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PRELIMINARY OFFICIAL STATEMENT DATED MAY 26,2016
<br /> • ro NEW ISSUES Moody's Ratings: Requested
<br /> e.= BANK QUALIFIED—THE SERIES 2016A BONDS
<br /> 2 NOT BANK-QUALIFIED—THE SERIES 2016B BONDS
<br /> p ti In the opinion of Kennedy&Graven,Chartered,Bond Counsel for the Bonds,based on present federal and Minnesota laws,regulations,rulings and decisions(which exclude any pending
<br /> legislation which may have a retroactive effect),and assuming compliance with certain covenants,interest to be paid on the Bonds is excluded from gross income for federal income tax
<br /> purposes and 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
<br /> o-5 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
<br /> o 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
<br /> y institutions)measured by income.No opinion will be expressed by Kennedy&Graven regarding other state or federal tax consequences caused by the receipt or accrual of interest on the
<br /> ' Bonds or arising with respect to ownership of the Bonds. See"TAX EXEMPTION"and"OTHER FEDERAL TAX CONSIDERATIONS"herein.
<br /> I. City of Elk River, Minnesota
<br /> $10,000,000* $1,460,000*
<br /> Electric Revenue Bonds, Series 2016A Electric Revenue Refunding Bonds, Series 2016B
<br /> a o (the"Series 2016A Bonds") (the"Series 2016B Bonds")
<br /> y C
<br /> 'y T
<br /> N p
<br /> s (Book Entry Only)
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<br /> • • Dated Date: Date of Delivery Interest Due: Each February 1 and August 1,
<br /> • -F, commencing February 1,2017
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<br /> .-2 The Bonds(as defined herein)will mature as shown on the inside front cover of this Official Statement.
<br /> c• ° Proposals for the Bonds may contain a maturity schedule providing for a combination of serial bonds and term bonds. All term
<br /> -5 bonds shall be subject to mandatory sinking fund redemption at a price of par plus accrued interest to the date of redemption
<br /> "o:C scheduled to conform to the respective maturity schedule set forth on the following page.
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<br /> o 2 The Bonds will be special obligations of the City of Elk River,Minnesota(the"City")payable solely from net revenues of the
<br /> g t, electric system of the Elk River Municipal Utilities Commission(the"Commission")and shall not constitute a debt for which
<br /> the full faith and credit or taxing powers of the City will be pledged. The proceeds of the Series 2016A Bonds will be used to
<br /> roc finance a portion of the cost of the acquisition of the Commission's membership interest in the Minnesota Municipal Power
<br /> co).N
<br /> Agency(MMPA). The proceeds of the Series 2016B Bonds will be used to refund the February 1, 2017 through February 1,
<br /> • C w 2022 maturities of the City's Electric Revenue Bonds, Series 2007A,dated March 28,2007.
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<br /> • E o A separate proposal must be submitted for each issue subject to the minimum bid amounts shown below,plus accrued interest,
<br /> ▪ .Y 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
<br /> • of each issue must be 98.0%or greater. Following receipt of proposals,a good faith deposit for each issue will be required to
<br /> • t4 be delivered to the City by the lowest bidder as described in each "Terms of Proposal"herein. Award of the Bonds will be
<br /> • og made on the basis of True Interest Cost(TIC).
<br /> E o Minimum Bid
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<br /> The Series 2016A Bonds $9,870,000
<br /> E• - The Series 2016B Bonds $1,449,780
<br /> y5)
<br /> b The City will designate the Series 2016A Bonds as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the
<br /> Internal Revenue Code of 1986, as amended. The City will not designate the Series 2016B Bonds as "qualified tax-exempt
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<br /> o obligations"pursuant to Section 265(b)(3)of the Internal Revenue Code of 1986,as amended.
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<br /> The Bonds will be issued as fully registered bonds without coupons and,when issued,will be registered in the name of Cede&
<br /> •- 'j Co.,as nominee of The Depository Trust Company("DTC"). DTC will act as securities depository for the Bonds. Individual
<br /> • °:• i purchases may be made in book entry form only, in the principal amount of$5,000 and integral multiples thereof. Investors
<br /> .b ° will not receive physical certificates representing their interest in the Bonds purchased. (See "Book Entry System" herein.)
<br /> U.S.Bank National Association, St.Paul,Minnesota will serve as registrar(the"Registrar")for the Bonds. The Bonds will be
<br /> available for delivery at DTC on or about July 14,2016.
<br /> PROPOSALS RECEIVED: June 14,2016(Tuesday)until 10:00 A.M.,Central Time
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<br /> „ AWARD: June 14,2016(Tuesday)at 3:30 P.M., Central Time
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<br /> Further information may be obtained from SPRINGSTED Inco orated,
<br /> b S p r Cl 9 S .e Municipal Advisor to the City, 380 Jackson Street, Suite 300, Saint Paul,
<br /> F o Minnesota 55101-2887(651)223-3000.
<br /> * Preliminary;subject to change.
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