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Home My WebLink AboutA011 - Council Action Form dated October 10, 2023 ITEM # 11 DATE: 10/10/23 DEPT: FINANCE COUNCIL ACTION FORM SUBJECT: RESOLUTION APPROVING OFFICIAL STATEMENT FOR GENERAL OBLIGATION CORPORATE PURPOSE BONDS, SERIES 2023D, SETTING DATE OF SALE FOR OCTOBER 24, 2023, AND AUTHORIZING ELECTRONIC BIDDING FOR THE SALE BACKGROUND: The FY 2023/24 Budget includes General Obligation (G.O.) Bond-funded capital improvement projects in the amount of $12,870,000. The City Council held a public hearing on the issuance of these bonds on April 11, 2023. Separately, on September 14, 2021, the City Council held a public hearing for the issuance of G.O. Bonds to fund a capital improvement project for the Indoor Aquatic Center. This action is to proceed with a total G.O. Bond issuance of$12,870,000, which includes $11,663,300 for capital improvement projects and $1,000,000 for a portion of the Indoor Aquatic Center. Council action is required to approve the official statement, set the date of sale for October 24, 2023, 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 to this report. 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: Arterial Street Pavement Improvements 1,500,000 Asphalt Street Pavement Improvements 3,000,000 Concrete Pavement Improvements 950,000 Collector Street Pavement Improvements 1,200,000 Seal Coat Street Pavement Improvements 1,750,000 South 16th Street Road Widening 325,000 Campustown Public Improvements 1,200,000 Alley Pavement Improvements 400,000 Intelligent Transportation System 468,300 Traffic System Capacity Improvements 370,000 Indoor Aquatic Center(Essential Purpose URA) 1,000,000 Park System Facility Improvements (General Corporate Purpose) 500,000 Subtotal Tax Supported Bonds $12,663,300 Estimated Issuance Costs 206,700 Grand Total—2023/24 GO Issue $12,870,000 ALTERNATIVES: 1. Approve the Official Statement for General Obligation Corporate Purpose Bonds, Series 2023D, set the date of sale for October 24, 2023, 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 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. w PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 10,2023 � o y New Issue Rating: Application Made to Moody's Investors Service o � In the opinion of Dorsey& Whitney LLP,Bond Counsel,according to present laws,rulings and decisions and assuming the accuracy of certain representations and compliance with certain covenants, the interest on the Bonds(i) is excluded from gross income for federal income tax purposes under Section 103 of the Internal Y Revenue Code of 1986(the"Code')and(ii)is not an item of tax preference for purposes of the federal alternative minimum tax imposed on noncorporate taxpayers by Section 55 of the Code. Interest on the Bonds may, however, be taken into account in determining adjusted financial statement income for purposes of the federal alternative minimum tax imposed on applicable corporations(as defined in Section 59(k)of the Code)for tax years beginning after December 31,2022. See "TAX o EXEMPTIONAND RELATED TAXMATTERS"herein. a ❑ o w o CITY OF AMES, IOWA .0 $12,870,000* General Obligation Corporate Purpose Bonds, Series 2023D b 01 BIDS RECEIVED: Tuesday, October 24, 2023, 10:00 A.M., Central Time ° AWARD: Tuesday, October 24,2023, 6:00 P.M., Central Time ♦+ U y o Dated: Date of Delivery(November 9,2023) Principal Due: June 1,as shown inside front cover The $12,870,000* General Obligation Corporate Purpose Bonds, Series 2023D (the "Bonds") are being issued pursuant to as N Division III of Chapters 384 of the Code of Iowa and a resolution to be adopted by the City Council of the City of Ames,Iowa the "City"). The Bonds are being issued for the purpose of paying the costs to that extent of constructing street alley, ( ty ) g p m pY g g y, o N stormwater drainage, sanitary sewer, water system and sidewalk improvements; acquiring and installing street department roequipment,traffic control devices and systems,street lighting, signage and signalization assets. 0 � o a y `d 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 obligations under the Loan Agreement. The Bonds are general obligations of the City for which the City will pledge its power of levy direct ad valorem taxes against all taxable property within the City without limitation as to rate or amount to the repayment of the Bonds. o � t .Ur 2 w E The Bonds will be issued as fully registered Bonds without coupons and,when issued,will be registered in the name of Cede& Co., as nominee of The Depository Trust Company("DTC"). DTC will act as securities depository for the Bonds. Individual purchases may be made in book-entry-only form,in the principal amount of$5,000 and integral multiples thereof. The purchaser . ° will not receive certificates representing their interest in the Bonds purchased. The City's Treasurer as Registrar/Paying Agent a " (the"Registrar")will pay principal on the Bonds,payable annually on June 1,beginning June 1,2024,and interest on the Bonds y payable initially on June 1,2024 and thereafter on each December 1 and June 1 to DTC,which will in turn remit such principal oo and interest to its participants for subsequent disbursements to the beneficial owners of the Bonds as described herein. Interest 'r and principal shall be paid to the registered holder of a bond as shown on the records of ownership maintained by the Registrar 3 as of the 15th day of the month next preceding the interest payment date(the"Record Date"). Now o a THE BONDS WILL MATURE AS LISTED ON THE INSIDE FRONT COVER � � o -d •0 3 co MINIMUM BID: $12,741,300 o GOOD FAITH DEPOSIT: $128,700 Required of Purchaser Only w TAX MATTERS: Federal: Tax-Exempt .N State: Taxable w See"TAX EXEMP TION A ND RELATED TAX U MATTERS"for more information. S The Bonds are offered, subject to prior sale,withdrawal or modification,when,as, and if issued subject to the legal opinion as 3 to legality, validity and tax exemption of Dorsey & Whitney LLP, Bond Counsel, Des Moines, Iowa, to be furnished upon cz delivery of the Bonds.It is expected the Bonds will be available for delivery on or about November 9,2023 via Fast Automated Securities Transfer delivery with the Registrar holding the Bonds on behalf of DTC. This Preliminary Official Statement in the form resented is deemed final for purposes of Rule 15c2-12 of the Securities and Exchan e Commission subject to revisions ° o p pmP g J corrections of modifications as determined to be appropriate,and is authorized to be distributed in connection with the offering of the Bonds for sale. a a" *Preliminary; subject to change. F � W CITY OF AMES, IOWA $12,870,000* General Obligation Corporate Purpose Bonds, Series 2023D MATURITY: The Bonds will mature June 1 in the years and amounts as follows: Year Amount* 2024 $1,105,000 2025 830,000 2026 870,000 2027 910,000 2028 960,000 2029 1,010,000 2030 1,060,000 2031 1,105,000 2032 1,165,000 2033 1,220,000 2034 1,285,000 2035 1,350,000 *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$13,500,000. 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 1,2024 and semiannually thereafter. REDEMPTION: Bonds due after June 1,2031 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 be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer,solicitation or sale. The information 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 is submitted in connection with the sale of the securities referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Preliminary Official Statement and any addenda thereto were prepared relying on information from the City and other sources,which are believed to be reliable. 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 on or about November 9, 2023 via Fast Automated Securities Transfer delivery with the Registrar holding the Bonds on behalf of DTC. Compensation of the Municipal Advisor,payable entirely by the City,is contingent upon the sale of the Bonds. References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader's convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this Preliminary Official Statement for purposes of, and as that term is defined in, Securities and Exchange Commission Rule 15c2-12. City of Ames, Iowa Mayor/City Council Member Office Initial Term Commenced Term Expires John Haila Mayor January 2,2018 December 31,2025 Gloria Betcher Council Member— I"Ward January 2,2014 December 31,2025 Tim Gartin Council Member—2nd Ward January 2,2014 December 31,2023 Anita Rollins Council Member—3rd Ward January 3,2022 December 31,2025 Rachel Junck Council Member—4th Ward January 2, 2020 December 31, 2023 Bronwyn Beatty-Hansen Council Member—At Large January 1,2016 December 31,2023 Amber Corrieri Council Member—At Large January 2,2014 December 31,2025 Tabitha Etten Ex-Officio Administration Steven Schainker, City Manager Corey Goodenow, Director of Finance Renee Hall, City Clerk Roger Wisecup Il,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 TABLE OF CONTENTS TERMS OF OFFERING................................................................................................................. ..i SCHEDULE OF BOND YEARS....................................................................................................vii EXHIBIT 1 -FORMS OF ISSUE PRICE CERTIFICATES PRELIMINARY OFFICIAL STATEMENT Introduction.........................................................................................................................................................1 AuthorityAnd Purpose........................................................................................................................................1 InterestOn The Bonds.........................................................................................................................................1 OptionalRedemption...........................................................................................................................................1 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..............................................................................................................................................7 Rating................................................................................................................................................................11 MunicipalAdvisor.............................................................................................................................................11 ContinuingDisclosure.......................................................................................................................................11 FinancialStatements..........................................................................................................................................12 Certification.......................................................................................................................................................12 APPENDIX A-GENERAL INFORMATION ABOUT THE CITY OF AMES,IOWA APPENDIX B-FORM OF LEGAL OPINION APPENDIX C-JUNE 30,2022 ANNUAL COMPREHENSIVE FINANCIAL REPORT APPENDIX D-FORM OF CONTINUING DISCLOSURE CERTIFICATE OFFICIAL BID FORM TERMS OF OFFERING CITY OF AMES, IOWA Bids for the purchase of the City of Ames, Iowa's (the "City") $12,870,000* General Obligation Corporate Purpose Bonds, Series 2023D (the "Bonds") will be received on Tuesday, October 24, 2023, before 10:00 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,telephone 515-724-5734. Information may also be obtained from Mr. Roger Wisecup, City Treasurer, City of Ames, 515 Clark Avenue,Ames, Iowa, 50010,telephone 515-239-5119. 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 2023D,in the principal amount of$12,870,000* to be dated the date of delivery(anticipated to be November 9,2023),in the denomination of$5,000 or multiples thereof, will mature on June 1 as follows: Year Amount* 2024 $1,105,000 2025 830,000 2026 870,000 2027 910,000 2028 960,000 2029 1,010,000 2030 1,060,000 2031 1,105,000 2032 1,165,000 2033 1,220,000 2034 1,285,000 2035 1,350,000 *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 $13,500,000. 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. i INTEREST ON THE BONDS Interest on the Bonds will be payable on June 1, 2024, and semiannually on the 1st 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 15th 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 1,2031,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 term bonds, or both. The bid must designate whether each of the principal amounts shown above represent a serial maturity or a mandatory redemption requirement for a term bond maturity. (See the "OFFICIAL BID FORM" for more information.) In any event, the above principal amount scheduled shall be represented by either serial bond maturities or mandatory redemption requirements, or a combination of both. GOOD FAITH DEPOSIT A good faith deposit in the amount of$128,700 (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 12:00 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 $12,741,300, 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 herein. 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"herein, and"GOOD FAITH DEPOSIT"herein. The TIC shall be determined by the present value method, i.e.,by ascertaining the semiannual rate, compounded semiannually,necessary to discount to present value as of the dated date of the Bonds, the amount payable on each interest payment date and on each stated maturity date or earlier mandatory redemption, so that the aggregate of such amounts will equal the aggregate purchase price offered therefore. The TIC shall be stated in terms of an annual percentage rate and shall be that rate of interest which is twice the semiannual rate so ascertained(also known as the Canadian Method). The TIC shall be as determined by the Municipal Advisor based on the "TERMS OF OFFERING" and all amendments, and on the bids as submitted. The Municipal Advisor's computation of the TIC of each bid shall be controlling. In the event of tie bids for the lowest TIC,the Bonds will be awarded by lot. The City will reserve the right to: (i) waive non-substantive informalities of any bid or of matters relating to the receipt of bids and award of the Bonds,(ii)reject all bids without cause,and(iii)reject any bid which the City determines to have failed to comply with the terms herein. ii 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 Bidding: Sealed bids may be submitted and will be received at the office of the City's Treasurer, 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 Treasurer. 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. 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 iii 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. 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- offering price rule applies,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 1-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. iv 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. ELECTRONIC EXECUTED DOCUMENTS Purchaser consents to the receipt of electronic transcripts and acknowledges the City's intended use of electronically executed documents. Chapter 554D of the Iowa Code establishes electronic signatures have the full weight and legal authority as manual signatures. CONTINUING DISCLOSURE The City will covenant in a Continuing Disclosure Certificate for the benefit of the Owners and Beneficial Owners of the Certificates 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 not later than June 30th after the close of each fiscal year,commencing with the close of the fiscal year ending June 30,2023, 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 Purchaser in complying with section(b)(5)of the Rule. In accordance with the reporting requirements of paragraph(f)(3)of the Rule,within the past five years,the City has not failed to comply, in all material respects,with any previous undertakings it has entered into with respect to the Rule. Regarding the Mary Greeley Medical Center's (the "Medical Center") the quarterly financials for the quarter ended September 30, 2019 were filed one day late. In addition, the Medical Center's Annual Financial Information and Operating Data Report for the Fiscal Year ending June 30, 2021 was 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. v CUSIP NUMBERS It is anticipated that Committee on Uniform Security Identification Procedures("CUSIP")numbers will be printed on the Bonds and the Purchaser must agree in the bid proposal to pay the cost thereof. In no event will the City,Bond Counsel or Municipal Advisor be responsible for the review or express any opinion that the CUSIP numbers are correct. Incorrect CUSIP numbers on said Bonds shall not be cause for the Purchaser to refuse to accept delivery of said Bonds. BY ORDER OF THE CITY COUNCIL City of Ames,Iowa /s/Roger Wisecup, City Treasurer vi SCHEDULE OF BOND YEARS $12,870,000* City of Ames, Iowa General Obligation Corporate Purpose Bonds, Series 2023D Bonds Dated: November 9,2023 Interest Due: June 1,2024 and each December 1 and June 1 to maturity Principal Due: June 1,2024-2035 Cumulative Ye ar Principal * Bond Years Bond Years 2024 $1,105,000 620.03 620.03 2025 830,000 1,295.72 1,915.75 2026 870,000 2,228.17 4,143.92 2027 910,000 3,240.61 7,384.53 2028 960,000 4,378.67 11,763.19 2029 1,010,000 5,616.72 17,379.92 2030 1,060,000 6,954.78 24,334.69 2031 1,105,000 8,355.03 32,689.72 2032 1,165,000 9,973.69 42,663.42 2033 1,220,000 11,664.56 54,327.97 2034 1,285,000 13,571.03 67,899.00 2035 1,350,000 15,607.50 83,506.50 Average Maturity(dated date): 6.488 Years *Preliminary;subject to change. vii EXHIBIT I FORMS OF ISSUE PRICE CERTIFICATES EXHIBIT 1-A CITY OF AMES,IOWA GENERAL OBLIGATION CORPORATE PURPOSE BONDS,SERIES 2023D ISSUE PRICE CERTIFICATE (competitive sale 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) City means 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 City(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 October 24, 2023. 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 Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the City with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Dorsey & Whitney LLP, Des Moines,Iowa 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 City from time to time relating to the Bonds. [UNDERWRITER] By: Name: Dated: November 9, 2023 SCHEDULE A EXPECTED OFFERING PRICES (Attached) Exhibit I-A to Terms of Offering SCHEDULE B COPY OF UNDERWRITER'S BID (Attached) Exhibit 1-B to Terms of Offering EXHIBIT 1-B CITY OF AMES,IOWA GENERAL OBLIGATION CORPORATE PURPOSE BONDS, SERIES 2023D ISSUE PRICE CERTIFICATE (Form-Fewer than 3 bids) The undersigned, on behalf of [NAME OF UNDERWRITER/REPRESENTATIVE] (["[SHORT NAME OF UNDERWRITER]")][the "Representative")][, on behalf of itself and [NAMES OF OTHER UNDERWRITERS] (together,the"Underwriting Group"),]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][The Underwriting Group] 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][The Underwriting Group] 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 third-party 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][Representative]'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 (October 31, 2023), 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) City means 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 City(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). Exhibit 1-B to Terms of Offering (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 parry 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). (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 October 24,2023. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents [SHORT NAME OF UNDERWRITER][The Underwriting Grouff s 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 City with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Dorsey & Whitney LLP, Des Moines, Iowa 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 City from time to time relating to the Bonds. By: Name: Dated:November 9,2023 Exhibit 1-B to Terms of Offering SCHEDULE A INITIAL OFFERING PRICES OF THE BONDS (Attached) Exhibit 1-B to Terms of Offering SCHEDULE B PRICING WIRE (Attached) Exhibit 1-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 (Attached) PRELIMINARY OFFICIAL STATEMENT CITY OF AMES, IOWA $12,870,000* General Obligation Corporate Purpose Bonds, Series 2023D INTRODUCTION This Preliminary Official Statement contains information relating to the City of Ames,Iowa(the"City")and its issuance of$12,870,000* General Obligation Corporate Purpose Bonds, Series 2023D (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, telephone 515-724-5734. Information may also be obtained from Mr.Roger Wisecup,City Treasurer,City of Ames,515 Clark Avenue,Ames,Iowa,50010,telephone 515-239-5119. AUTHORITY AND PURPOSE The Bonds are being issued pursuant to Division III of Chapters 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 purpose of paying the costs, to that extent, of constructing street, alley, stormwater drainage, sanitary sewer, water system and sidewalk improvements; acquiring and installing street department equipment, traffic control devices and systems, street lighting, signage and signalization assets. The estimated sources and uses of the Bonds are as follows: Sources of Funds* Par Amount of Bonds $12,870,000.00 Uses of Funds* Deposit to Project Fund $12,663,300.00 Underwriter's Discount 128,700.00 Cost of Issuance and Contingency 78,000.00 Total Uses $12,870,000.00 *Preliminary;subject to change. INTEREST ON THE BONDS Interest on the Bonds will be payable on June 1, 2024 and semiannually on the I't 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 15th 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, 2031 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 Pursuant to the Resolution and the Act, the Bonds and the interest thereon are general obligations of the City, and all taxable property within the corporate boundaries of the City is subject to the levy of taxes to pay the principal of and interest on the Bonds without constitutional or statutory limitation as to rate or amount. Section 76.2 of the Code of Iowa,2023,as amended(the"Iowa Code"),provides that when an Iowa political subdivision issues general obligation bonds, the governing authority of such political subdivision shall,by resolution adopted before issuing the bonds,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. A certified copy of this resolution shall be filed with the County Auditor in which the City is located, giving rise to a duty of the County Auditor to annually enter this levy for collection from the taxable property within the boundaries of the City,until funds are realized to pay the bonds in full. For the purpose of providing for the levy and collection of a direct annual tax sufficient to pay the principal of and interest on the Bonds as the same become due,the Resolution provides for the levy of a tax sufficient for that purpose on all the taxable property in the City in each of the years while the Bonds are outstanding. The City shall file a certified copy of the Resolution with the County Auditor, pursuant to which the County Auditor is instructed to enter for collection and assess the tax authorized. When annually entering such taxes for collection, the County Auditor shall include the same as a part of the tax levy for Debt Service Fund purposes of the City and when collected,the proceeds of the taxes shall be converted into the Debt Service Fund of the City and set aside therein as a special account to be used solely and only for the payment of the principal of and interest on the Bonds and for no other purpose whatsoever. Pursuant to the provisions of Section 76.4 of the Iowa Code, each year while the Bonds remain outstanding and unpaid, any funds of the City which may lawfully be applied for such purpose, may be appropriated, budgeted and, if received, used for the payment of the principal of and interest on the Bonds as the same become due, and if so appropriated, the taxes for any given fiscal year as provided for in the Resolution, shall be reduced by the amount of such alternate funds as have been appropriated for said purpose and evidenced in the City's budget. BOOK-ENTRY-ONLY ISSUANCE The information contained in the following paragraphs of this subsection `BOOK-ENTRY-ONLYISSUANCE"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 2 ("DTCC"). DTCC is the holding company for DTC,National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S.and non-U.S. securities brokers and dealers,banks, trust companies,and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly(the"Indirect Participants"). DTC has 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. 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 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 status of the interest thereon(see"TAX EXEMPTION AND RELATED TAX MATTERS"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 to this Preliminary Official Statement. Signed copies of the opinion, dated and premised on law in effect as of the date of original delivery of the Bonds,will be delivered to the purchaser at the time of such original delivery. The Bonds are offered subject to prior sale and to the approval of legality of the Bonds by Bond Counsel.Dorsey&Whitney LLP is also serving as Disclosure Counsel to the City in connection with the issuance of the Bonds. The legal opinion to be delivered will express the professional judgment of Bond Counsel, and by rendering a legal opinion,Bond Counsel does not become an insurer or guarantor of the result indicated by that expression of professional judgment of the transaction or the future performance of the parties to the transaction." 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 is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on noncorporate taxpayers under 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,taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations, and corporations that may be subject to the alternative minimum tax. 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. Ownership of the Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Bonds. Prospective purchasers of the Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. State of Iowa Income Taxes: The interest on the Bonds is NOT exempt from present Iowa income taxes. Proposed Changes in Federal and State Tax Law: From time to time,there are Presidential proposals,proposals of various federal committees, and legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein or adversely affect the marketability or market value of the Bonds or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption of interest on the Bonds. Further, such proposals may impact the marketability or market value of the Bonds simply by being proposed. No prediction is made whether such provisions will be enacted as proposed or concerning other future legislation affecting the tax treatment of interest on the Bonds. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax 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. 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 "qualified tax-exempt obligations" within the meaning of Section 265(b)(3)of the Code. 5 Original Issue Discount: The Bonds maturing in the years (collectively, the "Discount Bonds") are being sold at a discount from the principal amount payable on such Discount 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 Internal Revenue Code. The amount of original issue discount that accrues to a holder of a Discount Bond under section 1288 of the Internal Revenue Code is excluded from federal gross income to the same extent that stated interest on such Discount Bond would be so excluded. The amount of the original issue discount that accrues with respect to a Discount Bond under section 1288 is added to the owner's federal tax basis in determining gain or loss upon disposition of such Discount Bond(whether by sale,exchange,redemption or payment at maturity). Interest in the form of original issue discount accrues under section 1288 pursuant to a constant yield method that reflects semiannual compounding on dates that are determined by reference to the maturity date of the Discount Bond. The amount of original issue discount that accrues for any particular semiannual accrual period generally is equal to the excess of(1)the product of(a) one-half of the yield on such Discount Bonds (adjusted as necessary for an initial short period) and (b) the adjusted issue price of such Discount Bonds, over (2) the amount of stated interest actually payable. For purposes of the preceding sentence,the adjusted issue price is determined by adding to the Issue Price for such Discount Bonds the original issue discount that is treated as having accrued during all prior semiannual accrual periods. If a Discount Bond is sold or otherwise disposed of between semiannual compounding dates,then the original issue discount that would have accrued for that semiannual accrual period for federal income tax purposes is allocated ratably to the days in such accrual period. An owner of a Discount Bond who disposes of such Discount Bond prior to maturity should consult owner's tax advisor as to the amount of original issue discount accrued over the period held and the amount of taxable gain or loss upon the sale or other disposition of such Discount Bond prior to maturity. Owners who purchase Discount Bonds in the initial public offering but at a price different than the Issue Price should consult their own tax advisors with respect to the tax consequences of the ownership Discount Bonds. The Internal Revenue 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 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. 6 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 particular fiscal year, may cause Bondholders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. Changes in Property Taxation: The Bonds are general obligations of the City secured by an unlimited ad valorem property tax as described more fully in the"PAYMENT OF AND SECURITY FOR THE BONDS"herein. 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 Resolution or the Loan Agreement. The remedies available to the Bondholders upon an event of default under the Resolution or the Loan Agreement, in certain respects, may require judicial 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 Agreement or the Resolution 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 opinion 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 resolution for the Bonds or the Loan Agreement, 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. 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. 7 Rating Loss: Moody's Investors Service ("Moody's") has assigned a rating of`_' 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. Bankruptcy and 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 nine of the federal 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. Under Iowa Code Chapter 76 sections 76.16 and 76.16A of the Act, as amended, a city, county, or other political subdivision may become a debtor under Chapter 9 of the Federal bankruptcy code, if it is rendered insolvent, as defined in 11 U.S.C. §101(32)(c),as a result of a debt involuntarily incurred. As used therein,"debt"means an obligation to pay money, other than pursuant to a valid and binding collective bargaining agreement or previously authorized bond issue, as to which the governing body of the city, county, or other political subdivision has made a specific finding set forth in a duly adopted resolution of each of the following: (1) all or a portion of such obligation will not be paid from available insurance proceeds and must be paid from an increase in general tax levy; (2) such increase in the general tax levy will result in a severe,adverse impact on the ability of the city, county,or political subdivision to exercise the powers granted to it under applicable law, including without limitation providing necessary services and promoting economic development; (3)as a result of such obligation,the city,county,or other political subdivision is unable to pay its debts as they become due;and(4)the debt is not an obligation to pay money to a city,county,entity organized pursuant to chapter 28E of the Code of Iowa, or other political subdivision. Forward-Looking 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. Cybersecurity: The City, like many other public and private entities, relies on a large and complex technology environment to conduct its operations. As such, it may face multiple cybersecurity threats including but not limited to, hacking, viruses, malware and other attacks on computer or other sensitive digital systems and networks. There can be no assurances that any security and operational control measures implemented by the City will be completely successful to guard against and prevent cyber threats and attacks. Failure to properly maintain functionality, control, security, and integrity of the City's information systems could impact business operations and/or digital networks and systems and the costs of remedying any such damage could be significant. Along with significant liability claims or regulatory penalties, any security breach could have a material adverse impact on the City's operations and financial condition. The City maintains insurance policies to cover the various aspects of a cyber-attack. See"GENERAL INFORMATION ABOUT THE CITY OF AMES, IOWA — THE CITY — subsection "INSURANCE" located in APPENDIX A to this Preliminary Official Statement. The City cannot predict whether these policies would be sufficient in the event of a cyber breach. The Bonds are secured by an unlimited ad valorem property tax as described more fully in the"PAYMENT OF AND SECURITY FOR THE BONDS"herein. 8 Tax Matters,Bank Qualification and Loss of Tax Exemption: As discussed under the heading"TAX EXEMPTION AND RELATED TAX MATTERS"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. 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. Risk of Audit: The Internal Revenue Service has an ongoing program to audit tax-exempt obligations to determine the legitimacy of the tax status of such obligations. No assurance can be given as to whether the Internal Revenue Service will commence an audit of the Bonds.Public awareness of any audit could adversely affect the market value and liquidity of the Bonds during the pendency of the audit,regardless of the ultimate outcome of the audit. 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. Beneficial Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. See"BOOK-ENTRY-ONLY ISSUANCE"herein. 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"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 except for those covered by another retirement system. 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 Annual Comprehensive Financial Report for its Fiscal Year ended June 30, 2022 (the "IPERS ACFR")indicates that as of June 30, 2022,the date of the most recent actuarial valuation for IPERS,the funded ratio of IPERS was 89.50%, and the unfunded actuarial liability was $4.615 billion. The IPERS ACFR identifies the IPERS Net Pension Liability/(Asset) at June 30, 2022, at approximately $3.778 billion, while its net pension liability/(asset) at June 30, 2021 was approximately ($345.2) million. The IPERS ACFR is available on the IPERS website, or by contacting IPERS at 7401 Register Drive,Des Moines, IA 50321. See"APPENDIX C—JUNE 30, 2022 INDEPENDENT AUDITOR'S REPORTS" for additional information on IPERS. However, the information presented in such financial reports or on such websites is not incorporated into this Preliminary Official Statement by any references. 9 In the Fiscal Year ended June 30, 2022, the City's IPERS contribution totaled approximately $10,223,542. The City is current in its obligations to IPERS. At June 30, 2022, the City reported a liability of$131,427 for its proportionate share of the net pension liability (asset). 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 to this Preliminary Official Statement, and "JUNE 30, 2022 ANNUAL COMPREHENSIVE FINANCIAL REPORT" included in APPENDIX C to this Preliminary Official Statement for additional information on pension and liabilities of the City. Bond Counsel, 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 Actuarial Valuation Report indicates that as of July 1, 2022, the date of the most recent actuarial valuation for MFPRSI, the funded ratio of MFPRSI was 84.43%, and the unfunded actuarial liability was approximately $568.4 million. The MFPRSI Financial Statements for its Fiscal Year ended June 30,2022(the"MFPRSI Report")identifies the MFPRSI Net Pension Liability at June 30,2022,at approximately$561.5 million(market value),while its net pension liability at June 30, 2021 was approximately $224.5 million (market value). The MFPRSI Report is available on the MFPRSI website. See"EMPLOYEES AND PENSIONS"included in APPENDIX A to this Preliminary Official Statement,and"JUNE 30, 2022 ANNUAL COMPREHENSIVE FINANCIAL REPORT" included in APPENDIX C to this Preliminary Official Statement for additional information on MFPRSI. In the Fiscal Year ended June 30, 2022, the City's MFPRSI contribution totaled approximately $2,268,424. The City is current in its obligations to MFPRSI. At June 30,2022,the City reported a liability of$6,008,465 for its proportionate share of the net pension liability(asset). 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 to this Preliminary Official Statement, and"JUNE 30, 2022 ANNUAL COMPREHENSIVE FINANCIAL REPORT"included in APPENDIX C to this Preliminary Official Statement for additional information on pension and liabilities of the City. Bond Counsel, 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. 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. For additional information, see "OTHER POST-EMPLOYMENT BENEFITS" included in APPENDIX A to this Preliminary Official Statement,and"JUNE 30,2022 ANNUAL COMPREHENSIVE FINANCIAL REPORT"included in APPENDIX C to this Preliminary Official Statement. 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. 10 RATING The Bonds have been rated' 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 any explanation of the significance of such rating may only be obtained from Moody's. The ratings described above are not recommendations to buy, sell or hold the Bonds. There is no assurance that any such rating will continue for any period of time or that it will not be revised downward or withdrawn entirely if,in the judgment of Moody's,circumstances so warrant. Therefore, after the date hereof, investors should not assume that the ratings are still in effect. A downward revision or withdrawal of either rating is likely to have an adverse effect on the market price and marketability of the Bonds. The City has not assumed any responsibility either to notify the owners of the Bonds of any proposed change in or withdrawal of any rating subsequent to the date of this Preliminary Official Statement,except in connection with the reporting of events as provided in the Continuing Disclosure Certificate, or to contest any revision or withdrawal. 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 30th after the close of each fiscal year,commencing with the fiscal year ending June 30,2023,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 "FORM OF CONTINUING DISCLOSURE CERTIFICATE"included in APPENDIX D to this Preliminary Official Statement 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 the "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"). In accordance with the reporting requirements of paragraph(f)(3)of the Rule,within the past five years,the City has not failed to comply, in all material respects,with any previous undertakings it has entered into with respect to the Rule. Regarding the Mary Greeley Medical Center's (the "Medical Center") the quarterly financials for the quarter ended September 30, 2019 were filed one day late. In addition, the Medical Center's Annual Financial Information and Operating Data Report for the Fiscal Year ending June 30, 2021 was 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. 11 FINANCIAL STATEMENTS The City's"JUNE 30, 2022 ANNUAL COMPREHENSIVE 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 Annual Comprehensive Financial Report may be obtained from PFM Financial Advisors LLC. 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 my knowledge, information and belief, said Preliminary Official Statement does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein,in light of the circumstances under which they were made, not misleading regarding the issuance of$12,870,000* General Obligation Corporate Purpose Bonds, Series 2023D. CITY OF AMES,IOWA /s/Roger Wisecup, City Treasurer *Preliminary;subject to change. 12 APPENDIX A GENERAL INFORMATION ABOUT THE CITY OF AMES, IOWA The $12,870,000* GENERAL OBLIGATION CORPORATE PURPOSE BONDS, SERIES 2023D (the "Bonds') are general obligations of the City of Ames, Iowa (the "City')for which the City will pledge its power to levy direct ad valorem taxes against all taxable property within the City without limitation as to rate or amount to the repayment of the Bonds. *Preliminary,subject to change. CITY PROPERTY VALUATIONS IOWA PROPERTY VALUATIONS In compliance with Section 441.21 of the Code of Iowa,the State Director of Revenue annually directs the county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The Story County Auditor adjusted the final Actual Values for 2022. The reduced values, determined after the application of rollback percentages, are the taxable values subject to tax levy. For assessment year 2022, the taxable value rollback rate was 54.6501% of actual value for residential property; 91.6430% of actual value for agricultural property and 100.0000% of the actual value of utility property. The residential taxable rollback rate of 54.6501% would apply to the value of each property unit of commercial, industrial and railroad property that exceeds zero dollars ($0) but does not exceed one hundred fifty thousand dollars ($150,000) with a taxable value rollback rate of 90.0000% to the value that exceeds one hundred fifty thousand dollars ($150,000). 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. The 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 (1/1/2022 Valuations for Taxes Payable July 1,2023 through June 30, 2024) Taxable Value 100%Actual Value (With Rollback) Residential $4,224,975,500 $2,308,953,296 Commercial 1,071,898,222 924,053,036 Industrial 177,153,700 156,213,595 Railroads 12,808,159 11,519,677 Utilities w/o Gas &Electric 724,039 724,039 Gross valuation $5,487,559,620 $3,401,463,643 Less military exemption (1,926,080) (1,926,080) Net valuation $5,485,633,540 $3,399,537,563 TIF Increment $17,675,578 $17,675,578 Taxed separately Ag. Land&Building $4,397,100 $4,029,640 Gas &Electric Utilities $37,862,320 $7,160,026 2022 GROSS TAXABLE VALUATION BY CLASS OF PROPERTY'S Taxable Valuation Percent of Total Residential $2,308,953,296 67.74% Gas &Electric Utilities 7,160,026 0.21% Commercial, Industrial,Railroads,Utility 1,092,510,347 32.05% Total Gross Taxable Valuation $3,408,623,669 100.00% 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 2018 2019-20 $4,842,735,118 $3,079,908,598 $45,584,078 2019 2020-21 5,026,796,234 3,112,286,020 75,857,137 2020 2021-22 5,191,529,367 3,257,725,869 81,120,190 2021 2022-23 5,516,177,632 3,399,701,391 57,260,674 2022 2023-24 5,545,568,538 3,406,697,589 17,675,578 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. 1/1/2022 2) Taxpayer Type of Property/Business Taxable Valuation Iowa State University Research Park Commercial $67,803,701 Barilla America Inc. Industrial 49,670,131 Clinic Building Company Inc. Commercial 35,497,425 Campus Investors IS LLC Commercial 34,570,683 FPA6 University West LLC Commercial 25,179,953 Spirit Realty LP Commercial 23,716,140 Bricktowne Ames LC Commercial 21,973,417 SZ Ames Apartments LLC Commercial 21,839,873 GW Land Holdings LLC Commercial 20,447,255 Dayton Park LLC Commercial 20,098,133 1) This list represents some of the larger taxpayers in the City,not necessarily the 10 largest taxpayers. 2) The January 1,2022 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 A-2 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 2022 Actual Valuation currently applicable to the Fiscal Year 2023-24, is as follows: 2022 Gross Actual Valuation of Property $5,545,568,538 Legal Debt Limit of 5% 0.05 Legal Debt Limit $277,278,426 Less: G.O. Debt Subject to Debt Limit (78,045,000) Less: Other Debt Subject to Debt Limit (401,986)2) Net Debt Limit $198,831,440 * 1) Actual Valuation of property as reported by the Iowa Department of Management for the Fiscal Year 2023-24. 2) Other Debt Subject to Debt Limit includes TIF rebate agreement payments appropriated for Fiscal Year 2023-24. DIRECT DEBT General Obligation Debt Paid by Taxes and Other Sources ') (Includes the Bonds) Principal Date Original Final Outstanding of Issue Amount Purpose Maturi1y As of 11/09/2023 9/14 $9,695,000 Corporate Purpose Improvements 6/26 $2,225,000 9/15A 18,445,000 Corporate Purpose Improvements &Refunding 6/35 5,440,000 9/16A 11,650,000 Corporate Purpose Improvements &Refunding 6/28 3,995,000 9/17A 10,975,000 Corporate Purpose Improvements &Refunding 6/29 3,835,000 9/18A 7,490,000 Corporate Purpose Improvements 6/30 4,790,000 9/19A 10,775,000 Corporate Purpose Improvements 6/31 7,485,000 9/20A 17,865,000 Corporate Purpose Improvements &Refunding 6/32 10,285,000 9/21A 19,640,000 Corporate Purpose Improvements &Refunding 6/33 15,880,000 11/22A 12,440,000 Corporate Purpose Improvements 6/34 11,240,000 11/23D 12,870,000 * Corporate Purpose Improvements 6/35 12,870,000 * Total $78,045,000 * 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. A-3 Annual Fiscal Year Debt Service Payments (Includes the Bonds) Existing Debt The Bonds Total Outstanding Fiscal Principal Principal Principal Year Principal and Interest Principal* and Interest* Principal* and Interest* 2023-24 $9,120,000 $11,509,706 $1,105,000 $1,466,075 $10,225,000 $12,975,781 2024-25 8,560,000 10,563,731 830,000 1,418,250 9,390,000 11,981,981 2025-26 8,235,000 9,866,981 870,000 1,416,750 9,105,000 11,283,731 2026-27 7,780,000 9,077,356 910,000 1,413,250 8,690,000 10,490,606 2027-28 6,790,000 7,774,506 960,000 1,417,750 7,750,000 9,192,256 2028-29 6,130,000 6,905,681 1,010,000 1,419,750 7,140,000 8,325,431 2029-30 5,660,000 6,209,181 1,060,000 1,419,250 6,720,000 7,628,431 2030-31 5,060,000 5,427,981 1,105,000 1,411,250 6,165,000 6,839,231 2031-32 4,175,000 4,418,594 1,165,000 1,416,000 5,340,000 5,834,594 2032-33 2,255,000 2,388,175 1,220,000 1,412,750 3,475,000 3,800,925 2033-34 1,350,000 1,405,500 1,285,000 1,416,750 2,635,000 2,822,250 2034-35 60,000 61,950 1,350,000 1,417,500 1,410,000 1,479,450 Total $65,175,000 $12,870,000* $78,045,000* *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 11/09/2023 1115 $68,081,339 Water Revenue Bonds(SRF) 6/37 $44,494,000 8/22 3,500,000 Water Revenue Bonds(SRF) 6/42 3,356,000 1) 6/23C 12,161,000 Water Revenue Bonds(SRF) 6/43 12,161,000 2) Total $60,011,000 1) Based on preliminary debt service schedule established prior to final project draws. The City has an outstanding balance of $2,295,462.11 based on draws through September 11,2023. 2) Based on preliminary debt service schedule established prior to final project draws. The City has an outstanding balance of $832,578.30 based on draws through September 11,2023. A-4 Sewer Revenue Debt The City has sewer revenue debt paid solely from the net revenues of the Sewer Utility as follows: Principal Date Original Final Outstanding of Issue Amount Purpose Maturity As of 11/09/2023 11/12 $2,474,250 Sewer Revenue Bonds(SRF) 6/33 $1,262,000 9/16 641,332 Sewer Revenue Bonds(SRF) 6/36 429,000 2/18-1 767,771 Sewer Revenue Bonds(SRF) 6/38 585,000 10/18-2 5,206,055 Sewer Revenue Bonds(SRF) 6/38 4,339,000 1/23-1 4,071,000 Sewer Revenue Bonds(SRF) 6/42 4,070,000 1/23-2 7,631,852 Taxable Sewer Revenue Bonds (SRF) 6/42 7,630,852 8/23-3 2,150,000 Sewer Revenue Bonds(SRF) 6/43 2,150,000 2) Total $20,465,852 1) Based on preliminary debt service schedule established prior to final project draws. The City has an outstanding balance of $337,526.04 based on draws through September 11,2023. 2) Based on preliminary debt service schedule established prior to final project draws.The City has an outstanding balance of$10,750 based on draws through September 11,2023. 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 Maturity As of 11/09/2023 12/15B $9,500,000 Electric Revenue Bonds 6/27 $3,625,000 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 Purpose Maturity As of 11/09/2023 11/12 $26,000,000 Mary Greeley Medical Center&Refunding 6/27 $1,910,000 06/16 64,790,000 Mary Greeley Medical Center&Refunding 6/36 57,125,000 11/19 35,000,000 Mary Greeley Medical Center 6/34 27,180,000 Total $86,215,000 A-5 OVERLAPPING DEBT Portion of City's l/l/2022 Taxable Valuation Percent Proportionate Taxing District Taxable Valuation 1) Within the City Applicable G.O. Debt 2) Share Story County $5,835,737,049 $3,428,402,807 58.75% $4,179,681 $2,455,563 Ames CSD 3,113,976,403 3,064,401,613 98.41% 85,065,000 83,712,467 Gilbert CSD 679,181,562 348,734,699 51.35% 22,235,000 11,417,673 Nevada CSD 567,475,396 1,354,335 0.24% 8,778,000 21,067 United CSD 395,739,776 13,912,160 3.52% 1,320,000 46,464 DMACC 62,389,305,642 3,428,402,807 5.50% 86,510,000 4,758,050 City's share of total overlapping debt: $102,411,284 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/66,427 G.O. Debt ($5,545,568,538)1) Population 2) Total General Obligation Debt $78,045,000* 1.41%* $1,174.90* City's Share of Overlapping Debt $102,411,284 1.85% $1,541.71 1) Based on the City's I/1/2022 100%Actual Valuation;includes Ag Land,Ag Buildings,all Utilities and TIF Increment. 2) Population based on the City's 2020 U.S. Census. *Preliminary;subject to change. LEVIES AND TAX COLLECTIONS Collected During Percent Fiscal Year Levy Collection Year Collected 2019-20 $31,041,345 $30,109,340 97.00% 2020-21 31,838,345 30,756,123 96.60% 2021-22 32,428,985 31,361,804 96.71% 2022-23 33,603,968 33,497,600 99.68% 2023-24 34,748,203 --------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 Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2022 and the City's Adoption of Budget and Certification of City Taxes Form 85-811 for FY 2022-23 and FY 2023-24. A-6 TAX RATES FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 $/$1,000 $/$1,000 $/$1,000 $/$1,000 $/$1,000 Story County 5.12714 5.02778 4.95627 4.50207 4.50196 Story County Hospital 0.94500 0.90891 0.87250 0.93350 0.93090 County Ag. Extension 0.07784 0.07960 0.07582 0.11527 0.11735 City of Ames 10.02557 10.14681 9.87363 9.82936 10.20097 City Assessor 0.35032 0.34504 0.38331 0.33790 0.35183 Ames Comm. School District 14.34142 14.34107 14.34470 14.28616 13.93640 Gilbert Comm. School District 18.87279 18.08785 17.20522 17.05730 16.80418 Nevada Comm. School District 16.81278 14.71656 14.91083 14.71344 14.69969 United Comm. School District 12.49845 12.00008 10.44720 9.76510 9.76371 Des Moines Area Comm. College 0.65249 0.63533 0.67789 0.69448 0.74410 State of Iowa 0.00280 0.00270 0.00260 0.00240 0.00180 Total Tax Rate: Ames CSD Resident 31.52258 31.48724 31.18672 30.70114 30.78531 Gilbert CSD Resident 36.05395 35.23402 34.04724 33.47228 33.65309 Nevada CSD Resident 33.99394 31.86273 31.75285 31.12841 31.54860 United CSD Resident 29.67961 29.14625 27.28922 26.18008 26.61262 LEVY LIMITS A city's general fund tax levy is limited to $8.10 per$1,000 of taxable value, with provision for an additional $0.27 per $1,000 levy for an emergency fund which can be used for general fund purposes(Code of Iowa,Chapter 384,Division 1). Cities may exceed the $8.10 limitation upon authorization by a special levy election. Further, there are limited special purpose levies, which may be certified outside of the above-described levy limits (Code of Iowa, Section 384.12). The amount of the City's general fund levy subject to the $8.10 limitation is $6.34138 for Fiscal Year 2023-24, and the City has levied no emergency levy. The City has certified special purpose levies outside of the above-described levy limits as follows: $0.60552 for the operation and maintenance of a public transit system. Debt service levies are not limited. FUNDS ON HAND (CASH AND INVESTMENTS AS OF AUGUST 31,2023) Governmental General Fund $12,867,315 Debt Service Fund 2,538,914 Capital Projects Fund 22,603,299 Other Governmental Funds 36,516,771 Business-type Mary Greeley Medical Center 380,448,091 Electric Utility 58,209,046 Sewer Utility 20,584,015 Water Utility 19,559,846 Other Enterprise Funds 34,981,098 Internal Service Funds 26,256,586 Total all funds $614,564,981 A-7 GENERAL FUND BUDGETS(ACCRUAL BASIS) The table below represents a comparison between the final Fiscal Year 2021-22 actual financial performance,the amended Fiscal Year 2022-23 budget, and the adopted Fiscal Year 2023-24 budget on an accrual basis. Actual Amended Adopted FY 2021-22 FY 2022-23 FY 2023-24 Revenues: Property taxes $20,584,293 $21,253,501 $24,361,388 Other City taxes 2,415,735 2,696,946 2,401,073 Licenses and permits 1,198,379 1,613,440 1,613,440 Use of money and property (487,337) 580,414 591,514 Intergovernmental 2,446,414 2,582,192 2,625,611 Charges for fees and services 2,191,715 2,058,674 2,232,500 Miscellaneous 249,894 337,937 201,358 Transfers in 11,735,851 11,155,054 8,740,084 Proceeds of Capital Asset Sales 0 0 0 Total revenues $40,334,994 $42,278,158 $42,766,968 Expenditures: Public safety $19,525,219 $21,328,127 22,400,342 Public works 1,117,282 1,100,189 1,099,840 Health and social services 0 0 0 Culture and recreation 8,773,252 9,121,684 9,700,911 Community&economic development 984,823 1,082,796 1,120,746 General government 2,894,167 3,662,733 3,331,529 Capital projects 638,203 4,359,493 0 Transfers out 7,661,061 5,692,904 5,113,600 Total expenditures $41,594,007 $46,347,926 $42,766,968 Excess(deficiency)of revenues over (under) expenditures (1,289,907) (4,069,768) 0 Fund balance at beginning of year $15,558,734 $14,299,671 $10,229,903 Fund balance at end of year $14,299,671 $10,229,903 $10,229,903 A-8 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 currently has 1,436 full-time employees of which 515 are governmental employees and 912 are employees of the Mary Greeley Medical Center, and 1,081 part-time employees (including seasonal employees) of which 457 are governmental employees and 624 are employees of the Mary Greeley Medical Center. Included in the City's full-time employees are 58 sworn police officers and 62 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 1 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 2019-20 FY 2020-21 FY 2021-22 IPERS City Contribution $9,139,672 $9,131,127 $10,223,542 At June 30, 2022, the City reported a liability of$131,427 for its proportionate share of the net pension liability (asset). The net pension liability(asset)was measured as of June 30,2021,and the total pension liability(asset)used to calculate the net pension liability (asset) was determined by the actuarial valuation of that date. The City's proportion of the net pension liability (asset) was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all employers participating in IPERS, actuarily determined. At June 30, 2021, the City's proportion was(0.0381%),which was a decrease of 1.2368%from its proportion measured as of June 30,2020. For additional information on IPERS,refer to Section IV,Note F,beginning on page 60 of the City's June 30,2022 ACFR contained in APPENDIX C to this Preliminary Official Statement. 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. A-9 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 2019-20 FY 2020-21 FY 2021-22 MFPRSI City Contribution $2,076,217 $2,200,185 $2,268,424 At June 30,2022,the City reported a liability of$6,008,465 for its proportionate share of the net pension liability(asset). The net pension liability(asset)was measured as of June 30,2021,and the total pension liability(asset)used to calculate the net pension liability (asset) was determined by the actuarial valuation of that date. The City's proportion of the net pension liability (asset) was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all employers participating in IPERS, actuarily determined. At June 30, 2021, the City's proportion was 2.6755%,which was a decrease of 0.0021%from its proportion measured as of June 30,2020. 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 ofsuch information on the State Auditor's website or links to other Internet sites accessed through the MFPRSI websites. For additional information on MFPRSI,refer to Section IV,Note F,Municipal Fire and Police Retirement System of Iowa (MFPRSI)beginning on page 64 of the City's June 30,2022 ACFR contained in APPENDIX C to this Preliminary Official Statement. OTHER POST-EMPLOYMENT BENEFITS("OPEB") The City provides 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. As of June 30, 2022 there were 603 active employees and 36 inactive employees or beneficiaries receiving benefits. The following table shows the components of the City's annual OPEB cost for the Fiscal Year ended June 30, 2022, the amount actually contributed to the plan,and changes in the City's annual OPEB obligation. ciiy Balance,beginning of Year $2,550,569 Changes for the year: Service Cost 181,568 Interest 56,886 Difference between expected and actual experience 398,929 Change in Assumptions or other inputs (99,678) Benefit Payments (197,042) Net Changes 340,663 Net OPEB obligation, end of year 2 891 232 For additional information regarding the City's Other Post-Employment Benefits,refer to Section IV,Note G,beginning on page 68 of the City's June 30,2022 ACFR contained in APPENDIX C to this Preliminary Official Statement. A-10 UNION CONTRACTS City employees are represented by the following bargaining units: Bargaining Unit Contract Expiration Date International Association of Firefighters June 30, 2025 Public,Professional and Maintenance Employees June 30, 2024 International Union of Operating Engineers (Local 234C) June 30, 2025 International Union of Operating Engineers(Local 234D) June 30, 2025 INSURANCE The City's insurance coverage is as follows: Type of Insurance All Limits General Liability $2,000,000 Auto Liability $2,000,000 Wrongful Acts $2,000,000 Excess (over all other coverage except Iowa liquor liability) $13,000,000 Law Enforcement $2,000,000 Public Official $2,000,000 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 $224,368,999 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) $5,000,000 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 Cyber Liability $1,000,000 A-11 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 2020 population of 66,427, 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 Employees Iowa State University Higher Education 18,212 Mary Greeley Medical Center Health Care 1,545 McFarland Clinic,P.C. Health Care 1,200 Danfoss Corp. Hydro-Transmissions 1,052 Iowa Department of Transportation Public Transportation 975 City of Ames Municipal Government 972 USDA Government 750 Ames Community School District Education 700 Hach Chemical Water Testing 580 Workiva Software 550 1) Includes full-time,part-time and seasonal employees. Source: The City and the City's 2022 Annual Comprehensive Financial Report 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 August 31,2023. The figures below include both new construction and remodeling. 2019 2020 2021 2022 2023 Residential Construction: Number of units: 379 461 397 402 285 Valuation: $27,504,682 $34,947,523 $34,201,457 $33,826,621 $15,953,624 Commercial Construction: Number of units: 203 155 162 163 161 Valuation: $210,645,223 $150,034,358 $62,880,240 $76,251,698 $105,911,485 Total Permits 582 616 559 565 446 Total Valuations $238,149,905 $184,981,881 $97,081,697 $110,078,319 $121,865,109 A-12 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 2020 U.S. Census 66,427 Source: U.S.Census Bureau UNEMPLOYMENT RATES City of Ames Story County State of Iowa Annual Averages: 2019 1.8% 1.8% 2.7% 2020 3.5% 3.5% 5.2% 2021 2.7% 2.7% 3.8% 2022 2.0% 2.0% 2.7% 2023 (as of August) 2.1% 2.1% 2.8% Source: U.S.Bureau of Labor Statistics EDUCATION Public education is provided by the Ames Community School District, with a fall 2022 certified enrollment of 4,439.6. The district,with approximately 650 employees, owns and operates one early childhood center, five elementary schools, one middle school,one high school and a facilities and maintenance building. 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") 2022 Fall enrollment is currently 30,708. ISU is the City's largest employer with faculty and staff totaling approximately 18,212, including teaching assistants and hourly part-time employees. ISU, in addition to its educational function, is a leading agricultural research and experimental institution. 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 approximately 2,750 and 450,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: Jack Trice football stadium with a seating capacity of 61,500 and Hilton Coliseum with capacity for approximately 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). A-13 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 Availa Bank,Bank of the West,Bankers Trust Company,Central State Bank, CoBank ACB, Exchange State Bank, First Interstate Bank, Midwest Heritage Bank F.S.B., South Story Bank & Trust; US Bank,N.A., and Wells Fargo Bank, as well as by several credit unions. First National Bank Ames and VisionBank of Iowa report the following deposits as of June 30 for each year: Year First National Bank Ames VisionBank of Iowa 2018 $648,715,000 $357,109,000 2019 745,795,000 365,706,000 2020 855,840,000 448,663,000 2021 952,731,000 490,477,000 2022 978,988,000 486,110,000 Source: Federal Deposit Insurance Corporation(FDIC) A-14 APPENDIX B FORM OF LEGAL OPINION APPENDIX C DUNE 30, 2022 ANNUAL COMPREHENSIVE FINANCIAL REPORT APPENDIX D FORM OF CONTINUING DISCLOSURE CERTIFICATE OFFICIAL BID FORM To: City Council of Sale Date: October 24,2023 City of Ames,Iowa 10:00 A.M.,CT RE: $12,870,000*General Obligation Corporate Purpose Bonds, Series 2023D(the"Bonds") This bid is a firm offer for the purchase of the Bonds identified in the"TERMS OF OFFERING"and on the terms set forth in this bid form and"TERMS OF OFFERING", and is not subject to any conditions,except as permitted by the "TERMS OF OFFERING". By submitting this bid,we confirm we have an established industry reputation for underwriting new issuance of municipal bonds. For all or none of the above Bonds,in accordance with the"TERMS OF OFFERING",we will pay you$ (not less than$12,741,300)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 2024 2030 2025 2031 2026 2032 2027 2033 2028 2034 2029 2035 * 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$13,500,000. Interest rates specified by the successful bidder for each maturity will not change. Final adjustments shall be in the sole discretion of the City. The dollar amount of the purchase price proposed by the successful bidder will be changed if the aggregate principal amount of the Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Bonds will be made while maintaining,as closely as possible,the successful bidder's net compensation,calculated as a percentage of bond principal. The successful bidder may not withdraw or modify its bid as a result of any post-bid adjustment. Any adjustment shall be conclusive and shall be binding upon the successful bidder. We hereby designate that the following Bonds to be aggregated into term bonds maturing on June 1 of the following years and in the following amounts(leave blank if no term bonds are specified): Years Aggregated Maturity Year Aggregate Amount through through through In making this offer we accept all of the terms and conditions of the"TERMS OF OFFERING"published in the Preliminary Official Statement dated October 10,2023,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 November 9,2023) 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 241 day of October 2023. Attest: By: Title: Title: