St. Louis County, MinnesotaADDENDUM DATED AUGUST 7, 2013 . TO OFFICIAL STATEMENT DATED JULY 23, 2013 . NEW ISSUE Moody's Rating: Aa2 . $20,650,000(a) St. Louis County, Minnesota

ADDENDUM DATED AUGUST 7, 2013

TO OFFICIAL STATEMENT DATED JULY 23, 2013 NEW ISSUE Moody's Rating: Aa2

$20,650,000(a)

St. Louis County, Minnesota

General Obligation Capital Improvement Bonds, Series 2013A

(Book Entry Only)

Schedule of Maturity Dates, Principal Amounts, and Interest Rates

Maturity Interest Yield CUSIP Maturity Interest Yield CUSIP

(December 1) Amount Rate or Price 791230 (December 1) Amount Rate or Price 791230

2015 $ 800,000 2.00% 0.50% PY 5 2024 $1,055,000 3.50% 3.10%(b) QH 1

2016 $ 815,000 2.00% 0.80% PZ 2 2025 $1,090,000 3.50% 3.28%(b) QJ 7

2017 $ 835,000 2.00% 1.10% QA 6 2026 $1,130,000 4.50% 3.46%(b) QK 4

2018 $ 850,000 2.00% 1.40% QB 4 2027 $1,180,000 4.25% 3.83%(b) QL 2

2019 $ 865,000 4.00% 1.75% QC 2 2028 $1,230,000 4.00% 4.00% QM 0

2020 $ 900,000 5.00% 2.18% QD 0 2029 $1,280,000 4.00% 4.10% QN 8

2021 $ 945,000 5.00% 2.50% QE 8 2030 $1,330,000 4.00% 4.16% QP 3

2022 $ 995,000 3.00% 2.85%(b) QF 5 2031 $1,385,000 4.10% 4.21% QQ 1

2023 $1,025,000 3.00% 3.00% QG 3 2033(c) $2,940,000 4.125% 4.26% QS 7

(a) Reflects final principal amount. (b) Priced to the first optional call date of December 1, 2021. (c) Term Bonds (see “Mandatory Redemption of Term Bonds” herein).

Hutchinson, Shockey, Erley & Co. has agreed to purchase the Bonds from the County for an aggregate price of $21,080,299.03, plus accrued interest, if any, to the date of delivery. It is expected that the Bonds will be available for delivery on or about September 5, 2013. THIS ADDENDUM IS INCORPORATED BY REFERENCE AS OF THE DATE HEREOF INTO THE OFFICIAL STATEMENT OF THE COUNTY DATED JULY 23, 2013, WITH RESPECT TO THE BONDS. TAKEN IN CONJUNCTION WITH SAID OFFICIAL STATEMENT, THIS ADDENDUM SHALL CONSTITUTE A “FINAL OFFICIAL STATEMENT” OF THE COUNTY WITH RESPECT TO THE BONDS AS THAT TERM IS DEFINED IN RULE 15C2-12 OF THE SECURITIES AND EXCHANGE COMMISSION.

Original Issue Discount The difference between the principal amount of the December 1, 2029 through December 1, 2031 maturities and the December 1, 2033 term bond (the “OID Bonds”) and the initial offering price to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers) constitutes original issue discount which is excluded from gross income for federal income tax purposes to the same extent as interest on the Bonds. Such original issue discount accrues actuarially on the constant yield basis over the term of each OID Bond and the basis of each OID Bond acquired at the initial offering price by an initial purchaser thereof will be increased by the amount of such accrued original issue discount. Mandatory Redemption of Term Bonds The Term Bonds maturing on December 1, 2033 (the “Term Bonds”) are subject to mandatory sinking fund redemption and shall be redeemed in part at par plus accrued interest on the mandatory dates and in the principal amounts as follows: 2033 Term Bond

Year Amount

2032 $1,440,000 2033* $1,500,000

* Final Maturity.

The principal amount of the Term Bonds may be reduced through the earlier optional redemption, with any partial optional redemptions of the Term Bonds credited against future mandatory redemption requirements for such Term Bonds in such order as the County shall determine.


TO OFFICIAL STATEMENT DATED JULY 23, 2013 NEW ISSUE Moody's Rating: Aa2

$4,640,000*


General Obligation Capital Equipment Notes, Series 2013B

(Book Entry Only)




2014 $575,000 3.00% 0.22% QT 5 2018 $685,000 2.00% 1.40% QX 6

2015 $630,000 4.00% 0.50% QU 2 2019 $695,000 5.00% 1.75% QY 4

2016 $655,000 2.00% 0.80% QV 0 2020 $730,000 5.00% 2.18% QZ 1

2017 $670,000 2.00% 1.10% QW 8

* Reflects final principal amount.

Hutchinson, Shockey, Erley & Co. has agreed to purchase the Notes from the County for an aggregate price of $5,028,345.20, plus accrued interest, if any, to the date of delivery. It is expected that the Notes will be available for delivery on or about September 5, 2013. THIS ADDENDUM IS INCORPORATED BY REFERENCE AS OF THE DATE HEREOF INTO THE OFFICIAL STATEMENT OF THE COUNTY DATED JULY 23, 2013, WITH RESPECT TO THE NOTES. TAKEN IN CONJUNCTION WITH SAID OFFICIAL STATEMENT, THIS ADDENDUM SHALL CONSTITUTE A “FINAL OFFICIAL STATEMENT” OF THE COUNTY WITH RESPECT TO THE NOTES AS THAT TERM IS DEFINED IN RULE 15C2-12 OF THE SECURITIES AND EXCHANGE COMMISSION.


TO OFFICIAL STATEMENT DATED JULY 23, 2013 REFUNDING ISSUE Moody's Rating: Aa2

$8,895,000*


General Obligation Capital Improvement Refunding Bonds, Series 2013C

(Book Entry Only)




2014 $ 900,000 3.00% 0.22% RA 5 2018 $1,545,000 2.00% 1.40% RE 7

2015 $1,395,000 4.00% 0.50% RB 3 2019 $1,590,000 5.00% 1.75% RF 4

2016 $1,460,000 2.00% 0.80% RC 1 2020 $ 505,000 5.00% 2.18% RG 2

2017 $1,500,000 2.00% 1.10% RD 9

* Reflects final principal amount.



TO OFFICIAL STATEMENT DATED JULY 23, 2013 REFUNDING ISSUE Moody's Rating: Aa2

$5,495,000(a)


General Obligation Capital Improvement Refunding Bonds, Series 2013D

(Book Entry Only)




2014 $335,000 3.00% 0.22% RH 0 2020 $455,000 5.00% 2.18% RP 2

2015 $395,000 4.00% 0.50% RJ 6 2021 $480,000 5.00% 2.50% RQ 0

2016 $415,000 2.00% 0.80% RK 3 2022 $505,000 4.00% 2.76%(b) RR 8

2017 $420,000 2.00% 1.10% RL 1 2023 $525,000 3.00% 3.00% RS 6

2018 $430,000 2.00% 1.40% RM 9 2024 $540,000 3.50% 3.10%(b) RT 4

2019 $440,000 4.00% 1.75% RN 7 2025 $555,000 3.50% 3.28%(b) RU 1

(a) Reflects final principal amount. (b) Priced to the first optional call date of December 1, 2021.


OFFICIAL STATEMENT DATED JULY 23, 2013 NEW AND REFUNDING ISSUES Ratings: Requested from Moody’s Investor Service In the opinion of Fryberger, Buchanan, Smith & Frederick, P.A., Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decisions and assuming compliance with certain covenants, the Obligations bear interest which is not includable in gross income of the recipient for federal income tax purposes or in taxable net income of individuals, trusts and estates for Minnesota income tax purposes, but such interest is includable in taxable income of corporations and financial institutions for purpose of Minnesota franchise tax; is not an item of tax preference which is included in alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum tax imposed on individuals, trusts and estates; it should be noted, however, that for purposes of computing the federal alternative minimum tax imposed on corporations, such interest is taken into account in determining adjusted current earnings. (See “Tax Exemption” herein.)


$21,355,000* General Obligation Capital Improvement

Bonds, Series 2013A (the “Series 2013A Bonds”)

$5,065,000* General Obligation Capital Equipment

Notes, Series 2013B (the “Series 2013B Notes”)

$9,565,000*

General Obligation Capital Improvement Refunding Bonds, Series 2013C

(the “Series 2013C Bonds”)

$5,920,000* General Obligation Capital Improvement

Refunding Bonds, Series 2013D (the “Series 2013D Bonds”)

(Book Entry Only)

Dated Date: Date of Delivery Interest Due: Each June 1 and December 1,

commencing June 1, 2014 The Obligations will mature as shown on the inside front cover of this Official Statement. Proposals for the Obligations 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 Obligations will be general obligations of the County for which the County pledges its full faith and credit and power to levy direct general ad valorem taxes. A separate proposal must be submitted for each Issue, along with a good faith deposit in the amounts shown below in the form of a certified or cashier's check payable to the order of the County, a wire transfer, or a Financial Surety Bond, and delivered to Springsted Incorporated prior to the time proposals will be opened. Bidders shall specify rates 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. Award of each Issue will be made on the basis of True Interest Cost (TIC).

Minimum Bid Good Faith Deposit

The Series 2013A Bonds $21,077,385 $213,550 The Series 2013B Notes 5,032,077 50,650 The Series 2013C Bonds 9,507,610 95,650 The Series 2013D Bonds 5,872,640 59,200 The County will NOT designate the Obligations as “qualified tax-exempt obligations” pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The Obligations will be issued as fully registered obligations 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 Obligations. 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 Obligations purchased. (See “Book Entry System” herein.) The County Auditor of the County will serve as registrar (the “Registrar”) for the Obligations. Obligations will be available for delivery at DTC on or about September 5, 2013. * Preliminary; subject to change.

PROPOSALS RECEIVED: August 5, 2013 (Monday) until 11:30 A.M., Central Time AWARD: August 6, 2013 (Tuesday) at 10:30 A.M., Central Time

Further information may be obtained from SPRINGSTED Incorporated, Financial Advisor to the County, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101-2887 (651) 223-3000.

St. Louis County, Minnesota $21,355,000* General Obligation Capital Improvement Bonds, Series 2013A The Series 2013A Bonds will mature each December 1 as follows: 2015 $880,000

2016 $890,000

2017 $900,000

2018 $915,000

2019 $ 935,000

2020 $ 955,000

2021 $ 980,000

2022 $1,005,000

2023 $1,040,000

2024 $1,075,000

2025 $1,110,000

2026 $1,155,000

2027 $1,200,000

2028 $1,245,000

2029 $1,300,000

2030 $1,355,000

2031 $1,410,000

2032 $1,470,000

2033 $1,535,000

The County may elect on December 1, 2021, and on any day thereafter, to prepay Series 2013A Bonds due on or after December 1, 2022 at a price of par plus accrued interest. $5,065,000* General Obligation Capital Equipment Notes, Series 2013B The Series 2013B Notes will mature each December 1 as follows: 2014 $680,000

2015 $705,000

2016 $710,000

2017 $720,000

2018 $735,000

2019 $750,000

2020 $765,000

The Series 2013B Notes will not be subject to payment in advance of their respective stated maturity dates. $9,565,000* General Obligation Capital Improvement Refunding Bonds, Series 2013C The Series 2013C Bonds will mature each December 1 as follows: 2014 $1,040,000

2015 $1,550,000

2016 $1,565,000

2017 $1,595,000

2018 $1,630,000

2019 $1,665,000

2020 $520,000

The Series 2013C Bonds will not be subject to payment in advance of their respective stated maturity dates. $5,920,000* General Obligation Capital Improvement Refunding Bonds, Series 2013D The Series 2013D Bonds will mature each December 1 as follows: 2014 $430,000

2015 $460,000

2016 $465,000

2017 $470,000

2018 $475,000

2019 $480,000

2020 $490,000

2021 $500,000

2022 $515,000

2023 $530,000

2024 $545,000

2025 $560,000

The County may elect on December 1, 2021, and on any day thereafter, to prepay Series 2013D Bonds due on or after December 1, 2022 at a price of par plus accrued interest. _____________________________ * Preliminary; subject to change.

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 Issuer from time to time (collectively, the “Official Statement”), may be treated as an Official Statement with respect to the Obligations described herein that is deemed final as of the date hereof (or of any such supplement or correction) by the Issuer, except for the omission of certain information referred to in the succeeding paragraph. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Obligations, together with any other information required by law, shall constitute a “Final Official Statement” of the Issuer with respect to the Obligations, as that term is defined in Rule 15c2-12. Any such addendum shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. By awarding the Obligations to any underwriter or underwriting syndicate submitting a Proposal therefor, the Issuer 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 Obligations are awarded copies of the Official Statement and the addendum or addenda described in the preceding paragraph in the amount specified in the Terms of Proposal(s). The Issuer designates the senior managing underwriter of the syndicate to which the Obligations are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the Obligations agrees thereby that if its bid is accepted by the Issuer (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Obligations for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. No dealer, broker, salesman or other person has been authorized by the Issuer to give any information or to make any representations with respect to the Obligations other than as contained in the 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 Issuer. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the Issuer and, while believed to be reliable, is not guaranteed as to completeness or accuracy. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR 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 ISSUER SINCE THE 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 of documents prepared by or on behalf of the Issuer have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. Any CUSIP numbers for the Obligations included in the Final Official Statement are provided for convenience of the owners and prospective investors. The CUSIP numbers for the Obligations have been assigned by an organization unaffiliated with the Issuer. The Issuer is not responsible for the selection of the CUSIP numbers and makes no representation as to the accuracy thereof as printed on the Obligations or as set forth in the Final Official Statement. No assurance can be given that the CUSIP numbers for the Obligations will remain the same after the date of issuance and delivery of the Obligations.

TABLE OF CONTENTS

Page(s) Terms of Proposal: $21,355,000 General Obligation Capital Improvement Bonds, Series 2013A ................. i-v $5,065,000 General Obligation Capital Equipment Notes, Series 2013B ....................... vi-x $9,565,000 General Obligation Capital Improvement Refunding Bonds, Series 2013C ................................................................................. xi-xv $5,920,000 General Obligation Capital Improvement Refunding Bonds, Series 2013D ................................................................................. xvi-xx

Introductory Statement ...................................................................................................... 1

Continuing Disclosure ....................................................................................................... 2

The Obligations ................................................................................................................. 2

The Series 2013A Bonds .................................................................................................. 5

The Series 2013B Notes ................................................................................................... 5

The Series 2013C Bonds .................................................................................................. 6

The Series 2013D Bonds .................................................................................................. 7

Future Financing ............................................................................................................... 8

Litigation ........................................................................................................................... 9

Legality ............................................................................................................................. 9

Tax Exemption .................................................................................................................. 9

Not Bank Qualified Tax-Exempt Obligations ..................................................................... 10

Ratings ............................................................................................................................. 10

Financial Advisor ............................................................................................................... 11

Certification ....................................................................................................................... 11

County Property Values .................................................................................................... 12

County Indebtedness ........................................................................................................ 13

County Tax Rates, Levies and Collections ........................................................................ 18

Funds on Hand ................................................................................................................. 19

County Investments .......................................................................................................... 19

General Information Concerning the County ..................................................................... 19

Area Economy .................................................................................................................. 20

Governmental Organization and Services ......................................................................... 22

Proposed Forms of Legal Opinions ......................................................................... Appendix I

Continuing Disclosure Certificates ........................................................................... Appendix II

Summary of Tax Levies, Payment Provisions, and Minnesota Real Property Valuation ...................................................................... Appendix III

Excerpt of 2012 Comprehensive Annual Financial Report ...................................... Appendix IV

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THE COUNTY HAS AUTHORIZED SPRINGSTED INCORPORATED TO NEGOTIATE THIS ISSUE ON ITS BEHALF. PROPOSALS WILL BE RECEIVED ON THE FOLLOWING BASIS:

TERMS OF PROPOSAL

$21,355,000* ST. LOUIS COUNTY, MINNESOTA

GENERAL OBLIGATION CAPITAL IMPROVEMENT BONDS, SERIES 2013A

(BOOK ENTRY ONLY) Proposals for the Series 2013A Bonds and the Good Faith Deposit (“Deposit”) will be received on Monday, August 5, 2013, until 11:30 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 2013A Bonds will be by the County Board at 10:30 A.M., Central Time, of the following day, Tuesday, August 6, 2013.

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 County to purchase the Series 2013A 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 Bids submitted to PARITY®. Each bidder shall be solely responsible for making necessary arrangements to access PARITY® for purposes of submitting its electronic Bid in a timely manner and in compliance with the requirements of the Terms of Proposal. Neither the County, 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 County, 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 County is using the services of PARITY® solely as a communication mechanism to conduct the electronic bidding for the Bonds, and PARITY® is not an agent of the County. 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, 2nd Floor, New York, New York 10018 Customer Support: (212) 849-5000

* Preliminary; subject to change.

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DETAILS OF THE SERIES 2013A BONDS The Series 2013A Bonds will be dated as of the date of delivery, as the date of original issue, and will bear interest payable on June 1 and December 1 of each year, commencing June 1, 2014. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Series 2013A Bonds will mature December 1 in the years and amounts* as follows: 2015 $880,000

2016 $890,000

2017 $900,000

2018 $915,000

2019 $ 935,000

2020 $ 955,000

2021 $ 980,000

2022 $1,005,000

2023 $1,040,000

2024 $1,075,000

2025 $1,110,000

2026 $1,155,000

2027 $1,200,000

2028 $1,245,000

2029 $1,300,000

2030 $1,355,000

2031 $1,410,000

2032 $1,470,000

2033 $1,535,000

* The County reserves the right, after proposals are opened and prior to award, to increase or reduce

the principal amount of the Series 2013A 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 2013A Bonds as that of the original proposal. Gross spread is the differential between the price paid to the County for the new issue and the prices at which the securities are initially offered to the investing public.

Proposals for the Series 2013A 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 2013A Bonds will be issued by means of a book entry system with no physical distribution of Series 2013A Bonds made to the public. The Series 2013A Bonds will be issued in fully registered form and one Series 2013A Bond, representing the aggregate principal amount of the Series 2013A 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 2013A Bonds. Individual purchases of the Series 2013A 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 2013A 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 Bonds, will be required to deposit the Series 2013A Bonds with DTC.

REGISTRAR The County Auditor of the County will serve as registrar for the Series 2013A Bonds.

OPTIONAL REDEMPTION The County may elect on December 1, 2021, and on any day thereafter, to prepay Series 2013A Bonds due on or after December 1, 2022. Redemption may be in whole or in part and if in part at the option of the County and in such manner as the County shall determine. If less than all Series 2013A Bonds of a maturity are called for redemption, the County 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

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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 2013A Bonds will be general obligations of the County for which the County will pledge its full faith and credit and power to levy direct general ad valorem taxes. The proceeds of the Series 2013A Bonds will be used to finance the cost of the renovation of a government services center.

BIDDING PARAMETERS Proposals shall be for not less than $21,077,385 plus accrued interest, if any, on the total principal amount of the Series 2013A Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the County scheduled for award of the Series 2013A Bonds is adjourned, recessed, or continued to another date without award of the Series 2013A 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 2013A Bonds of the same maturity shall bear a single rate from the date of the Series 2013A Bonds to the date of maturity. No conditional proposals will be accepted.

GOOD FAITH DEPOSIT Proposals, regardless of method of submission, shall be accompanied by a Deposit in the amount of $213,550, in the form of a certified or cashier's check, a wire transfer, or Financial Surety Bond and delivered to Springsted Incorporated prior to the time proposals will be opened. Each bidder shall be solely responsible for the timely delivery of their Deposit whether by check, wire transfer or Financial Surety Bond. Neither the County nor Springsted Incorporated have any liability for delays in the transmission of the Deposit. Any Deposit made by certified or cashier’s check should be made payable to the County and delivered to Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101. Any Deposit sent via wire transfer should be sent to Springsted Incorporated as the County’s agent according to the following instructions:

Wells Fargo Bank, N.A., San Francisco, CA 94104 ABA #121000248

for credit to Springsted Incorporated, Account #635-5007954 Ref: St. Louis County, MN Series 2013A Good Faith Deposit

Contemporaneously with such wire transfer, the bidder shall send an e-mail to [email protected], including the following information; (i) indication that a wire transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies, and (iv) the return wire instructions if such bidder is not awarded the Series 2013A Bonds. Any Deposit made by the successful bidder by check or wire transfer will be delivered to the County following the award of the Series 2013A Bonds. Any Deposit made by check or wire transfer by an unsuccessful bidder will be returned to such bidder following County action relative to an award of the Series 2013A Bonds.

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If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota and pre-approved by the County. Such bond must be submitted to Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Series 2013A Bonds are awarded to an underwriter using a Financial Surety Bond, then that underwriter is required to submit its Deposit to the County in the form of a certified or cashier’s check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the County to satisfy the Deposit requirement. The Deposit received from the purchaser, the amount of which will be deducted at settlement, will be deposited by the County and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the County.

AWARD The Series 2013A 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 County. The County's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The County 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 2013A Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the County determines to have failed to comply with the terms herein.

BOND INSURANCE AT PURCHASER'S OPTION The County has not applied for or pre-approved a commitment for any policy of municipal bond insurance with respect to the Series 2013A Bonds. If the Series 2013A 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 County specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the County. All costs associated with the issuance and administration of such policy and associated ratings and expenses (other than any independent rating requested by the County) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Bonds shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Series 2013A Bonds.

CUSIP NUMBERS If the Series 2013A Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Series 2013A Bonds, but neither the failure to print such numbers on any Series 2013A Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Series 2013A Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser.

SETTLEMENT On or about September 5, 2013, the Series 2013A 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 Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota, and of customary closing papers, including a no-litigation certificate. On the

- v -

date of settlement, payment for the Series 2013A Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the County or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Series 2013A Bonds has been made impossible by action of the County, or its agents, the purchaser shall be liable to the County for any loss suffered by the County 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 County will undertake, pursuant to the resolution awarding sale of the Series 2013A 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 2013A Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Series 2013A Bonds.

OFFICIAL STATEMENT The County has authorized the preparation of an Official Statement containing pertinent information relative to the Series 2013A Bonds, and said Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the County, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Series 2013A Bonds, together with any other information required by law, shall constitute a “Final Official Statement” of the County with respect to the Series 2013A Bonds, as that term is defined in Rule 15c2-12. By awarding the Series 2013A Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the County 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 Series 2013A Bonds are awarded up to 25 copies of the Official Statement and the addendum or addenda described above. The County designates the senior managing underwriter of the syndicate to which the Series 2013A Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Series 2013A Bonds agrees thereby that if its proposal is accepted by the County (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Series 2013A Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated July 2, 2013 BY ORDER OF THE COUNTY BOARD

/s/ Kevin Gray County Administrator

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TERMS OF PROPOSAL


GENERAL OBLIGATION CAPITAL EQUIPMENT NOTES, SERIES 2013B

(BOOK ENTRY ONLY) Proposals for the Series 2013B Notes and the Good Faith Deposit (“Deposit”) will be received on Monday, August 5, 2013, until 11:30 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 2013B Notes will be by the County Board at 10:30 A.M., Central Time, of the following day, Tuesday, August 6, 2013.

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 County to purchase the Series 2013B Notes 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 Bids submitted to PARITY®. Each bidder shall be solely responsible for making necessary arrangements to access PARITY® for purposes of submitting its electronic Bid in a timely manner and in compliance with the requirements of the Terms of Proposal. Neither the County, 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 County, 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 County is using the services of PARITY® solely as a communication mechanism to conduct the electronic bidding for the Notes, and PARITY® is not an agent of the County. 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:



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DETAILS OF THE SERIES 2013B NOTES The Series 2013B Notes will be dated as of the date of delivery, as the date of original issue, and will bear interest payable on June 1 and December 1 of each year, commencing June 1, 2014. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Series 2013B Notes will mature December 1 in the years and amounts* as follows: 2014 $680,000

2015 $705,000

2016 $710,000

2017 $720,000

2018 $735,000

2019 $750,000

2020 $765,000


the principal amount of the Series 2013B Notes 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 2013B Notes as that of the original proposal. Gross spread is the differential between the price paid to the County for the new issue and the prices at which the securities are initially offered to the investing public.

Proposals for the Series 2013B Notes 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 2013B Notes will be issued by means of a book entry system with no physical distribution of Series 2013B Notes made to the public. The Series 2013B Notes will be issued in fully registered form and one Series 2013B Note, representing the aggregate principal amount of the Series 2013B Notes 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 2013B Notes. Individual purchases of the Series 2013B Notes 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 2013B Notes. 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 2013B Notes, will be required to deposit the Series 2013B Notes with DTC.

REGISTRAR The County Auditor of the County will serve as registrar for the Series 2013B Notes.

OPTIONAL REDEMPTION The Series 2013B Notes will not be subject to payment in advance of their respective stated maturity dates.

SECURITY AND PURPOSE The Series 2013B Notes will be general obligations of the County for which the County will pledge its full faith and credit and power to levy direct general ad valorem taxes. The proceeds of the Series 2013B Notes will be used to finance the acquisition of various items of equipment.

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BIDDING PARAMETERS Proposals shall be for not less than $5,032,077 plus accrued interest, if any, on the total principal amount of the Series 2013B Notes. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the County scheduled for award of the Series 2013B Notes is adjourned, recessed, or continued to another date without award of the Series 2013B Notes 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 2013B Notes of the same maturity shall bear a single rate from the date of the Series 2013B Notes to the date of maturity. No conditional proposals will be accepted.



for credit to Springsted Incorporated, Account #635-5007954 Ref: St. Louis County, MN Series 2013B Good Faith Deposit

Contemporaneously with such wire transfer, the bidder shall send an e-mail to [email protected], including the following information; (i) indication that a wire transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies, and (iv) the return wire instructions if such bidder is not awarded the Series 2013B Notes. Any Deposit made by the successful bidder by check or wire transfer will be delivered to the County following the award of the Series 2013B Notes. Any Deposit made by check or wire transfer by an unsuccessful bidder will be returned to such bidder following County action relative to an award of the Series 2013B Notes. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota and pre-approved by the County. Such bond must be submitted to Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Series 2013B Notes are awarded to an underwriter using a Financial Surety Bond, then that underwriter is required to submit its Deposit to the County in the form of a certified or cashier’s check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the County to satisfy the Deposit requirement.

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The Deposit received from the purchaser, the amount of which will be deducted at settlement, will be deposited by the County and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the County.

AWARD

The Series 2013B Notes 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 County. The County's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The County 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 2013B Notes, (ii) reject all proposals without cause, and (iii) reject any proposal that the County determines to have failed to comply with the terms herein.

BOND INSURANCE AT PURCHASER'S OPTION The County has not applied for or pre-approved a commitment for any policy of municipal bond insurance with respect to the Series 2013B Notes. If the Series 2013B Notes 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 County specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the County. All costs associated with the issuance and administration of such policy and associated ratings and expenses (other than any independent rating requested by the County) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Series 2013B Notes shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Series 2013B Notes.

CUSIP NUMBERS

If the Series 2013B Notes qualify for assignment of CUSIP numbers such numbers will be printed on the Series 2013B Notes, but neither the failure to print such numbers on any Series 2013B Note nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Series 2013B Notes. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser.

SETTLEMENT On or about September 5, 2013, the Series 2013B Notes 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 Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota, and of customary closing papers, including a no-litigation certificate. On the date of settlement, payment for the Series 2013B Notes shall be made in federal, or equivalent, funds that shall be received at the offices of the County or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Series 2013B Notes has been made impossible by action of the County, or its agents, the purchaser shall be liable to the County for any loss suffered by the County by reason of the purchaser's non-compliance with said terms for payment.

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CONTINUING DISCLOSURE In accordance with SEC Rule 15c2-12(b)(5), the County will undertake, pursuant to the resolution awarding sale of the Series 2013B Notes, 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 2013B Notes will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Series 2013B Notes.

OFFICIAL STATEMENT The County has authorized the preparation of an Official Statement containing pertinent information relative to the Series 2013B Notes, and said Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the County, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Series 2013B Notes, together with any other information required by law, shall constitute a “Final Official Statement” of the County with respect to the Series 2013B Notes, as that term is defined in Rule 15c2-12. By awarding the Series 2013B Notes to any underwriter or underwriting syndicate submitting a proposal therefor, the County 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 Series 2013B Notes are awarded up to 25 copies of the Official Statement and the addendum or addenda described above. The County designates the senior managing underwriter of the syndicate to which the Series 2013B Notes are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Series 2013B Notes agrees thereby that if its proposal is accepted by the County (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Series 2013B Notes for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated July 2, 2013 BY ORDER OF THE COUNTY BOARD


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TERMS OF PROPOSAL


GENERAL OBLIGATION CAPITAL IMPROVEMENT REFUNDING BONDS, SERIES 2013C

(BOOK ENTRY ONLY) Proposals for the Series 2013C Bonds and the Good Faith Deposit (“Deposit”) will be received on Monday, August 5, 2013, until 11:30 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 2013C Bonds will be by the County Board at 10:30 A.M., Central Time, of the following day, Tuesday, August 6, 2013.

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 County to purchase the 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 Bids submitted to PARITY®. Each bidder shall be solely responsible for making necessary arrangements to access PARITY® for purposes of submitting its electronic Bid in a timely manner and in compliance with the requirements of the Terms of Proposal. Neither the County, 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 County, 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 County is using the services of PARITY® solely as a communication mechanism to conduct the electronic bidding for the Series 2013C Bonds, and PARITY® is not an agent of the County. 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:



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DETAILS OF THE SERIES 2013C BONDS The Series 2013C Bonds will be dated as of the date of delivery, as the date of original issue, and will bear interest payable on June 1 and December 1 of each year, commencing June 1, 2014. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Series 2013C Bonds will mature December 1 in the years and amounts* as follows: 2014 $1,040,000

2015 $1,550,000

2016 $1,565,000

2017 $1,595,000

2018 $1,630,000

2019 $1,665,000

2020 $520,000


the principal amount of the Series 2013C 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 2013C Bonds as that of the original proposal. Gross spread is the differential between the price paid to the County for the new issue and the prices at which the securities are initially offered to the investing public.

Proposals for the Series 2013C 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 2013C Bonds will be issued by means of a book entry system with no physical distribution of Series 2013C Bonds made to the public. The Series 2013C Bonds will be issued in fully registered form and one Series 2013C Bond, representing the aggregate principal amount of the Series 2013C 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 2013C Bonds. Individual purchases of the Series 2013C 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 2013C 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 2013C Bonds, will be required to deposit the Bonds with DTC.

REGISTRAR The County Auditor of the County will serve as registrar for the Series 2013C Bonds.

OPTIONAL REDEMPTION The Series 2013C Bonds will not be subject to payment in advance of their respective stated maturity dates.

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SECURITY AND PURPOSE The Series 2013C Bonds will be general obligations of the County for which the County will pledge its full faith and credit and power to levy direct general ad valorem taxes. The proceeds of the Series 2013C Bonds will be used to refund in advance of maturity (i) the December 1, 2014 through December 1, 2019 maturities of the County’s General Obligation Capital Improvement Bonds, Series 2004A, dated October 1, 2004; and (ii) the December 1, 2015 through December 1, 2020 maturities of the County’s General Obligation Capital Improvement Bonds, Series 2005A, dated November 22, 2005.

BIDDING PARAMETERS Proposals shall be for not less than $9,507,610 plus accrued interest, if any, on the total principal amount of the Series 2013C Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the County scheduled for award of the Series 2013C Bonds is adjourned, recessed, or continued to another date without award of the Series 2013C 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 2013C Bonds of the same maturity shall bear a single rate from the date of the Series 2013C Bonds to the date of maturity. No conditional proposals will be accepted.



for credit to Springsted Incorporated, Account #635-5007954 Ref: St. Louis County, MN Series 2013C Good Faith Deposit

Contemporaneously with such wire transfer, the bidder shall send an e-mail to [email protected], including the following information; (i) indication that a wire transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies, and (iv) the return wire instructions if such bidder is not awarded the Series 2013C Bonds. Any Deposit made by the successful bidder by check or wire transfer will be delivered to the County following the award of the Series 2013C Bonds. Any Deposit made by check or wire transfer by an unsuccessful bidder will be returned to such bidder following County action relative to an award of the Series 2013C Bonds.

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If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota and pre-approved by the County. Such bond must be submitted to Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Series 2013C Bonds are awarded to an underwriter using a Financial Surety Bond, then that underwriter is required to submit its Deposit to the County in the form of a certified or cashier’s check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the County to satisfy the Deposit requirement. The Deposit received from the purchaser, the amount of which will be deducted at settlement, will be deposited by the County and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the County.

AWARD

The Series 2013C 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 County. The County's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The County 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 2013C Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the County determines to have failed to comply with the terms herein.

BOND INSURANCE AT PURCHASER'S OPTION The County has not applied for or pre-approved a commitment for any policy of municipal bond insurance with respect to the Series 2013C Bonds. If the Series 2013C 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 County specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the County. All costs associated with the issuance and administration of such policy and associated ratings and expenses (other than any independent rating requested by the County) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Series 2013C Bonds shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Series 2013C Bonds.

CUSIP NUMBERS

If the Series 2013C Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Series 2013C Bonds, but neither the failure to print such numbers on any Series 2013C Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Series 2013C Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser.

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SETTLEMENT On or about September 5, 2013, the Series 2013C 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 Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota, and of customary closing papers, including a no-litigation certificate. On the date of settlement, payment for the Series 2013C Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the County or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Series 2013C Bonds has been made impossible by action of the County, or its agents, the purchaser shall be liable to the County for any loss suffered by the County 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 County will undertake, pursuant to the resolution awarding sale of the Series 2013C 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 2013C Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Series 2013C Bonds.

OFFICIAL STATEMENT The County has authorized the preparation of an Official Statement containing pertinent information relative to the Series 2013C Bonds, and said Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the County, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Series 2013C Bonds, together with any other information required by law, shall constitute a “Final Official Statement” of the County with respect to the Series 2013C Bonds, as that term is defined in Rule 15c2-12. By awarding the Series 2013C Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the County 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 Series 2013C Bonds are awarded up to 25 copies of the Official Statement and the addendum or addenda described above. The County designates the senior managing underwriter of the syndicate to which the Series 2013C Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Series 2013C Bonds agrees thereby that if its proposal is accepted by the County (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Series 2013C Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated July 2, 2013 BY ORDER OF THE COUNTY BOARD


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TERMS OF PROPOSAL


GENERAL OBLIGATION CAPITAL IMPROVEMENT REFUNDING BONDS, SERIES 2013D

(BOOK ENTRY ONLY) Proposals for the Series 2013D Bonds and the Good Faith Deposit (“Deposit”) will be received on Monday, August 5, 2013, until 11:30 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 2013D Bonds will be by the County Board at 10:30 A.M., Central Time, of the following day, Tuesday, August 6, 2013.

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 County to purchase the Series 2013D 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 Bids submitted to PARITY®. Each bidder shall be solely responsible for making necessary arrangements to access PARITY® for purposes of submitting its electronic Bid in a timely manner and in compliance with the requirements of the Terms of Proposal. Neither the County, 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 County, 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 County is using the services of PARITY® solely as a communication mechanism to conduct the electronic bidding for the Series 2013D Bonds, and PARITY® is not an agent of the County. 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:



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DETAILS OF THE SERIES 2013D BONDS The Series 2013D Bonds will be dated as of the date of delivery, as the date of original issue, and will bear interest payable on June 1 and December 1 of each year, commencing June 1, 2014. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Series 2013D Bonds will mature December 1 in the years and amounts* as follows: 2014 $430,000

2015 $460,000

2016 $465,000

2017 $470,000

2018 $475,000

2019 $480,000

2020 $490,000

2021 $500,000

2022 $515,000

2023 $530,000

2024 $545,000

2025 $560,000 * The County reserves the right, after proposals are opened and prior to award, to increase or reduce

the principal amount of the Series 2013D 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 2013D Bonds as that of the original proposal. Gross spread is the differential between the price paid to the County for the new issue and the prices at which the securities are initially offered to the investing public.

Proposals for the Series 2013D 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 2013D Bonds will be issued by means of a book entry system with no physical distribution of Series 2013D Bonds made to the public. The Series 2013D Bonds will be issued in fully registered form and one Series 2013D Bond, representing the aggregate principal amount of the Series 2013D 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 2013D Bonds. Individual purchases of the Series 2013D 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 2013D 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 2013D Bonds, will be required to deposit the Bo Series 2013D Bonds with DTC.

REGISTRAR The County Auditor of the County will serve as registrar for the Series 2013D Bonds.

OPTIONAL REDEMPTION The County may elect on December 1, 2021, and on any day thereafter, to prepay Series 2013D Bonds due on or after December 1, 2022. Redemption may be in whole or in part and if in part at the option of the County and in such manner as the County shall determine. If less than all Series 2013D Bonds of a maturity are called for redemption, the County 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.

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SECURITY AND PURPOSE The Series 2013D Bonds will be general obligations of the County for which the County will pledge its full faith and credit and power to levy direct general ad valorem taxes. The proceeds of the Series 2013D Bonds will be used to refund in advance of maturity the December 1, 2014 through December 1, 2025 maturities of the County’s Taxable General Obligation Capital Improvement Bonds, Series 2010A (Build America Bonds – Direct Pay), dated December 9, 2010.

BIDDING PARAMETERS Proposals shall be for not less than $5,872,640 plus accrued interest, if any, on the total principal amount of the Series 2013D Bonds. No proposal can be withdrawn or amended after the time set for receiving proposals unless the meeting of the County scheduled for award of the Series 2013D Bonds is adjourned, recessed, or continued to another date without award of the Series 2013D 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. Bonds of the same maturity shall bear a single rate from the date of the Series 2013D Bonds to the date of maturity. No conditional proposals will be accepted.



for credit to Springsted Incorporated, Account #635-5007954 Ref: St. Louis County, MN Series 2013D Good Faith Deposit

Contemporaneously with such wire transfer, the bidder shall send an e-mail to [email protected], including the following information; (i) indication that a wire transfer has been made, (ii) the amount of the wire transfer, (iii) the issue to which it applies, and (iv) the return wire instructions if such bidder is not awarded the Series 2013D Bonds. Any Deposit made by the successful bidder by check or wire transfer will be delivered to the County following the award of the Series 2013D Bonds. Any Deposit made by check or wire transfer by an unsuccessful bidder will be returned to such bidder following County action relative to an award of the Series 2013D Bonds.

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If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Minnesota and pre-approved by the County. Such bond must be submitted to Springsted Incorporated prior to the opening of the proposals. The Financial Surety Bond must identify each underwriter whose Deposit is guaranteed by such Financial Surety Bond. If the Series 2013D Bonds are awarded to an underwriter using a Financial Surety Bond, then that underwriter is required to submit its Deposit to the County in the form of a certified or cashier’s check or wire transfer as instructed by Springsted Incorporated not later than 3:30 P.M., Central Time on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the County to satisfy the Deposit requirement. The Deposit received from the purchaser, the amount of which will be deducted at settlement, will be deposited by the County and no interest will accrue to the purchaser. In the event the purchaser fails to comply with the accepted proposal, said amount will be retained by the County.

AWARD The Series 2013D 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 County. The County's computation of the interest rate of each proposal, in accordance with customary practice, will be controlling. The County 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 2013D Bonds, (ii) reject all proposals without cause, and (iii) reject any proposal that the County determines to have failed to comply with the terms herein.

BOND INSURANCE AT PURCHASER'S OPTION The County has not applied for or pre-approved a commitment for any policy of municipal bond insurance with respect to the Series 2013D Bonds. If the Series 2013D 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 County specifically reserves the right to reject any bid specifying municipal bond insurance, even though such bid may result in the lowest TIC to the County. All costs associated with the issuance and administration of such policy and associated ratings and expenses (other than any independent rating requested by the County) shall be paid by the successful bidder. Failure of the municipal bond insurer to issue the policy after the award of the Series 2013D Bonds shall not constitute cause for failure or refusal by the successful bidder to accept delivery of the Series 2013D Bonds.

CUSIP NUMBERS If the Series 2013D Bonds qualify for assignment of CUSIP numbers such numbers will be printed on the Series 2013D Bonds, but neither the failure to print such numbers on any Series 2013D Bond nor any error with respect thereto will constitute cause for failure or refusal by the purchaser to accept delivery of the Series 2013D Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the purchaser.

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SETTLEMENT On or about September 5, 2013, the Series 2013D 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 Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota, and of customary closing papers, including a no-litigation certificate. On the date of settlement, payment for the Series 2013D Bonds shall be made in federal, or equivalent, funds that shall be received at the offices of the County or its designee not later than 12:00 Noon, Central Time. Unless compliance with the terms of payment for the Series 2013D Bonds has been made impossible by action of the County, or its agents, the purchaser shall be liable to the County for any loss suffered by the County 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 County will undertake, pursuant to the resolution awarding sale of the Series 2013D 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 2013D Bonds will be conditioned upon receiving evidence of this undertaking at or prior to delivery of the Series 2013D Bonds.

OFFICIAL STATEMENT The County has authorized the preparation of an Official Statement containing pertinent information relative to the Series 2013D Bonds, and said Official Statement will serve as a nearly final Official Statement within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. For copies of the Official Statement or for any additional information prior to sale, any prospective purchaser is referred to the Financial Advisor to the County, Springsted Incorporated, 380 Jackson Street, Suite 300, Saint Paul, Minnesota 55101, telephone (651) 223-3000. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Series 2013D Bonds, together with any other information required by law, shall constitute a “Final Official Statement” of the County with respect to the Series 2013D Bonds, as that term is defined in Rule 15c2-12. By awarding the Series 2013D Bonds to any underwriter or underwriting syndicate submitting a proposal therefor, the County 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 Series 2013D Bonds are awarded up to 25 copies of the Official Statement and the addendum or addenda described above. The County designates the senior managing underwriter of the syndicate to which the Series 2013D Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter delivering a proposal with respect to the Series 2013D Bonds agrees thereby that if its proposal is accepted by the County (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Series 2013D Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. Dated July 2, 2013 BY ORDER OF THE COUNTY BOARD


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OFFICIAL STATEMENT

ST. LOUIS COUNTY, MINNESOTA

$21,355,000* GENERAL OBLIGATION CAPITAL IMPROVEMENT BONDS, SERIES 2013A

$5,065,000*

GENERAL OBLIGATION CAPITAL EQUIPMENT NOTES, SERIES 2013B

$9,565,000* GENERAL OBLIGATION CAPITAL IMPROVEMENT REFUNDING BONDS, SERIES 2013C

$5,920,000*

GENERAL OBLIGATION CAPITAL IMPROVEMENT REFUNDING BONDS, SERIES 2013D

(BOOK ENTRY ONLY)

INTRODUCTORY STATEMENT This Official Statement contains certain information regarding St. Louis County, Minnesota (the “County” or the “Issuer”) and its issuance of $21,355,000* General Obligation Capital Improvement Bonds, Series 2013A (the “Series 2013A Bonds”); $5,065,000* General Obligation Capital Equipment Notes, Series 2013B (the “Series 2013B Notes”); $9,565,000* General Obligation Capital Improvement Refunding Bonds, Series 2013C (the “Series 2013C Bonds”); and $5,920,000* General Obligation Capital Improvement Refunding Bonds, Series 2013D (the “Series 2013D Bonds”), collectively referred to as the “Obligations” or the “Issues”. The Obligations will be general obligations of the County for which the County pledges its full faith and credit and power to levy direct general ad valorem taxes. Inquiries may be directed to Mr. Donald Dicklich, County Auditor, St. Louis County Courthouse, 100 North Fifth Avenue West, Room 202, Duluth, Minnesota 55802-1293, or by telephoning (218) 726-2000. Information may also be obtained from Springsted Incorporated, 380 Jackson Street, Suite 300, St. Paul, Minnesota 55101-2887, or by telephoning (651) 223-3000. If information of a specific legal nature is desired, requests may be directed to Mr. Robert Toftey, Fryberger, Buchanan, Smith & Frederick, P.A., of Duluth, Minnesota, Bond Counsel (218) 722-0861.

* The County reserves the right, after proposals are opened and prior to award, to increase or reduce the principal amount of the Obligations 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 Obligations as that of the original proposal. Gross spread is the differential between the price paid to the County for the new issue and the prices at which the securities are initially offered to the investing public.

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CONTINUING DISCLOSURE In order to permit bidders for the Obligations to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the “Rule”), the County will covenant and agree, for the benefit of the holders from time to time of the outstanding Obligations, to provide annual reports and to provide notice of the occurrence of certain material events. The specific provisions of the undertaking are set forth in the Continuing Disclosure Certificates (the “Disclosure Certificates”) as set forth in Appendix II of this Official Statement. The Disclosure Certificates will be executed and delivered by the County at the time the Obligations are delivered. Failure of the County to enter into an undertaking substantially similar to that described in the Official Statement would relieve the successful bidder of its obligation to purchase the Obligations. The County has not failed to comply within the past five years with any of its prior undertakings made pursuant to the Rule.

THE OBLIGATIONS General Description The Obligations will be dated as of the date of delivery and will mature annually on December 1, as set forth on the inside front cover of this Official Statement. The Obligations will be issued in book entry form. Interest on the Obligations is payable on June 1 and December 1 of each year, commencing June 1, 2014. Interest will be payable to the holder (initially Cede & Co.) registered on the books of the Registrar on the fifteenth day of the calendar month next preceding such interest payment date. Principal and interest on the Obligations will be paid as described herein entitled “Book Entry System.” The County Auditor of the County will serve as Registrar for the Obligations. Optional Redemption The County may elect on December 1, 2021, and on any day thereafter, to prepay Series 2013A Bonds and/or Series 2013D Bonds due on or after December 1, 2022. Redemption may be in whole or in part and if in part at the option of the County and in such manner as the County shall determine. If less than all Series 2013A Bonds and/or Series 2013D Bonds of a maturity are called for redemption, the County 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. Thirty days’ written notice of redemption shall be given to the registered owner(s) of the Series 2013A Bonds and the Series 2013D Bonds. Failure to give such notice by mail to any registered owner of the Series 2013A Bonds and the Series 2013D Bonds or any defect therein shall not affect the validity of any proceedings for the redemption of the Series 2013A Bonds and the Series 2013D Bonds. All Series 2013A Bonds and Series 2013D 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. The Series 2013B Notes and the Series 2013C Bonds will not be subject to payment in advance of their respective stated maturity dates.

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Book Entry System The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Obligations. The Obligations 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 Obligations, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for securities that its 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 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 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”). 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 Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the Obligations on DTC’s records. The ownership interest of each actual purchaser of each Obligation (“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 Obligations 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 Obligations, except in the event that use of the book-entry system for the Obligations is discontinued. To facilitate subsequent transfers, all Obligations 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 Obligations 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 Obligations; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Obligations 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 Obligations

http://www.dtcc.com/

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may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of the Obligations may wish to ascertain that the nominee holding the Obligations 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 the notices be provided directly to them. Redemption notices are required to be sent to DTC. If less than all of the Obligations 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. Neither DTC nor Cede & Co. (nor any such other DTC nominee) will consent or vote with respect to the Obligations unless authorized by a Direct Participant in accordance with DTC’s procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer or Bond Registrar 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 Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Obligations 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 Issuer 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, Agent, the Bond Registrar, or the Issuer, 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 Bond Registrar, Issuer, or the Issuer's 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. A Beneficial Owner shall give notice to elect to have its Obligations purchased or tendered, through its Participant, to Agent, and shall effect delivery of such Obligations by causing the Direct Participant to transfer the Participant’s interest in the Obligations, on DTC’s records, to Agent. The requirement for physical delivery of Obligations in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Obligations are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Obligations to Trustee’s DTC account. DTC may discontinue providing its services as securities depository with respect to the Obligations at any time by giving reasonable notice to the Issuer or its agent. Under such circumstances, in the event that a successor securities depository is not obtained, certificates are required to be printed and delivered. The Issuer 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 Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof.

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THE SERIES 2013A BONDS Authority and Purpose The Series 2013A Bonds are being issued pursuant to Minnesota Statutes, Chapter 475 and Section 373.40. The proceeds of the Series 2013A Bonds will be used to finance the cost of the renovation of a government services center. The composition of the Series 2013A Bonds is as follows: Sources of Funds: Principal Amount $21,355,000 Total Sources of Funds $21,355,000 Uses of Funds: Project Costs $21,000,000 Costs of Issuance 77,385 Allowance for Discount Bidding 277,615 Total Uses of Funds $21,355,000 Security and Financing The Series 2013A Bonds are general obligations of the County for which the County pledges its full faith and credit and power to levy direct general ad valorem taxes. The County will make its first levy for the Series 2013A Bonds in 2013 for collection in 2014. Each year’s tax collections, if collected in full, will be sufficient to pay 105% of the interest due on June 1 and the principal and interest due on December 1 of each year. Minnesota Statutes, Section 373.40, limits the maximum amount of principal and interest to become due in any year on all outstanding capital improvement plan bonds to not more than 0.12% of the taxable market value of property in the County for taxes payable in the year in which the bonds are issued or sold. The statutory maximum allowable for annual debt service on the County’s capital improvement plan bonds is $17,183,766, based on the County’s 2012/13 taxable market value of $14,319,805,000. The combined maximum annual debt service for the County’s outstanding capital improvement plan bonds (including the Series 2013A Bonds, Series 2013C Bonds, and Series 2013D Bonds and excluding the Refunded Maturities (as defined herein)) is projected at approximately $6,204,458, which is within the statutory limit.

THE SERIES 2013B NOTES Authority and Purpose The Series 2013B Notes are being issued pursuant to Minnesota Statutes, Chapter 475 and Section 373.01. The proceeds of the Series 2013B Notes will be used to finance the acquisition of various items of equipment.

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The composition of the Series 2013B Notes is as follows: Sources of Funds: Principal Amount $5,065,000 Total Sources of Funds $5,065,000 Uses of Funds: Project Costs $5,000,000 Costs of Issuance 32,077 Allowance for Discount Bidding 32,923 Total Uses of Funds $5,065,000 Security and Financing The Series 2013B Notes are general obligations of the County for which the County pledges its full faith and credit and power to levy direct general ad valorem taxes. The County will make its first levy for the Series 2013B Notes in 2013 for collection in 2014. Each year’s tax collections, if collected in full, will be sufficient to pay 105% of the interest due on June 1 and the principal and interest due on December 1 of each year.

THE SERIES 2013C BONDS Authority and Purpose The Series 2013C Bonds are being issued pursuant to Minnesota Statutes, Chapter 475 and Section 373.40. The proceeds of the Series 2013C Bonds will be used to refund in advance of maturity (i) the December 1, 2014 through December 1, 2019 maturities (the “Series 2004A Refunded Maturities”) of the County’s General Obligation Capital Improvement Bonds, Series 2004A, dated October 1, 2004 (the “Series 2004A Bonds”) (the “Current Refunding Portion”); and (ii) the December 1, 2015 through December 1, 2020 maturities (the “Series 2005A Refunded Maturities”) of the County’s General Obligation Capital Improvement Bonds, Series 2005A, dated November 22, 2005 (the “Series 2005A Bonds”) (the “Crossover Refunding Portion”). The composition of the Series 2013C Bonds is as follows: Current Crossover Refunding Refunding Portion Portion Total Sources of Funds:

Principal Amount $6,595,000 $2,970,000 $9,565,000

Total Sources of Funds $6,595,000 $2,970,000 $9,565,000

Uses of Funds: Deposit to Current Refunding Fund $6,505,000 - 0 - $6,505,000 Deposit to Escrow Fund - 0 - $2,931,788 2,931,788 Costs of Issuance 50,430 20,392 70,822 Allowance for Discount Bidding 39,570 17,820 57,390

Total Uses of Funds $6,595,000 $2,970,000 $9,565,000

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The Current Refunding Portion of the Series 2013C Bonds is being conducted to achieve debt service savings. The Series 2004A Refunded Maturities will be called and prepaid on December 1, 2013 at a price of par plus accrued interest. The Crossover Refunding Portion of the Series 2013C Bonds is also being conducted to achieve debt services savings. Proceeds of the Crossover Refunding Portion of the Series 2013C Bonds will be placed in an escrow account with U.S. Bank, National Association, St. Paul, Minnesota. The amount in the escrow account 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 (i) pay the interest on the Crossover Refunding Portion of the Series 2013C Bonds through the call date of the Series 2005A Bonds, which is December 1, 2014; and (ii) redeem the Series 2005A Refunded Maturities on the call date of December 1, 2014 at a price of par plus accrued interest. Verification services necessary to ensure 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. Security and Financing The Series 2013C Bonds are general obligations of the County for which the County pledges its full faith and credit and power to levy direct general ad valorem taxes. The County will make its first levy for the Current Refunding Portion of the Series 2013C Bonds in 2013 for collection in 2014. Each year’s tax collections, if collected in full, will be sufficient to pay 105% of the interest due on June 1 and the principal and interest due on December 1 of each year. The County will make its first levy for the Crossover Refunding Portion of the Series 2013C Bonds in 2014 for collection in 2015. The escrow account established with the proceeds of the Crossover Refunding Portion of the Series 2013C Bonds will make the interest payments due on the Crossover Refunding Portion of the Series 2013C Bonds through December 1, 2014. Thereafter, each year’s tax collections, if collected in full, will be sufficient to pay 105% of the interest due on June 1 and the principal and interest due on December 1 of each year. Minnesota Statutes, Section 373.40, limits the maximum amount of principal and interest to become due in any year on all outstanding capital improvement plan bonds to not more than 0.12% of the taxable market value of property in the County for taxes payable in the year in which the bonds are issued or sold. The statutory maximum allowable for annual debt service on the County’s capital improvement plan bonds is $17,183,766, based on the County’s 2012/13 taxable market value of $14,319,805,000. The combined maximum annual debt service for the County’s outstanding capital improvement plan bonds (including the Series 2013A Bonds, Series 2013C Bonds, and Series 2013D Bonds and excluding the Refunded Maturities (as defined herein)) is projected at approximately $6,204,458, which is within the statutory limit.

THE SERIES 2013D BONDS Authority and Purpose The Series 2013D Bonds are being issued pursuant to Minnesota Statutes, Chapter 475 and Section 373.40. The proceeds of the Series 2013D Bonds, along with available County funds, will be used to refund in advance of maturity the December 1, 2013 through December 1, 2025 maturities (the “Series 2010A Refunded Maturities”) of the County’s Taxable General Obligation Capital Improvement Bonds, Series 2010A (Build America Bonds – Direct Pay), dated December 9, 2010 (the “Series 2010A Bonds”).

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The Series 2004A Refunded Maturities, the Series 2005A Refunded Maturities, and the Series 2010A Refunded Maturities are collectively referred to herein as the “Refunded Maturities.” The composition of the Series 2013D Bonds is as follows: Sources of Funds: Principal Amount $5,920,000 Transfer of Prior Issue Debt Service Funds 529,098 Total Sources of Funds $6,449,098 Uses of Funds: Deposit to Current Refunding Fund $6,348,773 Costs of Issuance 52,965 Allowance for Discount Bidding 47,360 Total Uses of Funds $6,449,098 The Series 2013D Bonds have been structured as a current refunding. The Series 2010A Refunded Maturities will be called and prepaid on October 15, 2013 at a price of par plus accrued interest. Security and Financing The Series 2013D Bonds are general obligations of the County for which the County pledges its full faith and credit and power to levy direct general ad valorem taxes. The County will make its first levy for the Series 2013D Bonds in 2013 for collection in 2014. Each year’s tax collections, if collected in full, will be sufficient to pay 105% of the interest due on June 1 and the principal and interest due on December 1 of each year. Minnesota Statutes, Section 373.40, limits the maximum amount of principal and interest to become due in any year on all outstanding capital improvement plan bonds to not more than 0.12% of the taxable market value of property in the County for taxes payable in the year in which the bonds are issued or sold. The statutory maximum allowable for annual debt service on the County’s capital improvement plan bonds is $17,183,766, based on the County’s 2012/13 taxable market value of $14,319,805,000. The combined maximum annual debt service for the County’s outstanding capital improvement plan bonds (including the Series 2013A Bonds, Series 2013C Bonds, and Series 2013D Bonds and excluding the Refunded Maturities (as defined herein)) is projected at approximately $6,204,458, which is within the statutory limit.

FUTURE FINANCING The County anticipates issuing general obligation capital improvement bonds in the last quarter of 2013.

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LITIGATION The County is not aware of any threatened or pending litigation affecting the validity of the Obligations or the County's ability to meet its financial obligations.

LEGALITY The Obligations are subject to approval as to certain matters by Fryberger, Buchanan, Smith & Frederick, Professional Association, of Duluth, Minnesota, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement except for guidance concerning the following “TAX EXEMPTION” section 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 as Appendix I to this Official Statement will be delivered at closing.

TAX EXEMPTION In the opinion of Fryberger, Buchanan, Smith and Frederick, P.A., as Bond Counsel, under federal and Minnesota laws, regulations, rulings, and decisions in effect on the date of issuance of the Obligations, interest on the Obligations is not includable in gross income for federal income tax purposes, or in taxable net income of individuals, trusts and estates for Minnesota income tax purposes but is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax. Certain provisions of the Internal Revenue Code of 1986, as amended (the "Code"), however, impose continuing requirements that must be met after the issuance of the Obligations in order for interest thereon to be and remain not includable in federal gross income and in Minnesota taxable net income. Noncompliance with such requirements by the County may cause the interest on the Obligations to be includable in federal gross income and in Minnesota taxable net income, retroactive to the date of issuance of the Obligations, irrespective in some cases of the date on which such noncompliance occurs or is ascertained. No provision has been made for redemption of or for an increase in the interest rate on the Obligations in the event that interest on the Obligations becomes includable in federal gross income or Minnesota taxable net income. Interest on the Obligations is not an item of tax preference includable in alternative minimum taxable income for purposes of the federal alternative minimum tax imposed by Section 55 of the Code on corporations and individuals or the Minnesota alternative minimum tax applicable to individuals, estates and trusts. However, interest on the Obligations is includable in adjusted current earnings in determining the alternative minimum taxable income of corporations for purposes of the federal alternative minimum tax and the environmental tax imposed by Section 59A of the Code. Interest on the Obligations may be includable in income of foreign corporations for purposes of the branch profits tax imposed by Section 884 of the Code and is includable in the net investment income of foreign insurance companies for purposes of Section 842(b) of the Code. In the case of an insurance company subject to the tax imposed by Section 831 of the Code, the amount which otherwise would be taken into account as losses incurred under Section 832(b)(5) of that Code must be reduced by an amount equal to fifteen percent of the interest on the Obligations that is received or accrued during the taxable year. Section 86 of that Code requires recipients of certain Social Security and railroad retirement benefits to take into account interest on the Obligations in determining the taxability of such

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benefits. Passive investment income, including interest on the Obligations, may be subject to federal income taxation under Section 1375 of the Code for a Subchapter S corporation that has Subchapter C earnings and profits at the close of the taxable year if more than twenty-five percent of its gross receipts is passive investment income. Section 265 of the Code denies a deduction for the interest on indebtedness incurred or continued to purchase or carry the Obligations, or in the case of a financial institution, that portion of the bond owner’s interest expense allocated to the Bonds, and Minnesota law similarly denies a deduction for such interest in the case of individuals, estates and trusts. Indebtedness may be allocated to the Obligations for this purpose even though not directly traceable to the purpose of the Obligations. Federal laws also restrict the deductibility of other expenses allocable to the Obligations. The foregoing is not intended to be an exhaustive discussion of collateral tax consequences arising from receipt of interest on the Obligations. Prospective purchasers should consult their tax advisors with respect to collateral tax consequences, including without limitation the calculations of alternative minimum tax, environmental tax or foreign branch profits tax liability or the inclusion of Social Security or other retirement payments in taxable income. From time to time, legislative proposals are introduced in Congress which, if enacted, could alter one or more of the federal tax matters referred to above or would adversely affect the market value of the Obligations. It cannot be predicted whether or in what form any of the proposals may be enacted and whether, if enacted, such proposals will apply to obligations (such as the Obligations) issued prior to enactment.

NOT BANK QUALIFIED TAX-EXEMPT OBLIGATIONS The County will NOT designate the Obligations as “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended, relating to the ability of financial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations.

RATINGS Application for ratings of the Obligations has been made to Moody’s Investors Service (“Moody’s”), 7 World Trade Center, 250 Greenwich Street, 23rd Floor, New York, New York. If ratings are assigned, they will reflect only the opinion of Moody’s. Any explanation of the significance of the ratings may be obtained only from Moody’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 or withdrawn, if in the judgment of Moody’s, circumstances so warrant. A revision or withdrawal of the ratings may have an adverse effect on the market price of the Obligations.

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FINANCIAL ADVISOR The County has retained Springsted Incorporated, Public Sector Advisors, of St. Paul, Minnesota, as financial advisor (the “Financial Advisor”) in connection with the issuance of the Obligations. In preparing the Official Statement, the Financial Advisor has relied upon governmental officials and other sources, who have access to relevant data to provide accurate information for the Official Statement, and the Financial Advisor has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. The Financial Advisor is not a public accounting firm and has not been engaged by the County to compile, review, examine or audit any information in the Official Statement in accordance with accounting standards. The Financial Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities and therefore will not participate in the underwriting of the Obligations.

CERTIFICATION The County has authorized the distribution of this Official Statement for use in connection with the initial sale of the Obligations. As of the date of the settlement of the Obligations, the Purchaser(s) will be furnished with a certificate signed by the appropriate officers of the County. The certificate will state that the Official Statement did not and does not, as of the date of the certificate, 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.

(The Balance of This Page Has Been Intentionally Left Blank)

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COUNTY PROPERTY VALUES 2012/13 Indicated Market Value of Taxable Property: $14,916,463,542* * Indicated market value is calculated by dividing the County’s taxable market value of

$14,319,805,000 by the 2011 sales ratio of 96.0% for the County as determined by the State Department of Revenue. (2012 sales ratios are not yet available.)

2012/13 Taxable Net Tax Capacity by Class of Property: $164,022,955

Real Estate: Residential Homestead $ 70,918,143 43.2% Commercial/Industrial, Public Utility and Railroad 34,381,729 20.9 Residential Non-Homestead 21,123,597 12.9 Residential Seasonal/Recreational and Other 18,231,599 11.1 Agricultural 11,427,969 7.0 Personal Property 8,070,660 4.9

2012/13 Net Tax Capacity $164,153,697 100.0%

Less: Captured Tax Increment Tax Capacity (2,375,753 ) Transmission Lines (30,051 ) Contribution to Fiscal Disparities (2,949,108 ) Plus: Distribution from Fiscal Disparities 5,224,170

2012/13 Taxable Net Tax Capacity $164,022,955

Trend of Values Indicated Taxable Taxable Net Market Value(a) Market Value Tax Capacity(b)

2012/13 $14,916,463,542 $14,319,805,000(c) $164,022,955 2011/12 15,175,560,822 14,568,538,389 164,265,509 2010/11 16,880,660,314 16,121,030,600 178,794,052 2009/10 17,816,331,065 16,230,677,600 179,368,287 2008/09 18,397,066,978 15,766,286,400 169,819,527

(a) Indicated market values are calculated by dividing the County’s taxable market value by the sales

ratio certified each year for the County as determined by the State Department of Revenue. (b) See Appendix III for an explanation of taxable net tax capacity and the Minnesota property tax system. (c) The taxable market value reflects a decrease of $1,290,390,700 due to the Market Value Homestead

Exclusion program implemented by the State of Minnesota in 2011. See Appendix III.

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Ten of the Largest Taxpayers in the County

2012/13 Net Taxpayer Type of Business/Service Tax Capacity Minnesota Power Utility $ 7,152,009 Wisconsin Central LTD Railroad 2,680,665 Enbridge Energy LP Utility 2,230,087 Potlatch Corp. Wood Products 800,837 Duluth Clinic Medical Services 701,496 American Transmission Co. LLC Utility 695,848 Cliffs Mining Services Industrial 661,010 IRET Properties Apartments 621,586 Miller Hill Mall Shopping Mall 617,098 Burlington Northern Santa Fe Railroad Railroad 597,353 Total $16,757,989* * Represents 10.2% of the County’s 2012/13 taxable net tax capacity.

COUNTY INDEBTEDNESS Legal Debt Limit and Margin*

Legal Debt Limit (3% of Taxable Market Value) $429,594,150 Less: Outstanding Debt Subject to Limit (Including the Obligations and Excluding the Refunded Maturities) (58,140,000)

Legal Debt Margin as of September 5, 2013 $371,454,150

* The legal debt margin is referred to statutorily as the “Net Debt Limit” and permits debt to be offset by

debt service funds and current revenues which are applicable to the payment of debt in the current fiscal year. To conservatively state the legal debt margin, no such offset has been used to increase the margin as shown above.

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General Obligation Debt Supported by Taxes(a) Est. Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 9-5-13

10-1-04 $13,785,000 Capital Improvements 12-1-2013 $ 930,000(b) 11-22-05 6,115,000 Capital Improvements 12-1-2014 815,000(c) 3-1-06 7,845,000 Capital Improvements Refunding 12-1-2016 4,715,000 10-21-08 3,580,000 Capital Equipment Notes 12-1-2013 770,000 10-21-08 11,380,000 Capital Improvements 12-1-2023 9,005,000 9-5-13 21,355,000 Capital Improvements (the Series 2013A Bonds) 12-1-2033 21,355,000 9-5-13 5,065,000 Capital Equipment Notes (the Series 2013B Notes) 12-1-2020 5,065,000 9-5-13 9,565,000 Capital Improvements Refunding (the Series 2013C Bonds) 12-1-2020 9,565,000 9-5-13 5,920,000 Capital Improvements Refunding (the Series 2013D Bonds) 12-1-2025 5,920,000 Total $58,140,000 (a) These issues are subject to the legal debt limit. Excludes the Series 2010A Refunded Maturities. (b) Excludes the Series 2004A Refunded Maturities. (c) Excludes the Series 2005A Refunded Maturities.


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Estimated Calendar Year Debt Service Payments Including the Obligations And Excluding the Refunded Maturities G.O. Debt Supported by Taxes Principal Year Principal & Interest(a)

2013 (at 9-5) $ 3,875,000 $ 4,386,848 2014 4,410,000 6,279,333 2015 5,510,000 6,977,600 2016 5,620,000 6,986,670 2017 4,460,000 5,710,898 2018 4,560,000 5,726,580 2019 4,670,000 5,734,883 2020 3,610,000 4,557,573 2021 2,400,000 3,241,013 2022 2,485,000 3,242,383 2023 2,580,000 3,245,995 2024 1,620,000 2,185,295 2025 1,670,000 2,181,585 2026 1,155,000 1,608,150 2027 1,200,000 1,608,105 2028 1,245,000 1,604,505 2029 1,300,000 1,607,838 2030 1,355,000 1,607,588 2031 1,410,000 1,604,323 2032 1,470,000 1,602,988 2033 1,535,000 1,603,308

Total $58,140,000(b) $73,303,461

(a) Includes the Series 2013A Bonds, Series 2013B Notes, Series 2013C Bonds, and Series 2013D

Bonds at assumed average annual interest rates of 3.85%, 1.94%, 1.47%, and 2.43%, respectively, and excludes the Refunded Maturities.

(b) 71.6% of this debt will be retired within ten years. Revenue Notes The County has four general obligation revenue notes payable to the Minnesota Department of Agriculture to provide funds for the septic system improvement loan program under the Agricultural Best Management Loan Program. Semi-annual payments ranging from $7,900 to $20,700 will be made on the notes from April 1, 2009 through 2024. The total outstanding amount on these notes as of December 31, 2012 is $395,730.

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Operating Leases The County has various operating leases for office space, parking facilities, data processing software, and office equipment. The future minimum lease payments as of December 31, 2012 are as follows: Year Ending December 31

2013 $1,041,655 2014 1,049,482 2015 1,050,779 2016 1,053,192 2017 1,055,158

Total Minimum Lease Payments $5,250,266


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Indirect Debt Debt Applicable to

2012/13 Taxable Est. G.O. Debt Tax Capacity in County

Taxing Unit(a) Net Tax Capacity As of 9-5-13(b) Percent Amount Cities: Babbitt $ 716,073 $ 140,000 100.0% $ 140,000

Biwabik 830,277 770,000 100.0 770,000

Buhl 332,310 280,000 100.0 280,000

Chisholm 1,780,630 1,720,000 100.0 1,720,000

Duluth 58,633,673 135,940,000 100.0 135,940,000

Ely 1,650,052 1,095,000 100.0 1,095,000

Gilbert 686,545 1,585,000 100.0 1,585,000

Hermantown 9,852,634 15,770,000 100.0 15,770,000

Hibbing 7,902,187 4,598,000 100.0 4,598,000

Hoyt Lakes 1,534,775 615,000 100.0 615,000

Mountain Iron 1,910,046 1,840,000 100.0 1,840,000

Proctor 1,925,009 6,250,000 100.0 6,250,000

Tower 328,799 325,000 100.0 325,000

Virginia 3,968,237 3,925,000 100.0 3,925,000

Winton 71,482 220,000(c) 100.0 220,000 Towns: Alborn 453,868 604,104(c) 100.0 604,104

Canosia 2,079,429 1,086,000(c) 100.0 1,086,000

Crane Lake 638,789 250,000(c) 100.0 250,000

Fredenberg 1,711,443 810,000 100.0 810,000

Grand Lake 2,784,121 755,000 100.0 755,000

Lakewood 1,817,685 440,000 100.0 440,000

Rice Lake 2,476,868 4,200,000 100.0 4,200,000 School Districts: ISD No. 94 (Cloquet) 9,736,901 22,815,000 4.9 1,117,935

ISD No. 381 (Lake Superior) 20,340,859 31,515,000 15.8 4,979,370

ISD No. 695 (Chisholm) 2,425,897 8,990,000 100.0 8,990,000

ISD No. 696 (Ely) 7,046,888 3,600,000 100.0 3,600,000

ISD No. 698 (Floodwood) 3,596,067 5,070,000 95.4 4,836,780

ISD No. 700 (Hermantown) 12,113,500 2,600,000 100.0 2,600,000

ISD No. 707 (Nett Lake) 125,331 254,000(c) 51.1 129,794

ISD No. 704 (Proctor) 9,801,766 19,705,000 100.0 19,705,000

ISD No. 706 (Virginia) 5,530,844 8,785,000 100.0 8,785,000

ISD No. 709 (Duluth) 65,713,892 60,550,000 100.0 60,550,000

ISD No. 712 (Mountain Iron-Buhl) 3,205,031 3,510,000 100.0 3,510,000

ISD No. 2142 (St. Louis County) 30,116,434 69,780,000 98.8 68,942,640

ISD No. 2154 (Eveleth-Glbert) 4,671,807 4,424,000 100.0 4,424,000

ISD No. 2711 (Mesabi East) 6,409,308 26,890,000 100.0 26,890,000 Total $402,278,623 (a) Only those units with general obligation debt outstanding are listed here. (b) Excludes debt supported by revenues or state aid, and tax and aid anticipation certificates. (c) Debt as of December 31, 2012; most recent information available.

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Debt Ratios* G.O. G.O. Indirect & Direct Debt Direct Debt To 2012/13 Indicated Market Value ($14,916,463,542) 0.39% 3.09% Per Capita (200,319 – 2012 U.S. Census Bureau Estimate) $290 $2,298 * Excludes revenue notes and operating leases.

COUNTY TAX RATES, LEVIES AND COLLECTIONS Tax Capacity Rates for a resident in the City of Duluth 2012/13 For 2008/09 2009/10 2010/11 2011/12 Total Debt Only St. Louis County 57.624% 55.349% 55.994% 62.310% 63.870% 3.215% City of Duluth 25.403 26.331 27.956 31.597 33.198 12.214 ISD No. 709 (Duluth)* 20.987 20.957 23.400 27.741 32.966 25.250 Other 6.497 5.654 5.829 5.975 6.180 -0- Total 110.511% 108.291% 113.179% 127.623% 136.214% 40.679% * Independent School District No. 709 (Duluth) also has a 2012/13 tax rate of 0.13527% spread on the

market value of property in support of an excess operating levy. NOTE: Property taxes are determined by multiplying the net tax capacity by the tax capacity rate, plus

multiplying the referendum market value by the market value rate. This table does not include the market value based rates. See Appendix III.

Tax Levies and Collections Collected During Collected and/or Abated Net Collection Year As of 12-31-12 Levy/Collect Levy* Amount Percent Amount Percent

2012/13 $101,954,370 (In Process of Collection) 2011/12 100,525,458 $97,573,166 97.1% $97,573,165 97.1% 2010/11 92,048,735 88,784,272 96.5 90,505,352 98.3 2009/10 91,311,279 88,159,253 96.5 90,376,046 99.0 2008/09 89,183,812 85,853,394 96.3 88,432,638 99.2

* The net levy excludes state aid for property tax relief and fiscal disparities, if applicable. The net levy is the basis for computing tax capacity rates. See Appendix III.

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FUNDS ON HAND As of April 30, 2013

General Fund $ 37,797,830 Special Revenue Funds 62,978,846 Debt Service Funds 1,220,305 Capital Projects Funds 8,753,570 Permanent Fund 6,489,608 Enterprise Funds 17,212,117 Internal Service Funds 30,742,942 Fiduciary Funds 56,796,267 Total $221,991,485

COUNTY INVESTMENTS County investments are managed in accordance with Minnesota Statutes, Chapter 118A and the County’s investment policy as revised on October 15, 2010. Day-to-day investment activity is the responsibility of the County Auditor. The County has an investment committee, which is comprised of the County Auditor, County Administrator, County Board Chair and the Chair of the County Board Budget and Finance Committee. The investment committee provides assistance related to the investments function and advises the County Auditor with respect to investment strategies, policies, procedures and limitations. As of April 30, 2013, the County’s investments totaled approximately $204,728,368.

GENERAL INFORMATION CONCERNING THE COUNTY St. Louis County is located in northeastern Minnesota, approximately 160 miles north of the Minneapolis/Saint Paul Metropolitan area. The City of Duluth is the County Seat. The County covers an area of approximately 7,000 square miles (4,480,000 acres) and includes 73 full and fractional congressional townships. The County’s population trend is shown below. Percent Population Change 2012 U.S. Census Estimate 200,319 0.1% 2010 U.S. Census 200,226 (0.3) 2000 U.S. Census 200,827 1.3 1990 U.S. Census 198,213 (10.8) 1980 U.S. Census 222,229 0.7 1970 U.S. Census 220,693 (4.7) 1960 U.S. Census 231,588 -- Source: U.S. Census Bureau, http://census.gov.

http://census.gov/

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AREA ECONOMY Major Employers within the County Approximate Employer Product/Service Number of Employees Essentia Healthcare (Duluth) Healthcare 7,219 St. Luke’s Hospital (Duluth) Healthcare 2,592 State of Minnesota Government 2,033 University of Minnesota (Duluth) Education 2,000 St. Louis County (Duluth and Virginia) Government 1,800 ALLETE, Inc., formerly Minnesota Power (Duluth) Utility 1,400 Independent School District No. 709 (Duluth) Education 1,400 Uniprise (Duluth) Finance and insurance 1,400 U.S. Steel-Minntac (Mountain Iron) Iron ore/Taconite 1,390 Military Installations(a) Military 1,068 Fairview Range-University Medical Center- Mesabi, Fairview Mesaba Clinics (Hibbing, Mt. Iron, Nashwauk) Healthcare 1,028 City of Duluth Government 854 United States Government Government 850 College of St. Scholastica (Duluth) Education 750(b) Center for Independent Living (Hibbing and Duluth) Healthcare and social assistance 746 Essentia Health-Virginia Health care 657(b) Benedictine Health System (Duluth) Healthcare 633 Hibbing Taconite Co. Taconite mining 550 United Taconite (Eveleth) Taconite mining 546 Cirrus Aircraft (Duluth) Aircraft manufacturing 538 ZMC Hotels (Duluth) Hotels/restaurants 500(b) (a) Units located in the cities of Chisholm, Duluth, and Hibbing. (b) Includes full- and part-time employees. Source: Telephone survey of individual employers, July 2013 and Northland Connection

http://www.northlandconnection.com/. Labor Force Data Annual Average June 2009 2010 2011 2012 2013 Labor Force: City of Duluth 45,641 46,471 46,181 45,788 45,578 St. Louis County 150,965 105,503 104,938 104,058 103,912 State of Minnesota 2,950,277 2,962,633 2,969,696 2,969,366 3,006,755 Unemployment Rate: City of Duluth 7.9% 7.7% 7.0% 6.3% 5.9% St. Louis County 9.4 8.0 7.3 6.7 6.6 State of Minnesota 8.0 7.4 6.5 5.6 5.2 Source: Minnesota Department of Employment and Economic Development,

http://www.positivelyminnesota.com. 2013 data are preliminary.

http://www.northlandconnection.com/

http://www.positivelyminnesota.com/

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Retail Sales and Effective Buying Income for St. Louis County

Effective Buying Retail Sales Income (EBI) Median ($000) ($000) Household EBI

2012 $3,369,235 $3,792,970 $34,667 2011 3,210,424 3,685,758 35,368 2010 3,211,308 3,551,470 35,415 2009 N/A N/A N/A 2008 3,078,995 3,583,445 35,874

The 2012 median household EBI for the State of Minnesota was $44,911. Source: Claritas, Inc. Construction Activity New Residential Construction Number Value

2013 (to 4-30) 2,320 $ 55,228,200 2012 2,419 57,183,200 2011 2,485 76,095,267 2010 2,638 78,377,450 2009 2,905 94,489,501 2008 3,408 135,138,140 2007 3,849 185,384,300 2006 4,086 163,018,085 2005 4,095 169,224,052 2004 4,648 150,296,000

Financial Institutions The following full service banks are located in the County: Deposits As of 3-31-13 Republic Bank, Inc. (Duluth) $ 251,003,000 North Shore Bank of Commerce (Duluth) 220,001,000 Western National Bank (Duluth) 113,891,000 Boundary Waters Bank (Ely) 100,062,000 Security State Bank of Hibbing 98,662,000 First National Bank (Chisholm) 66,781,000 The Pioneer National Bank of Duluth 66,055,000 Northern State Bank of Virginia 53,963,000 The Miners National Bank of Eveleth 51,504,000 Park State Bank (Duluth) 28,629,000 The First National Bank of Proctor 28,363,000 The First National Bank of Gilbert 21,359,000 The First National Bank of Buhl 20,921,000 Total $1,121,194,000 In addition, branch offices of Wells Fargo Bank, National Association and U.S. Bank National Association are located throughout the County. Source: Federal Deposit Insurance Corporation, http://www2.fdic.gov/; most recent information

available.

http://www2.fdic.gov/

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Education The County encompasses all or part of 15 independent school districts that serve County residents. Higher education is available through colleges and universities located throughout the County, including the University of Minnesota-Duluth and the College of St. Scholastica, both located in the City of Duluth. Also located throughout the County are component institutions of the Minnesota State Colleges and Universities, including Lake Superior College (Duluth); Hibbing Community College (Hibbing); Mesabi Range Community and Technical College (Eveleth and Virginia); and Vermillion Community College (Ely). Health Care Facilities Hospital services are available to County residents at eight locations throughout the County. In addition, 18 nursing homes and 14 supervised living facilities offer services to residents throughout the County. Source: Minnesota Department of Health, http://www.health.state.mn.us/.

GOVERNMENTAL ORGANIZATION AND SERVICES Organization St. Louis County was organized in 1856 and is governed by a seven-member Board of Commissioners, who are elected to four-year overlapping terms of office. The Chairperson is elected to that position by the other members of the Board. The Board is comprised of the following individuals: Expiration of Term Christopher Dahlberg Chairman January 2017 Mike Forsman Commissioner January 2015 Frank Jewell Commissioner January 2015 Keith Nelson Commissioner January 2015 Steve O’Neil Commissioner January 2017 Steve Raukar Commissioner January 2015 Pete Stauber Commissioner January 2017 Mr. Kevin Gray serves as the County Administrator and Mr. Donald Dicklich serves as the County Auditor. County Services Department of Administration oversees Purchasing, Veterans’ Services, Safety and Risk Management, and Extension Services, all of which are under the direction of the County Administration. County Administration develops and implements the broad policy directives for the County through the Board of Commissioners.

http://www.health.state.mn.us/

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County Auditor’s Department performs the financial administration for the County and other agencies; proper maintenance of property records, maintains tax records, provides motor vehicle registration and licensing services; supervises the voter registration and election process within the County; and maintains official records of the Board of Commissioners. Human Resources Department is responsible for administering a merit-based system of classification, compensation, selection and personnel rules and regulations for employment in the classified service. Functional responsibilities are performed in compliance with Civil Service Law and Rules and include: administration of policies and procedures; establishment of official work classifications; maintenance of equitable compensation structure; and recruitment and testing, as well as employee development and training. County Attorney’s Department administers, manages and directs the statutory duties of the office as required by Minnesota Statutes. Divisions within the department include Administration, Criminal Division, Civil Division, Administrative/Secretary Support, and the Victim/Witness Assistance Program. The Social Services Division provides services to the County’s Social Services Department through advice, consultation or court representation. County Assessor’s Department administers property assessment for the County, including supervising local assessors; advising local jurisdictions on assessment matters; conducting statistical studies of assessment ratios; providing programs, policies and procedures to assist local assessors; preparing appraisals for the County Board of Equalization and Tax Count; and advising the Board of Commissioners in assessment matters. The County Assessor also provides assessment services for organized and unorganized townships that contract with the County for such services. County Recorder’s Department provides protection and public notice by recording, indexing, maintaining and displaying records of legal documents and the issuance and updating of land title certificates according to Minnesota Statutes. County Purchasing Department is responsible for the procurement of goods and services, including contracts, requests for proposals, and bids. Sheriff’s Department is responsible for all law enforcement activity in the unincorporated areas of the County, including patrol, investigative and support services. This department is also responsible for providing boat and water safety, providing contracts for law enforcement services, providing emergency management, maintaining the County jail, and maintaining the Sheriff’s Rescue Squad; providing countywide emergency communication services through the 9-1-1 system; and administering the radio maintenance agency which provides technical support for the communications network. Public Works Department is responsible for developing and implementing an orderly plan for maintenance, restoration and construction of the ground transportation network in the County. County Public Health and Human Services Department administers and implements federal, state and County public policies and mandates that involve the protection, support and rehabilitation of individuals and families. This department is responsible for administration of all forms of public assistance, child support collection enforcement, employment and training initiatives, child welfare, adult protection, and community social services for the mentally challenged, elderly, mentally ill, and chemically dependent. This department is also responsible for the provision of health services and to maintain and improve the physical well-being of all County residents. Divisions of this department include Public Health Nursing; Women, Infant and Children; and Maternal and Child Health.

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Land and Minerals Department administers tax forfeited lands through inventory, planning, merchandising, leasing and resource protection. Also managed by this department are the Land Investment operations, which perform forest management practices on the County’s commercial forest lands in accordance with an agreement with the State of Minnesota Department of Natural Resources. The department further manages minerals development and extraction on tax forfeited land. Planning and Community Development Department is organized into four divisions: Physical Planning, Community Development, Human Services Planning, and Geographic Information Systems (GIS). Management Information Systems plans for and provides automated information systems to County departments, as well as provides computer hardware, programming, operations and technical support. Environmental Services Department is an enterprise activity accounting for all of the solid waste services in the County outside of the Western Lake Superior Sanitary District. The Solid Waste program provides administration activities (MPCA reporting, contract management, preparation of solid waste management plans), recycling, collection, disposal of municipal solid waste, and environmental services (including health inspections and lab services). The department also operates the County landfill in the East Mesaba area of the County. Property Management Department includes facility maintenance and building contracts and leases. Labor Contracts The status of the County's labor contracts are as follows: Civil Service Basic In negotiations Merit System Basic In negotiations Merit Supervisory In negotiations Jail/911 Settled Teamsters Settled Deputy Sheriffs Settled Confidential In negotiations Attorneys In negotiations Investigators In negotiations Sheriffs Supervisory In negotiations Civil Service Supervisory Settled Employee Pension Plans All full-time and certain part-time employees are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). The PERA administers the General Employees Retirement Fund (GERF), the Public Employees Police and Fire Fund (PEPFF), and the Public Employees Correctional Fund (PECF), which are cost-sharing, multiple-employer retirement plans. PERA members belong to either the Coordinated or Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All police officers, fire fighters, and peace officers who qualify for membership by statute are covered by the PEPFF. Members who are employed in a county correctional institution as a correctional guard or officer, a joint jailer/dispatcher, or as a supervisor of correctional guards or officers or of joint jailers/dispatchers and are directly

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responsible for the direct security, custody, and control of the county correctional institution and its inmates, are covered by the PECF. Members eligible for membership before July 1, 2010 are fully vested after three years of service. Benefits for members first eligible for membership after June 30, 2010 are vested on a graduated scale starting with 50% after five years and increasing 10% for each year of service until fully vested after ten years. The County’s contributions to GERF, PEPFF, and PECF for the past five years were as follows: Fiscal Year Ended GERF PEPFF PECF 2012 $5,983,560 $1,093,847 $610,006 2011 5,896,106 1,120,180 582,497 2010 5,781,585 1,100,152 566,521 2009 5,968,992 1,101,657 547,683 2008 5,919,839 986,555 590,399 These contribution amounts are equal to the contractually required contributions for each year as set by State Statute. Five of the nine eligible elected officials of the County are covered by the Public Employees Defined Contribution Plan (PEDCP), which is a multiple-employer deferred compensation plan administered by PERA in accordance with Minnesota Statutes, Chapter 353D. The plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. An eligible elected official who chooses to participate contributes 5% of their salary, which is matched by the employer. Employees may elect to make contributions in an amount not to exceed the employer share. Employee and employer contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. Contributions made by the County for the fiscal year ended December 31, 2012 totaled $14,023. For more information regarding the liability of the County with respect to its employees, please reference “Note 2 B. Liabilities, Retirement Plan” of the County’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2012, an excerpt of which is included as Appendix IV of this Official Statement. Other Post-Employment Benefits The Governmental Accounting Standards Board (GASB) has issued Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions (GASB 45), which addresses how state and local governments must account for and report their obligations related to post-employment healthcare and other non-pension benefits (referred to as Other Post-employment Benefits or “OPEB”). The County provides health insurance benefits for certain retired employees under a single-employer self-insured plan, as required by Minnesota Statutes. Active employees who retire from the County when eligible to receive retirement benefits from PERA (or a similar plan) and do not participate in any other health benefits program providing similar coverage will be eligible to continue coverage with respect to themselves and their dependents under the County’s health benefits program. Retirees are required to pay 100% of the total premium cost. Since the premium is a blended rate determined on the combined total of active and retiree

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participants, the retirees are receiving an implicit rate subsidy. As of January 1, 2012, there were approximately 219 retirees receiving health benefits from the County’s health plan. In addition to the implicit rate subsidy described above, the County pays a portion or the entire premium for postretirement medical coverage on behalf of certain disabled deputies and their dependents under Minnesota Statutes. These contributions are referred to as the explicit rate subsidy. Components of the County’s annual OPEB cost, the amount actually contributed to the plan, and the changes in the County’s net OPEB obligation to the plan for the fiscal year ended December 31, 2012 are as follows:

Annual required contribution $ 1,912,772 Interest on net OPEB obligation 128,597 Adjustment to annual required contribution (177,324) Annual OPEB cost (expense) $ 1,864,045 Contributions made (1,412,077) Increase in net OPEB obligation $ 451,968 Net OPEB obligation – beginning of year 2,922,657

Net OPEB obligation – end of year $ 3,374,625

The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the past four years are as follows: Percent of Fiscal Annual Employer Annual OPEB Net OPEB Year Ended OPEB Cost Contributions Cost Contributed Obligation December 31, 2012 $1,864,045 $1,412,077 75.75% $3,374,625 December 31, 2011 2,065,153 1,495,333 72.41 2,922,657 December 31, 2010 2,018,508 1,207,853 59.84 2,352,837 December 31, 2009 1,743,979 848,894 48.68 1,542,182 December 31, 2008 1,729,664 680,051 39.32 647,097 For more information regarding the liability of the County with respect to its employees, please reference “Note 4 Summary of Significant Contingencies and Other Items, Annual OPEB Costs and Net OPEB Obligations” of the County’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2012, an excerpt of which is included as Appendix IV of this Official Statement.

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General Fund Budget Summary 2011 2012 2012 2013 Actual Budget Actual Adopted Revenues: Taxes $48,795,527 $ 53,753,683 $54,638,859 $57,910,219 Charges for Services 19,985,135 20,776,178 20,275,873 21,744,204 Fines and Forfeitures 223,409 176,750 276,085 179,250 Licenses and Permits 116,071 116,500 126,058 116,000 Intergovernmental Revenues 19,585,954 19,964,233 19,768,807 10,729,643 Gifts and Contributions 8,205 7,250 8,195 8,300 Investment Earnings 2,664,170 1,227,509 1,168,896 1,025,050 Miscellaneous 1,680,087 2,042,108 2,100,604 1,339,674 Total Revenues $93,058,558 $ 98,064,211 $98,363,377 $93,052,340 Expenditures: General Government $37,746,989 $ 44,548,093 $38,359,427 $44,511,110 Public Safety 46,948,550 57,376,477 52,464,170 46,813,366 Health and Sanitation 782,456 627,302 517,731 592,691 Human Services 557,199 161,123 161,123 175,000 Culture and Recreation 1,845,470 2,105,614 1,883,054 1,823,614 Conservation of Natural Resources 968,047 910,025 885,385 950,922 Economic Development 50,000 139,000 0 50,000 Total Expenditures $88,898,711 $105,867,634 $94,270,890 $94,916,703


APPENDIX I

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302 W SUPERIOR STREET, SUITE 700 DULUTH, MINNESOTA 55802

PHONE (218) 722-0861 FAX (218) 725-6800

PROPOSED FORMS OF LEGAL OPINIONS

$21,355,000

GENERAL OBLIGATION CAPITAL IMPROVEMENT BONDS, SERIES 2013A

ST. LOUIS COUNTY, MINNESOTA

We have acted as Bond Counsel in connection with the authorization, issuance and delivery by St. Louis County, Minnesota (the “Issuer”), of its $21,355,000 General Obligation Capital Improvement Bonds, Series 2013A, dated September 5, 2013 (the “Bonds”). The Bonds are issued pursuant to Minnesota Statutes, Section 373.40 and Chapter 475.

For purposes of this opinion, we have examined the law and certified copies of certain proceedings taken, and certain affidavits and certificates furnished by the Issuer with respect to the authorization, sale and issuance of the Bonds. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certificates of public officials furnished to us without undertaking to verify such facts by independent investigation.

We have not been engaged or undertaken to review the accuracy, completeness, or sufficiency of the Official Statement or other offering material relating to the Bonds, and we express no opinion relating thereto (excepting only the matters set forth as our opinion in the Official Statement).

Based upon such examination, and assuming the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals, and assuming the genuineness of the signatures thereon and the accuracy of the facts and representations stated therein, and on the basis of laws, regulations, rulings and decisions in effect on the date hereof, but excluding any legislation which may have a retroactive effective date prior to the date hereof, it is our opinion that:

1. The Bonds are valid and binding general obligations of the Issuer enforceable in accordance with their terms.

2. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the principal of and interest on the Bonds.

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3. The Bonds, as of their date of issuance, bear interest which is not includable in gross income of the recipient for federal income tax purposes or in taxable net income of individuals, trusts and estates for Minnesota income tax purposes, but such interest is includable in taxable income of corporations and financial institutions for purposes of Minnesota franchise tax. Interest on the Bonds is not an item of tax preference which is included in alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum tax imposed on individuals, trusts and estates; it should be noted, however, that for purposes of computing the federal alternative minimum tax imposed on corporations, such interest is taken into account in determining adjusted current earnings. We express no opinion regarding other federal or state tax consequences arising with respect to the Bonds.

For the purpose of rendering the opinions set forth in paragraph 3 above, we have assumed compliance by the Issuer with requirements of the Code that must be satisfied subsequent to the issuance of the Bonds. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in federal gross income and in Minnesota taxable net income retroactive to the date of issuance of the Bonds.

It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors’ rights heretofore or hereafter enacted and that their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity.

Dated: September 5, 2013

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PHONE (218) 722-0861 FAX (218) 725-6800

$5,065,000

ST. LOUIS COUNTY, MINNESOTA GENERAL OBLIGATION CAPITAL EQUIPMENT NOTES, SERIES 2013B

We have acted as Bond Counsel in connection with the authorization, issuance and delivery by St. Louis County, Minnesota (the “Issuer”), of its $5,065,000 General Obligation Capital Equipment Notes, Series 2013B, dated September 5, 2013 (the “Notes”). The Notes are issued pursuant to Minnesota Statutes, Section 373.01 and Chapter 475. For purposes of this opinion, we have examined the law and certified copies of certain proceedings taken, and certain affidavits and certificates furnished by the Issuer with respect to the authorization, sale and issuance of the Notes. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certificates of public officials furnished to us without undertaking to verify such facts by independent investigation. We have not been engaged or undertaken to review the accuracy, completeness, or sufficiency of the Official Statement or other offering material relating to the Notes, and we express no opinion relating thereto (excepting only the matters set forth as our opinion in the Official Statement). Based upon such examination, and assuming the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals, and assuming the genuineness of the signatures thereon and the accuracy of the facts and representations stated therein, and on the basis of laws, regulations, rulings and decisions in effect on the date hereof, but excluding any legislation which may have a retroactive effective date prior to the date hereof, it is our opinion that: 1. The Notes are valid and binding general obligations of the Issuer enforceable in accordance with their terms. 2. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the principal of and interest on the Notes. 3. The Notes, as of their date of issuance, bear interest which is not includable in gross income of the recipient for federal income tax purposes or in taxable net income of individuals, trusts and estates for Minnesota income tax purposes, but such interest is includable in taxable income of corporations and financial institutions for purposes of Minnesota franchise tax. Interest on the Notes is not an item of tax preference which is included in alternative

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minimum taxable income for purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum tax imposed on individuals, trusts and estates; it should be noted, however, that for purposes of computing the federal alternative minimum tax imposed on corporations, such interest is taken into account in determining adjusted current earnings. We express no opinion regarding other federal or state tax consequences arising with respect to the Notes. For the purpose of rendering the opinions set forth in paragraph 3 above, we have assumed compliance by the Issuer with requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Notes. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Notes in federal gross income and in Minnesota taxable net income retroactive to the date of issuance of the Notes. It is to be understood that the rights of the holders of the Notes and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors’ rights heretofore or hereafter enacted and that their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity. Dated: September 5, 2013

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PHONE (218) 722-0861 FAX (218) 725-6800

$9,565,000

ST. LOUIS COUNTY, MINNESOTA GENERAL OBLIGATION CAPITAL IMPROVEMENT REFUNDING BONDS,

SERIES 2013C We have acted as Bond Counsel in connection with the authorization, issuance and delivery by St. Louis County, Minnesota, St. Louis County, Minnesota (the “Issuer”), of its $9,565,000 General Obligation Capital Improvement Refunding Bonds, Series 2013C, dated September 5, 2013 (the “Bonds”). The Bonds are issued pursuant to Minnesota Statutes, Chapter 475 and Section 475.67. For purposes of this opinion, we have examined the law and certified copies of certain proceedings taken, and certain affidavits and certificates furnished by the Issuer with respect to the authorization, sale and issuance of the Bonds. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certificates of public officials furnished to us without undertaking to verify such facts by independent investigation. We have not been engaged or undertaken to review the accuracy, completeness, or sufficiency of the Official Statement or other offering material relating to the Bonds, and we express no opinion relating thereto (excepting only the matters set forth as our opinion in the Official Statement). Based upon such examination, and assuming the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals, and assuming the genuineness of the signatures thereon and the accuracy of the facts and representations stated therein, and on the basis of laws, regulations, rulings and decisions in effect on the date hereof, but excluding any pending legislation which may have a retroactive effective date prior to the date hereof, it is our opinion that:



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3. The Bonds, as of their date of issuance, bear interest which is not includable in gross income of the recipient for federal income tax purposes or in taxable net income of individuals, trusts and estates for Minnesota income tax purposes, but such interest is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax. Interest on the Bonds is not an item of tax preference which is included in alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum tax imposed on individuals, trusts and estates; it should be noted, however, that for purposes of computing the federal alternative minimum tax imposed on corporations, such interest is taken into account in determining adjusted current earnings. We express no opinion regarding other federal or state tax consequences arising with respect to the Bonds.

For the purpose of rendering the opinion set forth in paragraph 3 above, we have assumed compliance by the Issuer with requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in federal gross income and in Minnesota taxable net income retroactive to the date of issuance of the Bonds. It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors’ rights heretofore or hereafter enacted and that their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity. Dated: September 5, 2013

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PHONE (218) 722-0861 FAX (218) 725-6800

$5,920,000

ST. LOUIS COUNTY, MINNESOTA GENERAL OBLIGATION CAPITAL IMPROVEMENT REFUNDING BONDS,

SERIES 2013D We have acted as Bond Counsel in connection with the authorization, issuance and delivery by St. Louis County, Minnesota, St. Louis County, Minnesota (the “Issuer”), of its $5,920,000 General Obligation Capital Improvement Refunding Bonds, Series 2013D, dated September 5, 2013 (the “Bonds”). The Bonds are issued pursuant to Minnesota Statutes, Chapter 475 and Section 475.67. For purposes of this opinion, we have examined the law and certified copies of certain proceedings taken, and certain affidavits and certificates furnished by the Issuer with respect to the authorization, sale and issuance of the Bonds. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certificates of public officials furnished to us without undertaking to verify such facts by independent investigation. We have not been engaged or undertaken to review the accuracy, completeness, or sufficiency of the Official Statement or other offering material relating to the Bonds, and we express no opinion relating thereto (excepting only the matters set forth as our opinion in the Official Statement). Based upon such examination, and assuming the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals, and assuming the genuineness of the signatures thereon and the accuracy of the facts and representations stated therein, and on the basis of laws, regulations, rulings and decisions in effect on the date hereof, but excluding any pending legislation which may have a retroactive effective date prior to the date hereof, it is our opinion that:


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3. The Bonds, as of their date of issuance, bear interest which is not includable in gross income of the recipient for federal income tax purposes or in taxable net income of individuals, trusts and estates for Minnesota income tax purposes, but such interest is includable in taxable income of corporations and financial institutions for purposes of the Minnesota franchise tax. Interest on the Bonds is not an item of tax preference which is included in alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to all taxpayers or the Minnesota alternative minimum tax imposed on individuals, trusts and estates; it should be noted, however, that for purposes of computing the federal alternative minimum tax imposed on corporations, such interest is taken into account in determining adjusted current earnings. We express no opinion regarding other federal or state tax consequences arising with respect to the Bonds.

For the purpose of rendering the opinion set forth in paragraph 3 above, we have assumed compliance by the Issuer with requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in federal gross income and in Minnesota taxable net income retroactive to the date of issuance of the Bonds. It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors’ rights heretofore or hereafter enacted and that their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity. Dated: September 5, 2013

APPENDIX II

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CONTINUING DISCLOSURE CERTIFICATE

This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by St. Louis County, Minnesota (the “Issuer”) in connection with the issuance of the $__________ General Obligation _________________________________, Series 2013_, dated September 5, 2013 (the “Obligations”). The Obligations are being issued pursuant to a Resolution of the Issuer dated August 6, 2013 (the “Resolution”). The Issuer covenants and agrees as follows:

Section 1. (a) Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the holders and beneficial owners of the Obligations and in order to assist the Participating Underwriter in complying with the Rule (defined below). References in this Disclosure Certificate to holders of the Obligations shall include the beneficial owners of the Obligations. This Disclosure Certificate constitutes the written understanding under the Rule.

(b) Filing Requirements. Any filing under this Disclosure Certificate must be made solely by transmitting such filing to the MSRB (defined herein) through the Electronic Municipal Market Access (“EMMA”) System at www.emma.msrb.org in the format prescribed by the MSRB. All documents provided to the MSRB shall be accompanied by the identifying information prescribed by the MSRB.

Section 2. Definitions. In addition to the definitions set forth in the Resolution, 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, which are currently prepared in accordance with generally accepted accounting principles (GAAP) for governmental units as prescribed by the Governmental Accounting Standards Board (GASB) and which the Issuer intends to continue to prepare in substantially the same form.

“Code” means the Internal Revenue Code of 1986, as amended.

“Dissemination Agent” means such person from time to time designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation.

“IRS” means the Internal Revenue Service of the Department of the Treasury.

“Listed Events” means any of the events listed in Sections 5(a) and 5(b) of this Disclosure Certificate.

http://www.emma.msrb.org/

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“MSRB” means the Municipal Securities Rulemaking Board, whose current address is 1900 Duke Street, Suite 600, Alexandria, Virginia 22314.

“Official Statement” means the Official Statement, dated July 23, 2013, delivered in connection with the original issuance and sale of the Obligations, together with any amendments thereto or supplements thereof.

“Participating Underwriter” means any of the original underwriter(s) of the Obligations required to comply with the Rule in connection with offering of the Obligations.

“Rule” means Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time.

“SEC” means the Securities and Exchange Commission or any successor to its functions governing state and municipal securities.

Section 3. Provision of Annual Reports.

(a) The Issuer shall, or shall cause the Dissemination Agent to, not later than 12 months after the end of the fiscal year (presently December 31), commencing with the fiscal year ended December 31, 2013, provide to the MSRB, filed in accordance with Section 1(b) of this Disclosure Certificate, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. In each case, 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 later than the date required above for the filing of the Annual Report if they are not available by that date; provided, however, unaudited financial information will be provided and the Audited Financial Statements will be submitted to the MSRB when and if available. The Issuer may provide the Annual Report by specific reference to documents previously provided to the MSRB or filed with the SEC; provided, however, that if the document so referenced is a final official statement within the meaning of the Rule, such final official statement must be available from the MSRB.

(b) Not later than 15 days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, the Issuer shall provide the Annual Report to the Dissemination Agent (if the Issuer is not the Dissemination Agent).

(c) If the Issuer is unable or fails to provide an Annual Report by the date required in subsection (a), the Issuer shall send in a timely manner a notice of such fact to the MSRB in the format prescribed by the MSRB, as described in Section 1(b) of this Disclosure Certificate.

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Section 4. Content of Annual Reports. The Issuer’s Annual Report shall contain or incorporate by reference the Audited Financial Statements and updates of the following sections of the Official Statement to the extent such financial information and operating data are not included in the Audited Financial Statements:

(a) County Property Values

(b) County Indebtedness

(c) County Tax Rates, Levies and Collections

Section 5. Reporting of Significant Events.

(a) The Issuer shall give, or cause to be given notice of the occurrence of any of the following events with respect to the Obligations, in a timely manner not in excess of ten business days after the occurrence of the event:

(1) principal and interest payment delinquencies;

(2) unscheduled draws on debt service reserves reflecting financial difficulties;

(3) unscheduled draws on credit enhancements reflecting financial difficulties;

(4) substitution of credit or liquidity providers, if any, or their failure to perform;

(5) adverse tax opinions or the issuance by the IRS of proposed or final determinations of taxability or of a Notice of Proposed Issue (IRS Form 5701-TEB);

(6) tender offers;

(7) defeasances;

(8) rating changes; or

(9) bankruptcy, insolvency, receivership or similar event of the Issuer.

(b) The Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Obligations, if material, in a timely manner not in excess of ten business days after the occurrence of the event:

(1) non-payment related defaults;

(2) unless described in (a)(5) above, other notices or determinations by the IRS with respect to the tax-exempt status of the Obligations, or other events affecting the tax-exempt status of the Obligations;

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(3) modifications to rights of holders of the Obligations;

(4) bond calls;

(5) release, substitution or sale of property securing repayment of the Obligations;

(6) the consummation of a merger, consolidation or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, 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; or

(7) appointment of a successor or additional trustee or the change of name of a trustee.

(c) For the purposes of the event identified in subsection (a)(9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan or reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer.

(d) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event under subsection (b), the Issuer shall as soon as possible determine if such event would constitute material information for holders of Obligations.

(e) Unless otherwise required by law, the Issuer shall submit the information in the format prescribed by the MSRB, as described in Section 1(b) of this Disclosure Certificate.

Section 6. Termination of Reporting Obligation. The Issuer’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Obligations.

Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. If at any time there is not any other designated Dissemination Agent, the Issuer shall be the Dissemination Agent.

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Section 8. Amendment; Waiver. Notwithstanding any other provision of 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 the undertaking herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule.

Section 9. 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 Listed 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 Listed Event, in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 10. Default.

(a) The Issuer has never failed to comply in all material respects with any previous undertakings under the Rule to provide annual reports or notices of material events.

(b) In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any holder or beneficial owner of the Obligations may take such action as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolution, 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.

Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Obligations.

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Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Obligations, and shall create no rights in any other person or entity.

Section 13. Reserved Rights. The Issuer reserves the right to discontinue providing any information required under the Rule if a final determination should be made by a court of competent jurisdiction that the Rule is invalid or otherwise unlawful or, subject to the provisions of Section 8 hereof, to modify the undertaking under this Disclosure Certificate if the Issuer determines that such modification is required by the Rule or by a court of competent jurisdiction.

Dated as of September 5, 2013.

ST. LOUIS COUNTY, MINNESOTA By

Chair By

County Auditor

APPENDIX III

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SUMMARY OF TAX LEVIES, PAYMENT PROVISIONS, AND MINNESOTA REAL PROPERTY VALUATION

(effective through levy year 2012/payable year 2013) Following is a summary of certain statutory provisions effective through levy year 2012/payable year 2013 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.” Taxable Market Value. The Taxable Market Value is the value that property taxes are based on, after all reductions, limitations, exemptions and deferrals. It is also the value used to calculate a municipality’s legal debt limit. Indicated Market Value. The Indicated Market Value is determined by dividing the Taxable Market Value of a given year by the same year's sales ratio determined by the State Department of Revenue. The Indicated Market Value serves to eliminate disparities between individual assessors and equalize property values statewide. 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 determined by multiplying the Net Tax Capacity by the tax capacity rate, plus multiplying the referendum market value by the market value rate. Market Value Homestead Exclusion. In 2011, the Market Value Homestead Exclusion Program (MVHE) 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 mimic the property tax prior to the elimination of the homestead credit. The MVHE applies to property classified as Class 1a or 1b and Class 2a, and causes a decrease in the Issuer’s Taxable Market Value, even though the Assessor’s Estimated Market Value on the same property did not decline.

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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. 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 that, depending on the type of property, increases from 2% to 4% on the day after the due date. In the case of the first installment of real property taxes due May 15, the penalty increases to 4% or 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, the penalty increases to 6% or 8% on November 1 and increases again to 8% or 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 five years (5) in the case of all property located outside of cities or in the case of residential homestead, agricultural homestead and seasonal residential recreational property located within cities or three (3) years with respect to other types of property 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 renters credit, which relates property taxes to income and provides relief on a sliding income scale; and targeted tax relief, which is aimed primarily at easing the effect of significant tax increases. The circuit breaker credit 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.

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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.

4. Obligations issued to create or maintain a permanent improvement revolving fund.

5. 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.

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STATUTORY FORMULAE: CONVERSION OF TAXABLE MARKET VALUE (TMV) TO NET TAX CAPACITY FOR MAJOR PROPERTY CLASSIFICATIONS

Local Tax Payable

Local Tax Payable

Local Tax Payable

Local Tax Payable

Local Tax Payable

Property Type 2009 2010 2011 2012 2013

Residential Homestead (1a)

Up to $500,000 1.00% 1.00% 1.00% 1.00% 1.00% Over $500,000 1.25% 1.25% 1.25% 1.25% 1.25%

Residential Non-homestead

Single Unit (4bb1)

Up to $500,000 1.00% 1.00% 1.00% 1.00% 1.00% Over $500,000 1.25% 1.25% 1.25% 1.25% 1.25% 1-3 unit and undeveloped land (4b1) 1.25% 1.25% 1.25% 1.25% 1.25%

Market Rate Apartments

Regular (4a) 1.25% 1.25% 1.25% 1.25% 1.25% Low-Income (4d) 0.75% 0.75% 0.75% 0.75% 0.75%

Commercial/Industrial/Public Utility (3a)

Up to $150,000 1.50%1 1.50%

1 1.50%

1 1.50%

1 1.50%

1

Over $150,000 2.00%1 2.00%

1 2.00%

1 2.00%

1 2.00%

1

Electric Generation Machinery 2.00% 2.00% 2.00% 2.00% 2.00%

Commercial Seasonal Residential

Homestead Resorts (1c)

Up to $600,000 0.55% 0.55% 0.50% 0.50% 0.50% $600,000 - $2,300,000 1.00% 1.00% 1.00% 1.00% 1.00% Over $2,300,000 1.25%

1 1.25%

1 1.25%

1 1.25%

1 1.25%

1

Seasonal Resorts (4c)

Up to $500,000 1.00%1 1.00%

1 1.00%

1 1.00%

1 1.00%

1

Over $500,000 1.25%1 1.25%

1 1.25%

1 1.25%

1 1.25%

1

Non-Commercial (4c12)

Up to $500,000 1.00%1 2

1.00%1 2

1.00%1 2

1.00%1 2

1.00%1 2

Over $500,000 1.25%

1 2 1.25%

1 2 1.25%

1 2 1.25%

1 2 1.25%

1 2

Disabled Homestead (1b) Up to $50,000 0.45% 0.45% 0.45% 0.45% 0.45% $50,000 to $500,000 1.00% 1.00% 1.00% 1.00% 1.00% Over $500,000 1.25% 1.25% 1.25% 1.25% 1.25%

Agricultural Land & Buildings

Homestead (2a)

Up to $500,000 1.00% 1.00% 1.00% 1.00% 1.00% Over $500,000 1.25% 1.25% 1.25% 1.25% 1.25% Remainder of Farm Up to $1,290,000

3 0.55%

2 0.55%

2 0.50%

2 0.50%

2 0.50%

2

Over $1,290,0003 1.00%

2 1.00%

2 1.00%

2 1.00%

2 1.00%

2

Non-homestead (2b) 1.00%2 1.00%

2 1.00%

2 1.00%

2 1.00%

2

1 Subject to the State General Property Tax. 2 Exempt from referendum market value tax. 3 2012 legislative increases.

APPENDIX IV

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EXCERPT OF 2012 COMPREHENSIVE ANNUAL FINANCIAL REPORT The County’s financial statements are audited annually by the State Auditor’s Office in conformance with generally accepted accounting principles. Data on the following pages was extracted from the County’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2012. The reader should be aware that the complete financial statements may contain additional data relating to the information presented here, which may interpret, explain or modify it. The County’s comprehensive annual financial reports for the years ending 1987 through 2011 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. The County plans to submit to GFOA its comprehensive annual financial report for the year ended December 31, 2012. A Certificate of Achievement is valid for a period of one year only. The Governmental Accounting Standards Board (GASB) issued Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions for State and Local Governments in February 2009. The statement establishes a new financial reporting model for state and local governments to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. This statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds.

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Documents

St. Louis County, MinnesotaADDENDUM DATED AUGUST 7, 2013 . TO OFFICIAL STATEMENT DATED JULY 23, 2013 . NEW ISSUE Moody's Rating: Aa2 . $20,650,000(a) St. Louis County, Minnesota