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Key Indicators <br />Exhibit 1 <br />Orono (City of) MN <br />2011 <br />2012 <br />2013 <br />2014 <br />2015 <br />Economy/Tax Base <br />Total Full Value ($000) <br />$ <br />2,767,493 <br />$ 2,589,708 <br />$ <br />2,536,140 <br />$ 2,541,853 <br />$ 2,697,179 <br />Full Value Per Capita <br />$ <br />372,576 <br />$ 345,571 <br />$ <br />334,319 <br />$ 330,540 <br />$ 346,458 <br />Median Family Income (% of US Median) <br />182.4% <br />192.9% <br />180.8% <br />187.7% <br />187.7% <br />Finances <br />Operating Revenue ($000) <br />$ <br />7,033 <br />$ 6,835 <br />$ <br />8,234 <br />$ 9,009 <br />$ 9,087 <br />Fund Balance as a % of Revenues <br />77.9% <br />73.6% <br />59.7% <br />54.5% <br />70.9% <br />Cash Balance as a % of Revenues <br />82.2% <br />59.6% <br />44.4% <br />73.2% <br />91.5% <br />Debt/Pensions <br />Net Direct Debt ($000) <br />$ <br />10,791 <br />$ 9,678 <br />$ <br />8,531 <br />$ 10,637 <br />$ 9,622 <br />Net Direct Debt / Operating Revenues (x) <br />1.5x <br />1.4x <br />1.0x <br />1.2x <br />1.1x <br />Net Direct Debt / Full Value (%) <br />0.4% <br />0.4% <br />0.3% <br />0.4% <br />0.4% <br />Moody's - adjusted Net Pension Liability (3 -yr average) to Revenues (x) <br />N/A <br />1.6x <br />1.6x <br />1.8x <br />1.9x <br />Moody's - adjusted Net Pension Liability (3 -yr average) to Full Value (%) <br />N/A <br />0.4% <br />0.5% <br />0.6% <br />0.6% <br />The table above reflects data through the close of fiscal 2015. <br />Source: Moody's Investors Service; Audited Financia! Statements; US Census Bureau <br />Detailed Rating Considerations <br />Economy and Tax Base: Moderately Sized Tax Base Located in the Twin Cities Metropolitan Area; Recent Tax Valuation <br />Growth <br />Orono's tax base will likely remain stable due to recent tax base valuation growth as a result of new residential development. The city <br />is located approximately 20 miles west of downtown Minneapolis (Aal stable) and is an affluent community with a sizable lakefront <br />housing stock. The city is nearly entirely residential (88.3% of valuations) and it benefits from ease of access to city and suburban <br />employment centers. While the city itself has little employment of its own, its proximity to the Twin Cities employment center makes <br />it an attractive destination for a number of corporate executives. The city is mature and built out and the tax base has seen some <br />declines in valuations during the economic downturn. Most recently, valuations ticked up by a significant 6.1% and 5.0% in 2014 and <br />2015 respectively, due to a rebounding economy, recent new residential development, and an increase in home values over the last <br />two years. Management expects the valuations to continue to grow due to upcoming residential development projects planned for the <br />next two years. Socioeconomic indicators for the city are very strong, with median family income at 187.7% of the nation. The city's <br />unemployment rate as of July 2016 was a low 3.4%, tracking better than both the state (3.7%) and national (5.1%) rates for the same <br />time period. <br />Financial Operations and Reserves: Stable Financial Operations Supported by Healthy Reserves and Conservative <br />Budgeting <br />We expect the city's financial profile to remain strong due to conservative budgeting practices and policies that consistently produce <br />balanced operations and a history of maintaining healthy reserve levels. The city's formal general fund policy is to hold 45% to 50% <br />of its operating expenditures in reserves and transfers out any operating surpluses in excess of the target to various capital funds. In <br />fiscal 2015 the city ended with an operating fund (General Fund and Debt Service Fund) surplus of $852,000, as a result of lower than <br />budgeted expenditures related to fuel and personal costs in the police department and higher than budgeted revenues for building <br />related fees. Operating Fund reserves totaled $6.4 million, or a very healthy 70.9% of operating revenues. Year to date results for fiscal <br />2016 reflect a $150,000 surplus in the general fund, net targeted transfers out to various capital funds in the amount of $350,000. The <br />city expects balanced operations for 2017. The majority of the city's revenues are derived from property taxes which comprised 52.6% <br />of operating fund revenues in 2015. The second and third largest revenue sources included user fees (31.8%) and licenses (5.9%). <br />This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on <br />www.moodys.com for the most updated credit rating action information and rating history. <br />2 20 October 2016 City of Orono, MN: New Issue - Moody's assigns Aaa to the City of Orono, MN's Ser. 2016A GO bonds <br />