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PRELIMINARY OFFICIAL STATEMENT DATED JANUARY 27, 2014
<br /> REFUNDING ISSUE Moody's Rating: Requested
<br /> • BANK QUALIFIED
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<br /> E o In the opinion of Kennedy&Graven, Chartered,Bond Counsel for the Bonds,based on present federal and Minnesota laws,regulations,rulings and decisions(which
<br /> exclude any pending legislation which may have a retroactive effect),and assuming compliance with certain covenants,interest to be paid on the Bonds is excluded from
<br /> 5 y gross income for federal income tax purposes and,to the same extent,from taxable net income of individuals,estates and trusts for Minnesota income purposes,and is
<br /> m`y not a preference item for purposes of computing the federal lte ative minimum tax or the Minnesota alternative minimum tax imposed on individuals,trusts,and estates.
<br /> V£ m Such interest is taken into account in determining adjusted current eamings for the purpose of computing the federal No opinion minimum tax imposed on certain
<br /> corporations and is subject to Minnesota franchise taxes on corporations(including financial institutions)measured by income.e.No opinion will be expressed by Kennedy 8
<br /> Graven regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Bonds or arising with respect to ownership of the Bonds.The
<br /> N• m en Bonds will be deemed designated as"qualified tax-exempt obligations"for purposes of Section 265(6)(3)of the Infernal Revenue Code of 1986,as amended,relating to
<br /> 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
<br /> C obligations.See'TAX EXEMPTION"and"OTHER FEDERAL AND STATE TAX CONSIDERATIONS"herein.
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<br /> o $2,125,000*
<br /> wo City of Elk River, Minnesota
<br /> • ° t Electric Revenue Refunding Bonds, Series 2014A
<br /> d ='«
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<br /> t (Book Entry Only)
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<br /> Dated Date: Date of Delivery Interest Due: Each February 1 and August 1,
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<br /> d a commencing August 1,2014
<br /> d d o The Bonds will mature August 1 in the years and amounts* as follows:
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<br /> 2014 $430,000 2015 $420,000 2016 $420,000 2017 $425,000 2018 $430,000
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<br /> w ° o Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term
<br /> 2; o bonds. All term bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest
<br /> .c to the date of redemption scheduled to conform to the maturity schedule set forth above.
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<br /> G e The Bonds will not be subject to payment in advance of their respective stated maturity dates.
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<br /> E 8 o, The Bonds will be special obligations of the City of Elk River, Minnesota (the "City") payable solely from
<br /> — net revenues of the electric system of the Elk River Municipal Utilities Commission (the"Commission") and
<br /> 3• g shall not constitute a debt for which the full faith and credit or taxing powers of the City will be pledged.
<br /> , The proceeds of the Bonds will be used to refund the August 1, 2014 through August 1, 2021 maturities of the
<br /> f' City's Electric Revenue Bonds, Series 2006A, dated March 2, 2006.
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<br /> do Proposals shall be for not less than $2,106,938 plus accrued interest, if any, on the total principal amount of the
<br /> a a m Bonds. Proposals shall specify rates in integral multiples of 1/100 or 1/8 of 1%. The initial price to the public for
<br /> E• co each maturity must be 98.0% or greater. Proposals must be accompanied by a good faith deposit in the amount of
<br /> a•-•
<br /> ° $21,250 in the form of a certified or cashier's check payable to the order of the City, a wire transfer, or a Financial
<br /> c N 2 Surety Bond, and delivered to Springsted Incorporated prior to the time proposals will be opened. Award of the
<br /> E' Bonds will be made on the basis of True Interest Cost(TIC).
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<br /> y j The City will designate the Bonds as "qualified tax-exempt obligations" pursuant to Section 265(b)(3)of the Internal
<br /> • o Revenue Code of 1986, as amended, and the Bonds will not be subject to the alternative minimum tax for
<br /> .(I) o individuals.
<br /> 0-,,:t2 The Bonds will be issued as fully registered bonds without coupons and, when issued, will be registered in the
<br /> E�3 name of Cede &Co., as nominee of The Depository Trust Company ("DTC"). DTC will act as securities depository
<br /> E for the Bonds. Individual purchases may be made in book entry form only, in the principal amount of $5,000 and
<br /> CI- g integral multiples thereof. Investors will not receive physical certificates representing their interest in the Bonds
<br /> • Hpurchased. (See "Book Entry System" herein.) U.S. Bank National Association, St. Paul, Minnesota will serve as
<br /> s E'g registrar (the "Registrar") for the Bonds. The Bonds will be available for delivery at DTC on or about March 13,
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<br /> 2014.
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<br /> PROPOSALS RECEIVED: February 11, 2014 (Tuesday) until 10:00 A.M., Central Time
<br /> o E AWARD: February 11, 2014 (Tuesday) at 3:30 P.M., Central Time
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<br /> €o d Further information may be obtained from SPRINGSTED Incorporated,
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<br /> Springsted Financial Advisor to the City and the Commission, 380 Jackson Street,
<br /> 15--E
<br /> Suite 300,Saint Paul, Minnesota 55101-2887(651)223-3000.
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<br /> * Preliminary; subject to change. 74
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