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Home My WebLink AboutA023 - Preliminiary Official Statement dated August 17, 2010PREILIMINARY OFF10AL STA,rEMENTDA,rED AUGUST 17,2010 New Issue Rating: Application Made fit the opinion oJ'Dorsey & Whitney LLP, Bond Counsel, according to present laws, rulings and decisions and assuming compliance with certain covenants the interest on the Bonds will be excludedfroin gross income for federal income tax purposes, such interest on the Bonds will not be an item of tax pre.firence ./br purposes oj'thefederal alternative minimum tax imposed on individuals and corporations under the Internal Revenue Code oJ'1986 and will not be taken into account 2 in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes) and the City will designate the Bonds as "qualified tax exempt obligations. See "TAX EXEMPTION AND RELATED CONSIDERATIONS herein for more information, CITY OF AMES, IOWA 2,5 L, 2 $6,690,000* General Obligation Corporate Purpose Bonds, Series 2010A t BIDS RECEIVED: Tuesday, August 24, 2010, 11:00 o'clock A.M., Central Time AWARD: Tuesday, August 24, 2010, 7:00 o'clock P.M., Central Time Dated: Date of Delivery (Septernber30, 2010) Minimum Bid: $6,646,515 Principal Due: June 1, 2011-2022 Good Faith Deposit: Required of Purchaser Only E "File $6,690,000* General Obligation Corporate Purpose Bonds, Series 2010A (the "Bonds") are being issued pursuant to i Division III of Chapter 384 of the Code of Iowa and resolutions to be adopted by the City Council o the City of Allies, Iowa (the "City"). The Bonds are being issued for the purpose of paying the cost for the construction of improvements to streets, bridges, and the City Hall, and acquisition of equipment for the fire department. The Ba nds are general obligations of the City, for which the City will pledge to levy ad valorem taxes against all property within the City without limitation as to rate or amount. �2 1 The Band s ds will be issued as fully registered Bonds without coupons and, when issued, will be registered in the name of Cede s & Co., as nominee of The Depository Trust Company ("DTC"). DTC will act as securities depository for the Bonds. CA Individual purchases may be made in book -entry -only form, in the principal amount of $5,000 and integral multiples thereof. Purchasers will not receive certificates representing their interest in the Bonds purchased. The City's Treasurer as , 5 s°5- Registrar/Paying Agent (the "Registrar") will pay principal on the Bonds, payable annually on June 1, beginning June 1, 2011, and interest on the Bonds payable initially on June 1, 2011 and thereafter an each December I and June I to DTC, which will in turn remit such principal and interest to its participants for subsequent disbursements to the beneficial owners of the Bonds 151 = �! as described herein. Interest and principal shall be paid to the registered holder of a bond as shown on the records of ownership maintained by the registrar as of the fifteenth day preceding such interest payment date (the "Record Date"). The Bonds will mature June t in the years and amounts as follows: Year Amount* Year Amount* 2011 $380,000 2017 $565,000 2012 515,000 2018 580,000 2013 520,000 2019 595,000 2014 530,000 2020 615,000 2015 540,000 2021 640,000 2016 550,000 2022 660,000 PRINCIPAL ADJUSTMENT: The City reserves the right to decrease the aggregate principal amount ofthe Bonds. Such change will be in increments of $5,000 and may be made in any of" the maturities. The purchase price will be adiusted DroDortionatelv to reflect anv change in issue size. REDEMPTION: Bonds due on or after June 1, 2018 will be subject to call for prior redemption on June 1, 2017 or on any date thereafter upon terms of par plus accrued interest to date of call. C, The Bonds are offered, subject to prior sale, withdrawal or modification, when, as and if issued and subject to the unqualified V� approving legal opinion of Dorsey & Whitney UP, Bond Counsel, of Des Moines, Iowa, to be furnished upon delivery of the Bonds. It is expected that the Bonds will be available for delivery on or about September 30, 2010. This Preliminary Official Statement will be further supplemented by offering prices, interest rates, aggregate principal amount, principal amount per maturity, anticipated delivery date and underwriter, together with any other information required by law, and shall constitute a "Final Official Statement" of the City with respect to the Bonds, as defined in Rule 15c2-12. Preliminary; subject to change COMPLIANCE WITH S.E.C. RULE 15c2-12 Municipal obligations (issued in an aggregate amount over $1,000,000) are subject to General Rules and Regulations, Securities Exchange Act of 1934, Rule 15c2-12 Municipal Securities Disclosure. Preliminary Official Statement: This Preliminary Official Statement was prepared for the City for dissemination to prospective bidders. Its primary purpose is to disclose information regarding the Bonds to prospective bidders in the interest of receiving competitive bids in accordance with the TERMS OF OFFERING contained herein. Unless an addendum is received prior to the sale, this document shall be deemed the "Near Final Official Statement". Review Period: This Preliminary Official Statement has been distributed to City staff as well as to prospective bidders for an objective review of its disclosure. Comments or omissions or inaccuracies must be submitted to Public Financial Management, Inc. at least two business days prior to the sale. Requests for additional information or corrections in the Preliminary Official Statement received on or before this date will not be considered a qualification of a bid received. If there are any changes, corrections or additions to the Preliminary Official Statement, prospective bidders will be informed by all addendum at least one business day prior to the sale. Final Official Statement: Upon award of sale of the Bonds, the legislative body will authorize the preparation of a Final Official Statement that includes the offering prices, interest rates, aggregate principal amount, principal amount per maturity, anticipated delivery date and other information required by law and the identify of the underwriter (the "Syndicate Manager") and syndicate members. Copies of the Final Official Statement will be delivered to the Syndicate Manager within seven business days following the bid acceptance. REPRESENTATIONS No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representations, other than those contained in the Preliminary Official Statement. This Preliminary Official Statement does not constitute any offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by ally person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information, estimates and expressions of opinion herein are subject to change without notice and neither the delivery of this Preliminary Official Statement nor any sale made hereunder, shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. This Preliminary Official Statement is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Preliminary Official Statement and any addenda thereto were prepared relying on information of the City and other sources, which are believed to be reliable. Bond Counsel has not participated in the preparation of this Preliminary Official Statement and is not expressing ally opinion as to the completeness or accuracy of the information contained therein. Compensation of Public Financial Management, Inc. (the "Financial Advisor"), payable entirely by the City, is contingent upon the sale of the issue. TABLE OF CONTENTS i INTRODUCTION............................................................................................................................................................. I Authorityand Purpose .............. ........................................................................................ ............................. .............. ' Payment ofand Security for the Bonds .......... ................................. ............................................... ....... ........... ...... '/ System............................................................. ..... ............ ......... ............ ...... ............................. / Po�rcF�aoo�g----------------------------------------------------. 3 Litigation; Debt Payment History ................................................... --.......... ........ ...................................................... ^ LeguMatteo---------------------------------------------------- —'* Tax Exemption and Related Considerations ................................... ............................... ................................. ............ 4 Rating......... ............................................................... .................................................. ........ ......... ...... ............. ........ 5 FinancialAdvisor .............................................. ........................................... .................... ................ ........................... 5 ContinuingDisclosure ..................... --....................... .......................................... ............. ....................................... o Certification.......................................... .................................. .............. ...................... ....... ....................... ............... 5 CITY PROPERTY VALUATIONS .~~_.'~.._~_.~^—'~~~—^—^—~~—`—~—'—~—^~—~—~—'~—~» IowaProperty Valuations ......................... ..................................................... ......... .......... ........ ............. ...... ....... .... » Dl/2009Valuations (Taxes payable July l.20lVthrough June 30,20ll)............................ ....................................... 6 2089GnmmToxnhleValuation byClass ufProperty ........................ ............................................... --....... ............... v TrendofValuations .................. ............................... ........................................... ........................................................ ' LargerTaxpayers .................................................. —.......................................................... ........... ........................... —/ Legislation................................................................... ....................................... ................................... ...................... W CITYINDEBTEDNESS ................................................................................................................................................... ' DebtLimit .......... ..... ... —......... —............... ................................ ........... .................................... ............... .............. x I)boc Dcht------------------------------------------------------- 9 0�uDebt -----------------------________________________________ l0 OverlappingDebt .................... —............................................. ........... _......... _.................. ................. .............. l Debt Rubox----------------------________________________________. D Levies and Tax Cn �o�ono----------------------------------------------. ll Tax K�ey-------------------------------------------------------. l2 LevyLimits. ..... ----....................... ................. .......................... ............................... ......... .................................. 2 Gnouod Fund Budgets - Accrual Basis ... ................................................................ .................................................... 3 Funds oo8auJ- Cash Basis (Cash and Investments as of June 30.20lN................................... ............................ A3 THE CITY ....................................................................................................................................................................... 1� CdyGovernment ---------------------------------------------------' l4 Employees; Pensions .......................................... ......................................... _..... --- ................ ...... --.................. ]4 Dn�uCoo�ac�---------------------------------------------------- l4 �6 GENERAL .—.--......._.............._—^'^^—^^'^^^'^^^^—''''^'—^'^^^—'—'~''—`—`^`^—'^'—^^' Locationand Transportation ........ ................................................................................................................................ 6 l6 LargerEmployers --------------------------------------------------- l7 8uUdiog9ormj�---------------------------------------------------' U.S. Census Data .......................................... .................................... .............. ............................ —............................ 7 UnemploymentRates ........................... ............................................... ............... .................... ............................... ... 7 l8 uuucaoou-----------------------________________________________. APPENDIX A - FORM 0FLEGAL OPINION APPENDIX 0-JDY4D30,2809COMPREHENSIVE ANNUAL FINANCIAL REPORT APPENDIX C - FORM OF CONTINUING DISCLOSURE CERTIFICATE OFFICIAL BID FORMS Member Ann Campbell Peter Orazern, Matthew Goodman Torn Wacha Jami Lai -son Jeremy Davis Riad Mahayni City of Ames, Iowa Mayor/City Council Office Mayor Council Member At Large Council Member At Large Council Member — I" Ward Council Member -- 2 nd Ward Council Member — 3 rd Ward Council Member — 4"' Ward Initial Term Commenced January 03, 2006 January 04, 2010 January 03, 2004 January 04, 2010 November 14, 2006 January 04, 2010 January 14, 2003 Administration Steven Schainker, City Manager Duane Pitcher, Director of Finance Diane Voss, City Clerk Roger Wisecup 11, City Treasurer John Dunn, Director of Water and Pollution Control John Joiner, Director of Public Works Don Kom, Director of Electric Utility City Attorney Doug Marek Ames, Iowa Bond Counsel Dorsey & Whitney LLP Des Moines, Iowa Financial Advisor Public Financial Management, Inc. Des Moines, Iowa Term Expires December 31, 2013 December 31, 2013 December 31, 2011 December 31, 2013 December 31, 2011 December 31, 2013 December 31, 2011 TERMS OF OFFERING CITY OF AMES, IOWA This section sets forth the description of certain of the terms of the Bonds as well as the TERMS OF OFFERING with which all bidders and bid proposals are required to comply, as follows: DETAILS OF THE BONDS GENERAL OBLIGATION CORPORATE PURPOSE BONDS, SERIES 2010A (the "Bonds"), in the principal amount of $6,690,000* to be dated September 30, 2010 in the denomination of $5,000 or multiples thereof, and to mature on June I as follows: Year Amount* Year Amount* 2011 $380,000 2017 $565,000 2012 515,000 2018 580,000 2013 520,000 2019 595,000 2014 530,000 2020 615,000 2015 540,000 2021 640,000 2016 550,000 2022 660,000 Preliminary; subject to change. The City reserves the right to decrease the aggregate principal amount of, the Bonds. Such change will be in increments of $5,000 and may be made in any of the maturities. The purchase price will be adjusted proportionately to reflect any change in issue size. OPTIONAL REDEMPTION Bonds due on or after June 1, 2018 will be subject to call for prior redemption on June 1, 2017 or on any date thereafter upon terms of par Plus accrued interest to date of call. INTEREST ON THE BONDS Interest on the Bonds will be payable on. June 1, 2011 and semiannually on the I" day of December and June thereafter. Interest and principal shall be paid to the registered holder of a Bond as shown on the records of ownership maintained by the registrar as of the fifteenth day preceding such interest payment date (the "Record Date"). Interest will be computed on the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the MSRB. GOOD FAITH DEPOSIT A Good Faith Deposit (the "Deposit") in the amount of $66,900 is required of' the lowest bidder only for the Bonds. The lowest bidder is required to submit such Deposit payable to the order of the City in the form of either (i) a cashier's check provided to the City or its Financial Advisor prior to the opening of bids or (ii) a wire transfer as instructed by the City's Financial Advisor not later than 1:00 P.M. Central 'rime on the day of sale of the Bonds. If not so received, the bid of that lowest bidder may be rejected and the City may direct the second lowest bidder for the Bonds to submit a Deposit and thereafter may award the sale of the Bonds to the same. No interest on a Deposit will accrue to a successful bidder (the "Purchaser"). The Deposit will be applied to the purchase price of the Bonds. In the event a Purchaser fails to honor its accepted bid proposal, the Deposit will be retained by the City. BOOK -ENTRY -ONLY SYSTEM The Bonds will be issued by means of a book -entry -only system with no physical distribution of bond certificates made to the public. The Bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the Registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. FORM OF BIDS AND AWARD All bids shall be unconditional for the entire issue of Bonds for a price not less than $6,646,5 15, plus accrued interest, and shall specify the rate or rates of interest in conformity to the limitations as set fimth under the "RATES OF INTEREST" section below. Bids must be submitted on or in substantial compliance with the OFFICIAL BID FORM provided by the City. The Bonds will be awarded to the bidder offering the lowest interest rate to be determined on a true interest cost basis ("TIC") assuming compliance with the "GOOD FAITH DEPOSIT" section on the previous page. The TIC shall be determined by the "present worth method," i.e., by ascertaining the semiannual rate, compounded semi-annually, necessary to discount to present worth as of the anticipated dated date of the Bonds, the amount payable on each interest payment date and on each stated maturity date or earlier mandatory redemption, so that the aggregate of such amounts will equal the aggregate purchase price offered therefore. The TIC shall be stated in terms of an annual percentage rate and shall be that rate of interest which is twice the semiannual rate so ascertained, (This method is also known as the "Canadian Method"). The TIC shall be as determined by the Financial Advisor based on the TERMS OF OFFERING and all amendments, and on the bid as submitted. The Financial Advisor's computation of the TIC of each bid shall be controlling. In the event of tie bids for the lowest TIC, the Bonds will be awarded by lot. The City will reserve the right to: (i) waive non -substantive informalities of any bid or of matters relating to the receipt of bids and award of the Bonds, (ii) reject all bids without cause and (iii) reject any bid which the City determines to have failed to comply with the terms herein. RATES OF INTEREST The rates of interest specified in the bidder's proposal must conform to the following limitations: Each annual maturity must bear a single rate of interest from the dated date of the Bonds to the date of maturity. Rates of interest bid must be in multiples of one -eighth or one -twentieth of one percent. Each rate of interest specified for any annual maturity shall not be less than a rate of interest specified for any earlier maturity. Rates must be level or in ascending order. RECEIPT OF BIDS No bid will be accepted after the time specified in the OFFICIAL BID FORM. A bid may be withdrawn before the bid deadline using the same method used to Submit the bid. If more than one bid is received from a bidder, the last bid received shall be considered. Form of Bids: Bids for the Bonds must be Submitted on or in substantial compliance with the OFFICIAL BID FORM provided by the City or through the Internet Bid System as defined below. The City shall not be responsible for malfunction or mistake made by any person, or as a result of the use of the electronic bid, facsimile facilities or the M means used to deliver or complete a bid. The use of such facilities or means is at the sole risk of the prospective bidder who shall be bound by the terms of the bid as received. Seated Bidding: Sealed bids may be Submitted and will be received at, the office of the Director of Finance, City Hall, 515 Clark Avenue, Ames, Iowa 50010. Electronic Internet Bidding: Electronic internet bids will be received at the office of the Director of Finance, City Hal], Ames, Iowa, or at the office of Public Financial Management, Inc. The bids must be Submitted through the PARITY' competitive bidding system (the "Internet Bid System"). Information about the Internet Bid System may be obtained by calling (212) 404-8102. Each prospective bidder shall be solely responsible for making necessary arrangements to access the Internet Bid System for purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the TERMS OF OFFERING. The City is permitting prospective bidders to use the services of Internet Bid System solely as a communication mechanism to conduct the Internet bidding and the Internet Bid System is not an agent of the City. Provisions of the TERMS OF OFFERING shall control in the event of conflict with information provided by the Internet Bid System. Electronic Facsimile Bidding: Electronic facsimile bids will be received at the office of the Director of Finance, Ames, Iowa (facsimile number: (515) 239-5320) or at the office of the City's Financial Advisor, Public Financial Management, Inc. (facsimile number: (515) 243-6994). Electronic facsimile bids will be sealed and treated as sealed bids. Transmissions received after the deadline will be rejected. Bidders electing to submit bids via electronic facsimile transmission bear full responsibility for the transmission of such bid. Neither the City nor its agents shall be responsible for malfunction or mistake made by any person, or as a result of the use of the electronic facsimile facilities or any other means used to deliver or complete a bid. Tile use of such facilities or means is at the sole risk of the bidder who shall be bound by the terms of the bid as received. Neither the City nor its agents will assume liability for the inability of the bidder to reach the above named fax number prior to the time of sale specified above. Time of receipt shall be the time recorded by the facsimile operator receiving the bids. MUNICIPAL BOND INSURANCE AT PURCHASER'S OPTION If the Bonds qualify for issuance of any policy of municipal bond insurance or commitment therefore at the option of the bidder, the purchase of any such insurance 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 agency, the City will pay that initial rating fee, Any other rating agency fees shall be the responsibility of the Purchaser. Failure of the municipal bond insurer to issue the policy after the Bonds have been awarded to the Purchaser shall not constitute cause for failure or refusal by the Purchaser to accept delivery on the Bonds. 'file City reserves the right in its sole discretion to accept or deny changes to the financing documents requested by the insurer selected by the Purchaser. DELIVERY The Bonds will be delivered to the Purchaser through DTC in New York, New York, against full payment in immediately available cash or federal funds. The Bonds are expected to be delivered within forty-five days after the sale. Should delivery be delayed beyond sixty days from date of sale for any reason except failure of performance by the Purchaser, the Purchaser may withdraw his bid and thereafter his interest in and liability for the Bonds will cease. When the Bonds are ready for delivery, the City may give the successful bidder five working days notice of the delivery date and the City will expect payment in full on that date, otherwise reserving the right of its option to determine that the bidder has failed to comply with the offer of purchase. IM INFORMATION FROM PURCHASER The Purchaser will be required to certify to the City immediately after the opening of bids: (i) the initial public offering price of each maturity of the Bonds (not including bond houses and brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Bonds (not less than 10% of each maturity) were sold to the public; or (ii) if less than 10% of any maturity has been sold, the price for that maturity determined as of the time of the sale based upon the reasonably expected initial offering price to the public; and (iii) that the initial public offering price does not exceed their fair market value of the Bonds on the sale date. The Purchaser will also be required to provide a certificate at closing confirming the information required by this paragraph. OFFICIAL STATEMENT The City has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Bonds. The Preliminary Official Statement when further supplemented with maturity dates, principal amounts, and interest rates of the Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a Final Official Statement of the City with respect to the Bonds, as that term is defined in Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). By awarding the Bonds to any underwriter or underwriting syndicate submitting an OFFICIAL BID FORM therefore, the City agrees that, no more than seven (7) business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded up to 30 copies of the Final Official Statement to permit each "Participating Underwriter" (as that term is defined in the Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Bonds are awarded as its designated agent for purposes of distributing copies of the I"inal Official Statement to the Participating Underwriter. Any underwriter executing and delivering an OFFICIAL BID FORM with respect to the Bonds agrees thereby that if its bid is accepted by the City, (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. CONTINUING DISCLOSURE In order to assist bidders in complying with SEC Rule 15c2-12(b)(5), the City will undertake, pursuant to the resolutions for the Bonds and Continuing Disclosure Certificates, to provide certain annual financial information and notices of certain events. The details of these undertakings are set forth in APPENDIX C of the Preliminary Official Statement. The City will deliver the Continuing Disclosure Certificate at closing, and any failure on the part of the City to deliver the same shall relieve the Purchaser 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. CUSIP NUMBERS It is anticipated that CUSIP numbers will be printed on the Bonds and the Purchaser must agree in the bid proposal to pay the cost thereof. In no event will the City, Bond Counsel or Financial Advisor be responsible for the review or express any opinion that the CUSIP numbers are correct. Incorrect numbers on said Bonds shall not be cause for the Purchaser to refuse to accept delivery of said Bonds. BY ORDER OF THE CITY COUNCIL 515 Clark Avenue Ames, Iowa 50010 iv $6,690,000- City of Ames, Iowa General Obligation Corporate Purpose Bonds, Series 2010A Bonds Dated: September 30, 2010 Interest Due: June 1, 2011 and each December I and June I to maturity Principal Due: June 1, 2011-2022 Cumulative Year Principal BondYears Bond Years 2011 $380,W0 254.39 254.39 2012 515,000 859.76 1,114.15 2013 520,000 1,388.11 2,502.26 2014 530,000 1,944.81 4,447.07 2015 540,000 2,521.50 6,968.57 2016 550,000 3,118.19 10,086.76 2017 565,000 3,768.24 13,855.00 2018 580,000 4,448.28 18,303.28 2019 595,000 5,158.32 23,461.60 2020 615,000 5,946.71 29,408.31 2021 640,000 6,828.44 36,236.75 2022 660,000 7,701.83 43,938.58 Average Maturity (dated date): 6.568 Years * Preliminary; subject to change. v OFFICIAL STATEMENT CITY OF AMES, IOWA $6,690,000* General Obligation Corporate Purpose Bonds, Series 2010A INTRODUCTION This Preliminary Official Statement contains information relating to the City of Ames, Iowa (the "City") and its issuance of $6,690,000* General Obligation Corporate Purpose Bonds, Series 2010A (the "Bonds"). This Preliminary Official Statement has been executed on behalf of the City and may be distributed in connection with the sale of the Bonds authorized therein. Inquiries may be made to Public Financial Management, Inc., Terrace Place, Suite 214, 2600 Grand Avenue, Des Moines, Iowa, or by telephoning (515) 243-2600. Information can also be obtained from Mr. Duane Pitcher, Director of Finance, City of Ames, 515 Clark Avenue, Ames, Iowa 50010, or by telephoning (515) 239-5101. F11fty-161 The Bonds are being issued pursuant to Chapter 384 of the Code of Iowa and resolutions to be adopted by the City Council of the City. The Bonds are being issued for the purpose of paying the cost for the construction of improvements to streets, bridges, and the City Hall, and acquisition of equipment for the fire department. The estimated Sources and Uses of the Bonds are as follows: Sources of Funds Par Amount of Bonds $6,690,000.00* Uses of Funds Deposit to Project Fund $6,601,000.00 Underwriter's Discount 43,485.00 Costs of Issuance and Contingency 45,515.00 Total Uses $6,690,000.00 PAYMENT OF AND SECURITY FOR THE BONDS The Bonds constitute valid and binding general obligations of the City, and all taxable property within the corporate boundaries of the City is subject to the levy of taxes to pay the principal of and interest on the Bonds. If the amount credited to the debt service fund for payment of the Bonds is insufficient to pay principal and interest, whether from transfers or from original levies, the City must use funds in its treasury and is required to levy ad valorem taxes upon all taxable property in the City Sufficient to pay the debt service deficiency without limit as to rate or amount. BOOK -ENTRY -ONLY SYSTEM The information contained in the following paragraphs Of this Subsection "Book -Entry -Only System" has been extracted from a schedule prepared by Depository Trust Company ("DTC") entitled "SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK -ENTRY -ONLY ISSUANCE." 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. * Prelirninary; Subject to change. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully - registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue. DTC, the world's largest securities depository, 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 meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC's participants (the "Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This elirrimates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"), DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Securities Under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security (the "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. Beneficial Owners are, however, 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 Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect 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 among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co., nor any other DTC nominee, will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. 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 Securities are credited on the record date identified in a listing attached to the Omnibus Proxy. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or Agent, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities field for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to tinie. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is the responsibility of the City or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book - entry credit of tendered Securities to Remarketing Agent's DTC account. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the City or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 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. FUTURE FINANCING The City does not anticipate any additional borrowing needs within 90 days of the date of this Preliminary Official Statement. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. DEBT PAYMENT HISTORY The City knows of no instance in which they have defaulted in the payment of principal and interest on its debt. LEGAL MATTERS Legal matters incident to the authorization, issuance and sale of the Bonds and with regard to the tax-exempt or taxable status of the interest thereon (see "TAX EXEMPTION AND RELATED TAX CONSIDERATIONS" herein) are subject to the approving legal opinion of Dorsey & Whitney LLP, Des Moines, Iowa, Bond Counsel, a form of which is attached hereto as APPENDIX A. Signed copies of the opinion, dated and premised on law in effect as of the date of original delivery of the Bonds, will be delivered to the Purchaser at the time of such original delivery. The Bonds are offered subject to prior sale and to the approval of legality of the Bonds by Bond Counsel. The legal opinion will express the professional judgment of Bond Counsel and by rendering a legal opinion, Bond Counsel does not become an insurer or guarantor of the result indicated by that expression of professional judgment or of the transaction or the future performance of the parties to the transaction. Bond Counsel has not been engaged, nor has it undertaken, to prepare or to independently verify the accuracy of the Preliminary Official Statement, including but not limited to financial or statistical information of the City and risks associated with the purchase of the Bonds, except Bond Counsel has reviewed and/or prepared the information and statements contained in the Preliminary Official Statement under "AUTHORITY AND PURPOSE", "PAYMENT OF AND SECURITY FOR. THE BONDS", "TAX EXEMPTION AND RELATED CONSIDERATIONS" and "CONTINUING DISCLOSURE" insofar as such statements contained under such captions purport to summarize certain provisions of the Internal Revenue Code of 1986, the Bonds and any opinions rendered by Bond Counsel. Bond Counsel has prepared the documents contained in APPENDIX A and APPENDIX C. TAX EXEMPTION AND RELATED CONSIDERATIONS Federal Income Tax Exemption — Tile opinion of Bond Counsel will state that under present laws and rulings, interest oil the Bonds is excluded from gross income for federal income tax purposes, 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 "Code"), and such interest need not be taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes). Tile opinion set forth in the preceding sentence will be 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. 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 and Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will express no opinion with respect to other federal tax consequences to owners of the Bonds. Prospective purchasers of such bonds should consult With their tax advisors as to such matters. Bank Qualification - In the resolution authorizing the issuance of the Bonds, the City will designate such bonds as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Code relating to the ability of financial institutions to deduct from income for federal income tax purposes a portion of the interest expense that is allocable to tax-exempt obligations. 4 RATING The City has requested a rating on the Bonds from Moody's Investors Service, Inc. ("Moody's"). Moody's currently rates the City's outstanding General Obligation long-term debt 'Aaa'. The existing rating on long-term debt reflects only the view of tile rating agency and with any explanation of the significance of such rating may only be obtained from Moody's. There is no assurance that such rating will continue for any period of time or that it will not be revised or withdrawn. Any revision or withdrawal of the rating may have an effect on the market price of the Bonds. FINANCIAL ADVISOR The City has retained Public Financial Management, Inc., Des Moines, Iowa as financial advisor (the "Financial Advisor") in connection with the preparation of the issuance of the Bonds. In preparing the Preliminary Official Statement, the Financial Advisor has relied on government officials, and other sources to provide accurate information for disclosure purposes. The Financial Advisor is not obligated to undertake, and has not undertaken, an independent verification of the accuracy, completeness, or fairness of the information contained in this Preliminary Official Statement. Public Financial Management, Inc. is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. 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 tile Securities Exchange Act of 1934, as amended (the "Rule"), the City will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds, in its disclosure certificate, to provide annual reports of specified information and notice of the occurrence of certain events, if material, as hereinafter described (the "Disclosure Covenants"). The City 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 which continuing disclosure must be made. The information to be provided on an annual basis, the events as to which notice is to be given, if material, and the other provisions of the Disclosure Covenants, including termination, amendment and remedies, are set forth in the FORM OF CONTINUING DISCLOSURE CERTIFICATE attached hereto as APPENDIX C to this Preliminary 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 City to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. Currently, the City is compliant with its Disclosure Covenants. CERTIFICATION The City has authorized the distribution of this Preliminary Official Statement for use in connection with the initial sale of the Bonds. I have reviewed the information contained within the Preliminary Official Statement prepared on behalf of the City of Ames, Iowa, by Public Financial Management, Inc., Des Moines, Iowa, and said Preliminary Official Statement does not contain any material misstatements of fact nor omission of any material fact regarding the issuance of $6,690,000* General Obligation Corporate Purpose Bonds, Series 2010A. CITY OF AMES, IOWA /s/ Duane Pitcher, Director of Finance Preliminary; subJect to change, CITY PROPERTY VALUATIONS IOWA PROPERTY VALUATIONS In compliance with Section 441.21 of the Code of Iowa, the State Director of Revenue annually directs the county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The 2009 final Actual Values were adjusted by the Story County Auditor. The reduced values, determined after the application of rollback percentages, are the Taxable Values subject to tax levy. For assessment year 2009, the Taxable Value rollback rate was 46.9094% of Actual Value for residential property; 66.2715% of Actual Value for agricultural property; and 100% of Actual Value for commercial, industrial, railroad and utility property, The Legislature's intent has been to limit the growth of statewide taxable valuations for the specific classes of property to 4% annually. Political subdivisions whose taxable values are thus reduced or are unusually low in growth are allowed to appeal the valuations to the State Appeal Board, in order to continue to fund present services. 1/1/2009 VALUATIONS (Taxes Payable ,July 1, 2010 through June 30,2011) Taxable Value 100% Actual Value (With Rollback) Residential $2,442,888,499 $1,145,943,933 Commercial 834,382,923 834,382,923 Industrial 132,671,800 132,671,800 Railroads 3,204,062 3,204,062 Utilities w/o Gas & Electric 6,965,305 6,965,305 Gross valuation $3,420,112,589 $2,123,168,023 Less military exerription (2,849,302) (2,849,302) Net valuation $3,417,263,287 $2,120,318,721 Taxed separately Ag. Land & Building $2,097,330 $1,387,447 Gas & Electric Utilities $14,337,297 $5,856,162 1) Does not include $7,370 of'School TUin Ag Land. 2009 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY') Taxable Valuation Percent of Total Residential $1,145,943,933 53.82% Gas & Electric Utilities 5,856,162 0.28% Commercial, Industrial, Railroads and Utility 977,224,090 45.90% Total Gross Taxable Valuation $2,129,024,185 100.00% ') Excludes Taxable TI F' Increment and Ag. [.,and & Buildings. Assessment Payable Taxable Valuation Taxable Year Fiscal Year TIE Increment 2805 2006'07 $3,005,042,777 $1,896,589,910 $0 2006 2007-08 3`121,234,289 1,933,311,423 O 2007 2008-09 3,225,950,114 1,941,794,082 U 2008 2000-10 3,329,113,783 2`030`775'716 0 2009 2010-11 3,433,705,284 2,126,174`883 0 The 100% Actual Valuation, before rollback and after the reduction of military exemption, includes Ag. Land & Buildings, ?OP Increment and (3ao & Electric Utilities. The ?oxu6|e Valuation, with the rollback and after the /ednodmn of military exemption, includes Oua & Electric Utilities and excludes &Q. Land di Buildings and Taxable I[P luo/enoen1. Iowa cities certify operating levies against Taxable Valuation excluding Tuxo6|eTlF Increment and debt service levies are certified against Taxable Valuation including the Taxable TIF Increment. LARGER TAXPAYERS T4al"Ity—er 0arJ|aAmerica Inc. North Grand Mall Partners LLC Wal-Mart Stores, Inc Store 4256-00 Cyo)000buULLC Clinic Building Company Inc. Midwest Centers SumaHolding ofStory County Inc. Campus Investors ]BLLC Ball Plastic Container Corp. Chelan Daybreak LLC Type of Property/Business l/l/2O09 Taxable Valuation Industrial $41,260,000 Commercial 24,402,600 Commercial 22`468,000 Industrial 17,277,000 Coo`noe»ciu] 15,981,000 Commercial 13,720,000 Industrial I2,743,000 Conomuzkd 11,022'000 Industrial 10`024,000 Comnuumiu| 9'469'900 LEGISLATION From time to time, legislative proposals are pending in Congress and the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described herein. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for taxes levied by the City or have an adverse impact on the future tax collections of the City. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed federal or state tax legislation. The opinions expressed by Bond Counsel are based upon existing legislation as of the date Of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending federal or state tax legislation. Iowa Code section 76.2 provides that when an Iowa political subdivision issues general obligation debt: "The governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an, annual levy upon all the taxable property in the political Subdivision Sufficient to pay the interest and principal of the bonds within a period named not exceeding the applicable period of time specified in section 76.1. A certified copy of this resolution shall be filed with the county auditor or the auditors of the Counties in which the political subdivision is located; and the filing shall make it a duty of the auditors to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." Iowa Code section 76.1 provides that the annual levy shall be sufficient to pay the interest and approximately such portion of the principal of the bonds as will retire them in a period not exceeding twenty years from the date of issue, except for certain bonds issued for disaster purposes and bonds issued to refund or refinance bonds issued for Such disaster purposes which may mature and be retired in a period not exceeding thirty years from date of issue. CITY INDEBTEDNESS 111 W .111 a 0 101 Article XL Section 3 of the State of Iowa Constitution limits the amount of debt outstanding at ally time of any county, municipality or other political subdivision to no more than 5% of the Actual Value of all taxable property within the corporate limits, as taken from the last state and county tax list. The debt limit for the City, based on its 2009 Actual Valuation currently applicable to the fiscal year 20 10-11, is as follows: 2009 Gross Actual Valuation of Property $3,436,554,586 Less: Military Exemption (1849,302) Subtotal $3,433,705,284 Legal Debt Limit of 5% 0.05 Legal Debt Limit $171,685,264 Less: G.O. Debt Subject to Debt Limit (53,425,000)* Net Debt Limit $118,260,264* DIRECT DEBT General Obligation Debt Paid by Taxes (Includes the Bonds) Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 8/24/10 5/02A $3,475,000 Capital Improvement Projects 6/21 $2,340,000 10/02B 5,885,000 Capital Improvement Plan 6/14 2,185,000 9/03 6,555,000 Capital Improvement Projects 6/15 2,725,000 10/04 6,030,000 Capital Improvement Plan 6/14 2,615,000 9/05 5,495,000 Street Improvements, Fire Equipment and 6/17 2,380,000 Refunding Series 1997A 10/06 5,285,000 Street and Storm Sewer Improvements 6/18 3,865,000 1 1/07A 9,630,000 Street Improvements & Aquatic Center 6/19 7,985,000 10/08A 8,355,000 Street Improvements & Aquatic Center 6/20 7,370,000 4/09A 6,995,000 Refunding Series 1998A, 1999, 2000, 6/13 4,605,000 2001A and 2001B 10/09B 11,165,000 Capital Improvement Projects 6/21 10,665,000 9/1 OA 6,690,000* Capital Improvement Projects 6/22 6,690,000* Total G.O. Debt Subject to Debt Limit * Preliminary; subject to change. $53,425,000- Annual Fiscal Year Debt Service Payments G. 0. Debt Paid by Property Taxes (Includes the Bonds) Outstanding j2ebt Fiscal Principal Year PrinciL)a} and nterest 2010-11 $6`820,000 $0,422,895 2011-12 6`530'008 7,924,498 2012-13 6,060,000 7,243,254 2013-14 5,250,000 6,233,494 2014-15 4,105,000 4'910,654 2015-16 3,710,000 4'370,604 2016-17 3,850,000 4,379'909 2017-18 3`610`000 4,002'139 2018-19 3,185,000 3,443,101 2019'28 2,220,008 2,360,599 Total $46,735,000 * Preliminary; euNxotmchange. OTHER DEBT The Bonds Principal and oterest* $380,000 $495,050 515,000 604`784 520,000 684,119 530`000 686,527 540`000 686,881 550,000 885,189 565,080 685'919 500,000 684,768 595,000 682,128 615`000 682,849 640,000 606`878 _-660,000 684,222 TotaOutstandiu Principal 11'rinciQa}* and Interest* $7,200,000 $0,918,045 7'045,000 8,609,281 6`500,000 7,927`372 5,700,080 6,920`020 4,645,000 5,597,534 4,260'080 5,055,712 4'415`000 5,065,837 4,190,080 4,686'898 3,780,000 4,125,229 2,835,080 3`043,448 2`035,000 2,135,089 660,000 684,222 The City has outstanding revenue debt payable from hospital revenues uafollows: Date of Issue 6/03 Amount Original Final Purpose Maturity Mary Greeley Medical Center 6/22 10 Principal Outstanding As of 8/24/0 $20,405,000 OVERLAPPING DEBT City's 1/1/2009 Percent Proportionate Taxing District Taxable Valuation In City G.O. Debt Share Story County $3,443,792,926 61.78% $10,630,000 $6,567,214 Ames Community School District 2,018,966,170 98.02% 1,550,000 1,519,310 Gilbert Community School District 3 12,477,018 46.69% 7,865,000 3,672,169 Nevada Community School District 340,250,228 0.13% 3,620,000 4,706 United Community School District 218,075,803 0.98% 0 0 Des Moines Area Community College 35,124,092,931 6.06% 79,220,000 4,800,732 City's share of total overlapping debt: $16,564,131 1) Taxable Valuation includes Ag. Land & Buildings, all Utilities and Taxable TIF Increment. DEBT RATIOS Debt/Actual Market Value Debt/50,731 G.O. Debt ($3,431705,284) as Population Total General Obligation Debt $53,425,000* 1.56%* $1,053.10* City's Share of Overlapping Debt $16,564,131 0.48% $326.51 1) Based on the City's 2009 Actual Valuation; includes Ag. Land & Buildings, all Utilities and 'raxable 'I'll' Increment. * Preliminary; subject to change. LEVIES AND TAX COLLECTIONS Collected During percent Fiscal Year [levy Collection Year Collected 2005/06 $18,339,910 $18,450,076 100.600/c 2006/07 19,443,653 19,290,940 9 9.2 1 ON 2007/08 20,175,738 20,147,655 99.860/c 2008/09 21,480,892 21,317,823 99.240/c 2009/10 21,960,516 21,780,828 99.180/c 2010/11 23,000,700 --------In Process of Collection -------- Collections include delinquent taxes from all prior years. 'Faxes in Iowa are delinquent each October I and April I and a late payment penalty of I% per month of delinquency is enforced as of those dates. If delinquent taxes are not paid, the property may be offered at the regular tax sale on the third Monday of June following the delinquency date. Purchasers at the tax sale must pay an amount equal to the taxes, special assessments, interest and penalties due on the property and funds so received are applied to taxes. A property owner may redeem from the regular tax sale but, failing redemption within three years, the tax sale purchaser is entitled to a deed, which in general conveys the title free and clear of all liens except future tax installments. TAX ItATES FY 2006/07 FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 $/$1,000 $/$1,000 $/$1,000 $/$1,000 $/$1,000 Story County 5.63175 5.53799 5.59701 5.81536 5.64515 Story County Hospital 0.42049 0.42063 0.42050 0.42050 0.42050 County Ag. Extension 0.08904 0.09118 0.08904 0.09053 0.08609 City of Ames 10.25190 10.43585 11 .06239 10.85819 10.84579 City Assessor 0.32266 0.37197 0.41661 0.34391 0.41785 Ames Comm. School District 13.74398 13.27297 13.62557 13.58764 14.65339 Gilbert Comm. School District 20.00344 19.98071 19.79131 19.83048 19.99688 Nevada Comm. School District 17.76119 17.75500 16.43213 16.45943 17.03265 United Comm. School District 11.40784 10.52057 10.06277 9.68981 10.93599 Des Moines Area Comm. College 0.68688 0.60276 0.56386 0.56778 0.56008 State of Iowa 0.00400 0.00350 0.00350 0.00300 0.00340 Total Tax Rate: Ames CSD Resident 31.1507 30.73685 31.77848 31.68691 32.63225 Gilbert CSD Resident 37.41016 37.44459 37.94422 37.92975 37.97574 Nevada CSD Resident 35.16791 35.21888 34.58504 34.55870 35.01151 United CSD Resident 28.81456 27.98445 28.21568 27.78908 28.91485 LEVY LIMITS A city's general fund tax levy is limited to $8. 10 per $1,000 of taxable value, with provision for an additional $0.27 per $1,000 levy for an emergency fund which can be used for general fund purposes (Code of Iowa, Chapter 384, Division 1). Cities may exceed the $8. 10 limitation upon authorization by a special levy election. Further, there are limited special purpose levies, which may be certified outside of the above -described levy limits (Code of Iowa, Section 384.12). The amount of the City's general fund levy subject to the $8.10 limitation is $6.1.4501 for FY 2010/11, and the City has levied no emergency levy. The City has certified special purpose levies outside of the above described levy limits as follows: $0.51112 for police and fire retirement and $0.61862 for the operation and maintenance of a public transit system. Debt service levies are not limited. N GENERAL FUND BUDGETS - ACCRUAL BASIS 2009/10 Adopted 2009/10 Actual 2010/11 Adopted Revenues: Taxes $13,101,741 12,988,048 14,404,831 General Services 2,650,067 1,949,617 2,359,457 Streets 686,156 468,611 671,862 Police and Fire 2,667,736 2,501,856 2,451,871 Other 1,846,307 1,792,500 1,872,213 Operating Transfers in 6 �624 386 6,047,929 6,782525 Total Revenues: $27,576,393 25,748,561 28,542,759 Expenditures Public Safety $13,984,430 13,228,073 14,435,050 Transportation 131,586 147,734 125,151 Community Enrichment 6,962,441 6,579,916 7,122,793 General Government 4,232,141 3,579,967 3,589,495 Operating Transfers Out 2,865,795 2,552,399 3,270 ,270 Total Expenditures $28,176,393 26,088,089 28,542,759 Excess (deficiency) of Revenues Over (under) Expenditures ($600,000) (339,528) 0 Fund Balance at Beginning of year $6,360,749 7,086,823 5,901,236 Fund Balance at End of Year $5,760,749 6,747,295 5,901,236 ') Unaudited actual results. FUNDS ON HAND (CASH AND INVESTMENTS AS OF .TUNE 30,2010) Governmental General Fund 6,069,086 Debt Service Fund 2,348,720 Capital Projects Fund 2,488,946 Other Governmental Funds 14,405,649 Business -type Mary Greeley Medical Center 94,173,536 Electric Utility 35,083,343 Sewer Utility 5,308,503 Water Utility 7,128,633 Other Enterprise Funds 6,330,406 Internal Service Funds 12.647.352 Total all funds 185,984,174 13 THE CITY • f The City of Arnes, Iowa (the "City") is governed under and operates Linder a Mayor -Council form of government with a City Manager. The principle of this type of government is that the Council sets policy and the City Manager carries it out. The six members of the Council are elected for staggered four-year terms. One member is elected from each of the four wards and two are elected at large. The Council appoints the City Manager as well as the City Attorney. The City Manager is the chief administrative officer of the City. The Mayor is elected for a four-year term, presides at council meetings and appoints members of various City boards, commissions and committees with the approval of the Council. EMPLOYEES; PENSIONS The City has 1,309 full-time employees of which 487 are governmental employees and 822 are employees of the Mary Greeley Medical Center and 959 part-time employees (including seasonal employees) of which 410 are governmental employees and 549 are employees of the Mary Greeley Medical Center. Included in the City's full-time employees are 35 sworn police officers and 44 firefighters. The City contributes to the Iowa Public Employees Retirement System (the "IPERS"), a cost sharing multiple - employer public employees' retirement system designed as a supplement to Social Security. The pension plan provides retirement and death benefits, which are established by State statute. The City is current in its obligation to IPERS, which has been as follows: $4,137,527 in Fiscal Year 2007-08, $4,807,938 in Fiscal Year 2008-09 and $4,965,440 in Fiscal Year 2009-10. The City also contributes to the Municipal Fire and Police Retirement System of Iowa (the "MFPRSI"), a benefit plan administered by a Board of Trustees. MFPRSI provides retirement, disability and death benefits that are established by State statute to plan members and beneficiaries. Plan members are required to contribute 9.4% of their earnable compensation and the City's contribution rate was 17% of earnable compensation as of July 1, 2009, The City's contribution rate for 2010-11 is 19.9%. The City is current in its obligation to MFPRSI, which has been as follows: $1,412,973 in Fiscal Year 2007-08, $1,641,527 in Fiscal Year 2008-09 and $1,591,570 in Fiscal Year 2009-10. UNION CONTRACTS City employees are represented by the following five bargaining units: Bargaining Unit Contract Expiration Date International Association of Firefighters June 30, 2011 Public, Professional and Maintenance Employees June 30, 2011 International Brotherhood of Electrical Workers June 30, 2011 International Union of Operating Engineers (Local 234C) June 30, 2011 International Union of Operating Engineers (Local 234D) June 30, 2011 Ed OTHER POST EMPLOYMENT BENEFITS In addition to providing pension benefits, the City and Mary Greeley Medical Center (the "Medical Center") offers medical and prescription drug coverage to its retirees and their eligible dependants. Retirees between the ages of 55 and 65 can purchase health insurance at the group rate cost. In addition, the Medical Center provides a flat $2,500 life insurance benefit to its retirees. Employees must be a minimurn of 55 years old, have been employed for the preceding four years, and currently be enrolled in a sponsored health insurance plan at the time of retirement. Benefits terminate upon attaining Medicare eligibility. Health insurance for these retirees, while at the individual's own expense, is included within the City's overall insurance package. Therefore, a portion of the coverage is being subsidized by the City and its current employees. Based on the results of the City's July 1, 2007 and July 1, 2008 actuarial studies, it has been estimated that the City's annual Other Post Employment Benefits (the "OPEB") cost is $1,128,950 for year ended June 30, 2009. The percentage of annual OPEB cost contributed is 5.9% resulting in a net OPEB obligation of $1,824,717. INSURANCE The City's insurance coverage is as follows: Type qffmumnce General Liability Auto Liability Wrongful Acts Excess (over all other coverage except Iowa liquor liability) Law Enforcement Public Official Employee Benefit Medical Malpractice Underinsured Motorist Uninsured Motorist Commercial Property Commercial Property & Boiler and Machinery Terrorism — TRIA Airport Liability 15 All Limits $6,000,000 $6,000,000 $6,000,000 $6,000,000 $6,000,000 $6,000,000 $1,000,000 $6,000,000 $1,000,000 $1,000,000 $440,000,000 $3,000,000 LOCATION AND TRANSPORTATION The City is located in Story County in central Iowa. It is approximately thirty miles north of Des Moines, Iowa, the State capital and largest city. The City is located on Interstate Highway 35. 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 United States Census Bureau estimated 2008 population of 56,510, is known for its excellent quality of life which includes a relatively crime -free environment, an extensive park system, superior culturaYrecreations facilities and a nationally recognized school system. Ames is the home of Iowa State University ("ISU"). ISU was established in 1859 and is an integral part of the C01111111111ity. 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. The City operates a municipal airport, which handles primarily charter services. National air service is available at the Des Moines International Airport, approximately thirty miles south of the City. The City is also provided freight services through the Union Pacific Railroad line. LARGER EMPLOYERS A representative list of larger employers in the City is as follows: Employer Type of Business Number of Employees rl Iowa State University Higher Education 14,374 Mary Greeley Medical Center Health Care 1,409 Iowa Department of Transportation Public Transportation 1,062 City of Arnes, Municipal Government 904 fly-Vee Food Stores Grocery 733 Ames Community School District Education 650 Sauer-Danfoss Company Hydro -Transmissions 650 zl McFarland Clinic, P.C. Health Care 520 Arnes Laboratories Research 466 3M Company Manufacturing 430 National Animal Disease Center USDA Research 250 Hach Company Water Analysis Equipment 250 National Veterinary Service Lab Veterinary Research 233 Wal-Mart Retail 230 Cub Foods Grocery 200 J.C. Penney Retail 190 Ball Corporation Plastics Manufacturing 180 Target Stores Retail 175 Access Direct Telemarketing Research 150 Iowa Newspapers, Inc. Print Journalism 137 K-Mart Retail 130 Barilla Food Distribution 129 Sam's Club Retail 125 1) Includes full-time, part-time and seasonal employees. 2) Updated total includes the elimination of 145 positions in June 2009. Source: The City, the Ames Economic Development Commission and LocationOne Information System website. ID BUILDING PERMITS City officials reported the following construction activity as of June 30, 2010. Permits for the City are reported on a calendar year basis. The figures below include both new construction and remodeling. 2006 2007 2008 2009 2010 Residential Construction: Number of units: 494 492 462 466 256 Valuation: $38,109,326 $ 37,789,219 $25,656,078 $20,084,857 $11,296,241 Commercial Construction: Number Of units: Valuation: Total Permits Total Valuations U.S. CENSUS DATA Population Trend 180 163 $34,072,512 $66,353,738 674 655 $72,181,838 $104,142,957 1980 U.S. Census 1990 U.S. Census 2000 U.S. Census 2008 U.S. Census Estimate Source: U.S. Census Bureau website. UNEMPLOYMENT RATES Annual Averages: 2006 2007 2008 2009 2010 (Jan -May only) Source: Iowa Workforce Development Center website. City of Ames 2.3% 2.5% 3.0% 3.9% 4.4% WA 175 $61,157,671 637 $86,813,749 43,775 47,198 50,731 56,510 Story County 2.6% 2.8% 3.3% 4.4% 5.2% 173 $24,655,737 639 $44,740,594 72 $24,498,800 328 $35,795,041 State of Iowa 3.7% 3.7% 4.4% 6.0% 6.7% EDUCATION Public education is provided by the Ames Community School District, with a certified enrollment for the 2009-10 school year of 4,358. The district, with approximately 650 employees, owns and operates one early childhood center, seven elementary schools, one middle school and one high school. Nevada Community School District, Gilbert Community School District and United Community School District all lie partially within the City and provide public education to portions of the City. The Iowa State University ("ISU") 2009 fall term enrollment was 27,945. ISU is the City's largest employer with faculty and staff totaling approximately 14,374, 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 to Ames major athletic, dramatic and musical events, as well as seminars and conferences. In addition to ISU located in the City, the following institutions provide higher education within 30 miles of the City: Des Moines Area Community College, Upper Iowa University, Simpson College, Hamilton College, Grand View College and Drake University. FINANCIAL SERVICES Financial services for the residents of the City are provided by First National Bank Arnes, Iowa. In addition, the City is served by branch offices of Bank of the West, Bankers Trust Company, City State Bank'), CoBank ACB, Exchange State Bank, F&M Batik -Iowa, First American Bank, First Federal Savings Batik of Iowa, Midwest Heritage Bank, F.S.B., US Bank, N.A., Valley Bank and Wells Fargo Bank, N.A., as well as by several credit unions. First National Bank reports the following deposits as of December 3 1 " for each year: Year First National Bank 2005 $355,057,000 2006 358,077,000 2007 388,924,000 2008 362,394,000 2009 378,778,000 ') Ames Community Batik was acquired by City State Bank in January 2009 Source: Federal Deposit Insurance Corporation (FDIC) website. FINANCIAL STATEMENTS The City's June 30, 2009 Comprehensive Annual Financial Report, as prepared by City Management and audited by a certified public accountant, is reproduced as APPENDIX B. The City's certified public accountant has not consented to distribution of the audited financial statements and has not undertaken added review of their presentation. Further information regarding financial performance and copies of the City's prior Comprehensive Annual Financial Report may be obtained from Public Financial Management, Inc. 0 FORM OF LEGAL OPINION MOMM, JUNE 30,2009 COMPREHENSIVE ANNUAL FINANCIAL REPORT APPENDIX C FORM OF CONTINUING DISCLOSURE CERTIFICATE OFFICIAL BID FORM To: City Council of City of Ames, Iowa Sale Date: August 24, 2010 11:00 AM, CT RE: $6,690,000* General Obligation Corporate Purpose Bonds, Series 2010A (the "Bonds") For all or none of the above Bonds, in accordance with the TERMS OF OFFERING, we will pay you (not less than $6,646,515) plus accrued interest to date of delivery for fully registered bonds bearing interest rates and maturing in the stated years as follows: Coupon Maturity WIN 2012 2013 2014 2015 2016 Coupon Maturity 2017 2018 2019 2020 2021 2022 *Preliminary; subject to change. The City reserves the right to decrease the aggregate principal amount of the Bonds. Such change will be in increments of $5,000 and may be made in any of the maturities. The purchase price will be adiUsted proportionately to reflect any change in issue size. In making this offer we accept all of the terms and conditions of the TERMS OF OFFERING published in the Preliminary Official Statement dated August 17, 2010. In the event of failure to deliver these Bonds in accordance with the TERMS OF OFFERING as printed in the Preliminary Official Statement and made a part hereof, we reserve the right to withdraw our offer. All blank spaces of this offer are intentional and are not to be construed as an omission. Not as a pail of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we have made the following computations: NET INTEREST COST: S TRUE INTEREST COST: Account Manager: Account Members: % (Based on dated date of September 30, 2010) By: The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Ames, Iowa this 24th day of" August, 2010. Attest: as Title: Title: