HomeMy WebLinkAboutA054 - Preliminary Official Statement I'RFLLMINARN OFFICIAL STAVYENIb;NT DA"FF.D SIIA'FENI BEER _2011
New Issue Rating: Application Made
— = In the opinion of 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 excluded from gross income for federal income tax purposes, such interest on the Bonds will not be 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,but will 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). 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
$6,675,000* General Obligation Corporate Purpose Bonds, Series 2011B
BIDS RECEIVED: Tuesday,October 25,2011, 11:00 o'clock A.M.,Central Time
AWARD: Tuesday,October 25,2011,7:00 o'clock P.M.,Central Time
- Dated: Date of Delivery(November 21,2011) Minimum Bid: $6,628,275
Principal Due: June 1,2012-2023 Good Faith Deposit: Required of Purchaser Only
_ The $6,675,000* General Obligation Corporate Purpose Bonds, Series 2011B (the "Bonds") are being issued pursuant to Division
= III of Chapter 384 of the Code of Iowa and resolutions to be adopted by the City Council of the City of Ames, Iowa(the "City").
The Bonds are being issued for the purpose of paying the cost of constructing street improvements and making improvements to
_ City Hall. The purchaser of the Bonds agrees to enter into a loan agreement (the "Loan Agreement") with the City pursuant to
authority contained in Section 384.24A of the Code of Iowa. The Bonds are issued in evidence of the City's obligations under the
rr = Loan Agreement. The Bonds 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.
The Bonds will be issued as fully registered Bonds without coupons and,when issued,will be registered in the name of Cede&Co.,
as nominee of The Depository Trust Company("DTC"). DTC will act as securities depository for the Bonds. 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 Registrar/Paying Agent(the"Registrar")will
= pay principal on the Bonds,payable annually on June 1,beginning June 1,2012,and interest on the Bonds payable initially on June
1,2012 and thereafter on each December 1 and June 1 to DTC,which will in turn remit such principal and interest to its participants
= for subsequent disbursements to the beneficial owners of the Bonds 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 close of business on the 15"'
- day of the month next preceding the interest payment date(the"Record Date").
MATURITY: June I as follows:
Year Amount* Year Amount*
2012 $570,000 2018 $545,000
2013 505,000 2019 560,000
_ = 2014 510,000 2020 575,000
2015 520,000 2021 590,000
_ 2016 525,000 2022 610,000
2017 535,000 2023 630,000
- ' PRINCIPAL
_ ADJUSTMENT: The City reserves the right to increase or 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.
REDEMPTION: Bonds due after June 1,2018 will be subject to call prior to maturity in whole,or from time to time in part,in
- - any order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the
City,upon terms of par plus accrued interest to date of call.
s The Bonds are offered, subject to prior sale, withdrawal or modification, when, as and if issued and subject to the unqualified
- -= approving legal opinion of Dorsey & Whitney LLP, 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 November 21, 2011. 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
J S.
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 an 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 identity 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 any
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 from 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 any
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
TERMSOF OFFERING..................................................................................................................................................i
SCHEDULEOF BOND YEARS.....................................................................................................................................v
INTRODUCTION.............................................................................................................................................................I
Authority and Purpose;Optional Redemption;Interest on the Bonds............................................................................I
Payment of and Security for the Bonds..........................................................................................................................2
Book-Entry-Only System...............................................................................................................................................2
FutureFinancing.............................................................................................................................................................4
Litigation; Debt Payment History...................................................................................................................................4
LegalMatters..................................................................................................................................................................4
Tax Exemption and Related Considerations...................................................................................................................4
Rating..............................................................................................................................................................................5
FinancialAdvisor............................................................................................................................................................5
ContinuingDisclosure....................................................................................................................................................6
Certification....................................................................................................................................................................6
CITY PROPERTY VALUATIONS................................................................................................................................7
IowaProperty Valuations...............................................................................................................................................7
1/1/2010 Valuations(Taxes payable July 1,2011 through June 30,2012)....................................................................7
2010 Gross Taxable Valuation by Class of Property......................................................................................................7
Trendof Valuations........................................................................................................................................................8
LargerTaxpayers............................................................................................................................................................8
Legislation......................................................................................................................................................................8
CITYINDEBTEDNESS...................................................................................................................................................9
DebtLimit.......................................................................................................................................................................9
DirectDebt......................................................................................................................................................................9
OtherDebt....................................................................................................................................................................10
OverlappingDebt..........................................................................................................................................................10
DebtRatios...................................................................................................................................................................I I
Leviesand Tax Collections...........................................................................................................................................I I
TaxRates......................................................................................................................................................................12
LevyLimits...................................................................................................................................................................12
GeneralFund Budgets-Accrual Basis.........................................................................................................................13
Funds on Hand(Cash and Investments as of June 30,2011)........................................................................................13
THECITY.......................................................................................................................................................................14
CityGovernment...........................................................................................................................................................14
EmployeesAnd Pensions..............................................................................................................................................14
UnionContracts............................................................................................................................................................14
Other Post-Employment Benefits; Insurance................................................................................................................15
GENERALINFORMATION........................................................................................................................................16
Locationand Transportation.........................................................................................................................................16
LargerEmployers.........................................................................................................................................................16
BuildingPermits...........................................................................................................................................................17
U.S. Census Data..........................................................................................................................................................17
UnemploymentRates....................................................................................................................................................17
Education......................................................................................................................................................................18
Financial Services;Financial Statements......................................................................................................................18
APPENDIX A-FORM OF LEGAL OPINION
APPENDIX B-JUNE 30,2010 COMPREHENSIVE ANNUAL FINANCIAL REPORT
APPENDIX C-FORM OF CONTINUING DISCLOSURE CERTIFICATE
OFFICIAL BID FORMS
City of Ames, Iowa
Mayor/City Council
Member Office Initial Term Commenced Term Expires
Ann Campbell Mayor January 03, 2006 December 31,2013
Peter Orazem Council Member—At Large January 04, 2010 December 31,2013
Matthew Goodman Council Member—At Large January 03, 2004 December 31,2011
Tom Wacha Council Member— I"Ward January 04,2010 December 31,2013
Jami Larson Council Member—2nd Ward November 14, 2006 December 31,2011
Jeremy Davis Council Member—3`d Ward January 04,2010 December 31,2013
Riad Mahayni Council Member—4"Ward January 14,2003 December 31, 2011
Administration
Steven Schainker,City Manager
Duane Pitcher,Director of Finance
Diane Voss, City Clerk
Roger Wisecup II,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
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 2011B, in the principal amount of
$6,675,000* to be dated November 21, 2011 in the denomination of$5,000 or multiples thereof, will mature on June I
as follows:
Year Amount* Year Amount*
2012 $570,000 2018 $545,000
2013 505,000 2019 560,000
2014 510,000 2020 575,000
2015 520,000 2021 590,000
2016 525,000 2022 610,000
2017 535,000 2023 630,000
*Preliminary; subject to change. The City reserves the right to increase or 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 after June 1, 2018 will be subject to call prior to maturity in whole, or from time to time in part, in any
order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the City, 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, 2012 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 close of business on the 15'h day of the month next preceding the 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 Municipal Securities Rulemaking Board.
GOOD FAITH DEPOSIT
A good faith deposit(the"Deposit") in the amount of$66,750 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 Time 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.
i
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 Bonds for a price not less than $6,628,275, plus accrued interest, and shall
specify the rate or rates of interest in conformity to the limitations set forth under the "RATES OF INTEREST"
section. 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
("TIC")basis assuming compliance with the"GOOD FAITH DEPOSIT" section. The TIC shall be determined by the
present value method, i.e., by ascertaining the semiannual rate, compounded semiannually, necessary to discount to
present value as of the 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 (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 bids 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:
1. Each annual maturity must bear a single rate of interest from the dated date of the Bonds to the date of
maturity.
2. Rates of interest bid must be in multiples of one-eighth or one-twentieth of one percent.
3. 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
Forms of Bids: Bids must be submitted on or in substantial compliance with the TERMS OF OFFERING and
OFFICIAL BID FORM provided by the City or through PARITY® competitive bidding system (the "Internet Bid
System"). 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 or the 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.
No bid will be accepted after the time specified in the OFFICIAL BID FORM. The time as maintained by the Internet
Bid System shall constitute the official time with respect to all bids submitted. A bid may be withdrawn before the bid
ii
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.
Sealed 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 must be submitted through the Internet Bid System. Information
about the Internet Bid System may be obtained by calling(212)404-8102.
Each 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 and OFFICIAL BID FORM. The City is permitting bidders to use the services of the 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 and OFFICIAL BID FORM 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.
Facsimile 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. The 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 facsimile 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. The 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.
iii
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 20 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 Final 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 its previous undertakings under SEC Rule 15c2-12(b)(5).
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
SCHEDULE OF BOND YEARS
$6,675,000*
City of Ames,Iowa
General Obligation Corporate Purpose Bonds, Series 2011B
Bonds Dated: November 21,2011
Interest Due: June 1,2012 and each December 1 and June 1 to maturity
Principal Due: June 1,2012-2023
Cumulative
Year Principal * Bond Years Bond Years
2012 $570,000 300.83 300.83
2013 505,000 771.53 1,072.36
2014 510,000 1,289.17 2,361.53
2015 520,000 1,834.44 4,195.97
2016 525,000 2,377.08 6,573.06
2017 535,000 2,957.36 9,530.42
2018 545,000 3,557.64 13,088.06
2019 560,000 4,215.56 17,303.61
2020 575,000 4,903.47 22,207.08
2021 590,000 5,621.39 27,828.47
2022 610,000 6,421.94 34,250.42
2023 630,000 7,262.50 41,512.92
Average Maturity(dated date): 6.219 Years
*Preliminary;subject to change.
v
OFFICIAL STATEMENT
CITY OF AMES,IOWA
$6,675,000* General Obligation Corporate Purpose Bonds, Series 2011B
INTRODUCTION
This Preliminary Official Statement contains information relating to the City of Ames, Iowa (the "City") and its
issuance of$6,675,000* General Obligation Corporate Purpose Bonds, Series 2011B (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., 801 Grand Avenue, Suite
3300, Des Moines, Iowa 50309 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.
AUTHORITY AND PURPOSE
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 of constructing street improvements
and making improvements to City Hall. The purchaser of the Bonds agrees to enter into a loan agreement(the "Loan
Agreement") with the City pursuant to authority contained in Section 384.24A of the Code of Iowa. The Bonds are
issued in evidence of the City's obligations under the Loan Agreement.
The estimated Sources and Uses of the Bonds are as follows:
Sources of Funds
Par Amount of Bonds $6,675,000.00*
Uses of Funds
Deposit to Project Fund $6,570,000.00
Underwriter's Discount 46,725.00
Costs of Issuance and Contingency 58,275.00
Total Uses $6,675,000.00*
OPTIONAL REDEMPTION
Bonds due after June 1, 2018 will be subject to call prior to maturity in whole, or from time to time in part, in any
order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the City, 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, 2012 and semiannually on the 1" 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 close of business on the 151h day of the month next preceding the 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 Municipal Securities Rulemaking Board.
*Preliminary;subject to change.
1
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.
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 eliminates 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.
2
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 affect 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
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 DTC, Agent, or the City, subject to any statutory or regulatory requirements as may be in effect
from time to time. 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.
3
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: The opinion of Bond Counsel will state that under present laws and rulings, interest
on 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 will 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).
The 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,
4
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.
Information Reporting and Back-up Withholding: In general, information reporting requirements will apply with
respect to payments to an owner of principal and interest (and with respect to annual accruals of OID) on the Bonds
and with respect to payments to an owner of any proceeds from a disposition of the Bonds. This information reporting
obligation, however, does not apply with respect to certain owners including corporations, tax-exempt organizations,
qualified pension and profit sharing trusts, and individual retirement accounts. In the event that an owner subject to
the reporting requirements described above fails to supply its correct taxpayer identification number in the manner
required by applicable law or is notified by the Service that it has failed to properly report payments of interest and
dividends, a backup withholding tax (currently at a rate of 28%) generally will be imposed on the amount of any
interest and principal and the amount of any sales proceeds received by the owner on or with respect to the Bonds.
Any amounts withheld under the backup withholding provisions may be credited against the United States federal
income tax liability of the beneficial owner, and may entitle the beneficial owner to a refund, provided that the
required information is furnished to the Service.
Disclaimer Regarding Federal Tax Discussion: The federal income tax discussion set forth above is included for
general information only and may not be applicable depending upon a beneficial owner's particular situation.
Beneficial owners should consult their tax advisors with respect to the tax consequences to them of the purchase,
ownership, and disposition of the Bonds, including the tax consequences under state, local, foreign, and other tax laws
and the possible effects of changes in federal or other tax laws.
State Tax Considerations: In addition to the federal income tax consequences described above, potential investors
should consider the state income tax consequences of the acquisition, ownership, and disposition of the Bonds. State
income tax law may differ substantially from the corresponding federal law, and the foregoing is not intended to
describe any aspect of the income tax laws of any state. Therefore, potential investors should consult their own tax
advisors with respect to the various state tax consequences of an investment in Bonds.
RATING
The City has requested ratings on the Bonds from Moody's Investors Service, Inc. ("Moody's"). In addition,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 the 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.
5
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 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 the resolution authorizing the
issuance of the Bonds and the Continuing 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
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 as
APPENDIX C to this Official Statement. The City has complied in all material respects with its previous undertakings
under the Rule.
Breach of the Disclosure Covenants will not constitute a default or an "Event of Default" under the Bonds or the
resolutions for the Bonds. 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.
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$6,675,000* General Obligation Corporate Purpose Bonds, Series 2011B.
CITY OF AMES, IOWA
/s/Duane Pitcher,Director of Finance
*Preliminary;subject to change.
6
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 2010
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 2010, the Taxable Value
rollback rate was 48.5299% of Actual Value for residential property; 69.0152% 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/l/2010 VALUATIONS(Taxes Payable July 1,2011 through June 30,2012)
Taxable Value
100%Actual Value (With Rollback)
Residential $2,479,463,033 $1,203,280,867
Commercial 821,428,238 821,428,238
Industrial 129,708,000 129,708,000
Railroads 0 0
Utilities w/o Gas &Electric 10,815,526 10,815,526
Gross valuation $3,441,414,797 $2,165,232,631
Less military exemption (2,797,446) (2,797,446)
Net valuation $3,438,617,351 $2,162,435,185
Taxed separately
Ag. Land&Building $2,068,900 $1,427,853
Gas&Electric Utilities $14,766,599 $5,825,405
' Does not include$7,370 of TIF in Ag Land.
2010 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY')
Taxable Valuation Percent of Total
Residential $1,203,280,867 55.42%
Gas &Electric Utilities 5,825,405 0.27%
Commercial,Industrial,Railroads and Utility 961,951,764 44.31%
Total Gross Taxable Valuation $2,171,058,036 100.00%
Excludes Taxable TIF Increment and Ag.Land&Buildings.
7
TREND OF VALUATIONS
Assessment Payable Taxable Valuation Taxable
Year Fiscal Year 100%Actual Valuation (With Rollback) TIF Increment
2006 2007-08 $3,121,234,289 $1,933,311,422 0
2007 2008-09 3,225,950,114 1,941,794,882 0
2008 2009-10 3,329,113,783 2,030,775,716 0
2009 2010-11 3,433,705,284 2,126,174,883 0
2010 2011-12 3,455,460,220 2,168,260,590 7,370
The 100% Actual Valuation, before rollback and after the reduction of military exemption, includes Ag. Land &
Buildings, TIF Increment and Gas & Electric Utilities. The Taxable Valuation, with the rollback and after the
reduction of military exemption, includes Gas & Electric Utilities and excludes Ag. Land & Buildings and Taxable
TIF Increment. Iowa cities certify operating levies against Taxable Valuation excluding Taxable TIF Increment and
debt service levies are certified against Taxable Valuation including the Taxable TIF Increment.
LARGER TAXPAYERS
1/l/2010
Taxpayer Type of Property/Business Taxable Valuation
Barilla America Inc. Industrial $41,429,000
Campus Investors IS LLC Commercial 39,509,414
Jensen Development Corporation Commercial 38,893,100
University West Property Owner Commercial 29,638,600
Iowa State University Research Commercial 26,139,500
West Towne LC Commercial 24,595,900
North Grand Mall Partners LLC Commercial 24,535,400
Dayton Park LLC Commercial 22,602,900
Alexander LC Commercial 21,342,800
Wal-Mart Stores, Inc Store 4256-00 Commercial 20,300,000
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.
8
CITY INDEBTEDNESS
DEBT LIMIT
Article XI, Section 3 of the State of Iowa Constitution limits the amount of debt outstanding at any 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 2010 Actual
Valuation currently applicable to the fiscal year 2011-12,is as follows:
2010 Gross Actual Valuation of Property $3,458,257,666
Less: Military Exemption (2,797,446)
Subtotal $3,455,460,220
Legal Debt Limit of 5% 0.05
Legal Debt Limit $172,773,011
Less: G.O. Debt Subject to Debt Limit (52,860,000)*
Net Debt Limit $118,913,011
DIRECT DEBT
General Obligation Debt Paid by Taxes(Includes the Bonds)
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturity As of 10/25/11
10/04 6,030,000 Capital Improvement Plan 6/14 $1,995,000
9/05 5,495,000 Street Improvements,Fire Equipment and 6/17 2,080,000
Refunding Series 1997A
10/06 5,285,000 Street and Storm Sewer Improvements 6/18 3,450,000
11/07A 9,630,000 Street Improvements&Aquatic Center 6/19 7,240,000
10/08A 8,355,000 Street Improvements&Aquatic Center 6/20 6,745,000
4/09A 6,995,000 Refunding Series 1998A, 1999,2000,2001A 6/13 2,580,000
and 2001 B
10/09B 11,165,000 Capital Improvement Projects 6/21 9,805,000
9/10A 6,690,000 Capital Improvement Projects 6/22 6,310,000
5111A 5,980,000 Refunding Series 2002A,2002B and 2003 6/21 5,980,000
11/1113 6,675,000* Corporate Purpose Improvements 6/21 6,675,000
Total G.O.Debt Subject to Debt Limit $52,860,000
*Preliminary;subject to change.
9
Annual Fiscal Year Debt Service Payments
G. O.Debt Paid by Property Taxes(Includes the Bonds)
Outstanding Debt The Bonds* Total Outstanding
Fiscal Principal Principal Principal
Year Principal and Interest Principal and Interest Principal and Interest
2011-12 $8,305,000 $9,970,491 $570,000 $648,421 $8,875,000 $10,618,912
2012-13 6,575,000 7,792,135 505,000 647,888 7,080,000 8,440,023
2013-14 5,755,000 6,782,923 510,000 647,333 6,265,000 7,430,255
2014-15 4,635,000 5,497,923 520,000 651,111 5,155,000 6,149,033
2015-16 4,275,000 4,996,938 525,000 648,987 4,800,000 5,645,924
2016-17 4,425,000 5,010,823 535,000 650,062 4,960,000 5,660,884
2017-18 4,190,000 4,632,003 545,000 649,148 4,735,000 5,281,150
2018-19 3,775,000 4,076,828 560,000 651,177 4,335,000 4,728,004
2019-20 2,825,000 3,000,888 575,000 651,169 3,400,000 3,652,056
2020-21 2,020,000 2,099,625 590,000 649,551 2,610,000 2,749,176
2021-22 660,000 676,500 610,000 651,497 1,270,000 1,327,997
2022-23 630,000 651,672 630,000 651,672
Total $47,440,000 $6,675,000 $54,115,000
*Preliminary;subject to change.
OTHER DEBT
The City has outstanding revenue debt payable from hospital revenues as follows:
Principal
Date Original Final Outstanding
of Issue Amount Pulse Maturity As of 10/25/11
6/03 $29,385,000 Mary Greeley Medical Center 6/22 $19,065,000
OVERLAPPING DEBT
City's
1/1/2010 Valuation Within Percent Proportionate
Taxing District Taxable Valuation the City Applicable G.O. Debt Share
Story County $3,557,499,321 $2,169,695,813 60.99% $8,980,000 $5,476,902
Ames CSD 2,049,144,652 2,007,726,300 97.98% 1,120,000 1,097,376
Gilbert CSD 333,895,063 159,225,496 47.69% 17,440,000 8,317,136
Nevada CSD 354,615,718 447,617 0.13% 3,448,820 4,483
United CSD 224,617,380 2,296,400 1.02% 49,030 500
DMACC 36,478,169,487 2,169,965,813 5.95% 78,605,000 4,676,998
City's share of total overlapping debt: $19,573,395
Taxable Valuation includes Ag.Land&Buildings,all Utilities and Taxable TIF Increment.
10
DEBT RATIOS
Debt/Actual
Market Value Debt/58,965
G.O. Debt ($3,455,460,220) 1) Population 2)
Total General Obligation Debt $52,860,000* 1.53% $896.46
City's Share of Overlapping Debt $19,573,395 0.57% $331.95
')Based on the City's 2010 Actual Valuation;includes Ag.Land&Buildings,all Utilities and Taxable TIF Increment.
2)Based on the City's 2010 U.S.Census.
*Preliminary;subject to change.
LEVIES AND TAX COLLECTIONS
Collected During Percent
Fiscal Year Levy Collection Year Collected
2007/08 $20,175,738 $20,147,655 99.86%
2008/09 21,480,892 21,317,823 99.24%
2009/10 21,960,516 21,780,828 99.18%
2010/11 23,000,700 22,837,227 99.29%
2011/12 23,453,005 --------In Process of Collection--------
Collectionsinclude delinquent taxes from all prior years. Taxes in Iowa are delinquent each October 1 and April 1 and
a late payment penalty of 1%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.
11
TAX RATES
FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12
$/$1,000 $/$1,000 $/$1,000 $/$1,000 $/$1,000
Story County 5.53799 5.59701 5.81536 5.64515 5.49074
Story County Hospital 0.42063 0.42050 0.42050 0.42050 0.42050
County Ag. Extension 0.09118 0.08904 0.09053 0.08609 0.08340
City of Ames 10.43585 11.06239 10.85819 10.84579 10.84365
City Assessor 0.37197 0.41661 0.34391 0.41785 0.53075
Ames Comm. School District 13.27297 13.62557 13.58764 14.65339 14.51772
Gilbert Comm. School District 19.98071 19.79131 19.83048 19.99688 19.98282
Nevada Comm. School District 17.75500 16.43213 16.45943 17.03265 15.61389
United Comm. School District 10.52057 10.06277 9.68981 10.93599 11.72302
Des Moines Area Comm. College 0.60276 0.56386 0.56778 0.56008 0.59018
State of Iowa 0.00350 0.00350 0.00300 0.00340 0.00320
Total Tax Rate:
Ames CSD Resident 30.73685 31.77848 31.68691 32.63225 32.30014
Gilbert CSD Resident 37.44459 37.94422 37.92975 37.97574 37.76524
Nevada CSD Resident 35.21888 34.58504 34.55870 35.01151 33.39631
United CSD Resident 27.98445 28.21568 27.78908 28.91485 29.50544
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 I). 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 $6.00441 for
FY 2011/12, and the City has levied no emergency levy. The City has certified special purpose levies outside of the
above described levy limits as follows: $0.67239 for police and fire retirement and $0.63491 for the operation and
maintenance of a public transit system. Debt service levies are not limited.
12
GENERAL FUND BUDGETS-ACCRUAL BASIS
2010/11 Final 2010/I1 Actual �� 2011/12 Adopted
Revenues:
Property taxes $14,345,220 $14,171,845 $14,361,388
Other City taxes 1,372,811 1,478,217 1,374,689
Licenses and permits 1,100,449 1,184,148 1,160,439
Use of money and property 388,266 375,746 443,894
Intergovernmental 391,101 388,162 403,466
Charges for fees and services 3,965,838 4,014,556 4,186,984
Miscellaneous 309,637 274,229 311,912
Transfers in 6,827,843 6,807,019 7,338,802
Total revenues 28,701,165 28,693,922 29,581,574
Expenditures:
Public safety $14,091,598 $13,806,517 $14,831,212
Public works 1,743,182 1,512,653 1,674,139
Health and social services 176,089 176,428 134,163
Culture and recreation 6,565,612 6,343,527 6,707,238
Community&economic development 819,752 134,822 830,187
General government 2,490,502 2,888,391 2,211,165
Capital projects 600,000
Transfers out 3,104,584 3,194,364 3,182,470
Total expenditures 29,591,319 28,056,702 29,570,574
Excess(deficiency) of revenues over
(under)expenditures (890,154) 637,220 11,000
Fund balance at beginning of year 8,024,990 8,024,990 7,132,471
Fund balance at end of year $7,134,836 $8,662,210 $7,143,471
i)Unaudited actual results.
FUNDS ON HAND (CASH AND INVESTMENTS AS OF JUNE 30,2011)
Governmental
General Fund $6,733,065
Debt Service Fund 1,995,383
Capital Projects Fund 9,901,534
Other Governmental Funds 10,998,075
Business-type
Mary Greeley Medical Center $132,807,117
Electric Utility 37,209,358
Sewer Utility 5,350,645
Water Utility 7,623,550
Other Enterprise Funds 7,816,489
Internal Service Funds 13,894,464
Total all funds $234,329,680
13
THE CITY
CITY GOVERNMENT
The City of Ames, Iowa(the "City") is governed under and operates under 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 AND PENSIONS
The City has 1,290 full-time employees of which 489 are governmental employees and 801 are employees of the Mary
Greeley Medical Center. The City also has 936 part-time employees(including seasonal employees)of which 413 are
governmental employees and 523 are employees of the Mary Greeley Medical Center. Included in the City's full-time
employees are 52 sworn police officers and 53 firefighters.
The City contributes to the Iowa Public Employees Retirement System ("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: $4,807,938 in FY 2008-09, $4,965,440 in FY 2009-10,and$5,240,892 in FY 2010-11.
The City also contributes to the Municipal Fire and Police Retirement System of Iowa ("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 is 17%of earnable compensation. The City is current in its obligation to
MFPRSI, which has been as follows: $1,095,325 in FY 2008-09, $1,024,282 in FY 2009-10, and $1,253,345 in FY
2010-11.
UNION CONTRACTS
City employees are represented by the following five bargaining units:
Bargaining Unit Contract Expiration Date
International Association of Firefighters June 30,2012
Public,Professional and Maintenance Employees June 30,2012
International Brotherhood of Electrical Workers June 30,2012
International Union of Operating Engineers(Local 234C) June 30,2012
International Union of Operating Engineers(Local 234D) June 30,2012
14
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 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 minimum 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, 2008 and July 1, 2009 actuarial studies, it has been estimated that the City's
annual Other Post Employment Benefits ("OPEB") cost is $610,831 for year ended June 30, 2010. The percentage of
annual OPEB cost contributed is 25.9%resulting in a net OPEB obligation of$2,277,563.
INSURANCE
The City's insurance coverage is as follows:
Type of Insurance All Limits
General Liability $12,000,000
Auto Liability $12,000,000
Wrongful Acts $12,000,000
Excess (over all other coverage except Iowa liquor liability) $12,000,000
Law Enforcement $12,000,000
Public Official $12,000,000
Employee Benefit $1,000,000
Medical Malpractice $12,000,000
Underinsured Motorist $1,000,000
Uninsured Motorist $1,000,000
Commercial Property
Commercial Property&Boiler and Machinery $476,000,000
Terrorism—TRIA
Airport Liability $3,000,000
15
GENERAL INFORMATION
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 in the state. 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 2010 population of 58,965, is known for its excellent quality of life
which includes a relatively crime-free environment, an extensive park system, superior cultural/recreations 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 community.
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 '1
Iowa State University Higher Education 14,020
Mary Greeley Medical Center Health Care 1,347
Iowa Department of Transportation Public Transportation 1,012
McFarland Clinic,P.C. Health Care 886
City of Ames Municipal Government 902
Hy-Vee Food Stores Grocery 738
Sauer-Danfoss Company Hydro-Transmissions 650
Ames Community School District Education 650
Ames Laboratories Research 477
Wal-Mart Retail 440
3M Company Manufacturing 430
AG. Research Research 400
National Animal Disease Center USDA Research 250
Hach Company Water Analysis Equipment 287
National Veterinary Service Lab Veterinary Research 243
J.C.Penney Retail 190
Ball Corp/AMCOR Ridge Plastics Plastics Manufacturing 180
Center for Vet Bio Research 168
Target Stores Retail 160
Barilla Food Distribution 159
Sam's Club Retail 113
PRC of Ames Research 77 21
K-Mart Retail 60
Stephen Media Iowa Print Journalism 57 3�
Cub Foods Grocery 04)
')Includes full-time,part-time and seasonal employees.
2)PRC of Ames was formerly known as Access Direct Telemarketing.
3)Iowa News Papers,Inc.no longer owns the Ames Tribune newspaper. The newspaper is now published by Stephen Media Iowa.
4)Cubs Foods closed in November 2010. Dahl's has announced intent to hire prior Cub Foods employees.
Source:The City,LocationOne Information System website,and phone interviews conducted in March 2011.
16
BUILDING PERMITS
Permits for the City are reported on a calendar year basis. City officials reported most recently available construction
activity for a portion of the current calendar year, as of June 30, 2011. The figures below include both new
construction and remodeling.
2007 2008 2009 2010 2011
Residential Construction:
Number of units: 492 462 466 487 231
Valuation: $ 37,789,219 $25,656,078 $20,084,857 $22,855,260 $9,790,851
Commercial Construction:
Number of units: 163 175 173 175 116
Valuation: $66,353,738 $61,157,671 $24,655,737 $32,918,202 $39,116,701
Total Permits 655 637 639 662 347
Total Valuations $104,142,957 $86,813,749 $44,740,594 $55,773,462 $48,907,552
U.S. CENSUS DATA
Population Trend
1980 U.S. Census 43,775
1990 U.S. Census 47,198
2000 U.S. Census 50,731
2010 U.S. Census 58,965
Source: U.S.Census Bureau website.
UNEMPLOYMENT RATES
City of Story State of
Ames Counjy Iowa
Annual Averages: 2007 2.5% 2.8% 3.7%
2008 3.0% 3.3% 4.4%
2009 3.9% 4.4% 6.0%
2010 4.1% 4.6% 6.1%
2011(Jan-July) 4.3% 4.8% 6.0%
Source: Iowa Workforce Development Center website.
17
EDUCATION
Public education is provided by the Ames Community School District, with a certified enrollment for the 2010-11
school year of 4,280. 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 (the "University") 2010 fall term enrollment was 28,682. The University is the City's
largest employer with faculty and staff totaling approximately 14,020, 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 Ames, Iowa and Ames Community
Bank, Ames, Iowa. In addition, the City is served by branch offices of Bank of the West, Bankers Trust Company,
CoBank ACB, Exchange State Bank, Great Western, First American Bank, First Federal Savings Bank 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 June 301h for each year:
Year First National Bank Ames Community Bankn
2007 $349,319,000 $136,487,000
2008 366,688,000 132,473,000
2009 365,058,000 279,468,000
2010 393,145,000 350,648,000
2011 427,328,000 356,457,000
Ames Community Bank was acquired by City State Bank in January 2009.
Source: Federal Deposit Insurance Corporation(FDIC)website.
FINANCIAL STATEMENTS
The City's June 30, 2010 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.
18
APPENDIX A
FORM OF LEGAL OPINION
APPENDIX B
JUNE 30, 2010 COMPREHENSIVE ANNUAL FINANCIAL REPORT
APPENDIX C
FORM OF CONTINUING DISCLOSURE CERTIFICATE
OFFICIAL BID FORM
To: City Council of Sale Date: October 25,2011
City of Ames, Iowa 11:00 AM, CT
RE: $6,675,000* General Obligation Corporate Purpose Bonds, Series 2011B (the"Bonds")
For all or none of the above Bonds, in accordance with the TERMS OF OFFERING, we will pay you
$ (not less than $6,628,275) plus accrued interest to date of delivery for fully
registered bonds bearing interest rates and maturing in the stated years as follows:
Coupon Maturity Coupon Maturity
2012 2018
2013 2019
2014 2020
2015 2021
2016 2022
2017 2023
*Preliminary; subject to change. The City reserves the right to increase or 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.
In making this offer we accept all of the terms and conditions of the TERMS OF OFFERING published in the Preliminary
Official Statement dated September _, 2011. 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 part 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: $
TRUE INTEREST COST: % (Based on dated date of November 21,2011)
Account Manager: By:
Account Members:
The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Ames, Iowa this 251h day of
October, 2011.
Attest: By:
Title: Title: