COOK COUNTY, MINNESOTA

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ADDENDUM DATED NOVEMBER 28, 2012

TO PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 15, 2012

New Issue Rating: Standard & Poor’s "AA-"

$9,660,000

TAXABLE GENERAL OBLIGATION SALES TAX REVENUE BONDS, SERIES 2012B

COOK COUNTY, MINNESOTA

Schedule of Maturity Dates, Principal Amounts, Interest Rates and Yields Serial Bonds Maturity (February 1) Amount Interest Rate Yield CUSIP Base 216147 Maturity (February 1) Amount Interest Rate Yield CUSIP Base 216147 2014 2015 2016 2017 2018 2019 2020 $160,000 $200,000 $210,000 $220,000 $235,000 $245,000 $260,000 2.000% 2.000% 2.000% 2.000% 2.000% 3.000% 3.000% 0.500% 0.600% 0.800% 1.000% 1.200% 1.450% 1.750% JX7 JY5 JZ2 KA5 KB3 KC1 KD9 2021 2022 2023 2024 2025 2026 $275,000 $290,000 $305,000 $325,000 $345,000 $365,000 3.000% 3.000% 2.300% 2.500% 2.625% 2.750% 2.000% 2.150% 2.350% 2.500% 2.650% 2.800% KE7 KF4 KG2 KH0 KJ6 KK3 Term Bonds

$790,000; 3.000% Term Bond due February 1, 2028; Yield 3.000%; CUSIP No. 216147 KM9; with mandatory redemption at par in 2027 - 2028 as noted below.

Redemption (February 1) Amount 2027 2028 $385,000 $405,000

$875,000; 3.100% Term Bond due February 1, 2030; Yield 3.100%; CUSIP No. 216147 KP2; with mandatory redemption at par in 2029 - 2030 as noted below.

$965,000; 3.200% Term Bond due February 1, 2032; Yield 3.200%; CUSIP No. 216147 KR8; with mandatory redemption at par in 2031 - 2032 as noted below.

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Serial Bonds Maturity (February 1) Amount Interest Rate Yield CUSIP Base 216147 2033 2034 2035 $1,160,000 $1,195,000 $1,240,000 3.200% 3.250% 3.300% 3.250% 3.300% 3.350% KS6 KT4 KU1

Bonds maturing, or subject to mandatory redemption, on February 1, 2023 and thereafter are subject to call for prior redemption on February 1, 2022 and any date thereafter at par.

Baird, Syndicate Manager, has agreed to purchase the Bonds from the County for an aggregate price of $9,577,421.40 plus accrued interest, if any, to the date of delivery. It is expected that the Bonds will be available for delivery on or about December 13, 2012.

Book-Entry-Only: This offering will be issued as fully registered Bonds and will be registered in the name of Cede

& Co., as nominee of The Depository Trust Company, New York, New York, to which principal and interest payments on the Bonds will be made.

Paying Agent: Bond Trust Services Corporation, Roseville, Minnesota.

THIS ADDENDUM TOGETHER WITH THE OFFICIAL STATEMENT DATED NOVEMBER 15, 2012, SHALL CONSTITUTE A "FINAL OFFICIAL STATEMENT" OF THE ISSUER WITH RESPECT TO THE BONDS AS THAT TERM IS DEFINED IN RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION.

BAIRD

Milwaukee, Wisconsin

C.L. King

Coastal Securities

Kildare Capital

Edward D. Jones & Co

Cronin & Co., Inc.

SAMCO Capital Mkts

Loop Capital

Crews & Associates, Inc.

Davenport & Co. L.L.C.

Incapital, LLC

Ross Sinclaire Association

Wedbush

Castle Oak Sec.

Lafayette Investment

William Blair & Comp

Vining Sparks

FTN Financial Capital

Northland Securities

Country Club Bank

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ORIGINAL ISSUE DISCOUNT

In the opinion of Bond Counsel, under existing law, the original issue discount in the selling price of each Bond maturing on February 1, 2023, February 1, 2025, February 1, 2026, February 1, 2033, February 1, 2034, and February 1, 2035, to the extent properly allocable to each owner of such Bond, is excluded from gross income for federal income tax purposes with respect to such owner. The original issue discount is the excess of the stated redemption price at maturity of such Bond over the initial offering price to the public, excluding underwriters and other intermediaries, at which price a substantial amount of the Bonds of such maturity were sold.

Under Section 1288 of the Internal Revenue Code of 1986, as amended, original issue discount on tax-exempt bonds accrues on a compound basis. The amount of original issue discount that accrues to an owner of a Bond during any accrual period generally equals (i) the issue price of such Bond plus the amount of original issue discount accrued in all prior accrual periods, multiplied by (ii) the yield to maturity of such Bond (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period), less (iii) any interest payable on such Bond during such accrual period. The amount of original issue discount so accrued in a particular accrual period will be considered to be received ratably on each day of the accrual period, will be excluded from gross income for federal income tax purposes, and will increase the owner’s tax basis in such Bond. Any gain realized by an owner from a sale, exchange, payment or redemption of a Bond will be treated as a gain from the sale or exchange of such Bond.

No opinion is expressed as to state and local income tax treatment of original issue discount. It is possible under certain state and local income tax laws that original issue discount on such a discount bond may be taxable in the year of accrual, and may be deemed to accrue differently than under federal law. Holders of such discount bonds should consult their tax advisors for advice with respect to the state and local tax consequences of owning such bonds.

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In the opinion of Fryberger, Buchanan, Smith & Frederick, P.A., bond counsel, the Series 2012A 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 Series 2012A Notes 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. Interest on the Series 2012B Bonds is includable in gross income of the recipient

for United States and State of Minnesota income tax purposes according to present federal and Minnesota laws, regulations, rulings and decisions.

The County will designate the Series 2012A Notes 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. The County will not designate the Series 2012B Bonds as "qualified tax-exempt obligations" pursuant to Section 265 of the Internal Revenue Code of 1986, as

amended, which permits financial institutions to deduct interest expenses allocable to the Bonds to the extent permitted under prior law.

New Issues Rating Application Made: Standard & Poor's

PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 15, 2012 COOK COUNTY, MINNESOTA

$2,175,000* GENERAL OBLIGATION CAPITAL EQUIPMENT NOTES, SERIES 2012A $9,660,000* TAXABLE GENERAL OBLIGATION SALES TAX REVENUE BONDS, SERIES 2012B

PROPOSAL OPENING: November 27, 2012, 10:00 A.M., C.T. CONSIDERATION: November 27, 2012, 1:30 P.M., C.T. PURPOSE/AUTHORITY/SECURITY: The $2,175,000 General Obligation Capital Equipment Notes, Series 2012A (the "Series 2012A Notes") are being issued by Cook County, Minnesota (the "County"), pursuant to Minnesota Statutes, Chapter 475, and Sections 373.01, Subd. 3, and 373.47, to finance the cost of acquiring various items of capital equipment. The $9,660,000 Taxable General Obligation Sales Tax Revenue Bonds, Series 2012B (the "Series 2012B Bonds") are being issued pursuant to Minnesota Statutes, Chapter 475, and Laws of Minnesota 2008, Chapter 366, Article 7, Section18, as amended by Laws of Minnesota 2009, Chapter 88, Article 4, Section 22, and Chapter 88, Article 6, Section 25, by the County to finance a new community center. The Series 2012A Notes and Series 2012B Bonds will be general obligations of the County for which its full faith, credit and taxing powers are pledged. Delivery is subject to receipt of approving legal opinions of Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota.

SERIES 2012A NOTES SERIES 2012B BONDS

DATE OF NOTES: December 13, 2012 DATE OF BONDS: December 13, 2012

MATURITY: February 1 as follows: MATURITY: February 1 as follows:

Year Amount* Year Amount** Year Amount**

2014 $305,000 2014 $160,000 2025 $345,000 2015 305,000 2015 200,000 2026 365,000 2016 310,000 2016 210,000 2027 385,000 2017 310,000 2017 220,000 2028 405,000 2018 310,000 2018 235,000 2029 425,000 2019 315,000 2019 245,000 2030 450,000 2020 320,000 2020 260,000 2031 470,000 2021 275,000 2032 495,000 2022 290,000 2033 1,160,000 2023 305,000 2034 1,195,000 2024 325,000 2035 1,240,000

ADJUSTMENT: * See "Adjustment Option" herein. ADJUSTMENT: ** See "Adjustment Option" herein. TERM BONDS: See "Term Bond Option" herein. TERM BONDS: See "Term Bond Option" herein. INTEREST: August 1, 2013 and semiannually thereafter. INTEREST: August 1, 2013 and semiannually thereafter. REDEMPTION: The Notes are being offered without option of

prior redemption.

REDEMPTION: Bonds maturing February 1, 2023 and thereafter are subject to call for prior redemption on February 1, 2022 and any date thereafter, at par.

MINIMUM PROPOSAL: $2,153,250. MINIMUM PROPOSAL: $9,563,400.

GOOD FAITH DEPOSIT: $43,500. GOOD FAITH DEPOSIT: $193,200.

PAYING AGENT: Bond Trust Services Corporation, Roseville, Minnesota.

BOOK-ENTRY-ONLY: See "Book-Entry-Only System" herein (unless otherwise specified by the purchaser).

This Preliminary Official Statement will be further supplemented by an addendum specifying the offering prices, interest rates, aggregate principal amount, principal amount per maturity, anticipated delivery date, and Syndicate Manager and Syndicate Members, together with any other information required by law, and, as supplemented, shall constitute a "Final Official Statement" of the County with respect to the Notes and Bonds, as defined in S.E.C. Rule 15c2-12.

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REPRESENTATIONS

No dealer, broker, salesperson or other person has been authorized by the County to give any information or to make any representation other than those contained in this Preliminary Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the County. This Preliminary Official Statement does not constitute an offer to sell or a solicitation of an offer to buy any of these Series 2012A Notes or Series 2012B Bonds in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction.

This Preliminary Official Statement is not to be construed as a contract with the Syndicate Manager or Syndicate Members. Statements contained herein which involve estimates or matters of opinion are intended solely as such and are not to be construed as representations of fact. Ehlers prepared this Preliminary Official Statement and any addenda thereto relying on information of the County and other sources for which there is reasonable basis for believing the information is accurate and complete. Bond Counsel has not participated in the preparation of this Preliminary Official Statement except as described herein and is not expressing any opinion as to the completeness or accuracy of the information contained therein. Compensation of Ehlers, 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 General Rules and Regulations, Securities Exchange Act of 1934, Rule 15c2-12 Municipal Securities Disclosure (the "Rule").

Preliminary Official Statement: This Preliminary Official Statement was prepared for the County for dissemination to potential customers.

Its primary purpose is to disclose information regarding these Series 2012A Notes and Series 2012B Bonds to prospective underwriters in the interest of receiving competitive proposals in accordance with the sale notice contained herein. Unless an addendum is posted prior to the sale, this Preliminary Official Statement shall be 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 members of the legislative body and other public officials of

the County as well as to prospective bidders for an objective review of its disclosure. Comments or requests for the correction of omissions or inaccuracies must be submitted to Ehlers at least two business days prior to the sale. Requests for additional information or corrections in the Preliminary Official Statement received on or before this date will not be considered a qualification of a proposal received from an underwriter. If there are any changes, corrections or additions to the Preliminary Official Statement, interested bidders will be informed by an addendum at least one business day prior to the sale.

Final Official Statement: Upon award of sale of these Series 2012A Notes and Series 2012B Bonds, the Preliminary Official Statement

together with any previous addendum of corrections or additions will be further supplemented by an addendum specifying the offering prices, interest rates, aggregate principal amount, principal amount per maturity, anticipated delivery date, and Syndicate Manager and Syndicate Members, together with any other information required by law, and, as supplemented, shall constitute a "Final Official Statement" of the County with respect to the Series 2012A Notes and Series 2012B Bonds, as defined in the Rule. Copies of the Final Official Statement will be delivered to the underwriter (Syndicate Manager) within seven business 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 with

provisions of the Rule which require that underwriters obtain from the issuers of municipal securities (or other obligated party) an agreement for the benefit of the owners of the securities to provide continuing disclosure with respect to those securities. This Preliminary Official Statement describes the conditions under which these Series 2012A Notes and Series 2012B Bonds are exempt or required to comply with the Rule.

CLOSING CERTIFICATES

Upon delivery of these Series 2012A Notes and Series 2012B Bonds, the purchaser (underwriter) will be furnished with the following items: (1) a certificate of the appropriate officials to the effect that at the time of the sale of these Obligations and all times subsequent thereto up to and including the time of the delivery of these Series 2012A Notes and Series 2012B Bonds, this Preliminary Official Statement did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (2) a receipt signed by the appropriate officer evidencing payment for these Series 2012A Notes and Series 2012B Bonds; (3) a certificate evidencing the due execution of these Series 2012A Notes and Series 2012B Bonds, including statements that (a) no litigation of any nature is pending, or to the knowledge of signers, threatened, restraining or enjoining the issuance and delivery of these Series 2012A Notes and Series 2012B Bonds, (b) neither the corporate existence or boundaries of the County nor the title of the signers to their respective offices is being contested, and (c) no authority or proceedings for the issuance of these Series 2012A Notes and Series 2012B Bonds have been repealed, revoked or rescinded; and (4) a certificate setting forth facts and expectations of the County which indicates that the County does not expect to use the proceeds of these Series 2012A Notes in a manner that would cause them to be arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended, or within the meaning of applicable Treasury Regulations.

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BOARD OF COMMISSIONERS

Term Expires

Janice Hall Chairperson January 2015

Bruce Martinson Vice Chairperson January 2015

Sue Hakes County Commissioner January 2015

Jim Johnson County Commissioner January 2013

Fritz Sobanja County Commissioner January 2013

ADMINISTRATION

Braidy Powers, County Auditor-Treasurer

John Peterson, Financial Coordinator

PROFESSIONAL SERVICES

Tim Scannell, County Attorney, Grand Marais, Minnesota

Fryberger, Buchanan, Smith & Frederick, P.A., Bond Counsel, Duluth, Minnesota Ehlers & Associates, Inc., Financial Advisors, Roseville, Minnesota

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INTRODUCTORY STATEMENT

This Preliminary Official Statement contains certain information regarding Cook County, Minnesota (the "County") and the issuance of its $2,175,000 General Obligation Capital Equipment Notes, Series 2012A (the "Series 2012A Notes") and $9,660,000 Taxable General Obligation Sales Tax Revenue Bonds, Series 2012B (the "Series 2012B Bonds"), collectively referred to herein as the "Obligations." Any descriptions or summaries of the Obligations, statutes, or documents included herein are not intended to be complete and are qualified in their entirety by reference to such statutes and documents and the forms of the Obligations to be included in the resolutions authorizing the sale of the Obligations to be adopted by the Board of Commissioners on November 27, 2012.

Inquiries may be directed to Ehlers & Associates, Inc. ("Ehlers" or the "Financial Advisor"), Roseville, Minnesota, (651) 697-8500, the County's Financial Advisor. A copy of this Preliminary Official Statement may be downloaded

from Ehlers’ web site at www.ehlers-inc.com by connecting to the link to the Bond Sales and following the directions

at the top of the site.

THE SERIES 2012A NOTES

GENERAL

The Series 2012A Notes will be issued in fully registered form as to both principal and interest in denominations of $5,000 each or any integral multiple thereof, and will be dated, as originally issued, as of December 13, 2012. The Notes will mature on February 1 in the years and amounts set forth on the cover of this Preliminary Official Statement. Interest will be payable on February 1 and August 1 of each year, commencing August 1, 2013, to the registered owners of the Notes appearing of record in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the MSRB. All Notes of the same maturity will bear interest from date of issue until paid at a single, uniform rate.

Unless otherwise specified by the purchaser the Notes will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). (See "Book-Entry-Only System" herein.) As long as the Notes are held under the book-entry system, beneficial ownership interests in the Notes may be acquired in book-entry form only, and all payments of principal of, premium, if any, and interest on the Notes shall be made through the facilities of DTC and its Participants. If the book-entry system is terminated, principal of, premium, if any, and interest on the Notes shall be payable as provided in the resolution awarding the sale of the Notes. The County has selected Bond Trust Services Corporation, Roseville, Minnesota (“BTSC”), to act as paying agent (the "Paying Agent"). BTSC and Ehlers are affiliate companies. The County will pay the charges for Paying Agent services. The County reserves the right to remove the Paying Agent and to appoint a successor.

OPTIONAL REDEMPTION

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AUTHORITY; PURPOSE

The Series 2012A Notes are being issued by the County pursuant to Minnesota Statutes, Section 373.01, Subd. 3, 373.47, and Chapter 475. Proceeds of the Series 2012A Notes will be used to purchase highway equipment, public safety equipment, and public safety communication equipment (for use on the statewide ARMER system). The public safety communication equipment portion is not subject to the statutory debt limit.

Minnesota Statutes, Section 373.01, allows counties to issue capital notes for capital equipment, including public safety, ambulance, road construction or maintenance, medical and data processing equipment provided the equipment has an expected useful life of at least equal to the term of the capital notes.

ESTIMATED SOURCES AND USES Sources

Par Amount of Series 2012A Notes $2,175,000

Total Sources $2,175,000

Uses

Project Costs $2,117,000

Contingency 2,250

Discount Allowance 21,750

Finance Related Expenses 34,000

Total Uses $2,175,000

SECURITY

The Series 2012A Notes are general obligations of the County for which its full faith, credit and taxing powers are pledged without limit as to rate or amount. In accordance with Minnesota Statutes, the County will levy each year an amount not less than 105% of the debt service requirements on the Series 2012A Notes. In the event funds on hand for payment of principal and interest are at any time insufficient, the County is required to levy an ad valorem tax upon all taxable properties within its boundaries without limit as to rate or amount to make up any deficiency.

TAX EXEMPTION

In the opinion of Fryberger, Buchanan, Smith & Frederick, P.A., as Bond Counsel, under federal and Minnesota laws, regulations, rulings and decisions in effect on the date of issuance of the Series 2012A Notes, interest on the Series 2012A Notes 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 Series 2012A Notes in order for the 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 Series 2012A Notes to be includable in gross income and in Minnesota taxable net income retroactive to the date of issuance of the Series 2012A Notes, irrespective in some cases of the date on which such noncompliance

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occurs or is ascertained. No provision has been made for redemption of or for an increase in the interest rate on the Series 2012A Notes in the event that interest on the Series 2012A Notes becomes includable in federal gross income or Minnesota taxable net income.

Interest on the Series 2012A Notes 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 trust. However, interest on the Series 2012A Notes 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 Series 2012A Notes 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 the Code must be reduced by an amount equal to 15% of the interest on the Series 2012A Notes that is received or accrued during the taxable year. Section 86 of the Code requires recipients of certain Social Security and railroad retirement benefits to take into account interest on the Series 2012A Notes in determining the taxability of such benefits. Passive investment income, including interest on the Series 2012A Notes, 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 25% of its gross receipts is passive investment income.

The foregoing is not intended to be an exhaustive discussion of collateral tax consequences arising from receipt of interest on the Series 2012A Notes. Prospective purchasers should consult their tax advisers 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 Series 2012A Notes. 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 Series 2012A Notes) issued prior to enactment.

QUALIFIED TAX-EXEMPT OBLIGATIONS

The County will designate the Series 2012A Notes as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code 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.

LEGAL OPINION

Opinions as to the validity of the Series 2012A Notes and the exemption from taxation of the interest thereon will be furnished by Fryberger, Buchanan, Smith & Frederick, P.A., Duluth, Minnesota, bond counsel to the County, and will accompany the Series 2012A Notes. The legal opinion will state that the Series 2012A Notes are valid and binding general obligations of the County; provided that the rights of the owners of the Series 2012A Notes and the enforceability of the Series 2012A Notes may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights and by equitable principles (which may be applied in either a legal or equitable proceeding).

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THE SERIES 2012B BONDS

GENERAL

The Series 2012B Bonds will be issued in fully registered form as to both principal and interest in denominations of $5,000 each or any integral multiple thereof, and will be dated, as originally issued, as of December 13, 2012. The Series 2012B Bonds will mature on February 1 in the years and amounts set forth on the cover of this Preliminary Official Statement. Interest will be payable on February 1 and August 1 of each year, commencing August 1, 2013, to the registered owners of the Series 2012B Bonds appearing of record in the bond register as of the close of business on the 15th day (whether or not a business day) of the immediately preceding month. Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the MSRB. All Series 2012B Bonds of the same maturity will bear interest from date of issue until paid at a single, uniform rate.

Unless otherwise specified by the purchaser, the Series 2012B Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). (See "Book-Entry-Only System" herein.) As long as the Series 2012B Bonds are held under the book-entry system, beneficial ownership interests in the Series 2012B Bonds may be acquired in book-entry form only, and all payments of principal of, premium, if any, and interest on the Series 2012B Bonds shall be made through the facilities of DTC and its Participants. If the book-entry system is terminated, principal of, premium, if any, and interest on the Series 2012B Bonds shall be payable as provided in the resolution awarding the sale of the Series 2012B Bonds.

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

OPTIONAL REDEMPTION

At the option of the County, Series 2012B Bonds maturing on or after February 1, 2023 shall be subject to prior payment on February 1, 2022 or any date thereafter, at a price of par plus accrued interest.

Redemption may be in whole or in part of the Series 2012B Bonds subject to prepayment. If redemption is in part, the selection of the amounts and maturities of the Series 2012B Bonds to be prepaid shall be at the discretion of the County. If only part of the Series 2012B Bonds having a common maturity date are called for prepayment, the County or Paying Agent, if any, 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 interest in such maturity to be redeemed.

Notice of such call shall be given by mailing a notice not more than 60 and not fewer than 30 days prior to the date fixed for redemption to the registered owner of each Series 2012B Bond to be redeemed at the address shown on the registration books.

AUTHORITY; PURPOSE

The Series 2012B Bonds of the County are being issued pursuant to Minnesota Statutes, Chapter 475 and Laws of Minnesota 2008, Chapter 366, Article 7, Section 18, as amended by Laws of Minnesota 2009, Chapter 88, Article 4, Section 22, and Chapter 88, Article 6, Section 25. Revenues generated from the current 1% sales tax (after payment of the costs of collection of the tax) will be used to pay all or a portion of the costs to primarily finance the construction of a new community center in the City of Grand Marais.

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SOURCES AND USES Sources

Par Amount of Series 2012B Bonds $9,660,000

Planned Issuer Equity Contribution 158,600

Total Sources $9,818,600

Uses

Project Costs $9,660,000

Discount Allowance 96,600

Finance Related Expenses 62,000

Total Uses $9,818,600

SECURITY

The Series 2012B Bonds will be general obligations of the County for which its full faith, credit and taxing powers are pledged without limitation as to rate or amount. The 1% sales tax revenue currently collected by the County is projected to be more than sufficient to cover 105% of the debt service requirements on the Series 2012B Bonds.

TAXABILITY OF INTEREST

Under present federal and Minnesota laws, regulations, rulings and decisions, interest on the Series 2012B Bonds of this offering is includable in gross income for federal income tax purposes and in taxable net income of individuals, estates or trusts for Minnesota income tax purposes.

NON-QUALIFIED TAX-EXEMPT OBLIGATIONS

The County will not designate the Series 2012B Bonds 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.

LEGAL OPINION

An opinion as to the validity of the Series 2012B Bonds will be furnished by Fryberger, Buchanan, Smith & Frederick, P.A., of Duluth, Minnesota, bond counsel to the County, and will accompany the Series 2012B Bonds. The legal opinion will be issued on the basis of existing law and will state that the Series 2012B Bonds are valid and binding obligations of the County enforceable in accordance with their terms, except to the extent to which enforceability may be limited by Minnesota or United States laws relating to bankruptcy, reorganization, moratorium or creditors' rights generally.

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PROVISIONS COMMON TO BOTH THE

SERIES 2012A NOTES AND THE SERIES 2012B BONDS

The following information pertains to both the Series 2012A Notes and the Series 2012B Bonds which are collectively referred to hereinafter as the "Obligations."

RATING

General obligation debt of the County, with the exception of any outstanding credit enhanced issues, is currently rated “A1" by Moody’s Investors Service.

The County has requested ratings on the Obligations from Standard & Poor's, and bidders will be notified as to the assigned ratings prior to the sale. Such ratings, if and when received, will reflect only the view of the rating agency and any explanation of the significance of such ratings may only be obtained from Standard & Poor's. There is no assurance that such ratings, if and when received, will continue for any period of time or that they will not be revised or withdrawn. Any revision or withdrawal of the ratings may have an effect on the market price of the Obligations.

CONTINUING DISCLOSURE

In order to comply with the provisions of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule") the County has entered into an undertaking (the "Undertaking") for the benefit of the holders of the Obligations. Through the Undertaking, the County covenants and agrees to provide certain annual financial information and operating data about the County and to provide notice of the occurrence of certain material events. This information shall be provided according to the time parameters described in the Undertaking to the Municipal Securities Rulemaking Board as required by the Rule. The specific provisions of the Undertaking are set forth in the Continuing Disclosure Certificate in substantially the form attached hereto as Appendix D. The Certificate will be executed and delivered by the County at the time the Obligations are delivered. The County is the only "obligated person" with respect to the Obligations within the meaning of the Rule. The County has complied in all material respects with any previous undertaking under the Rule.

STATEMENT REGARDING BOND COUNSEL PARTICIPATION

Bond Counsel has not assumed responsibility for this Official Statement or participated in its preparation (except with respect to the sections entitled “Tax Exemption” and “Taxability of Interest” in the Official Statement and the “Form of Legal Opinion” found in the Appendix B) and has not performed any investigation as to its accuracy, completeness or sufficiency.

FINANCIAL ADVISOR

Ehlers has served as Financial Advisor to the County in connection with the issuance of the Obligations. The Financial Advisor will not participate in the underwriting of the Obligations. The financial information included in this Preliminary Official Statement has been compiled by the Financial 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 compilations of financial information. Ehlers is not a firm of certified public accountants.

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RISK FACTORS

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

Taxes: The Obligations of this offering are general obligations of the County, the ultimate payment of which rests

in the County's ability to levy and collect sufficient taxes to pay debt service should other revenue (sales tax revenues on the Series 2012B Bonds) be insufficient.

State Actions: Many elements of local government finance, including the issuance of debt and the levy of property

taxes, are controlled by state government. Past and future actions of the State may affect the overall financial condition of the County, the taxable value of property within the County, and the ability of the County to levy property taxes.

Ratings; Interest Rates: In the future, the County's credit rating may be reduced or withdrawn, or interest rates for

this type of obligation may rise generally, either possibility resulting in a reduction in the value of the Obligations for resale prior to maturity.

Tax Exemption: If the federal government or the State of Minnesota taxes all or a portion of the interest on

municipal obligations, directly or indirectly, or if there is a change in federal or state tax policy, the value of the Series 2012A Notes may fall for purposes of resale. Noncompliance following the issuance of the Series 2012A Notes with certain requirements of the Code and covenants of the Award Resolution may result in the inclusion of interest on the Series 2012A Notes in gross income of the recipient for United States or in taxable net income of individuals, estates or trusts for State of Minnesota income tax purposes. No provision has been made for redemption of the Series 2012A Notes, or for an increase in the interest rate on the Series 2012A Notes, in the event that interest on the Series 2012A Notes becomes subject to United States or State of Minnesota income taxation, retroactive to the date of issuance.

Continuing Disclosure: A failure by the County to comply with the Undertaking for continuing disclosure (see

"Continuing Disclosure") will not constitute an event of default on the Obligations. Any such failure must be reported in accordance with the Rule and must be considered by any broker, dealer, or municipal securities dealer before recommending the purchase or sale of the Obligations in the secondary market. Such a failure may adversely affect the transferability and liquidity of the Obligations and their market price.

State Economy; State Aids: State of Minnesota cash flow problems could affect local governments and possibly

increase property taxes.

Book-Entry-Only System: The timely credit of payments for principal and interest on the Obligations to the

accounts of the Beneficial Owners of the Obligations may be delayed due to the customary practices, standing instructions or for other unknown reasons by DTC participants or indirect participants. Since the notice of redemption or other notices to holders 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 Obligations.

Economy: A combination of economic, climatic, political or civil disruptions or terrorist actions could affect the

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1 _{A residential property qualifies as "homestead" if it is occupied by the owner or a relative of the owner on the}

assessment 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}

adjacent nine-county area and whose boundaries are 15 miles or more from the boundaries of a Minnesota city with a population of over 5,000.

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

8

VALUATIONS

OVERVIEW

All non-exempt property is subject to taxation by local taxing districts. Exempt real property includes Indian lands, public property, and educational, 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 less than 20% of all real properties are to be appraised by local assessors each year. (2) The taxable market value is the estimated market value adjusted 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 the jurisdiction into the dollars to be raised from the levy. State law determines whether a levy is spread on tax capacity or market value. Major classifications and the percentages by which tax capacity is determined are:

Type of Property 2009/10 2010/11 2011/12 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 $1,010,000 - 0.50% 2 Over $1,010,000 - 1.00% 2 First $500,000 HGA - 1.00% Over $500,000 HGA - 1.25% First $1,140,000 - 0.50% 2 Over $1,140,000 - 1.00% 2 First $500,000 HGA - 1.00% Over $500,000 HGA - 1.25% First $1,210,000 - 0.50% 2 Over $1,210,000 - 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% 3

Over $500,000 - 1.25% 3

First $500,000 - 1.00% 3

Over $500,000 - 1.25% 3

First $500,000 - 1.00% 3

Over $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% 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% 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% 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%

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1 _{According to the Minnesota Department of Revenue, the Assessor's Estimated Market Value (the "AEMV") for}

Cook County is about 102.4% of the actual selling prices of property most recently sold in the County. That sales ratio was calculated by comparing the selling prices with the AEMV. Dividing the AEMV of real estate by 1.024 and adding personal property and mobile home AEMV, if any, results in an "Estimated Full Market Value of Taxable Property" for the County of $1,685,427,134.

2 _{Each community in the taconite credit area contributes 40% of its new industrial and commercial valuation to}

an area pool which is then distributed among the municipalities on the basis of population, special needs, etc. Each governmental unit makes a contribution and receives a distribution–sometimes gaining and sometimes contributing net tax capacity for tax purposes. Taxes are spread on the basis of taxable net tax capacity.

3 _{Mobile home valuations are not included in the net tax capacity for purposes of determining tax capacity rates.}

However, valuations of mobile homes are determined at the beginning of the collection year, and the same tax capacity rates are applied to mobile home net tax capacity valuations as to real estate and personal property.

CURRENT PROPERTY VALUATIONS

Estimated Full Market Value of Taxable Property, 2011/12 $1,685,427,1341

2011/12 Assessor's Estimated Market Value 2011/12 Net Tax Capacity Real Estate $ 1,700,290,800 $17,320,075 Personal Property 24,164,600 272,807 Total Valuation $ 1,724,455,400 $17,592,882

Less: Fiscal Disparities Contribution2 _(334,487)

Taxable Net Tax Capacity $17,258,395

Plus: Fiscal Disparities Distribution2 _59,809

Adjusted Taxable Net Tax Capacity $17,318,204

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1 _{Net Tax Capacity is before fiscal disparities adjustments.}

2 _{Taxable Net Tax Capacity is after fiscal disparities adjustments.}

3 _{Beginning with taxes 2011/12, a portion of the Estimated Market Value is excluded from the calculation of}

Taxable Market Value and Net Tax Capacity for residential homesteads valued at $413,800 or less.

10

2011/12 NET TAX CAPACITY BY CLASSIFICATION

2011/12 Net Tax Capacity

Percent of Total Net Tax Capacity

Residential homestead $ 4,542,032 25.82%

Agricultural 53,335 0.30%

Commercial/industrial 850,050 4.83%

Public utility 199,478 1.13%

Non-homestead residential 416,346 2.37%

Commercial & residential seasonal/rec. 11,258,834 64.00%

Personal property 272,807 1.55% Total $17,592,882 100.00% TREND OF VALUATIONS Levy Year Assessor's Estimated Market Value Assessor's Taxable Market Value Net Tax Capacity1 Adjusted Taxable Net Tax Capacity2 Percent +/- in Estimated Market Value 2007/08 $ 1,796,517,500 $ 1,551,615,800 $16,103,792 $15,882,408 + 9.95% 2008/09 1,838,474,300 1,727,540,900 17,905,619 17,688,713 + 2.34% 2009/10 1,874,451,200 1,866,787,900 19,431,738 19,237,085 + 1.96% 2010/11 1,830,863,600 1,825,709,400 19,010,105 18,749,500 - 2.33% 2011/12 1,724,455,400 1,684,386,400 3 17,592,882 3 17,318,204 - 5.81%

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LARGER TAXPAYERS

Taxpayer Type of Property

2011/12 Net Tax Capacity Percent of County's Total Net Tax Capacity

Allete, Inc. Utility $244,574 1.39%

Lutsen Mountains Corporation Retail/Recreation 83,879 0.48%

Gunflint Lodge, Inc. Hotel/Motel 71,282 0.41%

Lutsen Mountains Lodging, Inc. Hotel/Motel 63,554 0.36%

Surfside Development LLC Real Estate Developer 45,996 0.26%

Individuals Retail/Commercial 35,611 0.20%

Individual Real Estate Investor 34,845 0.20%

1st_{Bank Duluth} _Banking _33,667 _0.19%

Individual Hotel/Motel 33,643 0.19%

Tofte Hospitality, Inc. Hotel/Motel 33,636 0.19%

Total $680,687 3.87%

County's Total 2011/12 Net Tax Capacity $17,592,882

Source: Current Property Valuations, Net Tax Capacity by Classification, Trend of Valuations and Larger

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1 _{Outstanding debt is as of the dated date of the Bonds.}

12

DEBT

DIRECT DEBT1

General Obligation Debt (see schedules following)

Total g.o. debt being paid from taxes

(includes the Series 2012A Notes of this offering) $ 3,590,000

Total g.o. debt being paid from sales tax revenues

(includes the Series 2012B Bonds of this offering) 18,160,000

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COOK COUNTY, MINNESOTA General Obligation Debt Being Paid from Taxes Dated _Amoun t Maturit y Fiscal Yea r Estimated Total Total Total Principal Fiscal Yea r Ending Principal Interes t Principal Interes t Principal Interes t P & I Outstanding % Paid Ending 2013 345,000 11,664 0 11,576 345,000 23,240 368,240 3,245,000 9.61% 2013 2014 355,000 9,473 305,000 17,591 660,000 27,064 687,064 2,585,000 27.99% 2014 2015 355,000 6,455 305,000 16,066 660,000 22,521 682,521 1,925,000 46.38% 2015 2016 360,000 2,340 310,000 14,220 670,000 16,560 686,560 1,255,000 65.04% 2016 2017 310,000 12,050 310,000 12,050 322,050 945,000 73.68% 2017 2018 310,000 9,415 310,000 9,415 319,415 635,000 82.31% 2018 2019 315,000 6,131 315,000 6,131 321,131 320,000 91.09% 2019 2020 320,000 2,160 320,000 2,160 322,160 0 100.00% 2020 1,415,000 29,931 2,175,000 89,210 3,590,000 119,141 3,709,141 1)

Schedule of Bonded Indebtedness (As of 12/13/12)

CIP 1) Series 2011A Capital Notes This Issue Series 2012A 12/13/2012 $2,175,000 2/01 11/29/11 $1,415,000 2/01 T h is issue refunded the 2013 through 2017 ma turities of the $4,235,000 Refunding Certificates of Participation, Series 2003A, dated August 20, 2003, w h ich w e re originally issued by

the Cook County

Building Authority

.

Prepared by Ehlers

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COOK COUNTY, MINNESOTA General Obligation Debt Being Paid from Sales Tax Revenues Dated _Amoun t Maturit y Fiscal Yea r Estimated Total Total Total Principal Fiscal Yea r Ending Principal Interes t Principal Interes t Principal Interes t P & I Outstanding % Paid Ending 2013 280,000 254,893 0 172,188 280,000 427,080 707,080 17,880,000 1.54% 2013 2014 335,000 248,743 160,000 271,395 495,000 520,138 1,015,138 17,385,000 4.27% 2014 2015 340,000 241,993 200,000 270,165 540,000 512,158 1,052,158 16,845,000 7.24% 2015 2016 350,000 235,093 210,000 268,418 560,000 503,510 1,063,510 16,285,000 10.32% 2016 2017 355,000 226,268 220,000 266,155 575,000 492,423 1,067,423 15,710,000 13.49% 2017 2018 365,000 215,468 235,000 263,304 600,000 478,771 1,078,771 15,110,000 16.80% 2018 2019 375,000 204,368 245,000 259,758 620,000 464,125 1,084,125 14,490,000 20.21% 2019 2020 390,000 192,893 260,000 255,393 650,000 448,285 1,098,285 13,840,000 23.79% 2020 2021 400,000 181,043 275,000 250,031 675,000 431,074 1,106,074 13,165,000 27.51% 2021 2022 410,000 168,893 290,000 243,668 700,000 412,560 1,112,560 12,465,000 31.36% 2022 2023 425,000 156,368 305,000 236,448 730,000 392,815 1,122,815 11,735,000 35.38% 2023 2024 435,000 143,468 325,000 228,410 760,000 371,878 1,131,878 10,975,000 39.56% 2024 2025 450,000 130,080 345,000 219,528 795,000 349,608 1,144,608 10,180,000 43.94% 2025 2026 465,000 115,894 365,000 209,851 830,000 325,745 1,155,745 9,350,000 48.51% 2026 2027 480,000 100,770 385,000 199,346 865,000 300,116 1,165,116 8,485,000 53.28% 2027 2028 495,000 84,679 405,000 187,886 900,000 272,565 1,172,565 7,585,000 58.23% 2028 2029 510,000 67,590 425,000 175,431 935,000 243,021 1,178,021 6,650,000 63.38% 2029 2030 530,000 49,518 450,000 161,975 980,000 211,493 1,191,493 5,670,000 68.78% 2030 2031 545,000 30,433 470,000 147,598 1,015,000 178,030 1,193,030 4,655,000 74.37% 2031 2032 565,000 10,311 495,000 132,151 1,060,000 142,463 1,202,463 3,595,000 80.20% 2032 2033 1,160,000 104,678 1,160,000 104,678 1,264,678 2,435,000 86.59% 2033 2034 1,195,000 64,634 1,195,000 64,634 1,259,634 1,240,000 93.17% 2034 2035 1,240,000 22,010 1,240,000 22,010 1,262,010 0 100.00% 2035 8,500,000 3,058,759 9,660,000 4,610,418 18,160,000 7,669,176 25,829,176 This Issue

Taxable Sales Tax

Series 2012B 12/13/12 $9,660,000 2/01 $8,500,000 2/01

Schedule of Bonded Indebtedness (As of 12/13/12)

11/29/11

Sales Tax _{Series 2011B}

Prepared by Ehlers

GO Sales Tax

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1 _{A portion of the Series 2012A Notes of this offering is not subject to the Debt Limit ($1,403,000 public safety}

communications equipment portion).

2 _{Only those taxing jurisdictions with general obligation debt outstanding are included in this section. Does not}

include non-general obligation debt, self-supporting general obligation revenue debt, short-term general obligation debt, or general obligation tax/aid anticipation certificates of indebtedness.

3 _{Debt is as of December 31, 2011.}

DEBT LIMIT

The statutory limit on debt of Minnesota municipalities other than school districts or cities of the first class (Minnesota Statutes, Section 475.53, subd. 1) is 3% of the Assessor's Taxable Market Value of all taxable property within its boundaries. "Net debt" (Minnesota Statutes, Section 475.51, subd. 4) is the amount remaining after deducting from gross 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 producing convenience; (4) obligations issued to create or maintain a permanent improvement revolving fund; (5) funds held as sinking funds for payment of principal and interest on debt other than those deductible under 1-4 above; (6) other obligations which are not to be included in computing the net debt of a municipality under the provisions of the law authorizing their issuance (e.g. the Series 2012B Bonds of this offering).

2011/12 Assessor's Taxable Market Value $1,684,386,400

Multiply by 3% 0.03

Statutory Debt Limit $ 50,531,592

Less: Long-Term Debt Outstanding Being Paid Solely from Taxes

(includes a portion of the Series 2012A Notes of this offering) (2,187,000)1

Unused Debt Limit $ 48,344,592

UNDERLYING DEBT2 Taxing District 2011/12 Taxable Net Tax Capacity % In County Total G.O. Debt County's Proportionate Share

City of Grand Marais $ 1,563,429 100.0000% $ 5,670,000 $ 5,670,000

I.S.D. No. 166 (Cook County) 17,258,395 100.0000% 7,215,000 7,215,000

Town of Lutsen 3,101,968 100.0000% 25,5003 25,500

Town of Schroeder 1,316,591 100.0000% 16,2003 16,200

Town of Tofte 1,317,822 100.0000% 158,5413 158,541

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1 _{Debt service on the County’s general obligation sales tax revenue debt is being paid entirely from sales tax}

revenues and therefore is considered self-supporting debt. 16 DEBT RATIOS G.O. Debt Debt/Estimated Full Market Value of Taxable Property ($1,685,427,134) Debt/5,216 Current Population

Direct G.O. Debt Being Paid From: Taxes

(includes the Series 2012A Notes of this offering) $ 3,590,000

Sales Tax Revenues

(includes the Series 2012B Bonds of this offering) 18,160,000

Total General Obligation Debt $ 21,750,000

Less: G.O. Debt Paid Entirely from Sales Tax Revenues1 _(18,160,000)

Tax Supported General Obligation Debt $ 3,590,000 0.21% $688.27

County's Share of Total Underlying Debt $ 13,085,241 0.78% $2,508.67

Total $ 16,675,241 0.99% $3,196.94

DEBT PAYMENT HISTORY

The County has never defaulted in the payment of principal and interest on its debt.

FUTURE FINANCING

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

2 _{Collections are through May 31, 2012.}

3 _{After reduction for state aids. Does not include the statewide general property tax against commercial/industrial,}

non-homestead resorts and seasonal recreational residential property.

TAX LEVIES AND COLLECTIONS

TAX COLLECTIONS Tax Year Net Tax Levy1 Total Collected Following Year Collected to Date2 _{% Collected} 2007/08 $5,166,259 $5,061,347 $5,154,002 99.76% 2008/09 5,283,120 5,180,774 5,267,780 99.71% 2009/10 5,566,961 5,432,409 5,534,545 99.42% 2010/11 5,601,869 5,478,731 5,536,795 98.84% 2011/12 5,873,730 In process of collection

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

TAX CAPACITY RATES3

2007/08 2008/09 2009/10 2010/11 2011/12

Cook County 34.887% 31.985% 30.717% 31.581% 34.610%

Source: Tax Collections and Tax Capacity Rates have been furnished by Cook County.

LEVY LIMITS

The State Legislature has periodically imposed limitations on the ability of municipalities to levy property taxes. In 2008, the Legislature imposed levy limits for all counties and all cities over 2,500 population for budget years 2009, 2010 and 2011. These limitations have not applied to taxes levied to pay debt service. While these limitations have expired, the potential exists for future legislation to limit the ability of local governments to levy property taxes. For more detailed information about Minnesota levy limits, contact the Minnesota Department of Revenue or Ehlers & Associates.

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18

THE ISSUER

COUNTY GOVERNMENT

Cook County was organized as a municipality in 1882. The County is governed by an elected five-member Board of County Commissioners, and decisions are made by a majority vote of a quorum. The County Auditor-Treasurer is elected and acts as Clerk to the Board.

EMPLOYEES; PENSIONS; UNIONS

The County has 96 full-time, 8 part-time, and 12 seasonal employees. All full-time and certain part-time employees of the County are covered by defined benefit pension plans administered by the Public Employee Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing multiple-employer retirement plans. PERA members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security. See the Notes to Financial Statements in Appendix A for a detailed description of the Plans.

Recognized and Certified Bargaining Units

Bargaining Unit

Expiration Date of Current Contract

Local 49 IUOE December 31, 2013

Cook County Employees Association December 31, 2013

Local 38 LELS December 31, 2013

LIABILITIES FOR OTHER POST EMPLOYMENT BENEFITS

The County has obligations for some post-employment benefits (some mandated by State Statute and others that cover a portion of the cost of health insurance during retirment) for the majority of its employees. Accounting for these obligations is dictated by Governmental Accounting Standards Board Statement No. 45 (GASB 45). The County has completed an internal review of its obligations.

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FUNDS ON HAND (as of October 29, 2012)

Fund

Total Cash and Investments

Revenue $ 6,732,415

Road and Bridge 340,684

Social Services 593,573

Building 437,926

Airport 102,275

Golf Course Lodging Tax 1

2009 Local Sales Tax Revenues 2,434,070

L.O.S.T. Projects Bond Proceeds 6,646,153

New Community Center (L.O.S.T.) (509,211)

1% L.O.S.T. - Other Projects (1,262,471)

Government Center Sinking Fund 243,375

Soil & Water Conservation 147,681

Taxes and Penalties 5,518,539

Lodging Tax (5,632)

State Revenue 15,517

Fire Districts 1

Leased Lakeshore Non Expendable Trust 835,085

Forfeited Tax (159,284)

Mortgage Registry 12,610

Medical & Dependent Care Flex Plan 1,858

Total Funds on Hand $ 22,125,165

LITIGATION

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

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20

GENERAL INFORMATION

LOCATION

Cook County, with a 2010 U.S. Census population of 5,176 and a current State Demographer’s estimated population of 5,216 and comprising an area of 992,000 acres, is located in northern Minnesota on the north shore of Lake Superior, approximately 110 miles northeast of the City of Duluth. The City of Grand Marais is the county seat. For

additional information regarding the County, please visit its website at www.co.cook.mn.us.

LARGER EMPLOYERS

Larger employers in the Cook County include the following:

Firm Type of Business/Product

Estimated No. of Employees

Grand Portage Tribal Council/Lodge Tribal government, businesses and services 325

Cook County North Shore Hospital Hospital 153

Lutsen Resort Lodging 130

Bluefin Bay Resort Lodging 125

Lutsen Mountains Resort Lodging 125

Cook County Municipal government and services 116

I.S.D. No. 166 (Cook County Schools) Elementary and secondary education 105

U.S.D.A. Forest Service Forestry services 75

Caribou Highlands Lodge Lodging 48

City of Grand Marais Municipal government and services 46

Source: Infogroup (www.salesgenie.com), written and telephone survey (November 2012), and the Minnesota

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U.S. CENSUS DATA

Population Trend: Cook County

2000 U.S. Census population 5,168

2010 U.S. Census population 5,176

2011 State Demographer's Estimate 5,216

Percent of Change 2000 - 2010 + 0.15%

Income and Age Statistics

Cook County State of Minnesota United States

2009 per capita income $28,873 $29,582 $27,334

2009 median household income $49,162 $57,243 $51,914

2009 median family income $56,146 $71,307 $62,982

2010 median gross rent $582 $759 $841

2010 median value owner-occupied units $247,100 $206,200 $188,400

2010 median age 49.5 yrs. 37.1 yrs. 36.9 yrs.

State of Minnesota United States

County % of 2009 per capita income 97.60% 105.63%

County % of 2009 median family income 78.74% 89.15%

Housing Statistics

Cook County

2000 2010 Percent of Change

All Housing Units 4,708 5,839 24.02%

Source: 2000 and 2010 Census of Population and Housing, and 2010 American Community Survey, U.S. Census

Bureau (www.factfinder2.census.gov).

EMPLOYMENT/UNEMPLOYMENT DATA

Average Employment Average Unemployment

Year Cook County Cook County State of Minnesota

2008 2,960 5.5% 5.4%

2009 2,897 7.3% 8.1%

2010 3,059 6.8% 7.3%

2011 3,124 6.5% 6.4%

2012, September 3,421 3.9% 5.3%

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A-1

APPENDIX A

EXCERPTS FROM FINANCIAL STATEMENTS

Reproduced on the following pages are excerpts from the County's audited Financial Statements for the fiscal year ending December 31, 2011. The Financial Statements have been prepared by the County and audited by a certified public accountant. The Management’s Discussion and Analysis and the Notes to Financial Statements are an integral part of the audit and any judgment of the Financial Statements should be based on the Financial Statements as a whole. Copies of the complete audited financial statements for the past three years and the current budget are available upon request from Ehlers.

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REBECCA OTTO STATE AUDITOR

Sr¡.rn

or

MTNNESoTA

Opprcs oF

THE

SrnrB

Auuron

SUITE 5OO

525 PARK STREET

SAINT PAUL, MN 55103-2139

(651) 296-2551 (Voice) (651) 296-47 55 (Fax)

state.audi [email protected] (E-mail)

1 -80O -627 -3 529 (Relay Servi ce)

INDEPENDENT AUDITOR'S REPORT

Board of County Commissioners Cook County

We have audited the accompanying financial statements

of

the governmental activities, the

discretely presented component

unit,

each major fund, and

the

aggregate remaining fund

information of Cook County, Minnesota, as of and for the year ended December 31,2071, which

collectively comprise the County's basic financial statements as listed in the table of contents.

These financial statements

are the

responsibility

of

Cook

County's management. Our

responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United

States of America; the standards applicable to financial audits contained in Government Auditing

Standards, issued

by

the

Comptroller General

of

the

United States; and U.S.

Office of

Management and Budget (OMB) Circular A-133, Audits

of

States, Local Governments, and

Non-Profit Organizatior¿s. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in

the financial statements. An audit also includes assessing the accounting principles used and

significant estimates made by management, as well as evaluating the overall financial statement

presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects,

the

respective financial position

of

the

governmental activities,

the

discretely presented

component unit, each major fund, and the aggregate remaining fund information of Cook County

as of December 31, 2011, and the respective changes in financial position thereof for the year

then ended in conformity with accounting principles generally accepted in the United States

of

America.

Cook County adopted the provisions

of

Governmental Accounting Standards Board (GASB)

Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, as of and

for the year ended December 31,

2011.

GASB Statement 54 provides clearer fund balance

classifications that can be more consistently applied and clarifies existing govemmental fund

COOK COUNTY, MINNESOTA

COOK COUNTY, MINNESOTA

BAIRD

Milwaukee, Wisconsin

C.L. King

Coastal Securities

Kildare Capital

Edward D. Jones & Co

Cronin & Co., Inc.

SAMCO Capital Mkts

Loop Capital

Crews & Associates, Inc.

Davenport & Co. L.L.C.

Incapital, LLC

Ross Sinclaire Association

Wedbush

Castle Oak Sec.

Lafayette Investment

William Blair & Comp

Vining Sparks

FTN Financial Capital

Northland Securities

Country Club Bank

TABLE OF CONTENTS

BOARD OF COMMISSIONERS

ADMINISTRATION

PROFESSIONAL SERVICES

INTRODUCTORY STATEMENT

THE SERIES 2012A NOTES

THE SERIES 2012B BONDS

PROVISIONS COMMON TO BOTH THE

SERIES 2012A NOTES AND THE SERIES 2012B BONDS

VALUATIONS

DEBT

TAX LEVIES AND COLLECTIONS

THE ISSUER

GENERAL INFORMATION

APPENDIX A

EXCERPTS FROM FINANCIAL STATEMENTS

Sr¡.rn

or

MTNNESoTA

Opprcs oF

THE

SrnrB

Auuron

of

unit,

the

are the

of

Cook

by

the

of

the

Office of

of

the

of

the

the

of

of

2011.