le sueur county, minnesota $9,255,000* general … · 2022 965,000 2029 240,000 2036 290,000 2023...

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PRELIMINARY OFFICIAL STATEMENT DATED JANUARY 4, 2018

In the opinion of Dorsey & Whitney LLP, Minneapolis, Minnesota, Bond Counsel, based on present federal and Minnesota laws, regulations, rulings and decisions, andassuming compliance with certain requirements of the Internal Revenue Code of 1986, as amended, (the "Code"), and certain covenants, interest to be paid on the Bondsis excluded from gross income for federal income tax purposes and from taxable net income of individuals, estates, and trusts for Minnesota income tax purposes, andis not an item of tax preference for federal or Minnesota alternative minimum tax purposes. Such interest is included in taxable income for purposes of the Minnesotafranchise tax on corporations and financial institutions and in adjusted current earnings of corporations for purposes of the federal alternative minimum tax applicableto taxable years beginning before January 1, 2018. The Bonds will be designated as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code. See "TAX EXEMPTION" and "RELATED TAX CONSIDERATIONS".

New Issue Rating Application Made: S&P Global Ratings

LE SUEUR COUNTY, MINNESOTA

$9,255,000* GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN ANDREFUNDING BONDS, SERIES 2018A

PROPOSAL OPENING: January 16, 2018, 10:00 A.M., C.T. CONSIDERATION: January 16, 2018, 11:45 A.M., C.T.

PURPOSE/AUTHORITY/SECURITY: The $9,255,000* General Obligation Capital Improvement Plan and Refunding Bonds,Series 2018A (the "Bonds") are authorized pursuant to Minnesota Statutes, Chapter 475, and Sections 373.40 and 475.67, by LeSueur County, Minnesota (the "County"), for the purpose of funding a portion of the costs associated with the construction of anew justice center, and effecting a current refunding of certain outstanding general obligations of the County as more fullydescribed herein. The Bonds will be general obligations of the County for which its full faith, credit and taxing powers arepledged. Delivery is subject to receipt of an approving legal opinion of Dorsey & Whitney LLP, Minneapolis, Minnesota.

DATE OF BONDS: February 15, 2018MATURITY: February 1 as follows:

Year Amount Year Amount Year Amount2019 $715,000 2026 $220,000 2033 $265,0002020 930,000 2027 225,000 2034 275,0002021 945,000 2028 230,000 2035 280,0002022 965,000 2029 240,000 2036 290,0002023 985,000 2030 245,000 2037 300,0002024 785,000 2031 250,000 2038 310,0002025 220,000 2032 260,000 2039 320,000

MATURITY ADJUSTMENTS:

* The County reserves the right to increase or decrease the principal amount of the Bonds on theday of sale, in increments of $5,000 each. Increases or decreases may be made in any maturity. If any principal amounts are adjusted, the purchase price proposed will be adjusted to maintain thesame gross spread per $1,000.

TERM BONDS: See "Term Bond Option" herein.INTEREST: August 1, 2018 and semiannually thereafter.OPTIONALREDEMPTION:

Bonds maturing February 1, 2028 and thereafter are subject to call for prior redemption onFebruary 1, 2027 and any date thereafter, at a price of par plus accrued interest.

MINIMUM PROPOSAL: $9,143,940.GOOD FAITH DEPOSIT: A good faith deposit in the amount of $185,100 shall be made by the winning bidder by wire

transfer of funds.PAYING AGENT: Bond Trust Services Corporation, Roseville, MinnesotaBOND COUNSEL: Dorsey & Whitney LLPMUNICIPAL ADVISOR: Ehlers and Associates, Inc.BOOK-ENTRY-ONLY: See "Book-Entry-Only System" herein (unless otherwise specified by the purchaser).

REPRESENTATIONS

No dealer, broker, salesperson or other person has been authorized by the County to give any information or to make any representation otherthan those contained in this Preliminary Official Statement and, if given or made, such other information or representations must not be reliedupon as having been authorized by the County. This Preliminary Official Statement does not constitute an offer to sell or a solicitation ofan offer to buy any of the Bonds in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in suchjurisdiction.

This Preliminary Official Statement is not to be construed as a contract with the Syndicate Manager or Syndicate Members. Statementscontained herein which involve estimates or matters of opinion are intended solely as such and are not to be construed as representations offact. Ehlers & Associates, Inc. prepared this Preliminary Official Statement and any addenda thereto relying on information of the County andother sources for which there is reasonable basis for believing the information is accurate and complete. Bond Counsel has not participatedin the preparation of this Preliminary Official Statement and is not expressing any opinion as to the completeness or accuracy of the informationcontained therein. Compensation of Ehlers & Associates, Inc., payable entirely by the County, is contingent upon the sale of the issue.

COMPLIANCE WITH S.E.C. RULE 15c2-12

Certain municipal obligations (issued in an aggregate amount over $1,000,000) are subject to Rule 15c2-12 promulgated by the Securities andExchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Rule").

Preliminary Official Statement: This Preliminary Official Statement was prepared for the County for dissemination to potential investors. Its primary purpose is to disclose information regarding the Bonds to prospective underwriters in the interest of receiving competitive proposalsin accordance with the sale notice contained herein. Unless an addendum is posted prior to the sale, this Preliminary Official Statement shallbe deemed nearly final for purposes of the Rule subject to completion, revision and amendment in a Final Official Statement as defined below.

Review Period: This Preliminary Official Statement has been distributed to prospective bidders for review. Comments or requests for thecorrection of omissions or inaccuracies must be submitted to Ehlers & Associates, Inc. at least two business days prior to the sale. Requestsfor additional information or corrections in the Preliminary Official Statement received on or before this date will not be considered aqualification of a proposal received from an underwriter. If there are any changes, corrections or additions to the Preliminary OfficialStatement, interested bidders will be informed by an addendum prior to the sale.

Final Official Statement: Copies of the Final Official Statement will be delivered to the underwriter (Syndicate Manager) within sevenbusiness days following the proposal acceptance.

Continuing Disclosure: Subject to certain exemptions, issues in an aggregate amount over $1,000,000 may be required to comply withprovisions of the Rule which require that underwriters obtain from the issuers of municipal securities (or other obligated party) an agreementfor the benefit of the owners of the securities to provide continuing disclosure with respect to those securities. This Preliminary OfficialStatement describes the conditions under which the Bonds are exempt or required to comply with the Rule.

CLOSING CERTIFICATES

Upon delivery of the Bonds, the underwriter (Syndicate Manager) will be furnished with the following items: (1) a certificate of the appropriateofficials to the effect that at the time of the sale of the Bonds and all times subsequent thereto up to and including the time of the delivery ofthe Bonds, this Preliminary Official Statement did not and does not contain any untrue statement of a material fact or omit to state a materialfact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (2) a receipt signedby the appropriate officer evidencing payment for the Bonds; (3) a certificate evidencing the due execution of the Bonds, including statementsthat (a) no litigation of any nature is pending, or to the knowledge of signers, threatened, restraining or enjoining the issuance and delivery ofthe Bonds, (b) neither the corporate existence or boundaries of the County nor the title of the signers to their respective offices is beingcontested, and (c) no authority or proceedings for the issuance of the Bonds have been repealed, revoked or rescinded; and (4) a certificatesetting forth facts and expectations of the County which indicates that the County does not expect to use the proceeds of the Bonds in a mannerthat would cause them to be arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or withinthe meaning of applicable Treasury Regulations.

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TABLE OF CONTENTS

INTRODUCTORY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . 1

THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1OPTIONAL REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . 2AUTHORITY; PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . 2ESTIMATED SOURCES AND USES . . . . . . . . . . . . . . . . 3SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4RATING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4CONTINUING DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . 4LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5TAX EXEMPTION AND RELATED TAX

CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 5MUNICIPAL ADVISOR . . . . . . . . . . . . . . . . . . . . . . . . . . . 8MUNICIPAL ADVISOR AFFILIATED COMPANIES . . . 8INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . 8RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

VALUATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11CURRENT PROPERTY VALUATIONS . . . . . . . . . . . . . 122016/17 NET TAX CAPACITY BY CLASSIFICATION . 13TREND OF VALUATIONS . . . . . . . . . . . . . . . . . . . . . . . 13LARGER TAXPAYERS . . . . . . . . . . . . . . . . . . . . . . . . . . 14

DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15DIRECT DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15SCHEDULE OF BONDED INDEBTEDNESS . . . . . . . . . 16DEBT LIMIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19UNDERLYING DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . 20DEBT RATIOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21DEBT PAYMENT HISTORY . . . . . . . . . . . . . . . . . . . . . . 21FUTURE FINANCING . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

TAX RATES, LEVIES AND COLLECTIONS . . . . . . . . . . . . . 22TAX LEVIES AND COLLECTIONS . . . . . . . . . . . . . . . . 22TAX CAPACITY RATES . . . . . . . . . . . . . . . . . . . . . . . . . 23LEVY LIMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25COUNTY GOVERNMENT . . . . . . . . . . . . . . . . . . . . . . . . 25EMPLOYEES; PENSIONS; UNIONS . . . . . . . . . . . . . . . 25POST EMPLOYMENT BENEFITS . . . . . . . . . . . . . . . . . 25FUNDS ON HAND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26MUNICIPAL BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . 27SUMMARY GENERAL FUND INFORMATION . . . . . . 28

GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 29LOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29LARGER EMPLOYERS . . . . . . . . . . . . . . . . . . . . . . . . . . 29U.S. CENSUS DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30EMPLOYMENT/UNEMPLOYMENT DATA . . . . . . . . . 30

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . A-1

FORM OF LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . . . B-1

BOOK-ENTRY-ONLY SYSTEM . . . . . . . . . . . . . . . . . . . . C-1

FORM OF CONTINUING DISCLOSURE COVENANTS (EXCERPTS FROM SALE RESOLUTION) . . . . . . . D-1

TERMS OF PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1

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BOARD OF COMMISSIONERS

Term ExpiresSteve Rohlfing Chairperson January 2019Lance Wetzel Vice Chairperson January 2019Joe Connolly County Commissioner January 2019Dave Gliszinski County Commissioner January 2021John King County Commissioner January 2021

ADMINISTRATION

Pam Simonette, County Auditor-TreasurerDarrell Pettis, County Administrator

Carol Blaschko, Finance Director

PROFESSIONAL SERVICES

Dorsey & Whitney LLP, Bond Counsel, Minneapolis, Minnesota

Ehlers & Associates, Inc., Municipal Advisors, Roseville, Minnesota(Other offices located in Waukesha, Wisconsin, Chicago, Illinois and Denver, Colorado)

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INTRODUCTORY STATEMENT

This Preliminary Official Statement contains certain information regarding Le Sueur County, Minnesota (the"County") and the issuance of its $9,255,000* General Obligation Capital Improvement Plan and Refunding Bonds,Series 2018A (the "Bonds") or the "Obligations". Any descriptions or summaries of the Bonds, statutes, or documentsincluded herein are not intended to be complete and are qualified in their entirety by reference to such statutes anddocuments and the form of the Bonds to be included in the resolution awarding the sale of the Bonds (the "AwardResolution") to be adopted by the Board of Commissioners on January 16, 2018.

Inquiries may be directed to Ehlers & Associates, Inc. ("Ehlers" or the "Municipal Advisor"), Roseville, Minnesota,(651) 697-8500, the County's Municipal Advisor. A copy of this Preliminary Official Statement may be downloadedfrom Ehlers’ web site at www.ehlers-inc.com by connecting to the Bond Sales link and following the directions atthe top of the site.

THE BONDS

GENERAL

The Bonds will be issued in fully registered form as to both principal and interest in denominations of $5,000 eachor any integral multiple thereof, and will be dated, as originally issued, as of February 15, 2018. The Bonds willmature on February 1 in the years and amounts set forth on the cover of this Preliminary Official Statement. Interestwill be payable on February 1 and August 1 of each year, commencing August 1, 2018, to the registered owners ofthe Bonds appearing of record in the bond register as of the close of business on the 15th day (whether or not abusiness day) of the immediately preceding month. Interest will be computed upon the basis of a 360-day year oftwelve 30-day months and will be rounded pursuant to rules of the Municipal Securities Rulemaking Board("MSRB"). The rate for any maturity may not be more than 1.00% less than the rate for any precedingmaturity. (For example, if a rate of 4.50% is proposed for the 2019 maturity, then the lowest rate that may beproposed for any later maturity is 3.50%.) All Bonds of the same maturity must bear interest from the date of issueuntil paid at a single, uniform rate. Each rate must be expressed in an integral multiple of 5/100 or 1/8 of 1%.

Unless otherwise specified by the purchaser, the Bonds will be registered in the name of Cede & Co., as nominee forThe Depository Trust Company, New York, New York ("DTC"). (See "Book-Entry-Only System" herein.) As longas the Bonds are held under the book-entry system, beneficial ownership interests in the Bonds may be acquired inbook-entry form only, and all payments of principal of, premium, if any, and interest on the Bonds shall be madethrough the facilities of DTC and its participants. If the book-entry system is terminated, principal of, premium, ifany, and interest on the Bonds shall be payable as provided in the Award Resolution.

The County has selected Bond Trust Services Corporation, Roseville, Minnesota, to act as paying agent (the "PayingAgent"). Bond Trust Services Corporation and Ehlers are affiliate companies. The County will pay the charges forPaying Agent services. The County reserves the right to remove the Paying Agent and to appoint a successor.

*Preliminary, subject to change.

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OPTIONAL REDEMPTION

At the option of the County, the Bonds maturing on or after February 1, 2028 shall be subject to optional redemptionprior to maturity on February 1, 2027 and on any date thereafter, at a price of par plus accrued interest.

Redemption may be in whole or in part of the Bonds subject to prepayment. If redemption is in part, the selectionof the amounts and maturities of the Bonds to be redeemed shall be at the discretion of the County. If only part ofthe Bonds having a common maturity date are called for redemption, then the County or Paying Agent, if any, willnotify DTC of the particular amount of such maturity to be redeemed. DTC will determine by lot the amount of eachparticipant's interest in such maturity to be redeemed and each participant will then select by lot the beneficialownership interest in such maturity to be redeemed.

Notice of redemption shall be sent by mail not more than 60 days and not less than 30 days prior to the date fixed forredemption to the registered owner of each Bond to be redeemed at the address shown on the registration books.

AUTHORITY; PURPOSE

The Bonds are authorized pursuant to Minnesota Statutes, Chapter 475, and Sections 373.40 and 475.67, for thepurpose of funding a portion of the costs associated with the construction of a new justice center, and effecting acurrent refunding of the County’s $2,555,000 General Obligation Capital Improvement Plan Bonds, Series 2006A,dated December 1, 2006 (the “Series 2006A Bonds”), the County’s $2,555,000 General Obligation CapitalImprovement Plan Bonds, Series 2007A, dated December 1, 2007 (the “Series 2007A Bonds”), and the County’s$4,090,000 General Obligation Capital Improvement Plan Bonds, Series 2008A, dated October 1, 2008 (the “Series2008A Bonds”) as shown below.

Minnesota Statutes, Section 373.40, allows counties to plan for and finance the acquisition and betterment of publiclands, buildings, and other improvements within the county, including financing county highway improvements. Annual principal and interest payments on general obligation capital improvement bonds are limited to 0.12% of theCounty’s estimated market value. The estimated market value of the County for taxes collectible in 2017 is$3,981,422,600. This results in a maximum annual debt service allowable of $4,777,707.12 for general obligationcapital improvement bonds outstanding at any time.

Issue Being Refunded

Date ofRefunded

IssueCallDate

CallPrice

MaturitiesBeing

RefundedInterestRates

Principal to be

Refunded

CUSIPBase

521426

Series 2006A Bonds 12/1/06 2/1/17 Par 2021 (term) 4.00% $590,000 JP22023 (term) 4.00% 435,000 JR8

Total Series 2006A Bonds Being Refunded $1,025,000

Proceeds of the Bonds will be used to call and prepay the maturities described above and to pay all or most of thecosts of issuance. The County will pay the principal and interest payment due on February 1, 2018 from the DebtService Fund for the Series 2006A Bonds.

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Date ofRefunded

IssueCallDate

CallPrice

MaturitiesBeing


Principal to be

Refunded

CUSIPBase

521426

Series 2007A Bonds 12/1/07 2/1/18 Par 2019 4.00% $180,000 KG02021 (term) 4.00% 385,000 KJ42023 (term) 4.00% 420,000 KL9

2024 4.10% 225,000 KM7




Date ofRefunded

IssueCallDate

CallPrice

MaturitiesBeing


Principal to be

Refunded

CUSIPBase

521426

Series 2008A Bonds 10/1/08 2/1/18 Par 2019 4.00% $290,000 KX32020 4.00% 305,000 KY12021 4.10% 320,000 KZ82022 4.20% 330,000 LA22023 4.25% 345,000 LB02024 4.30% 360,000 LC8



ESTIMATED SOURCES AND USES*

SourcesPar Amount of Bonds $9,255,000Total Sources $9,255,000

UsesProject Costs $4,732,000Deposit to Current Refunding Fund 4,199,212Contingency 2,407Estimated Discount 111,060Finance Related Expenses 83,000Capitalized Interest 127,321Total Uses $9,255,000

*Preliminary, subject to change

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SECURITY

The Bonds are general obligations of the County for which its full faith, credit and taxing powers are pledged withoutlimit as to rate or amount. In accordance with Minnesota Statutes, the County will levy each year an amount not lessthan 105% of the debt service requirements on the Bonds. In the event funds on hand for payment of principal andinterest are at any time insufficient, the County is required to levy an ad valorem tax upon all taxable properties withinits boundaries without limit as to rate or amount to make up any deficiency.

RATING

General obligation debt of the County, with the exception of any outstanding credit enhanced issues, is currently rated"AA" by S&P Global Ratings (“S&P).

The County has requested a rating on this issue from S&P, and bidders will be notified as to the assigned rating priorto the sale. Such rating reflects only the views of such organization and explanations of the significance of such ratingmay be obtained from S&P. Generally, a rating agency bases its rating on the information and materials furnishedto it and on investigations, studies and assumptions of its own. There is no assurance that such rating will continuefor any given period of time or that it will not be revised downward or withdrawn entirely by such rating agency, ifin the judgment of such rating agency circumstances so warrant. Any such downward revision or withdrawal of suchrating may have an adverse effect on the market price of the Bonds.

Such rating is not to be construed as a recommendation of the rating agency to buy, sell or hold the Bonds, and therating assigned by the rating agency should be evaluated independently. Except as may be required by the DisclosureUndertaking described under the heading "CONTINUING DISCLOSURE" neither the County nor the underwriterundertake responsibility to bring to the attention of the owner of the Bonds any proposed changes in or withdrawalof such rating or to oppose any such revision or withdrawal.

CONTINUING DISCLOSURE

In order to assist the Underwriters in complying with SEC Rule 15c2-12 promulgated by the Securities and ExchangeCommission, pursuant to the Securities Exchange Act of 1934 (hereinafter the "Rule"), the County shall covenantto take certain actions pursuant to a Resolution adopted by the Board of Commissioners by entering into a ContinuingDisclosure Undertaking (the "Disclosure Undertaking") for the benefit of holders, including beneficial holders. TheDisclosure Undertaking requires the County to provide electronically or in the manner otherwise prescribed certainfinancial information annually and to provide notices of the occurrence of certain events enumerated in the Rule. Thedetails and terms of the Disclosure Undertaking for this issue are set forth in Appendix D to be executed and deliveredby the County at the time of delivery of the Bonds. Such Disclosure Undertaking will be in substantially the formattached hereto.

The County did not timely file notice of certain bond insurer rating changes during the previous five years. Exceptto the extent the preceding is deemed to be material, in the previous five years the County believes it has not failedto comply in all material respects with its prior undertakings under the Rule. The County has reviewed its continuingdisclosure responsibilities to help ensure compliance in the future.

A failure by the County to comply with any Disclosure Undertaking will not constitute an event of default on thisissue or any issue outstanding. However, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price.

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The County will file its continuing disclosure information using the Electronic Municipal Market Access ("EMMA")system or any system that may be prescribed in the future. Investors will be able to access continuing disclosureinformation filed with the MSRB at www.emma.msrb.org. Ehlers is currently engaged as disclosure disseminationagent for the County.

LEGAL OPINION

An opinion in substantially the form attached hereto as Appendix B will be furnished by Dorsey & Whitney LLP,Minneapolis, Minnesota, bond counsel to the County.

TAX EXEMPTION AND RELATED TAX CONSIDERATIONS

The following discussion is not intended to be an exhaustive discussion of collateral tax consequences arising fromownership or disposition of the Bonds or receipt of interest on the Bonds. Prospective purchasers should consult theirtax advisors with respect to collateral tax consequences, including, without limitation, the determination of gain orloss on the sale of a Bond, the calculation of alternative minimum tax liability, the inclusion of Social Security orother retirement payments in taxable income, the disallowance of deductions for certain expenses attributable to theBonds, and applicable state and local tax rules in states other than Minnesota. The form of the approving opinion ofDorsey & Whitney LLP, Bond Counsel, is attached as Appendix B hereto.

Tax Exemption

It is the opinion of Dorsey & Whitney LLP, Minneapolis, Minnesota, Bond Counsel, based on present federal andMinnesota laws, regulations, rulings and decisions, and on certifications to be furnished at closing, and assumingcompliance by the County with certain covenants (the "Tax Covenants"), that interest to be paid on the Bonds isexcluded from gross income for federal income tax purposes and from taxable net income of individuals, estates, andtrusts for Minnesota income tax purposes. Such interest is, however, included in taxable income for purposes of theMinnesota franchise tax on corporations and financial institutions.

Certain provisions of the Internal Revenue Code of 1986, as amended (the "Code"), however, impose continuingrequirements that must be met after the issuance of the Bonds in order that interest on the Bonds be and remainexcludable from federal gross income and from Minnesota taxable net income of individuals, estates, and trusts. These requirements include, but are not limited to, provisions regarding the use of Bond proceeds and the facilitiesfinanced or refinanced with such proceeds; restrictions on the investment of Bond proceeds and other amounts; andprovisions requiring that certain investment earnings be rebated periodically to the federal government. Noncompliance with such requirements of the Code may cause interest on the Bonds to be includable in federal grossincome or in Minnesota taxable net income retroactively to their date of issue. Compliance with the Tax Covenantswill satisfy the current requirements of the Code with respect to exclusion of interest on the Bonds from federal grossincome and from Minnesota taxable net income of individuals, estates, and trusts. No provision has been made forredemption of or for an increase in the interest rate on the Bonds in the event that interest on the same becomesincludable in federal gross income or in Minnesota taxable net income.

Qualified Tax-Exempt Obligations

The County will designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of theCode relating to the ability of financial institutions to deduct from income for federal income tax purposes a portionof the interest expense that is allocable to carrying and acquiring tax-exempt obligations. Sections 265(a)(2) and 291of the Code impose additional limitations on the deductibility of such interest expense.

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Original Issue Discount

Certain maturities of the Bonds may be issued at a discount from the principal amount payable on such Bonds atmaturity (collectively, the "Discount Bonds"). The difference between the price at which a substantial amount of theDiscount Bonds of a given maturity is first sold to the public (the "Issue Price") and the principal amount payable atmaturity constitutes "original issue discount" under the Code. The amount of original issue discount that accrues toa holder of a Discount Bond under section 1288 of the Code is excluded from federal gross income and fromMinnesota taxable net income of individuals, estates, and trusts to the same extent that stated interest on such DiscountBond would be so excluded. The amount of the original issue discount that accrues with respect to a Discount Bondunder section 1288 is added to the owner’s federal and Minnesota tax basis in determining gain or loss upondisposition of such Discount Bond (whether by sale, exchange, redemption or payment at maturity). Original issuediscount is taxable under the Minnesota franchise tax on corporations and financial institutions.

Interest in the form of original issue discount accrues under section 1288 pursuant to a constant yield method thatreflects semiannual compounding on dates that are determined by reference to the maturity date of the Discount Bond.The amount of original issue discount that accrues for any particular semiannual accrual period generally is equal tothe excess of (1) the product of (a) one-half of the yield on such Bonds (adjusted as necessary for an initial shortperiod) and (b) the adjusted issue price of such Bonds, over (2) the amount of stated interest actually payable. Forpurposes of the preceding sentence, the adjusted issue price is determined by adding to the Issue Price for such Bondsthe original issue discount that is treated as having accrued during all prior semiannual accrual periods. If a DiscountBond is sold or otherwise disposed of between semiannual compounding dates, then the original issue discount thatwould have accrued for that semiannual accrual period for federal income tax purposes is allocated ratably to the daysin such accrual period.

If a Discount Bond is purchased for a cost that exceeds the sum of the Issue Price plus accrued interest and accruedoriginal issue discount, the amount of original issue discount that is deemed to accrue thereafter to the purchaser isreduced by an amount that reflects amortization of such excess over the remaining term of such Bond. If such excess isgreater than the amount of remaining original issue discount, the basis reduction rules in the Code for amortizableBond premium might result in taxable gain upon sale, redemption or maturity of the Bonds, even if the Bonds are sold,redeemed or retired for an amount equal to or less than their cost.

Except for the Minnesota rules described above, no opinion is expressed as to state and local income tax treatmentof original issue discount. It is possible under certain state and local income tax laws that original issue discount ona Discount Bond may be taxable in the year of accrual, and may be deemed to accrue differently than under federallaw.

Holders of Discount Bonds should consult their tax advisors with respect to the computation and accrual of originalissue discount and with respect to the other federal, state and local tax consequences associated with the purchase,ownership, redemption, sale or other disposition of Discount Bonds.

6

Bond Premium

Certain maturities of the Bonds may be issued at a premium to the principal amount payable at maturity. Except inthe case of dealers, which are subject to special rules, Bondholders who acquire Bonds at a premium, even Bonds thatwere not initially offered at a premium, must, from time to time, reduce their federal and Minnesota tax basis for theBonds for purposes of determining gain or loss on the sale or payment of such Bonds. Premium generally isamortized for federal and Minnesota income and franchise tax purposes on the basis of a Bondholder’s constant yieldto maturity or to certain call dates with semiannual compounding. Accordingly, Bondholders who acquire Bonds ata premium might recognize taxable gain upon sale of the Bonds, even if such Bonds are sold for an amount equal toor less than their original cost. Amortized premium is not deductible for federal or Minnesota income tax purposes. Bondholders who acquire Bonds at a premium should consult their tax advisors concerning the calculation of Bondpremium and the timing and rate of premium amortization, as well as the state and local tax consequences of owningand selling Bonds acquired at a premium.

Related Tax Considerations

Interest on the Bonds is not an item of tax preference for federal or Minnesota alternative minimum tax purposes, butis included in adjusted current earnings of corporations for purposes of the federal alternative minimum tax applicableto taxable years beginning before January 1, 2018. Section 86 of the Code and corresponding provisions of Minnesotalaw require recipients of certain Social Security and railroad retirement benefits to take interest on the Bonds intoaccount in determining the taxability of such benefits. Passive investment income, including interest on the Bonds,may be subject to taxation under section 1375 of the Code, and corresponding provisions of Minnesota law, for anS corporation that has accumulated earnings and profits at the close of the taxable year, if more than 25 percent ofits gross receipts is passive investment income. Section 265 of the Code denies a deduction for interest onindebtedness incurred or continued to purchase or carry the Bonds, and Minnesota law similarly denies a deductionfor such interest in the case of individuals, estates, and trusts. Indebtedness may be allocated to the Bonds for thispurpose even though not directly traceable to the purchase of the Bonds. Federal and Minnesota laws also restrictthe deductibility of other expenses allocable to the Bonds. [Because of the basis reduction rules in the Code foramortizable Bond premium, Bondholders who acquire Bonds at a premium might recognize taxable gain upon saleof the Bonds even if the Bonds are sold for an amount equal to or less than their original cost.] In the case of aninsurance company subject to the tax imposed by section 831 of the Code, the amount which otherwise would betaken into account as losses incurred under section 832(b)(5) of the Code must be reduced by an amount equal to 15percent of the interest on the Bonds that is received or accrued during the taxable year. Interest on the Bonds maybe included in the income of a foreign corporation for purposes of the branch profits tax imposed by section 884 ofthe Code, and is included in net investment income of foreign insurance companies under section 842(b) of the Code.

Proposed Changes in Federal and State Law

From time to time, there are Presidential proposals, proposals of various federal committees and legislative proposalsin Congress and in the state that, if enacted, could alter or amend the federal and state tax matters referred to hereinor adversely affect the marketability or market value of the Bonds or otherwise prevent holders of the Bonds fromrealizing the full benefit of the tax exemption of interest on the Bonds. For example, in the recent past, legislationhas been proposed that effectively would have imposed a partial tax on otherwise tax exempt interest for certain higherincome taxpayers. In addition, regulatory and administrative actions may from time to time be announced that couldadversely affect the market value, marketability or tax status of the Bonds.

No prediction is made concerning future events. The opinions expressed by Bond Counsel in connection with theissuance of the Bonds are based upon existing law only. Purchasers of the Bonds should consult their own taxadvisors regarding any pending or proposed legislation, regulatory action, or litigation.

7

THE FOREGOING IS NOT INTENDED TO BE AN EXHAUSTIVE DISCUSSION OF COLLATERAL TAXCONSEQUENCES ARISING FROM OWNERSHIP OR DISPOSITION OF THE BONDS OR RECEIPT OFINTEREST ON THE BONDS. PROSPECTIVE PURCHASERS ARE ADVISED TO CONSULT THEIR OWNTAX ADVISORS AS TO THE TAX CONSEQUENCES OF, OR TAX CONSIDERATIONS FOR, PURCHASINGOR HOLDING THE BONDS.

MUNICIPAL ADVISOR

Ehlers has served as municipal advisor to the County in connection with the issuance of the Bonds. The MunicipalAdvisor cannot participate in the underwriting of the Bonds. The financial information included in this PreliminaryOfficial Statement has been compiled by the Municipal Advisor. Such information does not purport to be a review,audit or certified forecast of future events and may not conform with accounting principles applicable to compilationsof financial information. Ehlers is not a firm of certified public accountants. Ehlers is registered with the Securitiesand Exchange Commission and the MSRB as a Municipal Advisor.

MUNICIPAL ADVISOR AFFILIATED COMPANIES

Bond Trust Services Corporation ("BTSC") and Ehlers Investment Partners, LLC ("EIP") are affiliate companies ofEhlers. BTSC is chartered by the State of Minnesota and authorized in Minnesota, Wisconsin, and Illinois to transactthe business of a limited purpose trust company. BTSC provides paying agent services to debt issuers. EIP is aRegistered Investment Advisor with the Securities and Exchange Commission. EIP assists issuers with the investmentof bond proceeds or investing other issuer funds. This includes escrow bidding agent services. Issuers, such as theCounty, have retained or may retain BTSC and/or EIP to provide these services. If hired, BTSC and/or EIP wouldbe retained by the County under an agreement separate from Ehlers.

INDEPENDENT AUDITORS

The basic financial statements of the County for the fiscal year ended December 31, 2016, have been audited by BakerTilly Virchow Krause, LLP, Minneapolis, Minnesota, independent auditors (the "Auditor"). The report of the Auditor,together with the basic financial statements, component units financial statements, and notes to the financialstatements are attached hereto as "APPENDIX A – FINANCIAL STATEMENTS". The Auditor has not beenengaged to perform and has not performed, since the date of its report included herein, any procedures on the financialstatements addressed in that report. The Auditor also has not performed any procedures relating to this PreliminaryOfficial Statement.

RISK FACTORS

Following is a description of possible risks to holders of the Bonds without weighting as to probability. Thisdescription of risks is not intended to be all-inclusive, and there may be other risks not now perceived or listed here.

Taxes: The Bonds are general obligations of the County, the ultimate payment of which rests in the County's abilityto levy and collect sufficient taxes to pay debt service should other revenue be insufficient. In the event of delayedbilling, collection or distribution of property taxes, sufficient funds may not be available to the County in time to paydebt service when due.

8

State Actions: Many elements of local government finance, including the issuance of debt and the levy of propertytaxes, are controlled by state government. Future actions of the state may affect the overall financial condition of theCounty, the taxable value of property within the County, and the ability of the County to levy and collect propertytaxes.

Future Changes in Law: Various State and federal laws, regulations and constitutional provisions apply to the County and to the Bonds. The County can give no assurance that there will not be a change in or interpretation ofany such applicable laws, regulations and provisions which would have a material effect on the County or the taxingauthority of the County.

Ratings; Interest Rates: In the future, the County's credit rating may be reduced or withdrawn, or interest rates forthis type of obligation may rise generally, either possibility resulting in a reduction in the value of the Bonds for resaleprior to maturity.

Tax Exemption: If the federal government or the State of Minnesota taxes all or a portion of the interest onmunicipal obligations, directly or indirectly, or if there is a change in federal or state tax policy, the value of the Bondsmay fall for purposes of resale. Noncompliance following the issuance of the Bonds with certain requirements of theCode and covenants of the bond resolution may result in the inclusion of interest on the Bonds in gross income of therecipient for United States income tax purposes or in taxable net income of individuals, estates or trusts for State ofMinnesota income tax purposes. No provision has been made for redemption of the Bonds, or for an increase in theinterest rate on the Bonds, in the event that interest on the Bonds becomes subject to United States or State ofMinnesota income taxation, retroactive to the date of issuance.

Continuing Disclosure: A failure by the County to comply with the Disclosure Undertaking for continuingdisclosure (see "CONTINUING DISCLOSURE") will not constitute an event of default on the Bonds. Any suchfailure must be reported in accordance with the Rule and must be considered by any broker, dealer, or municipalsecurities dealer before recommending the purchase or sale of the Bonds in the secondary market. Such a failure mayadversely affect the transferability and liquidity of the Bonds and their market price.

State Economy; State Aids: State of Minnesota cash flow problems could affect local governments and possiblyincrease property taxes.

Book-Entry-Only System: The timely credit of payments for principal and interest on the Bonds to the accounts ofthe Beneficial Owners of the Bonds may be delayed due to the customary practices, standing instructions or for otherunknown reasons by DTC participants or indirect participants. Since the notice of redemption or other notices toholders of these obligations will be delivered by the County to DTC only, there may be a delay or failure by DTC,DTC participants or indirect participants to notify the Beneficial Owners of the Bonds.

Economy: A combination of economic, climatic, political or civil disruptions or terrorist actions outside of thecontrol of the County, including loss of major taxpayers or major employers, could affect the local economy and resultin reduced tax collections and/or increased demands upon local government. Real or perceived threats to the financialstability of the County may have an adverse effect on the value of the Bonds in the secondary market.

Secondary Market for the Bonds: No assurance can be given that a secondary market will develop for the purchaseand sale of the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Theunderwriters are not obligated to engage in secondary market trading or to repurchase any of the Bonds at the requestof the owners thereof. Prices of the Bonds as traded in the secondary market are subject to adjustment upward anddownward in response to changes in the credit markets and other prevailing circumstances. No guarantee exists asto the future market value of the Bonds. Such market value could be substantially different from the original purchaseprice.

9

Bankruptcy: The rights and remedies of the holders may be limited by and are subject to the provisions of federalbankruptcy laws, to other laws, or equitable principles that may affect the enforcement of creditors’ rights, to theexercise of judicial discretion in appropriate cases and to limitations on legal remedies against local governments. The opinion of Bond Counsel to be delivered with respect to the Bonds will be similarly qualified.

10

VALUATIONS

OVERVIEW

All non-exempt property is subject to taxation by local taxing districts. Exempt real property includes Indian lands, public property, andeducational, religious and charitable institutions. Most personal property is exempt from taxation (except investor-owned utility mains,generating plants, etc.).

The valuation of property in Minnesota consists of three elements. (1) The estimated market value is set by city or county assessors. Not lessthan 20% of all real properties are to be appraised by local assessors each year. (2) The taxable market value is the estimated market valueadjusted by all legislative exclusions. (3) The tax capacity (taxable) value of property is determined by class rates set by the State Legislature. The tax capacity rate varies according to the classification of the property. Tax capacity represents a percent of taxable market value.

The property tax rate for a local taxing jurisdiction is determined by dividing the total tax capacity or market value of property within thejurisdiction into the dollars to be raised from the levy. State law determines whether a levy is spread on tax capacity or market value. Majorclassifications and the percentages by which tax capacity is determined are:

Type of Property 2014/15 2015/16 2016/17

Residential homestead1 First $500,000 - 1.00%Over $500,000 - 1.25%

First $500,000 - 1.00%Over $500,000 - 1.25%

First $500,000 - 1.00%Over $500,000 - 1.25%

Agricultural homestead1 First $500,000 HGA - 1.00%Over $500,000 HGA - 1.25%First $1,900,000 - 0.50% 2Over $1,900,000 - 1.00% 2

First $500,000 HGA - 1.00%Over $500,000 HGA - 1.25%First $2,140,000 - 0.50% 2Over $2,140,000 - 1.00% 2

First $500,000 HGA - 1.00%Over $500,000 HGA - 1.25%First $2,050,000 - 0.50% 2Over $2,050,000 - 1.00% 2

Agricultural non-homestead Land - 1.00% 2 Land - 1.00% 2 Land - 1.00% 2

Seasonal recreational residential First $500,000 - 1.00% 3Over $500,000 - 1.25% 3

First $500,000 - 1.00% 3Over $500,000 - 1.25% 3

First $500,000 - 1.00% 3Over $500,000 - 1.25% 3

Residential non-homestead: 1 unit - 1st $500,000 - 1.00% Over $500,000 - 1.25%2-3 units - 1.25% 4 or more - 1.25%Small City 4 - 1.25%Affordable Rental: First $100,000 - .75% Over $100,000 - .25%

1 unit - 1st $500,000 - 1.00% Over $500,000 - 1.25%2-3 units - 1.25% 4 or more - 1.25%Small City 4 - 1.25%Affordable Rental: First $106,000 - .75% Over $106,000 - .25%

1 unit - 1st $500,000 - 1.00% Over $500,000 - 1.25%2-3 units - 1.25% 4 or more - 1.25%Small City 4 - 1.25%Affordable Rental: First $115,000 - .75% Over $115,000 - .25%

Industrial/Commercial/Utility5 First $150,000 - 1.50%Over $150,000 - 2.00%

First $150,000 - 1.50%Over $150,000 - 2.00%

First $150,000 - 1.50%Over $150,000 - 2.00%

1 A residential property qualifies as "homestead" if it is occupied by the owner or a relative of the owner on theassessment date.

2 Applies to land and buildings. Exempt from referendum market value tax.

3 Exempt from referendum market value tax.

4 Cities of 5,000 population or less and located entirely outside the seven-county metropolitan area and the adjacentnine-county area and whose boundaries are 15 miles or more from the boundaries of a Minnesota city with apopulation of over 5,000.

5 The estimated market value of utility property is determined by the Minnesota Department of Revenue.

11

CURRENT PROPERTY VALUATIONS

2016/17 Economic Market Value $4,136,416,5931

2016/17Assessor's Estimated

Market Value

2016/17Net TaxCapacity

Real Estate $3,948,253,200 $34,961,737

Personal Property 33,169,400 653,146

Total Valuation $3,981,422,600 $35,614,883

Less: Captured Tax Increment Tax Capacity2 (158,648)

Taxable Net Tax Capacity $35,456,235

1 According to the Minnesota Department of Revenue, the Assessor's Estimated Market Value (the "AEMV") forLe Sueur County is about 96.00% of the actual selling prices of property most recently sold in the County. Thesales ratio was calculated by comparing the selling prices with the AEMV. Dividing the AEMV of real estateby the sales ratio and adding the AEMV of personal property and utility, railroads and minerals, if any, resultsin an Economic Market Value ("EMV") for the County of $4,136,416,593.

2 The captured tax increment value shown above represents the captured net tax capacity of tax increment financingdistricts located in Le Sueur County.

12

2016/17 NET TAX CAPACITY BY CLASSIFICATION2016/17

Net Tax CapacityPercent of Total

Net Tax Capacity

Residential homestead $13,556,613 38.06%

Agricultural 12,528,295 35.18%

Commercial/industrial 3,584,911 10.07%

Public utility 243,195 0.68%

Railroad operating property 234,520 0.66%

Non-homestead residential 2,376,880 6.67%

Commercial & residential seasonal/rec. 2,437,323 6.84%

Personal property 653,146 1.83%

Total $35,614,883 100.00%

TREND OF VALUATIONS

LevyYear

Assessor'sEstimated

Market Value

Assessor'sTaxable

Market ValueNet Tax

Capacity1

TaxableNet Tax

Capacity2

Percent +/- inEstimated

Market Value

2012/13 $3,588,679,300 $3,365,786,900 $31,944,321 $31,762,929 +1.55%

2013/14 3,793,914,400 3,577,852,850 33,697,703 33,547,409 +5.72%

2014/15 3,878,425,100 3,665,979,450 34,450,714 34,298,260 +2.23%

2015/16 3,958,055,700 3,749,261,553 35,230,416 35,077,962 +2.05%

2016/17 3,981,422,600 3,767,220,303 35,614,883 35,456,235 +0.59%

1 Net Tax Capacity includes tax increment values.

2 Taxable Net Tax Capacity does not include tax increment values.

13

LARGER TAXPAYERS

Taxpayer Type of Property

2016/17Net TaxCapacity

Percent ofCounty's Total

Net TaxCapacity

UNIMIN Minnesota, Corp. Ag/Industrial/Residential $ 577,003 1.62%

HAHN2, LLC Industrial 276,488 0.78%

Union Pacific Railroad Railroad 234,760 0.66%

Xcel Energy Utility 177,632 0.50%

Hometown Bio Energy Industrial 171,810 0.48%

Centerpoint Energy Minnegasco Utility 148,261 0.42%

Seneca Foods, Corp. Agricultural/Industrial 145,756 0.41%

Individual Agricultural/Residential 138,117 0.39%

Xcel Energy Electric Utility 135,394 0.38%

Northern Natural Gas Company Utility 127,958 0.36%

Total $ 2,133,179 5.99%

County's Total 2016/17 Net Tax Capacity $35,614,883

Source: Current Property Valuations, Net Tax Capacity by Classification, Trend of Valuations and LargerTaxpayers have been furnished by Le Sueur County.

14

DEBT

DIRECT DEBT1

General Obligation Debt (see schedules following)

Total g.o. debt being paid from state aids $ 520,000Total g.o. debt being paid from taxes (includes the Bonds)* 22,065,000Total g.o. debt being paid from taxes and state aids 7,845,000

Total General Obligation Debt $30,430,000


1 Outstanding debt is as of the dated date of the Bonds.

15

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18

DEBT LIMIT

The statutory limit on debt of Minnesota municipalities other than school districts or cities of the first class (MinnesotaStatutes, Section 475.53, subd. 1) is 3% of the Assessor's Estimated Market Value of all taxable property within itsboundaries. "Net debt" (Minnesota Statutes, Section 475.51, subd. 4) is the amount remaining after deducting fromgross debt: (1) obligations payable wholly or partly from special assessments levied against benefitted property; (2)warrants or orders having no definite or fixed maturity; (3) obligations issued to finance any public revenue producingconvenience; (4) obligations issued to create or maintain a permanent improvement revolving fund; (5) funds heldas sinking funds for payment of principal and interest on debt other than those deductible under 1-4 above; (6) otherobligations which are not to be included in computing the net debt of a municipality under the provisions of the lawauthorizing their issuance.

2016/17 Assessor's Estimated Market Value $3,981,422,600

Multiply by 3% 0.03

Statutory Debt Limit $ 119,442,678

Less: Long-Term Debt Outstanding Being Paid Solely from Taxes 1 (includes the Bonds)* (25,910,000)

Unused Debt Limit* $ 93,532,678


1 Includes the CIP Portion of the County's $9,625,000 General Obligation Bonds, Series 2015A ($3,845,000principal outstanding).

19

UNDERLYING DEBT1

Taxing District

2016/17Taxable Net

Tax Capacity% In

County Total

G.O. Debt2

County'sProportionate

Share

City of Cleveland $ 356,402 100.0000% $ 610,000 $ 610,000

City of Le Center 1,229,758 100.0000% 6,190,000 6,190,000

City of Le Sueur 2,796,202 100.0000% 12,005,000 12,005,000

City of Montgomery 1,771,110 100.0000% 2,595,000 2,595,000

City of Mankato 40,249,491 0.0028% 56,300,000 1,576

City of Waterville 1,144,163 100.0000% 434,000 434,000

City of Elysian 876,683 99.3670% 2,600,000 2,583,542

City of New Prague 2,699,770 100.0000% 13,059,000 13,059,000

I.S.D. No. 2397 (Le Sueur/Henderson) 9,734,257 62.6105% 10,985,000 6,877,763

I.S.D. No 394 (Montgomery/Lonsdale/Le Center) 13,654,285 71.9353% 24,320,000 17,494,665

Lake Washington Sanitary District 2,624,516 59.8272% 5,140,000 3,075,118

County's Share of Total Underlying Debt $64,925,665

1 Underlying debt is as of the dated date of the Bonds. Only those taxing jurisdictions with general obligation debtoutstanding are included in this section. Does not include non-general obligation debt, self-supporting generalobligation revenue debt, short-term general obligation debt, or general obligation tax/aid anticipation certificatesof indebtedness.

2 Outstanding debt is based on information in Official Statements obtained on EMMA and the Municipal Advisor'srecords.

20

DEBT RATIOS

G.O. Debt

Debt/EconomicMarket Value

($4,136,416,593)

Debt/Current

PopulationEstimate(27,639)

Direct G.O. Debt Being Paid From:State Aids $ 520,000Taxes 22,065,000Taxes & State Aids 7,845,000

Total General Obligation Debt (includes the Obligations)* $30,430,000Less: G.O. Debt Paid Entirely from State-Aids1 (4,520,000)Tax Supported General Obligation Debt* $25,910,000 0.63% $937.44

County's Share of Total Underlying Debt $64,925,665 1.57% $2,349.06

Total* $90,835,665 2.20% $3,286.50


DEBT PAYMENT HISTORY

The County has no record of default in the payment of principal and interest on its debt.

FUTURE FINANCING

The County plans to issue $4,950,000 General Obligation Jail Bonds, Series 2018B on March 1, 2018..

1 Debt service on the County’s general obligation state-aid debt is being paid entirely from state-aids and thereforeis considered self-supporting debt. Includes the state-aid portion of the County’s $9,625,000 General ObligationBonds, Series 2015A ($4,000,000 principal outstanding)

21

TAX RATES, LEVIES AND COLLECTIONS

TAX LEVIES AND COLLECTIONS

Tax YearNet Tax

Levy1Total CollectedFollowing Year

Collectedto Date2 % Collected

2012/13 $14,478,529 $14,206,936 $14,468,194 99.93%

2013/14 15,012,235 14,790,514 14,997,061 99.90%

2014/15 15,697,480 15,514,420 15,674,666 99.85%

2015/16 16,799,130 16,597,280 16,754,426 99.73%

2016/17 17,559,089 In process of collection

Property taxes are collected in two installments in Minnesota--the first by May 15 and the second by October 15.3 Mobile home taxes are collectible in full by August 31. Minnesota Statutes require that levies (taxes and specialassessments) for debt service be at least 105% of the actual debt service requirements to allow for delinquencies.

1 This reflects the Final Levy Certification of the County after all adjustments have been made.

2 Collections are through November 15, 2017.

3 Second half tax payments on agricultural property are due on November 15th of each year.

22

TAX CAPACITY RATES1

2012/13 2013/14 2014/15 2015/16 2016/17Le Sueur County 46.418% 45.433% 46.877% 48.952% 50.608%

City of Cleveland 72.488% 71.820% 75.161% 75.983% 78.809%

City of Heidelberg 28.916% 28.871% 28.709% 28.599% 30.095%

City of Kasota 23.629% 21.366% 21.879% 20.710% 20.272%

City of Kilkenny 78.231% 79.000% 77.510% 77.691% 80.572%

City of Le Center 83.159% 87.449% 86.482% 86.100% 88.697%

City of Le Sueur 69.841% 71.699% 76.398% 73.377% 76.675%

City of Montgomery 108.625% 119.597% 119.433% 100.689% 91.395%

City of Mankato N/A N/A N/A 43.624% 43.727%

City of Waterville 66.704% 66.520% 68.700% 70.071% 68.893%

City of Elysian 53.362% 60.123% 56.895% 59.809% 61.989%

City of New Prague 74.535% 70.348% 64.643% 62.256% 62.246%

I.S.D. No. 0077 (Mankato) 19.017% 24.169% 22.687% 24.200% 22.498%

I.S.D. No. 0391 (Cleveland) 7.058% 4.676% 7.809% 6.986% 6.720%

I.S.D. No. 0508 (St. Peter ) 16.879% 17.334% 17.115% 36.736% 38.350%

I.S.D. No. 0716 (Belle Plaine) 41.653% 39.070% 37.412% 35.577% 35.478%

I.S.D. No. 0721 (New Prague) 34.443% 33.724% 31.031% 38.449% 37.153%

I.S.D. No. 2143 (Waterville/Elysian/Morristown) 6.049% 4.502% 4.571% 5.778% 5.328%

I.S.D. No. 2397 (Le Sueur/Henderson) 22.038% 23.206% 21.481% 21.112% 19.169%

I.S.D. No 394 (Montgomery/Lonsdale/Le Center) 28.712% 27.697% 27.139% 26.069% 21.456%

Belle Plaine FD 2.536% 2.179% 2.160% 2.148% 2.416%

Le Center FD 2.579% 1.267% 1.228% 1.233% 1.217%

Le Sueur FD 3.424% 1.927% 1.912% 1.932% 2.195%

Montgomery FD 3.319% 3.441% 1.888% 1.811% 1.823%

New Prague FD 3.099% 3.407% 3.332% 3.345% 3.190%

Lake Wash Sanitary Sewer 3.582% 2.584% 3.233% 3.456% 5.383%

Scott County Library 1.887% 1.859% 1.808% 1.732% 1.736%

Waseca-Le Sueur Reg Library N/A 1.462% 1.567% 1.695% 1.733%

Town of Montgomery2 16.851% 16.483% 17.579% 15.937% 15.829%

Continued on next page...

1 After reduction for state aids. Does not include the statewide general property tax against commercial/industrial,non-homestead resorts and seasonal recreational residential property.

2 Representative town rate.

23

TAX CAPACITY RATES (CONTINUED)

2012/13 2013/14 2014/15 2015/16 2016/17

Referendum Market Value Rates:

I.S.D. No. 0077 (Mankato) 0.16714% 0.15481% 0.15781% 0.14777% 0.15897%

I.S.D. No. 0391 (Cleveland) 0.19429% 0.15639% 0.16604% 0.27417% 0.31251%

I.S.D. No. 0508 (St. Peter ) 0.22585% 0.19067% 0.18085% 0.16925% 0.17669%

I.S.D. No. 0716 (Belle Plaine) 0.08986% 0.13491% 0.12232% 0.12624% 0.11595%

I.S.D. No. 0721 (New Prague) 0.22465% 0.17768% 0.16885% 0.15253% 0.18668%

I.S.D. No. 2143 (Waterville/Elysian/Morristown) 0.29398% 0.27763% 0.24726% 0.33630% 0.30338%

I.S.D. No. 2397 (Le Sueur/Henderson) 0.20846% 0.16538% 0.17078% 0.20175% 0.16245%

I.S.D. No 394 (Montgomery/Lonsdale/Le Center) 0.12511% 0.08718% 0.11485% 0.11757% 0.12030%

City of Le Sueur 0.04800% 0.05396% 0.04384% 0.06366% 0.06385%

City of New Prague 0.01250% N/A N/A N/A N/A

Source: Tax Levies and Collections and Tax Capacity Rates have been furnished by Le Sueur County.

LEVY LIMITS

The State Legislature has periodically imposed limitations on the ability of municipalities to levy property taxes. Fortaxes levied in 2013, payable in 2014, only, the Legislature imposed a one year levy limit on all counties with apopulation greater than 5,000, and all cities with a population greater than 2,500. While these limitations have expired,the potential exists for future legislation to limit the ability of local governments to levy property taxes. All previouslimitations have not limited the ability to levy for the payment of debt service on bonded indebtedness. For moredetailed information about Minnesota levy limits, contact the Minnesota Department of Revenue or Ehlers &Associates.

24

THE ISSUER

COUNTY GOVERNMENT

Le Sueur County was organized as a municipality in 1853, and is governed by an elected five-member Board of CountyCommissioners, and decisions are made by a majority vote of a quorum. The County Administrator is appointed bythe Board, and the County Auditor-Treasurer is elected.

EMPLOYEES; PENSIONS; UNIONS

The County has 200 full-time, 25 part-time, and 2 seasonal employees. All full-time and certain part-time employeesof the County are covered by defined benefit pension plans administered by the Public Employee RetirementAssociation of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the PublicEmployees Police and Fire Fund (PEPFF) which are cost-sharing multiple-employer retirement plans. PERA membersbelong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security. Seethe Notes to Financial Statements in Appendix A for a detailed description of the Plans.

Recognized and Certified Bargaining Units

Bargaining UnitExpiration Date of Current Contract

Courthouse- Minnesota Teamsters #320 December 31, 2017

Highway- International #49 December 31, 2017

Human Services- Minnesota Teamsters #320 December 31, 2017

Deputy Sheriff- Minnesota Teamsters #320 December 31, 2017

Jailer/Dispatcher- Minnesota Teamsters #320 December 31, 2017

Status of Contracts

The contracts which expired December 31, 2017 are in negotiations.

POST EMPLOYMENT BENEFITS

The County has obligations for some post-employment benefits based on contractual agreements and State Statutes. Accounting for these obligations is dictated by Governmental Accounting Standards Board Statement No. 45 (GASB45). The County has undertaken a review of its OPEB liabilities. The County has not done an actuarial study at thistime.

25

FUNDS ON HAND (as of November 30, 2017)

FundTotal Cash

and Investments

Revenue $ 8,153,683

Victim Witness 29,218

Drug Task Force 73,474

Road & Bridge 2,092,471

Human Services 6,835,464

Family Service Collaborative 101,465

Bonded Indebtedness 2,130,014

Ditch (783,150)

Capital Improvement 10,230,655

Gravel Tax 340,874

Environmental Services 2,838,230

Trust 195,085

Agency 425,547

Health 308,826

Tax & Penalty 399,385

Total Funds on Hand $33,371,242

LITIGATION

There is no litigation threatened or pending questioning the organization or boundaries of the County or the right ofany of its officers to their respective offices or in any manner questioning their rights and power to execute and deliverthe Bonds or otherwise questioning the validity of the Bonds.

26

MUNICIPAL BANKRUPTCY

Municipalities are prohibited from filing for bankruptcy under Chapter 11 (reorganization) or Chapter 7 (liquidation)of the U.S. Bankruptcy Code (11 U.S.C. §§ 101-1532) (the "Bankruptcy Code"). Instead, the Bankruptcy Code permitsmunicipalities to file a petition under Chapter 9 of the Bankruptcy Code, but only if certain requirements are met. These requirements include that the municipality must be "specifically authorized" under State law to file for reliefunder Chapter 9. For these purposes, "State law" may include, without limitation, statutes of general applicabilityenacted by the State legislature, special legislation applicable to a particular municipality, and/or executive ordersissued by an appropriate officer of the State’s executive branch.

As of the date hereof, Minnesota Statutes, 471.831, authorizes municipalities to file for bankruptcy relief under Chapter9 of the Bankruptcy Code. A municipality is defined in United States Code, title 11, section 101, as amended throughDecember 31, 1996, but limited to a county, statutory or home rule charter city, or town; or a housing andredevelopment authority, economic development authority, or rural development financing authority established underChapter 469, a home rule charter or special law.

27

SUMMARY GENERAL FUND INFORMATIONFollowing are summaries of the revenues and expenditures and fund balances for the County's General Fund. These summariesare not purported to be the complete audited financial statements of the County, and potential purchasers should read the includedfinancial statements in their entirety for more complete information concerning the County. Copies of the complete statementsare available upon request. Appendix A includes the County’s 2016 audited financial statements.

FISCAL YEAR ENDING DECEMBER 31COMBINED STATEMENT 2013

Audited2014

Audited2015

Audited2016

AuditedRevenues

General property taxes $ 7,245,206 $ 7,571,038 $ 8,559,071 $ 8,738,963 Special Assessments 0 0 59,131 128,609

Intergovernmental 1,358,124 1,511,225 1,809,375 1,902,520Licenses and permits 232,211 221,076 260,947 382,555Charges for services 2,057,585 2,048,094 2,203,355 2,125,993Investment earnings 58,928 362,172 228,469 181,883Other miscellaneous revenues 386,158 97,660 120,078 184,232

Total Revenues $ 11,338,212 $ 11,811,265 $ 13,240,426 $ 13,644,755

ExpendituresCurrent:

General government $ 4,806,233 $ 5,208,520 $ 5,820,835 $ 6,046,380Public safety 3,659,048 3,755,507 3,958,361 3,927,597Health 1,873,852 1,948,417 1,985,583 2,191,445Conservation & Development 402,395 204,820 199,621 234,502Culture & Recreation 752,659 478,745 446,354 538,755

Capital outlay 200,377 362,785 326,686 232,335Total Expenditures $ 11,694,564 $ 11,958,794 $ 12,737,440 $ 13,171,014

Excess of revenues over (under) expenditures $ (356,352) $ (147,529) $ 502,986 $ 473,741

Other Financing Sources (Uses)Operating transfers in $ 0 $ 0 $ 42,997 $ 157,501Operating transfers out (17,086) (14,966) (16,245) (16,666)

Total Other Financing Sources (Uses) $ (17,086) $ (14,966) $ 26,752 $ 140,835

Net Changes in Fund Balances $ (373,438) $ (162,495) $ 529,738 $ 614,576

General Fund Balance January 1 6,317,743 5,944,305 5,781,810 6,311,548

General Fund Balance December 31 $ 5,944,305 $ 5,781,810 $ 6,311,548 $ 6,926,124

DETAILS OF DECEMBER 31 FUND BALANCENonspendable $ 2,070 $ 27,286 $ 25,156 $ 199,833Restricted 878,276 1,005,232 1,100,226 905,712Assigned 12,000 13,000 79,340 57,000Unassigned 5,051,959 4,736,292 5,106,826 5,763,579Total $ 5,944,305 $ 5,781,810 $ 6,311,548 $ 6,926,124

28

GENERAL INFORMATION

LOCATION

Le Sueur County, with a 2010 U.S. Census population of 27,703 and a current population estimate of 27,650, andcomprising an area of 298,880 acres, is located approximately 60 miles south of the Minneapolis-St. Paul metropolitanarea.

LARGER EMPLOYERS1

Larger employers in Le Sueur County include the following:

Firm Type of Business/ProductEstimated No.of Employees

Seneca Foods Corp. Food processing company 700

Chart, Inc Engineered products/systems of cryogenics 700

Le Sueur, Inc Aluminum casting & plastic molding 550

Mayo Clinic Health System Hospital and medical services 337

I.S.D. No. 2397 (Le Sueur-Henderson) Elementary and secondary education 301

USP Structural Connectors Metal fabricating manufacturer 268

Le Sueur County County government and services 227

Cambria Quatz surfaces 200

Minnesota Valley Health Cener Hospital and medical services 165

Davisco Foods International, Inc Cheese processors 120

Source: ReferenceUSA, written and telephone survey (December 2017), and the Minnesota Department ofEmployment and Economic Development.

1 This does not purport to be a comprehensive list and is based on available data obtained through a survey ofindividual employers, as well as the sources identified above. Some employers do not respond to inquiries foremployment data.

29

U.S. CENSUS DATA

Population Trend: Le Sueur County

2000 U.S. Census population 25,4262010 U.S. Census population 27,7032016 State Demographer's Estimate 27,650

Percent of Change 2000 - 2010 + 8.96%

Income and Age Statistics

Le SueurCounty

State ofMinnesota

UnitedStates

2016 per capita income $29,714 $32,157 $28,930

2016 median household income $62,462 $61,492 $53,889

2016 median family income $75,887 $77,055 $66,011

2016 median gross rent $696 $848 $928

2016 median value owner occupied units $182,000 $186,200 $178,600

2016 median age 41.5 yrs. 37.7 yrs. 37.6 yrs.

State of Minnesota United StatesCounty % of 2016 per capita income 92.40% 102.71%County % of 2016 median family income 98.48% 114.96%

Housing StatisticsLe Sueur County

2000 2016 Percent of Change

All Housing Units 10,858 12,498 15.10%

Source: 2000 and 2010 Census of Population and Housing, and 2015 American Community Survey (Based on a five-year estimate), U.S. Census Bureau (www.factfinder2.census.gov).

EMPLOYMENT/UNEMPLOYMENT DATA

Average Employment Average Unemployment

Year Le Sueur County Le Sueur County State of Minnesota

2013 14,538 6.1% 4.9%2014 14,590 5.4% 4.2%2015 14,672 4.9% 3.7%2016 14,803 4.9% 3.8%2017, November 15,369 3.5% 2.6%

Source: Minnesota Department of Employment and Economic Development.

30

APPENDIX A

FINANCIAL STATEMENTS

Potential purchasers should read the included financial statements in their entirety for more complete informationconcerning the County’s financial position. Such financial statements have been audited by the Auditor, to the extentand for the periods indicated thereon. The County has not requested the Auditor to perform any additional examination,assessments or evaluation with respect to such financial statements since the date thereof, nor has the County requestedthat the Auditor consent to the use of such financial statements in this Official Statement. Although the inclusion ofthe financial statements in this Official Statement is not intended to demonstrate the fiscal condition of the Countysince the date of the financial statements, in connection with the issuance of the Bonds, the County represents that therehave been no material adverse change in the financial position or results of operations of the County, nor has theCounty incurred any material liabilities, which would make such financial statements misleading.

Copies of the complete audited financial statements for the past three years and the current budget are available uponrequest from Ehlers.

A-1

APPENDIX B

FORM OF LEGAL OPINION

(See following page)

B-1

FORM OF LEGAL OPINION

Le Sueur County, Minnesota Le Center, Minnesota

[Purchaser]

Re: $9,255,000 General Obligation Capital Improvement Plan and Refunding Bonds, Series 2018A Le S

le sueur county, minnesota $9,255,000* general … · 2022 965,000 2029 240,000 2036 290,000 2023...

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