Center, located at 7020 Perry Avenue North. Motion passed unanimously. 05/26/15 -4- DRAFT 10. COUNCIL CONSIDERATION ITEMS lOa. MAYORAL APPOINTMENT OF MEMBERS TO SERVE ON PLANNING COMMISSION Mayor Willson recommended the ratification of Mayoral appointment of Alejandro Koenig and John MacMillan to the Planning Commission. Councilmember Myszkowski moved and Councilmember Lawrence-Anderson seconded to ratify the Mayoral Appointment of Alejandro Koenig, 3601 Admiral Lane, and John MacMillan, 6417 Colfax Avenue North, to the Planning Commission with terms to expire December 31, 2015, and December 31, 2016, respectively. Motion passed unanimously. lOb. MAYORAL APPOINTMENT OF MEMBER TO SERVE ON NORTHWEST HENNEPIN HUMAN SERVICES COUNCIL ADVISORY COMMISSION Mayor Willson recommended the ratification of Mayoral appointment of Patti Koenig to the Northwest Hennepin Human Services Council Advisory Commission. Councilmember Lawrence-Anderson moved and Councilmember Myszkowski seconded to ratify the Mayoral Appointment of Patti Koenig, 3601 Admiral Lane, to the Northwest Hennepin Human Services Council Advisory Commission with a term to expire December 31, 2016. Patti Koenig, 3601 Admiral Lane, introduced herself, described her professional background in human services, and stated she looks forward to serving in this capacity. Motion passed unanimously. lOc. CONSIDERATION OF TYPE IV 6-MONTH PROVISIONAL RENTAL LICENSES Mayor Willson explained the streamlined process that will now be used to consider Type IV 6- Month Provisional Rental Licenses. Mayor Willson polled the audience and asked whether anyone was in attendance to provide testimony on any of the rental licenses as listed on tonight's meeting agenda. Seeing no one coming forward, Mayor Willson called for a motion on Agenda Items 1 01 through 1 0c6, lOci. 5025 DREW AVENUE NORTH 10c2. RESOLUTION NO. 2015-89 APPROVING A TYPE IV RENTAL LICENSE FOR 3818 61ST AVENUE NORTH 106. RESOLUTION NO. 2015-90 APPROVING A TYPE IV RENTAL LICENSE FOR 1601 67TH LANE NORTH 05/26/15 -5- DRAFT 10c4. RESOLUTION NO. 2015-91 APPROVING A TYPE IV RENTAL LICENSE FOR 5444 DUPONT AVENUE NORTH 106. RESOLUTION NO. 2015-92 APPROVING A TYPE IV RENTAL LICENSE FOR 5508 FREMONT AVENUE NORTH 106. RESOLUTION NO. 2015-93 APPROVING A TYPE IV RENTAL LICENSE FOR 5540 KNOX AVENUE NORTH Councilmember Myszkowski moved and Councilmember Ryan seconded to approve the issuance of a Type IV six-month provisional rental license and mitigation plan for the following: 5025 Drew Avenue North; adopt Resolution No. 2015-89 Approving a Type IV Rental License for 3818 61 " Avenue North; adopt Resolution No. 2015-90 Approving a Type IV Rental License for 1601 67th Lane North; adopt Resolution No. 2015-91 Approving a Type IV Rental License for 5444 Dupont Avenue North; adopt Resolution No. 2015-92 Approving a Type IV Rental License for 5508 Fremont Avenue North; and adopt Resolution No. 2015-93 Approving a Type IV Rental License for 5540 Knox Avenue North, with the requirement that the mitigation plans and all applicable ordinances must be strictly adhered to before renewal licenses would be considered. Motion passed unanimously. lOd. AN ORDINANCE AUTHORIZING THE ACQUISITION OF TAX FORFEITED PROPERTY AND EXECUTION OF A QUIT CLAIM DEED TO DISPOSE OF THE PROPERTY AND ADOPT RESOLUTION NO. 2015-94 APPROVING PURCHASE AND CONVEYANCE OF PARCEL #01-118-21-34-0070 (3112 67TH AVENUE NORTH) Assistant City Manager/Director of Building and Community Standards Vickie Schleuning introduced the item, discussed the background information, process, and stated the purposes of the proposed ordinance to acquire tax forfeited property at 3112 67th Avenue N., the resolution to approve a Purchase Agreement, directing staff to acquire the property, and to schedule second reading and public hearing for June 22, 2015. It was noted that following review, staff determined this property would qualify for rehabilitation under the City's Neighborhood Stabilization Program, which is federally funded. Councilmember Lawrence-Anderson asked about the average profit minus expenses. Ms. Schleuning explained the City cannot make a profit on the sale of these homes. Mayor Willson asked how mold mitigation is addressed. Ms. Schleuning stated that type of work is typically bid to a contractor and mold mitigation guidelines are followed. In addition, the bid includes the testing for lead and other hazardous materials. Councilmember Myszkowski asked if bathrooms have been added with Neighborhood Stabilization Program properties. Ms. Schleuning answered in the affirmative, where possible. 05/26/15 -6- DRAFT Councilmember Graves asked about the time elapsed from the purchase to sale. Ms. Schleuning stated it depends on the condition of the property and the contractor, but it generally takes six months to a year. Councilmember Graves asked if the construction project in this area will result in a conflict. Mayor Willson stated there should not be an issue as access has to be maintained. Ms. Schleuning agreed and stated a new street will improve the City's ability to sell the property. Councilmember Ryan stated the Neighborhood Stabilization Program encourages private investment in the neighborhoods. Couneilmember Ryan moved and Councilmember Lawrence-Anderson seconded to approve First Reading of an Ordinance Authorizing the Acquisition of Tax Forfeited Property and Execution of a Quit Claim Deed to Dispose of the Property and adopt Resolution No. 20 15-94 Approving Purchase and Conveyance of Parcel #01-118-21-34-0070 (3112 67th Avenue North), and Set Second Reading and Public Hearing for June 22, 2015. Motion passed unanimously. 11. COUNCIL REPORT Councilmember Ryan reported on his attendance at the following and provided information on the following upcoming events: • May 13, 2015: 63'' Avenue Utility Replacement Preconstruction Meeting • May 17, 2015: Grand Opening of Michael's Craft Store • May 21, 2015: West Palmer Lake Park Neighborhood Meeting • May 23, 2015: Sold food for the Lions Fundraiser • May 28, 2015: Criminal Justice Forum Councilmember Ryan announced that Police Chief Benner had received the Hennepin County Sheriff Distinguished Service Award at a May 12, 2015, ceremony where Officer Salvosa was also recognized for apprehending a criminal. Councilmember Myszkowski reported on her attendance at the following and provided information on the following upcoming events: • May 13, 2015: 63 Avenue Utility Replacement Preconstruction Meeting • May 17, 2015: Grand Opening of Michael's Craft Store • May 19, 2015: Earle Brown Days Meeting • May 20, 2015: CEAP Board Meeting • May 21, 2015: West Palmer Lake Park Neighborhood Meeting • May 26, 2015: Meeting with Congressman Keith Ellison, CEAP Board Chair, and CEAP President Councilmember Lawrence-Anderson reported on her attendance at the following and provided information on the following upcoming events: 05/26/15 -7- DRAFT • Attended many meetings as a Board Member of Odyssey School, as it is seeking an Executive Director • May 24, 2015: Police Ride Along • May 13, 2015: 63rd Avenue Utility Replacement Preconstruction Meeting • May 14, 2015: Brooklyn Center High School Choir Concert • May 15, 2015: Odyssey School Play • May 19, 2015: Earle Brown Days Committee Meeting • May 19, 2015: Housing Commission Meeting • May 21, 2015: Odyssey Academy Meeting to review Executive Director Applications • May 26, 2015: Odyssey Academy Meeting to conduct Executive Director Interviews Councilmember Lawrence-Anderson announced the May 28, 2015, Business Association Luncheon and the June 4, 2015, Brooklyn Center High School Graduation and All Night Party. Councilmember Graves reported on her attendance at the following and provided information on the following upcoming events: • May 13, 2015: 63rd Avenue Utility Replacement Preconstruction Meeting • May 15, 2015: Youth Coordinator Outreach Team Meeting • May 18, 2015: Brooklyn Center Community District Advisory Council Meeting • May 19, 2015: Save the Kids Event • May 21, 2015: West Palmer Lake Park Neighborhood Meeting Councilmember Graves stated she will be leaving tonight for five days to act as a faculty resident mentor at a women's leadership retreat. Mayor Willson reported on his attendance at the following and provided information on the following upcoming events: • May 17, 2015: Grand Opening of Michael's Craft Store • May 20, 2015: Northwest Hennepin Volunteer Awards Ceremony and Luncheon • May 21, 2015: West Palmer Lake Neighborhood Meeting • May 22, 2015: Meeting with Mr. Boganey, Department Heads, and leadership group sponsored by the Chamber of Commerce • May 28, 2015: Dangerous Dog Hearing • June 1, 2015: Meeting with the City's Financial Auditors Mayor Willson stated he will be out of town on June 18, 2015, for the Riverwood Neighborhood Meeting and out of town on June 22, 2015, for the Regular Council meetings. Mayor Willson announced that Earle Brown Days is coming up the week of June 25th City Attorney LeFevere reported on his transition towards retirement and invited all to attend his June 18, 2015, 5-8 p.m. retirement party. He stated it has been his privilege to serve as the City's Attorney. Mayor Willson extended his best wishes to Mr. LeFevere and thanked him for his exceptional service to Brooklyn Center, noting he will be out of town on June 18, 2015. 12. ADJOURNMENT 05/26/15 -8- DRAFT Councilmember Ryan moved and Councilmember Graves seconded adjournment of the City Council meeting at 7:53 p.m. Motion passed unanimously. 05/26/15 -9- DRAFT MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENEPN AND THE STATE OF MINNESOTA JOINT WORK SESSION WITH FINANCIAL COMMISSION JUNE 1, 2015 CITY HALL - COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Joint Work Session with the Financial Commission and the session was called to order by Mayor Tim Willson at 6:30 p.m. ROLL CALL Mayor Tim Willson and Councilmembers April Graves, Lin Myszkowski, and Dan Ryan. Also present: City Manager Curt Boganey, Finance Director Nate Reinhardt, and Deputy City Clerk Maria Rosenbaum. Councilmember Kris Lawrence-Anderson was absent and excused. Others present were Financial Commissioners Anna Burke, Steve Landis, and Dean Van Der Werf. APPROVAL OF AGENDA Councilmember Ryan moved and Councilmember Myszkowski seconded to approve this evening's agenda. Motion passed unanimously. PRESENTATION OF AUDITOR REPORT AND MANAGEMENT LETTER James Eichten, CPA, partner with Malloy, Montague, Karnowski, Radosovich, & Company (MMKR), the City's Auditing Finn, was introduced to review the City's Audit Report and Management Letter. Mr. Eichten outlined the auditor's role and the Audit Opinions and Findings which included the following: • Financial Report - Unmodified or Clean Opinion • Internal Controls Over Financial Reporting -No Findings • Single Audit of Federal Awards -No Findings • Legal Compliance Audit Findings - No Findings Mr. Eichten reviewed the Management Report prepared by MMKR and pointed out highlights relating to the Audit Summary and Governmental Funds Overview along with information on Taxable Market Values, Tax Rates, Governmental Funds Revenue per Capita, Governmental Funds Expenditures per Capita, Governmental Funds Change in Fund Balance, General Fund Financial Position, General Fund Revenue by Source, General Fund Expenditures by Function, Enterprise Funds Change in Financial Position, Water Fund, Sanitary Sewer Fund, Liquor Fund, 06/01/15 -1- DRAFT and Earle Brown Heritage Center Fund. He also recapped that the City had received a clean opinion on financial statements; single audit of Federal Awards, no findings reported, and that the City is continuing with ongoing assessment of financial projections and results including General, Other Operational, and Enterprise Fund Activities. Mr. Eichten discussed that with the competitive liquor market the profit margins had fluctuated and due to competitiveness of this market many cities are experiencing a decline in profits; and this would be a fund to continue to watch. Mr. Eichten discussed future GASB No. 68 and Fire Relief Auditing that will be required and incorporated into next year's audit. STAFF OVERVIEW OF COMPREHENSIVE ANNUAL FINANCIAL REPORT Finance Director Reinhardt reviewed the 2014 Comprehensive Annual Financial Report (CAFR) and pointed out that there is a positive Operating Budget of $1,491,492; a total decrease in Fund Balance of $1,362,632, as a result of a transfer to the Capital Improvements Fund of $2,754,124; the General Fund Assigned and Unassigned Fund Balance represents 56.7 percent of next year's budgeted expenditures; and there is a fund balance >52 percent that will be transferred to the Capital Projects Fund ($908,761). He also outlined financial highlights in each of the following sections: General Fund Revenues, General Fund Expenditures, Enterprise Funds, Utility Funds, and other miscellaneous items. MISCELLANEOUS There were no miscellaneous items discussed. ADJOURNMENT Councilmember Myszkowski moved and Councilmember Ryan seconded to adjourn the Work Session at 7:33 p.m. Motion passed unanimously. 06/01/15 -2- DRAFT City Council Agenthii Item N©0 61b CityaCouncil VAgenda1Item No. 6b Revised Rental License Report. 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CI)N 0 0 Ct 0 0 N N LU) o N (I)0 0 H 0 H 0 N CI)-1 0 0 0 -)N 0 CI)-1 0srn..0 00 0 II) Cu s-..CO CI)CO LU)LI)LU)N LU)0 N CI)N 0 N N0NLU)LU)-1 U LU)CI)CI)If)If)II)LI)N N-If)LU)If)N CI) U)0>-F- COUNCIL ITEM MEMORANDUM DATE: June 2, 2015 TO: Curt Boganey, City Manager FROM: Maria Rosenbaum, Deputy City Cler,frg SUBJECT: Licenses for City Council Approval Recommendation: It is recommended that the City Council consider approval of the following licenses on June 8, 2015. Background: The following businesses/persons have applied for City licenses as noted. Each business/person has fulfilled the requirements of the City Ordinance governing respective licenses, submitted appropriate applications, and paid proper fees. Applicants for rental dwelling licenses are in compliance with Chapter 12 of the City Code of Ordinances, unless comments are noted below the property address on the attached rental report. AMUSEMENT DEVICE Metro Coin of Minnesota Theisen Vending FIREWORK -TEMPORARY TNT Fireworks 14940 28th Avenue N, Plymouth 2335 Nevada Avenue N, Golden Valley 2109 59 th Avenue S, Fargo ND LIQUOR - ON-SALE 3.2 PERCENT MALT LIQUOR UEC Hospitality, LLC dba Wingstop #1005 1180 Shingle Creek Crossing GI 12 MECHANICAL Air Mechanical Inc. Comfort Solutions Heating & Cooling Ditter Inc. Kath Fuel Oil Service Co. Liberty Comfort Systems Southtown Refrigeration RENTAL See attached report. SIGN HANGERS Serigraphics Sign Systems Inc. Signs Unlimited of Plymouth 16411 Aberdeen Street NE, Ham Lake I't Street NW, Osseo 820 Tower Drive, Medina 3096 Rice Street, Little Canada 627 East River Rd, Anoka 6325 Welcome Avenue N, Brooklyn Park 2401 Nevada Avenue N, Golden Valley 22400 Highway 55, Hamel Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust COUNCIL ITEM MEMORANDUM Rental License Category Criteria Policy - Adopted by City Council 03-08-10 Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Only) Type I - 3 Year 1-2 units 0-1 3+ units 0-0.75 Type II - 2 Year 1-2 units Greater than 1 but not more than 4 Type III - 1 Year 1 1-2 units Greater than 4 but not more than 8 Type IV —6 Months I 1-2 units Greater than 8 License Category Number of Units Validated Calls for Disorderly Conduct Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units -0-0.25 5 or more units 0-0.35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 units -Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 Budget Issues: There are no budget issues to consider. 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City Council Agenda !tem No. 6c [i[S1IJcIJ I U I I ILA L'A I MA 0) 1I I1IJ I DATE: June 8, 2015 TO: Curt Boganey, City Manager FROM: Nathan Reinhardt, Finance Director & SUBJECT: 2014 Comprehensive Annual Financial Report (CAFR) Recommendation: It is recommended that the City Council consider adoption of a resolution accepting the 2014 Comprehensive Annual Financial Report. Background: On June 1, 2015 the City Council and Financial Commission met in a joint work session to hear from James Eichten of Malloy, Montague, Karnowski, Radosevich & Co. (MMKR), the City's auditors, about the results of their audit of the City's financial statements for the period ended December 31, 2014. During the session Mr. Eichten reviewed the purpose of the audit process and the results of his firm's audit of the 2014 Comprehensive Annual Financial Report (CAFR). Most importantly, the City received an unmodified opinion, which is commonly referred to as a "clean audit opinion". This means that, in the auditor's opinion, the financial statements conform with applicable accounting standards. In addition to formulating an opinion on the City's financial statements, the auditors reviewed the City's internal controls, legal compliance and financial management practices. Those results were included in the Special Purpose Report which is issued under a separate cover. The City also expended more than $500,000 in federal financial assistance during 2014. This triggers an additional audit procedure known as the A-133 or Single Audit. The audit reviews for proper receipt, use, recording and reporting of federal financial assistance. The City's federal Awards that were subject to the audit included the $4.7 million of Capitalization Grants for Drinking Water State Revolving Funds, which was passed through the Minnesota Public Facilities Authority. The Single Audit found no discrepancies or internal control issues and expressed an unmodified opinion on the presentation of the financial statements for the purposes of the A-133 regulations. Overall, the information in the 2014 CAFR continues to show the City is in excellent financial condition and should continue to monitor itself to ensure its continued fiscal good health. The attached resolution ratifies the work done by City staff and accepts the CAFR, Audit Opinion and related materials. )Wission: Ensuring on attractive, clean, safe, inclusive community that enhancesces (lie quality of life for all people and preserves (lie public trust [EI]JJ[iJI • I I IA U I Dk4 (I] 1WI I1lJ I Budget Issues: The 2014 CAFR conveys the fiscal condition of the City as of December 31, 2014 and lays the groundwork for understanding the financial resources available to the City when planning for the future. Strategic Priorities: Resident Economic Stability Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION ADOPTING COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF BROOKLYN CENTER FOR THE CALENDAR YEAR ENDED DECEMBER 31, 2014 WHEREAS, the City of Brooklyn Center is required by State Statute and City Charter to annually produce financial statements for submission to the Office of the State Auditor by June 30 each year; and WHEREAS, the City of Brooklyn Center is required to provide an auditor's opinion as to the representations in the annual financial statements; and WHEREAS, the financial statements have been audited by the independent CPA firm of Malloy, Montague, Karnowski, Radosevich & Co., P.A. as required; and WHEREAS, Malloy, Montague, Karnowski, Radosevich & Co., P.A. opined that the general purpose financial statements present fairly, in all material respects, the financial position of the City of Brooklyn Center as of December 31, 2014. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that the Comprehensive Annual Financial Report for the City of Brooklyn Center for the calendar year ended December 31, 2014, and all supporting documentation, is hereby adopted as the official financial record for the 2014 fiscal year. June 8, 2015 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. City Council Agenda Item No. 6d I1i1Pk(J IU N U k' I I 1k'A (I) 1II I1$J I TO: Curt Boganey, City Manager FROM: Sharon Knutson, City Clerk UWM DATE: May 28, 2015 SUBJECT: Application and Permit for Temporary On-Sale Liquor License Submitted by St. Alphonsus Catholic Church, 7025 Halifax Avenue North, for a Social Event to be Held July 10 through 12, 2015 Recommendation: It is recommended that the City Council consider approval of the application and permit for a temporary on-sale liquor license submitted by St. Alphonsus Catholic Church, 7025 Halifax Avenue North, for a social event to be held July 10 through 12, 2015. Background: St. Alphonsus Catholic Church, 7025 Halifax Avenue North, has submitted an application and permit for a temporary on-sale liquor license for a social event to be held July 10 through 12, 2015. The applicant has satisfied the City's requirements, submitted the $25 fee for each day of the license, along with a certificate of coverage for liquor liability insurance, and has existed as a religious organization for at least three years. After Council review, the application and permit will be forwarded to the Minnesota Department of Public Safety Alcohol and Gambling Enforcement Division for approval. City Ordinance Section 11-107j Temporary On-Sale Intoxicating Liquor License. This license may be issued only upon receiving the approval from the Commissioner of Public Safety. The license may be issued only in connection with a social event within the city that is sponsored by a club or charitable, religious, or other nonprofit organization that has existed for at least three years or to a brewer who manufactures fewer than 3,500 barrels of malt liquor in a year. The license may authorize the sale of intoxicating liquor to be consumed on the Premises for not more than three consecutive days, and the City shall issue no more than twelve days' worth of temporary licenses to any one organization or for any one location within a 12-month period. The temporary license may authorize the sale of intoxicating liquor to be consumed on Premises other than Premises the licensee owns or permanently occupies. The temporary license may provide that the licensee may contract for intoxicating liquor catering services with the holder of an On-Sale Intoxicating Liquor License issued by any municipality. Budget Issues: There are no budget issues to consider. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust Minnesota Department of Public Safety ;^&^ Alcohol and Gambling Enforcement Division 445 Minnesota Street, Suite 222, St. Paul, MN 55101 651-201-7500 Fax 651-297-5259 TTY 651-282-6555 APPLICATION AND PERMIT FOR A 1 DAY TO 4 DAY TEMPORARY ON-SALE LIQUOR LICENSE Name of organization Date organized Tax exempt numberISt. Alphonsus Catholic Church Pan 1, 1959 1ES32045 Address City State Zip CodeI7025 Halifax Ave N Brooklyn Center IMinnesota 55429 Name of person making application Business phone Home phone Michelle Karlson I 763-503-3389 Date(s) of event Type of organization 7/10/2015-7/12/2015 Ei Club Charitable Z Religious Other non-profit Organization officer's name X Ir. Peter Connolly, C.Ss.R. Add Ne Location where permit will be used. If an outdoor area, describe. Hall, School & parking lot City State Zip Brooklyn Center ----] IMinnesota 55429 If the applicant will contract for intoxicating liquor service give the name and address of the liquor license providing the service. If the applicant will carry liquor liability insurance please provide the carrier's name and amount of coverage. Catholic Mutual Relief Society of America, $500,000.00-each occurrence APPROVAL APP I,USTBAPPROVED BY CITY OR couiv BEFORE SUBMITTING TO ALCOHOL AND GAMBLING ENFORCEMENT City/County Date ApprovedA j 5. D) City Fee Amount Permit Date Date Fee Paid City/County E-mail Address Signature City Clerk or County Official Approved Director Alcohol and Gambling Enforcement CLERKS NOTICE: Submit this form to Alcohol and Gambling Enforcement Division 30 days prior to event. PLEASE PROVIDE A VALID E-MAIL ADDRESS FOR THE CITY/COUNTY AS ALL TEMPORARY PERMIT APPROVALS WILL BE SENT BACK VIA EMAIL. E-MAIL THE APPLICATION SIGNED BY CITY/COUNTY TO AGE.TEMPORARYAPPLICATION@STATE.MN.US Page 1 of 1 City Council Agenda Hem N©0 8a S1IJTiJ I fl I I k"4 U'A I M'A 0) 1WI J!A1 DATE: June 1, 2015 TO: Curt Boganey, City Manager FROM: Sharon Knutson, City Clerk ikw 46k SUBJECT: An Ordinance Amending Chapter 6, Section 6.02, Subdivision 3, of the Brooklyn Center City Charter Recommendation: It is recommended that the City Council open the Public Hearing, take public input, close the Public Hearing, and consider adoption of An Ordinance Amending Chapter 6, Section 6.02, Subdivision 3, of the Brooklyn Center City Charter. Background: At its May 11, 2015, meeting, the City Council accepted the Charter Commission recommendations to amend the City Charter by Ordinance. The City Council approved first reading of an Ordinance Amending the City Charter and set second reading and Public Hearing for June 8, 2015. Attached are the materials provided at the May 11, 2015, meeting. The second reading and Public Hearing are scheduled for June 8, 2015. Notice of Public Hearing was published in the Brooklyn Center Sun-Post newspaper on May 21, 2015. Adoption of said ordinance requires unanimous approval of all Council Members to become effective. If adopted, the City Charter amendments become effective September 16, 2015 (90 days after publication). Budget Issues: There are no budget issues to consider. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for al/people and preserves the public trust CITY OF BROOKLYN CENTER Notice is hereby given that a public hearing will be held on the 8th day of June 2015 at 7 p.m. or as soon thereafter as the matter may be heard at the City Hall, 6301 Shingle Creek Parkway, to consider an ordinance amending Chapter 6, Section 6.02, Subdivision 3, of the Brooklyn Center City Charter. Auxiliary aids for persons with disabilities are available upon request at least 96 hours in advance. Please contact the City Clerk at 763-569-3300 to make arrangements. ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 6, SECTION 6.02, SUBDIVISION 3, OF THE BROOKLYN CENTER CITY CHARTER THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER DOES ORDAIN AS FOLLOWS: Section 1. Chapter 6, Section 6.02, Subdivision 3, of the City Charter of the City of Brooklyn Center is hereby amended as follows: Section 6.02. POWERS AND DUTIES OF THE CITY MANAGER. Subdivision 3. a)—Subjeet to the provisions of paragraphs b) and (e) of this Subdivision, tlhe City Manager shall appoint, upon the basis of merit and fitness and may suspend or remove upon the basis of merit and fitness, and upon the provisions of all applicable ordinances, all officers and employees of the City, except the City Attorney, whose appointment and removal shall be at the discretion of the Council. Section 2. This ordinance shall be effective after adoption and ninety (90) days following its legal publication. Adopted this 8th day of June 2015. Mayor ATTEST: City Clerk Date of Publication: June 18, 2015 Effective Date: September 16, 2015 (Strikeo-ut indicates matter to be deleted, double underline indicates new matter.) iEI1UISi SU I I DIhYA Uh'A I DIk'A (0) 1 INO I DATE: May 5,2015 TO: Curt Boganey, City Manager FROM: Sharon Iutson, City Clerk SUBJECT: An Ordinance Amending Chapter 6, Section 6.02, Subdivision 3, of the Brooklyn Center City Charter Recommendation: It is recommended that the City Council consider approving first reading of An Ordinance Amending Chapter 6, Section 6.02, Subdivision 3, of the Brooklyn Center City Charter and setting second reading and Public Hearing for June 8, 2015. Background: At its March 23, 2015, meeting, the City Council adopted Ordinance No. 2015-03 amending the City Charter as recommended by the Charter Commission. City staff noted after the Ordinance adoption that Section 6.02, Subdivision 3, still had some outdated language. The Charter Commission was notified about the housekeeping change and met on April 23, 2015. Attached is a recommendation from the Charter Commission to amend the City Charter to clean up Section 6.02. Attached is an ordinance amending the City Charter. Budget Issues: There are no budget issues to consider. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for al/people and preserves the public trust Sharon Knutson From:Mark Goodell <mgoodell@gmail.com > Sent:Friday, May 01, 2015 11:47 AM To:Curt Boganey Cc:Sharon Knutson; gary-julie-brown@comcast.net ebesfamily@msn.com ; flyfinn7 @ msncom; myrnakauth@usfamily.net ; Robert Marvin; Harold Middleton; mary_oconnor08@hotmail.com ; tthorbuyahoo.com ; rn.yelich@comcast.net Subject:Charter Amendment Change Transmittal Attachments:Charter Commission Amendment Transmittal 2015-04-30.pdf City Manager Boganey: Attached is the transmittal document for the recommended charter amendment to clean up section 6.02 that was approved by the commission at our July meeting for submission to the city council. Please let me know if there are any questions. Thank-you for your assistance, Mark Goodell Brooklyn Center Charter Commission 612.242.5657 mgoodell(gmail.com BROOKLYN CENTER HOME RULE CHARTER COMMISSION April 30th, 2015 Curt Boganey City Manager City of Brooklyn Center 6301 Shingle Creek Pkwy. Brooklyn Center, MN 55430 Re: Transmittal of Recommended Amendments to the City Charter Dear Mr. Boganey: The purpose of this letter is to transmit to the Brooklyn Center City Council proposed amendments to the Brooklyn Center City Charter. The enclosed recommended amendments are being forwarded for consideration for adoption by ordinance pursuant to Minnesota Statutes, section 410.12, subdivision 7 and Section \TIII(B)(3)(a) of the Charter Commission's Rules of Procedures ("Rules"). Each of the recommended amendments was accepted by a 2/3 affirmative vote of the actual membership (with never less than eight affirmative votes) of the Charter Commission as required by Section \TIII(B)( 1) of the Rules and are being transmitted as separate recommendations the City Council may act on individually or jointly. The Charter Commission understands the City will draft one or more ordinances as needed to address the recommended amendments and will act on them within the timelines established in Minnesota Statutes, section 410.12, subdivision 7. Please feel free to contact me if there are any questions or if you would like me to provide additional information regarding the Charter Commission's reasons behind the recommended amendment. Sincerely, Mark Goodell ChairpersOn Enclosure - Recommended Amendment #1 BROOKLYN CENTER HOME RULE CHARTER COMMISSION RECOMMENDED CHARTER AMENDMENTS The Brooklyn Center Home Rule Charter Commission hereby transmits the following recommended amendments to the City Charter for consideration and action by the City Council by ordinance pursuant to Minnesota Statutes, section 410.12, subdivision 7. The following are presented as separate recommendations that the City Council may act on individually or jointly as it determines is appropriate. Recommended Amendment #1 Chapter 6, Section 6.02, Subdivision 3, of the City Charter of the City of Brooklyn Center is hereby amended by deleting the stricken material as follows: Subdivision 3. (a) Subject to the previsions of paragraphs (b) and (e) of this Subdivision tThe City Manager shall appoint, upon the basis of merit and fitness and may suspend or remove upon the basis of merit and fitness, and upon the provisions of all applicable ordinances, all officers and employees of the City, except the City Attorney, whose appointment and removal shall be at the discretion of the Council. Submitted to the City this 30th day of April 2015. BY THE CHARTER COMMISSION Mark Goodell, Chairperson Mary O'Connor, Secretary City Courciidl Agenda I[tem No. Aa City Council Agenda Item No. 1O #1 COUNCIL ITEM MEMORANDUM DATE: June 8, 2015 IL" Curt Boganey, City Manager FROM: Sharon Knutson, City Clerk SUBJECT: Type IV 6-Month Provisional Rental License for 5617 Logan Ave N Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan and issuance of a Type IV 6-Month Provisional Rental License for 5617 Logan Ave N. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a single family property. The previous rental license was a Type II Rental License. This property qualifies for a Type IV Rental License based on sixteen (16) property code violations found during the initial rental license inspection and zero (0) validated police nuisance incidents for the past twelve months. Staff from Administration, Building & Community Standards and Police Departments worked with the property owner regarding a mitigation plan, which requires Phase I, II and III of the Crime Free Housing Program, and other items included by City ordinance for a Type IV Rental License. A Mitigation Plan has been developed addressing the requirements of the ordinance and any issues specific to the property. Therefore, staff is recommending approval of the Type IV Rental License on condition of adherence to the Mitigation Plan. Please refer to the attached copy of the Mitigation Plan for more information. The following is a brief history of the license process actions: 12-31-2014 The previous rental license expired. 01-05-2015 The Owner, Darwin and Marcia Kulzer, applied for renewal of the rental dwelling license for 5617 Logan Ave N, a single family dwelling. 01-22-2015 An initial rental license inspection was conducted. 16 property code violations were cited, see attached rental criteria. 02-26-2015 A second rental inspection was conducted and failed. A $100 reinspection fee was charged for the next inspection. 03-13-2015 A third rental inspection was conducted and failed. A $100 reinspection fee was charged for the next inspection. ]Wission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for al/people and preserves the public (rust COUNCIL ITEM MEMORANDUM 03-30-2015 A $200 reinspection fee was paid. 03-31-2015 A fourth inspection was conducted and passed. 04-08-2015 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 04-08-2015 City records indicate 0 validated police nuisance incidents occurred in the past twelve months. 04-09-2015 A $300 Administrative Citation was issued for renting without a license. 04-27-2015 A second letter was sent to the owner(s) notifying of qualification for Type IV 6- Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 05-04-2015 A Mitigation Plan was submitted. 05-14-2015 The Mitigation Plan was finalized. 06-01-2015 A letter was sent to the owner notifying that the hearing before the Council will be held June 8, 2015. If approved, after six months, a new rental license is required. The license process will begin immediately. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. 1.Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2.The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. 3.Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section t2-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4.Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust COUNCIL ITEM MEMORANDUM Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5. Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. Rental License Category Criteria Policy - Adopted by City Council 03-08-10 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a. Property Code and Nuisance Violations. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust COUNCIL ITEM MEMORANDUM Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: • At least 75% of units will be inspected for properties with 15 or less units. • At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. Property Code and Nuisance Violations Criteria License Category (Based on Property Code Only) Number of Units Property Code Violations per Inspected Unit Type I -3 Year 1-2 units 0-1 3+ units 0-0.75 Type II - 2 Year 1-2 units Greater than 1 but not more than 4 3+ units Greater than 0.75 but not more than 1.5 Type III - 1 Year 1-2 units Greater than 4 but not more than 8 3+ units Greater than 1.5 but not more than 3 Type IV —6 Months 1-2 units j Greater than 8 3+ units Greater than 3 b. Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (a). Mission: Ensuring an attractive, clean, safe, inclusive conununhty that enhances the qualitj' of life for all people and preserves the public trust 1BIIIJ I fl V Mk'A U I IhYA 0) 1WI I1IJ'A I License Category Number of Units Validated Calls for Disorderly Conduct Service & Part I Crimes (Calls Per Unit/Year) No Category 1-2 0-1 Impact 3-4 units 0-0.25 5 or more units 0-0.35 Decrease 1 1-2 Greater than 1 but not more than 3 Category 3-4 umts Greater than 0.25 but not more than 1 5 or more units Greater than 0.35 but not more than 0.50 Decrease 2 1-2 Greater than 3 Categories 3-4 units Greater than 1 5 or more units Greater than 0.50 Budget Issues: There are no budget issues to consider. Strategic Priorities: • Vibrant Neighborhoods Attachment - Mitigation Plan Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust BUILDING AND COMMUNITY STANDARDS XBRCCO'OICLYN ty of Rental License Mitigation PlanNTER Type IV License Handwritten Mitigation Plans will not be accepted. A fillable form can be found on the City's website at ww.cityofb rook lyncenter.org or call (763) 569-3330 to have an electronic copy sent to you via email. *;lpo Property Address: 5617 Logan Ave NI Brooklyn Comer, MN Owner's Name(s): Darwin Kulzer Local Agent(s): WN Properties PD BOX 75 Delano, MN 55328 Owner's Address: Agent's Address: Owner's Phone: Agent's Phone: (763(972-Bill Owners Email: Agent's Email: mandnprops@gmail.com Current Expiration Date: 9 J 3j J .'j LJ "t Pending Expiration Date: (Six mcnlli& lrwn unenI expir0cn) U,,f Based on property conditions and/or validated police nuisance incidents, the above referenced property qualifies for a Type IV-6 Month Rental License. Prior to application approval by the City Council a fully completed Mitigation Plan must be completed and approved by City staff. A Mitigation Plan must be completed immediately in order to ensure timely completion of the license application process. The Mitigation Plan should indicate the steps being taken to correct identified violations and the measures that wifi be taken to ensure ongoing compliance with City Ordinances and applicable codes. A Mitigation Plan allows the owner and the City to review concerns and identify possible solutions to improve overall conditions of the property. If the Mitigation Plan is not submitted, and all items are not completed within the pending license period, or the above property operates beyond the license expiration date, enforcement actions such as citation, formal complaint, or license review may result. Before submitting, fill-out Sections A, B, and C located on pages 2, 3, 4, and S. Page 116 Type lV Rental Liccns'j Meaal:on Plan, Ro', 4-1.1-15 City of Erooklyn Center—Building and Community Standards Department wi,',tcityofbrooMyncer1er.org 6301 SKngle Creek Par"way, Brooklyn Center, MN 5430.2 155 I Phore. (783) 5$2333O I flY 711 I Faa: (763) 565336U BUILDING AND COMMUNITY STANDARDSCHy ul BROOJLYN Rent al Lcu Mitigation PlanCENTER ^'Type IV Licen s e SecUons A--Crime Free Housing Program Requirements Phase I 1) Use a w ,ttc-n Vase aqc':rnent. The tease aqre ew,ent shalt nckee- we Crime Free Huulnq t,arc Adc5endurr. A copy of the lease agreement and Crime Free Housing Lease Addendum must be attached to the Mitigation Plan when submitted. 7j 21 ATCO to suo the tvminaki or tease agreement or evicion of tersits who violate the terms of Use tease or any acideridum L'I C onduct e minit cker n J Cher,' fe II -ii pi h ton-in If itcone nt tenant a nuwbWground check is not requred Must be able to oroide docurintticn to C i ty if re q ue s ted j 4) Attend a O'ty approved eictht-hur Come We =Mg Pa Wl! lnlorrrmton for aprroer1 courses can be found at wiw nrcpa net under the ?Thinng Events t ab , A copy of the Crime We Hnuing CeMlicato must Lw attached to the Mitigation Plan when submitted, Crime Fwv I Iousinr Uaininq was completed onhs scheduled for )J dLL)O or aqnt p nnin to atoni training at City of ) Submt Mani ljda tc by the 10" day of ech ni th Phase U FI 1) Coipetu o Sectuity isessI1vct or implwncnt improvements requested by the 8rooklyr Center Police Department To sChedue an initial or followup Sewrity Aeiesmwit, ci3t (763) fj K143Q A follow-up assessment must be completed before the license expiration date to *erlTy the scwiIy howo om muMs have been implemented. it a Security Asoessinent has been p uicaly comcetcd write tne cornpleton date. t'Sccurity Assessment was completed on/is scheduled 1w Security Assessment follow -up was completed an/ps heduted lw Continue Sections A, Phase III on page 3. t l t.r. 4.r5 City a fllsooUlye Crtr-13cn1dinj and Conirnnii' Slo"d ar di Ditntnt w# nij c 1i p p n W 49 1 ""'Y ii r 1rl XIB3 ty of BUILDING AND COMMUNITY STANDARDS OKLYN 5617 Logan Ave N NTER Bookrj Center, M1 Rental License Mitigation Plan Type IV License Sections A—Crime Free Housing Program Requirements (continued) Phase ID 1)Owner or agent Wil attend at minimum 50% (2) of the A. R.M. meetings. The A.R.M. meetings must be completed within the rental license period and before the pending Type IV License expiration date. Registration is not required, however you must sign-in during the meeting. Write two meeting dates an owner or agent plan to attend. Owner or agent will attend A.R.M. meetings scheduled on: 31121`15 and 2)have no repeat code violations previously documented with the past year. The following actions are required for properties with four (4) or more units. LI 1) Conduct resident training annually that includes crime prevention techniques. LII 2) Conduct regular resident meetings. Page 316 Typo !VRaoiaI I i censo MOtqa6un Par, Roy. 4-4-15 City of Brooklyn Center—Building and Community Standards Department yofbrooktcontor.org 6301 Shoyk Crcok Parkway, Brooklyn Cnkr, MN 55430.2199 1 Phone. (763) 563-3330 i TTY, 711 1 Fo x (7631569-3360 Condition* Expected Replacement Date F May 2020 N 2035 (4 2035 N 2024 N/A G 2017 G 2030 C 2040 C 2050 F 2080 NIA C 2050 F 2030 S 2080 BUILDING AND COMMUNITY STANDARDS ty or XBRCO'OlKLYN J5d17L NTER 1BrookIynConir,MN Rental License Mitigation Plan Type IV License Sections B—Long Term Capital improvement Plan Based on condition and age, estimated replacement dates need to be provided for common capital items. Funding should be considered accordingly. Items that are broken, worn, or otherwise in violation prior to the estimated replacement date need to be replaced sooner. All items must have a date for Estimated Replacement Date. Dates such as: "unsure", "don't know", or "when broken" will not be accepted. If you are unsure of when an item will need to be replaced, you can make a prediction based on the age, appearance, condition, or manufacture/industry recommendations. Additional information on Expected Useful Life can be found at wvw.hud.gov . Item Date Last Replaced Example: Water Heater May 2010 Furnace 2015 Water Healer 2015 Kitchen Appliances Laundry Appliances N/A Smoke Alarms! Carbon Monoxide Alarms 2013 Exterior Items Paint/Siding 2014 Windows 2013 Roof 2012 Fence 1960 Shed N/A Garage 2010 Driveway 2005 Sidewalks 1960 Other *Condition Abbreviations New=N GoothS FarzF Needs Reptacenieni=N Page 4!6 Rev, 4-14.15 City or Brooklyn Center—Building and Community Standards Department vvciycibrcokJyrcen1er.org 6301 SflnIe CfecX Parkway, Brooklyn Center, MN 554302199 1 Phone, (763) 63-3330 1 TTY, 711 1 Fax: (763) 569-3360 TIty of BUILDING AND COMMUNITY STANDARDS Broojn Cenl€.r MN Rental License Mitigation PlanOKLYN5617LoanAv8 N NTER Type IV License Sections C—Steps to Improve Management and Conditions of Property The items in this section have been proven to assist with property management and property image, The following actions are required: [71 1) Check-in with tenants every 30-days. 2) Drive by property to check for possible cede violations. E? 3) Evict tenants in violation of the lease or any addendums. EI 4) Remain current on all utility fees, taxes, assessments, fines, penalties, and other financial claim slpaynients due to the City. LII 5) Other, The following actions are optional unless required by the City. Eli 1) Provide lawn/snow service. 2) Provide garbage service. LII3)Install security system. LII4)Provide maintenance service plan for appliances. Name of service company: Eli 5) Other: If the Type IV-6 Month Rental License is approved by the City Council, the licensee must comply with the approved Mitigation Plan and all applicable City Codes. A written report must be submitted by the 10(h day of each month with an update of actions being taken by the owner and/or agent to comply with this Mitigation Plan. A copy of the Monthly Update can be found on page 7. A tillable form can be found on the City's website at www.cityofbrooklyncenter.org or call (763) 569-3330 to have an electronic copy sent to you via email. Please attach additional Information if necessary. Page 516 Type IV fciri&i? License Mzig,ii.' Pin, Rov, 4.1 4-15 City of Brooklyn Center—Building and Community Standards Department weAY.elyorork!1ncenter.crg 6301 Shingle Creek PM,tay, l3tooklyn Center, MN 55430-219 I Phone. (763) 5$3-330 1 flY. 711 1 Fax (753) 569.330c BUILDING AND COMMUNITY STANDARDS XBRCCO' ty of NTEI P J Rental License Mitigation Plan Type IV License Sign and Verify I verify that all information provided is true and accurate. I understand that if I do not comply with the approved Mitigation Plan, comply with all items within the license period, or operate beyond the license expiration date, enforcement actions such as citations, formal complaints, or license review may result. /2LL L) or Agent N9m&and Title (Please Print) Signa lute Dale icc" &i/97 PsI,-J Additional Owner or Agent Name and Ti/la (it Applicable, P/ease Print) / (If Applicable) Date City Staff Only k*-01.tA'-Lp'artnjenI 'Date Jh' 42 j/p lily en ommunhly Standards Department Dab Page 6 Type I'! Rental License 6tigalion Plan, Rev 4-14-15 City of Brooklyn Center—Building and Community Standards Department vvwdtyofbroc/dneantem.org 6301 Shingle Creek Paikway, Brooklyn center. MN 55430-2199 1 Phone: (763) 563-3330 1 TTY: 711 1 Fax: (763) 569-33d0 City Comdll Agenda Item No. 1[©2 #2 COUNCIL ITEM MEMORANDUM DATE: June 08, 2015 TO: Curt Boganey, City Manager FROM: Sharon Knutson, City Clerk 3'1d/LA{ KN)ZvL SUBJECT: Type IV 6-Month Provisional Rental License for 1510 69 k" Ave N Recommendation: It is recommended that the City Council consider approval of the Mitigation Plan, Resolution and issuance of a Type IV 6-Month Provisional Rental License for 1510 691h Ave N. The applicant or representative has an opportunity to present evidence regarding the submitted Mitigation Plan. If the Council chooses to modify or disapprove the Mitigation Plan, it is recommended that the motion be to direct staff to prepare proposed findings for disapproval of the Mitigation Plan and notify the license applicant of any pending license actions to be taken at a subsequent Council Meeting. Background: This owner is applying for a renewal rental license. This is a multi-family property with 1 building/4 units. The previous license was a Type IV Rental License issued on October 13, 2014, on condition of adherence to the Mitigation Plan and City Ordinances. The property qualifies for a Type IV Rental License based on 17 (4.25/unit) property code violations found during the initial rental inspection and one (1) validated police nuisance incidents for the past twelve months. Further, the owner failed to comply with the Mitigation Plan and applicable Ordinances, specifically failed to attend Owners/Managers Association Meetings and Crime-Free Housing Training. According to City Ordinances, if the requirements of the license category and the Mitigation Plan are not met, the license renewal category remains a Type IV. City Ordinance Section 12-901.2 requires a licensee of a Type IV Rental Property to complete Phase II of the Crime Free Housing Program. City Ordinance Section 12-914.3.c requires an owner (or authorized representative) to attend a minimum of 50 percent of Owners/Managers Association Meetings. Staff is recommending approval of the continued Type IV Rental License in lieu of denial, revocation or suspension because the owner is working with staff to meet the license requirements and the property is currently in compliance with the ordinance. The following is a brief history of the license process actions. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for al/people amid preserves the public trust COUNCIL ITEM MEMORANDUM Current rental license approval activities: 10-31-2014 The previous Type IV license expired. 11-24-2014 The owner, R & D Investment Group, LLC, applied for renewal of the rental dwelling license for 1510 69th Ave N, a multi-family dwelling. 01-09-2015 An initial rental inspection was conducted. 17 (4.25/unit) property code violations were cited, see attached rental criteria. 03-17-2015 A second inspection was conducted and passed. 03-17-2015 A $125 Administrative Citation was issued for not meeting mitigation plan requirements. 04-06-2015 City records indicate 1 (0.25/unit) validated police incident/nuisance calls occurred in the past twelve months. Incident was 01/30/15 disturbing peace. 04-08-2015 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 04-22-2015 A Mitigation Plan was submitted. 05-05-2015 The Mitigation Plan was finalized. 05-29-2015 A $300 Administrative Citation was issued for renting without a license. 06-01-2015 A letter was sent to the owner notifying that the hearing before the Council will be held June 08, 2015. Previous Type IV Rental License approval activities: 01-24-2014 The owner, R & D Investment Group, LLC, applied for renewal of the rental dwelling license for 1510 69th Ave N, a multi-family dwelling. 02-14-2014 An initial rental inspection was conducted. 4 (1.0/unit) property code violations were cited, see attached rental criteria. 03-17-2014 A second inspection was conducted and passed with weather deferral. 04-30-2014 The previous Type IV license expired. 05-01-2014 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 05-01-2014 City records indicate 1 (0.25/unit) validated police incident/nuisance calls occurred in the past twelve months. Incident was 04/05/13 theft. 05-20-2014 A third inspection was conducted and failed because weather deferral items were not completed. A $100 reinspection fee was charged to the property. 06-04-2014 A second letter was sent to the owner(s) notifying of qualification for Type IV 6- Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 06-09-2014 A $125 Administration Fine was issued for not meeting plan requirements. 07-01-2014 A fourth inspection was conducted on the weather deferred correction and passed. A $100 reinspection fee was charged to the property. 09-02-2014 A Mitigation Plan was submitted. 09-15-2014 The Mitigation Plan was finalized. Mission: Ensuring an attractive, clean, safe, inclusive conununity that enhances the quality of ilfe for all people and preserves the public trust COUNCIL ITEM MEMORANDUM 10-01-2014 A letter was sent to the owner notifying that the hearing before the Council will be held October 13, 2014. 10-06-2014 The $200 reinspection fee was paid. Prior Type IV Rental License approval activities: 03-05-2013 The Owner, Ryan Whisenant, applied for an initial rental dwelling license for 1510 69th1 Avenue N, a multi-family, 1 building, 4 unit, residential property. 04-03-2013 An initial rental inspection was scheduled. No one was on site. 04-04-2013 An initial rental license inspection was conducted. 27 property code violations were cited (6.75/unit). (See attached rental criteria) 05-06-2013 A follow- up inspection was completed. The property owner was not on site to meet the inspector. However, the tenants allowed access and an inspection was completed and additional violations noted. 05-21-2013 A follow-up inspection was scheduled. No one was on site to meet the inspector. 06-28-2013 A follow-up inspection was conducted and failed. 06-28-2013 A $100 reinspection fee was charged to the property. 07-15-2013 A rental license inspection was conducted and passed. Reinspection fees were outstanding. 08-29-2013 The $100 reinspection fees were paid. 09-03-2013 The rental license inspection passed. 09-04-2013 A letter was sent to the owner(s) notifying of qualification for Type IV 6-Month Provisional Rental License, including additional requirements to obtain a rental license. I.e. submit mitigation plan, completion of Phases I, II, and III of Crime Free Housing Program, etc. 09-17-2013 A Mitigation Plan was submitted. 09-18-2013 The Mitigation Plan was finalized. 10-04-2013 A letter was sent to the owner notifying that the hearing before the Council will be held October 14, 2013. If approved, after six months, a new rental license is required. The license process will begin immediately. The new license will be based on the property code violations found during the initial renewal license inspection and the number of validated police calls for services for disorderly activities and nuisances as defined in 12-911. The terms of the mitigation plan must also be met. Excerpt from Chapter 12 of City Code of Ordinances: Section 12-913. TYPE IV PROVISIONAL LICENSES. Rental properties that meet the provisional licensing criteria as described in Section 12- 901 are eligible only for provisional licenses. 2. The City will provide by mail to each licensee a monthly report of any police and fire calls and incidents and applicable property Code violations as described in Section 12- 901. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust COUNCIL ITEM MEMORANDUM Mitigation Plan. The applicant for a provisional license must submit for Council review a mitigation plan for the license period. The mitigation plan shall describe steps proposed by the applicant to reduce the number of police and fire calls and/or the property Code issues described in Section 12-901 and 12-911 to a level that qualifies for a Type I, II, or III license. The mitigation plan may include such steps as changes in tenant screening procedures, changes in lease terms, security measures, rules and regulations for tenant conduct, security personnel, and time frame to implement all phases of the Crime Free Housing Program. 4.Council Consideration. The application with a proposed mitigation plan will be presented to the City Council together with a recommendation by the City Manager or the Manager's designee as to the disposition thereof. After giving the applicant an opportunity to be heard and present evidence, the Council shall approve, disapprove, or approve with conditions the application and the mitigation plan. If the Council disapproves an application and mitigation plan or approves it with conditions, it shall state its reasons for so doing in writing. In evaluating a mitigation plan, the Council will consider, among other things, the facility, its management practices, the nature and seriousness of causes for police and fire incidences and/or property Code issues and the expected effectiveness of measures identified in the plan to reduce the number of police and fire incidences and/or property Code violations. In evaluating a mitigation plan submitted by an applicant already under a provisional license, the Council will also consider the effectiveness of measures identified in the applicant's previous mitigation plan and the need for different or additional measures to reduce police and fire incidences and/or property Code violations. 5.Compliance with Mitigation Plan. The licensee shall comply with the mitigation plan as approved or modified by the Council. No later than the tenth day after each calendar month, the licensee shall mail or deliver to the City Manager a written report describing all steps taken in furtherance of the mitigation plan during the preceding month. Rental License Category Criteria Policy - Adopted by City Council 03-08-10 1.Determining License Categories. License categories are based on property code and nuisance violations noted during the initial or renewal license inspection or for a category verification inspection, along with excessive validated police service calls occurring over a year. License categories are performance based and more accurately depict the condition of the property and the City costs of service. 2.Fees. Fee amounts are determined by the costs of the city to license, inspect, monitor and work with the property to ensure category conditions are met. License fees do not include reinspection fees, late fees, charges for criminal or civil enforcement actions, or other penalties. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust 11118EII I fl N N k'4 U'A I M'A OitiWIJII1k1 3.Category Conditions. The licensee or designated agent must meet the category conditions in the time period specified by the City. A licensee must meet all original conditions required by the License Category, even if a subsequent license category is achieved. 4.License Category Criteria. a.Property Code and Nuisance Violations. Property code violation rates will be based on the average number of property code violations per unit identified during the licensing inspection or category verification inspection. Property code violations for purposes of determining licensing categories shall include violations of property code and nuisances as defined in Chapter 12, 19, 7 and other applicable local ordinances. The City may, upon complaints or reasonable concerns that the establishment no longer complies with the license category criteria, perform a category verification inspection to the same standards as the license renewal inspection as indicated below. Inspections will be conducted in conjunction with established department policies. In cases where 100% of the units are not inspected, the minimum inspection standards will be established as follows: • At least 75% of units will be inspected for properties with 15 or less units. • At least 25% of units, to include a minimum of 12 units, will be inspected for properties with 16 or more units. Property Code and Nuisance Violations Criteria License Category Number of Units Property Code Violations per (Based on Property Inspected Unit Code Onlv Type I - 3 Year I 1-2 units 10-1 Type 11-2 Year 11-2 units I Greater than 1 but not more than 4 Type III - 1 Year 1-2 units - Greater than 4 but not more than 8 Type IV - 6 Months I 1-2 units j Greater than 8 b.Police Service Calls. Police call rates will be based on the average number of valid police calls per unit per year. Police incidences for purposes of determining licensing categories shall include Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust COUNCIL ITEM MEMORANDUM disorderly activities and nuisances as defined in Section 12-911, and events categorized as Part I crimes in the Uniform Crime Reporting System including homicide, rape, robbery, aggravated assault, burglary, theft, auto theft and arson. Calls will not be counted for purposes of determining licensing categories where the victim and suspect are "Family or household members" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 518B.01, Subd. 2 (b) and where there is a report of "Domestic Abuse" as defined in the Domestic Abuse Act, Minnesota Statutes, Section 51813.01, Subd. 2 (a). License Category No Category Impact Decrease 1 Category Decrease 2 Categories Number of Units Validated Calls for Disorderly Conduct Service & Part I Crimes (Calls Per Unit/Year) 1-2 0-1 3-4 units 5 or more units 1-2 11 A 5 or more units 1-2 0-0.35 Greater than 1 Greater than 0.35 Greater than 3 but not more than 3 ut not more Lnan i but not more than 0.50 13-4 units I Greater than 1 I 5 or more units Greater than 0.50 Budget Issues: There are no budget issues to consider. Strategic Priorities: e Vibrant Neighborhoods Attachment - Mitigation Plan - Resolution Approving a Type IV Rental License for 1510 69th Ave Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of ilfe for a!! people and preserves the public trust Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION APPROVING A TYPE IV RENTAL LICENSE FOR 1510 69 " AVEN WHEREAS, City Ordinance Sections 12-900 to 12-916 set forth requirements for licensed rental properties; and WHEREAS, the property located at 1510 69th Ave N, was issued a Type IV Rental License on October, 13, 2014; and WHEREAS, City Ordinance Section 12-901.2 requires a property owner who receives a Type IV Rental License complete Phase I, II and III of the Crime Free Housing Program; and WHEREAS, City Ordinance Section 12-914.3.e establishes the requirement for Phase II of the Crime Free Housing Program including attendance at a minimum of 50 percent of Owners/Managers Association Meetings and completion of Crime Prevention Through Environmental Design Requirements; and City Ordinance Section 12-913 requires submittal of monthly updates; and WHEREAS, the property owner of 1510 69th Ave N, Brooklyn Center failed to attend Owners/Managers Association Meetings and attend the Crime-Free Housing Training. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota, that a TYPE IV Rental License is hereby approved for the property at 1510 69th Ave N, Brooklyn Center, MN. June 08, 2015 Date Mayor ATTEST: City Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. BUILDING AND COMMUNITY STANDARDS City ofBROOKLYN Rental License Mitigation PlanCENTER Type LV License Handwritten Mitigation Plans will not be accepted. A tillable form can be found on the City's website at vwwcityofbrooklyncenterorg or call (763) 56-330 to have an electronic copy sent to you via email. Property Address: 1510 59th Ave N. Brooklyn Center, MN 65430 Owner's Name(s): R&D trivetrnent Group, LIC Local Agent(s): (Ryan Whisenant I David Itman) Owner's Address: 4953 Cetcimb Ave Agent's Address: MInneapolFs MN 55417 Ownerts Phone (770) 331-8307 Agent's Phone: Owners Email: rNhiejhotmaILcom Agent's Email: Current Expiration Date: øt.. Pending Expiration Date: (Six months from cuffontexpiration) Based on property conditions and/or validated police nuisance incidents, the above referenced property qualifies for a Type IV-6 Month Rental License. Prior to application approval by the City Council a fully completed Mitigation Plan must be completed and approved by City staff. A Mitigation Plan must be completed immediately In order to ensure timely completion of the license application process. The Mitigation Plan should indicate the steps being taken to correct identified violations and the measures that will be taken to ensure ongoing compliance with City Ordinances and applicable codes. A Mitigation Plan allows the owner and the City to review concerns and Identify possible solutions to improve overall conditions of the property. If the Mitigation Plan is not submitted, and all items are not completed within the pending license period, or the above property Operates beyond the license expiration date, enforcement actions such as citation, formal complaint, or license review may result. Before submitting, fill-out Sections A, B, and C located on pages 2, 3,4, and 5. Page 116 Type IV Ren I& License Mitigation P1et fw 4-14-15 City of 33rooldyn Ceter—Building and (onmuniiy StatdrcIs Det*et vw,yotoktyneriteror9 6301 Shnle Creek Parkway, BrIold'Jn Center, MN 55430-2199 1 Phone: (763) 563-3330 I TTY: 711 1 Fax: (763) 5593360 BUILDING AND COMMUNITY STANDARDS TIBBROOKLYNty of 1510 691h Ave N.ClCENTER Brooklyn Qeriter, MN 55430 . . Rental License Mitigation Plan Type IV License Sections A—Crime Free Housing Program Requirements Phase 1) Use a written lease agreement The lease agreement shall Include The Crime Free Housing Lease Addendum. A copy of the lease agreement and Crime Free Housing Lease Addendum must be attached to the Mitigation Plan when submitted. Z 2) Agree to pursue the termination or lease agreement or eviction of tenants who violate the terms of the lease or any addendums. J7J 3) Conduct criminal background check for all new prospective tenants. If it Is a current tenant a new background check is not required. Must be able to provide documentation to City if requested. 4)Attend a City approved eight-hour Crime Free Housing training course. Information for approved courses can be found at wwwmncpa.net under the Training and Events tab. A copy of the Crime Free Housing Certificate must be attached to the Mitigation Plan when submitted. Crime Free Housing training was completed on/is scheduled for: Owner or agent attended/is planning to attend training at city of: & Luvis Perk 5)Submit Monthly Update by the 10th day of each month. Phase II 1) Complete a Security Assessment and implement improvements requested by the Brooklyn Center Police Department. To schedule an initial or follow-up Security Assessment, call (763) 569-3344, A follow-up assessment must be completed before the license expiration date to verify the security improvements have been implemented. If a Security Assessment has been previously completed, write the completion date. Security Assessment was completed on/is scheduled Security Assessment follow-up was completed on/is scheduled for: Continue Sections A, Phase Ill on page 3. Page 216 Type N Rental LicvMse Mit1Qr Plan, Rev. 4-14-15 C1yofBxok1yi Ceite—Buildlng and Community Standards Dpaitmtii wwwcity&braontt,cr 601 Shingle Creek Parkway, arookiyn center. MN 55430-2199 1 Phone; (763) 563-3330 1 TTY: 711 I ax: (763) 569-336Q BUILDING AND 001VIMUMTY STANDARDS City of 1610 69th Ave Nl Broo}dynCenterMN 554O: Rental License Mitigation PlanCENTERType IV License Sections ACrime Free Housing Program Requirements (continued) Phase Ill jj 1) owner or agent will attend at minimum 50% (2) of the A.R.M. meetings. The A.R.M. meetings must be completed within the rental license period and before the pending Type IV License expiration date. Registration is not required, however you must sign -in during the meeting. Write two meeting dates an owner or agent plan to attend. Owner or agent will attend A.R.M. meetings scheduled on, 3118115 and 5114115 2) Have no repeat code violations previously documented with the past year. The following actions are required for properties with four (4) or more units. 1)Conduct resident training annually that includes crime prevention techniques. 2)Conduct regular resident meetings. Page 316 Type At Licenso Kfigotlon Mai), R6v 44445 City of Brooklyn Center—Building and Community 5ttdrds Depa1ment 6301 Shingle Creek Pacic.vay. OtokIyri center, MN 55430-219 Phone: (763) 56-333O I TTY 711 1 F:(763) 569336O BUILDING AND COMMUNITY STANDARDSCity of BROOICLYN 1510 65th Ave N. CENTER Brooklyn CenterMN 55430. Rental License Mitigation Plan Type IV License Sections 8—Long Term Capital Improvement Plan Based on condition and age, estimated replacement dates need to be provided for common capital items. Funding should be considered accordingly. Items that are broken, worn, or otherwise in violation prior to the estimated replacement date need to be replaced sooner. All items must have a date for Estimated Replacement Date, Dates such as; "unsure", "don't know", or "When broken" will not be accepted. If you are unsure of when an item will need to be replaced, you can make a prediction based on the age, appearance, condition, or manufacture/industry recommendations. Additional information on Expected Useful Life can be found atwv.hudgov. Item Date Last Replaced Example: Water Healer May 2010 Furnace 2005 Water Heater 2013 Kitchen Appliances 2014 Laundry Appliances Smoke Alarms! Carbon Monoxide Alarms 201 Exterior Items Paint/Siding 1098 Windows Roof 2003 Fence Shed n/a Garage Driveway 1085 Sidewalks 1585 Other. Sliding Doors 2015 Cndition Abbreviations: NewN Condition* Expected Replacement Date F May 2020 (3 2025 (3 •200 N 2020 (3 2020 N 2017 (3 2025 (3 2030 0 2023 0 2023 We (3 2018 0 2025 N 2040 GoodG FairF Needs RepEaemantR Pago 416 IV Rental License Mitig&ion i0!an. Roy. 44445 City of Bro1c1yit Centhr—Building and Community Standards 1)epartxnnt wwedtyofbrooklyncenterorg 9301 SlilnOla Creek Parkway, Broldyri Center, MN 55430-2199 1 Phone: (75) 3-3330 I TTY: 71 I Fa>c (Th3) 5593360 BUILDING AND COMMUNITY STANDARDSTBRCORkNTER t LYN I5lO69thAvN, Branklyti Center, MN 55430: Rental License Mitigation Plan Type IV License Sections C—Steps to Improve Management and Conditions of Piperty The items in this section have been proven to assist with property management and properly image. The following actions are required: [] 1) Check-in with tenants every 30-days. 17 2) Drive by properly to check for possible code violations. 3) Evict tenants in violation of the lease or any addendums. J 4) Remain current on all utility fees, taxes, assessments, fines, penalties, and other financial claims/payments due to the City. LII 5) Other: The following actions are optional unless required by the City. I7J 1) Provide lawn/snow service. 2) Provide garbage service. [7 3) Install security system 171 4) Provide maintenance service plan for appliances. Name of service company: CenterPoint Energy U 5) Other: If the Type IV-6 Month Rental License is approved by the City Council, the licensee must comply with the approved Mitigation Plan and all applicable City Codes. A written report must be submitted by the 10th day of each month with an update of actions being taken by the owner and/or agent to comply with this Mitigation Plan. A copy of the Monthly Update can be found on page 7. A fillable form can be found on the City's website at www.cityofbrooklyncenter.org or call (763) 569-3330 to have an electronic copy sent to you via email. Please attach additional information if necessary. Page MI Typo iVRflal Llceos.e Mt14ati Plan, Rev. 44445 City of Brooklyn Center—Thiflding and Community Standards 1)epartrnent w.tyelbreoklyncenter.org 6301 Shingle Creek Parkway, Brooklyn Center, MN 55430.2199 1 Phone: (763) 83-3330 1 TTY: 711 1 Fac (763) 669-3.360 - BUILDING AND COMMUNITY STANDARDSCity of -BROOILYN [EB3rookJyn ,Q e.nt er,-.N1N 10 9th Ave N. CENTER - 5543Qi Rental License Mitigation Plan __________________________ Type W License Sign and Verify I verify that all Information provided is true and accurate. I understand that if I do not comply with the approved Mitigation Plan, comply with all items within the license period, or operate beyond the license expiration date, enforcement actions such as citations, formal complaints, or license review may result Ryan Whisenant - Owner I CFO I COO Owner orAgont Mime and Title (Please Print) jn1Ryan V'/h isenant LL, 4/2912015 - - OwrerorAeent Signewe Date David Itmer, - Ado'ft(cnal Owner or A gent Neme and Title (if Applicable, Please Print) Acklitiqnal OwnerorAgent Signature (If Applicable) Date City Staff Only "0)2 e e/<^ Police DepartrnanE bate / b6- ding and ommunily Standards Deparlinent Date Pago 61I Type lVRenini License Mitigation Plans Rev, 44445 City of DYaoldyn Center—Building and Community Standards Department wdbrkIyncentercrg 6301 Shingte Creek Par1wy, Drekiyii Center, MN 554302199 1 Phone: (753) 503-3330 1 TTY. 711 I Fax: (763) 569-3-360 [1kuL.iN1.WLAgendaUItem .iIHti COUNCIL ITEM MEMORANDUM DATE: June 8, 2015 TO: Curt Boganey, City Manager FROM: Nathan Reinhardt, Finance Director SUBJECT: 2015A General Obligation Improvement Bonds Recommendation: It is recommended that the City Council consider approval of the attached resolution providing for the competitive sale of $7,035,000 General Obligation Improvement Bonds, Series 2015A to finance the construction of Freeway Park Area Improvements, 63rd Avenue Improvements and to refund the City's General Obligation Build America Bonds, Series 201 OA. Background: On May 11, 2015 the City Council adopted a resolution providing for the competitive negotiated sale of $7,035,000 General Obligation Improvement Bonds, Series 2015A. Background information on the three pieces that make up this debt issue is summarized below: Freeway Park Area Improvements January 12, 2015 - City Council approved a resolution ordering improvements and authorizing preparation of plans and specifications for the Freeway Park Area street, storm drainage and utility improvements. City Council also approved a resolution certifying the special assessments on this project. April 21, 2015 - City Council accepted the bid and awarded the contract of Freeway Park Area Improvements to the lowest responsible bidder. The estimated total cost of the project is $7,645,486, of this total cost, $4,438,552 of street and sanitary sewer costs will be financed through bond proceeds. 63 td Avenue Improvements January 12, 2015 - City Council approved a resolution ordering improvements and authorizing preparation of plans and specifications for 63rd Avenue street, storm drainage and utility improvements. City Council also approved a resolution certifying the special assessments on this project. May 11, 2015 - City Council will consider accepting the bid and awarding the contract of 63rd Avenue Improvements to the lowest responsible bidder. The estimated total cost of the project is $4,948,741, of this total cost, $814,797 of street and sanitary sewer costs will be financed through bond proceeds. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust COUNCIL ITEM MEMORANDUM 2010 Build America Bonds February 8, 2010 - City Council approved a resolution issuing $2,350,000 in Build America Bonds to finance a project to replace all water meters in Brooklyn Center. The bonds are being repaid over a 15 year term by Water (75%) and Sanitary Sewer (25%). October 1, 2014 - As a result of the sequestration, a 7.3% reduction was made to the Federal credit that the City receives for the interest paid on these bonds. This has triggered the possibility for the City to exercise an extraordinary redemption provision on the bond issue, which many City issuers of these bonds have exercised. Debt Summary (New vs Refunding) New Debt (Improvement Portion)$5,340,000 Refunded Debt (Build America Bonds)1.695.000 Total Debt Issue $7,035,000 Debt Summary (By Project) Freeway Park $4,438,552 631d1 Avenue 814,797 Refunded Debt (Build America Bonds)1,662,811 Issuance Costs 69,135 Discount (rounding)49.705 Total Debt Issue $7,035,000 Budget Issues: The improvement projects were included in the 2015 adopted budget. The Street Reconstruction fund which is the primary source of funding for the City's share of street reconstruction improvements receives approximately $650,000 per year in franchise fees. Franchise fees are not adequate to cover the City's share of street reconstruction expenditures which have an estimated average annual cost of $2.9 million for the years 2015 through 2020 as identified in the Capital Improvement Plan (CIP). During a review of the CIP at the July 7th, 2014 joint budget work session with the Financial Commission, a cash flow analysis showed that additional bond sales in the amount of $2.5 million would be needed every two years. The 2015A bond issue includes approximately $2.25 million in street reconstruction costs that will be repaid from an additional debt service property tax levy. The estimated required levy for the new debt service in 2016 is $240,000. The Infrastructure Reconstruction fund accounts for infrastructure replacement costs that are funded entirely by special assessments. Because special assessments are repaid over ten years, bonds are frequently issued to provide immediate funding for the project costs. The 2015A bond issue includes approximately $1.25 million in street/storm drainage improvements that will be funded by special assessment revenue. Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust COUNCIL ITEM MEMORANDUM The Sanitary Sewer Utility pays for infrastructure replacement costs through utility charges. Issuing debt to provide funding for the infrastructure improvements will allow the City to minimize the impact on these charges. The 2015A bond issue includes approximately $1.84 million in sanitary sewer improvements that will be funded through utility fees. The 2010 Build America Bonds are being re-paid by Water (75%) and Sanitary Sewer (25%). The decision to issue Build America Bonds was based on a 35% subsidy on the interest from the Federal Government over the life of the bond. The subsidy has since been reduced and could potentially be reduced in the future. The bond currently has $1,660,000 in principal payments remaining with the last payment to be made on February 1, 2025. The net present value savings, after issuance costs, is estimated to be $55,127. Debt Summary (By Repayment Source) Property Tax Levy $2,243,290 Sanitary Sewer Charges 1,853,834 Special Assessments 1,242,876 Refunded Debt (Build America Bonds)1,695,000 Total Debt Issue $7,035,000 We have attached a copy of the Official Statement which describes the bond sale in more detail. We anticipate that Standard & Poor's will confirm that the bonds will continue to be rated AA. The rating report will be sent to the Council when received prior to the Council meeting. Competitive proposals will be received by the City's financial advisor, Springsted Incorporated at 10:00am on June 2015. Proceeds from the bonds will be received July 9th 2015. Doug Green, Vice President of Springsted will be present at the Council meeting to discuss the recommendations for the sale. Strategic Priorities: Targeted Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive comnulnity that en/lances the quality of life fir all people and preserves the public trust 462335v1 JSB BR291-355 Extract of Minutes of Meeting of the City Council of the City of Brooklyn Center, Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Brooklyn Center, Minnesota, was duly held in the City Hall in said City on Monday, June 8, 2015, commencing at 7:00 P.M. The following members were present: and the following were absent: * * * * * * * * * The Mayor announced that the next order of business was consideration of the proposals that had been received for the purchase of the City’s General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A, proposed to be issued in an aggregate principal amount of $6,900,000. The City Manager presented a tabulation of the proposals that had been received in the manner specified in the Official Terms of Proposal for the Bonds. The proposals were as set forth in Exhibit A attached. After due consideration of the proposals, Member __________ then introduced the following resolution and moved its adoption: 462335v1 JSB BR291-355 2 RESOLUTION NO. 15____ A RESOLUTION AWARDING THE SALE OF $6,900,000 GENERAL OBLIGATION UTILITY REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2015A; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the City Council of the City of Brooklyn Center, Hennepin County, Minnesota (the “City”), as follows: Section 1. Findings, Determinations; Sale of Bonds. 1.01 It is hereby determined that: (a) Certain assessable public improvements in the City (the “Improvements”), have been made, duly ordered, or contracts let for the construction thereof, pursuant to Minnesota Statutes, Chapters 429 and 475, as amended (collectively, the “Improvement Act”); (b) On March 8, 2010, the City issued its $2,350,000 Taxable General Obligation Utility Revenue Bonds, Series 2010A (Build America Bonds-Direct Payment to Issuer) (the “2010A Bonds”), dated March 8, 2010, pursuant to the Minnesota Statutes Chapters 444 and 475 (the “Utility Act” and, together with the Improvement Act, the “Act”) to finance the replacement of residential and commercial water meters within the City. (c) The 2010A Bonds were issued in accordance with the terms of a resolution adopted at a regular meeting of the City Council of the City held on February 8, 2010 (the “2010A Award Resolution”). Section 7 of the 2010A Award Resolution provides for the redemption of the 2010A Bonds upon the occurrence of an Extraordinary Event and provides that an “Extraordinary Event” will have occurred if Section 54AA or 6431 of the Internal Revenue Code of 1986, as amended (as such Sections were added by Section 1531 of the American Recovery and Reinvestment Act of 2009, pertaining to “Build America Bonds”) are amended so that the City’s entitlement to a direct payment credit from the United States Treasury in the amount of 35% of the interest paid on the Bonds is reduced or eliminated. (d) In accordance with the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended by the Budget Control Act of 2011, and the Taxpayer Relief Act of 2012, reductions are required to be made in refundable credits under Section 6431 of the Internal Revenue Code of 1986, as amended. These reductions apply to the direct payments required to be made with respect to Build America Bonds. As a result, the reduction in direct payments, including the payment due to the City from the Internal Revenue Service with respect to interest payable on the 2010A Bonds, (i) for the period from March 1, 2013 through September 30, 2013, was 8.7% of the amount otherwise payable under the terms of Section 54AA of the Code, (ii) the reduction for the period from October 1, 2013 through September 30, 2014, was 7.2% of the amount otherwise payable under the terms of Section 54AA of the Code and (iii) for the current period (October 1, 2014 through September 30, 2015), is 7.3% percent of the amount otherwise payable under the terms of Section 54AA of the Code. 462335v1 JSB BR291-355 3 (e) The City Council hereby determines that the extraordinary redemption and prepayment on August 15, 2015 of the 2010A Bonds maturing on and after February 1, 2016 (the “Refunded Bonds”), is consistent with covenants made with the holders of the 2010A Bonds and is necessary or desirable for the reduction of debt service cost to the City. (f) it is necessary and expedient to the sound financial management of the affairs of the City to issue General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A (the “Bonds”), in an aggregate principal amount of $6,900,000, to provide financing for the Improvements and refunding the 2010A Bonds; and (d) The City is authorized by Minnesota Statutes, Section 475.60, subdivision 2(9) to negotiate the sale of the Bonds because the City has retained an independent financial advisor in connection with the sale of the Bonds. 1.02. Award to the Purchaser and Interest Rates The proposal of FTN Financial Capital Markets in Memphis, Tennessee (the “Purchaser”) to purchase the $6,900,000 General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A (the “Bonds”) of the City described in the Official Terms of Proposal thereof is found and determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $6,970,242.06 Bonds bearing interest as follows: Year Interest Rate Year Interest Rate 2016 2.00% 2022 2.00% 2017 2.00% 2023 2.00% 2018 2.00% 2024 2.25% 2019 2.00% 2025 2.50% 2020 2.00% 2026 2.50% 2021 2.00% 1.03. Purchase Contract. Any original issue premium and any rounding amount shall be credited to the Debt Service Fund or the Improvement Fund hereinafter created, or applied to redemption of the Refunded Bonds, as determined by the City Finance Director in consultation with the City’s municipal advisor. The City Finance Director is directed to retain the good faith check of the Purchaser pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Act in the total principal amount of $6,900,000, originally dated July 9, 2015, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 without option of prior payment in the years and amounts as follows: Year Amount Year Amount 2016 $140,000 2022 $700,000 2017 675,000 2023 705,000 2018 665,000 2024 710,000 2019 675,000 2025 715,000 2020 680,000 2026 550,000 2021 685,000 462335v1 JSB BR291-355 4 $1,660,000 of the Bonds constitute the Utility Refunding Bonds, maturing in the amounts and on the dates set forth below: Year Amount Year Amount 2016 $140,000 2021 $165,000 2017 165,000 2022 175,000 2018 165,000 2023 175,000 2019 165,000 2024 175,000 2020 165,000 2025 170,000 $5,240,000 of the Bonds constitute the Improvement Bonds, maturing in the amounts and on the dates set forth below: Year Amount Year Amount 2017 $510,000 2022 $525,000 2018 500,000 2023 530,000 2019 510,000 2024 535,000 2020 515,000 2025 545,000 2021 520,000 2026 550,000 1.05. Optional Redemption. The City may elect on February 1, 2023, and on any day thereafter to prepay Bonds due on or after February 1, 2024. Redemption may be in whole or in part and if in part, at the option of the City and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify DTC (as defined in Section 8 hereof) of the particular amount of such maturity to be prepaid. 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 interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1, 2016, to the registered owners of record thereof as of the close of business on the fifteenth day immediately preceding each interest payment date, whether or not such day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: 462335v1 JSB BR291-355 5 (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred, or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner’s attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner’s order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees, and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen, or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen, or lost, the Registrar will deliver a new Bond of like amount, number, maturity date, and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for any Bond destroyed, stolen, or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen, or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen, or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance, and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. 462335v1 JSB BR291-355 6 (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Registrar. The City appoints U.S. Bank National Association, St. Paul, Minnesota, as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Finance Director must transmit to the Registrar moneys sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication, and Delivery. The Bonds will be prepared under the direction of the City Finance Director and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed, and authenticated, the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Execution of the Bonds. The Bonds will be printed or typewritten in substantially the form attached hereto as Exhibit B. 3.02. Approving Legal Opinion. The City Manager is authorized and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and cause the opinion to be printed on or accompany each Bond. 462335v1 JSB BR291-355 7 Section 4. Payment; Security; Funds; Pledges and Covenants. 4.01. Debt Service Fund. The Bonds will be payable from the General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A Debt Service Fund (the “Debt Service Fund”) hereby created. The Debt Service Fund shall be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The City will maintain the following accounts in the Debt Service Fund: the “Improvements Account” and the “Utility Refunding Account.” Amounts in the Improvements Account are irrevocably pledged to the Improvement Bonds and amounts in the Utility Account are irrevocably pledged to the Utility Refunding Bonds. (a) Improvements Account. The Finance Director shall timely deposit in the Assessable Account of the Debt Service Fund hereby created, general taxes hereafter levied (the “Taxes”) and the special assessments levied against the property specially benefited by the Improvements (the “Assessments”) and allocated to the payment of debt service on the Improvement Bonds, which are pledged to the Improvements Account. There is also appropriated to the Improvements Account a pro rata portion of any original issue premium and any rounding amount, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof. (b) Utility Account. The City will continue to maintain and operate its water and sewer utility fund or funds, to which will be credited all gross revenues of the water and sewer utility systems (the “Utility Systems”), and out of which will be paid all normal and reasonable expenses of current operations of such systems. Any balances therein are deemed net revenues (the “Net Revenues”) and will be transferred, from time to time, to the Utility Account of the Debt Service Fund, which Utility Account will be used only to pay principal of and interest on the Utility Refunding Bonds, and any other bonds similarly authorized. There will always be retained in the Utility Account a sufficient amount to pay principal of and interest on all of the Utility Refunding Bonds, and the Finance Director must report any current or anticipated deficiency in the Utility Account to the City Council. If a payment of principal or interest on the Utility Refunding Bonds becomes due when there is not sufficient money in the Utility Account in the Debt Service Fund to pay the same, the City Finance Director is directed to pay such principal or interest from the general fund of the City, and the general fund will be reimbursed for the advances out of the proceeds of Net Revenues of the Utility Systems and taxes when collected. There is also appropriated to the Utility Account a pro rata portion of any original issue premium and any rounding amount, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03 hereof and any collections of taxes hereafter levied for the payment of the Utility Refunding Bonds and interest thereon. 4.02. Improvement Fund. The proceeds of the Improvement Bonds, less the appropriations made in Section 4.01(a), together the Assessments and Taxes collected during the construction of the Assessable Improvements, with any other funds appropriated for the Improvements, will be deposited in a separate fund of the City (the “Improvement Fund”). Amounts in the Improvement Fund will be disbursed solely to pay costs of the Improvements, including costs of issuance of the Bonds and the payment of principal of and interest on the Improvement Bonds prior to the completion and payment of all costs of the Improvements. Any balance remaining in the Improvement Fund after completion of the Improvements may be used for any other public use authorized by law or credited to the Debt Service Fund or other City debt service funds, all in accordance with Section 475.65 of the Act. When the Improvements are completed and the cost thereof paid, the Improvement Fund is to be closed and any subsequent collections of Assessments for the Improvements are to be deposited in the Improvements Account of the Debt Service Fund. 462335v1 JSB BR291-355 8 4.03. Application of Utility Refunding Bond Proceeds. Proceeds of the Utility Refunding Bonds, less the appropriations made in Section 4.01(b), shall be applied to the payment and the redemption and prepayment, on August 15, 2015, of the February 1, 2016 through February 1, 2025, maturities of the 2010A Bonds. It is hereby found and determined that the proceeds derived from the sale of the Bonds are sufficient for the payment and the redemption and prepayment on August 15, 2015, of the Refunded Bonds. It is hereby found and determined that the issuance of the Bonds and application of the proceeds of the Bonds to the redemption and prepayment of the Refunded Bonds is consistent with covenants made with the holders of the Refunded Bonds and is necessary and desirable for the reduction of debt service costs to the City. The Finance Director of the City is hereby authorized to deliver such notices of redemption and to take such other actions as are necessary or appropriate to provide for such redemption and prepayment of the Refunded Bonds on August 15, 2015. In accordance with the requirements of the Continuing Disclosure Certificate, dated as of March 8, 2010, executed and delivered in connection with the issuance of the Refunded Bonds, within 10 days of the date of issuance of the Bonds, the Finance Director shall deliver a “material event notice” of the proposed redemption and prepayment of the Refunded Bonds to the Electronic Municipal Market Access (“EMMA”) system operated by the Municipal Securities Rulemaking Board. 4.04. City Covenants with Respect to the Improvement Bonds. The City hereby covenants with the holders from time to time of the Improvement portion of Bonds as follows: (a) It is hereby determined that at least 20% of the costs of the Improvements to the City will be paid by Assessments. The City has caused or will cause the Assessments for the Improvements to be promptly levied so that the first installment will be collectible not later than 2016 and will take all steps necessary to assure prompt collection, and the levy of the Assessments is hereby authorized. The City Council will cause to be taken with due diligence all further actions that are required for the construction of each Improvement financed wholly or partly from the proceeds of the Bonds, and will take all further actions necessary for the final and valid levy of the Assessments and the appropriation of any other funds needed to pay the Bonds and interest thereon when due. (b) In the event of any current or anticipated deficiency in Assessments and Taxes, the City Council will levy ad valorem taxes in the amount of the current or anticipated deficiency. (c) The City will keep complete and accurate books and records showing: receipts and disbursements in connection with the Improvements, Assessments levied therefor and other funds appropriated for their payment, collections thereof and disbursements therefrom, monies on hand and, the balance of unpaid Assessments. (d) The City will cause its books and records to be audited at least annually and will furnish copies of such audit reports to any interested person upon request. 4.05 City Covenants with Respect to the Utility Refunding Bonds. The City Council covenants and agrees with the holders of the Bonds that so long as any of the Utility Refunding Bonds remain outstanding and unpaid, it will keep and enforce the following covenants and agreements: (a) The City will continue to maintain and efficiently operate the Utility Systems as public utilities and conveniences free from competition of other like municipal utilities and will cause all revenues therefrom to be deposited in bank accounts and credited to the accounts of the Utility Systems as hereinabove provided, and will make no expenditures from those accounts except for a duly authorized purpose and in accordance with this resolution. 462335v1 JSB BR291-355 9 (b) The City will also maintain in the Debt Service Fund a separate account identified as the Utility Account and will cause money to be credited thereto from time to time, out of Net Revenues from the Utility Systems in sums sufficient to pay principal of and interest on the Utility Refunding Bonds when due. (c) The City will keep and maintain proper and adequate books of records and accounts separate from all other records of the City in which will be complete and correct entries as to all transactions relating to the Utility Systems and which will be open to inspection and copying by any bondholder, or the bondholder's agent or attorney, at any reasonable time, and it will furnish certified transcripts therefrom upon request and upon payment of a reasonable fee therefor, and said account will be audited at least annually by a qualified public accountant and statements of such audit and report will be furnished to all bondholders upon request. (d) The City Council will cause persons handling revenues of the Utility Systems to be bonded in reasonable amounts for the protection of the City and the bondholders and will cause the funds collected on account of the operations of the Utility Systems to be deposited in a bank whose deposits are guaranteed under the Federal Deposit Insurance Law. (e) The Council will keep the Utility Systems insured at all times against loss by fire, tornado and other risks customarily insured against with an insurer or insurers in good standing, in such amounts as are customary for like plants, to protect the holders, from time to time, of the Utility Improvement Bonds and the City from any loss due to any such casualty and will apply the proceeds of such insurance to make good any such loss. (f) The City and each and all of its officers will punctually perform all duties with reference to the Utility Systems as required by law. (g) The City will impose and collect charges of the nature authorized by Minnesota Statutes, Section 444.075 at the times and in the amounts required to produce Net Revenues adequate to pay all principal and interest when due on the Utility Refunding Bonds and to create and maintain such reserves securing said payments as may be provided in this resolution. (h) The City Council will levy general ad valorem taxes on all taxable property in the City, when required to meet any deficiency in pledged net revenues. (i) The City hereby determines that the estimated collection of net revenues herein pledged for the payment of principal and interest on the Utility Refunding Bonds will produce at least 5% in excess of the amount needed to meet, when due, the principal and interest payments on such Utility Refunding Bonds. 4.06. Pledge of Taxes. For the purpose of paying the principal of and interest on the Improvement Portion of the Bonds, there is hereby levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City. Such tax will be credited to the as provided in Sections 4.01(a) and 4.02 on a pro rata basis and will be in the years and amounts as follows (year stated being year of levy for collection the following year): Year Levy (See Exhibit C) 462335v1 JSB BR291-355 10 The tax levy herein provided will be irrepealable until all of the Improvement Bonds are paid, provided that at the time the City makes its annual tax levies the City Manager may certify to the County Taxpayer Services Division Manager of Hennepin County (the “Taxpayer Services Division Manager”) the amount available in the Improvements Account of the Debt Service Fund to pay principal and interest due during the ensuing year, and the County Taxpayer Services Division Manager will thereupon reduce the levy collectible during such year by the amount so certified. 4.07. Debt Service Coverage. It is hereby determined that the estimated collection of the foregoing Taxes and Assessments will produce at least 5% in excess of the amount needed to pay when due, the principal and interest payments on the Improvement Bonds and the Net Revenues herein pledged will produce at least 5% in excess of the amount needed to pay when due the principal and interest payments on the Utility Refunding Bonds. 4.08. Registration of Resolution. The City Manager is authorized and directed to file a certified copy of this resolution with the County Auditor, Taxpayer Services Division Manager and to obtain the certificate required by Minnesota Statutes, Section 475.63. 4.09. General Obligation Pledge. For the prompt and full payment of the principal of and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City will be and are hereby irrevocably pledged. If the balance in the Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Debt Service Fund when a sufficient balance is available therein. Section 5. Refunding; Findings; Redemption of Refunded Bonds. 5.01. Refunded Bonds. It is hereby found and determined that based upon information presently available from the City’s financial advisers, the refunding of the Refunded Bonds is desirable for the reduction of debt service cost to the municipality. $705,772.92 of the proceeds of the Bonds shall be deposited in the debt service account for the Refunded Bonds and applied to their redemption on August 15, 2015. 5.02. Sufficiency to Pay Refunded Bonds. It is hereby found and determined that the proceeds of the Bonds deposited in the debt service funds for the Refunded Bonds, together with amounts previously on deposit therein, will be sufficient to prepay all of the principal of, interest on and redemption premium (if any) on the Refunded Bonds on August 15, 2015. 5.03. Redemption of Refunded Bonds. The Refunded Bonds will be redeemed and prepaid on August 15, 2015 in accordance with their terms and in accordance with the terms and conditions set forth in the forms of Notice of Call for Redemption attached hereto as Exhibit D which terms and conditions are hereby approved and incorporated herein by reference. The Registrar for the Refunded Bonds is authorized and directed to send a copy of the respective Notice of Redemption to each registered holder of the respective Refunded Bonds. Section 6. Authentication of Transcript. 6.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits, and transcripts as may be required to show the facts within their knowledge or as 462335v1 JSB BR291-355 11 shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, will be deemed representations of the City as to the facts stated therein. 6.02. Certification as to Official Statement. The Mayor and City Manager are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. Section 7. Tax Covenants. 7.01. Tax-Exempt Bonds. The City covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees, or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. To that end, the City will comply with all requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds and the rebate of excess investment earnings to the United States (unless the City qualifies for any exemption from rebate requirements based on timely expenditure of proceeds of the Bonds, in accordance with the Code and applicable Treasury Regulations). 7.02. Not Private Activity Bonds. The City further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be “private activity bonds” within the meaning of Sections 103 and 141 through 150 of the Code. 7.03. Qualified Tax-Exempt Obligations. In order to qualify the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Bonds are not “private activity bonds” as defined in Section 141 of the Code; (b) the City designates the Bonds as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2015 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2015 have been designated for purposes of Section 265(b)(3) of the Code. 7.04. Procedural Requirements. The City will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. 462335v1 JSB BR291-355 12 Section 8. Book-Entry System; Limited Obligation of City. 8.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.04 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (“DTC”). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 8.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar, and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds; (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar), of any notice with respect to the Bonds, including any notice of redemption; or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar, and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City’s obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words “Cede & Co.,” will refer to such new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 8.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which will govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 8.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 462335v1 JSB BR291-355 13 8.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and all notices with respect to the Bond will be made and given, respectively in the manner provided in DTC’s Operational Arrangements, as set forth in the Representation Letter. Section 9. Continuing Disclosure. 9.01. Execution of Continuing Disclosure Certificate. For purposes of this Section, “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. 9.02. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. Section 10. Defeasance. When all the Bonds, and all interest thereon, (or all of either the Improvement Bonds or Utility Refunding Bonds portions thereof) have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution (with respect to the Improvement Bonds or Utility Improvement Bonds portion of the Bonds, as the case may be) to holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The motion for the adoption of the foregoing resolution was duly seconded by Member ____________ and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 462335v1 JSB BR291-355 14 STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) SS. ) CITY OF BROOKLYN CENTER ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Brooklyn Center, Hennepin County, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on June 8, 2015 with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of $6,900,000 General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A of the City. WITNESS My hand officially as such City Clerk and the corporate seal of the City this ______ day of June, 2015. City Clerk Brooklyn Center, Minnesota (SEAL) 462335v1 JSB BR291-355 A-1 EXHIBIT A PROPOSALS 462335v1 JSB BR291-355 A-2 462335v1 JSB BR291-355 B-1 EXHIBIT B No. R-_____ UNITED STATES OF AMERICA $_________ STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF BROOKLYN CENTER GENERAL OBLIGATION UTILITY REVENUE REFUNDING AND IMPROVEMENT BOND SERIES 2015A Rate Maturity Date Date of Original Issue CUSIP February 1, 20__ _______, 2015 Registered Owner: Cede & Co. The City of Brooklyn Center, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the “City”), acknowledges itself to be indebted and for value received hereby promises to pay to the Registered Owner specified above or registered assigns the principal sum of the principal amount specified above on the Maturity Date specified above, with interest thereon from the date hereof at the annual rate specified above (calculated on the basis of a 360 day year of twelve 30 day months), payable February 1 and August 1 in each year, commencing February 1, 2016, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, St. Paul, Minnesota, as Registrar, Paying Agent, Transfer Agent, and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. The City may elect on February 1, 2023, and on any date thereafter to prepay Bonds due on or after February 1, 2024. Redemption may be in whole or in part and if in part, at the option of the City and in such order as the City will determine. If less than all Bonds of a maturity are called for redemption, the City will notify The Depository Trust Company (“DTC”) of the particular amount of such maturity to be prepaid. 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 interests in such maturity to be redeemed. Prepayments will be at a price of par plus accrued interest. This Bond is one of an issue in the aggregate principal amount of $6,900,000 all of like original issue date and tenor, except as to number, maturity date, redemption privilege, and interest rate, all issued pursuant to a resolution adopted by the City Council on June 8, 2015 (the “Resolution”), for the purpose of providing money to (i) refund the City’s Taxable General Obligation Utility Revenue Bonds, Series 2010A (Build America Bonds – Direct Pay), dated March 8, 2010 and (ii) finance various street and utility improvement projects within the City (the “Improvements”), pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapters 429, 444 and 475. The principal hereof and interest hereon are payable from special assessments against 462335v1 JSB BR291-355 B-2 property specially benefited by local improvements, net revenues of the water and storm sewer systems and from ad valorem taxes, as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy additional ad valorem taxes on all taxable property in the City in the event of any deficiency in special assessments, net revenues and taxes pledged, which additional taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. The City Council has designated the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”). As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner’s attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner’s attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee, or governmental charge required to be paid with respect to such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, statutory or charter limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual signature of one of its authorized representatives. IN WITNESS WHEREOF, the City of Brooklyn Center, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. 462335v1 JSB BR291-355 B-3 Dated: CITY BROOKLYN CENTER, MINNESOTA (Facsimile) (Facsimile) Mayor City Manager ______________________________________ CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK NATIONAL ASSOCIATION By ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT _________ Custodian _________ (Cust) (Minor) TEN ENT -- as tenants by entireties under Uniform Gifts or Transfers to Minors Act, State of _______________ JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ________________________________________ ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto ________________________________________ the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint _________________________ attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: 462335v1 JSB BR291-355 B-4 Notice: The assignor’s signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”), the New York Stock Exchange, Inc. Medallion Signatures Program (“MSP”) or other such “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STEMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee ________________________________________ PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration Registered Owner Signature of Officer of Registrar Cede & Co. Federal ID #13-2555119 462335v1 JSB BR291-355 C-1 EXHIBIT C TAX LEVY SCHEDULE $6,900,000 City of Brooklyn Center, Minnesota General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A ISSUE SUMMARY Post-Sale Tax Levies Payment Date Principal Coupon Interest Total P+I 105% Overlevy Special Assessments Utility Revenues Certified Levy Sewer Fund Contributions* Net Levy Levy/Collect Years 02/01/2016 140,000.00 2.000%81,978.33 221,978.33 233,077.25 -167,318.89 65,758.36 22,818.15 42,940.21 2014/2015 02/01/2017 675,000.00 2.000%143,300.00 818,300.00 859,215.00 183,406.17 206,521.88 469,286.96 226,484.51 242,802.45 2015/2016 02/01/2018 665,000.00 2.000%129,800.00 794,800.00 834,540.00 166,288.26 203,056.88 465,194.87 219,124.64 246,070.23 2016/2017 02/01/2019 675,000.00 2.000%116,500.00 791,500.00 831,075.00 161,397.42 199,591.88 470,085.71 219,124.64 250,961.07 2017/2018 02/01/2020 680,000.00 2.000%103,000.00 783,000.00 822,150.00 156,506.60 196,126.88 469,516.53 217,230.02 252,286.51 2018/2019 02/01/2021 685,000.00 2.000%89,400.00 774,400.00 813,120.00 151,615.76 192,661.88 468,842.37 215,298.97 253,543.40 2019/2020 02/01/2022 700,000.00 2.000%75,700.00 775,700.00 814,485.00 146,724.94 199,696.88 468,063.19 213,331.48 254,731.71 2020/2021 02/01/2023 705,000.00 2.000%61,700.00 766,700.00 805,035.00 141,834.10 196,021.88 467,179.03 211,327.55 255,851.48 2021/2022 02/01/2024 710,000.00 2.250%47,600.00 757,600.00 795,480.00 136,943.28 192,346.88 466,189.85 209,287.19 256,902.66 2022/2023 02/01/2025 715,000.00 2.500%31,625.00 746,625.00 783,956.25 132,052.43 182,962.50 468,941.32 208,544.83 260,396.49 2023/2024 02/01/2026 550,000.00 2.500%13,750.00 563,750.00 591,937.50 127,161.61 -464,775.89 205,402.31 259,373.58 2024/2025 Total $6,900,000.00 -$894,353.33 $7,794,353.33 $8,184,071.00 $1,503,930.57 $1,936,306.39 $4,743,834.04 $2,167,974.29 $2,575,859.75 - * The Sewer Fund Contribution for the Improvement Portion of the Bonds is 34.70% of the 105% overlevy. Series 2015A New and Ref | Issue Summary | 6/ 8/2015 | 11:05 AM 462335v1 JSB BR291-355 D-1 EXHIBIT D NOTICE OF CALL FOR EXTRAORDINARY REDEMPTION TAXABLE GENERAL OBLIGATION UTILITY REVENUE BONDS, SERIES 2010A (BUILD AMERICA BONDS – DIRECT PAY) CITY OF BROOKLYN CENTER HENNEPIN COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that, by order of the City Council of the City of Brooklyn Center, Hennepin County, Minnesota, there have been called for extraordinary redemption and prepayment on August 15, 2015 all outstanding bonds of the City designated as Taxable General Obligation Utility Revenue Bonds, Series 2010A (Build America Bonds – Direct Pay), dated March 8, 2010, having stated maturity dates of February 1 in the years 2016 through 2025, both inclusive, totaling $1,660,000 in principal amount, and with the following CUSIP numbers: Year of Maturity Amount CUSIP 2016 $145,000 113835 F5 6 2017 150,000 113835 F6 4 2018 155,000 113835 F7 2 2019 155,000 113835 F8 0 2020 160,000 113835 F9 8 2021 165,000 113835 G2 2 2022 175,000 113835 G3 0 2023 180,000 113835 G4 8 2024 185,000 113835 G5 5 2025 190,000 113835 G6 3 *************** The bonds are being called at a price of par plus accrued interest to August 15, 2015, on which date all interest on said bonds will cease to accrue. Holders of the bonds hereby called for redemption are requested to present their bonds for payment at the main office of U.S. Bank National Association, in the City of Saint Paul, Minnesota, on or before August 15, 2015, at the following address: If by mail: If by hand or overnight: U.S. Bank National Association Corporate Trust Operations, 3rd Floor P.O. Box 64111 St. Paul, MN 55164-0111 U.S. Bank National Association 60 Livingston Avenue EP-MN-WS3C Bond Drop Window, 1st Floor St. Paul, MN 55107 462335v1 JSB BR291-355 D-2 Important Notice: In compliance with the Economic Growth and Tax Relief Reconciliation Act of 2003, the Issuer is required to withhold a specified percentage of the principal amount of the redemption price payable to the holder of any Bonds subject to redemption and prepayment on the Redemption Date, unless the Issuer is provided with the Social Security Number or Federal Employer Identification Number of the holder, properly certified. Submission of a fully executed Request for Taxpayer Identification Number and Certification, Form W-9 (Rev. December 2011), will satisfy the requirements of this paragraph. Additional information may be obtained from: U.S. Bank National Association Corporate Trust Division Bondholder Services (800) 525-8574 Dated: ________________. BY ORDER OF THE CITY COUNCIL By /s/ Financial Director City of Brooklyn Center, Minnesota 462335v1 JSB BR291-355 $6,900,000 City of Brooklyn Center, Minnesota General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A COUNTY AUDITOR’S CERTIFICATE AS TO TAX LEVY, REGISTRATION I, the undersigned County Auditor of Hennepin County, Minnesota, hereby certify that a certified copy of a resolution adopted by the governing body of the City of Brooklyn Center, Minnesota (the “City”), on June 8, 2015, levying taxes for the payment of the City’s General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A, in an aggregate principal amount of $6,900,000, dated July 9, 2015, has been filed in my office and said bonds have been entered on the register of obligations in my office and that such tax has been levied as required by law. WITNESS My hand and official seal this _____ day of June, 2015. County Auditor Hennepin County, Minnesota (SEAL) Deputy 0 fl a '5 0 OC) OC) 51) 51 051cm -Ps-, 0a 0 '-I C)0 '" C) 211 — a0•— m 51 C) '-'5- 0o =— C);- .0oC)(J CiC -D - S • .1 00 51C)C)51 a LID (ID C Ci CiCi o 0-'10 10 S C PRELIMINARY OFFICIAL STATEMENT DATED MAY 19, 2015 REFUNDING AND NEW ISSUES Standard & Poor's Ratings: Requested BANK QUALIFIED - THE SERIES 2015A BONDS In the opinion of Keitnedy & Graven, Chartered, Bond Counsel for the Bonds, based on present federal and Ilinnesota 1mm, regulations, rulings and decisions (which excludes any pending legislation which inay.have a retroactive edyct), and assuming compliance with certain covenants, interest to be paid on the Series 2015A Bonds is excludedfroin gross income for federal inconle tat purposes and, to the same erte,mtfl'ommz taxable net income of individuals, estates and trusts for Minnesota income purposes, andisnotapreference item for purposes of computing the federal alternative minimum tar or the Minnesota alternative minimum tar imposed on individuals, mists, and estates. Such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative niunmuni 5cc unposed on certain corporations and is subject to Minnesota fl'anchise taxes on corporations (including financial institutions) measured by income. No opinion will be expressed by Kennedy & Graven regarding other state or federal tax consequences caused by the receipt at- accrual of interest on the Series 2015A Bonds or arising with respect to ommnemship of the Series 2015A Bonds. The Series 2015A Bonds will be designated as "qualified tar-exempt obligations"for purposes of Section 265b)(3) of tile Internal Revenue Code a(1986, as amended, relating to the ability offinancial institutions to deduct floni income for federal income tax purposes, interest expense that is allocable to calm ying and acquiring tar-exempt Series 2015A Bonds. See "TAX EXEMPTION - THE SERIES 2015A BONDS" and "RELATED TAX CONSIDERATIONS - The Series 2015A Bonds" herein. Interest on the Series 2015B Bonds is included in gross imicoineforpioposes of United States and State of Minnesota income tat (See "TAXABILITY OF INTEREST— THE SERIES 2015B BONDS" herein) City of Brooklyn Center, Minnesota $7035000* $6$30000* General Obligation Utility Revenue Refunding Taxable General Obligation Tax Increment and Improvement Bonds, Series 2015A Refunding Bonds, Series 2015B (the "Series 2015A Bonds") (the "Series 2015B Bonds") (Book Entry Only) Dated Date: Date of Delivery Interest Due: Each February 1 and August 1, commencing February 1, 2016 The Bonds (as defined herein) will mature as shown on the inside front cover of this Official Statement. Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the respective maturity schedule set forth on the following page. The Bonds are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. Additional sources of security for the Bonds are discussed herein. The proceeds of the Series 2015A Bonds will be used to (i) refund the February 1, 2016 through February 1, 2025 maturities of the City's Taxable General Obligation Utility Revenue Bonds, Series 2010A (Build America Bonds - Direct Pay), dated March 8, 2010; and (ii) finance various street and utility improvement projects within the City. The proceeds of the Series 2015B Bonds will be used to refund the February 1, 2017 through Februaiy 1, 2020 maturities of the City's Taxable General Obligation Tax Increment Bonds, Series 2004D, dated December 1, 2004. A separate proposal must be submitted for each issue subject to the minimum bid amounts shown below, plus accrued interest, if any. Proposals shall specify rates in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for each maturity of each issue must be 98.0% or greater. Following receipt of proposals, a good faith deposit for each issue will be required to be delivered to the City by the lowest bidder as described in each "Terms of Proposal" herein. Award of the Bonds will be made on the basis of True Interest Cost (TIC). Minimum Bid The Series 2015A Bonds $63985,755 The Series 2015B Bonds 6,797,557 The City will designate the Series 2015A Bonds as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, and the Series 2015A Bonds will not be subject to the alternative minimum tax for individuals. The Bonds will be issued as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). DTC will act as securities depository for the Bonds. Individual purchases may be made in book entry form only, in the principal amount of $5,000 and integral multiples thereof. Investors will not receive physical certificates representing their interest in the Bonds purchased. (See "Book Entry System" herein.) U.S. Bank National Association, St. Paul, Minnesota will serve as registrar (the "Registrar") for the Bonds. The Bonds will be available for delivery at DTC on or about July 9, 2015. PROPOSALS RECEIVED: June 8, 2015 (Monday) until 10:00 A.M., Central Time AWARD: June 8, 2015 (Monday) at 7:00 P.M., Central Time Further information may be obtained from SPRINUSTED Incorporated,S n r I n g s ted Municipal Advisor to the City, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101-2887 (651) 223-3000. * Preliminary,' subjeCt to change. a 5=is C) OC (.1 6am I - : (This page has been left blank intentionally.) City of Brooklyn Center, Minnesota $7,035,000* General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A The Series 2015A Bonds will mature February 1 in the years and amounts* as follows: 2016 $145,000 2019 $695,000 2022 $705,000 2025 $715,000 2017 $705,000 2020 $695,000 2023 $710,000 2026 $550,000 2018 $700,000 2021 $700,000 2024 $715,000 The City may elect on February 1, 2023, and on any day thereafter, to prepay Series 2015A Bonds due on or after February 1, 2024 at a price of par plus accrued interest. $6,830,000* Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B The Series 2015B Bonds will mature February i in the years and amounts* as follows: 2017 $1,665,000 2018 $1,675,000 2019 $1,735,000 2020 $1,755,000 The Series 2015B Bonds will not be subject to payment in advance of their respective stated maturity dates. * Preliininaiy; subject to change. (This page has been left blank intentionally.) CITY OF BROOKLYN CENTER, MINNESOTA CITY COUNCIL Tim Willson Mayor April Graves Council Member Kris Lawrence-Anderson Council Member Dan Ryan Council Member Lin Myszkowski Council Member CITY MANAGER Cornelius L. Boganey FINANCE DIRECTOR Nathan Reinhardt MUNICIPAL ADVISOR Springsted Incorporated St. Paul, Minnesota BOND COUNSEL Kennedy & Graven, Chartered Minneapolis, Miimesota For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the City from time to time, may be treated as a Preliminary Official Statement with respect to the Bonds described herein that is deemed final as of the date hereof (or of any such supplement or correction) by the City. By awarding the Bonds to any underwriter or underwriting syndicate submitting a Proposal therefor, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded copies of the Final Official Statement in the amount specified in the each Terms of Proposal. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Bonds, other than as contained in the Preliminary Official Statement or the Final Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the City. Certain information contained in the Preliminary Official Statement or the Final Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness or accuracy. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE PRELIMINARY OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE PRELIMINARY OFFICIAL STATEMENT NOR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE RESPECTIVE DATE THEREOF. References herein to laws, rules, regulations, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Preliminary Official Statement or the Final Official Statement, they will be furnished upon request. Any CUSIP numbers for the Bonds included in the Final Official Statement are provided for convenience of the owners and prospective investors. The CUSIP numbers for the Bonds are assigned by an organization unaffiliated with the City. The City is not responsible for the selection of the CUSIP numbers and makes no representation as to the accuracy thereof as printed on the Bonds or as set forth in the Final Official Statement. No assurance can be given by the City that the CUSIP numbers for the Bonds will remain the same after the delivery of the Final Official Statement or the date of issuance and delivery of the Bonds. TABLE OF CONTENTS Page(s) Terms of Proposal: $7,035000* General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A ................................................................................i-v $6,830,000* Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B ............................................................................................vi-x IntroductoryStatement....................................................................................................................... ContinuingDisclosure .......................................................................................................................1 TheBonds..........................................................................................................................................2 TheSeries 2015A Bonds ...................................................................................................................4 TheSeries 2015B Bonds....................................................................................................................6 FutureFinancing.................................................................................................................................7 Litigation............................................................................................................................................7 Legality..............................................................................................................................................7 Tax Exemption — The Series 2015A Bonds.......................................................................................7 Related Tax Considerations - The Series 2015A Bonds ...................................................................8 Bank-Qualified Tax-Exempt Obligations - The Series 2015A Bonds ..............................................9 Taxability of Interest - The Series 2015B Bonds..............................................................................9 Ratings...............................................................................................................................................9 MunicipalAdvisor .............................................................................................................................9 Certification.......................................................................................................................................9 CityProperty Values..........................................................................................................................10 CityIndebtedness ...............................................................................................................................11 City Tax Rates, Levies and Collections.............................................................................................15 Fundson Hand ............................. ......................................................................................................16 Investments........................................................................................................................................1 6 General Information Concerning the City .........................................................................................17 Governmental Organization and Services..........................................................................................23 Proposed Forms of Legal Opinions ........................................................................................Appendix I Continuing Disclosure Undertaking.........................................................................................Appendix II Summary of Tax Levies, Payment Provisions, and Minnesota Real Property Valuation .....................................................................................Appendix III Excerpt of 2014 Comprehensive Annual Financial Report ....................................................Appendix IV * Preliminary; subject to change. (This page has been left blank intentionally.) THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $7,035,000* CITY OF BROOKLYN CENTER, MINNESOTA GENERAL OBLIGATION UTILITY REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2015A (BOOK ENTRY ONLY) Proposals for the Series 2015A Bonds will be received on Monday, June 8, 2015, until 10:00 A.M., Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened and tabulated. Consideration for award of the Series 2015A Bonds will be by the City Council at 7:00 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Series 2015A Bonds regardless of the manner in which the proposal is submitted. (a)Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223-3046 to Springsted. Signed proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final proposal price and coupons, by telephone (651) 223-3000 or fax (651) 223-3046 for inclusion in the submitted proposal. OR (b)Electronic Bidding. Notice is hereby given that electronic proposals will be received via PARITY ®. For purposes of the electronic bidding process, the time as maintained by PARITY ® shall constitute the official time with respect to all proposals submitted to PARITY ®. Each bidder shall be solely responsible for making necessaiy arrangements to access PARITY®/or purposes of submitting its electronic proposal in a timely manner and in compliance with the requirements qf the Terms ofproposal. Neither the City, its agents nor PARITY ® shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the City, its agents nor PARITY ® shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or interruptions of or any damages caused by the services of PARITY ®. The City is using the services of PARITY ® solely as a communication mechanism to conduct the electronic bidding for the Series 2015A Bonds, and PARITY ® is not an agent of the City. If any provisions of this Terms of proposal conflict with information provided by PARITY ®, this Terms of proposal shall control. Further information about PARITY®, including any fee charged, may be obtained from: PARITY ®, 1359 Broadway, 2 n Floor, New York, New York 10018 Customer Support: (212) 849-5000 Prelimina;y; subject to change. DETAILS OF THE SERIES 2015A BONDS The Series 2015A Bonds will be dated as of the date of delivery and will bear interest payable on February 1 and August 1 of each year, commencing February 1, 2016. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Series 2015A Bonds will mature February 1 in the years and amounts* as follows: 2016 $145,000 2019 $695,000 2022 $705,000 2025 $715,000 2017 $705,000 2020 $695,000 2023 $710,000 2026 $550,000 2018 $700,000 2021 $700,000 2024 $715,000 * The City reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Series 2015A Bonds or the amount of . any maturity in multiples of $5,000. In the event the amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same gross spread per $1,000 of Series 2015A Bonds as that of the original proposal. Gross spread is the differential between the price paid to the City/sr the new issue and the prices at which the securities are initially offered to the investing public. Proposals for the Series 2015A Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth above. In order to designate term bonds, the proposal must specify "Years of Term Maturities" in the spaces provided on the proposal form. BOOK ENTRY SYSTEM The Series 2015A Bonds will be issued by means of a book entry system with no physical distribution of Series 2015A Bonds made to the public. The Series 2015A Bonds will be issued in fully registered form and one Series 2015A Bond, representing the aggregate principal amount of the Series 2015A Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of the Series 2015A Bonds. Individual purchases of the Series 2015A Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Series 2015A Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Series 2015A Bonds, will be required to deposit the Series 2015A Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The City may elect on February 1, 2023, and on any day thereafter, to prepay Series 2015A Bonds due on or after February 1, 2024. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all Series 2015A Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be prepaid. 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 interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. SECURITY AND PURPOSE The Series 2015A Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge net revenues of the City's utility funds and special assessments against benefited properties. The proceeds will be used to (i) refund the February 1, 2016 through February 1, 2025 maturities of the City's Taxable General Obligation Utility Revenue Bonds, Series 2010A (Build America Bonds - Direct Pay), dated March 8, 2010; and (ii) finance various street and utility improvement projects within the City. BIDDING PARAMETERS Proposals shall be for not less than $6,985,755 plus accrued interest, if any, on the total principal amount of the Series 2015A Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Series 2015A Bonds is adjourned, recessed, or continued to another date without award of the Series 2015A Bonds having been made. Rates shall be in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for each maturity must be 98.0% or greater. Series 2015A Bonds of the same maturity shall bear a single rate from the date of the Series 2015A Bonds to the date of maturity. No conditional proposals will be accepted. GOOD FAITH DEPOSIT To have its proposal considered for award, the lowest bidder is required to submit a good faith deposit to the City in the amount of $70,350 (the "Deposit") no later than 1:00 P.M., Central Time on the day of sale. The Deposit may be delivered as described herein in the form of either (i) a certified or cashier's check payable to the City; or (ii) a wire transfer. The lowest bidder shall be solely responsible for the timely delivery of their Deposit whether by check or wire transfer. Neither the City nor Springsted Incorporated have any liability for delays in the receipt of the Deposit. If the Deposit is not received by the specified time, the City may, at its sole discretion, reject the proposal of the lowest bidder, direct the second lowest bidder to submit a Deposit, and thereafter award the sale to such bidder. Certified or Cashiers Check. A Deposit made by certified or cashier's check will be considered timely delivered to the City if it is made payable to the City and delivered to Springsted incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101 by the specified time. Wire Transtèr. A Deposit made by wire will be considered timely delivered to the City upon submission of a federal wire reference number by the specified time. Wire transfer instructions will be available from Springsted Incorporated following the receipt and tabulation of proposals. The successful bidder must send an e-mail including the following information: (i) the federal reference number and time released; (ii) the amount of the wire transfer; and (iii) the issue to which it applies. Once an award has been made, the Deposit received from the lowest bidder (the "purchaser") will be retained by the City and no interest will accrue to the purchaser. The amount of the Deposit will be deducted at settlement from the purchase price, in the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. AWARD The Series 2015A Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis calculated on the proposal prior to any adjustment made by the City. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Series 2015A Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the City determines to have failed to comply with the terms herein. - 111 - BOND INSURANCE AT PURCHASER'S OPTION The City has not applied for or pre-approved a commitment for any policy of municipal bond insurance with respect to the Series 2015A Bonds. If the Series 2015A Bonds qualify for municipal bond insurance and a bidder desires to purchase a policy, such indication, the maturities to be insured, and the name of the desired insurer must be set forth on the bidder's proposal. The City specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the City. All costs associated with the issuance and administration of such policy and associated ratings and expenses (other than any independent rating requested by the City) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Series 2015A Bonds shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Series 2015A Bonds. CUSIP NUMBERS If the Series 2015A Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Series 2015A Bonds, but neither the failure to print such numbers on any Series 2015A Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Series 2015A Bonds. The CUS1P Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT On or about July 9, 2015, the Series 2015A Bonds will be delivered without cost to the purchaser through DTC in New York, New York. Delivery will be subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven, Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation certificate. On the date of settlement, payment for the Series 2015A Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Series 2015A Bonds has been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non-compliance with said terms for payment. CONTINUING DISCLOSURE In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution awarding sale of the Series 2015A Bonds, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Official Statement. The purchaser's obligation to purchase the Series 2015A Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Series 2015A Bonds. OFFICIAL STATEMENT The City has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Series 2015A Bonds, and said Preliminary Official Statement will serve as a nearly final Official Statement within the meaning of Rule l5c2-12 of the Securities and Exchange Commission. For copies of the Preliminary Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Municipal Advisor to the City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000. A Final Official Statement (as that term is defined in Rule 15c2-12) will be prepared, specifying the maturity dates, principal amounts and interest rates of the Series 2015A Bonds, together with any other information required by law. By awarding the Series 2015A Bonds to an underwriter or underwriting syndicate, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the sole underwriter or to the senior managing underwriter of the syndicate (the "Underwriter" for purposes of this paragraph) to which the Series 2015A Bonds are awarded up to 25 copies of the Final Official Statement. The City designates the Underwriter of the syndicate to which - iv - the Series 2015A Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Such Underwriter agrees that if its proposal is accepted by the City, (i) it shall accept designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Series 2015A Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated May 11, 2015 BY ORDER OF THE CITY COUNCIL /s/ Sharon Knutson City Clerk -v - (This page has been left blank intentionally.) THE CITY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS: TERMS OF PROPOSAL $6,830,000* CITY OF BROOKLYN CENTER, MINNESOTA TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2015B (BOOK ENTRY ONLY) Proposals for the Series 2015B Bonds will be received on Monday, June 8, 2015, until 10:00 A.M., Central Time, at the offices of Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota, after which time proposals will be opened and tabulated. Consideration for award of the Series 2015B Bonds will be by the City Council at 7:00 P.M., Central Time, of the same day. SUBMISSION OF PROPOSALS Springsted will assume no liability for the inability of the bidder to reach Springsted prior to the time of sale specified above. All bidders are advised that each proposal shall be deemed to constitute a contract between the bidder and the City to purchase the Series 2015B Bonds regardless of the manner in which the proposal is submitted. (a)Sealed Bidding. Proposals may be submitted in a sealed envelope or by fax (651) 223-3046 to Springsted. Signed proposals, without final price or coupons, may be submitted to Springsted prior to the time of sale. The bidder shall be responsible for submitting to Springsted the final proposal price and coupons, by telephone (651) 223-3000 or fax (651) 223-3046 for inclusion in the submitted proposal. OR (b)Electronic Bidding. Notice is hereby given that electronic proposals will be received via PARITY"'. For purposes of the electronic bidding process, the time as maintained by PARITY ® shall constitute the official time with respect to all proposals submitted to PARITY ®. Each bidder shall be solely responsible for making necessary arrangements to access PARJTJ/® forpurposes of submitting its electronic proposal in a timely inaniier and in compliance with the requirements of the Terms ofproposal. Neither the City, its agents nor PARITY ® shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the City, its agents nor PARITY ® shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or interruptions of or any damages caused by the services of PARITY ®. The City is using the services of PARITY ® solely as a communication mechanism to conduct the electronic bidding for the Series 2015B Bonds, and PARITY® is not an agent of the City. If any provisions of this Terms of proposal conflict with information provided by PARITY ®, this Terms of proposal shall control. Further information about PARITY®, including any fee charged, may be obtained from: PARITY ®, 1359 Broadway, 2 nd Floor, New York, New York 10018 Customer Support: (212) 849-5000 Preliminaiy; subject to change. -vi - DETAILS OF THE SERIES 2015B BONDS The Series 2015B Bonds will be dated as of the date of delivery and will bear interest payable on February 1 and August 1 of each year, commencing February 1, 2016. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Series 2015B Bonds will mature February 1 in the years and amounts* as follows: 2017 $1,665,000 2018 $1,675,000 2019 $1,735,000 2020 $1,755,000 * The City, reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Series 2015B Bonds or the amount of any maturity in imiltiples of $5,000. In the event the amount of any maturity is modified, the aggregate purchase price will be adjusted to result in the same gross spread per $1,000 of Series 2015B Bonds as that of the original proposal. Gross spread is the d?fjèrential between the price paid to the City for the new issue and the prices at which the securities are initially offered to the investing public. Proposals for the Series 2015B Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption scheduled to conform to the maturity schedule set forth above. In order to designate term bonds, the proposal must specify "Years of Tenn Maturities" in the spaces provided on the proposal form. BOOK ENTRY SYSTEM The Series 2015B Bonds will be issued by means of a book entry system with no physical distribution of Series 2015B Bonds made to the public. The Series 2015B Bonds will be issued in fully registered form and one Series 2015B Bond, representing the aggregate principal amount of the Series 2015B Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of the Series 2015B Bonds. Individual purchases of the Series 2015B Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the registrar to DTC or its nominee as registered owner of the Series 2015B Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The purchaser, as a condition of delivery of the Series 2015B Bonds, will be required to deposit the Series 2015B Bonds with DTC. REGISTRAR The City will name the registrar which shall be subject to applicable SEC regulations. The City will pay for the services of the registrar. OPTIONAL REDEMPTION The Series 2015B Bonds will not be subject to payment in advance of their respective stated maturity dates. SECURITY AND PURPOSE The Series 2015B Bonds will be general obligations of the City for which the City will pledge its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge tax increment revenue collections from the City's Tax Increment District No. 3, located in the City's Economic Development District. The proceeds will be used to refund the February 1, 2017 through February 1, 2020 maturities of the City's Taxable General Obligation Tax Increment Bonds, Series 2004D, dated December 1, 2004. - vii - TAXABILITY OF INTEREST The interest to be paid on the Series 2015B Bonds is included in gross income of the recipient for United States and State of Minnesota income tax purposes, and is subject to Minnesota corporate and bank excise taxes measured by income. BIDDING PARAMETERS Proposals shall be for not less than $6,797,557 plus accrued interest, if any, on the total principal amount of the Series 2015B Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the City scheduled for award of the Series 2015B Bonds is adjourned, recessed, or continued to another date without award of the Series 2015B Bonds having been made. Rates shall be in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for each maturity must be 98.0% or greater. Series 2015B Bonds of the same maturity shall bear a single rate from the date of the Series 2015B Bonds to the date of maturity. No conditional proposals will be accepted. GOOD FAITH DEPOSIT To have its proposal considered for award, the lowest bidder is required to submit a good faith deposit to the City in the amount of $68,300 (the "Deposit") no later than 1:00 P.M., Central Time on the day of sale. The Deposit may be delivered as described herein in the form of either (i) a certified or cashier's check payable to the City; or (ii) a wire transfer. The lowest bidder shall be solely responsible for the timely delivery of their Deposit whether by check or wire transfer. Neither the City nor Springsted Incorporated have any liability for delays in the receipt of the Deposit. If the Deposit is not received by the specified time, the City may, at its sole discretion, reject the proposal of the lowest bidder, direct the second lowest bidder to submit a Deposit, and thereafter award the sale to such bidder. Certified or Cashiers Check. A Deposit made by certified or cashier's check will be considered timely delivered to the City if it is made payable to the City and delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101 by the specified time. Wire Transfer. A Deposit made by wire will be considered timely delivered to the City upon submission of a federal wire reference number by the specified time. Wire transfer instructions will be available from Springsted Incorporated following the receipt and tabulation of proposals. The successful bidder must send an e-mail including the following information: (i) the federal reference number and time released; (ii) the amount of the wire transfer; and (iii) the issue to which it applies. Once an award has been made, the Deposit received from the lowest bidder (the "purchaser") will be retained by the City and no interest will accrue to the purchaser. The amount of the Deposit will be deducted at settlement from the purchase price. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the City. AWARD The Series 2015B Bonds will be awarded on the basis of the lowest interest rate to be determined on a true interest cost (TIC) basis calculated on the proposal prior to any adjustment made by the City. The City's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The City will reserve the right to: (i) waive non-substantive informalities of any proposal or of matters relating to the receipt of proposals and award of the Series 2015B Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the City determines to have failed to comply with the terms herein. - viii - BOND INSURANCE AT PURCHASER'S OPTION The City has not applied for or pre-approved a commitment for any policy of municipal bond insurance with respect to the Series 2015B Bonds. If the Series 2015B Bonds qualify for municipal bond insurance and a bidder desires to purchase a policy, such indication, the maturities to be insured, and the name of the desired insurer must be set forth 011 the bidder's proposal. The City specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the City. All costs associated with the issuance and administration of such policy and associated ratings and expenses (other than any independent rating requested by the City) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Series 2015B Bonds shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Series 2015B Bonds. CUSIP NUMBERS If the Series 2015B Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Series 2015B Bonds, but neither the failure to print such numbers on any Series 2015B Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Series 2015B Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser. SETTLEMENT On or about July 9, 2015, the Series 2015B Bonds will be delivered without cost to the purchaser through DTC in New York, New York. Delivery will be subject to receipt by the purchaser of an approving legal opinion of Kennedy & Graven, Chartered of Minneapolis, Minnesota, and of customary closing papers, including a no-litigation certificate. On the date of settlement, payment for the Series 2015B Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the City or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Series 2015B Bonds has been made impossible by action of the City, or its agents, the purchaser shall be liable to the City for any loss suffered by the City by reason of the purchaser's non-compliance with said terms for payment. CONTINUING DISCLOSURE In accordance with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolution awarding sale of the Series 2015B Bonds, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Official Statement. The purchaser's obligation to purchase the Series 2015B Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Series 2015B Bonds. OFFICIAL STATEMENT The City has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Series 2015B Bonds, and said Preliminary Official Statement will serve as a nearly final Official Statement within the meaning of Rule l5c2-12 of the Securities and Exchange Commission. For copies of the Preliminary Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Municipal Advisor to the City, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000. A Final Official Statement (as that tenu is defined in Rule 15c2-12) will be prepared, specifying the maturity dates, principal amounts and interest rates of the Series 2015B Bonds, together with any other information required by law. By awarding the Series 2015B Bonds to an underwriter or underwriting syndicate, the City agrees that, no more than seven business days after the date of such award, it shall provide without cost to the sole underwriter or to the senior managing underwriter of the syndicate (the "Underwriter" for purposes of this paragraph) to which the Series 2015B Bonds are awarded up to - lx - 25 copies of the Final Official Statement. The City designates the Underwriter of the syndicate to which the Series 2015B Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Such Underwriter agrees that if its proposal is accepted by the City, (i) it shall accept designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Series 2015B Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated May 11, 2015 BY ORDER OF THE CITY COUNCIL Is! Sharon Knutson City Clerk -x - (This page has been left blank intentionally) OFFICIAL STATEMENT CITY OF BROOKLYN CENTER, MINNESOTA $7,035,000* GENERAL OBLIGATION UTILITY REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 2015A $6,830,000* TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2015B (BOOK ENTRY ONLY) INTRODUCTORY STATEMENT This Official Statement contains certain information relating to the City of Brooklyn Center, Minnesota (the "City") and its issuance of $7,035,000* General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A (the "Series 2015A Bonds") and $6,830,000* Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B (the "Series 2015B Bonds" and, together with the Series 2015A Bonds, the "Bonds"). The Bonds are general obligations of the City for which it pledges its full faith and credit and power to levy direct general ad valorem taxes. Additional sources of security for the Bonds are discussed herein. Inquiries may be directed to Mr. Nathan Reinhardt, Finance Director, City of Brooklyn Center, 6301 Shingle Creek Parkway, Brooklyn Center, Minnesota 55430, by telephoning (763) 569-3320, or by c-mailing nreinhardtci.brooklyn-center.mn.us . Inquiries may also be made to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101-2887, by telephoning (651) 223-3000, or by c-mailing bond_services@springsted.com . CONTINUING DISCLOSURE In order to assist the Underwriters in complying with SEC Rule 15c2-12 (the "Rule"), pursuant to the Awarding Resolution, the City have covenanted to comply with the continuing disclosure undertaking (the "Undertaking") for the benefit of holders or beneficial owners of the Bonds to provide certain financial information and operating data relating to the City to the Municipal Securities Rulemaking Board annually, and to provide notices of the occurrence of certain events enumerated in the Rule to the Municipal Securities Rulemaking Board and to any state information depository. The specific nature of the Undertaking, as well as the information to be contained in the annual report or the notices of material events, is set forth in the Undertaking in substantially the form attached hereto as Appendix II, subject to such modifications thereof or additions thereto as: (i) consistent with requirements under the Rule, (ii) required by the purchaser of the Bonds from the City, and (iii) acceptable to the Mayor and the Manager of the City. To the best of its knowledge, the City has complied for the past five years in all material respects in accordance with the terms of its previous continuing disclosure undertakings entered into pursuant to the Rule. In the interest of full disclosure, the City notes the following: The City's General Obligation Improvement Bonds, Series 2008B (CUSIP 113835) (the "Series 2008B Bonds") were insured by Assured Guaranty Corporation ("AGC") and received an insured rating from Moody's Investors Service ("Moody's"). On January 17, 2013, Moody's * Preliminary; subject to change. -I - downgraded the credit rating of AGC from "Aa3" to "A3", which resulted in the downgrade of the insured rating of the Series 2008B Bonds. A material event notice regarding this insurance rating change was not filed; however, the information was publicly available through other sources. The insured rating is currently at a level below that of the underlying rating of the City. A failure by the City to comply with the Undertaking will not constitute an event of default on the Bonds (although holders or other beneficial owners of the Bonds will have the sole remedy of bringing an action for specific performance). Nevertheless, such a 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. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. THE BONDS General Description The Bonds are dated as of the date of delivery and will mature annually on February 1 as set forth on the inside front cover of this Official Statement. The Bonds are issued in book entry form. interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1, 2016. Interest will be payable to the holder (initially Cede & Co.) registered on the books of the Registrar as of the fifteenth day of the calendar month next preceding such interest payment date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Principal of and interest on the Bonds will be paid as described in the section herein entitled "Book Entry System." U.S. Bank National Association, St. Paul, Minnesota will serve as Registrar for the Bonds, and the City will pay for registrar services. Redemption Provisions Thirty days' written notice of redemption shall be given to the registered owner(s) of the Bonds. Failure to give such written notice to any registered owner of the Bonds or any defect therein shall not affect the validity of any proceedings for the redemption of the Bonds. All Bonds or portions thereof called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment. Optional Redemption The City may elect on February 1, 2023, and on any day thereafter, to prepay Series 2015A Bonds due on or after February 1, 2024. Redemption may be in whole or in part and if in part at the option of the City and in such manner as the City shall determine. If less than all the Series 2015A Bonds of a maturity are called for redemption, the City will notify DTC of the particular amount of such maturity to be prepaid. 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 interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. The Series 2015B Bonds will not be subject to payment in advance of their respective stated maturity dates. Book Entry System The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The 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 certificate will be issued for each maturity of each series of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. -2- DTC is a limited-purpose trust company organized under the Now 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 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries)that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC 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 www.dtcc.com . Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of the Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. -3- Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's MMI procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co. or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC' s receipt of funds and corresponding detail information from the City or its agent on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or its agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to City or its agent. Under such circumstances, in the event that a successor depository is not obtained, certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered to DTC. The information in this section 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 SERIES 2015A BONDS Authority and Purpose The Series 2015A Bonds are being issued pursuant to Minnesota Statutes, Chapters 429, 444, and 475. The proceeds of the Series 2015A Bonds will be used to (i) refund the February 1, 2016 through February 1, 2025 maturities (the "Series 2010A Refunded Maturities") of the City's Taxable General Obligation Utility Revenue Bonds, Series 201 OA (Build America Bonds - Direct Pay), dated March 8, 2010 (the "Series 201 OA Bonds") (the "Refunding Portion"); and (ii) finance various street and utility improvement projects within the City (the "Improvement Portion"). The Refunding Portion of the Series 2015A Bonds has been structured as a current refunding, and is being issued to insulate the City from potential future federal rimbursement reductions related to Build America Bonds. Specifically, it is anticipated that the Series 2010A Refunded Maturities will be called and prepaid at a price of par plus accrued interest on August 15, 2015, which is within 90 days of settlement of the Series 2015A Bonds. ME Sources and Uses of Funds The composition of the Series 2015A Bonds is estimated to be as follows: Improvement Refunding Portion Portion Total Sources of Funds: Principal Amount $5,340,000 $1,695,000 $7,035,000 Total Sources of Funds $5,340,000 $1,695,000 $7,035,000 Uses of Funds: Deposit to Project Fund $5,253,349 $ 0 $5,253,349 Deposit for Refunding Purpose 0 1,662,811 1,662,811 Costs of Issuance 49,271 20,324 69,595 Allowance for Discount Bidding 37,380 11,865 49,245 Total Uses of Funds $5,340,000 $1,695,000 $7,035,000 Security and Financing The Series 2015A Bonds will be general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes. In addition, the City will pledge special assessments against benefited properties for repayment of the Improvement Portion of the Series 2015A Bonds and net revenues of the City's utility funds for repayment of the Refunding Portion of the Series 2015A Bonds, both as described below. Improvement Portion Special assessments in the principal amount of approximately $1,630,277 are expected to be filed in 2015 for first collection in 2016. The City anticipates receiving prepayments of approximately $407,569. Assessments will be filed over a term of ten years with equal annual payments of principal. Interest on the unpaid balance will be charged at an interest rate of 4.00% The City will also levy taxes for repayment of a portion of the Improvement Portion of the Series 2015A Bonds and will make its first levy in 2015 for collection in 2016. The City will use available funds on hand to make the February 1, 2016 interest payment due on the Improvement Portion of the Series 2015A Bonds. Thereafter, each year's collection of taxes and special assessments, if collected in full, will be sufficient to pay 105% of the interest payment due August 1 of the collection year and the principal and interest payment due February 1 of the following year for the Improvement Portion of the Series 2015A Bonds. Refunding Portion Pursuant to Minnesota Statutes, Chapter 444, and the resolution awarding the sale of the Series 2015A Bonds, the City will covenant to impose and collect charges for the service, use, availability and connection to the utilities to produce net revenues in amounts sufficient to support the operation of the utilities and to pay 105% of debt service on obligations to which it has pledged its utility revenues, including the Refunding Portion of the Series 2015A Bonds. The City is required to annually review the budget of the utilities to determine whether current rates and charges are sufficient and to adjust such rates and charges as necessary. The City does not anticipate the need to levy taxes for repayment of the Refunding Portion of the Series 2015A Bonds. -5- THE SERIES 2015B BONDS Authority and Purpose The Series 2015B Bonds are being issued pursuant to Minnesota Statutes, Chapters 469 and 475. The Series 2015B Bonds have been structured as a crossover refunding, and are being issued to achieve debt service savings. The proceeds of the Series 2015B Bonds will be used to redeem the February 1, 2017 through February 1, 2020 maturities (the "Series 2004D Refunded Maturities") of the City's Taxable General Obligation Tax Increment Bonds, Series 2004D, dated December 1, 2004 (the "Series 2004D Bonds"). The Series 2010A Refunded Maturities and the Series 2004D Refunded Maturities will be collectively referred to as the "Refunded Maturities." Specifically, the proceeds of the Series 2015B bonds will be placed in an escrow account with U.S. Bank National Association, St. Paul, Minnesota (the "Escrow Agent"). The amounts on deposit with the Escrow Agent will be (i) used to pay the costs associated with the issuance of the Bonds; and (ii) will be invested in special obligations of the United States Treasury or other obligations of the United States or of its agencies, which shall mature in such amounts and at such times as to be available to: o pay the interest on the Series 2015B Bonds to and including February 1, 2016, the anticipated call date of the Series 2004D Bonds; and o redeem the Series 2004D Refunded Maturities on the anticipated call date of February 1, 2016 at a price of par plus accrued interest. Verification services necessary to insure the adequacy of the escrow account to provide timely payment of the principal and interest for which the escrow account is obligated will be performed by a certified public accounting firm. Sources and Uses of Funds The composition of the Series 2015B Bonds is estimated to be as follows: Sources of Funds: Principal Amount $6,830,00 Total Sources of Funds $6,830,000 Uses of Funds: Deposit to Escrow Fund $6,730,003 Costs of Issuance 67,554 Allowance for Discount Bidding 32,443 Total Uses of Funds $6,830,000 Security and Financing The Series 2015B Bonds are general obligations of the City for which the City pledges its full faith and credit and power to levy direct general ad valorem taxes; however, the City does not anticipate the need to levy taxes for repayment of the Series 2015B Bonds. The City will pledge tax increment revenue collections from the City's Tax Increment District No. 3 located in the City's Economic Development District for repayment of the Series 2015B Bonds. The escrow account established with the proceeds of the Series 2015B Bonds will make the interest payments due on the Series 2015B Bonds through February 1, 2016. Thereafter, each year's collection of tax increment revenue will be sufficient to pay 105% of the debt service due on the Series 2015B Bonds in each year. S FUTURE FINANCING The City does not anticipate issuing any additional long-term general obligation debt within the next 90 days. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. LEGALITY The Bonds are subject to approval as to certain matters by Kennedy & Graven, Chartered, of Minneapolis, Minnesota, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement and will not pass 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. Legal opinions in substantially the forms set out in Appendix I herein will be delivered at closing. TAX EXEMPTION - THE SERIES 2015A BONDS At closing Kennedy & Graven, Chartered, of Minneapolis, Minnesota, Bond Counsel for the Bonds, will render an opinion that, at the time of their issuance and delivery to the original purchaser, under present federal and State of Minnesota laws, regulations, rulings and decisions (which excludes any pending legislation which may have a retroactive effect), the interest on the Series 2015A Bonds is excluded from gross income for purposes of United States income tax and is excluded, to the same extent, from taxable net income of individuals, estates and trusts for Minnesota income purposes, and is not a preference item for purposes of computing the federal alternative minimum tax or the Minnesota alternative minimum tax imposed on individuals, trusts, and estates. Such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income. No opinion will be expressed by Kennedy & Graven regarding other federal or state tax consequences caused by the receipt or accrual of interest on the Series 2015A Bonds or arising with respect to ownership of the Series 2015A Bonds. Preservation of the exclusion of interest on the Series 2015A Bonds from federal gross income and state gross and taxable net income, however, depends upon compliance by the City with all requirements of the Internal Revenue Code of 1986, as amended, (the "Code") that must be satisfied subsequent to the issuance of the Series 2015A Bonds in order that interest thereon be (or continue to be) excluded from federal gross income and state gross and taxable net income. The City will covenant to comply with requirements necessary under the Code to establish and maintain the Series 2015A Bonds as tax-exempt under Section 103 thereof, including without limitation, requirements relating to temporary periods for investments and limitations on amounts invested at a yield greater than the yield on the Series 2015A Bonds. -7- RELATED TAX CONSIDERATIONS - THE SERIES 2015A BONDS Property and Casualty Insurance Companies Property and casualty insurance companies are required to reduce the amount of their loss reserve deduction by 15% of the amount of tax-exempt interest received or accrued during the taxable year on certain Series 2015A Bonds, including interest on the Series 2015A Bonds. Foreign Insurance Companies Foreign companies carrying on an insurance business in the United States are subject to a tax on income which is effectively connected with their conduct of any trade or business in the United States, including "net investment income." Net investment income includes tax-exempt interest such as interest on the Series 2015A Bonds. Branch Profits Tax A foreign corporation is subject to a branch profits tax equal to 30% of the "dividend equivalent amount" for the taxable year. The "dividend equivalent amount" is the foreign corporation's "effectively connected earnings and profits" adjusted for increase or decrease in "U.S. net equity." A branch's earnings and profits may include tax-exempt municipal bond interest, such as interest on the Series 2015A Bonds. Passive Investment Income of S Corporations Passive investment income, including interest on the Series 2015A Bonds, may be subject to federal income taxation under Section 1375 of the Code for an S corporation that has Subchapter C earnings and profits at the close of the taxable year if more than 25% of the gross receipts of such S corporation is passive investment income. Financial Institutions Financial institutions are generally not entitled to a deduction for interest expenses allocable to the owners of tax-exempt bonds purchased after August 7, 1986. The City will designate the Series 2015A Bonds as qualified tax-exempt obligations pursuant to Section 265(b)(3) of the Code. General The preceding is not a comprehensive list of all federal or State tax consequences which may arise from the receipt or accrual of interest on the Series 2015A Bonds. The receipt or accrual of interest on the Series 2015A Bonds may otherwise affect the federal income tax (or Minnesota income tax or franchise tax) liability of the recipient based on the particular taxes to which the recipient is subject and the particular tax status of other items of income or deductions. All prospective purchasers of the Series 2015A Bonds are advised to consult their own tax advisors as to the tax consequences of, or tax considerations for, purchasing or holding the Series 2015A Bonds. -8- BANK-QUALIFIED TAX-EXEMPT OBLIGATIONS - THE SERIES 2015A BONDS The City will designate the Series 2015A 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. TAXABILITY OF INTEREST - THE SERIES 2015B BONDS The interest to be paid on the Series 2015B Bonds is included in gross income of the recipient for United States and State of Minnesota income tax purposes, and is subject to Minnesota corporate and bank excise taxes measured by income. RATINGS Application for ratings of the Bonds has been made to Standard & Poor's Ratings Services ("Standard & Poor's"), 55 Water Street, New York, New York. If ratings are assigned, they will reflect only the opinion of Standard & Poor's. Any explanation of the significance of the ratings may be obtained only from Standard & Poor's. There is no assurance that the ratings, if assigned, will continue for any given period of time, or that such ratings will not be revised, suspended or withdrawn, if, in the judgment of Standard & Poor's, circumstances so warrant. A revision, suspension or withdrawal of a ratings may have an adverse effect on the market price of the Bonds. MUNICIPAL ADVISOR The City has retained Springsted Incorporated, Public Sector Advisors, of St. Paul, Minnesota ("Springsted"), as municipal advisor in connection with certain aspects of the issuance of the Bonds. In preparing this Official Statement, Springsted has relied upon governmental officials, and other sources, who have access to relevant data to provide accurate information for this Official Statement, and Springsted has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. Springsted is not a public accounting firm and has not been engaged by the City to compile, examine or audit any information in this Official Statement in accordance with accounting standards. Springsted is an independent advisory firm, registered as a municipal advisor, and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. CERTIFICATION The City has authorized the distribution of the Preliminary Official Statement for use in connection with the initial sale of the Bonds and a Final Official Statement following award of the Bonds. The Purchaser(s) will be furnished with a certificate signed by the appropriate officers of the City stating that the City examined each document and that, as of the respective date of each and the date of such certificate, each document did not and does not contain any untrue statement of material fact or omit to state a material fact necessary, in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. IME CITY PROPERTY VALUES Trend of Values(a) Assessment! Assessor's Market Value Adjusted Collection Estimated Sales Economic Homestead Taxable Taxable Net Y ea r Market Value Ratio(h) Market Value(c) Exclusion Market Value Tax Capacity 2014/15 $1,667,663,500 N/A N/A $173,160,024 $1,489,548,076 $20,703,061 2013/14 1,515,999,000 91.5% $1,656,700,488 179,157,923 1,329,268,428 19,665,833 2012/13 1,524,919,100 100.2 1,646,174,750 180,200,766 1,338,405,415 19,827,575 2011/12 1,649,467,100 104.3 1,627,809,108 179,157,923 1,468,159,885 21,320,986 2010/11 1,697,804,900 N/A N/A N/A 1,692,594,600 23,317,934 (a) For a description of the Minnesota property tax system, see Appendix III. 'h) Sales Ratio Study for the year of assessment as posted by the Minnesota Department of Revenue, http://www. revenue.state.inn. us/propertytax/Pages/stalistics-imv . aspx.Prior to 2011112,a different methodology was used to calculate sales ratios and the economic market value cannot be derived. (c) Economic market values .tbr the year of assessment as posted by the Minnesota Department of Revenue, http://www. revenue. state.inn. us/proper!yt ax/P ages/statistics-inlv. aspx. Source: Hennepin County, Minnesota, April 2015, except as otherwise noted. 2014/15 Adjusted Taxable Net Tax Capacity: $20,703,061 Real Estate: 45.6% 40.8 11.2 0.5 1.9 100.0% Residential Homestead $ 8,818,050 Commercial/Industrial, Railroad, and Public Utility 7,887,747 Residential Non-Homestead 2,159,232 Agricultural and Seasonal Recreational 88,259 Personal Property 370,476 2014/15 Net Tax Capacity $19,323,764 Less: Captured Tax Increment (2,764,303) Contribution to Fiscal Disparities (2,690,138) Plus: Distribution from Fiscal Disparities 6.833,738 2014/15 Adjusted Taxable Net Tax Capacity $20,703,061 Ten of the Largest Taxpayers in the City Taxpayer The Luther Company LLC The Mola sky Group of COS Wal-Mart Stores Inc. AX RER L.P. Medtronic Inc. Brookdale Corner LLC TLN Lane! Ltd Partnership Lake Point Apartments LLC G B Homes LLC Brooklyn Hotel Partners Total Type of Property Car Dealer FBI Regional Headquarters Retail Real Estate Industrial Retail Apartments Apartments Custom Home Builders Hotel 2014/15 Net Tax Capacity $ 470,445 461,250 333,600 192,850 192,250 188,250 187,638 177,500 159,313 150.190 $2,513,286* * Represents 12.1% oft/ic City's 2014115 adjusted taxable net tax capacity. - 10 - CITY INDEBTEDNESS Legal Debt Limit and Debt Margin* Legal Debt Limit (3% of 2014/15 Estimated Market Value) $50,029,905 Less: Outstanding Debt Subject to Limit -0- Legal Debt Margin as of July 9, 2015 $50,029,905 * The legal debt margin is referred to statutorily as the 'Net Debt Limit" and may be increased by debt service finds and current revenues which are applicable to the payment of debt in the current jlscal year. NOTES. Certain types qf debt are not subject to the legal debt limit. See Appendix III - Debt Limitations. The 2013 Minnesota Legislature clarified the definition of estimated market value and established it as the basis ,ft- the calculation of the Net Debt Limit. A large contributing factor to the change was to q/jet the effect of the Market Value Homestead Exclusion implemented by the 2012 Minnesota Legislature, which had a significant impact on taxable market values. General Obligation Special Assessment Debt Date Original of Issue Amount 12-15-06 $1,460,000 12-15-08 2,390,000 12-19-13 4,920,000 7-9-15 5,340,000 Total Purpose Improvements Improvements Improvements Improvements (the Improvement Portion of the Series 2015A Bonds) Final Maturity 2-1-2017 2-1-2019 2-1-2024 2-1-2026 Est. Principal Outstanding As of 7-9-15 $ 195,000 865,000 4,115,000 5,340,000 $10,515,000 General Obligation Tax Increment Debt Date Original of Issue Amount 12-1-04 $17,245,000 6-1-08 4,335,000 12-19-13 6,040,000 7-9-15 6,830,000 Total Final Maturity 2-1-2016 2-1-2018 2-1-2022 2-1-2020 Est. Principal Outstanding As of 7-9-15 $ 1,450,000* 375,000 5,790,000 6,830,000 $14,445,000 Purpose Taxable Tax Increment Taxable Tax Increment Taxable Tax Increment Taxable Tax Increment Refunding (the Series 2015B Bonds) * Excludes the Series 2004D Re/i mnded Maturities. NIE General Obligation Utility Revenue Debt* Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 7-9-15 7-9-15 $1,695,000 Utility Revenue Refunding (the Refunding Portion of the Series 2015A Bonds) 2-1-2025 $1,695,000 * Excludes the Series 2010A Refunded Maturities. Revenue Debt Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 7-9-15 1-20-15 $19,662,352 Taxable GO PFA Water Loan 8-20-2034 $19,662,352 Estimated Calendar Year Debt Service Payments Including the Bonds and Excluding the Refunded Maturities G.O. Special G.O. Tax Assessment Debt Increment Debt Principal Principal Year Principal & Interest(0)Principal & Interest (b) 2015 (at 7-9)(Paid)$ 83,103 (Paid)$ 300,294 2016 $ 885,000 1,123,508 $ 1,835,000 2,250,631 2017 1,355,000 1,557,744 2,055,000 2,339,014 2018 1,275,000 1,446,805 2,070,000 2,318,134 2019 1,215,000 1,357,239 2,060,000 2,266,433 2020 1,060,000 1,176,433 2,090,000 2,250,306 2021 1,060,000 1,153,203 2,140,000 2,243,438 2022 1,065,000 1,134,145 2,195,000 2,230,669 2023 750,000 798,840 2024 755,000 787,310 2025 545,000 563,098 2026 550,000 556,188 Total $10,515,0000 $11,737,616 $14,445,000 $16,198,919 (a) Includes the Improvement Portion of the Series 2015A Bonds at an assumed average annual interest rate of 1.75%. ('l) Includes the Series 2015B Bonds at an assumed average annual interest rate of 1.87%, and excludes the Series 2004D Refunded Maturities. ('c) 94.8% o/this debt will be retired within ten years - 12- Estimated Calendar Year Debt Service Payments Including the Bonds and Excluding the Refunded Maturities (Continued) Revenue Debt Year 2015 (at 7-9) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Total G.O. Utility Revenue Debt Principal Principal & Interest(a) (Paid) 36,138 $ 145,000 169,456 170,000 191,950 175,000 195,438 170,000 188,585 170,000 186,503 170,000 184,165 175,000 186,533 175,000 183,558 175,000 180,276 170,000 171,785 $1,695,000 $1,874,387 Principal $ 15,352 944,000 954,000 963,000 973,000 982,000 992,000 1,002,000 1,012,000 1,022,000 1,033,000 1,043,000 1,053,000 1,064,000 1,075,000 1,085,000 1,096,000 1,107,000 1,118,000 1.129.000 $1 9,662,352(b) Principal & Interest $ 48,664 1,140,470 1,141,030 1,140,490 1,140,860 1,140,130 1,140,310 1,140,390 1,140,370 1,140,250 1,141,030 1,140,700 1,140,270 1,140,740 1,141,100 1,140,350 1,140,500 1,140,540 1,140,470 1,140,290 $21,718,954 (a)Includes the Refunding Portion of the Series 2015A Bonds at an assumed average annual interest rate of 1.64%, and excludes the Series 2010A Reti,nded Maturities. (b)45.1% of this debt will be retired within ten years. Other Debt Obligations Operating Leases The City has entered into two operating leases for its municipal liquor stores. Rent expenses for the fiscal year ended December 31, 2014 were $303,108. The following is a schedule by years of future minimum rental payments required under these operating leases as of December 31, 2014: Year Endinn December 31 2015 $ 229,914 2016 234,888 2017 234,888 2018 234,888 2019 234,888 2020-2023 444,204 Total $1,613,670 -13 - The City has leased a portion of the police second floor expansion area to the Local Government Information Systems Association as a backup computer facility. The lease, commended on August 1, 2011, has a term of five years and calls for monthly lease payments based on square-footage. Lease revenue for the year ended December 31, 2014 was $13,200. Future lease revenues under the current agreement is as follows: Year Ending December 31 2015 $13,200 2016 7,700 Total $20,900 The City is the lessor in an operating lease for building and office facilities. The leased space includes multiple tenants, all of which have different lease terms, but include short and long term lease expiration dates. Two of the tenants do have the option to extend their lease terms by five years; however, the City acquired the respective property in 2013 as part of a redevelopment plan, so the likelihood of the leases being extended is minimal. For the year ended December 31, 2014, the City received $363,788 in rental revenue. Future minimum base rent revenues under the current agreements are as follows: Year Ending December 31 2015 $ 238,361 2016 237,899 2017 254,439 2018 262,877 2019 102,942 2020-2021 208,238 Total $1,304,756 Overlapping Debt 2014/15 Debt Applicable to Adjusted Taxable Est. G.O. Debt Tax Capacity in City Taxing Unit)Net Tax Capacity As of 7-9-1 Percent Amount Hennepin County $1,489,879,943 $772,785,000 1.4%$10,818,990 Hennepin County Regional Railroad 1,489,879,943 36,205,000 1.4 506,870 Three Rivers Park District 1,079,365,752 54,835,000 1.9 1,041,865 I.S.D.No. 11 (Anoka-Hennepin)41,761,225 61,840,000 6.8 4,205,120 I.S.D. No. 279 (Osseo)147,235,170 124,150,000 4.4 5,462,600 I.S.D. No. 281 (Robbinsdale)90,074,826 148,980,000 5.1 7,597,980 I.S.D. No. 286 (Brooklyn Center)6,805,097 26,900,000 100.0 26,900,000 Metropolitan Council 2,999,061,916 14,500,000('d)0.7 101,500 Metropolitan Transit 2,381,101,627(c)247,215,000(e)0.9 2,224,935 Total $58,859,860 q) Only those units with outstanding general obligation debt are shown here.el (7)) Excludes general obligation tax and aid anticipation certificates and revenue-supported debt. (c) 2013114 taxable net tax capacity valuation; 2014115 valuations are not yet available. ('Ct) Excludes general obligation debt supported by wastewater revenues and housing rental payments. Includes certificates ofparticipation. (e) Includes general obligation grant anticipation notes. BEE Debt Ratios* G.O. G.O. Direct & Direct Debt Overlapping Debt To 2014/15 Estimated Market 'Value ($1,667,663,500) 1.50% 5.03% Per Capita - (30,426 - 2013 MN Demographer Estimate) $820 $2,755 * Excludes general obligation debt supported by revenues, revenue debt, and other debt obligations. CITY TAX RATES, LEVIES AND COLLECTIONS Tax Capacity Rates for a Resident in Independent School District No. 286 (Brooklyn Center) 2014/15 For 2010/11 2011/12 2012/13 2013/14 Total Debt Only Hennepin County 45.840%48.231%49.461% 49.959% 46.398% 5.555% City of Brooklyn Center 58.558 65.816 72.202 75.742 71.256 1.879 I.S.D. No. 286 (Brooklyn Center)(") 47.697 48.020 56.031 54.422 52.984 30.253 Special Districts(b) 8.775 9.120 9.611 10.047 23.021 3.155 Total 160.870%171.187%187.305% 190.170% 193.659% 40.842% ('a) In addition, Independent School District No. 286 (Brooklyn GenIe,) has a 2014115 market value tax rate of 0.0.11341% spread across the market value 0/property in support oj'an excess operating levy. Special districts include Metropolitan Council,Metropolitan Transit, Metropolitan Mosquito Control, Hennepin Park Museum, Hennepin County Regional Rail Authority, and Three Rivers Park District. NOTE: Taxes are determined by multiplying the net tax capacity by the tax capacity rate, plus multiplying the rqferendwn market value by the market value rate. This table does not include the market value based rates. See Appendix M. Tax Levies and Collections Collected During Collected and/or Abated Net Collection Year as of 12-31-14 Levy/Collect Lyy*Amount Percent Amount Percent 2014/15 $14,778,187 (In Process of Collection) 2013/14 14,643,347 $14,470,227 98.8%$14,530,858 99.2% 2012/13 14,590,560 14,444,534 99.0 14,546,348 99.7 2011/12 14,219,162 13,942,766 98.1 14,175,392 99.7 2010/11 13,209,383 12,947,358 98.0 13,191,600 99.9 * The net levy excludes state aid/br property tax relief and fiscal disparities,if applicable. The net levy is the basis/or computing tax capacity rates. See Appendix III. -15 - FUNDS ON HAND As of March 31, 2015 General Fund Special Revenue Funds Debt Service Funds Capital Project Funds Enterprise Fund Internal Service Total Cash and Investments $ 7,724,655 2,014,166 566,990 11,317,719 10,931,880 6,771,172 $39,326,582 INVESTMENTS The City's investment policy, last revised in October 2006, has the objectives of preserving safety of principal, retaining sufficient liquidity, providing a market rate of return, and yielding stable earnings on invested City funds. Minnesota Statutes, Chapter 118A, authorize and define an investment program for municipal governments. The City may invest in the following instruments allowed by Minnesota Statutes: a.Securities that are the direct obligations or are guaranteed or insured issues of the United States, its agencies, its instrumentalities, or organizations created by an act of Congress; including governmental bills, notes, bonds, and other securities. b.Commercial paper issued by U.S. corporations or their Canadian subsidiaries that is rated in the highest quality by at least two nationally recognized rating agencies and matures in 270 days or less. These investments are limited by City policy to funds that are professionally managed and include a mix of investments. c.Time deposits that are filly insured by the Federal Deposit Insurance Corporation or bankers acceptances of U.S. banks. d.Repurchase agreements and reverse repurchase agreements may be entered into with financial institutions identified by Minnesota Statutes, Chapter 11 8A. e.Securities lending agreements may be entered into with financial institutions identified by Minnesota Statutes, Chapter 11 8A. f.Minnesota joint powers investment trusts may be entered into with trusts identified by Minnesota Statutes, Chapter 11 8A g.Money market mutual funds regulated by the Securities and Exchange Commission and whose portfolios consist only of short-term securities permitted by Minnesota Statutes, Chapter 11 8A. h.Bonds of the City of Brooklyn Center issued in prior years may be redeemed at current market price, which may include a premium, prior to maturity using surplus funds of the debt service fund set up for that issue. Such repurchased bonds shall be canceled and removed from the obligation of the fund. -16- Derivative securities, which obtain their value by the calculation of some portion of the value of another security, shall not be purchased. Mortgage-backed securities, which are not agency securities backed by the United States government, and stripped securities also shall not be purchased pursuant to the City's investment policy. Investments of the City shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. Safety of principal is the foremost objective. Liquidity and yield are also important considerations. It is essential that the investment portfolio remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. The investment portfolio of the City shall be designed to attain a market-average rate of return during budgetary and economic cycles, taking into account the City's investment risk constraints and liquidity needs. Return on investment is of least importance compared to the objectives for safety and liquidity. Securities shall be held to maturity with the exceptions of meeting the liquidity needs of the portfolio and minimizing loss of principal for a security of declining credit. Securities of various maturities shall be purchased so that at least half of the investment portfolio will remain for two or more years with known interest rates. Authority to manage the investment program is vested in the City Manager, City Treasurer, and Assistant Finance Director, with the City Treasurer responsible for establishing and maintaining an internal control structure to provide reasonable assurance that the objectives of the investment policy are met. As of March 31, 2015, the City had $39,227,406 (par value) invested, with a market value of $39,326,582 (100% of the original cost to the City plus amortized premium). The City's investments include the following: $18,765,973 (47.7%) in government agency securities; $12,176,852 (31.0%) in certificates of deposit; and $8,383,757 (21.3%) in money market accounts. All of the investments in the City's portfolio mature within 60 months or less. The longest investment held by the City is currently scheduled to mature in March 2020. GENERAL INFORMATION CONCERNING THE CITY The City is a northern suburb of the Minneapolis/Saint Paul metropolitan area, adjacent to the City of Minneapolis. The City is wholly within Hennepin County and encompasses an area of approximately 8.5 square miles (5,440 acres). The Mississippi River forms the City's eastern boundary. Population The City's population trend is shown below. Percent Population Change 2013 MN Demographer Estimate 30,426 1.1% 2010U.S. Census 30,104 3.2 2000 U.S. Census 29,172 1.0 1990 U.S. Census 28,887 (7.5) 1980 U.S. Census 31,230 -- Sources: Minnesota State Demographic Center, ningo/ac1nthi/demorap1n; and United States Census Bureau, hilp./'ii'wwce,jsus.ov/ -17- The City's population by age group for the past two years is as follows: Data Year! Report Year 0-17 18-34 35-64 65 and Over 2014/15 8,786 7,734 11,171 3,811 2013/14 8,696 7,621 11,042 3,763 Source: Claritas, Inc. Transportation Major transportation routes in and through the City, including Interstate Highways 94 and 694 and State Highways 100 and 252, have provided a continued impetus for the development of the City's commercial tax base. Major Employers Employer Promeon, Inc. (a division of Medtronic) Independent School District No. 286 (Brooklyn Center) Luther Auto Group (three locations) Walmart Maranatha Care Center, Presbyterian Homes Caribou Coffee (Headquarters) University of Minnesota Physicians City of Brooklyn Center TCR Corporation Target Cub Foods Health Partners-Brooklyn Center Cass Screw Machine Products Sears Product/Service Medical devices Education Automobile dealership Retail Continuing care/retirement community Coffee retailer Healthcare Government Metal components Retail Grocery Medical and dental clinic Screw machine parts Retail Approximate Number of Employees 1,100 375 320 * 300 * 200 * 200 tAiI( 156 160 * 125 * 125 * 119 110 70 * Inclucles/iell-time and pail-time employees. Source: This does not pi/port to be a comprehensive list and is based on a May 2015 best ef/brts telephone survey of individual employers. Sonic employers do not respond to inquiries. NOTE: Some of the employers located in the City that have not responded to the inquires are: Hennepin County, Embassy Suites, and Regional FBI Field 0//Ice. - 18- Labor Force Data Annual Average March 2011 2012 2013 2014 2015 Labor Force: City of Brooklyn Center 15,332 15,372 15,292 15,284 15,353 Hennepin County 655,641 661,846 668,496 672,114 674,543 Minneapolis-St. Paul Metro Area 1,879,765 1,891,151 1,906,358 1,917,301 1,929,641 State of Minnesota 2,944,331 2,954,949 2,965,675 2,974,102 3,013,832 Unemployment Rate: City of Brooklyn Center 8.2% 7.2%6.1%4.7%4.7% Hennepin County 6.1 5.2 4.6 3.7 3.7 Minneapolis-St. Paul Metro Area 6.3 5.5 4.8 3.9 4.0 State of Minnesota 6.5 5.6 4.9 4.1 4.5 Source: Minnesota Department ofE,nployment and Economic Development, http.//Wfl'U.pOSif!VelV/fllflnes()IQ.CQJfl. 2015 data are preliininaiy. Retail Sales and Effective Buying Income (EBI) City of Brooklyn Center Data Year!Total Retail Total Median Report Year Sales ($000)EBI ($000)Household EBI 2014/15 $505,332 $531,155 $40,188 2013/14 596,059 512,550 39,878 2012/13 703,490 483,895 37,788 2011/12 635,027 483,477 40,492 2010/11 501,717 497,435 40,683 Hennenin Count Data Year!Total Retail Total Median Report Year Sales ($000)EBI ($000) Household EBI 2014/15 $21,713,206 $36,578,500 $52,644 2013/14 21,457,980 34,013,567 50,131 2012/13 23,055,734 32,511,237 47,033 2011/12 22,526,015 31,323,522 48,356 2010/11 22,535,802 31,565,737 48,451 The 2014/15 Median Household EBI for the State of Minnesota was $50,560.The 2014/15 Median Household EBI for the United States was $45,448. Source: claritas, inc. _19- Permits Issued by the City Total Permits Commercial Permits Residential Permits Year Number Value Number Value Number Value 2015 (to 4-16)183 $ 7,442,890 51 $ 5,521,692 132 $ 1,921,198 2014 849 47,990,030 156 41,458,102 693 6,531,928 2013 1,867 34,866,050 217 21,857,116 1,650 13,008,934 2012 929 24,766,964 132 19,029,921 797 5,737,043 2011 752 54,499,418 105 50,193,835 647 4,305,583 2010 772 55,631,100 146 50,688,194 626 4,942,906 2009 773 15,201,903 153 10,497,326 620 4,704,577 Source: City of Brooklyn Center. Growth and Development The City's Central Commerce District includes two major shopping centers: Shingle Creek Crossing: An 80-acre commercial planned unit development (PUD) that includes the redevelopment of the former Brookdale Mall, and is projected to be completed in 2016. • In 2011, a significant portion of Brookdale Mall was removed and planned for redevelopment of a lifestyle shopping center that included the existing Sears and Kohl's department stores and the Applebee's restaurant. The initial phase included the partial daylighting of Shingle Creek and the infrastructure improvements for a 183,000 square-foot Walmart store; 15 new building pads; and the renovation of 169,000 square feet of the former Brookdale Mall. • In 2012, the Walmart store was opened and construction began on a 38,000 square-foot building for LA Fitness and three retail buildings providing 29,134 square feet of new commercial tenant space. • In 2013, the second phase of the site improvements were completed. The LA Fitness Store was opened and several tenant improvements within the three retail buildings were completed and occupied. Site plans were approved for a Discount Tire store, a fourth multi-tenant retail building, and replacement of the food court portion of the former mall with ten retail buildings to facilitate several junior box retailers. • Development activity scheduled for 2014 included the demolition of the 169,000 square-foot food court building with the immediate construction of 92,000 square feet of retail buildings; the construction of an 11,200 square-foot multi-tenant building, the construction of a 6,673 square-foot multi-tenant retail/restaurant building;and site plan approvals for the remaining four lots within the former Food Court lot. Major tenants scheduled to occupy these new retail spaces late in the spring of 2015, include Michaels, TF Maxx, Jimmy John's Restaurant, and Aspen Dental. • Development planned for 2015 construction includes Discount Tire; an 11,200 square foot multi-tenant retail building; an 11,200 square foot building for two restaurants; and the renovation of a 75,000 square-foot two story retail building (Kohl's Department Store). The southern portion of the 80 acre Opportunity Site comprises 46 acres and is planned for a mixed-use commercial, office and residential P.U.D. A housing market study was completed by the McCombs Group and the architectural firm of ESG was retained to prepare a mixed use concept plan for the 46-acre site. On December 20, 2013, the Economic Development Authority (the "EDA") acquired the 23.2 acre Brookdale Square shopping center site, which adjoins the EDA's 8.4 acre former Brookdale Ford dealership property. -20- In 2014, the EDA acquired an additional 1.6 acre site and has discussed future redevelopment plans with the four remaining businesses and/or property owner along John Martin Drive (the northern portion of this redevelopment area). In 2015, the EDA adopted the necessary findings of blighted building conditions that would qualify this area as a future Tax Increment Redevelopment District or a Renewal and Renovation District. Demolition of the building is scheduled to commence in spring of 2015. The EDA continues to pursue redevelopment opportunities for market rate apartments that include the type of units and amenities associated with move up housing options. Luther Auto Group has completed a major portion of their redevelopment plans for the 39 acres located on the north side of the 1-694 and Brooklyn Boulevard interchange. The 2013 approvals for the construction of a 42,360 square-foot Volkswagen dealership and a 2.8 acre expansion of the Honda Dealership's sales lot which will open up space for a 6" dealership along 694. In 2014, Luther demolished the old Honda dealership buildings and began construction of the new Volkswagen dealership and completed expansion of Honda sales lot. The Volkswagen dealership is scheduled to open in 2015. Additionally, Luther's master plans for this area include the acquisition, demolition, and incorporation of two adjacent commercial buildings into the dealership lots. Redevelopment of industrial properties include: The completion in December 2012 of France Avenue IV Business Park, a 90,000 square-foot multi-tenant building with the leasing completed in early 2015. In 2014, the Minnesota Department of Agriculture and the Minnesota Pollution Control Agency approved a Soils Investigation and Remediation Action Plan for the former Howe Fertilizer Site and adjoin railroad property, which enabled the processing of applications for environmental cleanup funds from Hennepin County, DEED and the Metropolitan Council. The three grant applications totaling $1.45 million were approved and cleanup plans have begun that will enable the developer to proceed with the approved development of a 60,000 square-foot multi-tenant building on this five-acre industrial site. In 2014, Sign Zone completed the acquisition and renovation of 140,000 square feet of office/industrial space at the former Palmer Lake Plaza office industrial buildings, which enabled Sign Zone to consolidate their business operations and have their corporate headquarters in Brooklyn Center. Additional development activities in 2014 include: The EDA acquired the former Chrysler Auto Dealership, also known as Cars with Heart, a five acre commercial site at 6121 Brooklyn Boulevard. The buildings have been demolished and the EDA has entered into a letter of intent for the redevelopment of this area for an assisted senior housing project consistent with the Brooklyn Boulevard Corridor Planning Study. The Three River Park District provided funding for a realignment of Twin Lakes Regional Trail Corridor within the eastern portion of planned renovation of the Lake Pointe Apartments. Additionally, planning has begun for the 2016-17 construction of an extension of this regional trail along 57th Avenue, east of State Highway 100, to connect to the Mississippi Regional Corridor. The Brooklyn Boulevard bridge and trail improvements over State Highway 100 were completed and a cooperative grant application with Hennepin County has received favorable scoring for the funding of the reconstruction of the southern portion of the Brooklyn Boulevard Corridor Study (southern border of the City to Co. Rd. 10/Bass Lake Road). -21- Financial Institutions* City residents are served by branch facilities of Wells Fargo Bank, National Association; Bremer Bank, National Association; and TCF National Bank, as well as numerous credit unions. * This does not pu/port to be a comprehensive list. Source: Federal Deposit Insurance Coiporation, hftp:/Anvw2.fdic.grnVidasp/main. asp. Health Care Services The following is a summary of inpatient health care facilities located in and around the City: Facility Location No. of Beds Maranatha Care Center City of Brooklyn Center 97 Living Well Lyndale City of Brooklyn Center 8 Brooklyn Center Outreach Home City of Brooklyn Center 6 North Memorial Medical Center City of Robbinsdale 518 Unity Hospital City of Fridley 275 Source: Minnesota Department of Health, http:t/wivw. hea/th.st ate. inn. list Education Public Education The following districts serve the residents of the City: 2014/15 School Location Grades Enrollment ISD No. 11 (Anoka-Hennepin)City of Anoka K-12 37,853 ISD No. 279 (Osseo)City of Osseo K-12 20,398 ISD No. 281 (Robbinsdale)City of Robbinsdale K-12 12,385 ISD No. 286 (Brooklyn Center)City of Brooklyn Center K-12 2,399 Source: Minnesota Department of Education, www.education.stateii,iic The City's taxable net tax capacity is attributable to each of the four school districts as follows: Portion of 2014/15 Taxable Net Tax Capacity Located in the City % of Total ISD No. 286 (Brooklyn C en t er)* $ 6,805,097 32.8% ISD No. 279 (Osseo) 6,453,945 31.2 ISD No. 281 (Robbinsdale) 4,611,511 22.3 ISD No. 11 (Anoka-Hennepin) 2,832.508 13.7 Total $20,703,061 100.0% * Independent School District No. 286 is located entirely within the City of Brooklyn Center. -22- Non-Public Education City residents are also served by the following private schools: 2014/15 School Location Grades Enrollment Sacred Heart Catholic School City of Robbinsdale K-8 207 King of Grace Lutheran School City of Golden Valley K-8 181 St. Raphael Catholic School City of Crystal K-8 177 St. Aiphonsus City of Brooklyn Center K-8 153 RiverTree School City of Crystal K-12 78 Holy Trinity Lutheran School City of New Hope K-8 55 Future Leader Learning City of Brooklyn Center K-6 9 Source: Ivlinnesota Department of Education, wwweducationsiatc.mu.us Post-Secondary Education City residents have access to various colleges and universities located throughout the Miimeapolis/St. Paul metropolitan area. GOVERNMENTAL ORGANIZATION AND SERVICES Organization The City has been a municipal corporation since 1911 and is governed under a Home Rule Charter adopted in 1966 and subsequently amended. The City has a Council-Manager form of government. The Mayor and four Council Members are elected to serve overlapping four-year terms. The following individuals comprise the current City Council: Expiration of Term Tim Willson Mayor December 31, 2018 April Graves Council Member December 31, 2018 Kris Lawrence-Anderson Council Member December 31, 2016 Dan Ryan Council Member December 31, 2018 Lin Myszkowski Council Member December 31, 2016 The City Manager, Mr. Cornelius L. Boganey, is responsible for the administration of Council policy and the daily management of the City. The Manager is appointed by the Council and serves at its discretion. Mr. Boganey has served the City in this position since June 2006. Prior to that, Mr. Boganey served as the City's Assistant Manager since March 2003. He has also served as City Manager in Brooklyn Park, Minnesota and Port Arthur, Texas, and as Assistant City Manager in Kalamazoo, Michigan. The Finance Director, Mr. Nathan Reinhardt, is responsible for directing the City's financial operations, including preparation of the comprehensive annual financial report and interim reports, and the investment of City funds. Mr. Reinhardt was selected to be the City's Finance Director effective November 21, 2013. Previously, Mr. Reinhardt served as Finance Director for the City of Waseca, Minnesota. The City has 156 regular full-time and 150 seasonal full- and part-time employees. -23- Services 48 full-time sworn police officers and a support staff of 12 provide protective services in the City. Fire protection is provided by 1 full-time Chief, 1 full-time Deputy Chief and a 40-member volunteer force. The City has 2 fire stations and a class 4 insurance rating. All areas of the City are serviced by municipal water and sewer systems, with exception to one property located at 5306 Perry Avenue North. Water is supplied by nine wells and storage is provided by three elevated tanks with a combined total capacity of 3.0 million gallons. The municipal water system has a pumping capacity of 16.9 million gallons per day (rngd). The average daily water demand is estimated to be 3.4 mgd and peak demand is estimated to be 9.7 rngd. Water connections totaled 8,912 as of March 31, 2015. Although the City owns and maintains its own sanitary and storm sewer collection systems, wastewater treatment facilities are owned and operated by the Metropolitan Council Environmental Services (MCES). The City is billed an annual service charge by MCES, which is adjusted each year based on the prior years' actual usage. The City had 8,789 sewer connections as of March 31, 2015. A new water treatment plant is under construction and is expected to be up and running by the end of 2015. The estimated total cost of the water treatment plant is $19.98 million. Financing will be achieved through a low interest loan under the Drinking Water Revolving Loan Fund through the Minnesota Public Facility Authority (PFA) loan program. Water rates will be adjusted over the next three years to provide sufficient revenue for the annual loan repayments. The City owns and operates the Earle Brown Heritage Center, a convention center with catering services and commercial office rentals. The Earle Brown Heritage Center is a unique and spacious event center located on the site of an historic estate in Brooklyn Center. Awarded the WeddingWire Couples' Choice in 2015, the venue boasts more than 40,000 square feet of space, with intimate meeting rooms hosting groups in size from 6 - 1,200. The Earle Brown Heritage Center hosts approximately 500 events annually and includes a full staff of event specialists, an in-house Executive Chef, audio visual and free onsite parking. City offices are located in the City's Civic Center, which also includes community facilities such as exercise and game rooms, classrooms, craft rooms, a 300-seat hail, and a 50-meter indoor swimming pool. The City maintains 520 acres of parkland, much of which is located along Shingle Creek forming a "green way" north to south through the City. Recreational facilities include a par 3 nine-hole golf course, 20 playgrounds, softball and baseball diamonds, basketball courts, tennis courts, hockey and skating rinks, nature areas, trails, and an arboretum. Labor Contracts The status of labor contracts in the City are as follows: Bargaining Unit No. of Employees IUOE Local 49 25 LELS Local 82 & 86 47 Subtotal 72 Non-unionized employees Total employees 156 Expiration Date of Current Contract December 31, 2016 December 31, 2015 -24- Employee Pensions All full-time employees and certain part-time employees of the City are covered by defined benefit pension plans administered by the Public Employees 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. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. All police officers, fire fighters and peace officers who qualify for membership by statute are covered by PEPFF. The City's contributions to GERF and PEPFF are equal to the contractually required contributions for each year as set by State Statute, and are as follows for the past five years: GERF PEPFF 2014 $531,385 $600,402 2013 521,512 560,053 2012 498,832 544,497 2011 492,194 522,110 2010 470,559 497,538 The City contributes to the Brooklyn Center Fire Department Relief Association (the "Association"), which is the administrator of a single employer, public employee defined benefit retirement system to provide a retirement plan (the "Plan") to volunteer firefighters of the City who are members of the Association. The Association is organized and operates under the provisions of the Minnesota State Statutes 424A, and provides benefits in accordance with those statutes. The Association provides retirement benefits to members and survivors upon death of eligible members. Benefits are established by the Association and approved by the City Council under the applicable statutes. The defined retirement benefits are based on a member's years of service. Vesting begins after the tenth year of service with a 60% benefit increasing to 100% after the 20 111 year of service. Full benefits are available after 20 years of service by the member and having attained the age of 50. The current benefit available is a lump sum distribution of $7,500 per year of service. Vested, terminated members who are entitled to benefits but are not yet receiving them are bound by the provisions in effect at the time of termination of membership. The City levies property taxes at the direction of and for the benefit of the Plan and passes through state aids allocated to the Plan, all in accordance with State statutes. The minimum tax levy obligation is the financial contribution requirement for the year less anticipated state aids. The City's contributions to the Firefighter's Association for the past five years are as follows: Year Ending December 31, 2014 December 31, 2013 December 31, 2012 December 31, 2011 December 31, 2010 Annual Pension Cost (APC) $108,883 100,728 105,244 134,087 183,928 Percentage Net of APC Pension Contributed Obligation 129%-0- 147 -0- 144 -0- 70 $52,199 93 18,231 -25- Funded status of the Association as reported to-date: Actuarial Actuarial Actuarial Value Accrued Valuation Date of Assets Liability January 1, 2013 $3,282,317 $3,279,231 January 1, 2011 3,303,595 3,253,686 January 1, 2009 2,654,832 3,240,590 January 1, 2007 4,024,987 3,713,292 Assets in Excess of Unfunded Accrued Funded Liability Ratio $ 3,086 100.1% 49,909 101.5 (585,758)81.9 311,695 108.4 For more information regarding the liability of the City with respect to its employees, please reference "Note 5. B, Employee Retirement Plans" of the City's Comprehensive Annual Financial Report for fiscal year ended December 31, 2014, an excerpt of which is included as Appendix IV of this Official Statement. Sources. City's Comprehensive Annual Financial Reports. Other Post-Employment Benefits The City provides continued health insurance coverage for retired City employees who, on the date of their retirement, meet PERA or PERA Police and Fire eligibility requirements for a full retirement annuity, without reduction of benefits because of age, disability, or any other reason. This coverage does not extend to the retiree's family, except that if the retiree desires to continue additional coverage, the cost in excess of the single premium must be paid by the retiree. This benefit began in 1986 and was subsequently discontinued for employees hired after January 31, 1992. As of December 31, 2014, the City had 168 eligible participants. The City currently finances the plan on a pay-as-you-go basis. During 2014, the City expended $222,477 for these benefits. With the advent of GASB Statement 45, the City has engaged actuaries to provide biennial actuarial valuation reports. Under GASB 45 such costs must be accounted for on an accrual basis. The City must report an annual OPEB cost based on actuarially determined amounts that, if paid on an ongoing basis, will provide sufficient resources to pay these benefits. The most recent actuarial report is dated January 1, 2014, for a valuation date of December 31, 2014. Components of the City's annual OPEB cost, the amount actually contributed to the plan, and the changes in the City's net OPEB obligation to the plan for the fiscal year ended December 31, 2014 are as follows: Annual required contribution $ 222,477 Interest on net OPEB obligation 26,371 Adjustment to annual required contribution (22,124) Annual OPEB cost (expense)$ 226,724 Contributions made: Direct (137,445) Indirect Implicit Rate Subsidy (45,311) Increase in net OPEB obligation $ 43,968 Net OPEB obligation - beginning of year 586,026 Net OPEB obligation - end of year $ 629,994 Funded status of the City's OPEB as reported in the actuarial reports received to-date: Unfunded UAAL as a Actuarial Actuarial Percentage of Actuarial Accrued Accrued Covered Covered Valuation Date Liability (AAL)Liability (UAAL)Payroll Payroll January 1, 2014 $2,574,529 $2,574,529 $9,934,960 25.91% January 1, 2012 2,620,367 2,620,367 9,472,237 27.66 January l,2010 3,012,383 3,012,383 9,143,276 32.95 January 1, 2008 3,996,136 3,996,136 8,882,315 44.99 Required contributions as reported in the actuarial reports received to-date: Annual Net Fiscal OPEB Employer % of Annual OPEB OPEB Year Ended Cost Contributions Cost Contributed Obligation December 3l,2014 $226,724 $182,756 80.61%$629,994 December 3l,2013 238,744 140,071 58.67 586,026 December 31, 2012 235,915 159,375 67.56 487,353 December 3l,2011 256,278 210,319 82.07 410,810 December 3l,2010 266,232 191,807 72.05 364,851 For more information regarding the liability of the City with respect to its employees, please reference "Note 5. C., Other Post-Employment Benefits" of the City's Comprehensive Annual Financial Report for fiscal year ended December 31, 2014, an excerpt of which is included as Appendix IV of this Official Statement. Sources: City 's Comprehensive Annual Financial Reports. (The Balance of This Page Has Been Intentionally Left Blank) -27- General Fund Budget Summary 2014 Budget 2014 Actual 2015 Budget January 1 Fund Balance $12,382,713 $12,382,713 $11,020,081 Revenues: Taxes $14,892,326 $14,991,781 $15,751,533 Licenses and Permits 743,668 1,021,410 728,115 Intergovernmental 1,253,800 1,401,447 1,362,941 Charges for Services 883,081 810,597 855,000 Fines &Forfeits 349,500 312,130 316,500 Special Assessments 75,000 128,138 85,000 Investment Earnings 32,000 61,770 46,787 Transfers In 150,000 129,544 150,000 Miscellaneous 86,875 138,349 106,725 Total Revenues $18,466,250 $18,995,166 $19,402,601 Expenditures: General Government $ 3,616,739 $ 2,745,046 $ 3,650,259 Public Safety 9,992,626 9,444,438 10,436,293 Public Works 3,524,016 1,963,110 3,620,234 CARS 1,463,029 2,406,617 1,539,497 Non-Departmental 818,870 944,463 983,253 Transfers Out (949,030)2,854,124 (826,935) Total Expenditures $18,466,250 $20,357,798 $19,402,601 December 31 Fund Balance $12,382,713 $11,020,081 $11,020,081 Sources: City's Comprehensive Annual Financial Reports and 2015 Budget. Major General Fund Revenue Sources Revenue 2010 2011 2012 2013 2014 Taxes $12,654,355 $13,253,417 $14,266,612 $15,017,242 $14,991,781 Intergovernmental 937,832 934,948 966,479 1,086,162 1,401,447 Licenses and Permits 1,063,945 961,947 858,593 1,084,003 1,021,410 Charges for Services 985,617 1,098,334 1,046,626 990,123 810,597 Fines & Forfeits 359,937 340,356 336,740 160,755 312,130 Sources: City 's c'omprehensive Annual Financial Reports. -28- APPENDIX I PROPOSED FORM OF LEGAL OPINION $7,035,000 General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A City of Brooklyn Center Hennepin, Minnesota We have acted as bond counsel to the City of Brooklyn Center, Hennepin, Minnesota (the "Issuer") in connection with the issuance by the Issuer of its General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A (the "Bonds"), originally dated the date hereof and issued in the original aggregate principal amount of $7,035,000. 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 primarily from special assessments levied or to be levied on property specially benefited by local improvements and revenues of the water and sewer utility systems of the Issuer, but if necessary for the payment thereof ad valorem taxes are required by law to be levied on all taxable property of 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, is excludable from taxable net income of individuals, trusts, and estates for 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 taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations and is subject to Minnesota franchise taxes on corporations (including financial institutions) measured by income. The opinion set forth in this paragraph is 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 from taxable net income for 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 Minnesota income tax purposes retroactively to the date of issuance of the Bonds. We express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. 4.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 creditor's rights generally and by equitable principles, whether considered at law or in equity. I-I We have not been asked and have not undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, and accordingly we express no opinion with respect thereto. This opinion is given as of the date hereof and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Dated , 2015 at Minneapolis, Minnesota. 1-2 $6,830,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B City of Brooklyn Center Hennepin County, Minnesota We have acted as bond counsel to the City of Brooklyn Center, Hennepin County, Minnesota (the "Issuer") in connection with the issuance by the Issuer of its Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B (the "Bonds"), originally dated the date hereof and issued in the original aggregate principal amount of $6,830,000. 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: I. 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 tax increment revenues, but if necessary for the payment thereof ad valorem taxes are required by law to be levied on all taxable property of the Issuer, which taxes are not subject to any limitation as to rate or amount. 3.Interest on the Bonds is included gross income for federal income tax purposes and is included in taxable net income of individuals, estates, and trusts for State of Minnesota income tax purposes. 4. 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 creditor's rights generally and by equitable principles, whether considered at law or in equity. We have not been asked and have not undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds, and accordingly we express no opinion with respect thereto. This opinion is given as of the date hereof and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Dated , 2015 at Minneapolis, Minnesota. 1-3 (This page has been left blank intentionally.) APPENDIX II CONTINUING DISCLOSURE CERTIFICATES $7,035,000 City of Brooklyn Center, Minnesota General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A CONTINUING DISCLOSURE CERTIFICATE 2015 This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Brooklyn Center, Minnesota (the "Issuer") in connection with the issuance of its General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A, (the "Bonds") in the original aggregate principal amount of $7,035,000. The Bonds are being issued pursuant to resolutions adopted by the City Council of the Issuer (the "Resolutions"). The Bonds are being delivered to (the "Purchaser") on the date hereof. Pursuant to the Resolutions, the Issuer has covenanted and agreed to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events. The Issuer hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders (as defined herein) of the Bonds in order to provide for the public availability of such information and assist the Participating Underwriter(s) (defined herein) in complying with the Rule (as defined herein). This Disclosure Certificate, together with the Resolutions, constitutes the written agreement or contract for the benefit of the Holders of the Bonds that is required by the Rule. Section 2. Definitions. In addition to the defined tenns set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any annual report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Audited Financial Statements" means the Issuer's annual financial statements, prepared in accordance with generally accepted accounting principles ("GAAP") for Governmental Units as Prescribed by the Governmental Accounting Standards Board ("GASB"). "Bonds" means the General Obligation Utility Revenue Refunding and Improvement Bonds, Series 2015A, issued by the Issuer in the original aggregate principal amount of $7,035,000. "Disclosure Certificate" means this Continuing Disclosure Certificate. "EMMA" means the Electronic Municipal Market Access system operated by the MSRB and designated as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. "Final Official Statement" means the deemed final official statement dated , 2015, which constitutes the final official statement delivered in connection with the Bonds, which is available from the MSRB. Il-I "Fiscal Year" means the fiscal year of the Issuer. "Holder" means the person in whose name a security is registered or a beneficial owner of such a security. "Issuer" means the City of Brooklyn Center, Minnesota, which is the obligated person with respect to the Bonds. "Material Event" means any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" means the Municipal Securities Rulemaking Board located at 1900 Duke Street, Suite 600, Alexandria, VA 22314. "Participating Underwriter" means any of the original underwriter(s) of the Bonds (including the Purchaser) required to comply with the Rule in connection with the offering of the Bonds. "Purchaser" means "Repository" means EMMA, or any successor thereto designated by the SEC. "Rule" means SEC Rule 15c2-12(b)(5) promulgated by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time, and including written interpretations thereof by the SEC. "SEC" means the Securities and Exchange Commission. Section 3. Provision of Annual Financial Information and Audited Financial Statements. (a)The Issuer shall provide, as soon as available, but not later than 12 months after the end of the Fiscal Year commencing with the year that ends December 31, 2015, the Repository with an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the Audited Financial Statements of the Issuer may be submitted separately from the balance of the Annual Report and will be submitted as soon as available. (b)If the Issuer is unable or fails to provide to the Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice of that fact to the Repository and the MSRB. (c) The Issuer shall determine each year prior to the date for providing the Annual Report the name and address of each Repository. Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the following sections of the Final Official Statement: I. City Property Values 2.City Indebtedness 3.City Tax Rates, Levies and Collections 11-2 In addition to the items listed above, the Annual Report shall include Audited Financial Statements submitted in accordance with Section 3 of this Disclosure Certificate. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to the Repository or the SEC. If the document incorporated by reference is a final official statement, it must also be available from the MSRB. The Issuer shall clearly identify each such other document so incorporated by reference. Section 5. Reporting of Material Events. (a) This Section 5 shall govern the giving of notice of the occurrence of any of the following events ("Material Events") with respect to the Bonds: 1.Principal and interest payment delinquencies; 2.Non-payment related defaults, if material; 3.Unscheduled draws on debt service reserves reflecting financial difficulties; 4.Unscheduled draws on credit enhancements reflecting financial difficulties; 5.Substitution of credit or liquidity providers, or their failure to perform; 6.Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 570 l—TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; 7.Modifications to rights of security holders, if material; 8.Bond calls, if material, and tender offers; 9.Defeasances; 10.Release, substitution, or sale of property securing repayment of the securities, if material; 11.Rating changes; 12.Bankruptcy, insolvency, receivership or similar event of the obligated person; 13.The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14.Appointment of a successor or additional trustee or the change of name of a trustee, if material; and 15. Failure of an issuer or obligated person to provide annual financial information as required. 11-3 (b)The Issuer shall file a notice of such occurrence with the Repository or with the MSRB within 10 business days of the occurrence of the Material Event. (c)Unless otherwise required by law and subject to technical and economic feasibility, the Issuer shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the Issuer's information. Section 6. EMIMA. The SEC has designated EMMA as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. Until the EMMA system is amended or altered by the MSRB and the SEC, the Issuer shall make all filings required under this Disclosure Certificate solely with EMMA. Section 7. Termination of Reporting Obligation. The Issuer's obligations under the Resolutions and this Disclosure Certificate shall terminate upon the legal defeasance, or upon the redemption or payment in full of all the Bonds. Section 8. Agent. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under the Resolutions and this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent. Section 9. Amendment; Waiver. Notwithstanding any other provision of the Resolutions or this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not, in and of itself, cause a violation of the Rule. The provisions of the Resolutions constituting the undertaking and this Disclosure Certificate, or any provision hereof, shall be null and void in the event that the Issuer delivers to the Repository an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require the Resolutions and this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply to the Bonds. The provisions of the Resolutions and this Disclosure Certificate may be amended without the consent of the Holders of the Bonds, but only upon the delivery by the Issuer to the Repository of the proposed amendment and an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance of the Resolutions and this Disclosure Certificate and by the Issuer with the Rule. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of comnmnication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Holder of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under the Resolutions and this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. 11-4 Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Participating Underwriters and Holders from time to time of the Bonds, and shall create no rights in any other person or entity. IN WITNESS WHEREOF, we have executed this Disclosure Certificate in our official capacities effective as of the date and year first written above. CITY OF BROOKLYN CENTER, MINNESOTA By Its Mayor By Its Manager 11-5 $6,830,000 City of Brooklyn Center, Minnesota Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B CONTINUING DISCLOSURE CERTIFICATE 2015 This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Brooklyn Center, Minnesota (the "Issuer") in connection with the issuance of its Taxable General Obligation Tax Increment Refunding Bonds, Series 201 5B, (the "Bonds") in the original aggregate principal amount of $6,830,000. The Bonds are being issued pursuant to resolutions adopted by the City Council of the Issuer (the "Resolutions"). The Bonds are being delivered to ____________ (the "Purchaser") on the date hereof. Pursuant to the Resolutions, the Issuer has covenanted and agreed to provide continuing disclosure of certain financial information and operating data and timely notices of the occurrence of certain events. The Issuer hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders (as defined herein) of the Bonds in order to provide for the public availability of such information and assist the Participating Underwriter(s) (defined herein) in complying with the Rule (as defined herein). This Disclosure Certificate, together with the Resolutions, constitutes the written agreement or contract for the benefit of the Holders of the Bonds that is required by the Rule. Section 2. Definitions. In addition to the defined terms set forth in the Resolutions, which apply to any capitalized ten-n used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any annual report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Audited Financial Statements" means the Issuer's annual financial statements, prepared in accordance with generally accepted accounting principles ("GAAP") for Governmental Units as Prescribed by the Governmental Accounting Standards Board ("GASB"). "Bonds" means the Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B, issued by the Issuer in the original aggregate principal amount of $6,830,000. "Disclosure Certificate" means this Continuing Disclosure Certificate. "EMMA" means the Electronic Municipal Market Access system operated by the MSRB and designated as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. "Final Official Statement" means the deemed final official statement dated ,2015, which constitutes the final official statement delivered in connection with the Bonds, which is available from the MS RB. "Fiscal Year" means the fiscal year of the Issuer. 11-6 "Holder" means the person in whose name a security is registered or a beneficial owner of such a security. "Issuer" means the City of Brooklyn Center, Minnesota, which is the obligated person with respect to the Bonds. "Material Event" means any of the events listed in Section 5(a) of this Disclosure Certificate. "MSRB" means the Municipal Securities Rulemaking Board located at 1900 Duke Street, Suite 600, Alexandria, VA 22314. "Participating Underwriter" means any of the original underwriter(s) of the Bonds (including the Purchaser) required to comply with the Rule in connection with the offering of the Bonds. "Purchaser" means "Repository" means EMIVIA, or any successor thereto designated by the SEC. "Rule" means SEC Rule 1 5c2- 1 2(b)(5) promulgated by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time, and including written interpretations thereof by the SEC. "SEC" means the Securities and Exchange Commission. Section 3. Provision of Annual Financial Information and Audited Financial Statements. (a)The Issuer shall provide, as soon as available, but not later than 12 months after the end of the Fiscal Year commencing with the year that ends December 31, 2015, the Repository with an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the Audited Financial Statements of the Issuer may be submitted separately from the balance of the Annual Report and will be submitted as soon as available. (b)If the Issuer is unable or fails to provide to the Repository an Annual Report by the date required in subsection (a), the Issuer shall send a notice of that fact to the Repository and the MS RB. (c) The Issuer shall determine each year prior to the date for providing the Annual Report the name and address of each Repository. Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the following sections of the Final Official Statement: 1.City Property Values 2.City Indebtedness 3. City Tax Rates, Levies and Collections In addition to the items listed above, the Annual Report shall include Audited Financial Statements submitted in accordance with Section 3 of this Disclosure Certificate. 11-7 Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to the Repository or the SEC. If the document incorporated by reference is a final official statement, it must also be available from the MSRB. The Issuer shall clearly identify each such other document so incorporated by reference. Section 5. Reporting of Material Events. (a) This Section 5 shall govern the giving of notice of the occurrence of any of the following events ("Material Events") with respect to the Bonds: Principal and interest payment delinquencies; 2.Non-payment related defaults, if material; 3.Unscheduled draws on debt service reserves reflecting financial difficulties; 4.Unscheduled draws on credit enhancements reflecting financial difficulties; 5.Substitution of credit or liquidity providers, or their failure to perform; 6.Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701—TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; 7.Modifications to rights of security holders, if material; 8.Bond calls, if material, and tender offers; 9.Defeasances; 10.Release, substitution, or sale of property securing repayment of the securities, if material; 11.Rating changes; 12.Bankruptcy, insolvency, receivership or similar event of the obligated person; 13.The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14.Appointment of a successor or additional trustee or the change of name of a trustee, if material; and 15.Failure of an issuer or obligated person to provide annual financial information as required. (b) The Issuer shall file a notice of such occurrence with the Repository or with the MSRB within 10 business days of the occurrence of the Material Event. 11-8 (c) Unless otherwise required by law and subject to technical and economic feasibility, the Issuer shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the Issuer's information. Section 6. EMMA. The SEC has designated EMMA as a nationally recognized municipal securities information repository and the exclusive portal for complying with the continuing disclosure requirements of the Rule. Until the EMMA system is amended or altered by the MSRB and the SEC, the Issuer shall make all filings required under this Disclosure Certificate solely with EMMA. Section 7. Termination of Reporting Obligation. The Issuer's obligations under the Resolutions and this Disclosure Certificate shall terminate upon the legal defeasance, or upon the redemption or payment in full of all the Bonds. Section 8. Agent. The Issuer may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its obligations under the Resolutions and this Disclosure Certificate, and may discharge any such agent, with or without appointing a successor dissemination agent. Section 9. Amendment; Waiver. Notwithstanding any other provision of the Resolutions or this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of nationally recognized bond counsel to the effect that such amendment or waiver would not, in and of itself, cause a violation of the Rule. The provisions of the Resolutions constituting the undertaking and this Disclosure Certificate, or any provision hereof, shall be null and void in the event that the Issuer delivers to the Repository an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require the Resolutions and this Disclosure Certificate are invalid, have been repealed retroactively or otherwise do not apply to the Bonds. The provisions of the Resolutions and this Disclosure Certificate may be amended without the consent of the Holders of the Bonds, but only upon the delivery by the Issuer to the Repository of the proposed amendment and an opinion of nationally recognized bond counsel to the effect that such amendment, and giving effect thereto, will not adversely affect the compliance of the Resolutions and this Disclosure Certificate and by the Issuer with the Rule. Section 10. Additional information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Material Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Material Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Material Event. Section 11. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate any Holder of the Bonds may take such actions as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Issuer to comply with its obligations under the Resolutions and this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default with respect to the Bonds and the sole remedy under this Disclosure Certificate in the event of any failure of the issuer to comply with this Disclosure Certificate shall be an action to compel peiformance. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Participating Underwriters and Holders from time to time of the Bonds, and shall create no rights in any other person or entity. 11-9 TN WITNESS WHEREOF, we have executed this Disclosure Certificate in our official capacities effective as of the date and year first written above. CITY OF BROOKLYN CENTER, MINNESOTA By Its Mayor By Its Manager 11-10 APPENDIX III SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND MINNESOTA REAL PROPERTY VALUATION Following is a summary of certain statutory provisions relative to tax levy procedures, tax payment and credit procedures, and the mechanics of real property valuation. The summary does not purport to be inclusive of all such provisions or of the specific provisions discussed, and is qualified by reference to the complete text of applicable statutes, rules and regulations of the State of Minnesota. Property Valuations (Chapter 273, Minnesota Statutes) Assessor's Estimated Market Value. Each parcel of real property subject to taxation must, by statute, be appraised at least once every five years as of January 2 of the year of appraisal. With certain exceptions, all property is valued at its market value, which is the value the assessor determines to be the price the property to be fairly worth, and which is referred to as the "Estimated Market Value." The 2013 Minnesota Legislature established the Estimated Market Value as the value used to calculate a municipality's legal debt limit. Economic Market Value. The Economic Market Value is the value of locally assessed real property (Assessor's Estimated Market Value) divided by the sales ratio as provided by the State of Minnesota Department of Revenue plus the estimated market value of personal property, utilities, railroad, and minerals. Taxable Market Value. The Taxable Market Value is the value that Net Tax Capacity is based on, after all reductions, limitations, exemptions and deferrals. Net Tax Capacity. The Net Tax Capacity is the value upon which net taxes are levied, extended and collected. The Net Tax Capacity is computed by applying the class rate percentages specific to each type of property classification against the Taxable Market Value. Class rate percentages vary depending on the type of property as shown on the last page of this Appendix. The formulas and class rates for converting Taxable Market Value to Net Tax Capacity represent a basic element of the State's property tax relief system and are subject to annual revisions by the State Legislature. Property taxes are the sum of the amounts determined by (i) multiplying the Net Tax Capacity by the tax capacity rate, and (ii) multiplying the referendum market value by the market value rate. Market Value Homestead Exclusion. In 2011, the Market Value Homestead Exclusion Program (MYHE) was implemented to offset the elimination of the Market Value Homestead Credit Program that provided relief to certain homesteads. The MVHE reduces the taxable market value of a homestead with an Assessor's Estimated Market Value up to $413,800 in an attempt to result in a property tax similar to the effective property tax prior to the elimination of the homestead credit. The MVHE applies to property classified as Class la or lb and Class 2a, and causes a decrease in the City's aggregate Taxable Market Value, even if the Assessor's Estimated Market Value on the same properties did not decline. Property Tax Payments and Delinquencies (Chapters 275, 276, 277, 279-282 and 549, Minnesota Statutes) Ad valorem property taxes levied by local governments in Minnesota are extended and collected by the various counties within the State. Each taxing jurisdiction is required to certify the annual tax levy to the county auditor within five (5) working days after December 20 of the year preceding the collection year. A listing of property taxes due is prepared by the county auditor and turned over to the county treasurer on or before the first business day in March. 111-1 The county treasurer is responsible for collecting all property taxes within the county. Real estate and personal property tax statements are mailed out by March 31. One-half (1/2) of the taxes on real property is due on or before May 15. The remainder is due on or before October 15. Real property taxes not paid by their due date are assessed a penalty on homestead property of 2% until May 31 and increased to 4% on June 1. The penalty on nonhomestead property is assessed at a rate of 4% until May 31 and increased to 8% on June 1. Thereafter, an additional 1% penalty shall accrue each month through October 1 of the collection year for unpaid real property taxes. In the case of the second installment of real property taxes due October 15, a penalty of 2% on homestead property and 4% on nonhomestead property is assessed. The penalty for homestead property increases to 6% on November 1 and again to 8% on December 1. The penalty for nonhomestead property increases to 8% on November 1 and again to 12% on December 1. Personal property taxes remaining unpaid on May 16 are deemed to be delinquent and a penalty of 8% attaches to the unpaid tax. However, personal property that is owned by a tax-exempt entity, but is treated as taxable by virtue of a lease agreement, is subject to the same delinquent property tax penalties as real property. On the first business day of January of the year following collection all delinquencies are subject to an additional 2% penalty, and those delinquencies outstanding as of February 15 are filed for a tax lien judgment with the district court. By March 20 the county auditor files a publication of legal action and a mailing of notice of action to delinquent parties. Those property interests not responding to this notice have judgment entered for the amount of the delinquency and associated penalties. The amount of the judgment is subject to a variable interest determined annually by the Department of Revenue, and equal to the adjusted prime rate charged by banks but in no event is the rate less than 10% or more than 14%. Property owners subject to a tax lien judgment generally have three years (3) to redeem the property. After expiration of the redemption period, unredeemed properties are declared tax forfeit with title held in trust by the State of Minnesota for the respective taxing districts. The county auditor, or equivalent thereof, then sells those properties not claimed for a public purpose at auction. The net proceeds of the sale are first dedicated to the satisfaction of outstanding special assessments on the parcel, with any remaining balance in most cases being divided on the following basis: county - 40%; town or city - 20%; and school district - 40%. Property Tax Credits (Chapter 273, Minnesota Statutes) In addition to adjusting the taxable value for various property types, primary elements of Minnesota's property tax relief system are: property tax levy reduction aids; the homestead credit refund and the renter's property tax refund, which relate property taxes to income and provide relief on a sliding income scale; and targeted tax relief, which is aimed primarily at easing the effect of significant tax increases. The homestead credit refund, the renter's property tax refund, and targeted credits are reimbursed to the taxpayer upon application by the taxpayer. Property tax levy reduction aid includes educational aids, local governmental aid, equalization aid, county program aid and disparity reduction aid. Debt Limitations All Minnesota municipalities (counties, cities, towns and school districts) are subject to statutory "net debt" limitations under the provisions of Minnesota Statutes, Section 475.53. Net debt is defined as the amount remaining after deducting from gross debt the amount of current revenues that are applicable within the current fiscal year to the payment of any debt and the aggregate of the principal of the following: 1.Obligations issued for improvements that are payable wholly or partially from the proceeds of special assessments levied upon benefited property. 2.Warrants or orders having no definite or fixed maturity. 3. Obligations payable wholly from the income from revenue producing conveniences. 111-2 4. Obligations issued to create or maintain a permanent improvement revolving fund. Obligations issued for the acquisition and betterment of public waterworks systems, and public lighting, heating or power systems, and any combination thereof, or for any other public convenience from which revenue is or may be derived. 6.Certain debt service loans and capital loans made to school districts. 7.Certain obligations to repay loans. 8.Obligations specifically excluded under the provisions of law authorizing their issuance. 9.Certain obligations to pay pension fund liabilities. 10.Debt service funds for the payment of principal and interest on obligations other than those described above. 11.Obligations issued to pay judgments against the municipality. Levies for General Obligation Debt (Sections 475.61 and 475.74, Minnesota Statutes) Any municipality that issues general obligation debt must, at the time of issuance, certify levies to the county auditor of the county(ies) within which the municipality is situated. Such levies shall be in an amount that if collected in full will, together with estimates of other revenues pledged for payment of the obligations, produce at least five percent in excess of the amount needed to pay principal and interest when due. Notwithstanding any other limitations upon the ability of a taxing unit to levy taxes, its ability to levy taxes for a deficiency in prior levies for payment of general obligation indebtedness is without limitation as to rate or amount. Metropolitan Revenue Distribution (Chapter 473F, Minnesota Statutes) "Fiscal Disparities Law" The Charles R. Weaver Metropolitan Revenue Distribution Act, more commonly known as "Fiscal Disparities," was first implemented for taxes payable in 1975. Forty percent of the increase in commercial-industrial (including public utility and railroad) net tax capacity valuation since 1971 in each assessment district in the Minneapolis/St. Paul seven-county metropolitan area (Anoka, Carver, Dakota, excluding the City of Northfield, Hennepin, Ramsey, Scott, excluding the City of New Prague, and Washington Counties) is contributed to an area-wide tax base. A distribution index, based on the factors of population and real property market value per capita, is employed in determining what proportion of the net tax capacity value in the area-wide tax base shall be distributed back to each assessment district. 111-3 STATUTORY FORMULAE: CONVERSION OF TAXABLE MARKET VALUE (TMV) TO NET TAX CAPACITY FOR MAJOR PROPERTY CLASSIFICATIONS Local Tax Local Tax Payable Payable Property Type 2011-2014 2015 Residential Homestead (la) Up to $500,000 1.00%1.00% Over $500,000 1.25%1.25% Residential Non-homestead Single Unit (4bb1) Up to $500,000 1.00%1.00% Over $500,000 1.25%1.25% 1-3 unit and undeveloped land (4b1)1.25%1.25% Market Rate Apartments Regular (4a)1.25%1.25% Low-Income (4d)0.75% Up to $100,000 0.75% Over $100,000 0.25% Commercial/Industrial/Public Utility (3a) Up to $150,000 1.50%"1.50%" Over $150,000 2.00%2.00%° Electric Generation Machinery 2.00%2.00% Commercial Seasonal Residential Homestead Resorts (Ic) Up to $600,000 0.55%0.55% $600,000 -$2,300,000 1.00%1.00% Over $2,300,000 1 .25%1.25%(") Seasonal Resorts (4c) Up to $500,000 1.00%(")1.00%f") Over $500,000 1 .25%1.25% Non-Commercial (4cl2) Up to $500,000 1.00%(1 .00%"' Over $500,000 1 .25%"'1.25%(")(") Disabled Homestead (Ib) Up to $50,000 0.45%0.45% Agricultural Land & Buildings Homestead (2a) Up to $500,000 1.00%1.00% Over $500,000 1.25%1.25% Remainder of Farm Up to $ 1 ,900 ,000(e)0.50%0.50% Over $1,900,000 (')I .00%"L00%(1) Non-homestead (2b)L00%(1)1.00%(1) (a)Slate tax is applicable to these classifications. (b)Exempt from referendum market value based taxes. Legislative increases, payable 2015. Historical valuations ale: Payable 2014 - $1,500,000; Payable 2013 - $1,290,000; Payable 2012 - $1,210,000; and Payable 2011 - $1,140,000. NOTE: For purposes of the State general property tax only, the net tax capacity of non-commercial class 4c(1) seasonal residential recreational property has the following class late structure: First $76,000 - 0.40%; $76,000 to $500,000- 1.00%; and over $500,000 - 1.25%. In addition to the Slate tax base exemptions referenced by property classifIcation, airport property exempt from city and school district property taxes under MS. 473.625 is exempt fi'onI the State genera/properly tax (MSP International Airport and Ho/man Field in St. Paul are exempt under this provision. 111-4 APPENDIX IV EXCERPT OF 2014 COMPREHENSIVE ANNUAL FINANCIAL REPORT Data on the following pages was extracted from the City's Comprehensive Annual Financial Report for fiscal year ended December 31, 2014. The reader should be aware that the complete financial statements may contain additional information which may interpret, explain or modify the data presented here. The City's comprehensive annual financial reports for the years ending 1966 through 2013 were awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA). The Certificate of Achievement is the highest form of recognition for excellence in state and local government financial reporting. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report (CAFR), whose contents conform to program standards. Such CAFR must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. IV-1 Mmileal IV-2 INDEPENDENT AUDITOR'S REPORT To the City Council and Management City of Brooklyn Center, Minnesota REPORT ON THE FINANCIAL STATEMENTS We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Brooklyn Center, Minnesota (the City) as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contests. MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. AUDITOR'S REst'oNuIBtuTv Our responsibility is to express opinions on these financial Statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of tire City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. OPINIONS In our opininn, the financial statements referred to on the previous page present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major find, and the aggregate remaining fund information of the City as of December 31, 2014, and the respective changes in financial position and, where applicable, cash flows thereof, and the budgetary comparison for the General Fund and budgeted major special revenue funds for the year then ended, in accordance with accounting principles generally accepted in the United States of America. OTHER MATTERS Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and the Schedule of Funding Progress, as listed in the table of contents, he presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical content. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures da not provide us with sufficient evidence to express an opinion or provide any assurance, Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual fund statements and schedules, and statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not required parts of the basic financial statements. The combining and individual fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. in our opinion. the combining and individual fund statements and schedules are fairly stated, in all material respects, in relation to the basic financial Statements as whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we da not express an opinion or provide any assurance on them. OTHER REPORTING REQUIRED BY C,OVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated May 18, 2015 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not In provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. _;w4gEø7, lLfoad.nr, K*AwoessJi, I 1&ne'& o , P.4. 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Cost of capital assets Accumulated depreciation Long-term liabilities, including bonds payable, are not due and payable in the current period, and therefore, are not reported as liabilities in governmental funds. Bonds payable Accrued interest payable Some receivables are not available soon enough to pay for the current period's expenditures, and therefore, are unavailable in governmental funds. Delinquent property taxes receivable Delinquent tax increments receivable Special assessments receivable Interest on notes receivable Intergovernmental receivable Internal service funds are used by management to charge the cost of certain activities to individual funds. The assets and liabilities are included in the governmental statement of net position. Total net position - governmental activities $ -6,205,I88 7 9,344,461 3,644,735) .485,000) 368,879) 78,865 64,131 4,138,168 210,000 ,077, 504 747,047 $ 366,750 The notes to the financial statements are an integral part of this statement. 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N N a. a. -o a' N a' N - C' C' N C. C' 0' N N fl 0)1 fl fl 'd .ó o 40 00 00 - '0 N N'0 N N N N '0 N 'C 'C N'0 NC' N 01 00 'C o a. 'fl N N N 00 '0 '0 U 01 01 00 'C 00 '-' - 00 .-' I"- C' " a' 00 C' '0 o oo a' oq a', a', 00; 60 40 01 ' '0 '''0''' fl 00 0' ' '0 C' ' '0 ' C' ' '0 ' ' 00 00 C' 10 C' 00 C' 00 0000 '0 '00)1 N, 01 N 00 '0' °Z 00 a' C' 00 "1' - N 00 0' C' a' 0' C7, 009 fl - F" '0 fl - - a' a' N 00 N, '0 - '000 N N rON, 00; 60 N 'C ''N'''''' fl 00 ' ' ' ' 'N ' N ' N C' 00 '0 N N fl N 00 '0 oo r' r' C', 0; '- '0; 01 01 01 N N '0 z 'C '0 01 01 00 N C' '0 '0 00 00 01 9 N 00 N C', 00, 00 C' b' N 00 00 N N 00 - - - - - 40 N C' N 00 C' C' N ' N ' ' - '0N '0100 C' 00 00 N ' 00 N - N - - 'C C' N a' '0- N 'C N a' 0' 00 '0 C' - a' N 01 '0 '00000 01 - C C' N N .-'0000 0' - N N N 00 N -. '0 0 N N 01 9 C' Co - 00 - F'c N - 0 N 01 '0' N "-' 0' 00 C' a.o C' 00 00 00 N 00 N N a' N N N N 0" 'fi 'C - N C' 00 N a' O 'C .-" - - N fl .-" a' - N a' 01 01 ep 60 60 Co COU 'C)C0 .000 v.L 0 0,0'9C00 ç) C '05 010 • Oo>2 CO 10) '-' UL fl HH .9 S '9 o'59'9 EEI'FFoo<UOU) 000 0, 00000 0'O 00000 Z 00000 1. TV-13 CITY OF BROOKLYN CENTER, MINNESOTA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION December 31, 2014 Fund balances - governmental funds $ 6,205, 188 Amounts reported for the governmental activities within the statement of net position are different because: Capital assets used in governmental activities are not financial resources, and therefore, are not reported as assets in governmental funds. Cost of capital assets 79,344,461 Accumulated depreciation 3,644,735) Long-term liabilities, including bonds payable, are not due and payable in the current period, and therefore, are not reported as liabilities in governmental funds. Bonds payable ,485,000) Accrued interest payable 368,879) Some receivables are not available soon enough to pay for the current period's expenditures, and therefore, are unavailable in governmental funds. Delinquent property taxes receivable 78,865 Delinquent tax increments receivable 64,131 Special assessments receivable 1,138,168 Interest on notes receivable 210,000 Intergovernmental receivable J,077,504 Internal service funds are used by management to charge the cost of certain activities to individual funds. The assets and liabilities are included in the governmental statement of net position. 747,047 Total net position - governmental activities $ 366,750 The notes to the financial statements are an integral part of this statement. IV-14 00 0z m U, z C.) z C4 x 1-cd, enz 7 toZ Wan ul ES L 0 —1- 0Uc, -. 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N N — Nc'l N - 00 00 CI) C 00 U, 00 0 ' E5 mc 0.. 0 5 2 550 oo 0 0 0 0 > U, C U - 0') 10 0 £. 5 S 5 00 E ,5 ' 55 :2' SIS ' SE , "QOE 00 O -'S.E oo'5 S U x 0 1-1-1- 5 5Il U 0 Z Li, Li, IV-15 CITY OF BROOKLYN CENTER, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended December 31, 2014 Total net change in fund balances.- governmental funds S 324960 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives as depreciation. Capital outlays 33,244 Depreciation expense 92,916) Contributions of capital assets to the proprietary funds decrease net position in the statement of activities, but do not appear in the governmental funds because they are not financial resources. 39,266) The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Principal repayments J5,000 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. (75,259) Certain revenues are recognized as soon as they are earned. Under the modified accrual basis of accounting, certain revenues cannot be recognized until they are available to liquidate liabilities of the current period. Property taxes (48,595) Tax increments (5,345) Special assessments 173,999 Interest on notes receivable 60,000 Intergovernmental 826,014) Internal service funds are used by management to charge the cost of certain activities to individual funds. This amount is net revenue attributable to governmental activities. i8,636) Change in net position - governmental activities S i6 1,172 The notes to the financial statements are an integral part qf this statement. IV-16 CITY OF BROOKLYN CENTER, MINNESOTA GENERAL FUND - STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Variance with Final Budget - Budgeted Amounts Actual Positive Original Final Amounts (Negative) $ 14,032,326 $ 14,032,326 $ 14,077,130 $ 44,804 860,000 860,000 914,651 54,651 743,668 743,668 1,021,410 277,742 1,253,800 1,253,800 1,401,447 147,647 883,081 883,081 810,597 (72,484) 75,000 75,000 128,138 53,138 349,500 349,500 312,130 (37,370) 32,000 32,000 61,770 29,770 86,875 86,875 138,349 51,474 18,316,250 18,316,250 18,865,622 549,372 2,960,209 2,960,209 2,736,593 223,616 9,976,226 9,976,226 9,444,438 531,788 2,046,634 2,046,634 1,963,110 83,524 161,000 161,000 145,503 15,497 2,502,811 2,502,811 2,402,766 100,045 408,500 408,500 434,459 (25,959) 249,370 249,370 364,501 (115,131) 22,500 22,500 8,453 14,047 16,400 16,400 -16,400 22,600 22,600 3,851 18,749 18,366,250 18,366,250 17.503,674 862,576 (50,000)(50,000)1,361,948 1.411,948 150,000 150,000 129,544 (20,456) (100,000)(100,000)(2,854,124)(2,754,124) 50,000 50,000 (2,724,580)(2,774,580) - - (1,362,632) (1,362,632) 12,382,713 12,382,713 12,382,713 - $ 12,382,713 $ 12,382,713 $ 11,020,081 $ (1,362,632) REVENUES Property taxes Lodging taxes Licenses and permits Intergovernmental Charges for services Special assessments Fines and forfeits Investment earnings (net of market value adjustment) Miscellaneous Total revenues EXPENDITURES Current: General government Public safety Public works Community services Parks and recreation Economic development Nondeparimental Capital outlay: General government Public safety Parks and recreation Total expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance - January 1 Fund balance - December 31 The notes to the financial statements are an integral part qfthis statement. IV-17 CITY OF BROOKLYN CENTER, MINNESOTA TAX INCREMENT DISTRICT NO.3 - STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For the Year Ended December 31, 2014 Variance with Final Budget - Budgeted Amounts Actual Positive Original Final Amounts (Negative) $ 2,938,650 $ 2,938,650 $ 3,038,983 $ 100,333 --363,788 363,788 --23,123 23,123 -32,843 32,843 2,938,650 2,938,650 3,458,737 520,087 973,550 973,550 936,949 36,601 --377,685 (377,685) 973,550 973,550 1,314,634 (341,084) 1,965,100 1,965,100 2,144,103 179,003 (1,965,100)(1,965,100)(2,073,345)(108,245) --70,758 70,758 REVENUES Tax increments Charges for services Investment earnings (net of market value adjustment) Miscellaneous Total revenues EXPENDITURES Current: Economic development Capital outlay: Economic development Total expenditures Excess of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers out Net change in fund balance Fund balance - January I - Restated 17,827,991 17,827,991 17,827,991 Fund balance - December 3l $ 17,827,991 S 17,827,991 $ 17,898,749 S 70,758 The noses to the financial statements are an integral part of this statement. 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Tax Increment Refunding Bonds Recommendation: It is recommended that the City Council consider approval of the attached resolution for the competitive sale of $6,830,000 of Taxable G.O. Tax Increment Refunding Bonds, Series 2015B. The sale of such bonds will be used to refinance (refund) the Taxable G.O. Tax Increment Bonds, Series 2004D. Background: On May 11, 2015 the City Council adopted a resolution providing for the competitive negotiated sale of $6,830,000 Taxable G.O. Tax Increment Refunding Bonds, Series 2015B. The original $17,245,000 of Taxable G.O. Tax Increment Bonds, Series 2004D was approved on November 8, 2004. Those bonds were issued to finance certain public redevelopment costs set forth in the Economic Development Authority's Tax Increment Finance Plan for the Tax Increment Financing District No. 3. The bond bears an average interest coupon of 4.93%, with a maturity date of February 1, 2020. The debt service repayments on this bond have been financed with tax increment revenues generated within the project area for the Tax Increment Financing District No. 3. Budget Issues: The issuance of the refunding bonds would not warrant the introduction of any new budgetary expenditure, as the principal and interest payments on the original bond issue have been budgeted for on an annual basis within the respective debt service fund. The refunding bonds have been structured to achieve nearly equal annual savings. Based on current interest rate estimates, the refunding is projected to result in the estimated annual cash flow savings of $106,407 per year (2017 -2020). The refunding bonds will not extend the maturity date. The net present value benefit to the City will be approximately $424,219. It should be noted that the outcome of this refinancing will rely on market conditions at the time of the sale, and any estimates included above are indicative of current market conditions. We have attached a copy of the Official Statement which describes the bond sale in more detail with the City Council memo on the sale of Series 2015A bonds (also included in tonight's agenda). We anticipate that Standard & Poor's will confirm that the bonds will continue to be rated AA. The rating report will be sent to the Council when received prior to the Council meeting. A'lissioi,: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust COUNCIL ITEM MEMORANDUM Competitive proposals will be received by the City's financial advisor, Springsted Incorporated at 10:00am on June 8 th , 2015. Proceeds from the bonds will be received July 9th, 2015. Doug Green, Vice President of Springsted will be present at the Council meeting to discuss the recommendations for the sale. Strategic Priorities: Targeted Redevelopment Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people amid preserves the public trust 461355v1 JSB BR291-356 Extract of Minutes of Meeting of the City Council of the City of Brooklyn Center, Hennepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Brooklyn Center, Minnesota, was duly held in the City Hall in said City on Monday, June 8, 2015, commencing at 7:00 P.M. The following members were present: and the following were absent: * * * * * * * * * The Mayor announced that the next order of business was consideration of the proposals which had been received for the purchase of the City’s approximately $6,600,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B. The City Manager presented a tabulation of the proposals that had been received in the manner specified in the Official Terms of Proposal for the Bonds. The proposals are as set forth in EXHIBIT A attached. After due consideration of the proposals, Member ________ then introduced the following resolution, and moved its adoption: 461355v1 JSB BR291-356 2 RESOLUTION NO. 15____ A RESOLUTION AWARDING THE SALE OF $6,600,000 TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BONDS, SERIES 2015B; FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the City Council of the City of Brooklyn Center, Hennepin County, Minnesota (the “City”) as follows: Section 1. Sale of Bonds. 1.01 Background; Findings. It is hereby determined that: (a) the City is authorized by Minnesota Statutes, Chapter 475, Sections 469.174 through 469.1794 and Minnesota Laws of 1998, Chapter 389, Article 11, Section 24 (collectively, the “Act”) and Section 475.67, Subdivision 3, of the Act to issue and sell its general obligation bonds to refund obligations and the interest thereon before the due date of the obligations, if consistent with covenants made with the holders thereof, when determined by the City Council to be necessary or desirable for the reduction of debt service cost to the City or for the extension or adjustment of maturities in relation to the resources available for their payment; (b) Minnesota Statutes, Section 475.67, subdivision 13, permits the sale of crossover refunding obligations as long as the proceeds of the crossover refunding obligations are deposited in a debt service fund maintained as an Escrow Account and irrevocably appropriated to the payment of principal of and interest on the refunding obligations until the date the proceeds are applied to the payment of the obligations to be refunded; (c) it is necessary and desirable to reduce debt service costs that the City issue its $6,600,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B (the “Bonds”) to refund certain outstanding general obligations of the City; (d) the outstanding bonds to be refunded (the “Refunded Bonds”) consist of the $17,245,000 Taxable General Obligation Tax Increment Bonds, Series 2004D dated December 1, 2004 (the “Series 2004D Bonds”), of which $6,670,000 in principal amount (representing the 2017 through 2020 maturities) is callable on February 1, 2016 (the “Redemption Date”), which maturities, together with interest thereon, are referred to as the “Refunded Bonds.” 1.02. Award to the Purchaser and Interest Rates. The proposal of Robert W. Baird & Co., Inc. in Milwaukee, Wisconsin (the “Purchaser”) to purchase $6,600,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B (the “Bonds”) of the City described in 461355v1 JSB BR291-356 3 the Official Terms of Proposal thereof is found and determined to be a reasonable offer and is accepted, the proposal being to purchase the Bonds at a price of $6,835,574.61 Bonds bearing interest as follows: Year Interest Rate 2017 3.00% 2018 3.00% 2019 3.00% 2020 3.00% 1.03. Purchase. Any original issue premium and any rounding amount shall be credited to the Debt Service Fund hereinafter created, or applied to redemption of the Refunded Bonds, as determined by the City Finance Director in consultation with the City’s municipal advisor. The City Finance Director is directed to retain the good faith check of the Purchaser pending completion of the sale of the Bonds, and to return the good faith checks of the unsuccessful proposers. The Mayor and City Manager are directed to execute a contract with the Purchaser on behalf of the City. 1.04. Terms and Principal Amounts of the Bonds. The City will forthwith issue and sell the Bonds pursuant to the Act in the total principal amount of $6,600,000, originally dated July 9, 2015, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 without option of prior payment in the years and amounts as follows: Year Amount 2017 $1,570,000 2018 1,610,000 2019 1,690,000 2020 1,730,000 1.05. No Optional Redemption. The Bonds will not be subject to redemption and prepayment in advance of their maturity. Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest 461355v1 JSB BR291-356 4 payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing February 1, 2016, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not such day is a business day. 2.03. Registration. The City will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the “Registrar”). The effect of registration and the rights and duties of the City and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner’s attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the City. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The City and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes, and payments so made to a registered owner or upon the owner’s order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. 461355v1 JSB BR291-356 5 (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated, Lost, Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for a Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the City and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the City. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. 2.04. Appointment of Initial Registrar. The City appoints U.S. Bank National Association, St. Paul, Minnesota, as the initial Registrar. The Mayor and the City Manager are authorized to execute and deliver, on behalf of the City, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or trust company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The City agrees to pay the reasonable and customary charges of the Registrar for the services performed. The City reserves the right to remove the Registrar upon 30 days’ notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. On or before each principal or interest due date, without further order of this Council, the City Finance Director must transmit to the Registrar monies sufficient for the payment of all principal and interest then due. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the City Manager and executed on behalf of the City by the signatures of the Mayor and the City Manager, provided that those signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of a Bond, such signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. 461355v1 JSB BR291-356 6 When the Bonds have been so prepared, executed and authenticated, the City Manager will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The City may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. Section 3. Form of Bond. 3.01. Form of Bond. The Bonds will be printed or typewritten in substantially the form as attached hereto as EXHIBIT B. 3.02. Approving Legal Opinion. The City Manager is directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which is to be complete except as to dating thereof and will cause the opinion to be printed on or accompany each Bond. Section 4. Payment; Security. 4.01. Funds and Accounts. The Bonds are payable from the Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B Debt Service Fund (the “Debt Service Fund”) hereby created, and Available Tax Increments in the amount necessary to pay when due the principal of and accrued interest on the Bonds after the redemption date is pledged to the Debt Service Fund. The term “Available Tax Increments” means tax increments derived from Tax Increment Financing District No. 3 (“TIF District”). The City may pledge Available Tax Increments to any other obligation on a parity basis with the pledge hereunder, and may release the pledge of any tax increments hereunder, including release of any parcel within any of the identified TIF District, so long as the remaining pledged tax increments are reasonably expected to pay at least 20% of the principal and interest when due on the outstanding Bonds. There is also appropriated to the Debt Service Fund (i) any amount over the minimum purchase price of the Bonds paid by the Purchaser, to the extent so designated for deposit herein under Section 1.03 hereof, and (ii) any rounding amount. If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the City Finance Director will pay such principal or interest from the general fund of the City, and the general fund will be reimbursed for those advances out of the proceeds of Available Tax Increments when received. The debt service fund heretofore established for the Series 2004D Bonds pursuant to the resolution authorizing the issuance and sale of the Series 2004D Bonds (the “Prior Resolution”) shall be terminated on the Redemption Date, and all monies therein shall be transferred to the Debt Service Fund herein created. If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the City Finance Director will pay such principal or interest from the general fund of the City, and the 461355v1 JSB BR291-356 7 general fund will be reimbursed for those advances out of Taxes levied by this resolution when collected, or Available Tax Increments when received. 4.02. Escrow Account. The Escrow Account will be maintained as an Escrow Account (the “Escrow Account”) with U.S. Bank National Association in St. Paul, Minnesota, which is a suitable financial institution within the State, whose deposits are insured by the Federal Deposit Insurance Corporation, whose combined capital and surplus is not less than $500,000 and said financial institution is hereby designated escrow agent (the “Escrow Agent”) for the Escrow Account. All proceeds of the sale of the Bonds (less amounts deposited in the Debt Service Account under Section 4.01) will be received by the Escrow Agent and applied to fund the Escrow Account or used to pay costs of issuance. Proceeds of the Bonds not used to pay costs of issuance or fund the Escrow Account will be returned to the City for deposit into the Debt Service Fund. All investment earnings on the Escrow Account are hereby irrevocably pledged and appropriated thereto. The Escrow Account will be invested in securities maturing or callable at the option of the holder on such dates and bearing interest at such rates as will be required to provide sufficient funds, together with any cash or other funds retained in the Escrow Account, to pay when due the interest to accrue on each Bond to and including the Redemption Date, and to pay on the Redemption Date the principal amount of each of the Refunded Bonds. From the Escrow Account there will be paid (i) all interest paid on, or to be paid on, or to accrue on, the Bonds to and including the Redemption Date, and (ii) the principal of the Refunded Bonds due by reason of redemption on the Redemption Date. The Escrow Account will be irrevocably appropriated to the payment of the principal of and interest on the Bonds until the proceeds of the Bonds therein are applied to prepayment of the Refunded Bonds. The moneys in the Escrow Account will be used solely for the purposes herein set forth and for no other purpose, except that any surplus in the Escrow Account may be remitted to the City, all in accordance with the Refunding Escrow Agreement by and between the City and the Escrow Agent (the “Escrow Agreement”). Any moneys remitted to the City upon termination of the Escrow Agreement will be deposited in the Debt Service Fund. 4.03. Findings. It is hereby found and determined that based upon information presently available from the City’s municipal advisers, the issuance of the Bonds will result in a reduction of debt service cost to the City on the Refunded Bonds, such that the present value of the dollar amount of the debt service on the Bonds, computed to their stated maturity dates, after deducting any premium, is lower by at least 3.00% than the present value of the dollar amount of debt service, on the Refunded Bonds, exclusive of any premium, computed to their stated maturity dates (the “Reduction”). The Reduction, after the inclusion of all authorized expenses of refunding in the computation of the effective interest rate on the Bonds, is adequate to authorize the issuance of the Bonds as provided by Minnesota Statutes, Section 475.67, Subdivision 13. 4.04. Investment of Funds. Moneys in the Debt Service Fund will be used solely to pay the principal of and interest on the Bonds or any other bonds hereafter issued and made payable from the Fund and will be invested in accordance with State laws. 4.05. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City will be and are hereby irrevocably pledged. If the balance in the Escrow Account or 461355v1 JSB BR291-356 8 Debt Service Fund is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Escrow Account or Debt Service Fund when a sufficient balance is available therein. To the extent that it shall ever by necessary to provide full and timely payment of the debt service on the Bonds, the City shall, pursuant to the authority described in this paragraph, levy an ad valorem tax on all taxable property within the City sufficient for such purposes. 4.06. Pledge of Tax Increments. It is hereby determined that the estimated collection of Available Tax Increments for payment of principal and interest on the Bonds will produce at least five percent in excess of the amount needed to meet, when due, the principal and interest payments on the Bonds and that no tax levy is needed at this time. 4.07. Director of Property Records and Revenue's Certificate as to Registration. The City Manager is authorized and directed to file a certified copy of this resolution with the Director of Property Records and Revenue of Hennepin County and to obtain the certificate required by Minnesota Statutes, Section 475.63. Section 5. Refunding; Findings; Redemption of Refunded Bonds. 5.01. Refunding Prior Bonds. It is hereby found and determined that based upon information presently available from the City’s municipal advisors, the issuance of the Bonds is consistent with covenants made with the holders of the Refunded Bonds and is necessary and desirable for the reduction of debt service cost to the municipality. 5.02. Proceeds Pledged to the Escrow Account. As of the date of delivery of and payment for the Bonds, proceeds of the Bonds in the amount of $6,781,100.00 are hereby pledged and appropriated and will be deposited in the Escrow Account for the purposes of paying principal of and interest on the Series 2004D Bonds through the Redemption Date and redeeming and prepaying all the outstanding principal of the Series 2004D Bonds on the Redemption Date. 5.03. Purchase of Securities and Compliance with the Act. Securities purchased from the monies in the Escrow Account will be limited to securities specified in Section 475.67, subdivision 8 of the Act. Springsted Incorporated and/or the Escrow Agent, as agent for the City, is hereby authorized and directed to purchase for and on behalf of the City and in its name, appropriate securities to fund the Escrow Account. Upon the issuance and delivery of the Bonds, the securities so purchased will be deposited in the Escrow Account established herein and held pursuant to the terms of the Escrow Agreement and this resolution. 5.04. Escrow Agreement. On or prior to the delivery of the Bonds, the Mayor and the City Manager are hereby authorized and directed to execute on behalf of the City the Escrow Agreement. The Escrow Agreement is hereby approved in substantially the form on file with the City on the date hereof, with such necessary and appropriate variations, omissions, and insertions as do not materially change the substance thereof, or as the Mayor and City Manager, in their 461355v1 JSB BR291-356 9 discretion, shall determine, and the execution thereof by the Mayor and City Manager shall be conclusive evidence of such determination. 5.05. Notice of Redemption. The Refunded Bonds will be redeemed and prepaid on the Redemption Date. The Refunded Bonds will be redeemed and prepaid in accordance with their terms and in accordance with the terms and conditions set forth in the forms of Notice of Call for Redemption attached as Exhibit C to the Escrow Agreement which terms and conditions are hereby approved and incorporated herein by reference. The Registrar for the Refunded Bonds is authorized and directed to send a copy of the Notice of Redemption to each registered holder of the Refunded Bonds. Section 6. Authentication of Transcript. 6.01. City Proceedings and Records. The officers of the City are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the City relating to the Bonds and to the financial condition and affairs of the City, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, may be deemed representations of the City as to the facts stated therein. 6.02. Certificate as to Official Statement. The Mayor, City Manager and Finance Director are hereby authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. Section 7. Book-Entry System; Limited Obligation of City. 7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed fully registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns (“DTC”). Except as provided in this section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 7.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the City, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the “Participants”) or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership 461355v1 JSB BR291-356 10 interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar,) of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The City, the Registrar and the Paying Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal, premium and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the City’s obligations with respect to payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this resolution. Upon delivery by DTC to the City Manager of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words “Cede & Co.,” will refer to such new nominee of DTC; and upon receipt of such a notice, the City Manager will promptly deliver a copy of the same to the Registrar and Paying Agent. 7.03. Representation Letter. The City has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the “Representation Letter”) which shall govern payment of principal of, premium, if any, and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the City with respect to the Bonds will agree to take all action necessary for all representations of the City in the Representation letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 7.04. Transfers Outside Book-Entry System. In the event the City, by resolution of the City Council, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the City will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the City will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the City will issue and the Registrar will authenticate Bond certificates in accordance with this resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 7.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of, premium, if any, and interest on the Bond and notices with respect to the Bond will be made and given, respectively in the manner provided in DTC’s Operational Arrangements, as set forth in the Representation Letter. 461355v1 JSB BR291-356 11 Section 8. Continuing Disclosure. 8.01. City Compliance with Provisions of Continuing Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section. 8.02. Execution of Continuing Disclosure Certificate. “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate executed by the Mayor and City Manager and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. Section 9. Defeasance. When all Bonds and all interest thereon, have been discharged as provided in this section, all pledges, covenants and other rights granted by this resolution to the holders of the Bonds will cease, except that the pledge of the full faith and credit of the City for the prompt and full payment of the principal of and interest on the Bonds will remain in full force and effect. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in full. If any Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. The motion for the adoption of the foregoing resolution was duly seconded by Member ____________ and upon vote being taken thereon, the following voted in favor thereof: Councilmembers and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 461355v1 JSB BR291-356 STATE OF MINNESOTA ) ) COUNTY OF HENNEPIN ) SS. ) CITY OF BROOKLYN CENTER ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Brooklyn Center, Hennepin County, Minnesota, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of the City held on June 8, 2015 with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of $6,600,000 Taxable General Obligation Tax Increment Refunding Bonds, Series 2015B of the City. WITNESS My hand officially as such City Clerk and the corporate seal of the City this ______ day of June, 2015. City Clerk Brooklyn Center, Minnesota (SEAL) 461355v1 JSB BR291-356 A-1 EXHIBIT A PROPOSALS 461355v1 JSB BR291-356 A-2 461355v1 JSB BR291-356 B-1 EXHIBIT B FORM OF BOND No. R-___ UNITED STATES OF AMERICA $___________ STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF BROOKLYN CENTER TAXABLE GENERAL OBLIGATION TAX INCREMENT REFUNDING BOND, SERIES 2015B Rate Maturity Date of Original Issue CUSIP February 1, 20__ July 9, 2015 Registered Owner: Cede & Co. The City of Brooklyn Center, Minnesota, a duly organized and existing municipal corporation in Hennepin County, Minnesota (the “City”), acknowledges itself to be indebted and for value received promises to pay to the Registered Owner specified above or registered assigns, the principal sum of $__________ on the maturity date specified above, with interest thereon from the date hereof at the annual rate specified above, payable February 1 and August 1 in each year, commencing February 1, 2016, to the person in whose name this Bond is registered at the close of business on the fifteenth day (whether or not a business day) of the immediately preceding month. The interest hereon and, upon presentation and surrender hereof, the principal hereof are payable in lawful money of the United States of America by check or draft by U.S. Bank National Association, St. Paul, Minnesota, as Registrar, Paying Agent, Transfer Agent and Authenticating Agent, or its designated successor under the Resolution described herein. For the prompt and full payment of such principal and interest as the same respectively become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. This Bond is one of an issue in the aggregate principal amount of $6,600,000 all of like original issue date and tenor, except as to number, maturity date, and interest rate, all issued pursuant to a resolution adopted by the City Council on June 8, 2015 (the “Resolution”), for the purpose of providing money to refund the outstanding principal amount of certain general obligation bonds of the City, pursuant to and in full conformity with the home rule charter of the City and the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 475.67 and the principal hereof and interest hereon are payable primarily from tax increments resulting from increases in the taxable value of real property in certain tax increment financing districts in the City as set forth in the Resolution to which reference is made for a full statement of rights and powers thereby conferred. The full faith and credit of the City are 461355v1 JSB BR291-356 B-2 irrevocably pledged for payment of this Bond and the City Council has obligated itself to levy ad valorem taxes on all taxable property in the City in the event of any deficiency in tax increments pledged, which taxes may be levied without limitation as to rate or amount. The Bonds of this series are issued only as fully registered Bonds in denominations of $5,000 or any integral multiple thereof of single maturities. As provided in the Resolution and subject to certain limitations set forth therein, this Bond is transferable upon the books of the City at the principal office of the Registrar, by the registered owner hereof in person or by the owner’s attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Registrar, duly executed by the registered owner or the owner’s attorney; and may also be surrendered in exchange for Bonds of other authorized denominations. Upon such transfer or exchange the City will cause a new Bond or Bonds to be issued in the name of the transferee or registered owner, of the same aggregate principal amount, bearing interest at the same rate and maturing on the same date, subject to reimbursement for any tax, fee or governmental charge required to be paid with respect to such transfer or exchange. The City and the Registrar may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether this Bond is overdue or not, for the purpose of receiving payment and for all other purposes, and neither the City nor the Registrar will be affected by any notice to the contrary. IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND AGREED that all acts, conditions and things required by the home rule charter of the City and the Constitution and laws of the State of Minnesota to be done, to exist, to happen and to be performed preliminary to and in the issuance of this Bond in order to make it a valid and binding general obligation of the City in accordance with its terms, have been done, do exist, have happened and have been performed as so required, and that the issuance of this Bond does not cause the indebtedness of the City to exceed any constitutional, charter or statutory limitation of indebtedness. This Bond is not valid or obligatory for any purpose or entitled to any security or benefit under the Resolution until the Certificate of Authentication hereon has been executed by the Registrar by manual signature of one of its authorized representatives. 461355v1 JSB BR291-356 B-3 IN WITNESS WHEREOF, the City of Brooklyn Center, Hennepin County, Minnesota, by its City Council, has caused this Bond to be executed on its behalf by the facsimile or manual signatures of the Mayor and City Manager and has caused this Bond to be dated as of the date set forth below. Dated: CITY OF BROOKLYN CENTER, MINNESOTA (Facsimile) (Facsimile) City Manager Mayor CERTIFICATE OF AUTHENTICATION This is one of the Bonds delivered pursuant to the Resolution mentioned within. U.S. BANK National Association By Authorized Representative _________________________________ The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants UNIF GIFT MIN ACT _________ Custodian _________ in common (Cust) (Minor) TEN ENT -- as tenants under Uniform Gifts or by entireties Transfers to Minors Act . . . . . . . . . . . . JT TEN -- as joint tenants with right of survivorship and not as tenants in common (State) Additional abbreviations may also be used though not in the above list. ________________________________________ 461355v1 JSB BR291-356 B-4 ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto ________________________________________ the within Bond and all rights thereunder, and does hereby irrevocably constitute and appoint _________________________ attorney to transfer the said Bond on the books kept for registration of the within Bond, with full power of substitution in the premises. Dated: Notice: The assignor’s signature to this assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without alteration or any change whatever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agent Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”), the New York Stock Exchange, Inc. Medallion Signatures Program (“MSP”) or other such “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of 1934, as amended. The Registrar will not effect transfer of this Bond unless the information concerning the assignee requested below is provided. Name and Address: (Include information for all joint owners if this Bond is held by joint account.) Please insert social security or other identifying number of assignee 461355v1 JSB BR291-356 B-5 PROVISIONS AS TO REGISTRATION The ownership of the principal of and interest on the within Bond has been registered on the books of the Registrar in the name of the person last noted below. Date of Registration Registered Owner Signature of Officer of Registrar Cede & Co. Federal ID #13-2555119 AGENDA CITY OF BROOKLYN CENTER CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY WORK SESSION June 8, 2015 Immediately Following Regular City Council and EDA Meetings Which Start at 7:00 P.M. Council Chambers City Hall A copy of the full City Council packet is available to the public. The packet ring binder is located at the front of the Council Chambers by the Secretary. ACTIVE DISCUSSION ITEMS 1. Tobacco Free Parks PENDING LIST FOR FUTURE WORK SESSIONS Later/Ongoing 1.Sister City Voinjama Visit Update 2.Paperless Packets Report Work iiiiiiiiII MEMORANDUM - COUNCIL WORK SESSION DATE: June 3, 2015 TO: Curt Boganey, City Manager FROM: Jim Glasoe, Director of Community Activities, Recreation & Services Z- 7,7 SUBJECT: Tobacco-Free Parks Recommendation: It is recommended that the City Council consider providing direction to staff regarding a Tobacco-Free Parks policy, or Ordinance revision. Background: At their May 11, 2015 work session, the City Council discussed smoking and tobacco use in parks. At that meeting, City Council census was to move towards a complete ban of smoking and the use of tobacco and tobacco related products in all parks and open spaces. At the May 11th meeting, the City Council directed staff to develop both a draft policy and draft Ordinance revision language for them to consider. Accordingly, attached are a draft Tobacco- Free Parks Policy and a draft Ordinance revision. Policy Issues: How does the City Council wish to proceed regarding this issue? Strategic Priorities: . Enhanced Community Image Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life for all people and preserves the public trust City of BROOKLYN CENTER City of Brooklyn Center Tobacco-Free Park System Policy SUBJECT City of Brooklyn Center, Parks and Open Spaces Tobacco-Free Policy: In order to protect the health, welfare and safety of our park patrons, the City of Brooklyn Center prohibits the use of all tobacco products in our parks and open space areas. POLICY STATEMENT The City of Brooklyn Center is committed to the quality of life for all residents, therefore, we believe that: 1.Tobacco product use in the proximity of children and youth engaging in recreational activities is unhealthy and detrimental to the health of others. 2.Tobacco products once consumed in public spaces are often discarded on the ground, thus posing a risk of ingestion to toddlers and causing a litter problem. 3. As parents, leaders, coaches, and officials, we are thought of as role models, and the use of tobacco products around youth has a negative effect on their lifestyle choices. TOBACCO—FREE FACILITIES The City of Brooklyn Center does not allow the use of any tobacco, or tobacco related products on city- owned property, such as parkland, park facilities, open space or joint city/school district properties. COMPLIANCE PROCEDURES The emphasis on enforcing the Tobacco-Free park policy is through voluntary compliance: 1.Appropriate City-owned parkland, park facilities, open space or joint City/school district properties will be appropriately signed. 2.City of Brooklyn Center staff will meet with activity organizations and/or leaders or coaches to discuss the policy and to distribute flyers with the "Tobacco Free" policy. 3. City of Brooklyn Center staff will make periodic observations of activity sites to monitor compliance. Policy Adoption Date: June 8, 2015 CITY OF BROOKLYN CENTER Notice is hereby given that a public hearing will be held on the ____ day of , 2015, at 7:00 p.m. at City Hall, 6301 Shingle Creek Parkway, to consider an ordinance related to the prohibition of smoking within City parks and on public trails. Auxiliary aids for handicapped persons are available upon request at least 96 hours in advance. Please notify the personnel coordinator at 763-569-3303 to make arrangements. ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 13 RELATED TO THE PROHIBITION OF SMOKING IN CITY PARKS AND ON PUBLIC TRAILS THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER DOES ORDAIN AS FOLLOWS: Article I. Brooklyn Center City Code, Section 13-101 is amended by adding the following definition: Smoking - The inhaling, exhaling or combustion of any cigar, cigarette, pipe, tobacco product. tobacco-related Droduct, weed, plant or any other similar article. "Smoking" includes possessing or carrying a lighted cigar, ci g arette, pipe or any other lighted tobacco product or tobacco-related device. "Smoking" also includes the use of, or the inhaling or exhaling of vapor from any electronic delivery device, as well as carrying an electronic delivery device that is turned on or otherwise activated. Article II. Brooklyn Center City Code, Chapter 13 is amended to add the following new Section and all subsequent Sections of Chapter 13 shall be renumbered accordingly: Section 13-104. SMOKING PROHIBITED. Smoking is prohibited within all City Darks and on public trails. Article III. This Ordinance shall become effective after adoption and upon thirty (30) days following its legal publication. 462635v2 BR291 -298 Adopted this ____ day of , 2015. Mayor ATTEST: City Clerk Date of Publication: Effective Date: 462635v2 BR291-298