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In the opinion of Bond Counsel, the interest on the Bonds is exempt from taxation by the Stale of Minnesota and its subdivisions and municipalities and the interest to be paid
<br />on the Bonds is not includible in the gross income of the recipient for United States or State of Minnesota income lax purposes (but is subject to federal alternative minimum
<br />taxes on corporations and Minnesota franchise taxes imposed on corporations, including financial institutions, and measured by net income and the alternative minimum tax
<br />base) according to present federal and Minnesota laws, regulations, rulings and decisions. (See "Tax Exemption" herein)
<br />City will designate the Bonds as "qualified tax-exempt obligations "forpurposes of Section 265(b)(3) of the Internal Revenue Code of 1986. as amended, relating to the
<br />ability offnancial institutions to deduct from income for federal income tax purposes, interest expense that is allocable to carrying and acquiring tax-exempt obligations.
<br />New Issue Non -Rated
<br />PRELIMINARY OFFICIAL STATEMENT DATED MAY 11, 2007
<br />CITY OF GEM LAKE, MINNESOTA
<br />$850,000* GENERAL OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS,
<br />SERIES 2007A
<br />PROPOSAL OPENING: May 22, 2007, 10:00 A.M., C.T.
<br />CONSIDERATION: May 22, 2007, 7:00 P.M., C.T.
<br />PURPOSE/AUTHORITY/SECURITY: The $850,000 General Obligation Capital Improvement Plan Bonds, Series 2007A (the "Bonds")
<br />are being issued by the City of Gem Lake, Minnesota (the "City") pursuant to Minnesota Statutes, Section 475.521 and Chapter 475, for the
<br />purpose of financing the 2007 capital expenditure of approximately $1,225,500 for the Joint Use City Hall Building described in the City's
<br />5-Year Capital Improvement Plan dated February 20, 2007. The Bonds are general obligations of the City, for which its full faith, credit and
<br />taxing powers are pledged. Delivery is subject to receipt of an approving legal opinion of Kennedy & Graven, Chartered, Minneapolis,
<br />Minnesota.
<br />DATE OF BONDS:
<br />June 20, 2007
<br />MATURITY:
<br />February 1 as follows:
<br />Year Amount* Year Amount* Year Amount*
<br />2009 $15,000 2016 $15,000 2023 $60,000
<br />2010 15,000 2017 50,000 2024 65,000
<br />2011 15,000 2018 50,000 2025 65,000
<br />2012 15,000 2019 55,000 2026 70,000
<br />2013 15,000 2020 55,000 2027 70,000
<br />2014 15,000 2021 55,000 2028 75,000
<br />2015 15,000 2022 60,000
<br />MATURITY ADJUSTMENTS:
<br />* The City reserves the right to increase or decrease the principal amount of the Bonds on the day of
<br />sale, in increments of $5,000 each. Increases or decreases may be made in any maturity. If any
<br />principal amounts are adjusted, the purchase price proposed will be adjusted to maintain the same
<br />gross spread per $1,000.
<br />TERM BONDS:
<br />See "Term Bond Option" herein.
<br />INTEREST:
<br />February 1, 2008 and semiannually thereafter.
<br />OPTIONAL REDEMPTION:
<br />Bonds maturing February 1, 2017 and thereafter are subject to call for prior redemption on February
<br />1, 2016 and any date thereafter, at par.
<br />MINIMUM PROPOSAL:
<br />$837,250.
<br />GOOD FAITH DEPOSIT:
<br />$17,000.
<br />PAYING AGENT:
<br />Bond Trust Services Corporation, Roseville, Minnesota.
<br />BOOK -ENTRY -ONLY:
<br />See "Book -Entry -Only System" herein.
<br />This Preliminary Official Statement will be further supplemented by an addendum specifying the offering prices, interest rates, aggregate
<br />principal amount, principal amount per maturity, anticipated delivery date, and Syndicate Manager and Syndicate Members, together with any
<br />other information required by law, and, as supplemented, shall constitute a "Final Official Statement" of the City with respect to the Bonds,
<br />�iefined in S.E.C. Rule 15c2-12.
<br />EHLERS
<br />& ASSOCIATES INC
<br />3060 Centre Pointe Drive, Roseville, MN 55113
<br />651.697.8500 fax 651.697.8555 www.ehlers-inc.com
<br />Offices in Roseville, MN Brookfield, WI and Lisle, IL
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