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A011 - Official Statement
Z Rating: Moody's Investors Service. Inc. (Applied fart) —Standard & Poor's (Applied for) 117 th6' opinion ofBond Counsel, under existing law, interest to be paid to the holders of the Bonds• is not includable in gross income for leaeral income tax purposes, subject to certain matters described under 'Tax Exemption" herein. OFFICIAL STATEMENT (REFUNDING) $3,510,000* Sewer Revenue Refunding Bonds, Series 1996 City of Ames, Iowa Dated: March 15. 1996 Minimum Bid: $1494,205 (99,55%) Principal Due: December 1, 1996'2002 Good Faith Deposit: $3 5. 100 The Sewer Revenue Refunding Bonds, Series 1996 (the "Bonds") will be limited obligations payable solely from net revenues of the Municipal Sewage Utility (the "Sewer System") of the City of Ames, Iowa (the "City"). The Bonds will be issued as fully registered bonds without coupons and, when issued, will be registered in the name Cede & Co., as nominee of The Depositor), Trust Company ("DTC"), DTC will act as securities depository of the Bonds. Individual purchases may be made in book -entry form only, in the principal amount of $5,000 and integral multiples thereof. Purchasers will not receive certificates representing their interest in the Bonds purchased. Principal and interest on the Bonds, payable initially on December 1, 1996, and thereafter semiannually on each December I and June 1, will be paid to DTC, which will in turn remit such principal and interest to its participants for subsequent disbursement to the beneficial owners of the Bonds as described herein. The Bonds will mature December I in the years and amounts as follows: Interest Interest Year Amount* Rate** Yield* Year Amount* Rate" Yield* 1996 $440,000 % 2000 $595,000 % 1997 510,000 % 2001 600,0/000 /0 1998 520,000 2002 285,000 1999 560,000 % % The Bonds are not subject to prior redemption and prepayment. NOT BANK QUALIFIED: The Bonds are not "Qualified Tax -Exempt Obligations". LEGAL OPINION: Dorsey & Whitney P.L.L.P., Des Moines, Iowa REGISTRAR/PAYING AGENT: The City will be the Registrar/Paying Agent BIDS RECEIVED UNTIL: 11:00 A.M., C.T.,Tuesday, March 5, 1996 Council Chambers City Hall, Ames, Iowa BIDS CONSIDERED: 7:00 P.M., Council Chambers, City Hall. Ames, Iowa The date of this Official Statement is February 27, 1996. The City reserves the right to increase or decrease the issue size by an amount up to $175,000 on the sale date after bids have been received, but in no case by more than $25,000 per maturity. If the principal size is adjusted, the purchase price will be adjusted proportionately. Interest rates, reoffering yields or prices and ratings will be set forth in the Final Official Statement described herein. (Tins COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. 17'ISNOT ,4SUMMARY OFIHI,SISSUE. 1NVh,S70RSA41JST 1?1,,"AI)7'Hf,'L'NTII?Is01;7-7('L41,STATI,.'All-.N7'7'OoBTAININI,'ORA,IAIIONI,,',SSEN7'IAL7'07711,'MAKING; OF' ANINFORAIEDINVT,,',5IMI,'N7'1)1i('L,S'ION.) IN EVENSEN DODGE INC F f N A N C i A L C 0 N 5 U L T A N T 5 No dealer, broker, salesman or other person has been authorized by the City, the Financial Advisor or the Underwriters to give any information or to make any representations other than those contained in this Official Statement or the Final Official Statement and, if given or made, such information and representations must not be relied upon as having been authorized by the City, the Financial Advisor or the Underwriters. This Official Statement or the Final Official Statement does not constitute an offer to sell or solicitation of an offer to buy, nor shall there by any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City and other Sources which are believed to be reliable, but it is not to be construed as a representation by the Financial Advisor or Underwriters. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement or the Final Official Statement nor any sale made thereafter shall, under any circumstances, create any implication that there has been no change in the affairs of the City or in any other information contained herein, since the date hereof, IN CONNI - `CTION WITH THE OFFERING OF THE BONDS, 'THE UNDERWRITERS MAY OVER -ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAINTHE MARKET PRICE OF THE, BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE" OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANYTIME, TABLE OF CONTENTS Pale Introduction to the Official Statement Description of the Bonds .... - ........... - ..... -- ....... ............ 2 Authorization . ............. ........ --- ............. — 2 Purpose.................. ......... -- ......... 2 Redemption Provisions ... .................... - ............. 2 Book -Entry Only System., .................................. 2 Security..... .... ...... --- ..... ........ ...... ......... ......... 4 Continuing Disclosure.. ..... ............. .................. 6 TheCity of Ames . ...... -- ........ --- ... ......... - ................... 7 Description... -- ........................... ....... ............... 7 Organization ............ ........ .... ---- ..... -- ........... 7 (,'try Services....... ......... ................ .......... 8 I..'iriployce Relations.......... ..... ....... ...... .9 Economic and Demographic Information .... -- ...... ... -- ... ................ ......... 9 Population...... ........... ....... ....... . 9 Industry ... ............ 1-1-10 Labor Force Statistics ........... - ............ ........ 10 Retail Sales and Buying Income ... ................ ............... ...... (",onstruction ........... ....... ........ ................. I I Education . ... ....... ............ ....... ........ ....... --- 12 Medical Facilities ... ...... - ...... - ...... ...... ...... 12 rig-e Municipal Sewer System ..... ....... ........ ....... 13 Organization of Municipal Enterprises ..... -- ... ..... ........ ....... 13 SewerSystem .......... ...... _ ................................ 13 Sewer Rates.... ...... .... 13 SewerUsage ..... ............ - .... ................. 13 Indebtedness of the Sewer System... - ..... ........... ....... ...... ............. ... 14 Financial Information... ............. ........ - ...... ..................... 15 Financial Reports ................ ....... ............. 15 Results ol'Operations... - ..... ......... _ ....... _ _ _ _ 16 Debt Service Coverage ....................... - ............ 17 Ratings..... ....... - ....... ..... _ ..... --- ... - ........ - ....... .... 17 Federal Tax Considerations ..... ........ ........ _ ........ - - 17 Not Qualified Tax -Exempt Obligations....... ................... 18 Litigation... ...... .... - .... ...... __ .......... _ .......... ___ .... ... 18 Closing Documents ....... ............ .......... ....... ... 18 Certifications............. ................. ........ ...... ........... — 18 Financial Advisor.. ................... - .......... ........ ....... 18 Legal Matters ...... .............. .......... I *** ................ 1.1-111 ....... 19 Miscellaneous ...... - ............ ....... - ....... ......... ...... ..... 19 Appendix A - Excerpts from 1994 Financial Statements Appendix B - Form of Legal Opinion Appendix C - Notice of Sale and Official Terms of Offering Appendix 17 - Continuing Disclosure Undertaking Schedule of Bond Years Bid Form 37110 ii INTRODUCTION TO THE OFFICIAL STATEMENT The following information is furnished solell, to provide limited introductory information regarding the Citv'S S3,510,000* Sewer Revenue Refunding Bonds, Series 1996 (the "Bonds') and does not purport to I be comprehensive. All such information is qualified in its entirety by reference to the more detailed descriptions appearing in this Off icial Statement, including the appendices hereto, Issuer City of Ames, Iowa Security Limited obligation, payable solely from net revenues of the Municipal Sewage Utility. Purpose The Bonds will be issued to current refund the 1996-2002 maturities of the Sewer Revenue Bonds dated May 1, 1987, and the 1996-2002 maturities of the Sewer Revenue Bonds, Series 1987B, dated December 1, 1987. Optional Redemption The Bonds are not subject to redemption prior to maturity. Denominations The Bonds will be in denominations of $5,000 or multiples thereof. Form Book -entry only. Record Date The 15th day of the month preceding the payment date. Interest Payments Semiannually on December I and June 1, commencing December 1, 1996. Principal Payments December 1, 1996-2002. Tax Status Generally exempt from federal income taxes (see "Tax Exemption" herein). The Bonds are not "Qualified Tax -Exempt Obligations". Professional Consultants Financial Advisor: Evensen Dodge, Inc. zn Minneapolis, Minnesota Bond Counsel: Dorsey & Whitney P.L.LY, Des Moines, Iowa The Of .ficial Statement is in a.form, deemedfinal as of its date for purposes cif Securities and Exchange Commission Rule ljc2-12(b)(l) (the "Rule'), but is subject to minor revision or amendment in accordance with the Rule. Not later than seven business days following the award of the Bonds,, the Cit), shall provide copies of the Final Ofjicial Statement, as that term is used in the Rule, to the purchaser oj'the Bonds. The Final Official Statement will be the Off icial Statement dated February 23, 1996, and an addendum which includes the maturity dates and amounts, interest rates and reoffering yields or prices, credit ratings, and any other information required by law. Any such addendum shall, on or after the date thereof be fully incorporated in the Final Official Statement by reference. The purchaser will be supplied with Final Offic ial Statements in a quantity sufficient to meet its request. Up to 150 copies of the Final Official Statement will be f furnished without cost. Questions regarding the Bonds or the Official Statement can be directed to and additional copies of the Official Statement, the City's audited financial reports and the Resolution(s) may be obtained from Evensen Dodge, Inc., 601 Second Avenue South, Suite 5100, Minneapolis, Minnesota 55402 (612/338-3535), the City's financial advisor, or JoAnn Goins, the City Clerk. * Preliminary subject to change. DESCRIPTION OF THE BONDS Authorization The Bonds are issued pursuant to Sections 384.82 and 384.83 of the City Code of Iowa. Purpose The Bonds are being issued to refund the 1996-2002 maturities of the Sewer Revenue Bonds, Series 1987, dated May 1, 1987, and the 1996-2002 maturities of Sewer Revenue Bonds, Series 1987B, dated December 1, 1987. The proceeds of the Bonds will be used to effect a current refunding of the callable portions of the following indebtedness of the City (the "Refunded Bonds") as shown below. TABLE I Bonds to be Refunded Issue Amount Amount Maturities Call Call Date Type Outstanding Refunded Refunded Date Price 05/01/87 Sewer Revenue $2,450,000 $2,450,000 1996-2002 06/01/96 100% 12/01/87 Sewer Revenue $1,400,000 $1,400,000 1996-2002 06/01/96 1000/0 TABLE Sources and Uses of Funds Sources: Bond Proceeds $3,510,000.00 Reserve Fund (Series 1987 A and B Bonds) 708,837.50 Projected Investment Earnings 38A64.08 Total Sources %4.257.301.58 Uses: Redemption Price of Series 1987 A Bonds $2,450,000.00 Redemption Price of Series 1987 B Bonds 1,400,000.00 Cost of Issuance 40,000.00 Underwriters Discount 15,795.00 Debt Service Reserve 351,000.00 Contingency 50z.58 Total Uses $4,257.301 .58 Redemption Provisions The Bonds are not subject to redemption prior to maturity. Book-F,ntry Onty System The Depository Trust Company ("DTC"), New York, New York will act as securities depository for the Bonds. The Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully -registered Bond certificate will be issued for each annual maturity of the Bonds, each in the aggregate principal amount of such annual maturity, and will be deposited with DTC. N DTC is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meanint, of the New York Uniform Commercial Code, and a "clearing a(_1enc%` re-istered Pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book -entry changes in Participants' accounts, thereby eliminating the need for physical movement of security certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other or-anizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers. Inc. Access to the bTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and l-`xchan(l�ne Commission, Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf' of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no chan-c in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements annono them, Subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC or Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date I (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be 'governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of D'I"C or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the City, disbursements of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof, Security The Sewer Revenue Bonds will be limited obligations of the City payable solely from the net revenues of the Municipal Sewage Utility, The City has also pledged to maintain a reserve fund (Sewer Revenue Debt Service Reserve Fund, the "Reserve Fund") for the further security of the Bonds. Money in the Reserve Fund shall be used solely for the purpose of paying principal at maturity I of or interest on the Bonds and Parity Bonds for the payment of which insufficient money shall be available in the Sinking Fund. The Reserve Fund will be fully funded upon issuance of the Bonds. Rate Covenant So long as any of the Bonds are outstanding, the Utility shall continue to be operated as a revenue producing undertaking. The City shall establish, impose, adjust and provide for the collection of rates to be charged to customers of the Utility, including the City, to produce gross revenues (the "Gross Revenues") which are sufficient in each year to pay the expenses of operation and maintenance of the Utility, and to leave a balance of net revenues (the "Net Revenues") equal to not less than 1.10 times the amount required to pay the principal of and interest (but not including capitalize interest) on all outstanding sewer revenue bonds and any other obligations by their terms payable from the Net Revenues of the Utility, as the same becomes due, and to provide for the creation and maintenance of the reserve for the payment of such principal and interest. The City shall annually review the rates charged by the Utility and make any adjustments necessary to provide for sufficient Gross Revenues based upon the ensuinc, year's budget. Net Revenues shall mean Gross Revenues less operation and maintenance expenses, which shall include salaries, wages, cost of maintenance, operation and repair, materials supplies, insurance, purchases at wholesale, if any, and all other items normally included under recognized accounting practices (but does not include allowances for depreciation in the valuation of physical property or principal of and interest on the Bonds or payments to the various funds hereinafter established) (the "Operating Expenses"). Capital costs, depreciation and interest or principal payments are not Operating Expenses. Application of Revenues Upon the issuance of the Bonds and thereafter so long as any of the Bonds are outstanding, all of the income and revenues of the Utility shall be segregated and kept separate and apart and shall be deposited in a separate and special fund to be known as the Sewer Revenue Fund. The Sewer Revenue Fund shall first be used in maintaining and operating the Utility, and, thereafter, the remaining Net Revenues shall, be used to pay the interest on and principal of the Bonds and to create and maintain the several separate funds hereinafter described. The funds in the Sewer Revenue Fund shall first be used to make deposits into a separate and special fund to be known as the "Operation and Maintenance Fund". There shall be deposited into the Operation and Maintenance Fund on the first working day of each month an amount not less than one -twelfth (1/12) of the estimated annual operating expenses of the Utility for the ensuing twelve months but in no event less than an amount which, with the balance in the Operating and Maintenance and, is sufficient to pay all amounts becomingc' due and payable from each Fund in that month. After the first day of the month, further deposits may be made to the Operation and Maintenance Fund from the Sewer Revenue Fund to the extent necessary to pay current Operating Expenses accrued and payable, to the extent that funds are not available in the surplus Fund hereinafter described. In determining the estimated annual Operating Expenses of the Utility and the amount required to be deposited in the Operation and Maintenance Fund each month, the City may take into account any amount remaining and unused in such Fund at the beginning of the fiscal year, and available to pay Operating Expenses during that fiscal year. There shall be maintained an account to be known as the Sewer Revenue Bond Sinking Fund (the "Sinking Fund"), into which there shall be set aside from the first available future Net Revenues of the Utility such portion thereof as will be sufficient to pay the interest upon and principal of the Bonds as the same become due, and the minimum amount to be so set aside into the Sinking Fund from the Net Revenues during each month of each year in equal monthly installments shall not be less than as follows: A sum equal to one -twelfth (1/12) of the principal of all Bonds maturing on the December I next succeeding, plus a sum equal to one -sixth (1/6) of the interest becoming due on the next succeeding interest payment date on all of the outstanding Bonds payable from the Sinking Fund and to pay all interest to become due thereon prior to such retirement. The Sinking Fund shall be used solely for the purpose of paying the interest on and principal Bonds and any Parity Bonds, and for no other purpose. If any Parity bonds are issued under the conditions and restrictions set forth in the Resolution, provisions shall be made for increasing such payments into the Sinking Fund to meet maturing installments of principal of" and interest on such Parity Bonds. There shall be a special fund to be known and designated as the Sewer Revenue Bond Reserve Fund (the "Reserve Fund") into which there shall be set apart and paid at the time of the delivery of the Bonds, being equal to the lessor of: 1) 12511,4O of the average annual debt service on the Bonds; 2) 100% of the maximum annual debt service on the Bonds-, or 3) 1091/0 of the proceeds of the Bonds. Thereafter, the Reserve Fund shall be maintained at the "Required Reserve Fund Balance" which at any time of calculation is an amount equal to the lesser of: (1) 125% of'the average annual debt service on the then outstanding Bonds and any then outstanding Parity Bonds; or (2) 100% of the maximum annual debt service on the then outstanding Bonds and any then outstanding Parity Bonds; or (3) 10% of the proceeds of the Bonds, plus 10% of the proceeds of each issue of then outstanding Parity Bonds. Prior to the issuance of any Parity Bonds, the City shall deposit into the Reserve Fund sufficient funds so that the balance of the Reserve Fund shall equal the Required Reserve Fund Balance calculated on the basis of the proposed Parity Bonds havina been issued. Whenever the sum on deposit in the Reserve Fund has been reduced to less than the Required Reserve Fund Balance by the expenditure of all or a portion of the funds on deposit in said Fund there shall be deposited into such Reserve Fund from the next available Net Revenues, after first making the required deposits into the Sinking Fund, amounts sufficient so that the sum on deposit in the Reserve Fund has been restored to the Required Reserve Fund Balance. All monies credited to the Reserve Fund shall be used for the payment of the principal of and interest on the Bonds whenever for any reason the funds on deposit in the Sinking Fund are insufficient to pay such principal and interest when due. There shall be a special fund to be known as the Sewer Improvement Fund (the "Improvement Fund"). There shall be set apart and paid from the balance of the Net Revenues remaining, after first making the required payments into the Sinking Fund and the required payments into the Reserve Fund, the sum of $17,000 on the first day of each month of each year, until such time as there has been accumulated in the Improvement Fund the sum of $1,000,000 (the "Required Improvement Fund Balance"). If and to whatever extent it may become necessary to use such accumulated reserve for any of the purposes hereinafter specified payments into the Improvement Fund shall be resumed until such time as the money on deposit in the Improvement Fund again equals the Required Improvement Fund Balance. All monies credited to the Improvement Fund shall be used solely and only for the following purposes and with the following priorities: a. First, if for any reason there exists a deficiency in the required balance in the Sinking Fund and provided C, sufficient amounts are not available in the Sewer Revenue Fund or the Reserve Fund to pay such deficiency, there shall be paid into the Sinking Fund an amount equal to the deficiency from the amounts on deposit in the Improvement Fund. b. Secondly, said monies shall be transferred and credited to the Reserve Fund whenever any deficiency may exist in the Reserve Fund. c. Thirdly, to pay for the cost of capital improvements and extensions to the Utility provided, however, that prior to the expenditure no deficiency exists in the amounts required to be paid into the Sinking Fund and the Reserve Fund. There shall be a special fund to be known and designated as the Sewer Surplus Fund (the "Surplus Fund") into which there shall be set apart and paid all of the Net Revenues remaining after first making the required payments into the Sinking Fund the Reserve Fund and the Improvement Fund. All monies credited to the Surplus Fund shall be transferred and credited to the Sinking Fund whenever necessary to prevent or remedy a default in the payment of the principal of or interest on the bonds or shall be transferred and credited to the Reserve Fund whenever any deficiency may exist in the Reserve Fund, or shall be transferred and credited to the Improvement Fund whenever any deficiency may exist in the payments required to be made into the Improvement Fund. Any balance in the Surplus Fund may be made available to the City as the Council or such other duly constituted body as may then be charged with the operation of the Utility may from time to time direct. All payments required to be made to the foregoing Funds shall be made on the first day of each month, if necessary, except that when the first day of each month, if necessary, except that when the first day of any month shall be a Sunday or legal holiday, then such payments shall be made on the next succeeding secular day. I Additional Bonds The City covenants that so long as any of the Bonds are outstanding and unpaid, no other bonds or obligations payable from the Net Revenues of the Utility will be issued except upon the basis of such additional bonds or obli-ations then subject to the priority and security for payment of any Bonds then outstanding; provided, however, that the City reserves the right and privilege of issuing additional bonds from time to time payable from the Net Revenues of the Utility and ranking on a parity with the Bonds (the "Parity Bonds") in order to pay the cost of improvements and extensions to the Utility or for refunding any bonds or obligations payable from the Net Revenues of the Utility, but only if there has been first procured and filed with the City a statement of an independent Certified Public Accountant, consulting engineer or financial consultant, not in the regular employ of the City, reciting the opinion, based upon necessary investigations, that the officially reported Net Revenue of the Utilit%r for the last preceding fiscal year prior to the issuance of such Parity Bonds (with adjustments as hereinafter described) were equal to at least One Hundred Twenty-five percent (125%) of the maximum amount that will become due in any subsequent fiscal year for both the principal and of interest on the Bonds then outstanding and the Parity Bonds then proposed to be issued during the life of the then outstanding Bonds. C, The amount of Gross Revenues of the Utility shall be adjusted for the purpose of the foregoing computations by a consulting engineer not in the regular employ of the City so as to reflect any revision in the schedule of rates and charges being imposed at the time of the issuance of any such Parity Bonds. Bonds issued to refund any of the Bonds shall not be subject to the foregoing restrictions, provided the Bonds being refunded mature within three (3) months of the date of such refunding and no other funds are available to pay such maturing Bonds, but otherwise any refunding bonds ranking on a parity shall only be issued subject to the restrictions of the resolution. Continuing Disclosure In order to permit bidders for the Bonds and other participating underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchan-e act of 1934, as amended (the "Rule"), the Issuer will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds, in the Bond Resolution, to provide annual reports of specified information and notice of the occurrence of certain events, if material, as hereinafter described (the "Disclosure Covenants"). The information to be provided on an annual basis, the events as to which notice is to be given, if material, and a summary of other provisions of the Disclosure Covenants, including termination, amendment and remedies, are set forth in Appendix D to this Official Statement. Breach of the Disclosure Covenants will not constitute a default or an "Event of Default" under the Bonds or the Resolution. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of the bonds in the secondary market. Thus, a failure on the part of the Issuer to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. THE CITY OF AMES Description The City of Ames is located in Story County in central Iowa. It is approximately thirty miles north of Des Moines, the State capital and largest city in Iowa. The City was incorporated in 1869 under the laws of the State of Iowa, later amended in July, 1975 under the Home Rule City Act. The City, with a population of 47,198, is known for its excellent quality of life which includes a relatively crime - free environment, extensive park system, superior cultural/recreational facilities, and nationally recognized school system. Organization The City is governed under a Council -Manager form of government. The mayor and two council members are elected at large; the other four council members represent wards. The chief administrative I officer of the City is the city manager. The City provides many services including public safety, public works, culture, recreation and community development. The Council and staff have long supported a professional approach to local government management C, and involvement in professional organizations. Many of the City's department heads have gained national and international reputations in their professional fields. CITY UNCI Initial Present Term Term Member Office Commenced Expires Larry R. Curtis Mayor 1/1/90 12/31/97 Ted Tedeseo Council Member -At -Large I/l/94 12/31/97 Judie Hoffinan Council Member -At -Large 1/1/88 12/31/99 Sharon Wirth Council Member - First Ward 1/1/90 12/31/97 John Parks Council Member - Second Ward 1/1/80 12/31/99 Ann Campbell Council Member - Third Ward 1/1/86 12/31/97 Herman Quirmbach Council Member - Fourth Ward 1/1/96 12/31/99 ADMINISTRATION Steven Schainker City Manager John Klaus City Attorney Alice Carroll Finance Director Sandra Ryan City Clerk Sherry Meier City Treasurer Tom Neumann Director of Water, Water Pollution Control Paul Wiegand, P.E. Director of Public Works Merlin Hove Director of Electric Dept. City Services The City operates water, electrical and sewer utilities through modem city -owned systems. It also maintains a Municipal Solid Waste Recovery System and operates parking lot facilities, a medical center, a transit system, a recreational ice facility, a municipal golf course and a municipal airport which is the busiest general aviation air -port in the State. A brief summary of the enterprises operated by the City is presented below. Mary Greeley Medical Center The municipally owned Mary Greeley Medical Center is a 220 bed regional referral center which serves the City of Ames and an eight -county area in north central Iowa. Among the services provided are medical, surgical, pediatrics, intensive care, mental health, obstetrics, nursery, neonatal intensive care, emergency, hemodialysis, radiology, coronary care, and physical, respiratory, recreational and occupational therapy services. In 1992/1993, the Hospital issued approximately $24,000,000 in revenue bonds to fund the acquisition, construction and equipping of additions to the Medical Center. Electric Utility The Electric LJtilit-v generates electricity in a coal-fired power plant that also bums RDF (refuse -derived fuel) as a supplement to coal. The RDF is obtained through the Ames solid waste recovery system. On March 1, 1982, the city completed construction of a combustion turbine 60-megawatt steam unit. It is Z-1 anticipated that with this addition, the plant will be able to supply the electric power needs of the City through 1994. The total cost of the pro -ram was approximately $52,000,000. This was financed through the issuance of C� 7= $43,000,000 in revenue bonds and $9,000,000 from operating revenues. Water Utility The City's water system is supplied by wells located in the underground aquifer serving Ames. The City's water plant has a ground storage capacity of 6,000,000 gallons per day as compared to average and peak, daily use of' 6,000,000 -,pd and 8.000.000 apd, respectively. An additional 1.750,000 of storage capacity is provided by two elevated storage towers. Sewer Utility The Municipal Sanitary Sewer System of the City of Ames serves the community by collecting, conveying and delivering wastewater to the City treatment plant. The wastewater is then treated and disposed of within the requirements of federal, state and local regulations. Resource Recovery The City of Ames and surrounding communities are served by the Arnold Q. Chantland Resource Recovery Center, which provides communities with an environmentally safe means of solid waste disposal. Ames owns and operates the facility, while 12 other local governmental units share in the cost of its operation. Transit System The City operates a mass transit system to provide efficient and economical transportation to all members of the community. A fixed routing service is available on a daily basis to most residents and a Dial -A -Ride service is available for elderly or handicapped residents. Other Municipal Services The Ames Police Department has a staff of 67 of which 49 are sworn officers. The City's Fire Department operates out of two stations with a staff of 54. The Ames Parks and Recreation Department maintains the City's 600 acres of park property, including the Homewood Golf Course and the Community Center Ice Facility. Employee Relations The City has 2.100 permanent employees of whom 1,600 work in the City -owned Mary Greeley Medical Center. Citv employees are represented by five bargaining units. The City's agreements with the baroaimn_(1 units are as follows: Association Cotract Expires International Association of Firefighters June 30, 1996 Public, Professional and Maintenance Employees June 30, 1996 International Brotherhood of Electrical Workers June 30, 1996 International Union of Operating Engineers (Local 234) June 30, 1996 Z� t, International Union of Operating Engineers (Local 234D) June 30, 1996 The City has several contributory pension and retirement plans as provided under the Code of the State of Iowa covering; firefighters, police officers, utility employees and other City employees. The plans are funded by annual contributions as determined by actuarial valuations in accordance with the laws of the State of Iowa and the appropriate ordinances of the City of Ames. All full-time employees must participate in one of the plans. The City administers the Utility Retirement Systems. The State administers the Iowa Public Employees Retirement System. The City's responsibility is limited to the payment of contributions for those of its employees who qualify for participation in the System. The Municipal Fire and Police Retirement System of Iowa is a state-wide system administered by a representative board of trustees. The total of the City's contributions to all these retirement systems for the year ended June 30, 1995 was $3,468,193. For further information concerning the City's retirement plans, see Note 8 in the Notes to Financial Statements contained as a part of Appendix A to this Official Statement. ECONOMIC AND DEMOGRAPHIC INFORMATION Population Demographic statistics compiled by the City of Ames, presented in 'Fable 3, reflect the City's population, income and education levels and unemployment rates, The City experienced a 46% growth in population from 1960 to 1970. In the years 1970 to 1980, the City had a 10.8% growth in its population and a 7.8% growth in population from 1980 to 1990. The trends in growth are expected to continue for the City of Ames. C, TABLE City of Ames, Iowa Demographic Statistics Per Capita Median Year —PaaulattL)n 111com (1) Agg( I 1970 39,505 S 3,073 223 1980 43,775 6,698 22.5 1990 47,198 14,085 22.7 1994 46,562 15,062 22.7 1995 48,653 15,062 22.7 (1) Estimates. Source: State Library of Iowa, Industry The City of Ames has a diverse employment base. Among the products manufactured by companies located in Ames are precision electronic instruments, hydrotransmission equipment, water treatment and analysis equipment. farm implements, abrasives and feed and grain products. A number of governmental units and other public institutions also contribute significantly to the Ames economy. The major employers in Ames are listed in 'Fable 4. Firm/ `trganizati on Iowa State University City of Ames Iowa Department of Transportation Ames Community School District McFarland Clinic SAUER - Sundstrand Corporation Ames Laboratories 3M Company National Animal Disease Center National Veterinarian Service Lab Todd & Sargent Story County Mainstream Living, Inc. Hach Company Wal-Mart (1) Includes part-time employees, Source: Ames Chamber of Commerce, Labor Force Statistics TABLE Major Employers Business/Service _E_ mp I o v e es University 12.500(l) All functions (including Medical Center) 2,100 Headquarters 1,114 Education 637 Medical Clinic 500 Hydro -Transmission Research and Assembly 457 Environmental Technology 400 Abrasives Manufacturing and General Distribution 372 Animal Control Center 285 Veterinarian Association 270 Metal Fabrication 250 Government 242 Social Services Agency 235 Water Analysis Equipment 227 Retail 220 The State of Iowa Job Service Office Reports annual unemployment rates and labor force figures for Ames as shown in Table 5. TABLE Employment Statistics Ames Unemployment Rates Year Labor Force Ames State of Iowa 1985 24,650 3.3% 8.0% 1986 25,070 3.1% 7.0% 1987 25,390 2.3% 5.5% 1988 26,640 1.7% 4.5% 1989 26,940 1.6% 4.3 0/'o 1990 26,700 1.9% 4.2% 1991 26,940 2.3% 4.6% 1992 27,230 2.3% 4 . 3 0/'o 1993 28,670 2.3% 4.0% 1994 29,270 2.3% 3.7% 1995 29,050 2.7% 3.3% 1996(l) 27,560 3.2% 4.2% (1) For January, 1996 only. Source: lo%va Department of Employment Services. 10 Retail Soles and Income Table 6 |iva median household Effective Buying Income and per capita retail sales for Story C"unryand the State of' o Iowa and for the City of Ames for the yean 1990 through 1044, as reported by Sales and ��mtcdng Muuu�cmcot's "Survey ofBuying Po`vec" 1994 Median Household Story County S37/423 Stateofluwo 34,976 City ofAmes 34.578 Per -Capita Retail Sales Story County $9,272 State ofIowa 9,016 City ofAmes 11,723 Construction TABLE6 Retail Sales/Buying Income $34,406 �2,456 31,732 $0.680 11,043 8/6l2 $32,395 3l,\32 29,878 $7,787 7.833 9,765 S3U,6V2 29,690 28,419 $7'0D7 7,023 8,961 Construction activity within the City as shown by its building permit records if presented in Table TA0LE7 Amws Building Permits Commercial Calendar Number Number Year of Units Value of Units YAI!Le 1984 39 $4,637.293 380 $ 7.429,400 1985 104 3.238.372 383 11`545^825 1986 100 4,331.429 223 7,501.215 1987 184 6,698,838 375 7,464,165 /988 lll 7.194,143 256 7,666,358 1989 86 8.980.671 184 7.033.323 1990 101 9,878,576 301 14,951,377 luVl 92 4935.164 282 14.502.868 1992 96 3.845.383 406 22/450.839 1993 104 6.769.737 435 25,638.140 1994 128 21.919.825 435 21^404.539 1995 150 27,888.153 455 21,548,387 (l) Includes new construction and remodeling. 1990 ^ S2fix39 24,699 25,098 $6.864 6,79] 8,699 Education Elementari, andsecqn(lqe3, Most of the City is a part of the Ames Community School District. The District operates eight elementary schools, one middle school and one senior high school. The school district employs 650 people, of whom 350 are certified. It also operates a special education building which serves the needs of 14 local districts in Boone and Story Counties. Two other school districts, the Gilbert Community School District and the Nevada Community School District also overlap into the City of Ames. However, these districts, in total, represent less than 1% of the City's property valuation. TABLES Enrollment Trends 1995/96 4,969 1994/95 51012 1993/94 4,941 1992/93 4,962 1991/92 4,979 1990/91 4,855 1989/90 4,706 1988/89 4,573 1987/88 4,452 1986/87 4,471 1985/86 4,355 Vocational Ames is also a part of the Des Moines Area Community College District (DMACC). The DMACC has campuses in Ankeny (20 miles from Ames) and Boone (13 miles from Ames) and offers trade, technical and college preparatory programs. I loK,a State University Ames is the home of Iowa State University (ISU). ISU was established in 1859 and is an integral part of the community. The fall, 1995 enrollment was approximately 24,431, and the University is the City's major employer with faculty and staff totaling approximately 12,500, including teaching assistants and hourly part-time employees. The University, in addition to its educational function, is a leading agricultural research and experimental institution. The Iowa State Center, which is the cultural and athletic center of the University and City, is a complex of five structures, all completed since 1969. It consists of two theaters, a football stadium, a coliseum and a continuing education building which attract major athletic, dramatic and musical events, as well as seminars and conferences, to Ames. Medical Facilities The municipally owned Mary Greeley Medical Center is a 220-bed regional referral center which serves the City of Ames and an 8-county area in north central Iowa. Among the services provided are medical, surgical, pediatrics, intensive car, mental health, obstetrics, nursery, neonatal intensive care, emergency, hemodialysis, radiology, coronary care and physical, respiratory, recreational and occupational therapy services. Adjacent to the Medical Center is the McFarland Clinic offering complete medical service, The Clinic has 500 employees and is serviced by an additional 90 physicians. Also located in the immediate area is the Family Practice Medical Clinic and several smaller medical offices. The Iowa State University Student Health Center provides medical care for ISU students and staff. There are also two musing homes in the community. 12 MUNICIPAL SEWER SYSTEM Oq, anization of Municipal Enterprises The City of Ames municipal sewer system has been in existence since October of 1903. The department employs 19 full-time personnel. In addition, seasonal part-time personnel and six half-time administrative personnel are hired for maintenance activities during the summer time. Sewer System Wastewater treatment is currently provided by one plant and three pumping stations. There are approximately 160.78 miles of sanitary sewers in the system. Sewa-e is treated at a newly expanded plant with a maximum capacity design of 12.5 gallons per day (rngpd) and an average pumping capacity of 6 mcypd. The System's current average I tl 'Cre usage is 6 mgpd. The plant has secondary treatment and biological processing, advanced treatment for ammonia, and land application of biosolids. Sewer Rates Rates for sewer service are set by the City Council. Current rates, as most recently amended effective July 1, 1995 are $5.50 minimum charge per month and $1.41 per hundred cubic feet of usage. Z�l Sewer Usage Table 9 below shows the six -year historical sewer utility use for the City. TABLE Six -Year Historical Usage of Sewer Utilfty. Treatment Fiscal (Gallons, Sewer Year Thousands) Revenues 1995 2,232 $2,963,081 1994 3,045 3,157,561 1993 2,450 3,052,204 1992 1,482 3,256,099 1991 2,662 3,184,024 1990 1,972 3,430,627 (The remainder of this page has been 14i blank intentionally) 13 The largest sewer utility users for fiscal C� year 1995 by gallons of water consumed are presented in Table 10. I User (1) TABLE 10 Largest Sewer Utility Users (Fiscal Year 1995) Water Consumption (Gallons) Percent of Total ISU Physical Plant 56,464,200 18.9 IDOT- Facility Management 4,976,570 1.7 Mary Greeley Medical Center 3,456,000 1.1 USDA FCC 647 866 (NADC) 3,445,350 1.2 Old Orchard Mobile Home Park 1,927,100 0.6 3M Company 1,794,200 0.6 National veterinary Services Lab 1,179,000 0.4 Gateway Center Motor Hotel 1,049,390 0A Hach Chemical Co. 1,031,300 03 Starlite Village 882,700 0.3 Flummerfelt Inc. 812,700 0.3 SAUER-Sundstrand 583,377 0.2 Abrego Ames Inc. 556,900 0.2 McFarland Clinic 550,560 0.2 Gentry Management Services 497,600 0.2 Barclay Ltd. 494,830 0.2 North Grand Care Center 492,800 0.2 Mayfair Coin Laundry 427,240 0.1 Jewel Park Association 425,400 0.1 Ames Laundry 401,790 0.1 Indebtedness �f q the Sen,er.Systetn Table I I presents a listing of the City's sewer revenue debt by issue as of the issuance of the Bonds. TABLE II Sewer Revenue Debt Outstanding by Issue Principal Outstanding Issue Original Interest Range Final as of Issuance Issue Date Amount Outstanding Maturity of the Bonds Sewer Revenue Refunding Bonds 03/15/96 $3,5 10,000* Total This Issue 12/01/02 $3.5 1 1QQ0* U �00 � The City reserves the right to increase the issue size by up to $175,000 on the sale date after bids have been received, but in no case by more than $25,000 per maturity. If the principal size is adjusted, the purchase price will be adjusted proportionately. (The remainder cif this page has been left blank intentionally) 14 Table 12 presents annual principal and interest payments of debt issued by the City which I I is secured solely by the net revenues of the Ames sewer system. Fiscal Year TABLE 12 City of Ames Sewer System Revenue Debt Schedule of Annual Debt Service This Issue (1) Principal* Interest Total 1996 $440,000 $157,570 $597.570 1997 510,000 112,3395 622.395 1998 520,000 93,720 613,720 1999 560,000 72,910 632,910 2000 595,000 49,652 644,652 2001 600,000 24,855 624,855 2002 285,000 LL22 291,127 Totals S3 5 1 -0000* 517_230 $4,027*220 ( I ) Based on a projected average interest rate of 4.159%. * Preliminary subject to change. FINANCIAL INFORMATION Financial Reports The City of Ames maintains its financial reports for the Sewer Fund on a modified accrual basis. Copies of the City's audited financial reports for the years ended June 30, 1991 through 1995 are available upon request from Evensen Dodoe, Inc., the City's financial advisor. See Appendix A for selected schedules from the 1995 audited n financial report. (The remainder of this page has been Idi blank intentionally) 15 Results of Operations Table B below presents statements ofrevenues and expenses ofthe Sewer Fund ofthe City which have been compiled from the Gty'saudited financial reports. They have been organized iosuch amanner cm»ofacilitate year- to-year comparisons. TABLE 13 Sewer Fund Combining Statement of Revenues, Expenses and Change5 in Retained Earnings (Years Ended June 30) 1995 1994 1993 1992 -------- /991 --------- hRevenues: -------- -------- -------- [hurL,csfor (,00dsand services $2,961081 $3.157.561 SM52,214 �I256}94 $3]j84,0I24 0perudug Expenses: Costs of�,00dsand services $2.128,559 $2,099.175 $1,962.]4] $2,020.751 S1,787.064 Administration 338.957 322.718 287.813 112`882 94.701 Depreciation 1�56,574 1471lL51 _L.2ZlX, 0 _l~3342l6I8 ------ 1-3 3 _33 15 Total operating expenses 3,924�090 3,891944 3,620,484 3,483,291^ _�080 0pcmdoginunmc(|oo) _(461I09) _(735383) _��8��0) _-[��.l�j ___[l�!�±d NonnpoohogRevenues (Enpcnseu): Interest Income $567.685 $604.098 $732.259 $786,054 $701.011 Interest expense (478,765) (507.931) (523.231) (597.152) (625.604) Loss ondisposal offixed assets _-(21^926) (657) _�_(4,144) (lU,4ID) Total uonuperoziogrevenues 23,921 95,510 __20£j884. _128,500 25,402 Net profit (|oyy) before operating truoe[eo |$882l885l ($_639j873) (S-363[96) <S_4U,6f92J $__3{L3-51 Operating transfers out — (17,333) (22.297) — — Profit (Lnss)before cbao�eioaccounting (887,085) (657,206) (385.693) (48,692) 39.351 Extraordinary loss onrefunding ofbonds — — (196,403) — — [hanaciuaccounting principle 0 (49J27) Q ______0 _-----0 Net profit (|oos) (887,085) (786,033) (582.096) (48,692) 39.351 Transfer ofdepreciation tmcontributed capital for assets acguircdvv/cnntribub000 in aid 742.165 738.416 735,811 757.133 787.009 Retained Earnings, beginning ofyear $19,732,096 Sl_S� Z0lll3� 1l£~�U�i�� $18,8l37,957 $18J011~55.B� Retained Earnings, end oYyear (The remainder o/this page has been left blanintentionol�y) 10 Debt Service Coverage The followino table sets forth the City's historic and pro gross revenues, expenses, net revenues. J ected Sewer Fund Z� debt service and debt service coverafie. The historic data has been taken from the City's audited financial statements, The projections were made by the City. Year TABLE 14 Historic and Projected Sewer Fund Operations and Debt Service Coverag Net Available Annual Gross Operating and for Debt Service Revenues Maintenance Debt Service Requirement Coverage 1989 S3,947,668 $1,592,422 2,355,246 S700,806 3.36 1990 4,035,138 1,770,781 2,264,357 687,413 3.29 1991 3.885,035 1,886,765 1,998,270 672,363 2.97 1992 4,042,158 2,133,633 1,908,525 705,225 2.71 1993 3,784,463 2,249,354 1,535,109 686,031 2.24 1994 3,761,659 2,421,893 1,3139,766 690,525 1.94 1995 3,530,766 2,467,516 1,063,250 692,863 1.53 1996 (Projected) 4,029,207 2,726,836 1,302,371 597,570 2.18 1997 (Projected) 4,107,228 2,820,751 1,286,477 622,395 2.07 RATINGS Rating reviews have been requested from Moody's Investors Service, Inc., and Standard & Poor's Corporation for the Bonds. A rating is subject to withdrawal at any time; withdrawal of a rating may have an adverse effect on the marketability of the Bonds. For an explanation of the significance of the rating, an investor should communicate with the rating agency, The City last issued general obligation bonds on May 1, 1995. The outstanding general obligation bonds of the City are currently rated "Aal" by Moody's and "AA" by Standard & Poor's. The City's outstandim, Sewer Revenue Bonds are rated "A I " by Moody's and A- by Standard & Poor's. CI FEDERAL TAX CONSIDERATIONS The opinion of Bond Counsel will state that under present laws and rulings, interest on the Bonds is excluded from Cross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations under the Internal Revenue Code of 1986 (the "Cocle"); it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings, The opinions set forth in the preceding sentence are subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. In the resolution authorizing the issuance of the Bonds, the City will covenant to comply with all such requirements. 17 There may be certain other federal tax consequences to the ownership of the Bonds by certain taxpayers, including without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel expresses no opinion with respect to such other federal tax consequences to owners of the Bonds. Prospective purchasers of the Bonds should consult with their tax advisors as to such matters. NOT QUALIFIED TAX-EXEMPT OBLIGATIONS The Bonds are not eligible for designation, and the City will not designate the Bonds as "Qualified Tax -Exempt Obligations" for purposes of Section 265 of the Internal Revenue Code of 1986 and, therefore, in the case of certain financial institutions, no deduction is allowed for federal income tax purposes of such financial institutions' interest expense allocable to interest on the Bonds. LITIGATION There is no litigation pending or, to the knowledge of City Officials, threatened which questions the validity of the bonds or any proceedings of the City taken with respect to the issuance or sale of the Bonds. CLOSING DOCUMENTS Simultaneously with the delivery of and payment for the Bonds by the original purchasers thereof, the City will furnish to the original purchasers the customary closing documents in form satisfactory to Bond Counsel. CERTIFICATIONS The City will furnish a statement to the effect that this Official Statement, to the best of its knowledge and belief as of the date of sale and the date of delivery, is true and correct in all material respects and does not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made herein, in light of the circumstances under which they were, made not misleading. FINANCIAL ADVISOR The City has retained Evensen Dodge, Inc., of Minneapolis, Minnesota, as financial advisor (the "Financial Advisor") in connection with the issuance of the Certificates. In preparing the Official Statement, the Financial Advisor has relied upon governmental officials, and other sources, who have access to relevant data to provide accurate information for the Official Statement, and the Financial Advisor has not been engaged, nor has it undertaken, to independently verify the accuracy of such information. The Financial Advisor is not a public accounting firm and has not been engaged by the City to compile, review, examine or audit any information in the Official Statement in accordance with accounting standards. The Financial Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities and therefore will not participate in the underwriting of the Certificates. 18 Requests for information concerning the City should be addressed to Evensen Dodge, Inc., 601 Second Avenue Z� South, Suite 5100, Minneapolis, Minnesota 55402 (612/338-3535). LEGAL MATTERS I-e-al matters incident to the authorization and issuance of the Bonds are subject to the opinion of Dorsey & Whitney P.L.I—R, Bond Counsel, as to validity and tax exemption. The opinion will be in the form as set forth in Appendix B herein. Except to the extent necessary to issue their opinion as to legality of the bonds, Bond Counsel have not examined or reviewed or expressed any opinions with respect to the accuracy or completeness of documents, materials or statements made or furnished in connection with the sale, issuance or marketing of the Bonds. MISCELLANEOUS Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The execution and delivery of this Official Statement by its Clerk has been duly authorized by the City. CITY OF AMES, IOWA By: /s/ Steven Schainker City Manager 19 ". QJ�l►`l a ►'I1 EXCERPTS FROM THE CITY'S AUDITED FINANCIAL. STATEMENTS FOR THE YEAR ENDED JUNE 30, I995 } o u ,.. 8� - c O, .n^... M. 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Y Paonss:ob.Al- LIXITx:) Njaxz"U" Sol G�Rjk-,N-D, SUITE 3S)OO DES MojyZS, JOW4y 50309-Q790 (51512$3-tOOO VAX (515; 353-1060 rjix'.4ZnPOLJ%, *L14Vr.S0:A YrKW YORK, Xu VORA WASKWOrQX. D. C. pni"'Isa, CO1OTL4;-,)O r,,Soo, SORE ZAA OVI rt"X,406, M wt& C)NZAT A.ILLS, XO-,-A�NA 1I165010L., IAO:I*TAX� ama-wor. COL'Wry, CA WND02C , "OLA*rD z)*v.0X.LS DZLOI%:X We hereby certify that we have examined certified copies of the proceedings of the Council of the City of Ames, in Story County, Iowa (the "Issuer"), passed Series preliminary to the issue by the Issuer of its wer Revenue Refunding B"Sonderies 1995 s, 1996, to the amount of S doted March 15, 1996 (the Bonds"), in the denomination of $5,000 each or any integral multiple thereon, maturing on December I in each of the respective years and in the principal amounts and bearing interest payable semiannually, commencing December 1, 1996, at the respective rates as follows: Principal Interest Rate Principal Interest Rate y_e ..JU jknj AmD Per Annum Y?= Amount Per Ann 1996 % 2000 1997 2001 1998 2002 1999 Based upon our examination, we are of the opinion, as of the date hereof, that; 1. The aforementioned proceedings show lawful authority for such is$-.Ie under the laws of the State of Iowa. 2. The Series 1996 Bonds are valid and legally binding obligations of tle Issuer enforceable in accordance with their terms. 3. The Series 1996 Bonds, together with any additional obligations as may be hereafter issued and outstanding from time to time ranking on a parity therew-th under the conditions and restrictions set forth in the said proceedings, are and will continue to be payable as to both principal and interest solely and only from the future Net Revenues of the Municipal Sanitary Sewer System of the Issuer. 4. The interest on the Series 1996 Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of he federal alternative minimum tax imposed on individuals and corporations: it should be noted, however, that for t�,e purpose of computing the alternative DORSEY & WIIIT�'EY eaw""—[ ♦.L Uxn LIMiLlry' Page 2 minimum Lax imposed on corporations (as defined for federal income tax purposes, such interest is taken into account in determining adjusted current earnings. The opinions set forth in the preceding sentence are subject to the condition that the issuer comply with all requirements of the Internal Revenue Code of 1986 (the "Code") that must be satisfied subsequent to the issuance of the Series 1996 Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Issuer has covenanted to comply with each suca requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Series 1996 Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Series 1996 Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Series 1996 Bonds. The rights of the owners of the Series 1996 Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. APPENDIX C NOTICE OF SALE AND OFFICIAL TERMS OF OFFERING NOTICE OF SALE City of Ames, Iowa $3,510,000 Sewer Revenue Refunding Bonds, Series 1996 Sealed bids will be received on behalf of the City of Ames, Story County, Iowa, until 11:00 o'clock a.m. on the 5th day of March, 1996, at the Council Chambers, City Hall, Ames, Iowa, for the purchase of $3,510,000 Sewer Revenue Refunding Bonds, Series 1996, of the City, at which time such bids will be opened and canvassed. Thereafter such bids will be presented to the City Council for consideration at its meeting to be held at 7:00 o'clock p.m. on the same date at the Council Chambers, City Hall, b.mes, lm7a, at which time the Bonds will be sold to the best bidder for cash. No open bids will be accepted. The Bonds will be issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof, will be dated March 15, 1996, will bear interest payable semiannually on each June 1 and December 1 to maturity, commencing December 1, 1996, and will mature on December 1 in the following years and amounts: Principal Principal Year Amount Year Amount 1996 $440,000 2000 $595,000 1997 $510,000 2001 $600,000 1998 $520,000 2002 $285,000 1999 $560,000 The City reserves the right, after bids are opened and prior to award, to increase or reduce the principal amount of the Bonds offered for sale. Any such increase or reduction will be in a total amount not to exceed $173,000, will be made 1125,C0,0 in any of the ma -.LA, r -A. t lies. in the in multiples of $5,000 and will not exceed , t1l L event the principal amount of the Bonds is increased or reduced, any premium offered or any discount taken by the successful bidder will be increased or reduced by a percentage equal to the percentage by which the principal amount of the Bonds is increased or reduced. None of the Bonds will be optional for redemption prior to maturity. Bidders must specify a price of not less than $3,494,205, plus accrued interest. The legal opinion of Dorsey & Whitney P.L.L.P., Attorneys, Des Moines, Iowa, will be furnished by the City. DORSEY & WHITNEY P.L.LP., ATTORNEYS, DES MOINES, IOWA A good faith deposit of $35,100 is required and may be forfeited to the City in the event the successful bidder fails or refuses to take and pay for the Bonds. The City reserves the right to reject any or all bids and to waive irregularities in any bid. The Bonds are being issued pursuant to the provisions of Division V of Chapter 384 of the Code of Iowa and will not constitute general obligations of the City, nor will they be payable in any manner by taxation, and all such bonds, together with any additional sewer revenue bonds as may be hereafter issued and outstanding from time to time ranking on a parity therewith, will be payable solely and only from the future Net Revenues of the Municipal Sanitary Sewer System of the City. In order to permit bidders for the Bonds to comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), the City will covenant and agree, for the benefit of the owners from time to time of the' outstanding Bonds, in the resolution awarding the sale and prescribing the terms of the Bonds to provide annual reports of specified information and notice of the occurrence of certain material events. The City is the only "obligated person" in respect of the Bonds within the meaning of the Rule. A description of the undertaking is set forth in the Official Statement. Failure of the City to enter into an undertaking substantially similar to that described in the Official Statement would relieve the successful bidder of its obligation to purchase the Bonds. The City has complied in all material respects with any undertaking previously entered into by it under the Rule. Bidders should be aware that the official terms of offering to be published in the Official Statement for the Bonds contain additional bidding terms and information relative to the Bonds. In the event of a variance between statements in this Notice of Sale (except with respect to the time and place of the saie of the Bonds and the principal amount offered for sale) and said official terms of offering, the provisions of the latter shall control. By order of the City Council of Ames, Iowa. Sandra L. Ryan City Clerk DORSEY & WHITNEY P.L.L.P., ATTORNEYS, DES MOINES, IOWA OFFICIAL TERMS OF OFFERING 53.510,000 Sewer Revenue Refunding Bonds, Series 1996 City of Ames, Iowa Sealed bids for the Bonds will be received by the City on Tuesday, March 5, 1996 until 11:00 A.M., C.T., at the Council Chambers, City Hall, 515 Clark Avenue, Ames, Iowa 50010. Consideration for award ofthe Bonds will be by the City Council at 7:00 P.M., C.T., of the same day. ra-Wray"Mm a I I I as 0111113 ily The Bonds will be issued as fully registered Bonds without coupons in the denomination of 55,000 each, or in inteoral multiples thereof. Principal will be payable at the main corporate office of the Registrar and interest on each Bond will be payable by check, draft or wire of the Registrar mailed to the registered holder thereof at his address as it appears on the books of the Registrar as of the 15th day of the calendar month next preceding the interest payment. The Bonds will be initially dated as of March 15, 1996, and will bear interest payable on December I and June I of each year, commencing December 1, 1996. Interest will be computed upon the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to the rules of the Municipal Securities Rulemaking Board (MSRB). The Bonds will mature on December I in the years and amounts as follows. Year Amount 1996 $440,000 1997 510,000 1998 520.000 1999 560,000 2000 595,000 2001 600,000 2002 285,000 'The City reserves the right to increase or decrease the issue size by up to 5175,000 on the day of the sale after bids have been received, but in no case by more than $25,000 per maturity. If the principal size is adjusted, the purchase price will be adjusted proportionately. OPTIONAL REDEMPTION The Bonds are not subject to prior redemption. SECURITY AND PURPOSE 'The Bonds will be issued to current refund the 1996-2002 maturities of the City's Sewer Revenue Bonds Series 1987, Dated May 1, 1987, as well as the 1996-2002 maturities of the Sewer Revenue Bonds, Series 1987B, dated December 1, 1987. The Bonds will be limited obligations payable solely from net revenues of the Municipal Sewer Utility of the City. TYPE OF BID A sealed bid for not less than $3,494,205 and accrued interest on the total principal amount of the Bonds shall be filed with the City Clerk, City Hall, 515 Clark Avenues, Ames, Iowa prior to the time set for the opening of bids. A good faith deposit in the amount of $35,100, payable to the order of the City, is required for each bid to be considered. If a check is used, it must accompany each bid. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Iowa, and such bond must be submitted to the Financial Advisor prior to the opening of the bids. The Financial Surety Bond must identify each bidder whose deposit is guaranteed by such Financial Surety Bond. If the Bonds are awarded to a bidder utilizing a Financial Surety Bond, then that purchaser ("Purchaser") is required to submit its deposit to the Financial Advisor in the form of'a cashier's check (or wire transfer such amount as instructed by the Financial Advisor) not later than 3:30 P.M., Central Time, on the next business day following the award. If such deposit is not received by that time, the Financial Surety Bond may be drawn by the City to satisfy the deposit requirement. No interest on the deposit will accrue to the Purchaser. The good faith deposit of the Purchaser will be retained by the City as liquidated damages in the event the Purchaser fails to comply with the accepted bid. The City will deposit the good faith deposit of the Purchaser, the amount of which will be deducted at settlement. No bid shall be withdrawn after the time set for opening bids unless the meeting of the City Council scheduled for consideration of the bids is adjourned, recessed, or continued to another date without award of the Notes having been made. Rates bid must be expressed in integral multiples of 1/20 or 1/8 or 1%, one rate per maturity in non -descending order. BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefor at the option of the bidder, the purchase of any such policy or the issuance of any such commitment shall be at the sole option and expense of the purchaser of the Bonds. Any increased costs of issuance of the Bonds resulting from such purchase of insurance shall be paid by the purchaser, except that, if the City has requested and received a rating on the Bonds from a rating (T agency, the City will pay that rating fee. Any other rating agency fees shall be the responsibility of the -1 purchaser. Failure of the municipal bond insurer to issue the policy after Bonds have been awarded to the purchaser shall not constitute cause for failure or refusal by the purchaser to accept delivery on the Bonds. The Bonds will be awarded to the bidder offering tile lowest dollar interest cost to be determined on a net interest tl cost (NIQ basis. Tile City's computation of the total interest cost of each bid, in accordance with customary practice, will be controlling. Within 24 hours of award of the Bonds, the successful bidder shall provide the City with the initial reoffering price or yield to the public of the Bonds; a complete listing of all syndicate members; and confirmation of the acquisition of credit enhancement, if any. Simultaneously with or before delivery of the Bonds, the successful bidder shall furnish to the City a certificate in form and substance acceptable to bond counsel (a) confirming the initial certifying reofferinZ, g price, (b) that a bona fide reoffering of the Bonds has been made to the public (excluding bond 4n houses, brokers and other intermediaries), and (c) stating the price or yield at which a substantial portion of the C, Notes were sold to the public (excluding bond houses, brokers, and other intermediaries.) The Registrar shall be the City of Ames, Iowa. The Registrar shall be subject to applicable SEC regulations. CUSIP NUMBERS If the Bonds qualify for assignment of CUSIP numbers, such numbers will be printed on the Bonds; however, the City assumes no obligation for the assignment of CUSIP numbers and neither the failure to print such numbers on any Bonds nor any error with respect thereto will constitute cause for failure or refusal by the Purchaser to accept delivery of the Bonds. The CUSIP Service Bureau charge for the assignment of CUSIP identification numbers shall be paid by the Purchaser. SETTLEMENT Within 40 days following the date of their award, the Bonds will be delivered without cost to the Purchaser. Delivery will be subject to receipt by the Purchaser of an approving legal opinion of Dorsey & Whimey P.L.I.,.P., which opinion will be printed on the Bonds, and of customary closing papers, including a no -litigation certificate. On the date of settlement, payment for the Bonds shall be made in federal, or equivalent funds, which shall be received at the offices of the City, or its designee, not later than 11:00 A.M., C.T. Except as compliance with the terms of payment for the Bonds shall have been made impossible by action of the City or its agents, the Purchaser shall be liable to the City for any loss suffered by the City by reason of the Purchaser's non-compliance with said terms for payment. OFFICIAL STATEMENTS The City has prepared an Official Statement dated February 27, 1996 which the City deems to be a preliminary or "near -final" Official Statement as that term is defined in Rule 15c2-12 of the Securities and Exchange Commission I (the "Rule"), The Official Statement is available to prospective bidders and to others who request copies from the City or its financial advisor, Evensen Dodge, Inc. The City agrees to notify the successful bidder of any material developments impacting the Bonds or the City of which the City becomes aware within 60 days after delivery of the Bonds. Not later than seven business days following the award of the Bonds, the City shall provide copies of the Final Official Statement, as that term is used in the Rule, to the successful Purchaser of the Bonds. The Final Official Statement will be the Official Statement dated February 23, 1996, and the addendum which includes the maturity date and amount, interest rate and reoffering yield or price, credit ratings, and any other information required by law. Any such addendum shall, on or after the date thereof, be fully incorporated in the Final Official Statement by reference. The Purchaser will be supplied with Final Official Statements in a quantity sufficient to meet its request. Up to 150 copies of the Final Official Statement will be furnished without cost. Copies of the Official Statement and the addendum are available from Evensen Dodge, Inc., 601 Second Avenue South, Suite 5100, Minneapolis, Minnesota 55402, telephone 612/338-3535. The Citv desionates the manager of the account to which the Bonds are awarded as its agent for purposes of distributing copies of the Final Official Statement to each participating account member. Any underwriter executin,, and delivering an Official Bid Form with respect to the Bonds agrees thereby that if its bid is accepted by L, - the City, (i) it shall accept such designation and (ii) it will enter into a contractual relationship with all account members of the Bonds for purposes of assuring the receipt by each such account member of the Final Official Statement. By: /s/ Steven Schain,k.Qr City Manager APPENDIX.. D CONTINUING DISCLOSURE UNDERTAKING CONTINUING DISCLOSURE In order to permit bidders for the Bonds- and other participating underwriters in the primant offering of the Bonds to comply with paragraph (b)(5) of Rule 15cZ-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (as in effect and interpreted from time to time, the "Rule"), the Issuer will covenant and agree in the Bond Resolution, for the benefit of the Owners (as hereinafter defined) from time to ame of any Bonds which are Outstanding, to pTo%-,,de annual reports of specified information and notice of the occurrence of certain events, if material, as hereinafter des=ibed (the "Disclosure Covenants"). The Issuer is the only "obligated person" in respect of the Bonds within the meaning of the Rule for purposes of identifying the entities in respect of wh ch continuing disclosure must be made. The Issuer has complied in all material respects with e.Lny undertaking previously entered into by it under the Rule. Breach of the Disclosure Coverw-nts will not constitute a default under the Bond Resolution or the Bonds. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of Bonds in the secondary market. Thus, a failure on the part of the Issuer to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. As used herein, "Owner" or "Bandowner" means, in respect of a Bond, the registered holder or holders thereof appearing in the bond register maintained by the Registrar or any 'Beneficial Owner" (as hereinafter defined) thereof, if such 'Beneficial Owner provides to the Registrar evidence of such beneficial ownership in form and substance reasonably satisfactory to the Registrar. As used herein, "Beneficial Owner" means, in respect of a Bond, any person or entire which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ovinership of, such Bond (includng persons or entities holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of the Bond for federal income tax purposes. As used herein, a "Material Fact" is a fact as to which a substantial likelihood exists thx1- a reasonably prudent investor would attach importance thereto in deciding to buy, hold or sell a Bond or, if not disclosed, would significantly alter the total information otherwise available to an investor from the Official Statement, information disclosed under the Disclosure Covenants or information generally available to the public. Notwithstanding the foregoing sentence, a "Material Fact" is also an event that would be deemed "material" for purposes of the purchase, holding or We of a Bond within the meaning of applicable federal securities laws, as interpreted at the time of discovery of the occurrence of the event. Information To Be Disclosed The Issuer will provide, in the manner set forth under "Manner of Disclosure' below, either directly or indirectly through an agent designated by the Issuer, the following information at the following times: -2- Annual Information On or within 210 days after the end of each fiscal veal of the Issuer, commencing with ihe fiscal year ending June 30, 1996, the following financial information and operating data (-:he "Disclosure Information"): (A) The audited financial statements of the Issuer for such fiscal year, accompanied by the audit report and opinion of the accountant or government auditor relating thereto, as permitted or required by the laws of the State of Iowa, which financial statements shall contain balance sheets as of the end of such fiscal year and a statement of operations, changes in fund balances and cash flows for the fiscal year then ended, showing in comparative form such figures for the preceding fiscal year of the Issuer, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under Iowa law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with such generally accepted accounting principles for reasons beyond the reasonable control of the Issuer, noting the discrepancies therefrom and the effect thereof, and certified as to accuracy and completeness in all material respects by the fiscal officer of the issuer; and A To the extent not included in the financial statements referred to in paragraph (A) hereof, information of the type set forth below, which information may be unaudited, but is to be certified as to accuracy and completeness in all material respects by the Issuer's financial officer to the best of his or her knowledge, which certification may be based on the reliability of information obtained from governmental or other third party sources: Table 8 - Six -Year Historical Usage of Sewer Utility Table 9 - Largest Sewer Utility Users Table 10 - Sewer Revenue Debt Outstanding by Issue Table 11 - City of Ames Sewer System Revenue Debt/ Schedule of Annual Debt Service Table 12 - Sewer Fund/Combining Statement of Revenues, Expenses and Changes in Retained Earnings Table 13 - Historic and Projected Sewer Fund/Operations and Debt Service Coverage Notwithstanding the foregoing paragraph, if the audited financial statements are not available by the date specified, the Issuer shall provide on or before such date unaudited financial statements in the format required for the audited financial statements as part of the Disclosure Information and, within 10 days after the receipt thereof, the Issuer shall provide the audited financial statements. Any or all of the Disclosure Information may be incorporated, if it is updated as required by the Disclosure Covenants, by reference from other documents, including official statements. If the document incorporated by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board (the "MSRB"), -3- If any part of the Disclosure Information can no longer be generated because the Operations of the Issuer have matenally changed or been discontinued, such Disclosure Information need no longer be provided if the Issuer includes in the Disclosure Information a statement to such effect; provided, however, if such operations have beer, replaced by other Issuer operations in respect of which date, is not included in the Disclosure Information and the issuer determines that certain specified data regarding such replacement operations would've a Material Fact, then, from and after such determination, the Disclosure Information shall include such additional specified data regarding the replacement operations, U the Disclosure Information is changed or the Disclosure Covenants are amended as permitted by the Bond Resolution, then the Issuer as to include in the next Disclosure Information to be delivered under the Disclosure Covenants, to the extent nemssaLry, an explanation of the reasons for the amendment and the effect of any change in the type of financial information or operating data provided. Certain Material Events In a timely manner, notice of the occurrence of any of the following events which is a Material Fact (the "Material Events"): (1) Principal and interest payment delinquencies, (2) Non-payment related defaults; (3) Unscheduled draws on debt service reserves -reflecting financial difficulties; (4) Unscheduled draws on credit enhancements reflecting financial difficulties; (5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions or events affecting the tax-exempt status of the security; (7) Modifications to rights of security holders; (8) Bond calls; (9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the securifies': d (11) Rating changes. Certain Other Information In a timely manner, notice of the occurrence Of any Of the following events or conditions: (A) the failure of the Issuer to provide the Disclosure Information at the time specified under "Annual Information" above; (5) the amendment or supplementing of the Disclosure Covenants pursuant to the Bond Resolution, together with a copy of such amendment or supplement and any explanation provided by the Issuer under the Disclosure Covenants; (C) the termination of the obligations of the Issuer under the Disclosure Covenants pursuant to the Bond Resolution; (D) any change in the accounting principles pursuant to which the financial statements constituting a portion of the Disclosure Information or the audited financial statements furnished pursuant to the Disclosure Covenants are prepared; and (E) any change in the fiscal year of the Issuer. -4- Manner of Disclosure The Issuer agrees to deliver the information described under "Information To Be Disclosed" above to the following entities , by telecopY, overnight deliver}`, mail or other means, as appropriate- (1) the information described under "Anr.ua! Information" above, to each then nation aly recognized municipal securities information repository under the Rule and to any state informator, depository then designated or operated by the State of Iowa as contemplated by the Rule (the "State Depository"), if any; (2) the information described under 'Certain Material Events" and "Certain Other Information" above, to the Municipal Securities Rulemaking Board and to the State Depository, if ary; and (3) the information described under "Information To Be Disclosed" to any rating agency th,m maintaining a rating of the Bonds and, at the expense of such Bondholder, to y Bondholder W1 o ,g such information, at the time Of transmission under clauses (1) or (2) above, as the requests in writing an case may be, or, if such information is transmitted with a subsequent time of release, at the time su,-h information is to be released. Im The Disclosure C-Wenants shall remain in effect until all Bonds have been paid or defeased under the Bond Resolution. Notwithstanding the preceding sentence, however, the Disclosure Covenants shall terminate and be without further effect as of any date on which the Issuer delivers to the Registrar an opinion of Bond Counsel to the effect that, because of legislative action or final judicial or administrative actions or proceedings, the failure of the Issuer to comply with the Disclosure Covenants will not cause participating underwriters in the primary offering of the Bonds to be -n violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended, or any statutes or laws successory thereto or amendatory thereof, Amendments; Interpretation The Disclosure Covenants (and the form and requirements of the DHsdOsLJre Information) mi.y be amended or supplemented by the Issuer from time to time, without notice to or the consent of the Owners of anv Bonds, by a resolution of the governing body of the Issuer filed with the Registrar accompanied by an opinion of Bond Counsel, who may rely on certificates of the Issuer and others and the opinion may be subject to customary qualifications, to the effect that: (i) such amendment or supplement (a) is made in connection with a change in circumstances that arises from a change in law or regulation or a change in the identity, nature or status of the Issuer or the type of operations conducted by the Issuer, or (b) is required by, or better complies with, the provisions of paragraph (b)(5) of the Rule; (ii) the Disclosure Covenants as so amended or supplemented would have complied With tLe requirements of paragraph (b)(5) of the Rule at the time of the primary offering of the Bonds, givirg effect to any charge in circumstances applicable under clause (i)(a) and assuming that the Rule as :-n effect and interpreted at the time of the amendment or supplement was in effect at the time of the primary offering; and (iii) Such amendment or supplement does not materially impair the interests of the Bondowners under the Rule, If the Disclosure Information is so amended, the Issuer agrees I:o provide, contemporaneously with the effectiveness of such amendment, an explanation of the reasons for the amendment and the effect, if any, of the change in the type of financial information or operatir.g data being provided hereunder. The Disclosure Covenants are to be construed so as to satisfy the requirements of paragraph (b)(5) of the Rule, sm Default; Remedies If the issuer fails to comply with any of the Disclosure Covenants, any person aggrieved thereby, including the Owners of any Outstanding Bonds, may take whatever action at law or in equity may appear necessary or appropriate to enforce performance and observance of any such covenant. Direct, indirect, consequential and punitive damages shall not be recoverable, however. for any defa-At thereunder to the extent permitted by law. In no event shall a default under the Disclosure Covenants constitute a default under the Bonds or under any other provision of the Bond Resolution. Limitation of Liability of Issuer If and to the extent the limitations of liabihtv described under "Default; Remedies" above are not effective, anything contained in the Disclosure Covenants to the contrary notwithstanding, in making the agreements, provisions and covenants set forth in the Disclosure Covenants, the Issuer 1-as not obligated itself except with respect to the Net Revenues of its Municipal Sanitary Sewer System. None of the agreements or obligations of the Issuer contained in the Disclosure Covenants shall be construed to constitute an indebtedness of the Issuer within the meaning of any constitutional or statutory provisions whatsoever or constitute a pledge of the general credit or taxing powers of the Issuer. IM S@,5l00O Sewer Revenue Refunding Booda,ScricmD996 City of Ames, Iowa DATED Year 08/15/96 Principal Amount Bond Cumulative Duo Ycuo Bond Years DUE STARTING Coupon 1201/96 Year 01-Dcz-96 $440.000 0.71 312.889 312.889 Y4 81-Dcc-96 01'Dcc-97 510`000 1.71 872.667 1,18i556 Y6 01-Dxc'97 01-Dcc-98 520.O00 2.71 1.409.778 1595.333 % 01-Dcu-98 0|'Dcu-99 560.880 3.71 2.070222 4.673.556 Y6 01'Dnc'99 01-Dcc-2000 595.000 4.71 2.803.111 7.476.667 % 01-Dcc-2000 01'Dec'2001 608.000 5.71 3.420b67 10'903.333 ______Y6 01-Dco'2001 01-Dcc-2002 285`000 6.71 1.912.667 12.816,000 % 01'Dcc-2002 $2.5io-QUO UL&_1j6_0QQ AYGKAoE h1ATUk\TY: 3.65 1111)0PEN1NG: ll:00um,CI.Tuendoy.March 5. 1996. PRICE: Not less than $3`494,2O5plus accrued interest to the delivery date, lNTG8GSTRATE"S: Rates are m be in integral multiples of' l/B or 1/28of1Y6. nrany combination thereof, ionon-descending order, one rate per maturity. CALLABlClTY: Bonds are not subject tnprior redemption. OFFICIAL BID FORM Members of the City Council City of Ames, Iowa Sale Date: March 5, 1996 For the principal amount of $3,510,000* Sewer Revenue Refunding Bonds, Series 1996 of the City of Ames, Iowa, le( -,ally issued and as described in the Official Terms of Offering, we will pay the City $ (not less than $3,494,205) plus accrued interest on the total principal of $3,510,000* to date of delj—ve`rv,------"- bear the following interest rate: provided the Bonds I The Bonds mature on December I in the years and amounts as follows: Interest Interest Year Amount* Rate* Year Amount* Rate* 1996 $440,000 0/10 2000 $595,000 1997 510,000 % 2001 600,000 % 1998 520,000 % 2002 285,000 % 1999 560,000 0,/() * Preliminary, subject to adjustment as fully described in the Official Terms of Offering. In making this offer, we accept the terms and conditions as defined in the Official Terms of Offering published in the Official Statement dated February 27, 1996. All blank spaces of this offer are intentional and are not to be construed as an omission. Our good faith check in the amount of $35,100 is enclosed or surety bond has been filed according to the terms of the Official Terms of Offering g with Evensen Dodge, Inc. NOT PART OF THIS BID: Lxplanatory Note: According to our computation, this bid involves the following: S Net Interest Cost Net Interest Rate Respectfully submitted, Account Manager By (A list of account members is on the reverse side of this proposal.) V The foregoing offer is hereby accepted by and on behalf of the City of Ames, Iowa, this 5th day of March, 1996. (Title) (Title) Members of the City Council City of Ames, Iowa Sale Date: March 5. 1996 For the principal amount of S.3 ),5 10,000* Sewer Revenue Refunding Bonds, Series 1996 of the City, of Ames, Iowa, le,-,al]N, issued and as described in the Official Terms of Offering, we will pay the City S (not less than S3,494.205) plus accrued interest on the total principal of S3,5 10,000* to date of delivery, provided the Bonds bear the following interest rate: The Bonds mature on December I in the years and amounts as follows: Interest Interest Year Amount* Rate* Year Amount* Rate* 1996 $440.000 -0/0 2000 $595,000 % 1997 510.000 % 2001 600,000 % 1998 520.000 % 2002 285,000 0/,o 1999 560,000 % * Preliminary, subject to adjustment as fully described in the Official Terms of Offering. In makin-c., this offer, we accept the terms and conditions as defined in the Official Terms of Offerin(y"'published in the Official Statement dated February 27, 1996. All blank spaces of this:offer are intentional and are not to be construed as an omission. Our cyood faith check in the amount of S35, 100 is enclosed or surety bond has been filed according to the terms of the Official Terms of Offering with Evensen Dodge, Inc. NOT PART OF THIS BID: L-xplanatory Note: According to our computation, this bid involves the followill,,: S Net Interest Cost Net Interest Rate Respectfully submitted, Account Manager a (A list of account members is on the reverse side of this proposal.) The foregoin- offer is hereby accepted by and on behalf of the City of Allies, Iowa, this 5th day of March, 1996. (Title) (Title) C OFFICIAL BID FORM Members of the City Council City of Ames, Iowa Sale Date: March 5. 1996 For the principal amount of $3,5 10,000* Sewer Revenue Refunding Bonds, Series 1996 of the City of Ames, Iowa, legally issued and as described in the Official Terms of Offering, we will pay the City $ (not less than $3,494,205) plus accrued interest on the total principal of $3,5 10,000* to date of delivery, provided the Bonds bear the following interest rate: The Bonds mature on December I in the years and amounts as follows: Interest Interest Year Amount* Rate* Year Amount* Rate* 1996 $440.000 % 2000 $595.000 % 1997 510,000 - % 2001 600,000 -% 1998 520,000 O/o 2002 285,000 % 1999 560,000 % * Preliminary, subject to adjustment as fully described in the Official Terms of Offering. In making this offer, we accept the terms and conditions as defined in the Official Terms of Offering published in the Official Statement dated February 27, 1996. All blank spaces of this offer are intentional and 1� are not to be construed as an omission. Our good faith check in the amount of $35,100 is enclosed or surety bond has been filed according to the terms of the Official Terms of Offering with Evensen Dodge, Inc. Z� NOT PART OF THIS BID: Explanatory Note: --According to our computation, this bid involves the following: S-- Net Interest Cost Net Interest Rate Respectfully submitted, Account Manager 1-3 (A list of account members is on the reverse side of this proposal.) The foregoing offer is hereby accepted by and on behalf of the City of Ames, Iowa, this 5th day of March, 1996. Z� (Title) (Title)