HomeMy WebLinkAboutA013 - Preliminary Official Statement dated April 4, 2011 tt�,
PRELIMINARY OFFICIAL STATEMENT DATED APRIL 4,2011 I J
Refunding Issue Rating: Application Made
cIn 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 and 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
n purposes)and the City will NOT designate the Bonds as "qualified tax exempt obligations". See "TAX EXEMPTION AND RELATED CONSIDERATIONS"
herein for more information.
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CITY OF AMES, IOWA
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$6,105,000* General Obligation Refunding Bonds, Series 2011A
c BIDS RECEIVED: Tuesday,April 12,2011, 1:00 o'clock P.M.,Central Time
N AWARD: Tuesday,April 12,2011,7:00 o'clock P.M.,Central Time
c .
Dated: Date of Delivery(May 17,2011) Minimum Bid: $6,068,370
Y N, Principal Due: June 1,2012-2021 Good Faith Deposit: Required of Purchaser Only
The $6,105,000* General Obligation Refunding Bonds, Series 2011A (the "Bonds") are being issued pursuant to Division III of
M 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
G Bonds are being issued for the purpose of paying the cost to current refund on June 1,2011 $2,170,000 of the outstanding General
x Obligation Corporate Purpose Bonds, Series 2002A dated May 1',,2002 maturing June 1, 2012 through 2021 (the "Series 2002A
o Bonds"); $1,670,000 of the outstanding General Obligation-Corporate Purpose Bonds,'Series 2002B dated October 15, 2002
y R maturing June 1, 2012 through 2014(the "Series 2002B Bonds");and$2,180,000 of the outstanding General Obligation Corporate
Purpose Bonds, Series 2003 dated September 1, 2003 maturing Jiine il,2012 through 2015 (the"Series 2003 Bonds")(collectively
the "Refunded Bonds"). 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 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.,
8 as nominee of The Depository Trust Company "DTC" DTC will act as securities depository for the Bonds. Individual purchases
o i; p rY p y.( )• p ry
R 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
N December 1,2011 and thereafter on each June 1 and December 1 to DTC,which will in turn remit such principal and interest to its
a participants for subsequent disbursements to the-,bepeficial owners of the Bonds as described herein. Interest and principal shall be
r paid to the registered'holder of a bond as shown on the records of ownership maintained by the registrar as close of business on the
,i 15`h day of the month-preceding Such interest payment date(the"Record Date").
" The Bonds will mature June 1 in the years and amounts as follows:
v N
„ Year Amount*, Year Amount*
b 2012 $1,305,000 2017 $230,000
s
a N 013 1,310,000 2018 235,000
� s 2014 �1,310,000 2019 240,000
C 2015 745,000 2020 250,000
w 2016 225000 2021 255,000
.o PRINCIPAL
E ADJUSTMENT: The City reserves the right to decrease the aggregate principal amount of the Bonds. Such change will be in
'r increments of $5,000 and may be made in any of the maturities. The purchase price will be adjusted
.o proportionately to reflect any change in issue size.
REDEMPTION: Bonds due on or after June 1,2019 will be subject to call for prior redemption on June 1,2018 or on any date
u Y thereafter upon terms of par plus accrued interest to date of call.
r V G
The Bonds are offered, subject to prior sale, withdrawal or modification, when, as and if issued and subject to the unqualified
7— approving legal opinion of Dorsey & WhitneyLP Bond Counsel of Des Moines Iowa to be furnished upon delivery of the
.; pP g g p Y Y P rY
Bonds. It is expected that the Bonds will be available for delivery on or about May 17,2011. This Preliminary Official Statement
will be further supplemented by offering prices,interest rates,aggregate principal amount,principal amount per maturity,anticipated
deliver date and underwriter,together with an other information required b law, and shall constitute a "Final Official Statement"
c-, Y g Y q Y
of the City with respect to the Bonds,as defined in Rule 15c2-12.
s 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 PreliminaryOfficial Statement has been distributed to City staff as well as to prospective bidders for
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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 Offcial,.Statement This Preliminary Official Statement
does not constitute any offer to sell or the'solicitation o,tan offe 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 no' 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 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
Authorityand Purpose....................................................................................................................................................I
Optional Redemption;Interest on Bonds;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................................................ ... .............................................................5
Rating.............................................................................................. ........ .........................................................5
FinancialAdvisor............................................................................ ........: .'..............................................................6
ContinuingDisclosure.................................................................... .......`. ................................................................6
Certification........................................................................ 6
CITY PROPERTY VALUATIONS.................................... ......... .............. ... ...:................................................7
IowaProperty Valuations....................................... ........ ......... ......................... ........>...........................................7
1/1/2009 Valuations(Taxes payable July 1,2010 through June 30,2011)............. 7
2009 Gross Taxable Valuation by Class of Property.................................................................... ..............................7
Trendof Valuations............................................................ ............, ....'..... .................. ...........................8
LargerTaxpayers ............................' . <.. . ..:..... .................. .......`........ ...................8
Legislation.............................................................. ................... ...........................................................................8
CITYINDEBTEDNESS.............................. ..... .. ....... .........................................................9
DebtLimit.................................................. ..........................................................9
DirectDebt......................... ............ .a, ..................................... .................................................9
OtherDebt......................... ....................... ......... ......I. ........ . . ..........1... ... ..................................................10
OverlappingDebt............... ........................... ........ . ,.... . . .. .....!...... . .......................................................11
DebtRatios........................ ......... ........ ......... ................... ........................................................11
Levies and Tax Collections ......... I.............,.':................. ....,,.................................................................................11
TaxRates.. ... ......... .............................................12
Levy Limits ... . . 12
General Fund Budgets-A&crual Basis . ................... ..........................................................................13
Funds on Hand Cash Basis(Cash and Investments as of February 28,2011)............................................................13
THECITY.... .. .... ........ .... ................................................................................................14
CityGovernment............... ... .................................................................................14
Employees;Pensions..................... .......... .......... ..................................................................................................14
UnionContracts................. .......... .. .....',. ..............................................................................................................14
Other Post-Employment Benefits;Insurance ...............................................................................................................15
GENERAL INFORMATION..................:. ...............................................................................................................16
Locationand Transportation........................................................................................................................................16
LargerEmployers............................ ............................................................................................................................16
BuildingPermits...........................................................................................................................................................17
U.S. Census Data..........................................................................................................................................................17
UnemploymentRates....................................................................................................................................................17
Education......................................................................................................................................................................17
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 FORM
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— 1"Ward January 04,2010 December 31,2013
Jami Larson Council Member—2nd Ward November14,2006 December 31,2011
Jeremy Davis Council Member—3`d Ward January 04,2010 December 31,2013
Riad Mahayni Council Member—4 b Ward January l4,'2003 December 31,2011
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 Kam,Director of Electric Utility
City Attorney
Doug Marek
Ames,Iowa
Bond'Counsel
�Dorsey&'Whitney LLP
Des Moines,Iowa
F inane ial 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 REFUNDING BONDS, SERIES 2011A (the "Bonds"), in the principal amount of
$6,105,000* to be dated May 17, 2011 in the denomination of$5,000 or multiples thereof, and to mature on June 1 as
follows:
Year Amount* Year` Amount*
2012 $1,305,000 2017 $230,000
2013 1,310,000 201'8,' 235,000
2014 1,310,000 2019, 240,000
2015 745,000 2020 250,000
2016 225,000 2021 255,000
* 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 S5;000 and maybe 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, 2019 will be subject to call for prior redemption on June 1, 2018 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 December 1, 2011nand semiannually on the I" day of June and December
thereafter. Interest and principal shall be paid to the registered bolder of a Bond as shown on the records of ownership
maintained by the'regi"strar as of the close of business on the 15`h day of the month 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$61,050 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 3:00 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.
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
i
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 $6,068,370,plus accrued interest,
and shall specify the rate or rates of interest in conformity to the limitations as set forth 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'4Tthe 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:
1. Each annual maturity must bear aP single,rate of interest from the dated date of the Bonds to the date of
maturity.
2. Rates ofinterest 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
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
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.
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.
ii
Electronic Internet Bidding: Electronic internet bids will be received at the office of the Director of Finance, City
Hall, 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'o€"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 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. 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,sikty 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.
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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 supplemdInted 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-tbat term is defined in Rule 15c2-12 of
the Securities and Exchange Commission (the 'Rule"). B 4warding the Bonds„to any underwriter or underwriting
syndicate submitting an OFFICIAL BID FORM thereforg,'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 o£suchRule. The City shall heat 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 Underv3riter,of the Final Official Statement.
CONTINUIN�ar DISCLOSURE
ISc2-12(b)(5), the City will undertake, pursuant to the
In order to assist bidders in complying with SEC Rule
resolutions for the Bonds and Continuigg Disclosure Certificates, to provide certain annual financial information and
notices of certain events:„Tlie,details of these undertakings are,set forth in APPENDIX C of the Preliminary Official
Statement. The,City will deliverjhe 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,thc 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
$6,105,000*
City of Ames,Iowa
General Obligation Refunding Bonds, Series 2011A
Bonds Dated: May 17,2011
Interest Due: December 1,2011 and each June 1 and December 1 to maturity
Principal Due: June 1,2012-2021
Cumulative
Year Principal * BondYears,'k Bond Years
2012 $1,305,000 h,355.75 1,355.75
2013 1,310,000 2,670.94 4,026.69
2014 1,310,000 3,980.94 8,007.64
2015 745,000 3,008.97 11,016.61
2016 225,000 " 1)33.75 12,150.36
2017 230,000 1;3UN 13,539.31
14 2018 235,000 1,654 " a 15,193.44
2019 240,000 1,929.33 17,122.78
2020 250,000 ""'' 2,259.72 19,382.50
2021 255,000 2,559.92 21,942.42
Average Maturity(dated date): 3.594 Years
*Preli ninary;,subject to,chpgeN
v
OFFICIAL STATEMENT
CITY OF AMES,IOWA
$6,105,000*General Obligation Refunding Bonds, Series 2011A
INTRODUCTION
This Preliminary Official Statement contains information relating to the City of Ames, Iowa (the "City") and its
issuance of$6,105,000* General Obligation Refunding Bonds, Series 2011A(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, 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 Division III of Chapter 384 ofthe'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 to current refund on
June 1, 2011 $2,170,000 of the outstanding General Obligation=Corporate Purpose Bonds, Series 2002A dated May 1,
2002 maturing June 1, 2012 through 2021 (the "Series 20Q? A Bonds"); $1,670s000 of the outstanding General
Obligation Corporate Purpose Bonds, Series 2002B dated October 15, 2002 maturing June 1, 2012 through 2014 (the
"Series 2002B Bonds"); and $2,180,000 of the outstanding General Obligation Corporate Purpose Bonds, Series 2003
dated September 1, 2003 maturing June 1, 2012 through 2015 (the."Series 2003 Bonds") (collectively the "Refunded
Bonds"). 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 d1he Code of 1owa, The Bonds are issued in evidence of the
City's obligations under the Loan Agreement.
Maturiti6s,to, Principal
Name of Issue to be Refunded Call Date Call Price ,F beRefunded Amount Cou on
Series 2002A Bonds 6/6f/2011 fbv°d 6/l/1612 $175,000 4.375%
6/1/2013 185,000 4.500%
6/1/2014 190,000 4.600%
6/l/2015 200,000 4.700%
ffi 6/1/2016 210,000 4.800%
6/1/2017 220,000 5.000%
6/1/2018 230,000 5.000%
6/1/2019 240,000 5.000%
6/l/2020 255,000 5.100%
6/1/2021 265,000 5.125%
$2,170,000
Maturities to Principal
Name of Issue to be Refunded Call Date Call Price be Refunded Amount Coupon
Series 2002B Bonds 6/01/2011 100% 6/1/2012 $535,000 3.300%
6/1/2013 555,000 3.450%
6/1/2014 580,000 3.600%
$1,670,000
1
Maturities to Principal
Name of Issue to be Refunded Call Date Call Price be Refunded Amount Coupon
Series 2003 Bonds 6/01/2011 100% 6/1/2012 $545,000 3.350%
6/1/2013 545,000 3.500%
6/1/2014 545,000 3,600%
6/1/2015 545,000 3,700%
$2,180,000
The estimated Sources and Uses of the Bonds are as follows:
Sources of Funds
Par Amount of Bonds $6,105,000.00*
Uses of Funds
Funds for Redemption of the Refunded Bonds ,$6,020,000.00
Underwriter's Discount 36,630.00
Costs of Issuance and Contingency 48,370.00
Total Uses $6,105,000.00*
*Preliminary;subject to change.
OPTIONAL REDEMP
TION
Bonds due on or after June 1, 2019 will be sub,j' tact<call for prior redemption on June 1, 2018 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 December 1, 2011 and-semiannually on the I" day of June and December
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 preceding such interest payment
date (the "Record Date"), interest wilt"be cortili'ed on,the basis of a 360-day year of twelve 30-day months and will
be rounded pursuant to rules,ofthe MSRB.'
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 paymentW 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.
2
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 . each actual purchaser of each Security (the
"Beneficial Owner")is in turn tosbe recorded on the Direct and,lridirectParticipants' records. Beneficial Owners will
not receive written confirmation from DTC of heir 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-en ysystem for the Securities is discontinued.
To facilitate subsequeint,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 benefictal;.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.
3
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 representatiye 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 Remgketirig Agent. The requirement for physical
delivery of Securities in connection with an optiorial'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 seiviccs, as depository w tli respect,jo 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.
"wz
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 aafd DTC's book-entry system has been obtained from sources that the
City believes to be reiiable,but the City takes no responsibility for the accuracy thereof.
FUTURE FINANCING
The City anticipates issuing approximately $6800,000 General Obligation Bonds sometime in late summer or early
fall.
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.
4
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"AUTHQIITY AND PURPOSE", "PAYMENT OF
AND SECURITY FOR THE BONDS", "TAX EXEMPTION AND", RELATED CONSIDERATIONS" and
"CONTINUING DISCLOSURE" insofar as such statements cgnntained under such captions purport to summarize
certain provisions of the Internal Revenue Code of 1986, the Blinds 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 Counsef will state that under present laws and rulings,
interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax
preference for purposes of the federal alternative°minimum tax imposed,on individuals and corporations under the
Internal Revenue Code of 1986 (the "Code"), but 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 b,satisfiedtsubsequent t6 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'ofinterest on the,Bonds in gross income for federal income tax purposes to
be retroactive to,,the=date of issuance of then 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, corporatipns subject to et 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`o other federal tax consequences to owners of the Bonds. Prospective
purchasers of such bonds should consult with their tax advisors as to such matters.
Non Bank Qualification - In the resolutions authorizing the issuance of the Bonds, the City will NOT designate the
Bonds as"qualified tax exempt obligations"within the meaning of Section 265(b)(3)of the Code.
5
RATING
The City has requested a rating 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.
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 bythe 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 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 etitities in respect of which continuing disclosure must
be made. The information to be provided on an annual"basis,the events as t6,iWch notice is to be given, if material,
and the other provisions of the Disclosure Covenants, including terminalioa, amendment and remedies, are set forth in
the FORM OF CONTINUING ITI CLOSdkE,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 bro ir..or dealer is to`c sider 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 Discl6` re 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 f this Preliminary Official Statement for use in connection with the initial
sale of the Bonds. I have reviewed the:4*nformation 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$6,105,000* General Obligation Refunding Bonds, Series 2011A.
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 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
g
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 30,20 I)
Taxable Value
100%Actual Value.. Mith 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 exemption 12,849,302) (2,849,302)
Net valuation $3,41`7,263,2il $2,120,318,721
Taxed separately
Ag. Land&Building $2,097,330 x $1,387,447
Gas&Electric Utilities $14,337,297 $5,856,162
Does not include$7,376�6rchool TIF in A,g''Li.
.. A
2009 GROSS TAXABLE VALUATION BY CLASS OF'PROPERTY')
`fixable 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 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
l/1/2010 Valuations are now available from the State of Iowa and become effective July 1,2011.
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
Taxpave l/l/2009
r Type of PropeM/Business Taxable Valuation
Barilla America Inc. Industrial $41; 6%000
North Grand Mall Partners LLC Commercial, 24,40i,600
Wal-Mart Stores,Inc Store 4256-00 Commercial",, 22,468,000
Cycloneball LLC ,Industrial 17,277,000
Clinic Building Company Inc. Commercial 15,981,000
Midwest Centers Commercial 13,720,000
Susa Holding of Story County Inc. Industrial 12,743,000
Campus Investors IS LLC Commercial," - 11,022,000
Ball Plastic Container Corp. Industrial 10,024,000
Chelan Daybreak LLC Commercial 9,469,900
LEGISLATION
From time to tithe; j6gislative� fgposals' e,pendmg i '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 can 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 2009 Actual
Valuation currently applicable to the fiscal year 2010-11,is as follows:
2009 Gross Actual Valuation of Property $3,436,554,586
Less: Military Exemption (2,849,302)
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 (53,510,000)*
Net Debt Limit $118,175,264
DIRECT DEBT
General Obligation Debt Paid by Taxes(Includes the Bonds)
Principal
Date Original Final E Outstanding
of Issue Amount Purpose � � Maturity As of 04/12/11
5/02A $3,475,000 Capital Improvement'Projects 6/11 $170,000
10/02B 5,885,000 Capital Improvement Plan 6/11 515,000 2)
9/03 6,555,000 Capital4niprovement Projects 6/11 545'000 3)
10/04 6,030,000 Capiraf Imp rovement 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
11/07A 9,630,000` Street Improvements&Aquatic Center 6/19 7,985,000
10/08A 8,3 5 000 � "Street Improv�Inents&Atluatic Center 6/20 7,370,000
4/09A 6;995,000 Refunding Series 1998A, 1999,2000,2001A 6/13 4,605,000
and; 9,,QIB
10/09B 11,165 000 Capital Improvemenf;Projects 6/21 10,665,000
9/10A 6,690,00(�,. Capital Improvement Priijects 6/22 6,690,000
5111 A 6,105,000*' Refunding Series 2002A,2002B and 2003 6/21 6,105,000 *
Total G.O.Debt Subject to Debt Limit $53,510,000 *
The 2012 through 2021 maturities are being fefunded by the Bonds on June 1,2011.
2)The 2012 through 2014 maturities are being refunded by the Bonds on June 1,2011.
3)The 2012 through 2015 maturities are being refunded by the Bonds on June 1,2011.
*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*
2010-11 $7,200,000 $8,096,860 $7,200,000 $8,096,860
2011-12 5,790,000 7,079,335 $1,305,000 $1,426,402 7,095,000 8,505,737
2012-13 5,295,000 6,406,360 1,310,000 1,412,764 6,605,000 7,819,124
2013-14 4,465,000 5,412,748 1,310,000 1,394,293 5,775,000 6,807,041
2014-15 3,900,000 4,708,548 745,000 806,237 4,645,000 5,514,785
2015-16 4,050,000 4,732,263 225,000 269,772 4,275,000 5,002,035
2016-17 4,195,000 4,745,648 230,000 269,237- ' °4,425,000 5,014,885
2017-18 3,960,000 4,372,578 235,000 267,958 4,195,000 4,640,536
2018-19 3,540,000 3,818,440 240,000 265,8$S'., .-� 3,780,000 4,084,325
2019-20 2,580,000 2,739,550 250,000 268,085 2,830,000 3,007,635
2020-21 1,770,000 1,841,250 255,000 264,410 2,025,000 2,105,660
2021-22 660,000 676,500 66,0000 676,500
Total $47,405,000 $6,105,000* $53,510006*
*Preliminary;subject to change.
OTHER DEBT
The City has outstanding revenue debt-payable from hospital revenges as follows:
Principal
Date Original Final Outstanding
of Issue Amount Pure Maturi1y As of 04/12/11
6/03 $29,385,000' Maly Greoley,Medical Center 6/22 $20,405,000
10
OVERLAPPING DEBT
City's
1/1/2009 Percent Proportionate
Taxing District Taxable Valuation 's 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 312,477,018 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 6.05% 88,800,000 5,372,400
City's share of total overlapping debt: $17,135,799
Taxable Valuation includes Ag.Land&Buildings,all Utilities and Taxable TIF Increment.
DEBT RATIOS
Debt/Actual
Market Value Debt/58,965
G.O.Debt ($3,433,705,,,28,4) Population 2)
Total General Obligation Debt $53,510,000 , _ .,,, 1.56% °'. $907.49
City's Share of Overlapping Debt1,7,135,799 0.50% $291.16
Based on the City's 2009 Actual Valuation;includes Ag:Larid&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 Lev Collection Year Collected
2006/07 $19,443,653 '119,290,94o- 99.21%
2007/08 ,20,175,738 20,147,655 99.86%
2008/09 21,480,892 21,31,7,823 99.24%
2009/10 21,960,516 21,7890,828 99.18%
2010/11 23,000,700 ----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 pf 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 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 0.563'86 0.56778 0.56008
State of Iowa 0.00400 0.00350 400350 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 37.444m59 37.94422 37.92975 37.97574
Nevada CSD Resident 35.16791 35.24888 34.58504 34.55870 35.01151
United CSD Resident 28.81456 27.98445 28.21568 21.18908 28.91485
LEVY LIMITS
A city's general fund tax levy is limited to $8.10 per$1;000'ofta able 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 authorizatibri by a special levy election. Further, there are
limited special purpose levies, which may'bo-,certified`lxutsi&of the above-described levy limits (Code of Iowa,
Section 384.12). The amount of-_
he City''s'general fund levy subject to the $8.10 limitation is $6.14501 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 .40.5111Z'for.police and fire retirement and $0.61862 for the operation and
maintenance of a publie'transt system. I7ebt:service levies are not limited.
12
GENERAL FUND BUDGETS-ACCRUAL BASIS
2009/10 Actual 2010/11 Adopted 2010/11 Amended
Revenues:
Property taxes $ 13,117,127 $ 14,345,220 $ 14,345,220
Other City taxes 1,208,792 1,529,611 1,372,811
Licenses and permits 1,068,920 937,614 1,074,014
Use of money and property 439,645 493,140 387,250
Intergovernmental 374,674 400,709 394,779
Charges for fees and services 3,512,673 3,807,859 3,960,852
Miscellaneous 425,061 264,081 294,206
Transfers in 6,498,467 6,782,525 6,827,843
Total revenues 26,645,359 28,560,7°59 28,656,975
Expenditures:
Public safety 13,047,308 13,01,077 14,077,647
Public works 1,391,958 1,638,789 1,735,987
Health and social services 150,938 152,348 154,340
Culture and recreation 6,328,033 6,538,007 6,526,791
Communt y and economic development 650,384 797,728 816,304
General government 2,194,799 2,208,540 2,533,841
Capital projects - - 600,000
Transfers out 2,570,,702 = 3,270,270 3,104,584
Total expenditures 26,334J22„ 28,542,759 29,549,494
Excess (deficiency) of revenues over
(under) expenditures 311,237 18,000„" (892,519)
Fund balance at beginning of year ' , 7,713,753 7,713,753 8,024,990
Fund balance at end of year . $ 8,024,990 ,$ 7,731,753 $ 7,132,471
FUNDS ON HAND(CASH AND INVESTMENTS AS OF FEBRUARY 28,2011)
Governmental
General Fund $4,430,246
IJesbt Service Fund 6,038,459
Capital Projects fund 11,054,589
Other Govprntltental Funds 12,322,019
Business-type
Mary Greeley Medical Center $122,068,867
Electric Utility 39,032,814
Sewer Utility 4,841,112
Water Utility 7,237,296
Other Enterprise Funds 7,083,468
Internal Service Funds 13,903,513
Total all funds $228,012,383
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; PENSIONS
The City has 1,312 full-time employees of which 488 are governmental empl6yees and 824 are employees of the Mary
Greeley Medical Center and 892 part-time employees (including seasonal employees) of which 369 are governmental
employees and 523 are employees of the Mary Greeley Medical Center. , naluded in the City's full-time employees are
50 sworn police officers and 54 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.�an&Police Retirement System of Iowa (MFPRSI), a benefit plan
administered by a Board of Trustees. MFPRSI provides'x6tirement, 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 19.90% of earhable compensation. The City is current in its
obligation to MFPRSI, which has been as follows: $1,41219.714ti"FY 2007/08 $1,095,325 in FY 2008-09 and
1 24 2 2 in FY 2009-$ ,0 8 10.
UNION CONTRACTS
City employees are represented by the following five bargaining units:
Bar ag inm .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 cif Operating Engineers(Local 234C) June 30,2011
International Union of Operating Engineers(Local 234D) June 30,2011
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 (the "OPEB") cost is $1,050,185 for year ended June 30, 2010. The
percentage of annual OPEB cost contributed is 27.4%resulting in a net OPEB obligation of$762,210.
INSURANCE
........... .......
The City's insurance coverage is as follows:
Tyne of Insurance Alf Limits
General Liability $6,000,000
Auto Liability $6,000,06Q,.
Wrongful Acts $6,000,006
Excess(over all other coverage except Iowa liquor liability)` $6,000,000
Law Enforcement , $6,000,000
Public Official $6,000,000
Employee Benefit $1,000,000
Medical Malpractice $6,000,000
Underinsured Motorist $1,000,000
Uninsured Motorist a $1,000,000
Commercial Property
Commercial Property&Boil'er And MachiTry $440,000,000
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. 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 Tyne of Business Number of Employees '
Iowa State University Higher Education 14,02(1 a
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 Govarpment 857
Hy-Vee Food Stores Grocery 738
Sauer-Danfoss Company Hydro-Transmissions 650
Ames Community School Distri� Education "' 622
Ames Laboratories Research 477
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
Wal-Mart Retail 240
J.C.Penney Retail 190
Ball Corp/AMCOR Ridge Plastics Plastics Manufacturing 180
Center for Vet Bio Research 168
Target Stores Retail 160
Barilla oa Distribution 159
Sam's Club Retail 113
PRC of Ames Research 77 2�
K-Mart Retail 60
Stephen Media Iowa Print Journalism 57 3)
Cub Foods Grocery 0 4)
')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
City officials reported the following construction activity as of February 28, 2011. Permits for the City are reported on
a calendar year basis. The figures below include both new construction and remodeling.
2007 2008 2009 2010 2011
Residential Construction:
Number of units: 492 462 466 487 46
Valuation: $ 37,789,219 $25,656,078 $20,084,857 $22,855,260 $1,694,290
Commercial Construction:
Number of units: 163 175 173 175 37
Valuation: $66,353,738 $61,157,671 $24,655,737 $32,918,202 $2,615,072
Total Permits 655 637 639 662 83
Total Valuations $104,142,957 $86,813,749 $44,'7 594 $55,773,462 $4,309,362
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, G5
Source: U.S.Census Bureau website.
UNEMPLOYMENT RATES
City,.of , ,,,Story State of
'County Iowa
Annual Averages: 2007 2.5% 2.8% 3.7%
2008, 3.3% 4.4%
2009, � �3,9%,. 4.4% 6.0%
2010 4.1°rfo 4.6% 6.1%
2011 4.2% 4.9% 6.1%
Source: Iowa Workforce Development Center W`elbsite.
EDUCATION
> o.
Public education is provided by the Amy Community School District, with a certified enrollment for the 2010-11
school year of 4,280. The district, with approximately 680 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") 2010 fall term enrollment was 27,945. ISU 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.
17
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. 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 Bank-Iowa, 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 December 31'for each year:
Year First National Bank
2006 $358,077,000
2007 388,924,000;
2008 362,394,090,y
2009 378,778,0d0�,
2010 418,694,000
t�Ames Community Bank was acquired by City State'Barik in January 2009.
Source: Federal Deposit Insurance Corporation(FDIC)website.
FINANCIAL STATEMENTS
The City's June 30,2010 Comprehensive Annual FinanciaFk6port,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
fi information regarding xiancial performance and eopies,of the City's prior Comprehensive Annual Financial Report
may be obtained from Public Financial Management,inc','-'
18
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APPENDIX A .
FORM OF LEGAL OPINION;
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(Form of Bond Counsel Opinion)*
We hereby certify that we have examined certified copies of the proceedings (the
"Proceedings") of the City Council of the City of Ames (the "Issuer"), in Story County, Iowa,
passed preliminary to the issue by the Issuer of its General Obligation Refunding Bonds, Series
2011A (the "Bonds") in the amount of$6,105,000, dated May 17, 2011, in the denomination of
$5,000 each, or any integral multiple thereof, in evidence of the Issuer's obligation under a
certain loan agreement (the "Loan Agreement"), dated as of May 17, 2011. The Bonds mature
on June 1 in each of the respective years and in the principal amounts and bear interest payable
semiannually, commencing December 1,2011, at the respective rates as follows:
Principal Interest Rate Principal Interest Rate
Year Amount Per Annum Year Amount Per Annum
2012 $1,305,000 2017 $230 000
2013 $1,310,000 2018 $235,000
2014 $1,310,000 2019 $240,000
2015 $745,000 2020 $250,000
2016 $225,000 2021 $255,000
but the Bonds maturing in each of the years 2019 to 2021, inclusive, are subject to redemption
prior to maturity on June 1,2018 or any date thereafter,upon terms of par and accrued interest.
Based upon our examination,we are of the opinion, as of the date hereof,that:
1. The Proceedings show lawful authority for such issue under the laws of the State
of Iowa.
2. The Bonds and the Loan Agreement are valid and binding general obligations of
the Issuer.
3. All taxable property within the corporate boundaries of the Issuer is subject to the
levy of taxes to pay the principal of and interest on the Bonds without constitutional or statutory
limitation as to rate or amount.
4. The interest on the Bonds (including any original issue discount properly
allocable to an owner thereof) is excluded from gross income for federal income tax purposes
and is not an item of tax preference for purposes of the federal alternative minimum tax imposed
on individuals and corporations; it should be noted, however, that for the purpose of computing
the alternative minimum tax imposed on corporations (as defined for federal income tax
Page 2
purposes), such interest is taken into account in determining adjusted current earnings. The
opinions set forth in the preceding sentence are subject to the condition that the Issuer comply
with all requirements of the Internal Revenue Code of 1986 (the "Code") that must be satisfied
subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be,
excluded from gross income for federal income tax purposes. The Issuer has covenanted to
comply with each such requirement. Failure to comply with certain of such requirements may
cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to
be retroactive to the date of issuance of the Bonds.
We express no opinion regarding other federal tax consequences arising with respect to
the Bonds.
The rights of the owners of the Bonds and the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights heretofore or hereafter enacted to the extent constitutionally applicable, and their
enforcement may also be subject to the exercise of judicial discretion in appropriate cases.
DORSEY&WHITNEY LLP
*This form of Bond Counsel Opinion is subject to change pending the results of the sale of
Bonds contemplated herein.
APPENDIX B
JUKE 30, 2010 COMPREHENSIVE ANNUAL FINANCIAL REPORT
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APPEND1°C
FORM OF CONTINUING DISCLOSUU,CERTIFIC`A"' E
0
�f
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Ames/419370-45/CDC
[Form of]
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate(the"Disclosure Certificate")is executed and delivered by
the City of Ames, Iowa(the "Issuer"), in connection with the issuance of$6,105,000 General Obligation
Refunding Bonds, Series 2011A(the"Bonds")dated May 17,2011. The Bonds are being issued pursuant
to a resolution of the Issuer approved on April 26, 2011 (the "Resolution"). The Issuer has complied in
all material respects with any undertaking previously entered into by it under the Rule, as hereinafter
defined. The Issuer covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds
and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12.
Section 2. Definitions. In addition to the definitions set forth in the Resolution,which apply
to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the
following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Certificate.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to
vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding
Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any
Bonds for federal income tax purposes.
"Dissemination Agent" shall mean the Dissemination Agent, if any, designated in writing by
the Issuer and which has filed with the Issuer a written acceptance of such designation.
"Holders" shall mean the registered holders of the Bonds, as recorded in the registration books of
the Registrar.
"Listed Events"shall mean any of the events listed in Section 5(a)of this Disclosure Certificate.
"Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities
Rulemaking Board, 1900 Duke Street, Suite 600,Alexandria,VA 22314.
"National Repository" shall mean, at any point in time, a nationally recognized municipal
securities information repository which is then recognized as such by the SEC; as of the date of this
Disclosure Certificate,the sole National Repository is the MSRB, which accepts filings via its Electronic
Municipal Market Access(EMMA) system at http:Hemma.msrb.org.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds required
to comply with the Rule in connection with offering of the Bonds.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as the same may be amended from time to time.
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Ames/419370-45/CDC
"State" shall mean the State of Iowa.
"State Repository" shall mean any public or private repository or entity designated by the State
as a state repository for the purpose of the Rule and recognized as such by the Securities and Exchange
Commission. As of the date of this Certificate,there is no State Repository.
Section 3. Provision of Annual Reports.
(a) As soon as available but not later than 12 months after the end of the Issuer's fiscal
year(presently June 30), commencing with the report for the 2010-2011 fiscal year, the Issuer shall, or
shall cause the Dissemination Agent(if any)to,provide to each National Repository an electronic copy
of its Annual Report which is consistent with the requirements of Section 4 of this Disclosure
Certificate and which Annual Report is in a format and accompanied by such identifying information as
prescribed by the MSRB. The Annual Report may be submitted as a single document or as separate
documents comprising a package, and may cross-reference other information as provided in Section 4
of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be
submitted separately from the balance of the Annual Report and later than the date required above for
the filing of the Annual Report if they are not available by that date. If the Issuer's fiscal year changes,
it shall give notice of such change in the same manner as for a Listed Event under Section 5(c).
(b) If the Issuer has designated a Dissemination Agent, then not later than fifteen (15)
business days prior to the filing date in Section 3(a), the Issuer shall provide the Annual Report to the
Dissemination Agent.
(c) If the Issuer is unable to provide an Annual Report by the date required in subsection
(a), the Issuer shall, or shall cause the Dissemination Agent (if any) to, send a notice to each National
Repository stating (1) that there has been a failure to provide an Annual Report on or before the date
specified in this Disclosure Certificate and (2) the date by which the Issuer will be able to provide the
required report.
(d) The Dissemination Agent (if any) shall file a report with the Issuer certifying that the
Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was
provided and confirming that it was filed with each National Repository.
Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or
incorporate by reference the following:
(a) The audited financial statements of the Issuer for the prior fiscal year, prepared in
accordance with generally accepted accounting principles promulgated by the Financial Accounting
Standards Board as modified in accordance with the governmental accounting standards promulgated
by the Governmental Accounting Standards Board or as otherwise provided under State law, as in
effect from time to time, or, if and to the extent such financial statements have not been prepared in
accordance with generally accepted accounting principles, noting the discrepancies therefrom and the
effect thereof. If the Issuer's audited financial statements are not available by the time the Annual
Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited
financial statements in a format similar to the financial statements contained in the final Official
Statement, and the audited financial statements shall be filed in the same manner as the Annual Report
when they become available.
(b) Tables, schedules or other information contained in the Official Statement for the Bonds,
under the following captions:
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Ames/419370-45/CDC
Direct Debt
Overlapping Debt
Debt Limit
General Fund Budgets
2009 Gross Taxable Valuation by Class of Property
1/l/2009 Valuations
Levies and Tax Collections
Larger Taxpayers
The information to be provided pursuant to Section 4(b) may be unaudited, but is to be
certified as to accuracy and completeness in all material respects by the Issuer's chief financial
officer to the best of his or her knowledge, which certification may be based on the reliability of
information obtained from governmental or other third party sources. Any or all of the items listed
above may be included by specific reference to other documents, including official statements of debt
issues of the Issuer or related public entities, which are available to the public on the MSRB's web
site or are filed with the Securities and Exchange Commission. If the document included by reference
is a final official statement, it must be available from the Municipal Securities Rulemaking Board.
The Issuer shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events
(a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be
given, notice of the occurrence of any of the following events with respect to the Bonds:
(1)Principal and interest payment delinquencies;
(2)Non-payment related defaults, if material;
(3)Unscheduled draws on debt service reserves reflecting financial difficulties;
(4)Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers,or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material
notices or determinations with respect to the tax status of the security, or other material events
affecting the tax status of the security;
(7)Modifications to rights of security holders,if material;
(8)Bond calls,if material,and tender offers;
(9)Defeasances;
(10)Release, substitution,or sale of property securing repayment of the securities,if material;
(11)Rating changes;
(12)Bankruptcy,insolvency,receivership or similar event of the obligated person;
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Ames/419370-45/CDC
Note to paragraph(12): For the purposes of the event identified in subparagraph(12),the event is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent
or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in
any other proceeding under state or federal law in which a court or governmental authority has
assumed jurisdiction over substantially all of the assets or business of the obligated person, or if
such jurisdiction has been assumed by leaving the existing governing body and officials or
officers in possession but subject to the supervision and orders of a court or governmental
authority,or the entry of an order confirming a plan of reorganization, arrangement or liquidation
by a court or governmental authority having supervision or jurisdiction over substantially all of
the assets or business of the obligated person;
(13) The consummation of a merger, consolidation, or acquisition involving an obligated person
or the sale of all or substantially all of the assets of the obligated person, other than in the
ordinary course of business, the entry into a definitive agreement to undertake such an action or
the termination of a definitive agreement relating to any such actions, other than pursuant to its
terms,if material;
(14) Appointment of a successor or additional trustee or the change of name of a trustee, if
material; and
(b) If a Listed Event described in paragraph (2), (7), (8) (but only with respect to bond calls
under(8)), (10), (13) or(14) above has occurred and the Issuer has determined that such Listed Event is
material under applicable federal securities laws,the Issuer shall,in a timely manner but not later than ten
business days after the occurrence of such Listed Event, promptly file a notice of such occurrence with
each National Repository.
(c) If a Listed Event described in paragraph(1),(3),(4),(5),(6), (8)(but only with respect to
tender offers under(8)), (9), (11) or(12) above has occurred the Issuer shall, in a timely manner but not
later than ten business days after the occurrence of such Listed Event, promptly file a notice of such
occurrence with each National Repository. Notwithstanding the foregoing, notice of Listed Events
described in subsections(a)(8)and(9)need not be given under this subsection any earlier than the notice
(if any)of the underlying event is given to Holders of affected Bonds pursuant to the Resolution.
Section 6. Termination of Reporting Obligation. The Issuer's obligations under this
Disclosure Certificate shall terminate upon the legal defeasance,prior redemption or payment in full of
all of the Bonds or upon the Issuer's receipt of an opinion of nationally recognized Bond counsel to the
effect that,because of legislative action or final judicial action or administrative actions or proceedings,
the failure of the Issuer to comply with the terms hereof will not cause Participating Underwriters to be
in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as
amended. If such termination occurs prior to the final maturity of the Bonds,the Issuer shall give notice
of such termination in the same manner as for a Listed Event under Section 5(c).
Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may
discharge any such Agent, with or without appointing a successor Dissemination Agent. The
Dissemination Agent shall not be responsible in any manner for the content of any notice or report
prepared by the Issuer pursuant to this Disclosure Certificate.The initial Dissemination Agent shall be the
Issuer.
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Ames/419370-45/CDC
Section 8. Amendment, Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived,provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may
only be made in connection with a change in circumstances that arises from a change in legal
requirements,change in law, or change in the identity,nature or status of an obligated person with respect
to the Bonds,or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver,would,in the opinion of
nationally recognized Bond counsel, have complied with the requirements of the Rule at the time of the
original issuance of the Bonds,after taking into account any amendments or interpretations of the Rule,as
well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the
same manner as provided in the Resolution for amendments to the Resolution with the consent of
Holders, or (ii) does not, in the opinion of nationally recognized Bond counsel, materially impair the
interests of the Holders or Beneficial Owners of the Bonds.
In the event of any amendment or waiver of a provision of this Disclosure Certificate, the
Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a
narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the
case of a change of accounting principles, on the presentation) of financial information or operating
data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to
be followed in preparing financial statements, (i) notice of such change shall be given in the same
manner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the
change is made will present a comparison or other discussion in narrative form(and also, if feasible, in
quantitative form) describing or illustrating the material differences between the financial statements as
prepared on the basis of the new accounting principles and those prepared on the basis of the former
accounting principles.
Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed
to prevent the Issuer from disseminating any other information,using the means of dissemination set forth
in this Disclosure Certificate or any other means of communication, or including any other information in
any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this
Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of
occurrence of a Listed Event in addition to that which is specifically required by this Disclosure
Certificate, the Issuer shall have no obligation under this Certificate to update such information or include
it in any future Annual Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the Issuer to comply with any provision
of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as
may be necessary and appropriate, including seeking mandate or specific performance by court order,
to cause the Issuer to comply with its obligations under this Disclosure Certificate. Direct, indirect,
consequential and punitive damages shall not be recoverable by any person for any default hereunder
and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate
shall not be deemed an event of default under the Resolution, and the sole remedy under this
Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure
Certificate shall be an action to compel performance.
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Section 11. Duties Immunities and Liabilities of Dissemination Agent. The
Dissemination Agent, if any, shall have only such duties as are specifically set forth in this
Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its
officers, directors, employees and agents, harmless against any loss, expense and liabilities which it
may incur arising out of or in the exercise or performance of its powers and duties hereunder,
including the costs and expenses (including attorneys' fees) of defending against any claim of
liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct.
The obligations of the Issuer under this Section shall survive resignation or removal of the
Dissemination Agent and payment of the Bonds.
Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial
Owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Dated: May 17,2011
CITY OF AMES, IOWA
By
Mayor
Attest:
By
City Clerk
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OFFICIAL BID FORM
To: City Council of Sale Date: April 12,2011
City of Ames,Iowa 1:00 PM,CT
RE: $6,105,000* General Obligation Refunding Bonds, Series 2011A(the"Bonds")
For all or none of the above Bonds, in accordance with the TERMS OF OFFERING, we will pay you
$ (not less than $6,068,370) plus accrued interest to date of delivery for fully
registered bonds bearing interest rates and maturing in the stated years as follows:
Coupon Maturity Yield Coulon Maturi1y Yield
2012 2017
2013 2018
2014 2019 "
2015 2020
2016 2021 .,-
* 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.
In making this offer we accept all of the terms and conditions of the TERMS OF OFFERING published in the Preliminary
Official Statement dated April 4, 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 hereofy,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"' ces be pg controllilig but only as�aid for the verification of the offer,we
have made the following computations:
NET INTEREST COST: $
TRUE INTEREST COST: % (Based on dated date of May 17,2011)
Account Manager: By:
Account Members:
The foregoing offer is hereby accepted by and.,orr'behalf of the City Council of the City of Ames, Iowa this 12'h day of
April,2011.
Attest: By:
Title: Title: