HomeMy WebLinkAboutA019 - Letter from Dorsey & Whitney dated May 1, 2002 - opinion0� .
DORSEY & WHITNEY LLP
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DES MOINES, IOWA 503q9f"
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NORTHERN VIRGINIA
TOKYO
DES MOINES
MISSOULA
LONDON
VANCOUVER
ANCHORAGE
May 1, 2002
TORONTO
SALT LAKE CITY
SHANGHAI
BRUSSELS
We hereby certify that we have examined a certified copy of the proceedings of the City
Council of the City of Ames, in the County of Story, State of Iowa (the "Issuer"), passed preliminary
to the issue by the Issuer of its General Obligation Corporate Purpose Bonds, Series 2002A, in the
amount of $3,475,000 (the "Bonds"), dated May 1, 2002, in the denomination of $5,000 each, or any
integral multiple thereof, maturing on June I in each of the respective years and in the principal
amounts and bearing interest payable semiannually, commencing December 1, 2002, at the
respective rates, as follows:
Principal
Interest Rate
Year
Amount
Per Annurn
2003
$120,000
4.00%
2004
$130,000
4.00%
2005
$135,000
4.00%
2006
$140,000
4.00%
2007
$145,000
4.00%
2008
$150,000
4.00%
2009
$155,000
4.15%
2010
$160,000
4.25%
2011
$170,000
4.25%
2012
$175,000
4.375%
Principal Interest Rate
Year Amount Per Annum.
2013
$185,000
4.50%
2014
$190,000
4.60%
2015
$200,000
4.70%
2016
$210,000
4.80%
2017
$220,000
5.00%
2018
$230,000
5.00%
2019
$240,000
5.00%
2020
$255,000
5.10%
2021
$265,000
5.125%
but the Bonds maturing in each of the years 2012 to 2021, inclusive, are subject to redemption prior
to maturity at the times and on the terms specified in the Bonds.
Based upon our examination, we are of the opinion, as of the date hereof, that:
1. The aforementioned proceedings show lawful authority for such issue under the laws
of the State of Iowa.
2. The Bonds are valid and binding general obligations of the Issuer.
M
DORSEY & WHITNEY LLP
I
3. All taxable property within the corporate boundaries of the Issuer is subject to the
levy of taxes to pay the principal of and interest on the Bonds without constitutional or statutory
limitation as to rate or amount.
4. The interest on the 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 the federal alternative minimum tax imposed on individuals and
corporations; 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 Issuer comply with all requirements of the Internal
Revenue Code of 1986 (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. The Issuer has covenanted to comply with each such requirement. 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.
5. The Bonds are not "qualified tax-exempt obligations" within the meaning of Section
265 (b)(3) of the Code, and, therefore, in the case of certain financial institutions (within the meaning
of Section 265(b)(5) of the Code), a deduction is not allowed for that portion of such financial
institutions' interest expense allocable to interest on the Bonds.
We express no opinion regarding other federal tax consequences arising with respect to the
Bonds.
The rights of the owners of the 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.
DORSEY & WHITNEY LLP