HomeMy WebLinkAboutA012 - Council Action Form dated August 13, 2019 ITEM # 15
DATE: 08-13-19
COUNCIL ACTION FORM
SUBJECT: RESOLUTION APPROVING OFFICIAL STATEMENT FOR GENERAL
OBLIGATION CORPORATE PURPOSE BONDS, SERIES 2019A,
SETTING DATE OF SALE FOR AUGUST 27, 2019, AND AUTHORIZING
ELECTRONIC BIDDING FOR THE SALE
BACKGROUND:
The FY 2019120 budget includes General Obligation (G.O.) Bond-funded capital
improvement projects in the amount of $11,154,204. The City Council held a public
hearing on the issuance of these bonds on March 5, 2019. Council action is now required
to approve the official statement, set the date of sale for August 27, 2019, and authorize
electronic bidding.
The Official Statement, or "Preliminary Official Statement," is the offering document for
municipal securities, in preliminary form, which does not contain pricing information. The
Statement provides several financial disclosures and information about the City. This
"Preliminary Official Statement" is on file in the City Clerk's Office and is attached for your
review. Additionally, Council is asked to approve electronic bidding as the method to
provide a secure and highly competitive process for the sale of the bonds. The proposed
issuance is in compliance with the City Council approved debt policy.
Projects to be funded by this bond issue include the following:
City-Wide Radio System $1,240,000
Grand Avenue Extension 2,000,000
Campustown Improvements 1,000,000
Cherry Avenue Extension 300,000
Arterial Street Pavement Improvements 1,600,000
Bridge Rehabilitation 120,000
Concrete Pavement Improvements 2,800,000
Collector Street Pavement Improvements 500,000
Asphalt Street Improvements 1,000,000
Subtotal Tax Supported Bonds $ 10,5607000
City-Wide Radio System (Abated) 280,000
ISU Research Park Phase IV (TIF) 314,204
Subtotal Abated Bonds $594,204
Total Bond Funded Projects $11,154,204
Issuance Cost and Allowance for Premium 725,796
Grand Total — 2019120 G.O. Issue $ 11,880,000
ALTERNATIVES:
1 . Adopt a resolution approving the Official Statement for General Obligation
Corporate Purpose Bonds, Series 2019A, setting the date of sale for August 27,
2019, and authorize electronic bidding for the sale.
2. Refer the Official Statement back to City staff for modifications.
CITY MANAGER'S RECOMMENDED ACTION:
Issuance of these bonds is necessary in order to accomplish the City's approved Capital
Improvements Plan for the current fiscal year.
Therefore, it is the recommendation of the City Manager that the City Council adopt
Alternative No. 1 as stated above.
2
u u
E PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 13,2019
do
s 51 New Issue Rating: Moody's Investors Service `Aa1'
o �
,a g In the opinion of Dorsey& Whitney LLP, Bond Counsel.according to present laws,rulings and decisions and assuming compliance with certain covenants,
dthe interest on the Bonds(including any original issue discount properly allocable to an owner thereon is excluded from gross income forfederal income tar
s purposes. Interest on the Bonds is not treated as a preference item in calculating the federal alternative minimum tax imposed under the Internal Revenue
Code of 1986(the "Code"). In the opinion of Bond Counsel,the Bonds are NOT"qualified tax-exempt obligations"within the meaning of Section 265(b)(3)
of the Code. See "TAX EXEMPTION AND RELATED TAX MATTERS"herein.
c �
r CITY OF AMES, IOWA
Ca
o . $11,555,000* General Obligation Corporate Purpose Bonds,Series 2019A
E o g
o BIDS RECEIVED: Tuesday,August 27, 2019, 11:00 A.M., Central Time
o„ AWARD: Tuesday,August 27,2019, 6:00 P.M.,Central Time
O V N
Dated: Date of Delivery(September 12,2019) Principal Due: June 1,as shown inside front cover
C N C
E o The$11,555,000* General Obligation Corporate Purpose Bonds,Series 2019A(the"Bonds")are being issued pursuant to
g 8 A Division III of Chapter 384 of the Code of Iowa and a resolution to be adopted by the City Council of the City of Ames,
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Iowa(the"City"). The Bonds are being issued for the essential corporate purposes of paying the cost, to that extent, of
r5 s constructing improvements to streets, sanitary sewers and bridges and acquisition of emergency services communication
equipment. The purchaser of the Bonds agrees to enter into a loan agreement (the "Loan Agreement") with the City
pursuant to the authority contained in Section 384.24A of the Code of Iowa. The Bonds are issued in evidence of the City's
z S a obligations under the Loan Agreement. The Bonds are general obligations of the City for which the City will pledge its
`g power of levy direct ad valorem taxes against all taxable property within the City without limitation as to rate or amount
m= - to the repayment of the Bonds.
s E c
V V 9
r N 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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Cede&Co.,as nominee of The Depository Trust Company("DTC"). DTC will act as securities depository for the Bonds.
o 9 Individual purchases may be made in book-entry-only form, in the principal amount of$5,000 and integral multiples
`o thereof. The purchaser will not receive certificates representing their interest in the Bonds purchased. The City's Treasurer
o as Registrar/Paying Agent(the"Registrar")will pay principal on the Bonds,payable annually on June 1,beginning June 1,
2 @ 2020, and interest on the Bonds payable initially on June 1,2020 and thereafter on each December 1 and June I to DTC,
a r which will in turn remit such principal and interest to its participants for subsequent disbursements to the beneficial owners
t ° of the Bonds as described herein. Interest and principal shall be paid to the registered holder of a bond as shown on the
s N a records of ownership maintained by the Registrar as of the 15m day of the month next preceding the interest payment date
(the"Record Date").
v = �
THE BONDS WILL MATURE AS LISTED ON THE INSIDE FRONT COVER
V O O
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t V O
V � 3
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MINIMUM BID: $11,451,005
° E ° GOOD FAITH DEPOSIT: Required of Purchaser Only
a — �
E E TAX MATTERS: Federal: Tax-Exempt
State: Taxable
g v o See"TAX EXEMPTIONAND RELATED TAX
t MATTERS"for more information.
SE =t The Bonds are offered, subject to prior sale,withdrawal or modification, when,as,and if issued subject to the unqualified
o. Y
€ approving legal opinion of Dorsey & Whitney LLP, Bond Counsel, Des Moines, Iowa, to be fumished upon delivery of
45
the Bonds. It is expected the Bonds will be available for delivery through the facilities of DTC on or about September 12,
g 2019. The Preliminary Official Statement in the form presented is deemed final for purposes of Rule 15c2-12 of the
°o Securities and Exchange Commission, subject to revisions,corrections or modifications as determined to be appropriate,
E A and is authorized to be distributed in connection with the offering of the Bonds for sale.
E c
d a o *Preliminary;subject to change.
C
� ?I
CITY OF AMES, IOWA
$11,555,000* General Oblieation Corporate Purpose Bonds, Series 2019A
MATURITY: The Bonds will mature June 1 in the years and amounts as follows:
Year Amount*
2020 $965,000
2021 920,000
2022 935,000
2023 955,000
2024 970,000
2025 995,000
2026 1,010,000
2027 920,000
2028 940,000
2029 960,000
2030 980,000
2031 1,005,000
*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$11,880,000. 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, 2020 and semiannually thereafter.
REDEMPTION: Bonds due after June 1,2027 will be subject to call for prior redemption on said date or on any day
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 final"Preliminary 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 PFM Financial
Advisors LLC(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,salesman or other person has been authorized by the City,the Municipal Advisor or the underwriter to
give any information or to make any representations other than those contained in this Preliminary Official Statement or
the final Official Statement and,if given or made,such information and representations must not be relied upon as having
been authorized by the City, the Municipal Advisor or the underwriter. This Preliminary Official Statement or the final
Official Statement does not constitute an offer to sell or solicitation of an offer to buy, nor shall there by 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 set forth herein has been obtained from the City and other sources which are believed to be reliable, but it is
not to be construed as a representation by the Municipal Advisor or underwriter. The information and expressions of
opinion herein are subject to change without notice, and neither the delivery of this Preliminary Official Statement or the
final Official Statement, nor any sale made thereafter shall, under any circumstances, create any implication there has
been no change in the affairs of the City or in any other information contained herein,since the date hereof.
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.
The Bonds are being offered when, and if issued by the City and accepted by the underwriter, subject to receipt of an
opinion as the legality, validity and tax exemption by Dorsey & Whitney LLP, Des Moines, Iowa, Bond Counsel. It is
expected that the Bonds in the definitive form will be available for delivery through the facilities of DTC on or about
September 12, 2019.
Compensation of the Municipal Advisor,payable entirely by the City, is contingent upon the sale of the issue.
TABLE OF CONTENTS
TERMSOF OFFERING.....................................................................................................................I.......i
SCHEDULEOF BOND YEARS..............................................................................................................vii
EXHIBIT 1 -FORMS OF ISSUE PRICE CERTIFICATES
PRELIMINARY OFFICIAL STATEMENT............................................................................................I
INTRODUCTION...........................................................................................................................................................I
AUTHORITYAND PURPOSE.........................................................................................................................................I
INTERESTON THE BONDS ...........................................................................................................................................I
OPTIONALREDEMPTION.............................................................................................................................................I
PAYMENT OF AND SECURITY FOR THE BONDS............................................................................................................2
BOOK-ENTRY-ONLY ISSUANCE..................................................................................................................................2
FUTUREFINANCING....................................................................................................................................................4
LITIGATION.................................................................................................................................................................4
DEBTPAYMENT HISTORY...........................................................................................................................................4
LEGALMATTERS........................................................................................................................................................4
TAX EXEMPTION AND RELATED TAX MATTERS.........................................................................................................5
BONDHOLDER'S RISKS................................................................................................................................................6
RATING.....................................................................................................................................................................10
MUNICIPALADVISOR...............................................................................................................................................10
CONTINUINGDISCLOSURE........................................................................................................................................10
CERTIFICATION.........................................................................................................................................................11
APPENDIX A-GENERAL INFORMATION ABOUT THE CITY OF AMES, IOWA
APPENDIX B-FORM OF LEGAL OPINION
APPENDIX C-JUNE 30,2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
APPENDIX D-FORM OF CONTINUING DISCLOSURE CERTIFICATE
OFFICIAL BID FORM
City of Ames, Iowa
Mayor/City Council
Initial Term
Member Office Commenced Term Expires
John Haila Mayor January 02,2018 December 31, 2021
Gloria Betcher Council Member— 1" Ward January 02,2014 December 31,2021
Tim Gartin Council Member—2'Ward January 02,2014 December 31,2019
David Martin Council Member—and Ward January 01,2018 December 31, 2021
Chris Nelson Council Member—4s'Ward January 02,2014 December 31,2019
Bronwyn Beatty-Hansen Council Member—At Large January 01,2016 December 31,2019
Amber Corrieri Council Member—At Large January 02, 2014 December 31,2021
Devyn Leeson Ex-Officio May 14,2019 May 14, 2020
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
Donald Kom, Director of Electric Utility
City Attorney
Mark Lambert
Ames, Iowa
Bond Counsel
Dorsey &Whitney LLP
Des Moines, Iowa
Municipal Advisor
PFM Financial Advisors LLC
Des Moines, Iowa
TERMS OF OFFERING
CITY OF AMES, IOWA
Bids for the purchase of the City of Ames, Iowa's (the "City") $11,555,000* General Obligation Corporate Purpose
Bonds, Series 2019A (the "Bonds") will be received on Tuesday, August 27, 2019, before 11:00 A.M., Central Time,
after which time they will be tabulated. The City Council will consider award of the Bonds at 6:00 P.M., Central Time,
on the same day. Questions regarding the sale of the Bonds should be directed to the City's Municipal Advisor, PFM
Financial Advisors LLC (the "Municipal Advisor"), 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.
DETAILS OF THE BONDS
GENERAL OBLIGATION CORPORATE PURPOSE BONDS,SERIES 2019A,in the principal amount of$11,555,000*
to be dated the date of delivery (September 12,2019),in the denomination of$5,000 or multiples thereof,will mature on
June I as follows:
Year Amount*
2020 $965,000
2021 920,000
2022 935,000
2023 955,000
2024 970,000
2025 995,000
2026 1,010,000
2027 920,000
2028 940,000
2029 960,000
2030 980,000
2031 1,005,000
Preliminary;subject to change.
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 $11,880,000. 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 I, 2020 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.
OPTIONAL REDEMPTION
Bonds due after June 1, 2027 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.
TERM BOND OPTION
Bidders shall have the option of designating the Bonds as serial bonds or tens 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.
GOOD FAITH DEPOSIT
A good faith deposit in the amount of$115,550 (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 and 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,any 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 $11,451,005, 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 "ESTABLISHMENT OF ISSUE PRICE" and "GOOD
FAITH DEPOSIT"section. The TIC shall be determined by the present value method,i.e.,by ascertaining the semiannual
rate, compounded semiannually, necessary to discount to present value as of the dated date of the Bonds, the amount
payable on each interest payment date and on each stated maturity date or earlier mandatory redemption, so that the
aggregate of such amounts will equal the aggregate purchase price offered therefore. The TIC shall be stated in terns 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 terns 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
Forms of Bids: Bids must be submitted on or in substantial compliance with the "TERMS OF OFFERING" and
"OFFICIAL BID FORM" provided by the City or through PARITY® competitive bidding system (the "Internet Bid
System"). The City shall not be responsible for malfunction or mistake made by any person, or as a result of the use of
an electronic bid or the means used to deliver or complete a bid. The use of such facilities or means is at the sole risk of
the prospective bidder who shall be bound by the terms of the bid as received.
No bid will be accepted after the time specified in the"OFFICIAL BID FORM". The time as maintained by the Internet
Bid System shall constitute the official time with respect to all bids submitted. A bid may be withdrawn before the bid
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 Biddine: Sealed bids may be submitted and will be received at the office of the City's Director of Finance, City
Hall, 515 Clark Avenue,Ames, Iowa 50010.
Electronic Internet Bidding: Electronic internet bids will be received at the office of the City's Municipal Advisor, PFM
Financial Advisors LLC, Des Moines, Iowa,and at the office of the City's Finance Director. 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 electronic 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 electronic 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 Biddine: Electronic facsimile bids will be received at the office of the City's Municipal Advisor,
PFM Financial Advisors LLC(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 electronic
facsimile transmission bear full responsibility for the transmission of such bid. Neither the City nor its agents shall be
responsible for malfunction or mistake made by any person, or as a result of the use of the electronic facsimile facilities
or any other means used to deliver or complete a bid. The use of such facilities or means is at the sole risk of the
prospective bidder who shall be bound by the terns 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 electronic facsimile numbers prior to the time of sale
specified above. Time of receipt shall be the time recorded by the electronic 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 Bonds. Transfer of principal and interest
payments to participants of DTC will be the responsibility of DTC;transfer of principal and interest payments to beneficial
owners by participants will be the responsibility of such participants and other nominees of beneficial owners. 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.
ESTABLISHMENT OF ISSUE PRICE
In order to establish the issue price of the Bonds for federal income tax purposes,the City requires bidders to agree to the
following, and by submitting a bid,each bidder agrees to the following.
If a bid is submitted by a potential underwriter, the bidder confirms that(i) the underwriters have offered or reasonably
expect to offer the Bonds to the public on or before the date of the award at the offering price(the"initial offering price")
for each maturity as set forth in the bid and (ii)the bidder, if it is the winning bidder,shall require any agreement among
underwriters, selling group agreement, retail distribution agreement or other agreement relating to the initial sale of the
Bonds to the public to which it is a party to include provisions requiring compliance by all parties to such agreements
with the provisions contained herein. For purposes hereof, Bonds with a separate CUSIP number constitute a separate
"maturity," and the public does not include underwriters of the Bonds (including members of a selling group or retail
distribution group)or persons related to underwriters of the Bonds.
If, however, a bid is submitted for the bidder's own account in a capacity other than as an underwriter of the Bonds, and
the bidder has no current intention to sell, reoffer, or otherwise dispose of the Bonds, the bidder shall notify the City to
that effect at the time it submits its bid and shall provide a certificate to that effect in place of the certificate otherwise
required below.
iv
If the winning bidder intends to act as an underwriter, the City shall advise the winning bidder at or prior to the time of
award whether(i)the competitive sale rule or(ii)the"hold-the-offering price"rule applies.
If the City advises the Purchaser that the requirements for a competitive sale have been satisfied and that the competitive
sale rule applies,the Purchaser will be required to deliver to the City at or prior to closing a certification,substantially in
the form attached hereto as EXHIBIT 1-A,as to the reasonably expected initial offering price as of the award date.
If the City advises the Purchaser that the requirements for a competitive sale have not been satisfied and that the hold-the-
offerine price rule aoolies,the Purchaser shall (1)upon the request of the City confirm that the underwriters did not offer
or sell any maturity of the Bonds to any person at a price higher than the initial offering price of that maturity during the
period starting on the award date and ending on the earlier of(a)the close of the fifth business day after the sale date or
(b)the date on which the underwriters have sold at least 10%of that maturity to the public at or below the initial offering
price;and(2)at or prior to closing,deliver to the City a certification substantially in the form attached hereto as EXHIBIT
I-B,together with a copy of the pricing wire.
Any action to be taken or documentation to be received by the City pursuant hereto may be taken or received on behalf
of the City by Municipal Advisor.
Bidders should prepare their bids on the assumption that the Bonds will be subject to the"hold-the-offering-price"
rule. Any bid submitted pursuant to the "TERMS OF OFFERING" and "OFFICIAL BID FORM" shall be
considered a firm offer for the purchase of the Bonds, and bids submitted will not be subject to cancellation or
withdrawal.
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
Statement of the City with respect to the Bonds, as that term is defined in Rule 15c2-12 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934,as amended(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 25 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, 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
The City will covenant in a Continuing Disclosure Certificate for the benefit of the owners and beneficial owners of the
Bonds to provide annually certain financial information and operating data relating to the City(the"Annual Report"),and
to provide notices of the occurrence of certain enumerated events. The Annual Report is to be filed by the City no later
than June 30'after the close of each fiscal year,commencing with the fiscal year ending June 30,2019,with the Municipal
Securities Rulemaking Board, at its internet repository named "Electronic Municipal Market Access" ("EMMA"). The
notices of events, if any, are also to be filed with EMMA. See "APPENDIX D — FORM OF CONTINUING
DISCLOSURE CERTIFICATE." The specific nature of the information to be contained in the Annual Report or the
notices of events,and the manner in which such materials are to be filed,are summarized in"APPENDIX D—FORM OF
CONTINUING DISCLOSURE CERTIFICATE." These covenants have been made in order to assist the Underwriter in
complying with SEC Rule 15c2-12(b)(5)(the"Rule").
v
In accordance with the reporting requirements of paragraph(f)(3)of the Rule, within the past five years, the City failed
to timely file a notice of bond call for the redemption of the City's General Obligation Corporate Purpose Bonds, Series
2009B.
Regarding the Mary Greeley Medical Center's (the "Medical Center") outstanding hospital revenue debt, the annual
financial information filings for the Fiscal Year ended June 30,2014 was timely filed,but were not properly linked to the
Hospital Revenue Bonds, Series 2011 CUSIP numbers. In addition, certain tables in the annual financial information
filings for the Fiscal Years ended June 30, 2014 through June 30, 2015 were not timely filed.
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.
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
City of Ames, Iowa
/s/Duane Pitcher. Director of Finance
vi
SCHEDULE OF BOND YEARS
$11,555,000*
City of Ames, Iowa
General Obligation Corporate Purpose Bonds, Series 2019A
Bonds Dated: September 12, 2019
Interest Due: June 1, 2020 and each December 1 and June 1 to maturity
Principal Due: June 1, 2020-2031
Cumulative
Year Principal * Bond Years Bond Years
2020 $965,000 694.26 694.26
2021 920,000 1,581.89 2,276.15
2022 935,000 2,542.68 4,818.83
2023 955,000 3,552.07 8,370.90
2024 970,000 4,577.86 12,948.76
2025 995,000 5,690.85 18,639.61
2026 1,010,000 6,786.64 25,426.25
2027 920,000 7,101.89 32,528.14
2028 940,000 8,196.28 40,724.42
2029 960,000 9,330.67 50,055.08
2030 980,000 10,505.06 60,560.14
2031 1,005,000 11,778.04 72,338.18
Average Maturity (dated date): 6.260 Years
• Preliminary;subject to change.
vii
EXHIBIT 1
FORMS OF ISSUE PRICE CERTIFICATES
EXHIBIT I-A to TERMS OF OFFERING
$11,555,000
General Obligation Corporate Purpose Bonds,Series 2019A
ISSUE PRICE CERTIFICATE
(Form - More than 3 bids)
The undersigned, on behalf of [NAME OF UNDERWRITER] ("[SHORT NAME OF
UNDERWRITER]"), hereby certifies as set forth below with respect to the sale of the obligations named
above(the"Bonds").
1. Reasonably Expected Initial Offering Price.
(a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the
Public by [SHORT NAME OF UNDERWRITER] are the prices listed in Schedule A (the "Expected
Offering Prices"). The Expected Offering Prices are the prices for the Maturities of the Bonds used by
[SHORT NAME OF UNDERWRITER] in formulating its bid to purchase the Bonds. Attached as Schedule
B is a true and correct copy of the bid provided by [SHORT NAME OF UNDERWRITER]to purchase the
Bonds.
(b) [SHORT NAME OF UNDERWRITER]was not given the opportunity to review other bids
prior to submitting its bid.
(c) The bid submitted by [SHORT NAME OF UNDERWRITER] constituted a firm offer to
purchase the Bonds.
2. Defined Terms. For purposes of this Issue Price Certificate:
(a) Issuer means the City of Ames, Iowa.
(b) Maturity means Bonds with the same credit and payment terms. Any Bonds with different
maturity dates, or with the same maturity date but different stated interest rates, are treated as separate
Maturities.
(c) Member of the Distribution Group means (i) any person that agrees pursuant to a written
contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in
the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract
directly or indirectly with a person described in clause(i)of this paragraph to participate in the initial sale
of the Bonds to the Public(including a member of a selling group or a party to a retail distribution agreement
participating in the initial sale of the Bonds to the Public).
(d) Public means any person (i.e., an individual, trust, estate, partnership, association,
company,or corporation)other than a Member of the Distribution Group or a related party to a Member of
the Distribution Group. A person is a"related party"to a Member of the Distribution Group if the Member
of the Distribution Group and that person are subject, directly or indirectly, to (i) at least 50% common
ownership of the voting power or the total value of their stock, if both entities are corporations(including
direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital
interests or profits interests, if both entities are partnerships(including direct ownership by one partnership
of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the
corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a
corporation and the other entity is a partnership (including direct ownership of the applicable stock or
interests by one entity of the other).
(e) Sale Date means the first day on which there is a binding contract in writing for the sale of
the respective Maturity. The Sale Date of each Maturity was August 27, 2019.
The representations set forth in this certificate are limited to factual matters only. Nothing in this
certificate represents [SHORT NAME OF UNDERWRITER]'s interpretation of any laws, including
specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury
EXHIBIT]-A to TERMS OF OFFERING
Regulations thereunder. The undersigned understands that the foregoing information will be relied upon
by the Issuer with respect to certain of the representations set forth in the Closing Certificate and with
respect to compliance with the federal income tax rules affecting the Bonds, and by Dorsey & Whitney
LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income
for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other
federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
[UNDERWRITER]
By:
Name:
Dated: September 12,2019
EXHIBIT I A to TERMS OF OFFERING
SCHEDULE A
EXPECTED OFFERING PRICES
(Attached)
EXIIIBIT]-A to TERMS OF OFFERING
SCHEDULE B
COPY OF UNDERWRITER'S BID
(Attached)
EXFIIBIT I-B to TERMS OF OFFERING
$11,555,000
General Obligation Corporate Purpose Bonds,Series 2019A
ISSUE PRICE CERTIFICATE
(Form - Fewer than 3 bids)
The undersigned, on behalf of [NAME OF UNDERWRITER (["[SHORT NAME OF UNDERWRITER]")]
hereby certifies as set forth below with respect to the sale of the obligations named above(the"Bonds").
1. Initial Offering Price of the Bonds. [SHORT NAME OF UNDERWRITER] offered the Bonds to the
Public for purchase at the specified initial offering prices listed in Schedule A(the`Initial Offering Prices")on or before
the Sale Date. A copy of the pricing wire for the Bonds is attached to this certificate as Schedule B.
2. First Price at which Sold to the Public. On the Sale Date, at least 10% of each Maturity [listed in
Schedule C] was first sold to the Public at the respective Initial Offering Price [or price specified [therein][in Schedule
C], if different].
3. Hold the Offering Price Rule. [SHORT NAME OF UNDERWRITER]has agreed in writing that,(i)for
each Maturity less than 10% of which was first sold to the Public at a single price as of the Sale Date, it would neither
offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for
such Maturity during the Holding Period for such Maturity(the"Hold-the-Offering-Price Rule"), and(ii)any agreement
among underwriters,selling group agreement,or retail distribution agreement contains the agreement of each underwriter,
dealer,or broker-dealer who is a party to such agreement to comply with the Hold-the-Offering-Price Rule. Based on the
[SHORT NAME OF UNDERWRITER]'s own knowledge and, in the case of sales by other Members of the Distribution
Group,representations obtained from the other Members of the Distribution Group,no Member of the Distribution Group
has offered or sold any such Maturity at a price that is higher than the respective Initial Offering Price during the respective
Holding Period.
4. Defined Terms. For purposes of this Issue Price Certificate:
(a) Holding Period means the period starting on the Sale Date and ending on the earlier of(i)the close of the
fifth business day after the Sale Date (August 27, 2019), or (ii) the date on which Members of the Distribution Group
have sold at least 10% of such Maturity to the Public at one or more prices, none of which is higher than the Initial
Offering Price for such Maturity.
(b) Issuer means the City of Ames, Iowa.
(c) Maturity means Bonds with the same credit and payment terms. Any Bonds with different maturity dates,
or with the same maturity date but different stated interest rates, are treated as separate Maturities.
(d) Member of the Distribution Group means (i) any person that agrees pursuant to a written contract with
the Issuer(or with the lead underwriter to form an underwriting syndicate)to participate in the initial sale of the Bonds to
the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in
clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling
group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
(e) Public means any person (i.e., an individual, trust, estate, partnership, association, company, or
corporation)other than a Member of the Distribution Group or a related party to a Member of the Distribution Group. A
person is a"related party"to a Member of the Distribution Group if the Member of the Distribution Group and that person
are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their
stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50%
common ownership of their capital interests or profits interests, if both entities are partnerships (including direct
ownership by one partnership of another),or(iii)more than 50%common ownership of the value of the outstanding stock
of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation
EXHIBIT I-B to TERMS OF OFFERING
and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the
other).
(f) Sale Date means the first day on which there is a binding contract in writing for the sale of the respective
Maturity. The Sale Date of each Maturity was August 27,2019.
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate
represents[NAME OF UNDERWRITING FIRM]interpretation of any laws,including specifically Sections 103 and 148
of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned
understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations
set forth in the Closing Certificate and with respect to compliance with the federal income tax rules affecting the Bonds,
and by Dorsey & Whitney LLP in connection with rendering its opinion that the interest on the Bonds is excluded from
gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other
federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
[UNDERWRITER]
By:
Name:
Dated: September 12, 2019
EXHIBIT I-B to TERMS OF OFFERING
SCHEDULE A
INITIAL OFFERING PRICES OF THE BONDS
(Attached)
EXHIBIT I-B to TERMS OF OFFERING
SCHEDULE B
PRICING WIRE
(Attached)
EXHIBIT I-B to TERMS OF OFFERING
SCHEDULE C
SALES OF AT LEAST 10% OF MATURITY TO THE PUBLIC ON THE SALE DATE
AT THE INITIAL OFFERING PRICE
(Attaches!)
PRELIMINARY OFFICIAL STATEMENT
CITY OF AMES,IOWA
$11,555,000* General Obligation Corporate Purpose Bonds, Series 2019A
INTRODUCTION
This Preliminary Official Statement contains information relating to the City of Ames,Iowa(the"City")and its issuance
of$1 1,555,000* General Obligation Corporate Purpose Bonds, Series 2019A (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,PFM Financial Advisors LLC(the"Municipal Advisor"),
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 III of Chapter 384 of the Code of Iowa and a resolution to be adopted
by the City Council of the City. The Bonds are being issued for the essential corporate purposes of paying the cost, to
that extent, of constructing improvements to streets, sanitary sewers and bridges and acquisition of emergency services
communication equipment.
The estimated sources and uses of the Bonds are as follows:
Sources of Funds*
Par Amount of Bonds $11,555,000.00
Uses of Funds*
Deposit to Project Fund $11,384,204.00
Underwriter's Discount 103,995.00
Cost of Issuance and Contingency 66,801.00
Total Uses $11,555,000.00
*Preliminary;subject to change.
INTEREST ON THE BONDS
Interest on the Bonds will be payable on June 1, 2020 and semiannually on the 1" 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.
OPTIONAL REDEMPTION
Bonds due after June 1, 2027 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.
1
PAYMENT OF AND SECURITY FOR THE BONDS
The Bonds are general obligations of the City and the unlimited taxing powers of the City are irrevocably pledged for
their payment. Upon issuance of the Bonds, the City will levy taxes for the years and in amounts sufficient to provide
100% of annual principal and interest due on the Bonds. If, however, the amount credited to the debt service fund for
payment of the Bonds is insufficient to pay principal and interest,whether from transfers or from original levies,the City
must use funds in its treasury and is required to levy ad valorem taxes upon all taxable property in the City without limit
as to rate or amount sufficient to pay the debt service deficiency.
Nothing in the resolution authorizing the Bonds prohibits or limits the ability of the City to use legally available moneys
other than the proceeds of the general ad valorem property taxes levied, as described in the preceding paragraph,to pay
all or any portion of the principal of or interest on the Bonds. If and to the extent such other legally available moneys are
used to pay the principal of or interest on the Bonds,the City may, but shall not be required to, (a)reduce the amount of
taxes levied for such purpose, as described in the preceding paragraph; or(b) use proceeds of taxes levied, as described
in the preceding paragraph, to reimburse the fund or account from which such other legally available moneys are
withdrawn for the amount withdrawn from such fund or account to pay the principal of or interest on the Bonds.
The resolution authorizing the Bonds does not restrict the City's ability to issue or incur additional general obligation
debt,although issuance of additional general obligation debt is subject to the same constitutional and statutory limitations
that apply to the issuance of the Bonds. For a further description of the City's outstanding general obligation debt upon
issuance of the Bonds and the annual debt service on the Bonds,see"DIRECT DEBT"under"CITY INDEBTEDNESS"
included in APPENDIX A herein. For a description of certain constitutional and statutory limits on the issuance of general
obligation debt,see"DEBT LIMIT"under"CITY INDEBTEDNESS" included in APPENDIX A herein.
BOOK-ENTRY-ONLY ISSUANCE
The information contained in the following paragraphs of this subsection "BOOK-ENTRY-ONLY ISSUANCE"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-only 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-only 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,
2
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 S&P Global Ratings: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-only 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 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.
3
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-only 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-only 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 any additional general obligation debt within 90 days 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
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 TAX MATTERS" included 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 successful bidder(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.
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 "TAX EXEMPTION AND RELATED TAX MATTERS" and "LEGAL
MATTERS" included herein, 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".
4
TAX EXEMPTION AND RELATED TAX MATTERS
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 treated as a preference item in calculating the federal alternative minimum tax
imposed under the Internal Revenue Code of 1986(the"Code").
The opinion set forth in the preceding sentence will be subject to the condition that the City comply with all requirements
of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to
be, excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements
may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the
date of issuance of the Bonds. In the resolution authorizing the issuance of the Bonds, the City will covenant to comply
with all such requirements.
There may be certain other federal tax consequences to the ownership of the Bonds by certain taxpayers,including without
limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, 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 the Bonds
should consult with their tax advisors as to such matters.
State of Iowa Income Taxes: The interest on the Bonds is NOT exempt from present Iowa income taxes.
Proposed Chanees 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 exempt 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.
Purchasers 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.
NOT Qualified Tax-Exempt Obligations: In the resolution authorizing the issuance of the Bonds, the City will NOT
designate the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code relating
to the ability of financial institutions to deduct from income for federal income tax purposes a portion of the interest
expense that is allocable to tax-exempt obligations. In the opinion of Bond Counsel, the Bonds are NOT"qualified tax-
exempt obligations"within the meaning of Section 265(b)(3)of the Code.
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
5
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 of the 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.
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 (collectively,the"Premium Bonds")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 the 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 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.
BONDHOLDER'S RISKS
An investment in the Bonds involves an element of risk. In order to identify risk factors and make an informed investment
decision, potential investors should be thoroughly familiar with this entire Preliminary Official Statement(including the
appendices hereto) in order to make a judgment as to whether the Bonds are an appropriate investment.
Tax Levy Procedures: The Bonds are general obligations of the City, payable from and secured by a continuing ad-
valorem tax levied against all of the taxable property within the boundaries of the City. As part of the budgetary process
of the City, each fiscal year the City will have an obligation to request a debt service levy to be applied against all of the
taxable property within the boundaries of the City. A failure on the part of the City to make a timely levy request, or a
levy request by the City that is inaccurate or is insufficient to make full payments of the debt service on the Bond for a
6
particular fiscal year, may cause Bondholders to experience delay in the receipt of distributions of principal of and/or
interest on the Bonds.
2013 Prooertv Tax Legislation: During its 2013 session the Iowa Legislature enacted,and the Governor signed legislation
that, among other things, reduces the limit on annual assessed value growth with respect to residential and agricultural
property from 4%to 3%,reduces as a rollback the taxable value applicable to commercial,industrial and railroad property
to 95%for the 2013 assessment year and 90%for the 2014 assessment year and all years thereafter,and provides a partial
exemption on telecommunications property. The legislation also created anew separate classification for multiresidential
properties which were previously taxed as commercial properties, and assigns an incremental rollback percentage over
several years for multiresidential properties such that the multiresidential rollback determination will match that for
residential properties in the 2022 assessment year. As a result of this legislation,local governments expect to experience
reductions in property tax revenues over the next several fiscal years. The legislation includes state-funded replacement
moneys for a portion of the expected reduction in property tax revenues to the local governments, but such replacement
funding is limited in both amount and duration of availability. There can be no assurance the state-funded replacement
moneys will be provided by the state, if at all, during the term the Bonds remain outstanding. The City does not expect
the state replacement funding to fully address the property tax reductions resulting from the legislation during the term
the Bonds remain outstanding. The legislation does not limit the legal obligation of the City to pay debt service on the
Bonds or the amount the City is required to levy for payments of debt service on the Bonds; however, there can be no
assurances that it will not have a material adverse impact with respect to the City's financial position.
Changes in Property Taxation: From time to time the Iowa General Assembly has altered the method of property taxation
and could do so again. Any alteration in property taxation structure could affect property tax revenues available to pay
the Bonds. Historically,the Iowa General Assembly has applied changes in property taxation structure on a prospective
basis; however, there is no assurance that future changes in property taxation structure by the Iowa General Assembly
will not be retroactive. It is impossible to predict the outcome of future property tax changes by the Iowa General
Assembly or their potential impact on the Bonds and the security for the Bonds.
Matters Relating: to Enforceability of Agreements: Bondholders shall have and possess all the rights of action and
remedies afforded by the common law, the Constitution and statutes of the State of Iowa and of the United States of
America for the enforcement of payment of the Bonds, including,but not limited to,the right to a proceeding in law or in
equity by suit, action or mandamus to enforce and compel performance of the duties required by Iowa law and the
resolution for the Bonds.
The practical realization of any rights upon any default will depend upon the exercise of various remedies specified in the
Loan Agreements. The remedies available to the Bondholders upon an event of default under the Loan Agreements, in
certain respects, may requirejudicial action,which is often subject to discretion and delay. Under existing law, including
specifically the federal bankruptcy code, certain of the remedies specified in the Loan Agreements may not be readily
available or may be limited. A court may decide not to order the specific performance of the covenants contained in these
documents. The legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the
enforceability of the various legal instruments by limitations imposed by general principles of equity and public policy
and by bankruptcy,reorganization, insolvency or other similar laws affecting the rights of creditors generally.
No representation is made, and no assurance is given,that the enforcement of any remedies will result in sufficient funds
to pay all amounts due under the Loan Agreements, including principal of and interest on the Bonds.
Secondary Market: There can be no guarantee there will be a secondary market for the Bonds or, if a secondary market
exists,that such Bonds can be sold for any particular price. Occasionally,because of general market conditions or because
of adverse history of economic prospects connected with a particular issue, secondary marketing practices in connection
with a particular note or bond issue are suspended or terminated. Additionally,prices of bond or note issues for which a
market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from
the original purchase price of the Bonds.
7
EACH PROSPECTIVE PURCHASER IS RESPONSIBLE FOR ASSESSING THE MERITS AND RISKS OF AN
INVESTMENT IN THE BONDS AND MUST BE ABLE TO BEAR THE ECONOMIC RISK OF SUCH
INVESTMENT. THE SECONDARY MARKET FOR THE BONDS,IF ANY,COULD BE LIMITED.
Rating Loss: Moody's Investors Service ("Moody's") has assigned a rating of'Aal' to the Bonds. Generally, a rating
agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of
its own.There is no assurance the rating with continue for any given period of time,or that such rating will not be revised,
suspended or withdrawn, if,in the judgment of Moody's,circumstances so warrant.A revision, suspension or withdrawal
of a rating may have an adverse effect on the market price of the Bonds.
Insolvency: The rights and remedies provided in the resolution for the Bonds may be limited by and are subject to the
provisions of federal bankruptcy laws,to other laws or equitable principles that may affect the enforcement of creditor's
rights, to the exercise of judicial discretion in appropriate cases and to limitations in legal remedies against exercise of
judicial discretion in appropriate cases and to limitations on legal remedies against municipal corporations in the State of
Iowa. The various opinions of counsel to be delivered with respect to the Bonds,the Loan Agreement and the resolution
for the Bonds, including the opinion of Bond Counsel,will be similarly qualified. If the City were to file a petition under
Chapter 9 of the Bankruptcy Code, the owners of the Bonds could be prohibited from taking any steps to enforce their
rights under the resolution for the Bonds. In the event the City fails to comply with its covenants under the resolution for
the Bonds or fails to make payments on the Bonds, there can be no assurance of the availability of remedies adequate to
protect the interests of the holders of the Bonds.
Forward-Lookine Statements: This Preliminary Official Statement contains statements relating to future results that are
"forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. When used in this
Preliminary Official Statement,the words"anticipated,""plan,""expect,""projected,""estimate,""budget,""pro forma,"
"forecast," "intend," and similar expressions identify forward-looking statements. Any forward-looking statement is
subject to uncertainty. Accordingly,such statements are subject to risks that could cause actual results to differ, possibly
materially, from those contemplated in such forward-looking statements. Inevitably, some assumptions used to develop
forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore,
investors should be aware that there are likely to be differences between forward-looking statements and the actual results.
These differences could be material and could impact the availability of funds of the City to pay debt service when due
on the Bonds.
Tax Matters, Bank Oualification and Loss of Tax Exemption: As discussed under the heading"TAX EXEMPTION AND
RELATED TAX MATTERS" included A herein,the interest on the Bonds could become includable in gross income for
purposes of federal income taxation retroactive to the date of delivery of the Bonds,as a result of acts or omissions of the
City in violation of its covenants in the resolution for the Bonds. Should such an event of taxability occur, the Bonds
would not be subject to a special redemption and would remain outstanding until maturity or until redeemed under the
redemption provisions contained in the Bonds,and there is no provision for an adjustment of the interest rate on the Bonds.
It is possible that actions of the City after the closing of the Bonds will alter the tax-exempt status of the Bonds, and, in
the extreme, remove the tax-exempt status from the Bonds. In that instance, the Bonds are not subject to mandatory
prepayment, and the interest rate on the Bonds does not increase or otherwise reset. A determination of taxability on the
Bonds, after closing of the Bonds, could materially adversely affect the value and marketability of the Bonds.
DTC-Beneficial Owners: Beneficial Owners of the Bonds may experience some delay in the receipt of distributions of
principal of and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC
will credit such distributions to the accounts of the Participants which will thereafter credit them to the accounts of the
Beneficial Owner either directly or indirectly through indirect Participants. Neither the City nor the Paying Agent will
have any responsibility or obligation to assure that any such notice or payment is forwarded by DTC to any Participants
or by any Participant to any Beneficial Owner.
In addition,since transactions in the Bonds can be effected only through DTC Participants,indirect participants and certain
banks, the ability of a Beneficial Owner to pledge the Bonds to persons or entities that do not participate in the DTC
system, or otherwise to take actions in respect of such Bonds, may be limited due to lack of a physical certificate.
8
Beneficial Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the
Participants. See"BOOK-ENTRY-ONLY ISSUANCE."
Proposed Federal Tax Legislation: From time to time, Presidential proposals,federal legislative committee proposals or
legislative proposals are made that would, if enacted, alter or amend one or more of the federal tax matters described
herein in certain respects or would adversely affect the market value of the Bonds. It cannot be predicted whether or in
what forms any of such proposals that may be introduced, may be enacted and there can be no assurance that such
proposals will not apply to the Bonds. In addition, regulatory actions are from time to time announced or proposed, and
litigation 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. See"TAX EXEMPTION AND RELATED TAX MATTERS" included herein.
Pension and Other Post-Employment Benefits ("OPEB") Information: The City contributes to the Iowa Public
Employees' Retirement System("IPERS"),which is a state-wide multiple-employer cost-sharing defined benefit pension
plan administered by the State of Iowa. IPERS provides retirement and death benefits which are established by State
statute to plan members and beneficiaries. All full-time employees of the City are required to participate in IPERS.
IPERS plan members are required to contribute a percentage of their annual salary, in addition to the City being required
to make annual contributions to IPERS. Contribution amounts are set by State statute. The IPERS Comprehensive Annual
Financial Report for its Fiscal Year ended June 30,2018(the"IPERS CAFR")indicates that as of June 30,2018,the date
of the most recent actuarial valuation for IPERS, the funded ratio of IPERS was 82.36%, and the unfunded actuarial
liability was $6.815 billion. The IPERS CAFR identifies the IPERS Net Pension Liability at June 30, 2018, at
approximately $6.328 billion, while its net pension liability at June 30, 2017 was approximately $6.661 billion. The
IPERS CAFR is available on the IPERS website,or by contacting IPERS at 7401 Register Drive,Des Moines,IA 50321.
In Fiscal Year ended June 30,2018,the City's IPERS contribution totaled approximately$7,862,807. The City is current
in its obligations to IPERS.
Pursuant to Governmental Accounting Standards Board Statement No. 68, IPERS has allocated the net pension liability
among its members, with the City's identified portion at June 30,2018 at approximately $75,255,392. While the City's
contributions to IPERS are controlled by state law, there can be no assurance the City will not be required by changes in
State law to increase its contribution requirement in the future, which may have the effect of negatively impacting the
finances of the City. See "EMPLOYEES AND PENSIONS" included in APPENDIX A herein, and "APPENDIX C—
JUNE 30, 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT" for additional information on pension and
liabilities of the City.
Bond Counsel, the Underwriter, the Municipal Advisor and the City undertake no responsibility for and make no
representations as to the accuracy or completeness of the information available from the IPERS discussed above or
included on the IPERS website, including, but not limited to, updates of such information on the State Auditor's website
or links to other Internet sites accessed through the IPERS website.
The City contributes to Municipal Fire and Police Retirement System of Iowa("MFPRSI"), which is a multiple-employer
cost-sharing defined benefit pension plan for fire fighters and police officers,administered under Chapter 411 of the Code
of Iowa. MFPRSI plan members are required to contribute a percentage of their annual salary, in addition to the City
being required to make annual contributions to MFPRSI. Contribution amounts are set by State statute. The MFPRSI
Financial Statements for its Fiscal Year ended June 30, 2018 (the"MFPRSI Report") indicates that as of June 30, 2018,
the plan fiduciary net position as a percentage of the total pension liability was 81.07%. The MFPRSI Report identifies
the MFPRSI Net Pension Liability at June 30, 2018, at approximately $595.4 million, while its net pension liability at
June 30,2017 was approximately $586.5 million. The MFPRSI Report is available on the MFPRSI website.
In the Fiscal Year ended June 30, 2018, the City's MFPRSI contribution totaled approximately $2,028,739. The City is
current in its obligations to MFPRSI.
9
Bond Counsel, the Underwriter, the Municipal Advisor and the City undertake no responsibility for and make no
representations as to the accuracy or completeness of the information available from the MFPRSI discussed above or
included on the MFPRSI website,including,but not limited to,updates of such information on the State Auditor's website
or links to other Internet sites accessed through the MFPRSI website.
Pursuant to Governmental Accounting Standards Board Statement No. 68,MFPRSI has allocated the net pension liability
among its members, with the City's identified portion at June 30, 2018 at approximately $15,549,272. While the City's
contributions to MFPRSI are controlled by state law, there can be no assurance the City will not be required by changes
in State law to increase its contribution requirement in the future, which may have the effect of negatively impacting the
finances of the City. See "EMPLOYEES AND PENSIONS" included in APPENDIX A herein, and "APPENDIX C —
JUNE 30, 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT"for additional information on MFPRSI.
The City and hospital provide health and dental care benefits for retirees 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. Participants must be age 55 or older. 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. See "OTHER POST-EMPLOYMENT BENEFITS" included in APPENDIX A, and
"APPENDIX C—JUNE 30, 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT"for additional information.
Summary: The foregoing is intended only as a summary of certain risk factors attendant to an investment in the Bonds.
In order for potential investors to identify risk factors and make an informed investment decision, potential investors
should become thoroughly familiar with this entire Preliminary Official Statement and the appendices hereto.
RATING
The Bonds have been rated 'Aal' by 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 PFM Financial Advisors LLC, Des Moines, Iowa as 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. PFM Financial Advisors LLC is an
independent advisory firm and is not engaged in the business of underwriting,trading or distributing municipal securities
or other public securities.
CONTINUING DISCLOSURE
The City will covenant in a Continuing Disclosure Certificate for the benefit of the owners and beneficial owners of the
Bonds to provide annually certain financial information and operating data relating to the City(the"Annual Report"),and
to provide notices of the occurrence of certain enumerated events. The Annual Report is to be filed by the City no later
than June 30'h after the close of each fiscal year,commencing with the fiscal year ending June 30,2019,with the Municipal
Securities Rulemaking Board, at its intemet repository named "Electronic Municipal Market Access" ("EMMA"). The
notices of events, if any, are also to be filed with EMMA. See "APPENDIX D — FORM OF CONTINUING
DISCLOSURE CERTIFICATE." The specific nature of the information to be contained in the Annual Report or the
notices of events,and the manner in which such materials are to be filed,are summarized in"APPENDIX D—FORM OF
CONTINUING DISCLOSURE CERTIFICATE." These covenants have been made in order to assist the Underwriter in
complying with SEC Rule ISc2-12(b)(5)(the"Rule").
10
In accordance with the reporting requirements of paragraph (f)(3) of the Rule, within the past five years, the City failed
to timely file a notice of bond call for the redemption of the City's General Obligation Corporate Purpose Bonds, Series
2009B.
Regarding the Mary Greeley Medical Center's (the "Medical Center") outstanding hospital revenue debt, the annual
financial information filings for the Fiscal Year ended June 30,2014 was timely filed,but were not properly linked to the
Hospital Revenue Bonds, Series 2011 CUSIP numbers. In addition, certain tables in the annual financial information
filings for the Fiscal Years ended June 30,2014 through June 30,2015 were not timely filed.
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.
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 by PFM Financial Advisors LLC, Des Moines, Iowa, and to the best of our knowledge, information and belief,
said Preliminary Official Statement does not contain any material misstatements of fact nor omission of any material fact
regarding the issuance of$11,555,000' General Obligation Corporate Purpose Bonds, Series 2019A.
CITY OF AMES,IOWA
/s/Duane Pitcher,Director of Finance
• Preliminary;subject to change.
11
APPENDIX A
GENERAL INFORMATION ABOUT THE CITY OF AMES, IOWA
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 2018 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 2018, the taxable value rollback rate was
56.9180% of actual value for residential property; 56.1324% of actual value for agricultural property; 75.0000% of the
actual value for multiresidential property; and 90% of actual value for commercial, industrial and railroad property. No
adjustment was ordered for utility property because its assessed value did not increase enough to qualify for reduction.
Utility property is limited to an 8%annual growth.
fhe Legislature's intent has been to limit the growth of statewide taxable valuations for the specific classes of property to
3% annually. Political subdivisions whose taxable values are thus reduced or are unusually low in growth are allowed to
appeal the valuations to the State Appeal Board, in order to continue to fund present services.
PROPERTY VALUATIONS(1/1/2018 Valuations for Taxes Payable July 1,2019 through June 30,2020)
Taxable Value
100%Actual Value (With Rollback)
Residential $3,548,646,174 $2,019,762,039
Commercial 823,143,900 736,326,020
Industrial 157,933,848 142,098,648
Multiresidential 215,828,400 161,871,300
Railroads 9,699,366 8,729,429
Utilities w/o Gas& Electric 5,462,254 5,462,254
Gross valuation $4,760,713,942 $3,074,249,690
Less military exemption (2,179,804) (2,179,804)
Net valuation $4,758,534,138 $3,072,069,886
TIF Increment $45,584,078 $45,584,078
Taxed separately
Ag. Land & Building $5,324,100 $2,988,543
Gas&Electric Utilities $33,292,802 $7,838,712
2018 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY ')
Taxable Valuation Percent of Total
Residential $2,019,762,039 65.53%
Multiresidential 161,871,300 5.25%
Gas&Electric Utilities 7,838,712 0.26%
Commercial, Industrial, Railroads, Utility 892,616,351 28.96%
Total Gross Taxable Valuation $3,082,088,402 100.00%
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
2014 2015-16 $3,793,802,326 $2,444,958,642 $1,827,450
2015 2016-17 4,055,993,730 2,603,065,698 10,883,485
2016 2017-18 4,184,550,434 2,701,440,748 30,501,176
2017 2018-19 4,637,521,835 2,914,741,622 34,554,637
2018 2019-20 4,842,735,118 3,079,908,598 45,584,078
The 100%Actual Valuation,before rollback and after the reduction of military exemption, includes Ag.Land&Buildings,
TIF Increment and Gas & Electric Utilities. The Taxable Valuation, with the rollback and after the reduction of military
exemption, includes Gas& Electric Utilities and excludes Ag. Land& Buildings and Taxable TIF Increment. Iowa cities
certify operating levies against Taxable Valuation excluding Taxable TIF Increment and debt service levies are certified
against Taxable Valuation including the Taxable TIF Increment.
LARGER TAXPAYERS
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.
I/l/2018 a>
Taxiaver' Type of Property/Business Taxable Valuation
Iowa State University Research Park Commercial $56,097,983
Barilla America Inc. Industrial 37,649,430
Campus Investors 1S LLC Commercial 36,949,414
Clinic Building Company, Inc. Commercial 29,672,730
FPA6 University West LLC Commercial 22,357,004
GPT Ames Owner LLC Commercial 21,346,650
ACA Stadium View Student Housing Dst Multiresidential 20,348,211
Dayton Park LLC Commercial 19,707,990
CB at Ames LLC Multiresidential 18,148,502
Ames Iowa LLC Commercial 16,857,900
1) This list represents some of the larger taxpayers in the City,not necessarily the 10 largest taxpayers.
2) The January 1,2018 Taxable valuations listed represents only those valuations associated with the title holder and may not
necessarily represent the entire taxable valuation.
Source:Story County Auditor
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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) reduced the maximum annual taxable value growth
percent,due to revaluation of existing residential and agricultural property to 3%,(ii)assigned a"rollback"(the percentage
of a property's value that is subject to tax) to commercial, industrial and railroad property of 90%, (iii) created 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)("Multiresidential Property"), and assigned a declining rollback percentage of 3.75%to such
properties for each year until the 2021 assessment year(the rollback percentage for Multiresidential Properties is equal to
the residential rollback percentage in the 2022 assessment year and thereafter)and(iv)exempted a specified portion of the
assessed value of telecommunication properties.
The Act included 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. Beginning in Fiscal Year 2017-
18 the standing appropriation could not 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%, the gradual transition for Multiresidential Property to the residential
rollback percentage, 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.
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 Official Statement. For instance during the 2019
legislative session, the Iowa General Assembly passed Senate File 634. This bill modifies the process for hearing and
approval of the total maximum property tax dollars under certain levies in the City budget, including levies for the General
Fund,the Emergency Fund,Trust and Agency Funds for pensions, insurance,transit,civic centers,certain bridges,sanitary
disposal,and emergency management. The bill also includes a provision that will require the affirmative vote of 2/3 of the
City Council when the maximum property tax dollars under these levies exceed an amount determined under a prescribed
formula. The bill does not change the process for hearing and approval of the debt service levy pledged for repayment of
the Bonds. It is too early to evaluate the affect this legislation will have on the overall financial position of the City and its
ability to fund essential services.
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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 2018 Actual
Valuation currently applicable to the Fiscal Year 2019-20, is as follows:
2018 Gross Actual Valuation of Property $4,842,735,118 l
Legal Debt Limit of 5% 0.05
Legal Debt Limit $242,136,756
Less: G.O. Debt Subject to Debt Limit (74,845,000)
Less: Other Debt Subject to Debt Limit (335.427)�1
Net Debt Limit $166,956,329 *
1) Actual Valuation of property as reported by the Iowa Department of Management for the Fiscal Year 2019-20.
2) Other Debt Subject to Debt Limit includes TIF rebate agreement payments appropriated for Fiscal Year 2019-20.
DIRECT DEBT
General Obligation Debt Paid by Taxes and Other Sources 1)(Includes the Bonds)
Principal
Date Original Final Outstanding
of Issue Amount Purpose Maturity As of 9112/19
9/10A $6,690,000 Capital Improvement Projects 6/22 $1,915,000
5/1 IA 5,980,000 Refunding Series 2002A,2002B &2003 6/21 495,000
11/11B 6,675,000 Corporate Purpose Improvements 6/23 2,405,000
10/12 12,660,000 Corporate Purpose Improvements 6/32 6,935,000
5/13 22,540,000 Corporate Purpose Improvements& Refunding 6/32 13,540,000
9/14 9,695,000 Corporate Purpose Improvements 6/26 5,690,000
9/15A 18,445,000 Corporate Purpose Improvements& Refunding 6/35 9,750,000
9/16A 11,650,000 Corporate Purpose Improvements&Refunding 6/28 7,630,000
9/17A 10,975,000 Corporate Purpose Improvements&Refunding 6/29 8,015,000
9/18A 7,490,000 Corporate Purpose Improvements 6/30 6,915,000
9/19A 11,555,000* Corporate Purpose Improvements 6/31 11,555,000
Total $74,845,000
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.
* Preliminary;subject to change.
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Annual Fiscal Year Debt Service Payments(Includes the Bonds)
Existing Debt Bonds Total Outstandin¢
Fiscal Principal Principal Principal
Year Principal and Interest Principal* and Interest* Principal* and Interest*
2019-20 $8,900,000 $10,931,674 $965,000 $1,135,048 $9,865,000 $12,066,722
2020-21 8,365,000 10,070,174 920,000 1,139,666 9,285,000 11,209,840
2021-22 7,320,000 8,759,469 935,000 1,138,382 8,255,000 9,897,851
2022-23 6,870,000 8,068,139 955,000 1,141,552 7,825,000 9,209,691
2023-24 6,410,000 7,382,369 970,000 1,139,266 7,380,000 8,521,635
2024-25 5,545,000 6,314,294 995,000 1,146,418 6,540,000 7,460,712
2025-26 5,010,000 5,591,394 1,010,000 1,142,215 6,020,000 6,733,609
2026-27 4,490,000 4,917,619 920,000 1,032,217 5,410,000 5,949,836
2027-28 3,320,000 3,619,469 940,000 1,033,633 4,260,000 4,653,102
2028-29 2,540,000 2,753,344 960,000 1,033,611 3,500,000 3,786,955
2029-30 1,915,000 2,052,144 980,000 1,032,683 2,895,000 3,084,827
2030-31 1,195,000 1,274,694 1,005,000 1,034,849 2,200,000 2,309,543
2031-32 1,230,000 1,273,844 1,230,000 1,273,844
2032-33 60,000 65,775 60,000 65,775
2033-34 60,000 63,900 60,000 63,900
2034-35 60,000 61,950 60,000 61,950
Total $63,290,000 $11,555,000* $74,845,000*
*Preliminary;subject to change.
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 Maturity As of 9/12/19
1115 $76,325,000 Water Revenue Bonds(SRF) 6/37 $62,190,737
1) Preliminary; subject to change based on final project costs. The City has drawn$67,987,737 as of June 24,2019.
A-5
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 Maturity As of 9/12/19
I1/12 $3,121,000 Sewer Revenue Bonds(SRF) 6/33 $1,702,000 l
9/16 375,000 Planning and Design Loan(SRF) 9/19 0 2)
9/16 797,000 Sewer Revenue Bonds(SRF) 6/36 541,332 3)
2/18-1 1,001,000 Sewer Revenue Bonds(SRF) 6/38 726,771 4)
2/18-2 5,700,000 Sewer Revenue Bonds(SRF) 6/38 2,985,156 3)
Total $5,955,259
1) Preliminary;subject to change based on final project costs. The City has drawn$2,474,250 as of June 24,2019.
2) Preliminary;subject to change based on final project costs. The City has drawn$0 as June 24,2019.
3) Preliminary;subject to change based on final project costs. The City has drawn$641,332 as June 24,2019.
4) Preliminary;subject to change based on final project costs. The City has drawn$767,771 as June 24,2019.
5) Preliminary;subject to change based on final project costs. The City has drawn$3,220,156 as June 24,2019.
Electric Revenue Debt
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 Maturi1y As of 9/12/19
12/15B $9,500,000 Electric Revenue Bonds 6/27 $6,735,000
Hospital Revenue Debt
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 Puroose Maturity As of 9/12/19
11/12 $26,000,000 Mary Greeley Medical Center& Refunding 6/27 $10,185,000
06/16 64,790,000 Mary Greeley Medical Center& Refunding 6/36 62,725,000
Total $72,910,000
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OVERLAPPING DEBT
City's
I/1/2018 Valuation Within Percent Proportionate
Taxing District Taxable Valuation l the City Applicable G.O.Debt') Share
Story County $5,166,725,247 $3,128,481,219 60.55% $o $0
Ames CSD 2,869,347,574 2,819,589,890 98.27% 52,675,000 51,763,723
Gilbert CSD 574,640,288 294,723,420 51.29% 28,755,000 14,748,440
Nevada CSD 515,526,253 1,109,613 0.22% 4,552,000 10,014
United CSD 329,419,006 13,058,296 3.96% 0 0
DMACC 50,504,396,751 3,128,481,219 6.19% 68,010,000 4,209,819
City's share of total overlapping debt: $70,731,996
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 ($4,842.735,118)it Population x>
Total General Obligation Debt $74,845,000* 1.55%* $1,269.31*
City's Share of Overlapping Debt $70,731,996 1.46% $1,199.56
1) Based on the City's 1/1/2018 100%Actual Valuation; includes Ag Land,Ag Buildings,all Utilities and TIF Increment.
2) Population based on the City's 2010 U.S.Census.
* Preliminary;subject to change.
LEVIES AND TAX COLLECTIONS
Collected During Percent
Fiscal Year Levy Collection Year Collected
2015-16 $26,000,394 $25,108,284 96.57%
2016-17 27,044,391 25,919,199 95.84%
2017-18 28,137,151 27,044,258 96.12%
2018-19 29,474,657 --------In Process of Collection--------
2019-20 30,953,785 --------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: The City's Comprehensive Annual Financial Report for the fiscal year ended June 30,2018 and the City's Adoption of Budget
and Certification of City Taxes Forth 85-811 for FY 2018-19 and FY 2019-20.
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TAX RATES
FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20
/ 1 000 $41,000 / 1 000 / 1 000 / 1 000
Story County 5.68249 5.09972 5.08816 5.06487 5.12714
Story County Hospital 0.58000 0.63884 0.75000 0.85000 0.94500
County Ag. Extension 0.08447 0.08268 0.08331 0.08154 0.07784
City of Ames 10.62937 10.37327 10.37589 10.06857 10.02557
City Assessor 0.37804 0.39544 0.31814 0.29989 0.35032
Ames Comm. School District 14.20276 14.34101 14.34129 14.34179 14.34142
Gilbert Comm. School District 17.83972 18.92186 18.90541 18.90141 18.87279
Nevada Comm. School District 16.80944 16.81007 16.81507 16.81478 16.81278
United Comm. School District 8.51849 8.94613 10.05600 10.10152 12.49845
Des Moines Area Comm. College 0.67574 0.72334 0.67458 0.69468 0.65249
State of Iowa 0.00330 0.00330 0.00310 0.00290 0.00280
Total Tax Rate:
Ames CSD Resident 32.23617 31.65760 31.63447 31.40424 31.52258
Gilbert CSD Resident 35.87313 36.23845 36.19859 35.96386 36.05395
Nevada CSD Resident 34.84285 34,12666 34.10825 33.87723 33.99394
United CSD Resident 26.55190 26.26272 27.34918 27.16397 29.67961
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$5.52509 for Fiscal Year 2019-20,and the City has
levied no emergency levy. The City has certified special purpose levies outside of the above described levy limits as follows:
$0.67923 for police and fire retirement and $0.62811 for the operation and maintenance of a public transit system. Debt
service levies are not limited.
FUNDS ON HAND(CASH AND INVESTMENTS AS OF JUNE 30,2019)
Governmental
General Fund $11,443,762
Debt Service Fund 891,765
Capital Projects Fund 17,300,484
Other Governmental Funds 19,189,238
Business-type
Mary Greeley Medical Center $315,563,722
Electric Utility 51,095,135
Sewer Utility 12,055,081
Water Utility 20,483,642
Other Enterprise Funds 10,452,887
Internal Service Funds 21,616,320
Total all funds $480,092,036
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GENERAL FUND BUDGETS(ACCRUAL BASIS)
The table below represents a comparison between the final Fiscal Year 2017-18 actual financial performance,the amended
Fiscal Year 2018-19 budget and the adopted Fiscal Year 2019-20 budget on an accrual basis.
Actual Amended Adopted
FY 2017-18 FY 2018-19 FY 2019-20
Revenues:
Property taxes $16,961,064 $17,847,026 $18,912,037
Other City taxes 2,462,436 2,514,018 2,518,239
Licenses and permits 1,602,795 1,692,750 1,627,904
Use of money and property 570,662 619,535 621,181
Intergovernmental 1,066,863 1,117,991 1,138,615
Charges for fees and services 3,783,175 4,170,227 4,340,868
Miscellaneous 402,726 115,522 115,830
Transfers in 9,105,376 9,359,575 9,413,970
Proceeds of Capital Asset Sales - 750 750
Total revenues $35,955,097 $37,437,394 $38,689,394
Expenditures:
Public safety $18,461,284 $20,159,075 $20,766,495
Public works 471,155 353,373 277,932
Health and social services - - -
Culture and recreation 8,250,507 8,521,584 8,698,213
Community &economic development 1,143,597 1,382,378 1,126,430
General government 2,683,042 2,940,598 2,740,958
Capital projects 684,868 1,427,099 -
Transfers out 4,837,024 5,007,631 5,079,366
Total expenditures $36,531,477 $39,791,738 $38,689,394
Excess(deficiency)of revenues over
(under)expenditures $(576,380) $(2,354,344) -
Fund balance at beginning of year 12,913,731 12,337,351 9,983,007
Fund balance at end of year $12,337,351 $9,983.007 $9,983,007
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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 1,456 full-time employees of which 503 are governmental employees and 953 are employees of the Mary
Greeley Medical Center, and 1,290 part-time employees (including seasonal employees) of which 876 are governmental
employees and 414 are employees of the Mary Greeley Medical Center. Included in the City's full-time employees are 55
sworn police officers and 57 firefighters.
The City participates in two statewide employee retirement systems, the Iowa Public Employees Retirement System
("IPERS") and the Municipal Fire and Police Retirement System of Iowa ("MFPRSI"). The State of Iowa administers
IPERS and a nine-member board of trustees governs the MFPRSI. Though separate and apart from state government, the
MFPRSI board is authorized by state legislature, which also establishes by statute the pension and disability benefits and
the system's funding mechanism. All full-time employees must participate in either IPERS or MFPRSI.
Iowa Public Employees Retirement System; The City contributes to IPERS, which is a cost-sharing, multiple-employer,
contributory defined benefit public employee retirement system administered by the State of Iowa. IPERS provides
retirement and death benefits,which are established by state statute,to plan members and beneficiaries. IPERS is authorized
to adjust the total contribution rate up or down each year, by no more than I percentage point, based upon the actuarially
required contribution rate. The City's contributions to IPERS for the past three fiscal years, as shown below, equal the
required contributions for each year.
FY 2015-16 FY 2016-17 FY 2017-18
IPERS City Contribution $7,543,219 $7,654,501 $7,862,807
Pursuant to Governmental Accounting Standards Board ("GASB") Statement No. 68, the City reported a liability of
$75,225,392 within its CAFR as of June 30, 2018 for its proportionate share of the net pension liability. The net pension
liability is the amount by which the total actuarial liability exceeds the pension plan's net assets or fiduciary net position
(essentially the market value) available for paying benefits. The net pension liability was measured as of June 30, 2017,
and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that
date. The City's proportion of the net pension liability was based on the City's share of contributions to the pension plan
relative to the contributions of all IPERS participating employers. At June 30, 2017,the City's collective proportion was
1.1293%, which was a decrease of 0.0259%from its proportion measured as of June 30,2016.
The City cannot predict the levels of funding that will be required in the future as any IPERS unfunded pension benefit
obligation could be reflected in future years in higher contribution rates. The investment of moneys,assumptions underlying
the same and the administration of IPERS is not subject to the direction of the City. Thus, it is not possible to predict,
control or prepare for future unfunded accrued actuarial liabilities of IPERS ("UAALs"). The UAAL is the difference
between total actuarially accrued liabilities and actuarially calculated assets available for the payment of such benefits. The
UAAL is based on assumptions as to retirement age,mortality,projected salary increases attributed to inflation,across-the-
board raises and merit raises, adjustments, cost-of-living adjustments, valuation of current assets, investment return and
other matters. Such UAAL could be substantial in the future, requiring significantly increased contributions from the City
which could affect other budgetary matters.
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For additional information on IPERS,refer to Section IV,Note F, beginning on page 57 of the City's June 30,2018 CAFR
contained as APPENDIX C of this Official Statement.
The IPERS Comprehensive Annual Financial Report is available on the IPERS website, https://www.ipers.org/financial-
and-investment, or by contacting IPERS at 7401 Register Drive P.O. Box 9117, Des Moines, IA 50321. However, the
information presented in such financial reports or on such websites is not incorporated into this Preliminary Official
Statement by any references.
Bond Counsel, the City and the Municipal Advisor undertake no responsibility for and make no representations as to
the accuracy or completeness of the information available from the IPERS discussed above or included on the IPERS
website,including,but not limited to,updates of such information on the State Auditor's website or links to other Internet
sites accessed through the IPERS website.
Municipal Fire and Police Retirement System of Iowa: The City contributes to MFPRSI,which is a cost-sharing,multiple-
employer defined benefit pension plan. MFPRSI provides retirement,disability,and death benefits to firefighters and police
offers. Benefit provisions are established by state statute, and vest after four years of credited service.
MFPRSI plan members are required to contribute a percentage of their annual covered salary, and the City is required to
contribute at an actuarially determined rate of annual covered payroll. The contribution requirements of plan members and
the City are established, and may be amended by state statute. The City's contributions to MFPRSI for the past three fiscal
years,as shown below,equal the required contributions for each year.
FY 2015-16 FY 2016-17 FY 2017-18
MFPRSI City Contribution $1,994,209 $1,946,357 $2,028,739
Pursuant to GASB Statement No.68,the City reported a liability of$15,549,272 with its CAFR as of June 30, 2018 for its
proportionate share of the net pension liability. The net pension liability is the amount by which the total actuarial liability
exceeds the pension plan's net assets or fiduciary net position(essentially the market value) available for paying benefits.
The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension
liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was
based on the City's share of contributions to the pension plan relative to the contributions of all MFPRSI participating
employers. At June 30, 2017, the City's collective proportion was 2.6513%, which was an increase of 0.0014% from its
proportion measured as of June 30,2016.
For additional information on MFPRSI,refer to Section IV,Note F,beginning on page 57 of the City's June 30,2018 CAFR
contained as APPENDIX C of this Official Statement.
The MFPRSI Independent Auditors Report is available on the MFPRSI website, hM://www.mft)rsi.or about-
mfprsi/publications/,or by contacting MFPRSI at 7155 Lake Drive, Suite 201, West Des Moines, IA 50266.
Bond Counsel, the City and the Municipal Advisor undertake no responsibility for and make no representations as to
the accuracy or completeness of the information available from MFPRSI discussed above or included on the MFPRSI
websites, including, but not limited to, updates of such information on the State Auditor's website or links to other
Internet sites accessed through the MFPRSI websites.
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OTHER POST-EMPLOYMENT BENEFITS
The Governmental Accounting Standards Board ("GASB") has issued Statement No. 45, Accounting and Financial
Reporting by Employers for Post-Employment Benefits Other Than Pensions("GASB 45"),which addresses how state and
local governments must account for and report their obligations related to post-employment healthcare and other non-
pension benefits (referred to as Other Post-Employment Benefits or"OPEB"). GASB 45 requires that local governments
account for and report the annual cost of OPEB and the outstanding obligations and commitments related to OPEB in
essentially the same manner as they currently do for pensions.
The City 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 100%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 rate are not risk adjusted. The City's annual OPEB cost(expense)is calculated based
on the annual required contribution ("ARC") of the employer, an amount actuarially determined in accordance with the
parameters of the GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is
projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty
years.
The following table shows the components of the City's annual OPEB cost for the Fiscal Year ended June 30,2018,the
amount actually contributed to the plan,and changes in the City's annual OPEB obligation.
C&
Balance,beginning of Year $1,871,145
Changes for the year:
Service Cost 124,144
Interest 75,321
Difference between expected and actual 0
Change in Assumptions (51,203)
Benefit Payments (97,725)
Net Changes 50,537
Net OPEB obligation,end of year Q�]
For additional information regarding the City's Post-Employment Benefits, refer to Section IV,Note G,beginning on page
67 of the City's June 30,2018 CAFR contained as APPENDIX C of this Official Statement.
UNION CONTRACTS
City employees are represented by the following five bargaining units:
Bar ag ining Unit Contract Expiration Date
International Association of Firefighters June 30,2022
Public, Professional and Maintenance Employees June 30,2020
International Brotherhood of Electrical Workers June 30, 2020
International Union of Operating Engineers(Local 234C) June 30,2022
International Union of Operating Engineers(Local 234D) June 30,2022
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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 $156,866,669
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
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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 Iowa, later amended in July, 1975 under the Home Rule City Act.
The City, with a United States Census Bureau 2010 population of 58,965, is known for its excellent quality of life which
includes a relatively crime-free environment, an extensive park system, superior cultural/recreations facilities and a
nationally recognized school system. 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 Type of Business Number of Emylovees '1
Iowa State University Higher Education 16,952�1
City of Ames Municipal Government 1,379
Mary Greeley Medical Center Health Care 1,367
Iowa Department of Transportation Public Transportation 1,025
Danfoss Corp. Hydro-Transmissions 1,015
McFarland Clinic, P.C. Health Care 990
USDA Ag Research Facility 750
Hy-Vee Food Stores Grocery 725
Ames Community School District Education 650
Workiva Software 510
Wal-Mart Retail 425
1) Includes full-time,part-time and seasonal employees.
2) Includes student and graduate assistants.
Source: The City and company inquiries.
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BUILDING PERMITS
Permits for the City are reported on a calendar year basis.City officials reported most recently available construction activity
for a portion of the current calendar year, as of June 30, 2019. The figures below include both new construction and
remodeling.
2015 2016 2017 2018 2019
Residential Construction:
Number of units: 430 458 451 441 164
Valuation: $34,403,447 $39,750,700 $45,151,141 $42,309,518 $13,689,595
Commercial Construction:
Number of units: 223 223 215 196 90
Valuation: $175.625.807 $131,925,258 $145,078,724 $98,771,167 $53,365,323
Total Permits 653 681 666 637 254
Total Valuations $210,029,254 $171,675,958 $190,229,865 $141,080,685 $67,054,918
U.S. CENSUS DATA
Population Trend
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
2015 U.S. Census(estimated) 65,060
Source: U.S.Census Bureau
UNEMPLOYMENT RATES
City of Ames Story County State of Iowa
Annual Averages: 2015 2.3% 2.5% 3.8%
2016 2.1% 2.3% 3.6%
2017 1.8% 2.0% 3.1%
2018 1.5% 1.6% 2.5%
2019(through May) 1.3% 1.3% 2.4%
Source: Iowa Workforce Development Center
EDUCATION
Public education is provided by the Ames Community School District,with a fall 2018 certified enrollment of 4,387.4.The
district, with approximately 650 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") 2018 fall enrollment was 34,992. The 2019 fall enrollment is projected to be around
35,000. ISU is the City's largest employer with faculty and staff totaling approximately 16,952, including teaching
assistants and hourly part-time employees. ISU, in addition to its educational function, is a leading agricultural research
and experimental institution.
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The Iowa State Center is the cultural center of ISU and the City. It attracts major dramatic and musical events, as well as
seminars and conferences to the City. It is a complex of three structures: two theaters with capacities of 2,700 and 428,and
a continuing education building with a 450 seat auditorium and 24 meeting rooms. Connected to this complex are two of
Iowa State University's major Big 12 athletic venues: a football stadium with a seating capacity of 61,000 and a coliseum
with capacity for 15,000.
In addition to ISU located in the City,the following institutions provide higher education within 30 miles of the City: Drake
University, Grand View University, Des Moines University (formerly University of Osteopathic Medicine and Health
Services). Two-year degree programs are offered at Des Moines Area Community College, Upper Iowa University,
Vatterott College and Kaplan University(formerly Hamilton College).
FINANCIAL SERVICES
Financial services for the residents of the City are provided by First National Bank Ames, Iowa and VisionBank of Iowa.
In addition, the City is served by branch offices of Bank of the West, Bankers Trust Company, CoBank ACB, Exchange
State Bank, First American Bank, Great Southern Bank, Great Western Bank, Midwest Heritage Bank F.S.B., US Bank,
N.A.,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 for each year:
Year First National Bank Ames VisionBank of Iowa
2014 $493,613,000 $331,845,000
2015 583,184,000 306,613,000
2016 585,973,000 337,027,000
2017 635,176,000 362,537,000
2018 648,715,000 357,109,000
Source: Federal Deposit Insurance Corporation(FDIC)
FINANCIAL STATEMENTS
The City's "JUNE 30, 2018 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 PFM Financial Advisors LLC.
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APPENDIX B
FORM OF LEGAL OPMON
APPENDIX C
JUNE 30, 2018 COMPREHENSIVE ANNUAL FINANCIAL REPORT
APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
OFFICIAL BID FORM
To: City Council of Sale Date: August 27,2019
City of Ames,Iowa 11:00 A.M.,CT
RE: $11,555,000• General Obligation Corporate Purpose Bonds,Series 2019A(the"Bonds")
This bid is a firm offer for the purchase of the Bonds identified in the"TERMS OF OFFERING"and on the terms set forth in this bid
form and"TERMS OF OFFERING", and is not subject to any conditions,except as permitted by the"TERMS OF OFFERING". By
submitting this bid,we confirm we have an established industry reputation for underwriting new issuance of municipal bonds.
For all or none of the above Bonds,in accordance with the"TERMS OF OFFERING",we will pay you$ (not less
than $11,451,005)plus accrued interest to date of delivery for fully registered Bonds bearing interest rates and maturing in the stated
years as follows:
Coupon Maturity Yield Coupon Maturity Yield
2020 2026
2021 2027
2022 2028
2023 2029
2024 2030
2025 2031
• 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 Sl 1,880,000. 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 I of the following years and in the
following amounts(leave blank if no term bonds are specified):
Years Aggre ag ted 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 August 13,2019,and represent we are a bidder with an established industry reputation for underwriting new issuances
of municipal bonds. In the event of failure to deliver the 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,whereupon the deposit accompanying
it will be immediately returned. 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 September 12,2019)
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 2r day of August,2019.
Attest: By:
Title: Title: