HomeMy WebLinkAboutA006 - Preliminary Official Statement dated November 10, 2015 - Electric Revenue Bonds, Series 2015B PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 10,2015
New Issue Rating:Application made to Moody's Investors Service
o r, In the opinion of Dorsey&Whitney LLP,Bond Counsel,according to present laws,rulings and decisions(assuming compliance with certain covenants),interest on
the Bonds will be excluded from gross income for federal income tax purposes. Interest on the Bonds is not an item of tax preference for purposes of the federal
j alternative mininnnn tax imposed on individuals and corporations under the Internal Revenue Code of 1986,provided,however,such interest is taken into account in
o determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax
4 purposes). The City will NOT designate the Bonds as"qualified tax-exempt obligations." See "TAX EXEMPTION AND RELATED CONSIDERATIONS"herein.
CITY OF AMES, IOWA
$10,350,000* Electric Revenue Bonds, Series 2015B
BIDS RECEIVED: Tuesday, December 8,2015, 11:00 o'clock A.M., Central Time
R o AWARD: Tuesday,December 8, 2015,5:30 o'clock P.M.,Central Time
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O2 Dated: Date of Delivery(December 29, 2015) Principal Due: June 1,2016-2027
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g The $10,350,000* Electric Revenue Bonds, Series 2015B (the "Bonds") are being issued pursuant to Division V of
v Chapter 384 of the Code of Iowa and a resolution to be adopted by the City Council of the City of Ames, Iowa (the
_ "City"). The Bonds are being issued for the purpose of paying the cost, to that extent, of constructing improvements to
the municipal electric light and power plant and system. 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
77
Iowa. The Bonds are issued in evidence of the City's obligations under the Loan Agreement. THE BONDS ARE NOT
J J GENERAL OBLIGATIONS OF THE CITY, but are payable solely and only from the net revenues of the Municipal
- - v Electric Utility (the"Utility").
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c The Bonds will be issued as fully registered Bonds without coupons and, when issued, will be registered in the name of
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s2 Cede & Co., as nominee of The Depository Trust Company ("DTC"). DTC will act as securities depository for the
Bonds. Individual purchases may be made in book-entry-only form, in the principal amount of$5,000 and integral
multiples thereof. The purchaser 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
e E June 1, beginning June 1, 2016, and interest on the Bonds payable initially on June 1, 2016 and thereafter on each
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December 1 and June 1 to DTC, which will in turn remit such principal and interest to its participants for subsequent
- disbursements to the beneficial owners of the Bonds as described herein. Interest and principal shall be paid to the
registered holder of a bond as shown on the records of ownership maintained by the Registrar as of the 15`h day of the
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month next preceding the interest payment date(the"Record Date").
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THE BONDS WILL MATURE AS LISTED ON THE INSIDE FRONT COVER
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MINIMUM BID: $10,251,675
b -
GOOD FAITH DEPOSIT: Required of Purchaser Only
N TAX MATTERS: Federal: Tax-Exempt
State: Taxable
See"TAX EXEMPTION AND RELATED
CONSIDERATIONS"for more information.
The Bonds are offered, subject to prior sale, withdrawal or modification, when, as and if issued and subject to the
unqualified approving legal opinion of Dorsey & Whitney LLP, Bond Counsel, Des Moines, Iowa, to be furnished upon
delivery of the Bonds. It is expected that the Bonds will be available for delivery through the facilities of DTC on or
`= about December 29, 2015. The Preliminary Official Statement will be further supplemented by offering prices, interest
o rates, selling compensation, aggregate principal amount, principal amount per maturity, anticipated delivery date and
underwriter, together with any other information required by law or deemed appropriate by the City, shall constitute a
ro _ Final Official Statement of the City with respect to the Bonds, as that term is defined in Rule 15c2-12 promulgated by the
m Securities and Exchange Commission under the Securities Exchange Act of 1934,as amended.
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2 *Preliminary;subject to change.
CITY OF AMES, IOWA
$10,350,000* Electric Revenue Bonds, Series 2015B
MATURITY: The bonds will mature June 1 in the years and amounts as follows:
Year Amount* Year Amount*
2016 $910,000 2022 $845,000
2017 750,000 2023 875,000
2018 765,000 2024 900,000
2019 780,000 2025 935,000
2020 800,000 2026 965,000
2021 825,000 2027 1,000,000
*PRINCIPAL
ADJUSTMENT: Preliminary; subject to change. The aggregate principal amount of the Bonds, and
each scheduled maturity thereof,are subject to increase or reduction by the City or its
designee after the determination of the successful bidder. The City may increase or
decrease each maturity in increments of$5,000 but the total amount to be issued will
not exceed $10,950,000. Interest rates specified by the successful bidder for each
maturity will not change. Final adjustments shall be in the sole discretion of the City.
The dollar amount of the purchase price proposed by the successful bidder will be
changed if the aggregate principal amount of the Bonds is adjusted as described
above. Any change in the principal amount of any maturity of the Bonds will be
made while maintaining, as closely as possible, the successful bidder's net
compensation, calculated as a percentage of bond principal. The successful bidder
may not withdraw or modify its bid as a result of any post-bid adjustment. Any
adjustment shall be conclusive,and shall be binding upon the successful bidder.
INTEREST: Interest on the Bonds will be payable on June 1, 2016 and semiannually thereafter.
REDEMPTION: Bonds due after June 1, 2023 will be subject to call on said date or on any date
thereafter upon terms of par plus accrued interest to date of call. Written notice of
such call shall be given at least thirty (30) days prior to the date fixed for redemption
to the registered owners of the Bonds to be redeemed at the address shown on the
registration books.
COMPLIANCE WITH S.E.C. RULE 15c2-12
Municipal obligations (issued in an aggregate amount over $1,000,000) are subject to General Rules and Regulations,
Securities Exchange Act of 1934,Rule 15c2-12 Municipal Securities Disclosure.
Preliminary Official Statement: This Preliminary Official Statement was prepared for the City for dissemination to
prospective bidders. Its primary purpose is to disclose information regarding the Bonds to prospective bidders in the
interest of receiving competitive bids in accordance with the TERMS OF OFFERING contained herein. Unless an
addendum is received prior to the sale,this document shall be deemed the"Near Final Official Statement".
Review Period: This Preliminary Official Statement has been distributed to City staff as well as to prospective bidders for
an objective review of its disclosure. Comments, omissions or inaccuracies must be submitted to Public Financial
Management, Inc. (the "Municipal Advisor") 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, selling compensation, aggregate principal amount,
principal amount per maturity, anticipated delivery date and other information required by law and the identity of the
underwriter (the "Syndicate Manager") and syndicate members. Copies of the Final Official Statement will be delivered
to the Syndicate Manager within seven business days following the bid acceptance.
REPRESENTATIONS
No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any
representations, other than those contained in the Preliminary Official Statement. This Preliminary Official Statement
does not constitute any offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any
person, in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The
information, estimates and expressions of opinion herein are subject to change without notice and neither the delivery of
this Preliminary Official Statement nor any sale made hereunder, shall, under any circumstances, create any implication
that there has been no change in the affairs of the City since the date hereof. This Preliminary Official Statement is
submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, in whole or in
part, for any other purpose.
This Preliminary Official Statement and any addenda thereto were prepared relying on information from the City and
other sources,which are believed to be reliable.
Bond Counsel has not participated in the preparation of this Preliminary Official Statement and is not expressing any
opinion as to the completeness or accuracy of the information contained therein.
Compensation of the Municipal Advisor,payable entirely by the City,is contingent upon the sale of the issue.
(This page has been left blank intentionally.)
TABLE OF CONTENTS
TERMSOF OFFERING..................................................................................................................................................i
SCHEDULEOF BOND YEARS..................................................................................................................................vii
INTRODUCTION.............................................................................................................................................................1
Authorityand Purpose....................................................................................................................................................I
OptionalRedemption......................................................................................................................................................I
Intereston the Bonds......................................................................................................................................................I
Paymentof and Security for the Bonds ..........................................................................................................................2
Book-Entry-Only Issuance..............................................................................................................................................3
FutureFinancing.............................................................................................................................................................4
Litigation.........................................................................................................................................................................4
DebtPayment History.....................................................................................................................................................5
LegalMatters..................................................................................................................................................................5
Tax Exemption and Related Considerations...................................................................................................................5
RelatedTax Matters........................................................................................................................................................7
Bondholders'Risk...........................................................................................................................................................8
Rating..............................................................................................................................................................................8
MunicipalAdvisor..........................................................................................................................................................8
ContinuingDisclosure....................................................................................................................................................9
FinancialStatements.......................................................................................................................................................9
Certification....................................................................................................................................................................9
CITY OF AMES,IOWA MUNICIPAL ELECTRIC UTILITY................................................................................10
Organizationand Management.....................................................................................................................................10
Description of the Municipal Electric Utility ...............................................................................................................10
RegulatoryMatters.......................................................................................................................................................12
Ratesand Charges.........................................................................................................................................................12
Electricity Produced,Purchased and Cost....................................................................................................................13
Historyof Electric Sales...............................................................................................................................................13
Billable Consumption by Class of Service(Kilowatt Hours).......................................................................................13
History of Electric Accounts Served(Kilowatt Hours)................................................................................................13
PeakDemand................................................................................................................................................................13
ElectricUsers(FY 2014-15).........................................................................................................................................14
Municipal Electric Utility Revenue Debt......................................................................................................................14
Utility's Historical Cashflow and Projected Debt Service Coverage............................................................................15
APPENDIX A- GENERAL INFORMATION ABOUT THE CITY OF AMES, IOWA
APPENDIX B- FORM OF LEGAL OPINION
APPENDIX C-JUNE 30,2014 COMPREHENSIVE ANNUAL FINANCIAL REPORT
APPENDIX D-FORM OF CONTINUING DISCLOSURE CERTIFICATE
OFFICIAL BID FORM
CITY OF AMES, IOWA
Mayor/City Council
Member Office Initial Term Commenced Tenn Expires
Ann Campbell Mayor January 03,2006 December 31,2017
Gloria Betcher Council Member— 151 Ward January 02,2014 December 31,2017
Tim Gartin Council Member—2nd Ward January 02,2014 December 31, 2015
Peter Orazem Council Member—3`d Ward January 02,2014 December 31,2017
Chris Nelson Council Member—41h Ward January 02,2014 December 31, 2015
Matthew Goodman Council Member—At Large January 01,2004 December 31,2015
Amber Corrieri Council Member—At Large January 02,2014 December 31,2017
Sam Schulte Ex-Officio
Administration
Steven Schainker, City Manager
Duane Pitcher,Director of Finance
Diane Voss,City Clerk
Roger Wisecup II,City Treasurer
John Dunn, Director of Water and Pollution Control
John Joiner,Director of Public Works
Don Kom, Director of Electric Utility
City Attorney
Judy Parks
Ames,Iowa
Bond Counsel
Dorsey& Whitney LLP
Des Moines,Iowa
Municipal Advisor
Public Financial Management,Inc.
Des Moines, Iowa
TERMS OF OFFERING
CITY OF AMES,IOWA
Bids for the purchase of the City of Ames, Iowa's (the "City") $10,350,000* Electric Revenue Bonds, Series 2015B
(the "Bonds") will be received on Tuesday, December 8, 2015, before 11:00 o'clock A.M. Central Time after which
time they will be tabulated. The City Council will consider award of the Bonds at 5:30 o'clock P.M. Central Time, on
the same day. Questions regarding the sale of the Bonds should be directed to the City's Municipal Advisor, Public
Financial Management, Inc., 801 Grand Avenue, Suite 3300, Des Moines, Iowa, 50309, or by telephoning 515-243-
2600. Information can also be obtained from Mr. Duane Pitcher, Director of Finance, City of Ames, 515 Clark
Avenue, Ames, Iowa, 50010, or by telephoning 515-239-5114. The following section sets forth the description of
certain 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
ELECTRIC REVENUE BONDS, SERIES 2015B, in the principal amount of$10,350,000* to be dated the date of
delivery (December 29,2015), in the denomination of$5,000 or multiples thereof,will mature on June 1 as follows:
Year Amount* Year Amount*
2016 $910,000 2022 $845,000
2017 750,000 2023 875,000
2018 765,000 2024 900,000
2019 780,000 2025 935,000
2020 800,000 2026 965,000
2021 825,000 2027 1,000,000
ADJUSTMENT TO BOND MATURITY AMOUNTS
The aggregate principal amount of the Bonds, and each scheduled maturity thereof, are subject to increase or reduction
by the City or its designee after the determination of the successful bidder. The City may increase or decrease each
maturity in increments of$5,000 but the total amount to be issued will not exceed$10,950,000. Interest rates specified
by the successful bidder for each maturity will not change. Final adjustments shall be in the sole discretion of the City.
The dollar amount of the purchase price proposed by the successful bidder will be changed if the aggregate principal
amount of the Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Bonds
will be made while maintaining, as closely as possible, the successful bidder's net compensation, calculated as a
percentage of bond principal. The successful bidder may not withdraw or modify its bid as a result of any post-bid
adjustment. Any adjustment shall be conclusive,and shall be binding upon the successful bidder.
TERM-BOND OPTION
Bidders shall have the option of designating the Bonds as serial bonds or term bonds, or both. The bid must designate
whether each of the principal amounts shown above represent a serial maturity or a mandatory redemption requirement
for a term bond maturity. (See the OFFICIAL BID FORM for more information.) In any event, the above principal
amount scheduled shall be represented by either serial bond maturities or mandatory redemption requirements, or a
combination of both.
* Preliminary;subject to change.
i
OPTIONAL REDEMPTION
Bonds due after June 1, 2023 will be subject to call prior to maturity in whole, or from time to time in part, in any
order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the City, upon
terns of par plus accrued interest to date of call. Written notice of such call shall be given at least thirty (30) days
prior to the date fixed for redemption to the registered owners of the Bonds to be redeemed at the address shown on the
registration books.
INTEREST
Interest on the Bonds will be payable on June 1, 2016 and semiannually on the I" day of December and June
thereafter. Principal and interest shall be paid to the registered holder of a bond as shown on the records of ownership
maintained by the Registrar as of the 15"' day of the month preceding the interest payment date (the "Record Date").
Interest will be computed on the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to
rules of the Municipal Securities Rulemaking Board.
LIEN
The Bonds will constitute a lien on the net revenues of the Municipal Electric Utility(the"Utility")of the City.
PARITY OBLIGATIONS
The City reserves the right and privilege to issue additional obligations on a parity and equality of rank with the Bonds
with respect to the lien and claim of such additional obligations to the net revenues of the Utility and the money on
deposit in the funds adopted by the resolution for the Bonds, for the purpose of refunding any of the Bonds, parity
obligations, or making extensions, additions, improvements or replacements to the Utility. Before any such additional
obligations ranking on a parity are issued, there will have been procured and filed with the City, a statement of an
independent auditor or an independent financial consultant, not a regular employee of the City, reciting the opinion,
based upon necessary investigations,that the net revenues of the Utility for the preceding fiscal year(with adjustments
as provided in the resolution for the Bonds) were equal to at least 1.25 times the maximum amount that will be
required in any fiscal year prior to the longest maturity of any of the Bonds or parity obligations for both the principal
of and interest on all Bonds or parity obligations then outstanding which are payable from the net earnings of the
Utility and the additional obligations then proposed to be issued.
GOOD FAITH DEPOSIT
A good faith deposit in the amount of$103,500 (the "Deposit") is required from the lowest bidder only. The lowest
bidder is required to submit such Deposit payable to the order of the City,not later than 1:00 P.M. Central Time on the
day of the sale of the Bonds in the form of either(i) a cashier's check provided to the City or its Municipal Advisor or
(ii) a wire transfer as instructed by the City's Municipal Advisor. If not so received, the bid of the lowest bidder may
be rejected and the City may direct the second lowest bidder to submit a Deposit and thereafter may award the sale of
the Bonds to the same. No interest on a Deposit will accrue to the 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.
FORM OF BIDS AND AWARD
All bids shall be unconditional for the entire issue of Bonds for a price not less than$10,251,675,plus accrued interest,
and shall specify the rate or rates of interest in conformity to the limitations as set forth in the BIDDING
PARAMETERS section. Bids must be submitted on or in substantial compliance with the OFFICIAL BID FORM
provided by the City. The Bonds will be awarded to the bidder offering the lowest interest rate to be determined on a
true interest cost(the "TIC") basis assuming compliance with the GOOD FAITH DEPOSIT section. The TIC shall be
determined by the present value method, i.e., by ascertaining the semiannual rate, compounded semiannually,
ii
necessaryto discount to resent value as of the dated date of the Bonds the amount payable on each interest payment
P � pY pY
date and on each stated maturity date or earlier mandatory redemption, so that the aggregate of such amounts will
equal the aggregate purchase price offered therefore. The TIC shall be stated in terms of an annual percentage rate and
shall be that rate of interest which is twice the semiannual rate so ascertained (also known as the Canadian Method).
The TIC shall be as determined by the Municipal Advisor based on the TERMS OF OFFERING and all amendments,
and on the bids as submitted. The Municipal 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.
BIDDING PARAMETERS
Each bidder's proposal must conform to the following limitations:
1. Each annual maturity must bear a single rate of interest from the dated date of the Bonds to the date of
maturity.
2. Rates of interest bid must be in multiples of one-eighth or one-twentieth of one percent.
3. The initial price to the public for each maturity must be 98%or greater.
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.
Sealed Bidding: Sealed bids may be submitted and will be received at the office of the Director of Finance, City Hall,
515 Clark Avenue,Ames,Iowa 50010.
Electronic Internet Bidding: Electronic internet bids must be submitted through the Internet Bid System. Information
about the Internet Bid System may be obtained by calling 212-849-5021.
Each bidder shall be solely responsible for making necessary arrangements to access the Internet Bid System for
purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the TERMS OF
OFFERING and OFFICIAL BID FORM. The City is permitting bidders to use the services of the Internet Bid System
solely as a communication mechanism to conduct the Internet bidding and the Internet Bid System is not an agent of
the City. Provisions of the TERMS OF OFFERING and OFFICIAL BID FORM shall control in the event of conflict
with information provided by the Internet Bid System.
Electronic Facsimile Bidding: Electronic facsimile bids will be received at the office of the City's Municipal Advisor,
Public Financial Management, Inc. (facsimile number: 515-243-6994). Electronic facsimile bids will be sealed and
treated as sealed bids.
Electronic facsimile bids received after the deadline will be rejected. Bidders electing to submit bids via facsimile
transmission bear full responsibility for the transmission of such bid. Neither the City nor its agents shall be
responsible for malfunction or mistake made by any person, or as a result of the use of the 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 prospective
bidder who shall be bound by the terms of the bid as received. Neither the City nor its agents will assume liability for
the inability of the bidder to reach the above named facsimile numbers prior to the time of sale specified above. Time
of receipt shall be the time recorded by the facsimile operator receiving the bids.
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BOOK-ENTRY-ONLY ISSUANCE
The Bonds will be issued by means of a book-entry-only system with no physical distribution of bond certificates
made to the public. The Bonds will be issued in fully registered form and one bond certificate, representing the
aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as
nominee of The Depository Trust Company ("DTC"),New York,New York, which will act as securities depository of
the Bonds. Individual purchases of the Bonds may be made in the principal amount of$5,000 or any multiple thereof
of a single maturity through book entries made on the books and records of DTC and its participants. Principal and
interest are payable by the Registrar to DTC or its nominee as registered owner of the B onds. 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. The Purchaser, as a condition of delivery of the Bonds, will be required to deposit the bond certificates with
DTC.
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. Any increased costs of issuance of the Bonds resulting from such purchase of
insurance shall be paid by the Purchaser, except that, if the City has requested and received a rating on the Bonds from
a rating agency,the City will pay that initial rating fee. Any other rating agency fees shall be the responsibility of the
Purchaser. Failure of the municipal bond insurer to issue the policy after the Bonds have been awarded to the
Purchaser shall not constitute cause for failure or refusal by the Purchaser to accept delivery on the Bonds. The City
reserves the right in its sole discretion to accept or deny changes to the financing documents requested by the insurer
selected by the Purchaser.
DELIVERY
The Bonds will be delivered to the Purchaser through DTC in New York, New York, against full payment in
immediately available cash or federal funds. The Bonds are expected to be delivered within forty-five days after the
sale. Should delivery be delayed beyond sixty days from the date of sale for any reason except failure of performance
by the Purchaser, the Purchaser may withdraw their bid and thereafter their interest in and liability for the Bonds will
cease. When the Bonds are ready for delivery, the City will give the Purchaser five working days notice of the
delivery date and the City will expect payment in full on that date; otherwise reserving the right at its option to
determine that the Purchaser failed to comply with the offer of purchase.
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 sales to 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 the 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 will be further supplemented by offering prices, interest rates, selling
compensation, aggregate principal amount, principal amount per maturity, anticipated delivery date and underwriter,
together with any other information required by law or deemed appropriate by the City,shall constitute a Final Official
iv
Statement of the City with respect to the Bonds,as that term is defined in Rule 15c2-12 of the Securities and Exchange
Commission (the "Rule"). By awarding the Bonds to any underwriter or underwriting syndicate submitting an
OFFICIAL BID FORM therefore, the City agrees that, no more than seven (7) business days after the date of such
award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are
awarded up to 40 copies of the Final Official Statement to permit each "Participating Underwriter" (as that term is
defined in the Rule)to comply with the provisions of the Rule. The City shall treat the senior managing underwriter of
the syndicate to which the Bonds are awarded as its designated agent for purposes of distributing copies of the Final
Official Statement to the Participating Underwriter. Any underwriter executing and delivering an OFFICIAL BID
FORM with respect to the Bonds agrees thereby that if its bid is accepted by the City, (i) it shall accept such
designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for
purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement.
CONTINUING DISCLOSURE
In order to permit bidders for the Bonds and other Participating Underwriters in the primary offering of the Bonds to
comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission (the "SEC")
under the Securities Exchange Act of 1934, as amended, the City will covenant and agree, for the benefit of the
registered holders or beneficial owners from time to time of the outstanding Bonds, in the resolution authorizing the
issuance of the Bonds and the Continuing Disclosure Certificate, to provide Annual Financial Information filings of
specified information and notice of the occurrence of certain material events as hereinafter described (the
"Undertakings"). The information to be provided on an annual basis,the events as to which notice is to be given,and a
summary of other provisions of the Undertakings, including termination, amendment and remedies, are set forth as
APPENDIX D to this Preliminary Official Statement.
Within the past five years,notice of the June 1,2011 call of the City's General Obligation Series 2002A, Series 2002B,
and Series 2003 Bonds were filed June 28,2011,thirteen(13)days after the date required.
In regard to the now matured Hospital Revenue Series 2003 debt, the Mary Greeley Medical Center filed required
reports for the fiscal year ended June 30, 2010 two (2) days after the date specified in the Undertaking, and filed
required reports for the quarters ended June 30, 2010, September 30,2010, and June 30, 2011, each within three (3)
days after the dates required. Additionally, the Mary Greeley Medical Center's required report for the quarter ended
December 31, 2012 was timely filed February 6, 2013, but not linked to the Hospital Revenue Series 2011 CUSIPs.
This was corrected upon discovery.
In an effort to augment the City's procedures and policies to maintain future compliance,the City has taken additional
steps intended to assure future compliance with its Undertakings. These steps include implementing the MSRB's
EMMA notification system whereby the City will receive timely email reminders a month in advance for all the City's
annual disclosure filings to ensure all disclosure obligations have been made on a timely basis and in all material
respects.
Breach of the Undertakings will not constitute a default or an"Event of Default"under the Bonds or the resolution for
the Bonds. A broker or dealer is to consider a known breach of the Undertakings, 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
Undertakings may adversely affect the transferability and liquidity of the Bonds and their market price.
v
CUSIP NUMBERS
It is anticipated that Committee on Uniform Security Identification Procedures ("CUSIP") numbers will be printed on
the Bonds and the Purchaser must agree in the bid proposal to pay the cost thereof. In no event will the City, Bond
Counsel or Municipal Advisor be responsible for the review or express any opinion that the CUSIP numbers are
correct. Incorrect CUSIP 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
Diane Voss,City Clerk
City of Ames, Iowa
515 Clark Avenue
Ames, Iowa 50010
vi
SCHEDULE OF BOND YEARS
$10,350,000*
CITY OF AMES, IOWA
Electric Revenue Bonds, Series 2015B
Bonds Dated: December 29,2015
Interest Due: June 1,2016 and each December 1 and June 1 to maturity
Principal Due: June 1,2016-2027
Cumulative
Year Principal* Bond Years Bond Years
2016 $910,000 384.22 384.22
2017 750,000 1,066.67 1,450.89
2018 765,000 1,853.00 3,303.89
2019 780,000 2,669.33 5,973.22
2020 800,000 3,537.78 9,511.00
2021 825,000 4,473.33 13,984.33
2022 845,000 5,426.78 19,411.11
2023 875,000 6,494.44 25,905.56
2024 900,000 7,580.00 33,485.56
2025 935,000 8,809.78 42295.33
2026 965,000 10,057.44 52:352.78
2027 1,000,000 11,422.22 63,775.00
Average Maturity(dated date): 6.16 Years
* Preliminary;subject to change.
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PRELIMINARY OFFICIAL STATEMENT
CITY OF AMES, IOWA
$10,350,000* Electric Revenue Bonds, Series 2015B
INTRODUCTION
This Preliminary Official Statement contains information relating to the City of Ames, Iowa (the "City") and its
issuance of$10,350,000* Electric Revenue Bonds, Series 2015B (the "Bonds"). This Preliminary Official Statement
has been authorized by the City and may be distributed in connection with the sale of the Bonds authorized therein.
Inquiries may be made to the City's Municipal Advisor, Public Financial Management, Inc., 801 Grand Avenue, Suite
3300, Des Moines, Iowa, 50309, or by telephoning 515-243-2600. Information can also be obtained from Mr. Duane
Pitcher, Director of Finance,City of Ames,515 Clark Avenue,Ames, Iowa, 50010,or by telephoning 515-239-5114.
AUTHORITY AND PURPOSE
The Bonds are being issued pursuant to Division V of Chapter 384 of the Code of Iowa and a resolution to be adopted
by the City. The Bonds are being issued for the purpose of paying the cost, to that extent, of constructing
improvements to the municipal electric light and power plant and system. The purchaser of the Bonds agrees to enter
into a loan agreement(the "Loan Agreement") with the City pursuant to authority contained in Section 384.24A of the
Code of Iowa. The bonds are issued in evidence of the City's obligations under the Loan Agreement.
The estimated Sources and Uses of the Bonds are as follows:
Sources of Funds
Par Amount of Bonds $10,350,000.00
Cash on Hand 1,035,000.00
Total Sources $11,385,000.00
Uses of Funds
Deposit to Project Fund $10,175,000.00
Deposit to Reserve Account 1,035,000.00
Underwriter's Discount 98,325.00
Cost of Issuance and Contingency 76,675.00
Total Uses $11,385,000.00
* Preliminary;subject to change.
OPTIONAL REDEMPTION
Bonds due after June 1, 2023 will be subject to call prior to maturity in whole, or from time to time in part, in any
order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the City, upon
terms of par plus accrued interest to date of call. Written notice of such call shall be given at least thirty (30) days
prior to the date fixed for redemption to the registered owners of the Bonds to be redeemed at the address shown on the
registration books.
INTEREST ON THE BONDS
Interest on the Bonds will be payable on June 1, 2016 and semiannually on the I" day of December and June
thereafter. Principal and interest shall be paid to the registered holder of a bond as shown on the records of ownership
maintained by the Registrar as of the 15`h day of the month preceding the interest payment date (the "Record Date").
Interest will be computed on the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to
rules of the Municipal Securities Rulemaking Board.
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PAYMENT OF AND SECURITY FOR THE BONDS
This section contains a summary of security provisions. A detailed statement of security provisions is contained in the
resolution for the Bonds, which is available upon request from the City's Municipal Advisor, Public Financial
Management,Inc.
Source of Payment: THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY, but are payable solely and
only from the net revenues of the City's Municipal Electric Utility (the "Utility"). The City pledges a first lien on the
net revenues of the Utility for payment of principal of and interest on the Bonds and on all outstanding Parity Bonds
after paying costs of operating,maintaining,repairing,and insuring the Utility.
Rate Covenant: The City covenants to impose just and equitable rates or charges for the use of the service rendered by
the Utility at levels sufficient to pay all expenses of operation and maintenance, to maintain the Utility in good
condition and operate it in an efficient manner and at reasonable cost. On or before the beginning of each fiscal year,
the City will adopt rates or charges determined to be sufficient to produce net revenues for the next succeeding fiscal
year adequate to pay principal and interest requirements and create reserves as provided in the resolution for the Bonds
but not less than 125 percent of the principal and interest requirements of the fiscal year.
Reserve Fund: The City covenants to maintain a separate Principal and Interest Reserve Fund (the "Reserve Fund")
into which there shall be set apart and paid from legally available funds of the City at the time of the delivery of the
Bonds, a sum equal to the lesser of i) the maximum amount of principal and interest becoming due on the Bonds and
Parity Bonds in any succeeding fiscal year ii) 125% of the average amount of principal of and interest becoming due
on the Bonds and Parity Bonds in any succeeding fiscal year, or iii) 10% of the original principal amount of the Bonds
and Parity Bonds outstanding at any time. Whenever the sum on deposit in the Reserve Fund has been reduced to less
than the required Reserve Fund balance by the expenditure of all or a portion of the funds on deposit in said fund for
any of the purposes specified herein, there shall be deposited into such Reserve Fund the remaining net revenues after
first making the required deposits into the sinking fund, until the sum on deposit in the Reserve Fund has been restored
to the required Reserve Fund balance. Upon issuance of the Bonds, it is estimated the Reserve Fund requirement will
be approximately $1,035,000, equal to 10% of the original principal amount of the Bonds and Parity Bonds
outstanding at any time.
Additional Bonds Test: The City reserves the right and privilege to issue additional revenue bonds, from time to time,
payable from the net revenues of the Utility and ranking on a parity with the Bonds and outstanding obligations, in
order to pay the cost of extensions, additions, or improvements or replacements to the Utility or for refunding any
Bonds, outstanding parity obligations, which were issued or the proceeds thereof were expended for the Utility, but
before any such additional bonds ranking on a parity are issued,there will have been procured and filed with the City's
Clerk, a statement of an independent auditor, an independent financial consultant or a consulting engineer not a regular
employee of the City, reciting the opinion based upon necessary investigations that the net revenues of the Utility for
the preceding fiscal year (with adjustments as provided in the resolution for the Bonds) were equal to at least 1.25
times the maximum amount that will be required in any fiscal year prior to the longest maturity of any of the Bonds or
parity obligations for both principal of and interest on all Bonds and parity obligations then outstanding which are
payable from the net revenues of the Utility and the additional parity obligations then proposed to be issued.
For the purpose of determining the net revenues of the Utility for the preceding fiscal year as aforesaid,the amount of
the gross revenues for such year may be adjusted by an independent auditor or independent financial consultant, not a
regular employee of the City, so as to reflect any changes in the amount of such revenues which would have resulted
had any revision of the schedule of rates or charges imposed at or prior to the time of the issuance of any such
additional obligations been in effect during all of such preceding fiscal year.
The "preceding fiscal year" shall be the most recently completed fiscal year for which audited financial statements
prepared by a certified public accountant are issued and available, but in no event a fiscal year which ended more than
eighteen months prior to the date of issuance of additional obligations.
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BOOK-ENTRY-ONLY ISSUANCE
The information contained in the following paragraphs of this subsection "Book-Entry-Only System" has been
extracted from a schedule prepared by Depository Trust Company ("DTC') entitled "SAMPLE OFFERING
DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE." The information in this section
concerning DTC and DTC's book-entry system has been obtained from sources that the City believes to be reliable,
but the City takes no responsibility for the accuracy thereof
The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the
"Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede& Co. (DTC's
partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-
registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of
such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500
million, one certificate will be issued with respect to each $500 million of principal amount, and an additional
certificate will be issued with respect to any remaining principal amount of such issue.
DTC, the world's largest securities depository, is a limited-purpose trust company organized under the New York
Banking Law, a"banking organization" within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC
holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and
municipal debt issues, and money market instruments from over 100 countries that DTC's participants (the "Direct
Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and
other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges
between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates.
Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust& Clearing
Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed
Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its
regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). DTC has Standard &
Poor's rating: AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.
Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a
credit for the Securities on DTC's records. The ownership interest of each actual purchaser of each Security (the
"Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will
not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive
written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the
Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership
interests in Securities,except in the event that use of the book-entry system for the Securities is discontinued.
To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name
of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative
of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC
nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of
the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are
credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of
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significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to
the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding
the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative,
Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be
provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's
practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co., nor any other DTC nominee, will consent or vote with respect to Securities unless
authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures,DTC mails
an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date
identified in a listing attached to the Omnibus Proxy.
Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such
other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct
Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or Agent, on
payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in"street name," and will be the responsibility of such
Participant and not of DTC, Agent, or the City, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co., or such
other nominee as may be requested by an authorized representative of DTC, is the responsibility of the City or Agent,
disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to
Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the
Participant's interest in the Securities, on DTC's records, to Remarketing Agent. The requirement for physical
delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-
entry credit of tendered Securities to Remarketing Agent's DTC account.
DTC may discontinue providing its services as depository with respect to the Securities at any time by giving
reasonable notice to the City or Agent. Under such circumstances, in the event that a successor depository is not
obtained, Security certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor
securities depository). In that event, Security certificates will be printed and delivered to DTC.
The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the
City believes to be reliable, but the City takes no responsibility for the accuracy thereof.
FUTURE FINANCING
The City does not anticipate issuing additional electric revenue debt within 90 days of the date of this Preliminary
Official Statement.
LITIGATION
The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to
meet its financial obligations.
At closing, the City will certify that no controversy or litigation is pending, prayed or threatened involving the
incorporation, organization, existence or boundaries of the Bonds, or the titles of the City officers to their respective
positions, or the validity of the Bonds, or the power and duty of the Bonds to provide and apply adequate taxes for the
4
full and prompt payment of the principal and interest of the Bonds, and that no measure or provision for the
authorization or issuance of the Bonds has been repealed or rescinded."
DEBT PAYMENT HISTORY
The City knows of no instance in which they have defaulted in the payment of principal and interest on its debt.
LEGAL MATTERS
Legal matters incident to the authorization, issuance and sale of the Bonds and with regard to the tax-exempt or taxable
status of the interest thereon (see "TAX EXEMPTION AND RELATED 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 B. 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 the information and statements
contained in the Preliminary Official Statement under the first paragraph of the section "AUTHORITY AND
PURPOSE", "PAYMENT OF AND SECURITY FOR THE BONDS", and "TAX EXEMPTION AND RELATED
CONSIDERATIONS" insofar as such statements contained under such captions purport to summarize certain
provisions of the Internal Revenue Code of 1986, the Bonds and any opinions rendered by Bond Counsel. Bond
Counsel has prepared the documents contained in APPENDIX B and APPENDIX D.
TAX EXEMPTION AND RELATED CONSIDERATIONS
Federal Income Tax Exemption: The opinion of Bond Counsel will state that under present laws and rulings, interest
on the Bonds (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 under the Internal Revenue Code of 1986, as amended (the
"Code"), provided, however, that such interest must be taken into account in determining adjusted current earnings for
the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax
purposes).
The opinion set forth in the preceding sentence will be subject to the condition that the City comply with all
requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon
be, or continue to be, excluded from gross income for federal income tax purposes. Failure to comply with certain of
such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to
be retroactive to the date of issuance of the Bonds. In the resolution for the Bonds, the City will covenant to comply
with all such requirements.
There may be certain other federal tax consequences to the ownership of the Bonds by certain taxpayers, including
without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies,
certain S corporations, individual recipients of Social Security and Railroad Retirement benefits and taxpayers who
may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond
Counsel will express no opinion with respect to other federal tax consequences to owners of the Bonds. Prospective
purchasers of such Bonds should consult with their tax advisors as to such matters.
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NOT-Qualified Tax-Exempt Obligations: The City will NOT designate the Bonds as "qualified tax-exempt
obligations"under the exception provided in Section 265(b)(3)of the Internal Revenue Code of 1986,as amended(the
"Code").
Proposed Changes in Federal and State Tax Law: From time to time, there are Presidential proposals, proposals of
various federal committees, and legislative proposals in the Congress and in the states that, if enacted, could alter or
amend the federal and state tax matters referred to herein or adversely affect the marketability or market value of the
Bonds or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption of interest on the
Bonds. Further, such proposals may impact the marketability or market value of the Bonds simply by being proposed.
No prediction is made whether such provisions will be enacted as proposed or concerning other future legislation
affecting the tax treatment of interest on the Bonds. In addition, regulatory actions are from time to time announced or
proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could
adversely affect the market value, marketability or tax status of the Bonds. It cannot be predicted whether any such
regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the
Bonds would be impacted thereby.
Purchaser of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory
initiatives or litigation.The opinions expressed by Bond Counsel are based upon existing legislation and regulations as
interpreted by relevant judicial and regulatory authorities 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 proposed or pending
legislation,regulatory initiatives or litigation.
Original Issue Discount: The Bonds maturing in the years through (collectively, the "Discount Bonds")
are being sold at a discount from the principal amount payable on such Bonds at maturity. The difference between the
price at which a substantial amount of the Discount Bonds of a given maturity is first sold to the public (the "Issue
Price") and the principal amount payable at maturity constitutes"original issue discount"under the Code. The amount
of original issue discount that accrues to a holder of a Discount Bond under section 1288 of the Code is excluded from
federal gross income to the same extent that stated interest on such Discount Bond would be so excluded. The amount
of the original issue discount that accrues with respect to a Discount Bond under section 1288 is added to the owner's
federal tax basis in determining gain or loss upon disposition of such Discount Bond (whether by sale, exchange,
redemption or payment at maturity).
Interest in the form of original issue discount accrues under section 1288 pursuant to a constant yield method that
reflects semiannual compounding on dates that are determined by reference to the maturity date of the Discount
Bond. The amount of original issue discount that accrues for any particular semiannual accrual period generally is
equal to the excess of(1)the product of(a) one-half of the yield on such Discount Bonds (adjusted as necessary for an
initial short period) and (b) the adjusted issue price of such Discount Bonds, over (2) the amount of stated interest
actually payable. For purposes of the preceding sentence,the adjusted issue price is determined by adding to the Issue
Price for such Discount Bonds the original issue discount that is treated as having accrued during all prior semiannual
accrual periods. If a Discount Bond is sold or otherwise disposed of between semiannual compounding dates,then the
original issue discount that would have accrued for that semiannual accrual period for federal income tax purposes is
allocated ratably to the days in such accrual period.
An owner of a Discount Bond who disposes of such Discount Bond prior to maturity should consult owner's tax
advisor as to the amount of original issue discount accrued over the period held and the amount of taxable gain or loss
upon the sale or other disposition of such Discount Bond prior to maturity.
Owners who purchase Discount Bonds in the initial public offering but at a price different than the Issue Price should
consult their own tax advisors with respect to the tax consequences of the ownership Discount Bonds.
The Code contains provisions relating to the accrual of original issue discount in the case of subsequent purchasers of
bonds such as the Discount Bonds. Owners who do not purchase Discount Bonds in the initial offering should consult
their own tax advisors with respect to the tax consequences of the ownership of the Discount Bonds.
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Original issue discount that accrues in each year to an owner of a Discount Bond may result in collateral federal
income tax consequences to certain taxpayers. No opinion is expressed as to state and local income tax treatment of
original issue discount. All owners of Discount Bonds should consult their own tax advisors with respect to the
federal, state, local and foreign tax consequences associated with the purchase, ownership, redemption, sale or other
disposition of Discount Bonds.
Original Issue Premium: The Bonds maturing in the years through are being issued at a premium to the
principal amount payable at maturity. Except in the case of dealers, which are subject to special rules, Bondholders
who acquire Bonds at a premium must, from time to time, reduce their federal tax bases for the Bonds for purposes of
determining gain or loss on the sale or payment of such Bonds. Premium generally is amortized for federal income tax
purposes on the basis of a bondholder's constant yield to maturity or to certain call dates with semiannual
compounding. Bondholders who acquire any Bonds at a premium might recognize taxable gain upon sale of the
Bonds, even if such Bonds are sold for an amount equal to or less than their any original cost. Amortized premium is
not deductible for federal income tax purposes. Bondholders who acquire any Bonds at a premium should consult
their tax advisors concerning the calculation of bond premium and the timing and rate of premium amortization, as
well as the state and local tax consequences of owning and selling the Bonds acquired at a premium.
RELATED TAX MATTERS
Information Reporting and Back-up Withholding: Audits: In general, information reporting requirements will apply
with respect to payments to an owner of principal and interest (and with respect to annual accruals of OID) on the
Bonds, and with respect to payments to an owner of any proceeds from a disposition of the Bonds. This information
reporting obligation, however, does not apply with respect to certain owners including corporations, tax-exempt
organizations, qualified pension and profit sharing trusts, and individual retirement accounts. In the event that an
owner subject to the reporting requirements described above fails to supply its correct taxpayer identification number
in the manner required by applicable law or is notified by the Internal Revenue Service(the"Service")that it has failed
to properly report payments of interest and dividends, a backup withholding tax (currently at a rate of 28%) generally
will be imposed on the amount of any interest and principal and the amount of any sales proceeds received by the
owner on or with respect to the Bonds.
Any amounts withheld under the backup withholding provisions may be credited against the United States federal
income tax liability of the beneficial owner, and may entitle the beneficial owner to a refund, provided that the
required information is furnished to the Service.
The Service has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the
Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal
income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Bonds. If an
audit is commenced, under current procedures the Service may treat the City as a taxpayer and the bondholders may
have no right to participate in such procedure. The commencement of an audit could adversely affect the market value
and liquidity of the Bonds until the audit is concluded,regardless of the ultimate outcome.
Opinion: Bond Counsel's opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered,
or of the future performance of parties to the transaction, but represents its legal judgment based upon its review of
existing statutes, regulations, published rulings and court decisions and the representations and covenants of the City
described in this section. No ruling has been sought from the Service with respect to the matters addressed in the
opinion of Bond Counsel and Bond Counsel's opinion is not binding on the Service. Bond Counsel assumes no
obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law
or interpretation,or otherwise.
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BONDHOLDERS' RISKS
An investment in the Bonds is subject to certain risks. No person should purchase the Bonds unless such person
understands the risks described below and is willing to bear those risks. There may be other risks not listed below
which may adversely affect the value of the Bonds.
Nature of Obligation: The Bonds are not general obligations of the City but are payable solely from the Net Revenues
of the Utility. The Bonds are not payable by, and have no recourse to, the power of taxation. The bondholders have
no lien on or security interest in any of the physical assets of the City, including the Utility.
Future revenues and expenses of the City,with respect to the Utility,are subject to conditions which may change in the
future to an extent that cannot be determined at this time. Future events may occur that upset the assumptions upon
which projections of revenues and expenses are based or those assumptions may fail to materialize. Because no
assurance can be made that actual events will correspond to such assumptions,no assurances can be made that the Net
Revenues will be realized in amounts sufficient to pay the debt service on the Bonds.
Revenues and Expenses: Several factors not within the control of the City could affect the City's ability to generate
sufficient Net Revenues to pay the debt service on the Bonds. These factors include, but are not limited to, inflation
and adverse economic conditions, increases in operation and maintenance costs, unexpected repairs, replacements or
improvements to the Utility and the ability of the City to supply the services demanded and to maintain necessary rates
for those services. Any one of the above factors, among others, individually or combined may cause the City to be
unable to generate sufficient Net Revenues to pay debt service on the Bonds.
Secondary Market Not Established: There is no established secondary market for the Bonds, and there is no assurance
that a secondary market will develop for the purchase and sale of the Bonds. Prices of municipal Bonds traded in the
secondary market, if any, are subject to adjustment upward and downward in response to changes in the credit markets
and changes in the operating performance of the entities operating the facilities subject to bonded indebtedness. From
time to time it may be necessary to suspend indefinitely secondary market trading in selected issues of municipal
Bonds as a result of the financial condition or market position, prevailing market conditions, lack of adequate current
financial information about the entity operating the subject facilities, or a material adverse change in the operations of
that entity, whether or not the subject Bonds are in default as to principal and interest payments, and other factors
which, may give rise to uncertainty concerning prudent secondary market practices.
Municipal Bonds are generally viewed as long-term investments, subject to material unforeseen changes in the
investor's circumstances, and may require commitment of the investor's funds for an indefinite period of time,perhaps
until maturity.
RATING
The City has requested a rating on the Bonds from Moody's Investors Service("Moody's"). Currently,Moody's rates
the City's outstanding General Obligation long-term debt `Aal'. 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.
MUNICIPAL ADVISOR
The City has retained Public Financial Management, Inc., Des Moines, Iowa as Municipal advisor (the "Municipal
Advisor") in connection with the preparation of the issuance of the Bonds. In preparing the Preliminary Official
Statement, the Municipal Advisor has relied on government officials, and other sources to provide accurate
information for disclosure purposes. The Municipal 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.
8
CONTINUING DISCLOSURE
In order to permit bidders for the Bonds and other Participating Underwriters in the primary offering of the Bonds to
comply with paragraph (b)(5) of Rule 15c2-12 promulgated by the Securities and Exchange Commission (the "SEC")
under the Securities Exchange Act of 1934, as amended, the City will covenant and agree, for the benefit of the
registered holders or beneficial owners from time to time of the outstanding Bonds, in the resolution authorizing the
issuance of the Bonds and the Continuing Disclosure Certificate, to provide Annual Financial Information filings of
specified information and notice of the occurrence of certain material events as hereinafter described (the
"Undertakings"). The information to be provided on an annual basis,the events as to which notice is to be given,and a
summary of other provisions of the Undertakings, including termination, amendment and remedies, are set forth as
APPENDIX D to this Preliminary Official Statement.
Within the past five years, Notice of the June 1, 2011 call of the City's General Obligation Series 2002A, Series
2002B,and Series 2003 Bonds were filed June 28,2011,thirteen(13)days after the date required.
In regard to the now matured Hospital Revenue Series 2003 debt, the Mary Greeley Medical Center filed required
reports for the fiscal year ended June 30, 2010 two (2) days after the date specified in the Undertaking, and filed
required reports for the quarters ended June 30, 2010, September 30,2010, and June 30, 2011, each within three (3)
days after the dates required. Additionally, the Mary Greeley Medical Center's required report for the quarter ended
December 31, 2012 was timely filed February 6, 2013, but not linked to the Hospital Revenue Series 2011 CUSIPs.
This was corrected upon discovery.
In an effort to augment the City's procedures and policies to maintain future compliance, the City has taken additional
steps intended to assure future compliance with its Undertakings. These steps include implementing the MSRB's
EMMA notification system whereby the City will receive timely email reminders a month in advance for all the City's
annual disclosure filings to ensure all disclosure obligations have been made on a timely basis and in all material
respects.
Breach of the Undertakings will not constitute a default or an"Event of Default"under the Bonds or the resolution for
the Bonds. A broker or dealer is to consider a known breach of the Undertakings, 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
Undertakings may adversely affect the transferability and liquidity of the Bonds and their market price.
FINANCIAL STATEMENTS
The City's June 30, 2014 Comprehensive Annual Financial Report, as prepared by City management and audited by a
certified public accountant, is reproduced as APPENDIX C. The City's certified public accountant has not consented
to distribution of the audited financial statements and has not undertaken added review of their presentation. Further
information regarding financial performance and copies of the City's prior Comprehensive Annual Financial Report
may be obtained from Public Financial Management,Inc.
CERTIFICATION
The City has authorized the distribution of this Preliminary Official Statement for use in connection with the initial
sale of the Bonds. I have reviewed the information contained within the Preliminary Official Statement prepared on
behalf of the City of Ames, Iowa, by Public Financial Management, Inc., Des Moines, Iowa, and said Preliminary
Official Statement does not contain any material misstatements of fact nor omission of any material fact regarding the
issuance of$10,350,000*Electric Revenue Bonds, Series 2015B.
CITY OF AMES,IO WA
/s/Duane Pitcher,Director of Finance
* Preliminary;subject to change.
9
CITY OF AMES,IOWA MUNICIPAL ELECTRIC UTILITY
ORGANIZATION AND MANAGEMENT
The City of Ames, Iowa's(the "City")Municipal Electric Utility(the"Utility")was established pursuant to an election
in 1896 and has successfully operated since that time.
The Utility is governed by the Electric Utility Operations Review and Advisory Board ("EUORAB"), which was
established on November 10, 1981. The EUORAB is composed of five members, each qualified by demonstrated
expertise or experience in generation, distribution or marketing of electric energy. The board members are appointed
by the Mayor with Council approval for three-year terms. Appointees who have served 2 consecutive full terms are
not eligible for reappointment to the board. The board is charged with investigating and reviewing, on a continuing
basis, all aspects of the operations of the Utility, including any and all practices, plans or proposals pertaining to
generation,distribution and marketing.
The board provides to the City Council a critique of management practices, planning and proposals, including rate
structures and power sale contracts. The EUORAB also provides advice and proposals to the City Council on matters
as aforesaid at such times and in such frequency as the board deems appropriate, or in response to requests from the
City Council.
The City Council is directly responsible for the operations of the Utility and has sole authority to establish rates and
charges. The Utility's Director, Mr. Donald Kom, is responsible for overseeing the day-to-day operations and reports
to the City Manager.
Electric Utility Operations Review and Advisory Board Members
Member Original Appointment Term Expires
Cathy Brown Sept 2009 April 2018
Justin Dodge April 2014 April 2017
John Russell April 2011 April 2017
Jim Converse April 2013 April 2016
Steve Goodhue March 2013 April 2018
DESCRIPTION OF THE MUNICIPAL ELETRIC UTILITY
Service Area
The Utility serves the majority of the City, as well as certain installations of Iowa State University (the "ISU").
Service is provided to ISU either by direct service or by wheeling power generated by the Iowa State University
generating facilities,which system is interconnected with that of the City.
The present service boundary of the Utility covers an area of approximately 25 square miles and includes
approximately 22,824 residential customers,3,135 commercial customers,and 4 industrial and large power customers.
Owned Generation
The City owns and operates two coal/gas/refuse-fired steam generation units, as well as two gas turbine units used to
meet peak demand. The installed capacity of the Utility's generating units is 146,000 KW and is operated from
adjoining plants located three blocks east of the principal business district. In addition, in 2010 the Utility entered into
a 20 year purchase power agreement for 36 MW of wind from the Story County II Windfarm.
The Utility's total nameplate capacity is expected to be adequate to serve the projected load growth through
approximately 2022 assuming no unusual growth and no generating units are retired or taken out of service.
10
Sources of Power
The City has the capability of burning coal, fuel oil, and refuse derived fuel in their electric system. The two main
coal-fired units are presently being converted from burning coal to natural gas. This conversion is scheduled to be
complete by April 2016.
The Utility has purchased refuse derived fuel ("RDF") for Units No. 7 & 8 since January 1976 to burn in combination
with coal. RDF has since provided 8 - 10 percent of the annual fuel requirement at the plant. The RDF is supplied by
the Ames Resource Recovery plant, a separate municipal utility. The RDF is produced by a two-stage shredding and
separation process which yields a fuel with about half of the heating value of coal and sulfur content of only 0.1
percent. The City has an electric interchange agreement with MISO for the interchange of power and economy energy.
Refuse fuel is supplied by the City's Resource Recovery Plant. Approximately 34,000 tons are supplied annually.
Coal fuel is supplied under a contract by Peabody COALSALES LLC since January 1,2010 and expires December 31,
2015. The contract quantity is 100,000 tons annually.
Natural gas is supplied by a number of actions taken by the City Council to secure a stable, firm source of fuel to the
power plant for years to come. For natural gas transportation, the City has entered into a 10 year contract with
Northern Natural Gas for firm transport service at a rate well under filed tariff. For the natural gas commodity, the
City solicited competitive bids and signed a 5 year contract to provide 12,000 MMBTU per day at $3.02 per
MMBTU. This volume represents the typical amount that the power plant consumes on a daily basis to meet customer
electrical power demand. For additional natural gas required to meet demand, the City has signed an asset
management contract with BP Canada Energy Marketing Corp.to schedule the natural gas and manage any day-to-day
changes in the City's usage. These arrangements will provide for relatively stable fuel costs over the next several
years.
In addition,the City is interconnected with the State of Iowa, acting through the State Board of Regents for Iowa State
University. The interconnection is a 69 KV line completed in March, 1993.
It is the policy of the City to maintain an 8 percent capability reserve above predicted system peak demand, which is
determined each year by the regional transmission operator.
The Utility's transmission system now consists of a 69 KV and 161 KV tie line to MidArnerican Energy Company, a
161 KV line to ITC, and a 69 KV loop feed around the City serving eight substations.
The Utility's distribution system consists of 13.8 KV circuits serving all but a small part of the City which is served by
4.16 KV circuits.
Ratings of Existing Generating Equipment
Plant No.2
Date of Nameplate Net
Unit No. Installation Fuel Fired Rating(KW) Capabilitv(KW)')
7 1968 Coal/Gas/Refuse 33,000 30,000
8 1982 Coal/Refuse 6500 65,000
Total 95,000
Combustion Turbine
Date of Nameplate Net
Unit No. Installation Fuel Fired Rating(KW) Capability(KW)
1 1971 Fuel Oil 22,000 19,000
2 2005 Fuel Oil 29,000 29,000
Total 48,000
Total Net Capability of the System 4 (QQQ
Story County 11 Windfarm(contract) 36,000
11
Transmission
Finn network transmission service for the Utility's entire load is provided by the Midcontinent Independent System
Operator("MISO"), a regional transmission organization. The Utility is a Transmission Owner("TO") in MISO. The
Utility owns several local transmission lines that provide service to the City and also supports the regional electric
system. The Utility actively participates in the planning of the regional transmission system and invests in expansion
projects as approved by the MISO planning process. As a TO in MISO, the Utility receives revenues from MISO
collected from transmission rate payers. These rates are based on the net book value of the assets and the Federal
Energy Regulatory Commission approved rate-of-return on these assets. Beginning in 2012 and continuing through
2014, the Utility made large investments in transmission assets. These assets allowed the Utility to experience fewer
congestion issues that impact wholesale market prices as well as providing a rate of return on invested transmission
equity that offsets transmission network service charges. The Utility currently has over $34 million in transmission
assets.
REGULATORY MATTERS
As the City currently operates a coal-fired power plant, it is subject to the Environmental Protection Agency's Mercury
and Air Toxic Standards rule ("MATS"). With approval of the 4"' year by EPA Region 7, the City is to meet MATS
requirements by April 16, 2016. To meet the emission standards outlined in the MATS rule, the City has chosen to
convert its two coal-fired units to operate with natural gas and eliminate coal. Once accomplished by April 2016,all of
the City's generation will be in full compliance of EPA's MATS rule.
RATES AND CHARGES
The City Council adopted the following electric rates and charges in November, 2012. Rates of the Utility, as a
municipal system, are not subject to Iowa Utilities Board Regulation. The current electric rate tariff provides for a
monthly energy cost adjustment factor, which reflects changes in the price of fuel used to generate electricity and
purchased power. Following are the basic monthly rates for electric service effective January 1,2013.
Residential
Basic Service Charge $8.00 per month
All kWh(June—Sept.) $0.1166 per kWh
All kWh(Oct.—May) $0.0966 per kWh
Minimum Billing $8.00 per month
Small Commercial
Basic Service Charge $15.00 per month
All kWh(June—Sept.) $0.1148 per kWh
All kWh(Oct.—May) $0.0948 per kWh
Minimum Billing $15.00 per month
Large Commercial
Basic Service Charge $150.00 per month
All kWh(June—Sept.) $0.0619 per kWh
All kWh(Oct.—May) $0.0619 per kWh
All KVA(June—Sept.) $10.30 per KVA
All KVA(Oct.—May) $7.70 per KVA
Minimum Billing $150.00 per month
Industrial
Basic Service Charge $150.00 per month
All kWh(June—Sept.) $0.0619 per kWh
All kWh(Oct.—May) $0.0619 per kWh
All KVA(June—Sept.) $10.00 per KVA
All KVA(Oct.—May) $7.50 per KVA
Minimum Billing $150.00 per month
12
ELECTRICITY PRODUCED,PURCHASED AND COST
Year kWh Produced(000's) kWh Purchased(000's) Cost
2011 341,229 254,651 $28,970,180
2012 307,448 287,847 27,663,336
2013 318,395 267,910 28,056,819
2014 282,349 320,114 30,029,217
2015 278,472 306,896 25,977,209
HISTORY OF ELECTRIC SALES
Number of Total kWh Sold Total
Year Customers 000's Billius
2011 24,521 570,072 $51,984,567
2012 24,723 567,391 51,143,042
2013 24,868 561,860 52,834,497
2014 25,292 574,659 54,555,355
2015 25,559 554,167 52,435,240
BILLABLE CONSUMPTION BY CLASS OF SERVICE (Kilowatt Hours)
Small Large Commercial
Fiscal Year Residential Commercial and Industrial Industrial Total
2011 163,288,498 51,169,606 225,588,368 130,025,466 570,071,938
2012 157,208,406 50,804,253 226,910,422 132,468,362 567,391,443
2013 161,851,581 54,020,115 223,465,399 122,523,014 561,860,109
2014 166,620,541 57,447,338 226,883,810 123,707,577 574,659,266
2015 156,807,514 53,596,265 220,057,475 123,705,299 554,166,553
HISTORY OF ELECTRIC ACCOUNTS SERVED (Kilowatt Hours)
Small Large Commercial
Fiscal Year Residential Commercial and Industrial Industrial Total
2011 21,756 2,344 418 3 24,521
2012 21,892 2,404 423 4 24,723
2013 21,999 2,457 408 4 24,868
2014 22,386 2,502 400 4 25,292
2015 22,648 2,502 404 5 25,559
PEAK DEMAND
Year Peak Demand(MW)
2011 123.6
2012 128.6
2013 130.7
2014 130.2
2015 122.6
13
LARGER ELECTRIC USERS(FY 2014-15)
Customer Kilowatt Hours
AMCOR Rigid Plastics USA 53,158,173
Danfoss Power Solutions 25,020,576
ISU FP&M Utilities 21,173,166
3 M Co. 20,973,211
COA-Mary Greeley Hospital 14,941,465
ISU Athletic Department 8,063,013
Hach Company 6,596,100
ISU Ames Lab 6,261,600
Hy-Vee Inc. 4,384,200
Wal-Mart Stores 4,178,400
MUNICIPAL ELECTRIC UTILITY REVENUE DEBT
Electric Revenue Debt(Includes the Bonds)
The City has electric revenue debt paid solely from the net revenues of the Electric Utility as follows:
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturity As of 12/29/15
12/15B $10,350,000* Electric System Improvements 6/27 $10,350,000
* Preliminary;subject to change.
Annual Fiscal Year Electric Revenue Debt Service Payments(Includes the Bonds)
Bonds
Fiscal Principal
Year Principal* &Interest*
2015-16 $910,000 $1,039,655
2016-17 750,000 1,041,335
2017-18 765,000 1,040,810
2018-19 780,000 1,038,139
2019-20 800,000 1,038,405
2020-21 825,000 1,041,245
2021-22 845,000 1,036,907
2022-23 875,000 1,040,374
2023-24 900,000 1,036,412
2024-25 935,000 1,040,632
2025-26 965,000 1,037,626
2026-27 1,000,000 1,03 7,500
Total $10,350,000
*Preliminary;subject to change.
14
UTILITY'S HISTORICAL CASHFLOW AND PROJECTED DEBT SERVICE COVERAGE
The following table sets forth the Utility's historical financial performance for FY 2010-11 through FY 2013-14 based
on information from the Utility's Comprehensive Annual Financial Report, as well as the Utility's unaudited financial
performance for FY 2014-15.
Based on the FY 2013-14 Comprehensive Annual Financial Report, the $10,916,148 net revenue for debt service
would provide 10.48 times debt service coverage for the $1,041,335 projected maximum annual debt service on the
Bonds. Based on the unaudited FY 2014-15 projected financial performance, the $9,329,913 net revenue for debt
service would provide 8.96 times debt service coverage of the projected maximum annual debt service.
Audited Financial Reports Unaudited
FY2010-11 FY2011-12 FY2012-13 FY2013-14 FY2014-1
OPERATING REVENUES
Retail Sales $52,154,428 $53,484,774 $52,461,248 $51,160,052 $49,197,757
Customer Service Charges 0 0 0 3,326,616 3,360,768
ISU Sales 4,007,508 2,149,934 3,586,865 3,895,298 2,478,425
Street Lights 791,613 830,443 768,973 870,623 873,669
Penalties 99,831 99,212 97,174 99,067 88,720
Miscellaneous 460,432 631,195 438,939 664,549 636,623
Total Operating Revenues $57,513,813 $57,195,559 $57,353,200 $60,016,205 $56,635,962
OPERATING EXPENSES
Administration $1,025,438 $1,057,343 $1,062,207 $1,055,898 $1,075,784
Electric Administration 1,572,767 1,728,734 1,392,937 1,093,777 997,050
Production 9,802,897 10,365,722 10,576,108 10,710,498 10,340,200
Fuel&Purchased Power 24,996,842 25,409,624 27,210,684 27,024,274 25,835,736
ISU Purchased Power 2,439,004 2,024,536 2,187,684 2,760,118 2,207,136
Distribution/Operations 2,441,588 2,529,716 2,438,895 2,870,838 2,780,827
Distribution/Improvements 1,033,264 1,448,144 1,796,819 1,797,661 2,090,849
Technical Services 918,116 978,819 993,935 975,909 1,036,658
Engineering 571,382 660,533 578,751 616,631 633,409
Customer Service 661,615 655,681 626,832 670,971 651,035
Depreciation 3,002,356 3,217,121 3,463,395 3,921,411 4,184,701
Total Operating Expenses $48,465,269 $50,075,973 $52,328,247 $53,497,986 $51,833,385
OPERATING INCOME $9,048,544 $7,119,586 $5,024,954 $6,518,219 $4,802,577
NONOPERATING REVENUES & EXPENSES
Interest Earnings $275,016 $302,711 ($49,896) $412,025 $326,744
Reimbursements 0 0 87,175 2,073 6,315
Other Income 31,331 0 36,801 62,420 53,867
Add back Depreciation 3,002,356 3,217,121 3,463,395 3,921,411 4,184,701
Subtotal $3,308,703 $3,519,832 $3,537,475 $4,397,929 $4,571,628
NET REVENUE FOR DEBT $12,357,247 $10,639,418 $8,562,428 $10,916,148 $9,374,204
ELECTRICE REVENUE DEBT
Proposed Series 2015B Bonds $0 $0 $0 $0 $0
Debt Coverage Ratio(Parity Debt N/A N/A N/A N/A N/A
CASHFLOW AFTER DEBT $12,357,247 $10,639,418 $8,562,428 $10,916,148 $9,374,204
15
APPENDIX A
GENERAL INFORMATION ABOUT THE CITY OF AMES, IOWA
This section is included for informational purposes only. THE$10,350,000*ELECTRIC REVENUE BONDS, SERIES
2015B (THE "BONDS') ARE NOT GENERAL OBLIGATIONS OF THE CITY OF AMES, IOWA but are payable
solely and only from net revenues of the Municipal Electric Utility ("Utility'). The Bonds are not a debt of nor a
charge against the City of Ames, Iowa (the "City') within the meaning of any constitutional or statutory limitation or
provision and are not payable in any manner by taxation, and the City shall not be liable by reason of the failure of the
net revenues to be sufficient for the payment of the Bonds.
*Preliminary;subject to change.
(This page has been left blank intentionally.)
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 2014
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 2014, the taxable value
rollback rate was 55.7335%of actual value for residential property;44.7021%of actual value for agricultural property;
and 90%of actual value for commercial, industrial, and railroad property.
The Legislature's intent has been to limit the growth of statewide taxable valuations for the specific classes of property
to 3% annually. Utility property is limited to an 8% annual growth. 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.
PROPERTY VALUATIONS(1/1/2014 Valuations for Taxes Payable July 1,2015 through June 30,2016)
Taxable Value
100%Actual Value (With Rollback)
Residential $2,785,314,800 $1,552,353,357
Commercial 842,003,200 757,802,880
Industrial 134,033,100 120,629,790
Railroads 5,873,500 5,286,150
Utilities w/o Gas &Electric 5,834,533 5,834,533
Gross valuation $3,773,059,133 $2,441,906,710
Less military exemption (2,514,090) (2,514,090)
Net valuation $3,770,545,043 $2,439,392,620
TIF Increment $2,030,500 $1,827,450
Taxed separately
Ag. Land& Building $4,204,100 $1,879,319
Gas& Electric Utilities $17,022,683 $5,566,022
2014 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY'S
Taxable Valuation Percent of Total
Residential $1,552,353,357 63.43%
Gas&Electric Utilities 5,566,022 0.23%
Commercial,Industrial,Railroads and Utility 889,553,353 36.34%
Total Gross Taxable Valuation $2,447,472,732 100.00%
1)Excludes Taxable TIF Increment and Ag.Land&Buildings.
A-1
TREND OF VALUATIONS
Assessment Payable 100% Taxable Valuation Taxable
Year Fiscal Year Actual Valuation (With Rollback) TIF Increment
2010 2011-12 $3,455,460,220 $2,168,260,590 $7,370
2011 2012-13 3,488,267,332 2,239,846,934 7,370
2012 2013-14 3,539,464,142 2,325,969,651 447,669
2013 2014-15 3,607,945,166 2,353,356,218 1,646,350
2014 2015-16 3,793,802,326 2,444,958,642 1,827,450
The 100% Actual Valuation, before rollback and after the reduction of military exemption, includes Ag. Land &
Buildings, Taxable 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
Set forth in the following table are the persons or entities which represent larger taxpayers within the boundaries of the
City, as provided by the Story County Auditor's Office. No independent investigation has been made of and no
representation is made herein as to the financial condition of any of the taxpayers listed below or that such taxpayers
will continue to maintain their status as major taxpayers in the City. With the exception of the electric and natural gas
provider noted below (which is subject to an excise tax in accordance with Iowa Code chapter 437A), the City's mill
levy is uniformly applicable to all of the properties included in the table, and thus taxes expected to be received by the
City from such taxpayers will be in proportion to the assessed valuations of the properties. The total tax bill for each
of the properties is dependent upon the mill levies of the other taxing entities which overlap the properties.
1/1/2014
Taxpayer Type of Property/Business Taxable Valuation 2)
Iowa State University Research Commercial $35,173,530
Barilla America Inc. Industrial 32,579,100
Campus Investors IS LLC Commercial 31,609,753
Clinic Building Company,Inc. Commercial 19,397,610
US Bank,NA Trustee 3) Commercial 19,019,520
Walmart Stores, Inc. Commercial 17,100,000
Dayton Park LLC Commercial 16,479,445
GPT Ames Owner LLC 4) Commercial 15,549,300
West Towne Condos LLC Commercial 14,398,364
University West Property Owner LLC Commercial 14,194,195
1) This list represents some of the larger taxpayers in the City,not necessarily the 10 largest taxpayers.
2) The 1/1/2014 Taxable Valuation listed represents only those valuations associated with the title holder and may not necessarily
represent the entire taxable valuation.
3) Formerly NG Mall.
4) Formerly Cycloneball.
Source: Story County Auditor's Office.
A-2
PROPERTY TAX LEGISLATION
During the 2013 legislative session, the Iowa General Assembly enacted Senate File 295 (the "Act"), which the
Governor signed into law on June 12, 2013. Among other things, the Act (i) reduces the maximum annual taxable
value growth percent, due to revaluation of existing residential and agricultural property, from the current 4% to 3%,
(ii) assigns a "rollback" (the percentage of a property's value that is subject to tax) to commercial, industrial and
railroad property of 95% for the 2013 assessment year and 90% for the 2014 assessment year and all years thereafter,
(iii) creates a new property tax classification for multi-residential properties (mobile home parks, manufactured home
communities, land-lease communities, assisted living facilities and property primarily used or intended for human
habitation containing three or more separate dwelling units) ("Multi-residential Property") that begins in the 2015
assessment year, and assigns a declining rollback percentage of 3.75% to such properties for each subsequent year
until 2021 assessment year (the rollback percentage for Multi-residential Properties will be equal to the residential
rollback percentage in 2022 assessment year and thereafter) and (iv) exempts a specified portion of the assessed value
of telecommunication properties.
The Act includes a standing appropriation to replace some of the tax revenues lost by local governments, including tax
increment districts, resulting from the new rollback for commercial and industrial property. Prior to fiscal year 2017-
18, the appropriation is a standing unlimited appropriation, but beginning in fiscal year 2017-18 the standing
appropriation cannot exceed the actual fiscal year 2016-17 appropriation amount. The appropriation does not replace
losses to local governments resulting from the Act's provisions that reduce the annual revaluation growth limit for
residential and agricultural properties to 3% from 4%, the gradual transition for Multi-residential Property from the
commercial rollback percentage (100% of Actual Value) to the residential rollback percentage (currently 55.7335% of
Actual Valuation), or the reduction in the percentage of telecommunications property that is subject to taxation.
Given the wide scope of the statutory changes, and the State of Iowa's discretion in establishing the annual
replacement amount that is appropriated each year commencing in fiscal year 2017-18, the impact of the Act on the
City's future property tax collections is uncertain and the City is unable to accurately assess the financial impact of the
Act's provisions on the City's future operations.
In Moody's Investor Service US Public Finance Weekly Credit Outlook, dated May 30, 2013, Moody's Investor
Service ("Moody's") projected that local governments in the State of Iowa are likely to experience modest reductions
in property tax revenues starting in fiscal year 2014-15 as a result of the Act, with sizeable reductions possible starting
in fiscal year 2017-18. According to Moody's, local governments that may experience disproportionately higher
revenue losses include regions that have a substantial commercial base, a large share of Multi-residential Property
(such as college towns),or significant amounts of telecommunications property.
Notwithstanding any decrease in property tax revenues that may result from the Act, Iowa Code section 76.2 provides
that when an Iowa political subdivision issues general obligation bonds, "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 twenty years. 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."
From time to time, other legislative proposals may be considered by the Iowa General Assembly that would, if
enacted, alter or amend one or more of the property tax matters described in this Preliminary Official Statement. It
cannot be predicted whether or in what forms any of such proposals may be enacted,and there can be no assurance that
such proposals will not apply to valuation,assessment or levy procedures for the levy of taxes by the City.
A-3
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 2014 Actual
Valuation currently applicable to the fiscal year 2015-16,is as follows:
2014 Gross Actual Valuation of Property $3,793,802,326
Legal Debt Limit of 5% 0.05
Legal Debt Limit $189,690,116
Less: G.O.Debt Subject to Debt Limit (77,005,000)
Less: Other Debt Subject to Debt Limit (17,500) ZI
Net Debt Limit $112,667,616
1) Source: Iowa Department of Management.After military exemption.
2) Other Debt Subject to Debt Limit includes an Iowa Department of Transportation Loan and TIF rebate agreement payments
appropriated for FY 2015-16.
DIRECT DEBT
General Obligation Debt Paid by Taxes and Other Sources 1�
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturi1y As of 12/29/15
10/08A $8,355,000 Street Improvements&Aquatic Center 6/20 $4,035,000
10/09B 11,165,000 Capital Improvement Projects 6/21 6,220,000
9/10A 6,690,000 Capital Improvement Projects 6/22 4,205,000
5111A 5,980,000 Refunding Series 2002A,2002B &2003 6/21 1,415,000
11/11B 6,675,000 Corporate Purpose Improvements 6/23 4,570,000
10/12 12,660,000 Corporate Purpose Improvements 6/32 10,260,000
5/13 22,540,000 Corporate Purpose Improvements&Refunding 6/32 18,955,000
9/14 9,695,000 Corporate Purpose Improvements 6/26 8,900,000
9/15A 18,445,000 Corporate Purpose Improvements&Refunding 6/35 18,445,000
Total $77,005,000
1) The City's general obligation debt is abated by tax increment reimbursements, water revenues, sewer revenues, airport
revenues,resource recovery revenues,and special assessments.
OTHER DEBT
Water Revenue Debt
The City has water revenue debt paid solely from the net revenues of the Water Utility as follows:
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturi1y As of 12/29/15
2/15 $76,325,000 Water Revenue Bonds(SRF) 6/37 $19,226,106 i)
1) Preliminary; subject to change based on final project costs.The City has drawn$19,226,106 as of the date of this Preliminary
Official Statement.
A-4
Sewer Revenue Debt
The City has sewer revenue debt paid solely from the net revenues of the Sewer Utility as follows:
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturfty As of 12/29/15
11/12 $3,121,000 Sewer Revenue Bonds(SRF) 6/33 $2,210,250 2)
4/14 375,000 Planning and Design Loan(SRF) 4/17 0 3)
Total $2,210,250
2) The City has drawn$2,469,250 as of the date of this Preliminary Official Statement.
3) The City has drawn$0 as of the date of this Preliminary Official Statement.
Hospital Revenue Debt 4)
The City has hospital revenue debt paid solely from the net revenues of Mary Greeley Medical Center as follows:
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturity As of 12/29/15
10/11 $65,000,000 Mary Greeley Medical Center 6/36 $63,560,000
11/12 26,000,000 Mary Greeley Medical Center& Refunding 6/27 19,945,000
Total $83,505,000
4) Excludes an electronic health records software note payable in the amount of$122,260.
OVERLAPPING DEBT
City's
1/1/2014 Valuation Within Percent Proportionate
Taxing District Taxable Valuation the City Applicable G.O. Debt 2) Share
Story County $4,133,480,199 $2,448,665,411 59.24% $3,130,000 $1,854,212
Ames CSD 2,268,984,601 2,221,460,327 97.91% 37,140,000 36,363,774
Gilbert CSD 430,567,087 215,508,171 50.05% 19,875,000 9,947,438
Nevada CSD 441,990,797 445,914 0.10% 7,755,000 7,755
United CSD 251,886,280 11,250,999 4.47% 0 0
DMACC 40,089,928,553 2,448,665,411 6.11% 81,820,000 4,999,202
City's Share of Total Overlapping Debt $53,172,381
1) Taxable Valuation excludes military exemption and includes Ag Land,Ag Buildings,all Utilities and TIF Increment.
2) Includes general obligation bonds,PPEL notes,certificates of participation and new jobs training certificates.
DEBT RATIOS
Debt/Actual
Market Value Debt/58,965
G.O. Debt ($3,793,802,326)11 Population 2)
Total General Obligation Debt $77,005,000 2.03% $1,305.94
City's Share of Total Overlapping Debt $53,172,381 1.40% $901.76
1) Based on the City's 1/1/2014 100%Actual Valuation;includes Ag Land,Ag Buildings,all Utilities and TIF Increment.
2) Population based on the City's 2010 U.S.Census.
A-5
LEVIES AND TAX COLLECTIONS
Collected During Percent
Fiscal Year Levy Collection Year Collected
2011-12 $23,516,201 $23,178,276 98.56%
2012-13 24,018,714 23,540,944 98.01%
2013-14 25,261,403 24,795,918 98.16%
2014-15 25,557,159 24,770,089 96.92%
2015-16 26,000,394 --------In Process of Collection--------
Collectionsinclude delinquent taxes from all prior years. Taxes in Iowa are delinquent each October 1 and April 1 and
a late payment penalty of 1% per month of delinquency is enforced as of those dates. If delinquent taxes are not paid,
the property may be offered at the regular tax sale on the third Monday of June following the delinquency date.
Purchasers at the tax sale must pay an amount equal to the taxes, special assessments, interest and penalties due on the
property and funds so received are applied to taxes. A property owner may redeem from the regular tax sale but,
failing redemption within three years,the tax sale purchaser is entitled to a deed,which in general conveys the title free
and clear of all liens except future tax installments.
Source: Story County.
TAX RATES
FY 2011-12 FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16
$/$1,000 / 1000 $/$1,000 / 1000 $/$1,000
Story County 5.49074 5.52837 5.50349 5.38990 5.68249
Story County Hospital 0.42050 0.57240 0.58000 0.58000 0.58000
County Ag. Extension 0.08340 0.08100 0.07196 0.08157 0.08447
City of Ames 10.84365 10.72125 10.85779 10.85538 10.62937
City Assessor 0.35075 0.39685 0.34391 0.33992 0.37804
Ames Comm. School District 14.51772 14.47262 14.34904 14.34759 14.20276
Gilbert Comm. School District 19.98282 17.98747 17.47825 17.71795 17.83972
Nevada Comm. School District 15.61389 15.61527 15.71000 16.75171 16.80944
United Comm. School District 11.72302 13.77425 12.01788 10.16705 8.51849
Des Moines Area Comm. College 0.59018 0.58466 0.58466 0.65724 0.67574
State of Iowa 0.00320 0.00330 0.00330 0.00330 0.00330
Total Tax Rate:
Ames CSD Resident 32.30014 32.36045 32.29415 32.25490 32.23617
Gilbert CSD Resident 37.76524 35.87530 35.42336 35.62526 35.87313
Nevada CSD Resident 33.39631 33.50310 33.65511 34.65902 34.84285
United CSD Resident 29.50544 31.66208 29.96299 28.07436 26.55190
LEVY LIMITS
A city's general fund tax levy is limited to $8.10 per $1,000 of taxable value, with provision for an additional $0.27
per $1,000 levy for an emergency fund which can be used for general fund purposes (Code of Iowa, Chapter 384,
Division I). Cities may exceed the $8.10 limitation upon authorization by a special levy election. Further, there are
limited special purpose levies, which may be certified outside of the above-described levy limits (Code of Iowa,
Section 384.12). The amount of the City's general fund levy subject to the $8.10 limitation is $5.77474 for FY 2015-
16, and the City has levied no emergency levy. The City has certified special purpose levies outside of the above
described levy limits as follows: $0.71216 for police and fire retirement and $0.65200 for the operation and
maintenance of a public transit system. Debt service levies are not limited.
A-6
FUNDS ON HAND(CASH AND INVESTMENTS AS OF SEPTEMBER 30,2015)
Governmental
General Fund $5,492,769
Debt Service Fund 656,857
Capital Projects Fund 23,311,402
Other Governmental Funds 15,914,744
Business Type:
Mary Greeley Medical Center 218,439,211
Electric Utility 39,784,440
Sewer Utility 8,498,749
Water Utility 17,727,293
Other Enterprise Funds 9,865,716
Internal Service Funds 15,253,613
Total All Funds: $354,944,794
GENERAL FUND BUDGETS(ACCRUAL BASIS)
The table below represents a comparison between the final fiscal year 2013-14 actual financial performance, the
amended fiscal year 2014-15 budget and the adopted fiscal year 2015-16 budget on an accrual basis.
Actual Amended Adopted
FY 2013-14 FY 2014-15 FY 2015-16
Revenues:
Property taxes $15,073,130 $15,236,592 $15,682,987
Other City taxes 1,895,619 1,809,787 1,828,772
Licenses and permits 1,899,285 1,417,449 1,449,125
Use of money and property 478,323 426,407 417,729
Intergovernmental 325,824 693,782 1,092,735
Charges for fees and services 3,332,845 3,682,680 3,831,205
Miscellaneous 382,609 141,892 149,426
Transfers in 8,171,120 9,237,294 8,822,639
Proceeds of Capital Asset Sales 0 500 500
Total revenues $31,558,755 $32,646,383 $33,275,118
Expenditures:
Public safety $15,721,086 $16,717,447 $17,258,057
Public works 983,617 964,199 1,120,252
Health and social services 0 0 0
Culture and recreation 6,675,071 7,258,647 7,431,641
Community&economic development 706,529 1,312,879 1,030,949
General government 2,218,031 2,584,662 2,367,903
Capital projects 343,571 2,316,998 0
Transfers out 3,881,731 3,881,522 4,066,316
Total expenditures $30,529,636 $35,036,354 $33,275,118
Excess(deficiency)of revenues over
(under)expenditures $1,029,119 ($2,389,971) $0
Fund balance at beginning of year $8,960,988 $9,990,107 $7,600,136
Fund balance at end of year $9,990,107 $7,600,136 $7,600,136
A-7
THE CITY
CITY GOVERNMENT
The City of Ames, Iowa(the"City") is governed under and operates under a Mayor-Council form of government with
a City Manager. The principle of this type of government is that the Council sets policy and the City Manager carries
it out. The six members of the Council are elected for staggered four-year terms. One member is elected from each of
the four wards and two are elected at large. The Council appoints the City Manager as well as the City Attorney. The
City Manager is the chief administrative officer of the City. The Mayor is elected for a four-year term, presides at
council meetings and appoints members of various City boards, commissions and committees with the approval of the
Council.
EMPLOYEES AND PENSIONS
The City has 1,306 full-time employees of which 490 are governmental employees and 816 are employees of the Mary
Greeley Medical Center and 1,207 part-time employees (including seasonal employees) of which 736 are
governmental employees and 471 are employees of the Mary Greeley Medical Center. Included in the City's full-time
employees are 51 sworn police officers and 55 firefighters.
The City contributes to the Iowa Public Employees Retirement System ("IPERS"), a cost sharing multiple-employer
public employees' retirement system designed as a supplement to Social Security. The pension plan provides
retirement and death benefits, which are established by State statute. The City is current in its obligation to IPERS,
which has been as follows: $6,862,042 in fiscal year 2012-13, $7,203,057 in fiscal year 2013-14 and $7,272,880 in
fiscal year 2014-15.
The City also contributes to the Municipal Fire and Police Retirement System of Iowa ("MFPRSI"), a benefit plan
administered by a Board of Trustees. MFPRSI provides retirement, disability and death benefits that are established
by State statute to plan members and beneficiaries. Plan members are required to contribute 9.4% of their earnable
compensation and the City's contribution rate is 27.77% of earnable compensation. The City is current in its
obligation to MFPRSI, which has been as follows: $1,758,163 in fiscal year 2012-13, $2,064,780 in fiscal year 2013-
14 and$2,150,611 in fiscal year 2014-15.
UNION CONTRACTS
City employees are represented by the following five bargaining units:
Bargaining Unit Contract Expiration Date
International Association of Firefighters June 30,2016
Public,Professional and Maintenance Employees June 30,2016
International Brotherhood of Electrical Workers June 30,2016
International Union of Operating Engineers(Local 234C) June 30,2016
International Union of Operating Engineers(Local 234D) June 30,2016
OTHER POST EMPLOYMENT BENEFITS
Plan description: The City and hospital provide health and dental care benefits for retired employees and their
beneficiaries through a single-employer, defined benefit plan. The hospital also provides a life insurance benefit. The
City has the authority to establish and amend benefit provisions of the plan. The post employment benefit is limited to
the implied subsidy since retirees pay one hundred percent of the premium for the insurance benefits, since the
premium rates are based on the entire pool of covered members, the retirees receive an implied subsidy since their
rates are not risk adjusted.
A-8
Funding_policy: Participants must be at least 55 years old, have been employed by the City for the preceding four
years, and be enrolled in a sponsored insurance plan at the time of retirement. Benefits terminate upon attaining
Medicare eligibility. The contribution requirements of the City are established and may be amended by the City. Plan
members are currently not required to contribute. The City funds on a pay-as-you go basis.
Annual OPEB cost and net OPEB obligation:The net OPEB obligation as of June 30,2015, is determined as follows:
City Medical Center Total
Annual required contribution $192 000 $465,640 $657,640
Interest on net OPEB obligation 46,000 148,077 194,077
Adjustment to annual required contribution (41,000) (105,975) (146,975)
Annual OPEB cost/expense $197,000 $507,742 $704,742
Contributions and payments made 49,024 (29,550) 78,574
Increase(decrease)in net OPEB obligation $246 024 $478,192 $783,316
Net OPEB obligation,July 1,2014 1 1 7 2 9 1 2 4 11
Net OPEB obligation,June 30, 2015 $1,399,597 $3,498,815 $4,898,412
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB
obligation for fiscal years 2013,2014 and 2015:
Annual %of Annual OPEB Net OPEB
Fiscal Year Ended OPEB Cost Cost Contributed Obligation
June 30,2013 $661,229 19.62% $3,467,601
June 30,2014 $748,896 13.54% $4,115,096
June 30,2015 $704,742 (11.15%) $4,898,412
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future employment,
mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual
required contributions of the employer are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. A schedule of funding progress is required to be presented
as supplementary information following the notes to the financial statements.
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A-9
INSURANCE
The City's insurance coverage is as follows:
Type of Insurance All Limits
General Liability $15,000,000
Auto Liability $15,000,000
Wrongful Acts $15,000,000
Excess(over all other coverage except Iowa liquor liability) $15,000,000
Law Enforcement $15,000,000
Public Official $15,000,000
Employee Benefit $1,000,000
Medical Malpractice $15,000,000
Underinsured Motorist $1,000,000
Uninsured Motorist $1,000,000
Commercial Property
Commercial Property& Boiler and Machinery,Power Generation related $200,000,000
Municipal Properties &Boiler and Machinery,Non-Power Generation $156,866,000
Terrorism—TRIA(Federally defined terrorist acts) Included in both of above
Commercial Property Flood Insurance
Non-Flood Plain Facilities(Power Generation) $100,000,000
Non-Flood Plain Facilities(Non-power) $25,000,000
Flood Plain Facilities:
Transit $6,000,000
Water Pollution Control $6,000,000
Airport $7,500,000
All Other $1,000,000
Airport Liability $3,000,000
A-10
GENERAL INFORMATION
LOCATION AND TRANSPORTATION
The City is located in Story County in central Iowa. It is approximately thirty miles north of Des Moines, Iowa, the
State capital and largest city in the state. The City is located on Interstate Highways 35 and 30. The City was
incorporated in 1864 under the laws of the State of low a, 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. The City 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 Tie of Business Number of Employees It
Iowa State University Higher Education 15,695
Mary Greeley Medical Center Health Care 1,287
City of Ames Municipal Government 1,226
Iowa Department of Transportation Public Transportation 920
McFarland Clinic,P.C. Health Care 910
Hy-Vee Food Stores Grocery 790
Ames Community School District Education 679
Sauer-Danfoss Company Hydro-Transmissions 650
Wal-Mart Retail 435
Ames Laboratories Research 432
Workiva 2) Software 430
AG. Research Research 400
3M Company Manufacturing 390
National Veterinary Service Lab USDA Veterinary Research 380
Hach Company Water Analysis Equipment 308
National Animal Disease Center USDA Research 230
1) Includes full-time,part-time and seasonal employees.
2) Formerly WebFilings.
Source: The City and phone interviews conducted in July 2015.
A-11
BUILDING PERMITS
Permits for the City are reported on a calendar year basis. City officials reported most recently available construction
activity for a portion of the current calendar year, as of September 30, 2015. The figures below include both new
construction and remodeling.
2011 2012 2013 2014 2015
Residential Construction:
Number of units: 451 444 481 431 344
Valuation: $19,710,497 $25,601,674 $39,099,306 $31,397,178 $26,636,818
Commercial Construction:
Number of units: 224 233 191 231 162
Valuation: $59,896,534 $140,814,521 $90,990,275 $194,854,793 $144,408,736
Total Permits 675 677 672 662 506
Total Valuations $79,607,031 $166,416,195 $130,089,581 $226,251,971 $171,045,554
U.S. CENSUS DATA
Population Trend
1980 U.S. Census 43,775
1990 U.S. Census 47,198
2000 U.S. Census 50,731
2010 U.S. Census 58,965
Source: U.S.Census Bureau website.
UNEMPLOYMENT RATES
City of Story State of
Ames County Iowa
Annual Averages: 2011 3.9% 3.9% 5.6%
2012 3.6% 3.6% 5.0%
2013 3.4% 3.3% 4.8%
2014 2.9% 2.9% 4.4%
2015 (through August) 2.6% 2.6% 3.9%
Source: Iowa Workforce Development Center and the Bureau of Labor Statistics websites.
EDUCATION
Public education is provided by the Ames Community School District, with a certified enrollment for the 2015-16
school year of 4,171. The district, with approximately 679 employees, owns and operates one early childhood center,
five 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") 2014 fall enrollment was 34,732. ISU is the City's largest employer with faculty
and staff totaling approximately 15,695, including teaching assistants and hourly part-time employees. ISU, in
addition to its educational function, is a leading agricultural research and experimental institution.
A-12
The Iowa State Center, which is the cultural and athletic center of ISU and City, is a complex of five structures, all
completed since 1969. It consists of two theaters, a football stadium, a coliseum and a continuing education building
which attract major athletic, dramatic and musical events, as well as seminars and conferences to the City.
In addition to ISU located in the City, the following institutions provide higher education within 30 miles of the City:
Des Moines Area Community College, Upper Iowa University, Simpson College, Hamilton College, Grand View
College and Drake University.
FINANCIAL SERVICES
Financial services for the residents of the City are provided by First National Bank Ames, Iowa and VisionBank of
Iowa, formerly known as Ames Community Bank, Ames, Iowa. In addition, the City is served by branch offices of
Bank of the West, Bankers Trust Company, CoBank ACB, Exchange State Bank, Great Western, First American
Bank, First Federal Savings Bank of Iowa, Midwest Heritage Bank, F.S.B., US Bank,N.A., Great Southern Bank and
Wells Fargo Bank as well as by several credit unions.
First National Bank and VisionBank of Iowa report the following deposits as of June 30'h for each year:
Year First National Bank VisionBank of Iowa
2011 $427,328,000 $356,457,000
2012 471,076,000 342,594,000
2013 518,068,000 318,316,000
2014 493,613,000 331,845,000
2015 583,184,000 306,613,000
1) Formerly Ames Community Bank.
Source: Federal Deposit Insurance Corporation(FDIC)website.
A-13
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APPENDIX B
FORM OF LEGAL OPINION
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[Form of Bond Counsel OpinionI
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 Electric Revenue Bonds, Series 2015B (the
"Bonds") in the amount of $10,950,000*, dated December 29, 2015, in the denomination of
$5,000 each, or any integral multiple thereof, in accordance with a loan agreement dated as of
December 29, 2015 (the "Loan Agreement"), and pursuant to a resolution adopted by the Issuer
on December 8, 2015 (the "Resolution"). The Bonds mature on June 1 in each of the respective
years and in the principal amounts and bear interest payable semiannually, commencing June 1,
2016, at the respective rates as follows:
Principal Interest Rate Principal Interest Rate
Year Amount Per Annum Year Amount Per Annum
2016 $910,000 % 2022 $845,000 %
2017 $750,000 % 2023 $875,000 %
2018 $765,000 % 2024 $900,000 %
2019 $780,000 % 2025 $935,000
2020 $800,000 % 2026 $965,000 %
2021 $825,000 % 2027 $1,000,000 %
but the Bonds maturing in each of the years 2024 to 2027, inclusive, are subject to redemption
prior to maturity on June 1, 2023 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 limited obligations of
the Issuer, subject to the terms and limitations set forth in the Bonds and the proceedings.
3. The Bonds and any additional obligations as may be hereafter issued and
outstanding from time to time ranking on a parity therewith under the conditions and restrictions
set forth in the Proceedings are and will continue to be payable as to both principal and interest
solely and only from the future Net Revenues of the Municipal Electric Light and Power Plant
and System of the Issuer.
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
Page 2
the alternative minimum tax imposed on corporations (as defined for federal income tax
purposes), such interest is taken into account in determining adjusted current earnings. The
opinions set forth in the preceding sentence are subject to the condition that the Issuer comply
with all requirements of the Internal Revenue Code of 1986 (the "Code") that must be satisfied
subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be,
excluded from gross income for federal income tax purposes. The Issuer has covenanted to
comply with each such requirement. Failure to comply with certain of such requirements may
cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to
be retroactive to the date of issuance of the Bonds.
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
*Preliminary, subject to change
APPENDIX C
JUNE 30, 2014 COMPREHENSIVE ANNUAL FINANCIAL REPORT
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
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A mes4l 9370-52/CDC ElectricRevenue
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
$10,950,000 Electric Revenue Bonds, Series 2015B (the "Bonds"), dated December 29, 2015.
The Bonds are being issued pursuant to a resolution of the Issuer approved on December 8, 2015
(the "Resolution"). 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.
"EMMA" shall mean the MSRB's Electronic Municipal Market Access system
available at http://emma.msrb.org.
"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.
"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.
-1-
Ames4l 9370-52/CDCElectricRevenue
"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.
"State" shall mean the State of Iowa.
Section 3. Provision of Annual Reports.
(a) Not later than June 30 (the "Submission Deadline") of each year following the
end of the 2014-2015 fiscal year, the Issuer shall, or shall cause the Dissemination Agent (if
any) to, file on EMMA an electronic copy of its Annual Report which is consistent with the
requirements of Section 4 of this Disclosure Certificate 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 Submission Deadline 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), and the Submission Deadline beginning with the subsequent
fiscal year will become one year following the end of the changed fiscal year.
(b) If the Issuer has designated a Dissemination Agent, then not later than fifteen
(15) business days prior to the Submission Deadline, the Issuer shall provide the Annual
Report to the Dissemination Agent.
(c) If the Issuer is unable to provide an Annual Report by the Submission Deadline,
in a timely manner thereafter, the Issuer shall, or shall cause the Dissemination Agent (if any)
to, file a notice on EMMA stating that there has been a failure to provide an Annual Report on
or before the Submission Deadline.
Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or
include 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 audited 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 Submission Deadline, the Annual Report shall contain unaudited
financial information (which may include any annual filing information required by
State law) accompanied by a notice that the audited financial statements are not yet
available, and the audited financial statements shall be filed on EMMA when they
become available.
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(b) Tables, schedules or other information contained in the official statement
for the Bonds, under the following captions:
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 on EMMA or are filed with the Securities and Exchange Commission. If
the document included by reference is a final official statement, it must be available on
EMMA. 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.
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(12) Bankruptcy, insolvency, receivership or similar event of the obligated person.
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.
(b) If a Listed Event described in Section 5(a) paragraph (2), (7), (8) (but only with
respect to bond calls under (8)), (10), (13) or (14) 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, or cause to be filed, a notice of such occurrence on EMMA, with such notice in a
format and accompanied by such identifying information as prescribed by the MSRB.
(c) If a Listed Event described in Section 5(a) 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, or cause to be filed, a notice of such occurrence on EMMA, with such notice in a
format and accompanied by such identifying information as prescribed by the MSRB.
Notwithstanding the foregoing, notice of Listed Events described in Section (5)(a) paragraphs(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
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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 Annual Report prepared by the Issuer pursuant to this Disclosure
Certificate.
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) (i) the amendment or waiver is 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; (ii) 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 (iii) the amendment or waiver either (1) is approved by a majority of
the Holders, or (2) does not, in the opinion of nationally recognized bond counsel,
materially impair the interests of the Holders or Beneficial Owners; or
(b) the amendment or waiver is necessary to comply with modifications to or
interpretations of the provisions of the Rule as announced by the Securities and Exchange
Commission.
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 audited 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 audited 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
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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 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.
Section 11. Duties, Immunities and Liabilities of Dissemination Ate. 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: December 29, 2015
CITY OF AMES, IOWA
By
Mayor
Attest:
By
City Clerk
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OFFICIAL BID FORM
TO: City Council of Sale Date: December 8,2015
City of Ames,Iowa 11:00 AM CT
RE: $10,350,000* Electric Revenue Bonds, Series 2015B(the"Bonds")
For all or none of the above Bonds, in accordance with the TERMS OF OFFERING, we will pay you
$ (not less than $10,251,675) plus accrued interest to date of delivery for fully registered
Bonds bearing interest rates and maturing in the stated years as follows:
Coupon Maturity Coupon Maturity Coupon Maturity
2016 2020 2024
2017 2021 2025
2018 2022 2026
2019 2023 2027
*Preliminary; Subject to change. The aggregate principal amount of the Bonds,and each scheduled maturity thereof,are
subject to increase or reduction by the City of its designee after the determination of the successful bidder. The City
may increase or decrease each maturity in increments of$5,000 but the toal amount to be issued will not exceed
$10,950,000. Interest rates specified by the successful bidder for each maturity will not change. Final adjustments
shall be in the sole discretion of the City.
The dollar amount of the purchase price proposed by the successful bidder will be changed if the aggregate principal
amount of the Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Bonds
will be made while maintaining, as closely as possible, the successful bidder's net compensation, calculated as a
percentage of bond principal. The successful bidder may not withdraw or modify its bid as a result of any post-bid
adjustment. Any adjustment shall be conclusive,and shall be binding upon the successful bidder.
We hereby designate that the following Bonds to be aggregated into term bonds maturing on June 1 of the following years and
in the following amounts(leave blank if no term bonds are specified):
Years Aggregated Maturity Year Aggregate Amount
through
through
through
through
In making this offer we accept all of the terms and conditions of the TERMS OF OFFERING published in the Preliminary
Official Statement dated November 10, 2015. In the event of failure to deliver these Bonds in accordance with the TERMS
OF OFFERING as printed in the Preliminary Official Statement and made a part hereof,we reserve the right to withdraw our
offer. All blank spaces of this offer are intentional and are not to be construed as an omission.
Not as a part of our offer, the above quoted prices being controlling, but only as an aid for the verification of the offer, we
have made the following computations:
NET INTEREST COST: $
TRUE INTEREST COST: % (Based on dated date of December 29,2015)
Account Manager: By:
Account Members:
The foregoing offer is hereby accepted by and on behalf of the City Council of the City of Ames, Iowa this 86' day of
December,2015.
Attest: By:
Title: Title: